The CAT rules on Commercial Market Operators, Confidentiality, and Costs in Manchester’s Property Development Feud
November 2025The developing case law under the Subsidy Control Act 2022 (the “Act”) continues to define how public authorities and private challengers should approach the United Kingdom’s new domestic subsidy control regime. One of the most instructive decisions to date is the Competition Appeal Tribunal’s ruling in Mr Aubrey Weis v Greater Manchester Combined Authority [2025], which considered whether two substantial property development loans provided by the Greater Manchester Combined Authority (GMCA) through its Greater Manchester Housing Investment Loans Fund (GMHILF) amounted to unlawful subsidies.
The case raised important questions about whether GMCA’s lending reflected the conduct of a rational market operator or conferred an economic advantage under the Act. Alongside these commercial issues, the Tribunal also addressed how confidential information should be handled between competing developers and how costs should be determined in early subsidy control appeals.
This article considers the background to the dispute, the issues leading to the Tribunal’s decision on confidentiality, the Tribunal’s reasoning on the market operator test and appeal outcome, followed by the ruling on costs and broader implications for those involved in subsidy control litigation.
Themes arising from the decision
- Balancing confidentiality and fair process: The case demonstrates that the Competition Appeal Tribunal will be flexible in adapting confidentiality arrangements where required for fairness, but such flexibility will remain exceptional. Parties seeking broader access must provide detailed justification and accept appropriate undertakings to protect sensitive information.
- Evidential demands under the commercial market operator principle: The decision shows the difficulty faced by challengers in proving that public lending fails the commercial market operator principle. As Hodge Malek KC observed, there may be no single “market” benchmark for assessing commercial terms, and any assessment is likely to require a broad evidential base across markets and financing structures.
- Costs and proportionality in subsidy appeals: The Tribunal’s approach to costs mirrors that of the High Court, emphasising proportionality, transparency and a cautious approach to interim payments. The decision also signals that parties should expect detailed scrutiny of costs schedules in future subsidy cases.
Read on for a detailed breakdown of the decision in Mr Aubrey Weis v Greater Manchester Combined Authority [2025].
Background
The proceedings concerned a challenge brought by Mr Aubrey Weis, a property developer active in the Manchester market (“Mr Weis”), against the Greater Manchester Combined Authority (“GMCA”). The GMCA administers the Greater Manchester Housing Investment Loans Fund (“GMHILF”), a public fund established to support housing and regeneration projects in the region.
Through the GMHILF, GMCA had agreed to grant two large development loans:
- A loan of £60.7 million to Trinity Developments (Manchester) Limited.
- A loan of £59.3 million to New Jackson (Contour) Investments Limited.
Both borrowing entities formed part of the Renaker Group, a well-known property development group that operates across Manchester. The loans (together described as the “2024 Renaker Loans”) were to support ongoing regeneration projects within the city centre.
Mr Weis, who owns and controls a number of companies described collectively as the “Weis Group”, operates in the same property development market as Renaker. He therefore brought an application under section 70(1) of the Subsidy Control Act 2022 for a review of GMCA’s decision to make the loans, arguing that they constituted subsidies contrary to sections 2(1) and 3(2) of the Act.
Section 2(1) defines a “subsidy” as financial assistance given, directly or indirectly, from public resources that confers an economic advantage on one or more enterprises, is specific to certain enterprises, and has or is capable of having an effect on competition or investment within the United Kingdom.
Section 3(2) provides that financial assistance confers an “economic advantage” if the benefit is provided on terms more favourable than those that might reasonably have been expected to have been available on the market to the enterprise concerned.
The key question, therefore, was whether GMCA’s decision to lend the sums in question to Renaker was consistent with what a private market operator would have done in similar circumstances, commonly referred to as the commercial market operator principle (CMOP).
At the time the proceedings were issued in June 2024, GMCA had not yet finalised the 2024 Renaker Loans and therefore argued that no reviewable “subsidy decision” existed within the meaning of section 70(1). Nonetheless, the Tribunal allowed the matter to proceed, managing the process through a series of case management conferences and orders for disclosure.
The confidentiality ring application
A central procedural issue in the case concerned the management of confidential information. The GMCA’s disclosure included a number of documents containing commercially sensitive material relating to Renaker’s business operations and financing arrangements. These included an investment proposal, a summary of heads of terms, and an interest rate setting paper that detailed the commercial rationale and pricing structure for the loans.
Given that Mr Weis and Renaker were competitors in the same development market, GMCA sought to restrict access to these documents to an external lawyers’ and experts’ confidentiality ring. This followed standard practice in competition law and procurement litigation, where disclosure between market competitors can create risks of information misuse and potential breaches of the Chapter I prohibition under the Competition Act 1998.
Initially, the confidentiality ring permitted access to the disclosed material only by the parties’ external legal representatives and any appointed expert. Mr Weis later applied to extend the ring to include his son, Mr Joel Weis, who manages the Weis Group’s day-to-day property development operations.
The application was prompted by two factors: first, that Weis’s legal team considered themselves unable to assess the significance of the disclosed material without client input; and second, that their appointed experts, Grant Thornton, had been de-instructed on cost grounds after conducting only preliminary work.
GMCA resisted the application, emphasising that both the Appellant and Renaker were active competitors in the same market and that the information in question contained sensitive pricing and financial data, the disclosure of which could distort competition. It argued that such material should remain restricted to external eyes only.
The Tribunal’s approach to confidentiality
The Competition Appeal Tribunal, chaired by Hodge Malek KC, was required to balance two competing considerations: the need for open justice and effective participation by the Appellant, and the protection of commercially sensitive information belonging to a third-party competitor.
Drawing on authorities including OnePlus Technology (Shenzhen) Co Ltd v Mitsubishi Electric Corporation [2020] EWCA Civ 1562 and IBM UK Ltd v LzLabs GmbH [2024] EWHC 423 (TCC), the Tribunal accepted that external eyes-only confidentiality arrangements are exceptional and must be justified by compelling reasons. However, it recognised that in the present case the Appellant could not properly progress the proceedings without understanding the disclosed material.
In its ruling, the Tribunal held that the information sought was “highly important for assessing the merits of the case and in deciding what points to take or not take” (paragraph 43), particularly given that the 2024 Renaker Loans related to special purpose vehicles without parent company guarantees. The Tribunal acknowledged, however, that this information was “precisely the type” that would not normally be shared with a competitor, and that Renaker’s confidentiality interests required protection.
Balancing these considerations, the Tribunal decided that Mr Joel Weis should be admitted to the confidentiality ring, but only in respect of certain documents and subject to protective conditions designed to mitigate the risk of any anti-competitive use of the information. The Tribunal stressed that this outcome was exceptional and driven by the specific structure of the Weis Group, where no other suitable client representative existed who could perform that role.
This aspect of the ruling provides useful procedural guidance for future subsidy cases, where competitors are often the only realistic challengers to alleged subsidies. The Tribunal’s reasoning demonstrates a pragmatic approach to ensuring fairness while maintaining safeguards for third-party confidentiality.
The Tribunal’s judgment: no unlawful subsidy
The Tribunal handed down its judgment on 24 July 2025 ([2025] CAT 41). It analysed in detail whether the Greater Manchester Combined Authority’s decision to provide two development loans to Renaker through the Greater Manchester Housing Investment Loans Fund amounted to a subsidy within the meaning of sections 2 and 3 of the Subsidy Control Act 2022.
The Tribunal confirmed that section 3(2) of the Act requires an objective comparison between the terms offered by a public authority and those that a commercial market operator, acting in its own interests, might reasonably have been expected to offer. It referred to the Subsidy Control Statutory Guidance as “a useful reference point” for applying the commercial market operator principle, citing paragraphs 15.63 and 15.64. The guidance advises that public authorities seeking to rely on the principle should obtain sufficient evidence to show that financial assistance “could be made available in the market by a private operator with commercial objectives and is provided on terms that would be acceptable to such a private operator”. It also recommends the use of benchmarking, profitability analysis and, where appropriate, expert input to demonstrate that a transaction accords with commercial practice.
The Tribunal set out its analytical structure under four headings: (a) the process followed by the GMCA, (b) the background, terms and security for the loans, (c) compliance with the Subsidy Control Guidance and the European Commission’s Reference Rate Communication, and (d) whether the loans would have been approved by a commercial market operator and the conclusion under section 3(2).
On the process followed, the Tribunal found that GMCA’s procedures were rational and not inherently defective. Applications were considered by experienced officers, the Gateway Panel and the Credit Committee, before being approved by the GMCA Committee and then subject to due diligence and legal review before signature by the Treasurer. The Tribunal rejected the Appellant’s argument that it was irregular for indicative interest rates to have been discussed prior to formal approval, noting that this is standard practice in commercial lending where rates are agreed in principle subject to credit committee approval.
Turning to the background and terms, the Tribunal found that the GMCA, through its investment fund, had considerable experience in development lending and a strong record of profitability without defaults. It was in the GMCA’s own interests to obtain commercial returns, given that profits were shared with central government under the facility agreement. The investment team comprised around 25 professionals with significant experience of pricing and managing development loans, and had access to market intelligence from other developers and lenders.
The Tribunal reviewed the key features of the 2024 Renaker Loans. It noted that the arrangement fees and interest rates were neither low nor inconsistent with market norms, and that the loans were secured by substantial assets with low loan-to-value and loan-to-cost ratios. Additional covenants and conditions for drawdown further reduced risk, and third-party security and step-in rights provided additional protection. The Tribunal found it legitimate for the GMCA to consider Renaker’s broader track record of successful development and repayment, and noted that a commercial lender would have regarded the loans as relatively low risk.
The Tribunal observed that GMCA had previously participated in a club loan with a co-lender that had commissioned an independent assessment from Avison Young, which concluded that the lending was in line with the market. The 2024 Renaker Loans were priced with reference to that previous market-rate lending, adjusted to reflect differences in risk profile.
At paragraph 205, the Tribunal concluded:
“The actual rates in all the circumstances are within what the Tribunal would expect to be available on the market, where lenders would seek to make a rate of return giving it a margin over the base rate at a level which reflects the low-risk nature of this lending, given its terms, security and conditions.”
The Tribunal therefore held that the loans sat within a range of reasonable market outcomes and that GMCA’s decision-making process was evidence-based and commercially rational. It rejected each of the Appellant’s grounds of appeal, finding that the GMCA was not required to conduct direct market soundings and had properly taken account of relevant comparators and valuations.
In its concluding paragraphs, the Tribunal stated:
“The Tribunal is satisfied that there was no subsidy in this case. The 2024 Renaker Loans went through a proper process and the terms and rates were considered by persons with significant experience in development loans.” (paragraphs 221 to 222)
Accordingly, the application for review was dismissed under section 70(1) of the Subsidy Control Act 2022.
The costs decision
The subsequent costs ruling, issued on 25 September 2025 ([2025] CAT 52), addressed two separate issues: (1) the allocation of costs for the confidentiality ring application, and (2) the level of interim payment due on account of GMCA’s overall costs.
The Appellant sought recovery of all costs related to the confidentiality ring application, amounting to approximately £84,000, while GMCA sought recovery of its total costs of approximately £510,000. The Tribunal determined that GMCA, as the overall successful party, should receive its costs of the proceedings but not those of the confidentiality application.
It awarded the Appellant 25% of his costs of the confidentiality application, summarily assessed at £17,500 inclusive of VAT, and offset that amount against GMCA’s recoverable costs. GMCA’s total recoverable costs were adjusted to £413,027.93, and the Tribunal ordered an interim payment on account of £250,000.
In reaching this decision, the Tribunal applied the principles set out in Petrofac Ltd (Costs), Re [2025] EWCA Civ 1106, Merricks v Mastercard (Costs) [2024] CAT 57, and Riefa v Apple Inc [2025] CAT 34. It reiterated that recoverable costs must be reasonable and proportionate, that interim payments should be conservative estimates of likely recoverable amounts, and that guideline hourly rates must be followed unless a clear and compelling justification exists for exceeding them.
The Tribunal also acknowledged that the case involved a novel area of law, being only the second appeal under the Subsidy Control Act 2022 and the first to consider the commercial market operator principle, which justified the involvement of senior legal input on the respondent’s side.
Conclusion
This case marks an important step in shaping how the Competition Appeal Tribunal applies the Subsidy Control Act 2022. The judgment confirms that authorities must be able to evidence the commercial rationale behind funding decisions, while challengers will need detailed market evidence to show any departure from commercial norms.
The Tribunal’s reasoning invites comparison with the approach under the former EU state aid regime, illustrated by the SISU Capital Ltd v Coventry City Council¹ litigation. In that case, both the CAT and the Court of Appeal upheld a local authority loan to a football club on the basis that it was made on market terms. The Supreme Court refused permission to appeal, signalling a high bar for overturning fact-based assessments of commercial reasonableness.
Under the EU framework, the European Commission’s annually published reference and discount rates offer a presumption of market conformity where public loans are priced within those margins. The UK’s domestic regime under the Subsidy Control Act does not provide a similar benchmark, leaving greater emphasis on evidence and judgment in demonstrating compliance with the commercial market operator principle.
Our team advises on all aspects of subsidy control, from structuring compliant public funding to preparing and defending challenges before the Tribunal. Please get in touch if you would like to discuss any current or potential subsidy issues.
¹ R (Sky Blue Sports & Leisure Ltd) v Coventry City Council (No. 1) [2016] EWCA Civ 453
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