Fuel row spills into the Royal Court

Wednesday 04 October 2017

Jersey's Royal Court is hearing a landmark case over whether a local fuel provider abused an apparently "dominant" position at the Airport fuel farm.

ATF Fuels is appealing to the Royal Court against a decision by the Jersey Competition Regulatory Authority (JCRA), who ruled in March 2016 that the fuel provider had abused a dominant market position by refusing to supply Aviation Beauport with fuel for resale, and by charging them more than previous suppliers.

The case could have important implications for the way the competition regulator oversees local markets. 

Yesterday, the Court heard that ATF Fuels started providing aviation fuel at the airport on an interim basis after Rubis withdrew from the operation.

ATF later signed a three-year agreement with Ports of Jersey (PoJ) to continue the supply. During that interim period, Aviation Beauport (now known as Gama Aviation), a company which provides private aircraft services, made a complaint to the JCRA. Aviation Beauport wanted to purchase fuel from ATF for use in its aircraft and to be sold on to private aircraft operators. ATF refused which led the JCRA to conclude it had abused its dominant position at Jersey Airport.

Advocate John Kelleher, who is representing ATF Fuels with Advocate Alistair Lindsey, told the Court that when Rubis withdrew as the main fuel operator, Aviation Beauport enquired about getting an authorisation to supply their own fuel, but then never made a formal request. He said that according to the Ports of Jersey, they were not prepared to meet the necessary conditions.

He then claimed that when Aviation Beauport first contacted ATF, they asked for a cheaper price than previously charged by Rubis, but never mentioned the fuel was to be sold on. ATF asked Aviation Beauport to provide verification of the Rubis prices and volumes, making it clear that they would not be providing fuel for resale, as Aviation Beauport would need a licence to do so. ATF ultimately rejected a deal because ABP didn't have the licence or the infrastructure necessary to provide fuel and refused to participate in the breaking of laws.

Advocate Kelleher insisted that this couldn't be seen as an abuse of a dominant position and used an analogy to prove it. He told the Court: "I want Coca Cola to provide the product, pay my rent, assume the risks of that but also sell me those bottles with a large discount so I can make a margin. And all I am going to do is put the price on the can and put someone on the till to collect the money. This is normal competition but it is not abuse to refuse to indulge it."

Mentioning the alleged hike in prices, ATF imposed on Aviation Beauport, Advocate Kelleher told Court that ATF had had an "active role in reducing aviation fuel prices," and that the company only started to break even in July 2015. He added that at the time of the dispute ATF was only providing fuel on an interim period while PoJ sorted out the tender and that if ATF had raised the prices too far, then the PoJ could have authorised another supplier to come in.

The trial is expected to last until Friday under the direction of the Bailiff Sir William Bailhache, who is sitting with Jurats Collette Crill and Jerry Ramsden.

Advocate Nigel Sanders, who is representing the JCRA, should address the Court on Thursday.