G+T helps log Federal Court win against ACCC on $5.2bn port privatisation problem

Gilbert + Tobin (G+T) has helped NSW Ports Operation Hold Co Pty Ltd, Port Botany Operations Pty Ltd and Port Kembla Operations Pty Ltd (NSW Ports) to emerge victorious against the ACCC in a Federal Court battle involving the $5.2bn privatisation of Port Botany and Port Kembla by NSW State in 2013.

The ACCC first lodged a claim in December 2018 arguing against agreements made by NSW Ports and NSW state under the privatisation terms. Known as the Port Commitment Deeds, one 50-year agreement stipulated that the state of NSW would have to compensate NSW Ports if container traffic at the Port of Newcastle exceeded a certain cap.

Another 50-year agreement made in 2014 after Port of Newcastle’s privatisation indicated that the Port of Newcastle must reimburse NSW State for any compensation made to NSW Ports. The ACCC said in a press release that the reimbursement would “effectively double the cost of moving a container at the Port of Newcastle.”

Thus, the organisation claimed, the agreements were anti-competitive in relation to the potential development of a container terminal at the Port of Newcastle.

“The case raised important matters of principle in relation to the nature of competition in ports and infrastructure more generally, crown immunity as well as public policy issues surrounding a state’s ability to privatise its assets,” G+T said.

The Federal Court dismissed the ACCC’s claims on Wednesday. According to G+T lead partner Elizabeth Avery, the ruling would provide “certainty for significant investment in critical infrastructure.”

“This is an important win for our client, vindicating its decision to invest in the State of New South Wales,” she said.

NSW Ports GC Julian Sefton said that with the court win, NSW Ports would continue to focus on “ensuring these vital infrastructure assets deliver for the people of NSW in the most efficient and sustainable way possible.”

Strong collaboration between the teams at G+T and NSW Ports was vital to the victory, especially with COVID-19 hampering the preparation process. Avery said that much of the intensive preparation took place during lockdown.

She received support from special counsel Geoff Petersen, as well as lawyers Sophie Player, Sarah Lynch, Jane Kluske, Jacqueline Reid, Erin Jardine, Jonathan Geagea, Isabel Owen, Adrian Vipond, and Jack Coles (before his leave of absence). The counsel team consisted of Noel Hutley SC, Dr Ruth Higgins SC, Brendan Lim and Tim Rogan.

“The quality of the defence strategy, evidence preparation and compelling arguments developed by the G+T team was integral to a successful outcome for our business,” Sefton said.

For G+T, not only did the court win serve as “a testament to NSW Ports’ commitment to play a role in ensuring a thriving and successful container transportation industry throughout NSW,” but it also highlighted the G+T team’s strength in “combining our detailed understanding of the competitive issues relevant to the privatisation deal, economics and how the law applies to the infrastructure sector.”