GAS and Electricity Markets Authority v GB Energy Supply Ltd
2016
CHANCERY DIVISION
United Kingdom
CORAM
- THE HONOURABLE MR JUSTICE BIRSS
Areas of Law
- Administrative Law
- Civil Procedure
- Corporate Law
- Commercial Law
2016
CHANCERY DIVISION
United Kingdom
CORAM
AI Generated Summary
On Saturday evening, 26 November 2016, the High Court (Birss J) heard by telephone an urgent application by the Gas and Electricity Markets Authority (GEMA), acting through OFGEM, for a final declaration that GB Energy Supply Ltd was unable to pay its debts. The company, a small, virtual energy supplier serving over 240,000 domestic customers combined, had failed to secure a sale, faced imminent loss of call centre services, and had been advised not to accept further direct debits, removing its income from 28 November. Statutory restrictions under Energy Act 2004/2011 required a 14-day wait for voluntary winding up, prompting the Authority to seek declaratory relief to enable immediate licence revocation and appointment of a Supplier of Last Resort. The court held this lawful and appropriate given risks to market participants and consumer confidence, found insolvency under Insolvency Act 1986 s.123, and made a final declaration, enabling swift regulatory intervention.
Judgment
Birss J:
This is an application brought by the claimant, the Gas and Electricity Markets Authority (“GEMA”) acting through the officials of OFGEM for a declaration that the defendant company GB Energy Supply Ltd is unable to pay its debts and therefore conditions in the relevant Electricity Supply Licence and Gas Supply Licence, whereby GEMA authorises the defendant to operate as a gas and electricity supplier in the UK, are satisfied. If those conditions are satisfied then under the terms of the relevant licences GEMA can revoke the supply licences and appoint another energy supplier as a Supplier of Last Resort.
The matter has been heard out of hours on the evening of Saturday 26th November 2016. The hearing was conducted on the telephone. Nicholas Cox and Lara Hassell instructed by OFGEM acted for GEMA. Also on the telephone conference call hearing was Mr Bates of Addleshaw Goddard representing the defendant. As is explained below the matter was very urgent and therefore it was appropriate to deal with it in that way. This judgment sets out the reasons for making the order I made on that Saturday evening.
The Application was supported by a witness statement of Mr Robert Philip Salter-Church of OFGEM. He was authorised to make his statement on behalf of OFGEM and GEMA. For convenience in this judgment both GEMA and OFGEM will be referred to as the Authority.
Background
As Mr Salter-Church explains the Authority is the independent regulator for the gas and electricity markets established by the Utilities Act 2000. It is funded largely by the network companies which are licenced by the Authority to participate in the gas and electricity markets. The Authority consists of non-executive and executive members appointed by the Secretary of State of the Department for Business, Enterprise and Industrial Strategy (“BEIS”) and a non-executive chair who oversees the work and provides strategic and policy direction. OFGEM stands for the Office of Gas and Electricity Markets. It is a non-ministerial government department and an independent national regulatory authority. It is governed by GEMA and carries out the day to day functions necessary to enable GEMA to discharge its functions. GEMA’s functions are, so far as relevant, provided under the Gas Act 1986, the Electricity Act 1989, the Utilities Act 2000 and measures set out in a number of Energy Acts, including the Energy Act of 2004 and 2011.
The principal objective of the Authority when carrying