The Competition Appeals Tribunal (CAT) has found, in all circumstances, in favour of the LME, in its appeal for costs against the OFT's imposition of an interim measures direction (IMD).
The OFT imposed the IMD on 27 February 2006 preventing the LME from extending the opening hours of Select (its electronic trading system) to cover Asian trading hours. The IMD was withdrawn by the OFT wholly and unconditionally on 15 May 2006.
The IMD was the first injunction the OFT has ever imposed under the Competition Act, having first been granted the power approximately six years ago. The judgment is the first judgment of the CAT dealing with the question of costs in the context of an appeal against an injunction imposed by the OFT. It is of major significance to industry that the CAT has determined that the OFT's conduct was below the standard which should be expected of such a body. The judgment is unequivocal that the OFT wrongly applied these powers to the LME. The full judgment of the CAT can be found on the CAT website: http://www.catribunal.org.uk/judgments/default.asp 
In the judgment, the CAT states:
The CAT expresses concern that the OFT's objectivity was flawed: … "we are concerned that armed with only a "limited" understanding of Spectron's relevant business and … the market in general, the OFT felt able to adopt an IMD based solely on information provided to it by Spectron without seeking information from "the market", in particular from third parties" … "the OFT should be circumspect about solely relying on uncorroborated information … this is particularly so where the source of the information is not impartial, as was the case here".
The procedures and processes adopted by the OFT were substandard: …'In all the circumstances we have come to the conclusion that that the OFT's investigative process was superficial and flawed and the IMD consequently ill founded".
Companies should not be allowed to suffer in the hands of the OFT: … "it is inappropriate [for the OFT] to suggest that the addressee of the IMD [the LME] should have to bear the burden of the OFT learning by its own mistakes".
As to costs: ...' the respondent [the OFT] pay the appellant's [the LME] reasonable and proportionate costs…'
Commenting on today's historic pronouncement, Simon Heale, LME Chief Executive said: 'The CAT is the only recourse when the processes of the OFT fail as they did in this case. The CAT's judgment says it all. To describe the OFT's investigative process as superficial and flawed is damning. I only hope that the OFT learns from this criticism so that other companies can avoid the damaging and completely unnecessary experience that we have gone through. I am thankful for the good sense and judgment that the CAT brought to bear.'