CAT set to rule on second subsidy control challenge under domestic regime

The substantive hearing for the matter of Mr Aubrey Weis (Applicant) v Greater Manchester Combined Authority (Respondent) was heard by the Competition Appeal Tribunal (CAT) on 27th, 29th and 30th May 2025.

The matter concerns loans comprising of £60.7m and £50.93 (the Loans) granted by the Respondent to Trinity Developments (Manchester) Limited and New Jackson (Contour) Investments Limited respectively. It is understood the purpose for the loans was to “bringing forward the supply of new, high-quality housing required for Greater Manchester to realise its full economic potential; (ii) sustaining a significant number of jobs within the construction sector on-site and in the supply chain; and (iii) providing opportunities for apprenticeships in construction trades.”

The basis for the Appellant’s claims is that the Loans granted by the Respondent have been concluded on “non-market terms and have distorted the proper and fair operation of the relevant market in and around Manchester”. The Appellant is a competitor of the two entities in receipt of the Loans.

The Respondent, however, claims the loans are on market terms, and therefore do not amount to a subsidy. We understand the Respondent’s view is the that Loans are in compliance with the Commercial Market Operator (CMO) Principle. For assistance to satisfy the CMO Principle, the assistance must be provided on terms akin to those available on the market, by a private operator, at the time the assistance was granted. If the CMO Principle is satisfied, arguably the assistance does not confer an economic advantage because it mirrors commercial terms available on the market at the time, which means the assistance would not amount to a subsidy.

To date some of the recent procedural rulings in this matter have given rise to interesting points to note:

• Firstly, the point at which a subsidy “decision” is made can be a grey area, especially where it could reasonably be argued that the decision to grant assistance does not amount to a subsidy under the Subsidy Control Act 2022. In this case, the application for review was filed after a decision in principle to grant the loans was made, but before the Loans had been finalised or entered. The Respondent denied making a subsidy decision on the basis that no decision to grant the Loans had yet been completed. The CAT ultimately ordered a stay of proceedings until the Loans were granted.
• Secondly, key documents relating to commercial terms of funding arrangements are likely to be subject to disclosure. In this case, the Appellant’s advisers required access to commercially sensitive loan terms to draft the basis of his claim. Whilst confidentiality rings would ordinarily prevent direct competitors from obtaining and using such information, in circumstances such as these the CAT will weigh up commercial sensitivities against the importance of the Appellant being able to provide its lawyers with informed instructions. In this case, the Appellant’s son was granted access to the confidentiality ring as a result of this balancing exercise (subject to the provision of undertakings by the Appellant and his son not to use or disclose the confidential information in any other context).

We await the CAT’s decision on the merits of this matter, particularly its rulings on the application of the CMO Principle.

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