The NSW government has argued successfully to remove parts of a Federal Court judgment on Newcastle's container penalties so the state is not prejudiced in any renegotiation of its deal with Port Botany.
The full bench of the Federal Court published on Thursday its reasons for rejecting an Australian Competition and Consumer Commission appeal against an earlier ruling that the penalties were not "illegal" or "anti-competitive", as the ACCC has maintained.
The court dismissed the ACCC appeal on February 23, closing a complex legal process sparked by the revelation in 2016 that the state had built secret compensation provisions into its privatisation deals with Botany and Kembla operator NSW Ports and Port of Newcastle in 2013 and 2014.
The court agreed on Thursday with a state request to remove "certain monetary figures and percentages which constitute value impact information" relating to the $5.07 billion Botany and Kembla lease price.
"Those dollar figures and percentages are derived from confidential advice given to the state by its external financial advisers and relate to the likely impact on the sale price of Port Kembla and Port Botany to factor in the risk of change in government policy with respect to port sequencing in New South Wales," the court said on Thursday.
The provisions were designed to bump up the lease price for Botany and Kembla by effectively locking Newcastle, a potential commercial rival, out of the containerised freight market. The ACCC legal action sought to have them scrapped.
After years of community and political pressure to unpick the deals, the government helped pass legislation in November which allows Port of Newcastle to apply for an independent review of how much compensation it should pay the state to remove the penalties.
The court said the legislation "may result in the Botany and Kembla Port Commitment Deeds, and specifically the compensation provisions, being valued [sic] or re-negotiated".
"The [value impact information] will likely be used as a guide to the price for any valuation or renegotiation of the compensation provisions or payment of compensation to NSW Ports," it said.
"Consequently, the disclosure of [value impact information] would prejudice the state's position in the context of those negotiations."
The three appeal judges largely supported the conclusions of Justice Jayne Jagot, who oversaw the original trial, that NSW Ports enjoyed derivative Crown immunity and the privatisation deals were not anti-competitive in purpose or effect because a Newcastle container terminal was "fanciful".
However, one of the appeal judges, Justice Jonathan Beach, said he disagreed with Justice Jagot's ruling that NSW Ports enjoyed derivative Crown immunity.
