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Part 1: Interpretation

Rule, Clause or Condition Determination Date of Hearing Points Made Within Determination
Interpretation NV58 April 2004

In respect of some elements of the freight operating constraints, namely the Rules of the Route/ Rules of the Plan, there is ample precedent, in the determinations of both this Committee, and of Timetabling Committee, that changes can be opposed, and overturned, but only on the basis that changes would infringe specific access rights. There is no precedent for challenging change in the general.

It would be illogical to treat other aspects of the freight operating constraints differently. At any time they are the product of past history and duly applied change procedures (Condition D or Condition G as appropriate), and any objection to change should logically require to be justified on the basis of identified specific impact on contractual rights. It cannot be right to challenge a Network Change solely on the grounds that it would result in change to the Network.

Where no rights, or reasonably prospective rights, are infringed, it would be wrong to curb Network Rail’s freedom to exercise its discretion as to the detailed management of the Network, given that it is Network Rail that is the accountable body for both the efficiency and the safety of that Network.”

(NV58, paras 9.3, 9.4, 9.5)

[This determination was the subject of appeal by EWS to the Rail Regulator. In January 2005 the Office of Rail Regulation determined the appeal and upheld the determination on the Network and Vehicle Change Committee, adding the following amplifications of the NVCC conclusions:]

EWS’ view was that EWS (and other freight operators) had a permission to use the whole Network Rail network, contained in Clause 5 of their track access contracts. EWS considers that it could therefore prevent a Network Change by arguing under Condition G2.1(a)(i) that the implementation of the Network Change “would necessarily result in Network Rail breaching an access contract to which that Train Operator is a party”. EWS’s view was that such a right would however only be applicable in those circumstances ``where Network Rail proposes to amend the freight operating constraints in such a way that a freight operator believes that the Network Change will adversely affect the prospects of allowing its business to grow and evolve over time”. EWS said that, when it entered into its existing track access agreement, it did so “in expectation that the entirety of the contract would enable the business to grow and evolve in response to the changing nature of its customers requirements”. In this particular case, EWS believed that the removal of the loop would indeed have an adverse effect on its ability to grow and evolve its business.

EWS argued that the NVCC was wrong to conclude that “any objection to change should logically require to be justified only on the basis of identified specific impact on contractual rights rather than in the generality of rights”…

Under Clause 5.1 of EWS’ track access agreement, Network Rail grants EWS permission to use its network in accordance with the terms of the agreement. However, Clause 5.2 states that the permission to use the network shall, except where the context otherwise requires, be construed to mean permission, among other things, “to use the track comprised in the Network in accordance with the Network Code for the provision of the Services in accordance with their Service Characteristics and for any Alternative Train Slots, using the Registered Equipment in accordance with the Freight Operating Constraints … Clause 5.2 explicitly provides that the permission to use is subject “in each case and in all respects to the network code and the Freight Operating Constraints”.

ORR does not consider that EWS has demonstrated before the NVCC or in this appeal that the implementation of the proposed Network Change will necessarily result in a breach of its track access agreement. The expectations which EWS may have had when it entered into the contract … do not constitute contractual terms … ORR does not accept EWS’s interpretation of the permission to use clause and considers that it would lead to a perverse outcome because it would enable EWS and other freight operators) to prevent any Network Change taking place anywhere on the Network, irrespective of whether the operator had any specific rights on the route where a Network Change was being proposed.

The assessment above is consistent with the NVCC’s conclusion that “It cannot be right to challenge a Network Change solely on the grounds that it would result in change to the Network” (paragraph 9.4 of its determination). ORR therefore rejects this element of EWS’ appeal.

(ORR appeal of NV58, paras 17, 18, 19, 20, 21, 22)

Operating Constraints ADP31 January 2008

…except where Network Rail specifically agrees an amendment to the Track Access Contract, inclusion of a type of passenger rolling stock in the Sectional Appendix, does not confer upon a Passenger Train Operator any right to include such stock in the Specified Equipment, or to use such stock to operate services for which it otherwise has access rights. (For the avoidance of doubt this finding relates specifically to the Passenger Track Access Contract only; the Panel acknowledges that within the Freight Track Access Contract, the Sectional Appendix has a more specific standing in relation to the “Operating Constraints”)

(ADP31, para 6.4)

Operating Constraints ADP52 April 2010

[This dispute was primarily about the operation of the Transfer of Rights provisions of Part J7 of the Network Code, and the definition of “Reasonable Ongoing Commercial Need”. In this case the Right in dispute related to a Train Slot over the single-track West Highland Line, that, by virtue of a dispensation set out in the “Scotland Route Specially Authorised Loads Book”, gave the Train Operator the permission, where necessary, to operate the service at a length that exceeded the laid down “operating constraints” length limit. The practical impact of the existence of this Permission, which was not asserted as a right in any Track Access Agreement, is that it prevented Network Rail from authorising extra length for any Train Slots for other trains that might require to cross the contested train. Thus:]

the Panel found that … Network Rail should reasonably have considered whether

DBS’ “reasonable on-going commercial need” was adequately met by a service such as its contractual rights in Schedule 5 prescribed, namely an SX service subject to the standard Operating Constraints on the West Highland line, and in particular a maximum train length of 31 SLU;

there was any “reasonable on-going commercial need” for the special dispensation for either 6Y15 or 6E16 to operate between Mossend and Fort William with a maximum length increased to 41 SLUs; and that

it needed to take immediate steps, as part of its responsibilities to maximise the capability of the Network, to withdraw this, and other, superannuated dispensations, so that its discretion is unfettered should another Train Operator (such as GBRf) wish to invoke the precedent that such dispensations can reasonably be granted, but in connection with a different Quantum Access Right …

The Panel was concerned that the Network Rail representatives could not give clear answers as to how they would address the matter of reviewing and revising such special operating dispensations as had outlived their usefulness, but was satisfied that

the responsibility for such “good housekeeping” was unequivocally Network Rail’s, and

the carrying through of such “good housekeeping” should not delay putting GBRf in the position that it had adequate Level 1 Rights and Train Slots to fulfil those responsibilities to convey the Alcan traffic that it had acquired as a result of the tendering and transfer of rights mechanisms contemplated in Condition J7.

The Panel’s Determination:

Taking all the foregoing arguments into account, the Panel therefore finds, in respect of the representations made by the parties, that the following points are decisive in its determination … on the other hand, the requirement that the “on-going commercial need” should be adjudged “reasonable” implies that, where there is the possibility of a discretion in relation to the scale of the Right, the Right that it secures should be proportionate to the scale of the commercial need. In this instance there is such discretion, as between a right for DBS to operate a service as per its Schedule 5 Level 1 Rights conforming to the standard Operating Constraints of a maximum train length of 31 SLU, or to continue to have access to the option to operate at the dispensation length of 41SLU.

The Panel therefore determines that … Network Rail should have considered whether that “on-going commercial need” reasonably justified perpetuating the discretionary permission to operate those services at a train length of 41 SLUs. In the view of the Panel, given the evidence presented, Network Rail should reasonably have concluded that that train length dispensation

was not something to which DBS was contractually entitled, and

was not appropriate to the scale of DBS “reasonable on-going commercial need”, and therefore, to the extent that it is an impediment to the granting to GBRf of appropriate Level 1 Rights to permit the efficient operation of the Alcan traffic

could, and should, be withdrawn at Network Rail’s initiative.

(ADP52, paras 13.3, 14, 15.3, 16.2)

Part 2: Network Code

Part 3: Conditions Precedent and Duration

Part 4: Standard of Performance

Part 5: Permission to Use

Rule, Clause or Condition Determination Date of Hearing Points Made Within Determination
5.1 “Permission to use the Network” NV58 April 2004

[This determination was the subject of appeal by EWS to the Rail Regulator. In January 2005 the Office of Rail Regulation determined the appeal and upheld the determination on the Network and Vehicle Change Committee, adding the following amplifications of the NVCC conclusions:]

Under Clause 5.1 of EWS’ track access agreement, Network Rail grants EWS permission to use its network in accordance with the terms of the agreement. However, Clause 5.2 states that the permission to use the network shall, except where the context otherwise requires, be construed to mean permission, among other things, “to use the track comprised in the Network in accordance with the Network Code for the provision of the Services in accordance with their Service Characteristics and for any Alternative Train Slots, using the Registered Equipment in accordance with the Freight Operating Constraints … Clause 5.2 explicitly provides that the permission to use is subject “in each case and in all respects to the network code and the Freight Operating Constraints”.

(NV58, ORR Determination para 20)

5.1 “Permission to use the Network” ADP47 February 2010

[This case related to the operation of Doncaster Up Decoy Yard. Within this yard there is a length of single track (referred to in the determination as “the Network Line”) that remains within the ownership of Network Rail, but provides access both to sites that are leased from Network Rail, and others that are on private land. “The Network Line” is not signalled beyond a boundary signal, and permission to pass that boundary, and control of all other movements over “the Network Line” is at the direction of an employee of the Train Operator that leases Up Decoy Yard. This arrangement perpetuates that in force prior to privatisation, but was challenged when a second Train Operator disputed that it should be required to pay a charge to another Train Operator for the right to use part of Network Rail’s Network. Thus:]

The Panel’s findings in respect of entitlements:

The Panel considered that the main issue in this case related to the rights GBRf (and other Train Operators) acquired by the terms of the “Permission to Use the Network” [Clause 5 of the GBRf Track Access Agreement]. Given Network Rail’s own stated position that “the Network line” was a part of the Network like any other, the Panel could not see that there would be any case for Network Rail charging any premium for its use, over and above the standard Network Access charges.

That said, the Panel considered that there was something intrinsically anomalous about Network Rail relying upon a de facto delegation, to one of the competing Freight Train Operators, of responsibility for the control and supervision of all users of “the Network line”. In such circumstances it would be unusual if there were not a clear contractual basis for determining the respective duties, obligations and responsibilities, in what is, to all appearances, a relationship between a principal and its agent.

The Panel therefore determines, in respect of the representations made by the parties, as follows:

The Panel acknowledges and agrees with the basic proposition that trains operated by GBRf over the stretch of railway line between Doncaster signals 1403 or 1405 and the boundary with Freightliner Railport, (“the Network line”) derive their entitlement to access that stretch of line from the terms of the GBRf Track Access Agreement. However,

Network Rail depends, for the safe regulation of trains over this stretch of line (i.e. for the discharge of its responsibilities towards GBRf, FL and other Train Operators in respect of Clauses 4 and 5 of their Track Access Agreements), upon the “degree of skill, diligence, prudence and foresight” of staff employed by a third party, namely DBS.

The Panel is quite clear that the responsibility for assuring the regulation and safe passage of trains over all parts of the Network, and for providing or procuring all services necessary to achieve this lies totally and unequivocally with Network Rail. In this context, the Panel supports the (abridged) proposition that “First GBRF should not be required to pay any third party for future access to this part of the Network”.

(ADP47, paras 13, 15, 16)

Part 6: Operation and Maintenance of Trains and Network

Rule, Clause or Condition Determination Date of Hearing Points Made Within Determination
6.3 Safety ADA20 Oct 2014

…although at first sight the requirement in the [Track Access contract] for each party to comply with ‘all applicable obligations’ may seem onerous, this must be interpreted to reflect the way in which safety law is enforced on the Network.

[A Safety Management System (“SMS”)] must include: ‘procedures to ensure that accidents, incidents, near misses and other dangerous occurrences are reported, investigated and analysed and that necessary preventative measures are taken’ … Schedule 1 to ROGS [Railways and Other Guided Transport Systems (Safety) Regulations 2006] deals with SMSs and Article 2 sets out the basic requirements of an SMS. The section quoted above appears at 2(f)(ii). In my judgment this duty must be conducted honestly and transparently, sharing information with other industry parties where appropriate. Even if this were not the case, the power in [the Track Access Contract] for either Party to make reasonable requests of the other relating to Safety Obligations is relevant.

Clearly the first duty on the Parties is to discuss any safety concerns with the other, whether these concerns arise from day-to-day operations on the Network or … from a specific incident.

…parties to [Track Access Contracts] who must inevitably hold a Safety Certificate or Authorisation - should be familiar with the duties placed on them in their [Track Access Contract], especially those relating to safety.

(ADA20, paras. 5.1.2, 5.1.9, 5.1.10, 5.12.3)

6.4.1 Suitable Access TTP10 June 2005

The Panel found that, in relation to the EWS Track Access Agreement, there were two immediate matters to address:

does EWS have any entitlement to have Train Slots allocated when it is not in a position to honour its obligations in respect of Clause 6.4.1? and

does Network Rail, in the course of managing the Timetabling process in compliance with Network Code Part D, have either the right, or an obligation, to manage Train Slot allocation in a way that can at least provisionally allocate capacity for flows that enjoy only “expectations of rights”?. Has Network Rail behaved appropriately in this instance?

The Panel found that the provisions in Network Code D3.2.3, and the range of factors embraced by the Decision Criteria (D6), all implied that Network Rail had the discretion to include all such Train Slots in the Timetable as might sensibly be expected to operate in the currency of the relevant Timetable. By contrast, a Train Operator, whilst it may reasonably expect to see evidence that Network Rail is catering for all realistic possibilities, has no entitlement to require Network Rail to make binding commitments, by way of allocation of Train Slots, when the Train Operator does not have the wherewithal to operate the service for which it has bid.

(TTP10, paras 15, 16)

6.4.1 Suitable Access TTP257 January 2009

The Panel considered whether an argument that FL may not have met its obligations under Clause 6.4.1 of its track access contract by not securing suitable access for Train Slots 4R60/61 from FDRC at the Port of Felixstowe, meant that Network Rail had erred in offering FL Train Slots 4R60/61. The Panel considered that, as a matter of fact, FL had not been prevented from running trains in the Train Slots 4R60/61, for reasons of lack of terminal access, but probably only because it had only used those Train Slots for services that already had rights of terminal access. Had Network Rail refused to make FL an offer, citing concerns about FL’s compliance with Clause 6.4.1 of the Track Access Agreement, this might have been the subject of a separate reference to a Timetabling Panel by FL, but is, in any case, not a matter that this Panel is required to determine.

(TTP257, para 19)

Part 7: Track Changes

Part 8: Liability

Part 9: Local Outputs-Performance Orders

Part 10: Liability-Other Matters

Part 11: Restrictions on Claims

Part 12: Governing Law

Part 13: Dispute Resolution

Part 14: Confidentiality

Part 15: Assignment

Part 16: Payments, Interest and VAT

Part 17: Force Majeure events

Part 18: Miscellaneous

Part 19: Traditional Matters

Schedule 1: Contract Particulars

Schedule 2: Information to Assist Bidding

Schedule 3: Collateral Agreements

Schedule 4: Variations to Services

Schedule 5: The Services

Rule, Clause or Condition Determination Date of Hearing Points Made Within Determination
“Spot Bid Services” TTP257 January 2009

The Panel took cognisance of the fact that FL was currently operating Train Slots 4R60/61 as Spot Bid Services. Network Rail grants the right to operate such Spot Bid Services by virtue of the Offer that it makes in response to a Spot Bid (in conformity with Condition D4.5). However, under the terms of paragraph 2.5 of Schedule 5 to FL’s Track Access Contract the right to operate Spot Bid Services is time constrained (“The duration of any Spot Bid Services shall not exceed six months”). This limit applies even if the Spot Bid in question has been described as a “rolling Spot Bid”; this is a “custom and usage” term that has no defined contractual status.

(TTP257, para 17)

Schedule 6: Events of Default, Suspension and Termination

Schedule 7: Track Charges

Schedule 8: Performance Regime

Schedule 9: Limitation on Liability

Schedule 10: Network Code Modifications

Schedule 11: CTRL