Guidelines relating to deferral of arbitrations and backdating of determinations under Part IIIA of the Trade Practices Act 1974

Administered by Department of the Treasury

Legislation au F2007L00857 Not in force Legislative Instrument

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EXPLANATORY STATEMENT

Subject Guidelines relating to deferral of arbitrations and backdating of determinations under Part IIIA of the Trade Practices Act 1974

Purpose

Under Part IIIA of the Trade Practices Act 1974 (the Act), the Australian Competition and Consumer Commission (ACCC) must, among other tasks, arbitrate access disputes for declared services and assess access undertakings and access codes. 

Effective from 1 October 2006 the Trade Practices Amendment (National Access Regime) Act 2006 amended Part IIIA by, among other things, providing the ACCC with mechanisms to:

  • defer arbitration of an access dispute where it is also considering an access undertaking on related issues [s. 44ZZCB]
  • backdate a final determination and apply payment of interest [s. 44ZO].

The amendments also require that the ACCC must, by legislative instrument, determine guidelines within six months of commencement of the legislation and to have regard to these guidelines when making decisions under Part IIIA [ss. 44ZZCB (5) (6)(7), 44ZO(7)(8)(9)]. 

Consistent with this requirement, the purpose of the guidelines is to explain how the ACCC may apply the provisions on deferral of arbitrations and backdating of final determinations and application of the payment of interest.

Description

Section 1 of the guidelines explains the legislative background and relevant provisions of the Act.

Section 2 explains the ACCC’s likely approach in deciding whether or not to suspend either an undertaking or arbitration process, if an undertaking is lodged after an arbitration has commenced.

Deferring access disputes or access undertakings

It is possible that the ACCC may be required to assess an access undertaking at the same time that it is arbitrating an access dispute in relation to the same matter(s).  To allow for this possibility, the ACCC, when arbitrating an access dispute now has the discretion under section 44ZZCB of the Act to decide whether or not to suspend either an undertaking or arbitration process, if an undertaking is lodged after an arbitration has commenced. The guidelines outline relevant considerations by the ACCC when deciding to defer one or more arbitrations while considering an undertaking that relates to the same matter.  These include:

  • effect of the undertaking—the ACCC must consider the fact that an undertaking, if accepted, will apply generally to all access seekers
  • the access undertaking process may enable the ACCC to deal with issues that are common to multiple arbitrations.

The guidelines also outline the circumstances where it may be appropriate for the ACCC to continue with arbitrations, namely where:

  • matters covered by the proposed undertaking have already been substantively considered in arbitrations
  • the arbitrations deal with issues separate or additional to those covered in the undertaking and/or
  • consideration of the undertaking is likely to involve a long time frame
  • outstanding access issues are likely to be dealt with more effectively by arbitration.

The guidelines deal with other matters that the ACCC may be required to consider when conducting parallel processes, such as the use of confidential information and its approach to coordination of decision-making.

Backdating of final determinations

Section 3 of the guidelines explains the ACCC’s approach to backdating a final determination and the application of payment of interest. Given that the backdating provision is intended to remove an incentive for either party to delay the negotiate/arbitrate process, the ACCC will, in general, be inclined to backdate determinations and award interest. 

The guidelines provide information as to how the ACCC may calculate the rate of interest.  The rate of interest should reflect the opportunity cost of the overpayment (or the underpayment, as the case may be)—that is, the opportunities that the person making the payment has foregone by being deprived of that overpaid (or underpaid amount).  Where the parties have reached agreement on an interest rate, the ACCC may have regard to this rate as evidence of the parties’ estimate of the opportunity cost.  Where such agreement is not reached, the ACCC may base its calculation on the rate that would have been paid to raise the amounts by means of debt financing. In this circumstance, the ACCC’s generally preferred approach will be to adopt the variable indicator rate for large businesses that is published by the RBA.  The ACCC may also decide to invite or direct parties to make written submissions.

Consultation

On 21 December 2006, the ACCC publicly released a draft version of the guidelines and issued a media release inviting public comments.  A small number of submissions were received which are available on the ACCC’s website.  Industry submissions generally supported the ACCC’s approach and the ACCC responded by clarifying in the guidelines (1) the limits to which determinations may be backdated and (2) that the ACCC will abide by matters of procedural fairness where it seeks to use information obtained outside an arbitration process for the purposes of an arbitration and, where appropriate, will provide an opportunity for parties to be heard in relation to the use of such information prior to the ACCC issuing its final determination.

Commencement

The Trade Practices Amendment (National Access Regime) Act 2006 commenced from 1 October 2006.  The ACCC’s guidelines in relation to the deferral and backdating provisions will be publicly available on its website from 30 March 2007.

Overview

The Trade Practices Amendment (National Access Regime) Act 2006, enacted to amend the Trade Practices Act 1974, introduces mechanisms allowing the Australian Competition and Consumer Commission (ACCC) to defer arbitration of access disputes and backdate final determinations. These changes were aimed at streamlining the arbitration process and ensuring that the ACCC can effectively manage overlapping access undertakings and arbitrations. The amendments were introduced by the Parliament of Australia, with a policy objective of enhancing the efficiency and fairness of the arbitration process under Part IIIA of the Trade Practices Act. The explanatory statement accompanying these guidelines explains that the ACCC has been tasked with determining guidelines within six months of the commencement of the legislation, to assist in applying the new provisions on deferring arbitrations and backdating determinations, while also considering the payment of interest. These guidelines clarify the ACCC’s approach to these processes, including relevant considerations when deciding whether to defer arbitrations, and the calculation of interest in backdated determinations.

Scope and Application

The explanatory statement for the Trade Practices Amendment (National Access Regime) Act 2006 and the accompanying guidelines for the Australian Competition and Consumer Commission (ACCC) delineate the scope and application of the legislation in relation to arbitration and access disputes under Part IIIA of the Trade Practices Act 1974. The Act applies to entities and individuals involved in declared services, which typically include telecommunications, electricity, and water services, and the ACCC, which is tasked with arbitrating access disputes and assessing access undertakings and codes. The amendments and guidelines aim to provide the ACCC with mechanisms to defer arbitration of access disputes where an access undertaking on related issues is also being considered and to backdate final determinations with the application of interest. These provisions apply nationally across Australia as they fall under the Commonwealth jurisdiction. The guidelines do not specify exclusions or thresholds but outline the ACCC's approach to decision-making in deferring arbitrations and backdating final determinations, including considerations such as the effect of undertakings and the calculation of interest rates. The ACCC is required to issue these guidelines within six months of the commencement of the legislation and must have regard to them when making decisions under Part IIIA. The guidelines are subject to public consultation, and any changes or clarifications are reflected in the final version, which is made publicly available on the ACCC's website.

Key Provisions

The primary provisions of these guidelines relate to how the Australian Competition and Consumer Commission (ACCC) may exercise its discretion to defer arbitration of access disputes and backdate final determinations under Part IIIA of the Trade Practices Act 1974, as amended by the Trade Practices Amendment (National Access Regime) Act 2006 (sections 44ZZCB and 44ZO). Specifically, the guidelines explain the considerations the ACCC must take into account when deciding whether to defer an arbitration where an access undertaking has been lodged after the arbitration has commenced. They also provide guidance on how the ACCC will apply the backdating of final determinations and the calculation of interest. The obligations imposed by these guidelines on the ACCC include determining whether to defer arbitrations or continue with them, and deciding whether to backdate final determinations and apply interest. The ACCC is required to consider various factors when making these decisions, such as the effect of the undertaking, the overlap between the arbitration and the undertaking, and the efficiency of resolving issues through arbitration versus undertakings. The ACCC must also ensure procedural fairness when using information obtained outside the arbitration process. In terms of potential breaches and penalties, the guidelines themselves do not impose specific criminal or civil penalties. However, the underlying Act, the Trade Practices Act 1974, includes provisions that impose penalties for breaches of the Act. For example, section 12GA of the Trade Practices Act provides for significant fines for corporations found to have contravened certain provisions of the Act, with penalties reaching up to $10 million for corporations and lesser amounts for individuals. The specific consequences for non-compliance with the guidelines would depend on the nature and severity of the breach in the context of the broader legislative framework.

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Sourced from the Federal Register of Legislation at 26 August 2026. For the latest information on Australian Government law please go to https://www.legislation.gov.au.