The Federal Court issued its decision of 2 June 2006 on the Australian Competition and Consumer Commission's appeal against the Australian Competition Tribunal's decision on the Moomba to Sydney Gas Pipeline.
The court overturned the tribunal's decision to set aside the ACCC's access arrangement for the Moomba to Sydney pipeline and its decision to establish a regulatory value of the pipeline at $835 million.
"The ACCC welcomes the court's decision as a vindication of the ACCC's professionalism and integrity in making regulatory decisions", ACCC Chairman, Mr Graeme Samuel, said.
"The interpretation the court has provided on the task of setting a regulatory value of a pipeline under the Gas Code endorses the approach taken by the ACCC.
"The ACCC did not take the decision to seek judicial review of the tribunal's decision lightly. The ACCC asked the Federal Court to consider the tribunal's application of the law, consideration of evidence and the reasonableness of its propositions relating to the methodology to be applied when establishing the regulatory value of the pipeline".
The ACCC took this unusual step because it believed the tribunal's decision was not consistent with legal precedent established in WA Supreme Court's review of the WA regulator's decision in relation to the value of the Dampier to Bunbury Natural Gas Pipeline.
The ACCC was concerned that the tribunal's approach to valuing the pipeline was not consistent with the code and that it did not give sufficient consideration to the manner in which the pipeline had operated in the past.
In its reasons the Federal Court found that: "none of the available grounds upon which the Tribunal could interfere with the ACCC's determination of the ICB of the MSP had been made out. There was no error in the ACCC's findings of fact in relation to its determination of the ICB; nor was the exercise of the ACCC's discretion in reaching that determination incorrect or unreasonable having regard to all the circumstances".
The ACCC determined in December 2003 that the regulatory value of the pipeline should be set at $545 million.
The court is considering submissions from the parties on its final orders in this matter.