PENTLAND FERRIES, RECLAIMING MOTION BY PENTLAND FERRIES AGAINST THE SCOTTISH MINISTERS [2019] ScotCS CSIH_41 (23 July 2019)

PENTLAND FERRIES, RECLAIMING MOTION BY PENTLAND FERRIES AGAINST THE SCOTTISH MINISTERS [2019] ScotCS CSIH_41 (23 July 2019)

The subsidy for the Scrabster route under the bundled PSC is lawful as the respondents demonstrated a real public service need, market failure, and necessity/proportionality of the subsidy. Bundling is permitted and justified by economies of scale and integration. The evidence showed that the Scrabster route could not be operated commercially without a subsidy, and the respondents' approach complied with EU law and Commission guidance.

Citation
[2019] ScotCS CSIH_41
Parties
Petitioners and Reclaimers: Pentland Ferries; Respondents: The Scottish Ministers
Jurisdiction
Scotland
Judgment Date
23 July 2019
Procedural Posture
Reclaiming Motion / Appeal From Lord Ordinary
Outcome
Petition refused; subsidy and bundling upheld.
Legal Topics
State Aid, Public Service Contracts, Maritime Cabotage Regulation, Market Failure, Necessity and Proportionality of Subsidy, Route Bundling
European Union Law Competition Law Administrative Law State Aid Public Service Contracts Maritime Cabotage Regulation Market Failure Necessity and Proportionality of Subsidy +1 more

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Parties

Pentland Ferries

Petitioners and Reclaimers

The Scottish Ministers

Respondents

Procedural Posture

Reclaiming Motion / Appeal From Lord Ordinary

Legal Issues

  1. 1 Whether the subsidy for the Scrabster ferry route under a bundled Public Service Contract complies with EU law and avoids illegality under Article 107(1) TFEU
  2. 2 Whether there is market failure justifying the subsidy
  3. 3 Whether the subsidy is necessary and proportionate

Ratio Decidendi

The subsidy for the Scrabster route under the bundled PSC is lawful as the respondents demonstrated a real public service need, market failure, and necessity/proportionality of the subsidy. Bundling is permitted and justified by economies of scale and integration. The evidence showed that the Scrabster route could not be operated commercially without a subsidy, and the respondents' approach complied with EU law and Commission guidance.

Court Disposition

Petition refused; subsidy and bundling upheld.

Orders

  • The reclaiming motion is refused.
  • The proposed subsidy and bundling of the Scrabster route under the PSC are lawful.