Judge gives green light for proposed sale of Bulb to Octopus
Mr Justice Zacaroli appointed a key date for the completion of an asset transfer as part of the transaction, in the face of arguments that he should delay his decision.
His ruling on Wednesday came soon after other energy providers: Scottish Power, British Gas and Eon, lodged urgent High Court bids to challenge the lawfulness of decision-making over the proposed Bulb transaction.
Scottish Power previously told the judge that the marketing of Bulb – a failed supplier bailed out at a forecasted cost to taxpayers of £6.5 billion – was “defective” and should be re-run to allow for alternative bids.
I do not have either visibility or control over the timing of judicial review proceedings
It was also alleged in court that there had been an “abject lack of transparency” over the deal, with British Gas claiming to have been “stonewalled” in requests for information.
Mr Justice Zacaroli appointed December 20 as a start date under an energy transfer scheme (ETS).
The Department for Business, Energy & Industrial Strategy (BEIS) previously confirmed an agreement had been reached between special administrators of Bulb and Octopus, and that the sale will be completed following the statutory ETS process, which will move Bulb’s relevant assets into a new separate entity that will “protect consumers during the transfer process”.
Business and Energy Secretary Grant Shapps announced he had approved the scheme earlier this month, to take effect on a date ordered by a High Court judge.
Mr Justice Zacaroli told a hearing in London: “I have decided that I should appoint and will appoint the effective time of 23:58 of December 20 2022.”
The judge said the “only obstacle” to the ETS proceeding was the separate judicial review challenges, but said decisions in relation to those cases should be dealt with by a different division of the High Court.
He told the court that Mr Shapps’s decision was a “valid and effective decision until such time a court order is made quashing it”.
Mr Justice Zacaroli said he had a “limited” role over proceedings, adding: “I do not have either visibility or control over the timing of judicial review proceedings.”
In October, Octopus announced it had sealed a deal to buy its rival and would be taking on Bulb’s 1.5 million customers after the 650-employee firm was placed into special administration in November 2021.
Richard Fisher KC, representing Bulb’s administrators from the Teneo consultancy firm, previously told the court that the ETS – a legal mechanism not considered by the courts before – was “central” to the sale and the objective to “secure that energy supplies are continued at the lowest cost which it is reasonably practicable to incur”.
The court was also told that the transfer will not vary the terms of Bulb customer contracts and not remove their ability to change energy suppliers.
Stephen Robins KC, for Scottish Power, previously said in written submissions that Octopus had effectively received a “cash gift” or “dowry” from the Government in relation to the Bulb transaction, full details of which rivals have not seen.
He argued that in light of funding offered to Octopus there should have been a “reverse auction” of Bulb, adding that “there was no attempt to see if anybody else would do it for less”.
Jonathan Adkin KC, for British Gas, told the court on Tuesday that the ETS decision should be put back pending an outcome in the judicial review proceedings.
He said Octopus would be taking an “enormous commercial risk” of pursuing a deal that could “end up falling apart in the most chaotic way”, with “pretty horrendous consequences for the energy market”.
But Mr Fisher told the court that “there must be an ETS time set otherwise the transaction will fail”.
In written arguments, he said that rival energy companies had opportunities to participate in the sale process and could have sought meetings with the Government or administrators to investigate funding options.
“Ultimately, they each decided, for their own reasons, to walk away from that process,” he said.
A spokesperson for Octopus Energy said after Wednesday’s hearing: “The High Court has rightly given the green light for the transfer to go ahead in December.
“Taxpayers will be saved from millions – even billions – of costs that could have been incurred if the process was dragged out.
“This is positive news for Bulb’s customers and staff, and starts to bring to an end the huge financial exposures for Government and taxpayers.”
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