Cable and Wireless (Cayman Islands) Ltd t/a LIME v Information and Communications Technology Authority - Judgment

¶ Judgment – Cable and Wireless (Cayman Islands) Limited t/a LIME v. The Information and Communications Technology Authority Cause No. 448 of 2010 09.06.11 Page 1 of 9 IN THE GRAND COURT OF THE CAYMAN ISLANDS 1 HOLDEN AT GEORGE TOWN, GRAND CAYMAN 2 3 4 CAUSE NO. 448 of 2010 5 6 IN THE MATER OF AN APPLICATION BY CABLE AND WIRELESS 7 (CAYMAN ISLANDS) LIMITED T/A LIME FOR JUDICIAL REVIEW 8 PURSUANT TO ORDER 53 OF THE GRAND COURT RULES 9 10 AND 11 12 IN THE MATTER OF THE INFORMATION AND COMMUNICATIONS 13 TECHNOLOGY AUTHORITY LAW (2006 REVISION) 14 15 BETWEEN: CABLE & WIRELESS (CAYMAN ISLANDS) LIMITED t/a LIME 16 PLAINTIFF 17 18 AND: THE INFORMATION AND COMMUNICATIONS 19 TECHNOLOGY AUTHORITY 20 DEFENDANT 21 22 Appearances: Mr. Hector Robinson and Mr. Nicholas Fox of Mourant Ozannes 23 for the Applicant 24 25 Mr. Graham Ritchie Q.C. & Mr. David Collier 26 of Charles Adams Ritchie & Duckworth for the Respondent 27 28 29 Before: Hon. Justice Henderson 30 31 32 Heard: June 9, 2011 33 Judgment – Cable and Wireless (Cayman Islands) Limited t/a LIME v. The Information and Communications Technology Authority Cause No. 448 of 2010 09.06.11 Page 2 of 9 1 JUDGMENT 2 3

¶ [1] The Information and Communications Technology Authority of the Cayman 4 Islands (to which I will refer as "the Authority") has established a committee 5 known as the Local Number Portability Consortium for the purpose of planning 6 and implementing local number portability in this country. Members of the 7 Consortium are four in number. They are each service providers in the industry 8 and I understand that they comprise the four active organisations in the industry at 9 the present time. These consortium members are acting partly in the public 10 interest, but for the most part they are representing and advocating their own 11 private commercial interests in the business of the consortium. 12 13

¶ [2] Each consortium member has a single vote on issues which fall to be considered. 14 Because the consortium members are four in number, it is of course expected that 15 they may be deadlocked on some issues. On September 3, 2010, all four 16 members of the Consortium submitted to the Authority a dispute between 17 themselves as to how decisions should be voted upon when there is no consensus. 18 This has been referred to in argument as the "Voting Rights Question". 19 20

¶ [3] Before I come to discuss the resolution of that question by the Authority, I need to 21 refer to certain Regulations made under the Information and Communications 22 Technology Authority Law 2002 which govern dispute resolution by the 23 Judgment – Cable and Wireless (Cayman Islands) Limited t/a LIME v. The Information and Communications Technology Authority Cause No. 448 of 2010 09.06.11 Page 3 of 9 Authority. Section 2 of the Regulations defines a "dispute" as any dispute which 1 is the subject of a determination request. There is also a definition of 2 "determination request". It means a written and signed submission made to the 3 Authority by any person including a licensee and an interested party. The Voting 4 Rights Question was submitted in the form of a determination request to the 5 Authority. 6 7

¶ [4] Section 5 of the Regulations contains an itemised list of what a determination 8 request should contain. Section 8 specifies the various ways in which the 9 Authority itself may resolve a determination request. It reads in part as follows: 10 “Upon receipt of a determination request, the Authority may take 11 one or more of the following actions: 12 13 (a) request such other information from any other person as may 14 be affected by the dispute as it may deem necessary; 15 16 (b) direct the parties to commence or continue reasonable efforts to 17 resolve the dispute; 18 19 (c) decline to determine the dispute on the basis of one or more of 20 the grounds set out in regulation 10; 21 22 (d) issue a notice for a public hearing...; 23 24 (f) appoint a mediator or arbitrator to deal with the dispute and in 25 such event may establish the terms of reference of any 26 mediator or arbitrator which shall include: 27 28 (i) whether the outcome of any such mediation or arbitration 29 will be binding; 30 31 (ii) the procedures for such mediation or arbitration; 32 (iii) any dates by which the mediation or arbitration process 33 will be concluded; 34 35 Judgment – Cable and Wireless (Cayman Islands) Limited t/a LIME v. The Information and Communications Technology Authority Cause No. 448 of 2010 09.06.11 Page 4 of 9 (iv) guidelines for the allocation of costs amongst the parties; 1 (g) act as adjudicator of the dispute and where it decides to do so it 2 shall establish its own terms of reference and procedures; or 3 4 (h) such other course of action as it considers necessary to resolve 5 the dispute.” 6 7

¶ [5] Section 10 of the Regulations contains a list of those circumstances which will 8 justify the Authority in declining to deal with a determination request. They refer 9 to such things as lack of jurisdiction or a determination request which is, in the 10 view of the Authority, vexatious or an abuse of process. Section 11 of the 11 Regulations is an exhortation to the Authority to act expeditiously in determining 12 disputes. 13 14

¶ [6] The Authority did indeed act expeditiously. Its decision on the Voting Rights 15 Question was given just one week later. It began by determining that each 16 member of the Consortium would have a single vote and that a majority of 50 per 17 cent plus one of the votes would be required to reach a decision. That is to say, 18 assuming the membership remains the same, three votes would be required for a 19 decision. The Authority went on to say that in the event of a tied vote the 20 Consortium must hold a second vote within 24 hours, giving the members an 21 opportunity to reassess their positions. 22 23 Judgment – Cable and Wireless (Cayman Islands) Limited t/a LIME v. The Information and Communications Technology Authority Cause No. 448 of 2010 09.06.11 Page 5 of 9

¶ [7] At this point, the Authority addressed the question of an issue which was still 1 unresolved because of deadlock in the following words. I read from paragraphs 2 26, 27 and 28 of the decision: 3 “26. The Authority notes that the members of the Consortium, in their 4 respective submissions, did not recommend any mechanism to be used in 5 the event of a tie. This would not be helpful to the Consortium and would 6 not satisfy the timeliness requirement. 7 8

¶ [27] In order to rectify this deficiency, the Authority believes that the 9 following tie-breaking mechanism is necessary. In the event of a tie, the 10 consortium should hold a second vote within 24 hours. This will give 11 members an opportunity to reassess their positions in light of the apparent 12 deadlock. If the second vote again results in a tie, a casting vote will be 13 assigned by randomly drawing the name of one operator from a “hat” 14 containing the names of all members of the Consortium. (A practical 15 implementation of this might make use of the random list generator at 16 www.random.org/lists). 17 18

¶ [28] The Authority recognises that this tie-breaking mechanism is arbitrary. 19 However the Authority considers that the use of a tie breaking method is 20 essential to bring some finality to Consortium decision making. After 21 careful consideration, the Authority has therefore determined that the 22 benefits of this method outweigh its disadvantages.” 23 24

¶ [8] On this judicial review application, I am asked by the Applicant, Cable & 25 Wireless (Cayman Islands) Ltd. (referred to during argument as LIME) to set 26 aside that portion of the decision I have read which makes the ultimate tie 27 breaking provision the result of a random process, i.e., by random selection of a 28 member of the Consortium (all of whom have their private commercial interests 29 to advocate) and assigning to it the right to break the tie. The argument is that this 30 tie breaking process is contrary to law, is irrational, and is unreasonable within the 31 Wednesbury definition of reasonableness. The request is for an order of certiorari. 32 33 Judgment – Cable and Wireless (Cayman Islands) Limited t/a LIME v. The Information and Communications Technology Authority Cause No. 448 of 2010 09.06.11 Page 6 of 9

¶ [9] The Applicant also says that it was not accorded a reasonable opportunity by the 1 Authority to make its views known on the question of how such a deadlock 2 should be resolved. There is no merit in this latter submission. On September 3rd, 3 2010, LIME wrote to the Authority under the heading "Decision Making in the 4 LNP Consortium". It knew at that time that the deadlock issue was on the table. 5 Obviously, with only four members the consortium could be expected to split 6 evenly on some issues. LIME must have understood on September 3rd that the 7 deadlock issue was to be resolved by the Authority in the immediate future. It 8 could have made a submission on that question as well as upon the other related 9 matters such as the one member, one vote issue. It had an adequate opportunity to 10 be heard before the Authority released its decision. 11 12

¶ [10] As for rationality, the Authority says that three important policy goals underlie its 13 decision, which was a considered one. First, decisions must be made in a timely 14 fashion and the random selection process achieves that. Second, it is desirable to 15 avoid cost. The process described above does that. Third, the Authority intends to 16 encourage the members of the consortium to reach their own decisions and the 17 tie-breaking procedure should induce them to make every effort to agree. 18 19

¶ [11] I accept that these three virtues are present in the mechanism chosen by the 20 Authority. The question is whether, notwithstanding these advantages, the 21 randomness of the process renders the mechanism and a decision resulting from it 22 unreasonable and irrational. 23 Judgment – Cable and Wireless (Cayman Islands) Limited t/a LIME v. The Information and Communications Technology Authority Cause No. 448 of 2010 09.06.11 Page 7 of 9 1

¶ [12] In GCHQ [1985] AC 374, Lord Diplock provided this oft-quoted definition of 2 "irrationality": 3 “By irrationality I mean what can now be succinctly referred to as 4 Wednesbury unreasonableness ... it applies to a decision which is so 5 outrageous in its defiance of logic or of accepted moral standards that no 6 sensible person who had applied his mind to the question to be decided 7 could have arrived at it. Whether a decision falls within this category is a 8 question that judges by their training and experience should be well 9 equipped to answer or else there would be something badly wrong with 10 our judicial system.” 11 12

¶ [13] In commenting upon this passage in Streeter v Immigration Bd. [1998] CILR 366, 13 Smellie CJ said: 14 15 “The tests of irrationality and illegality require a close consideration of the 16 Board's decision and if found to be present are not to be excused by the 17 assertion or incantation of public morals as that may be perceived by the 18 Board. The test of irrationality is a high and stringent test. It was originally 19 defined more than 50 years ago in Associated Provincial Picture Houses 20 LTD v. Wednesbury Corporation and now has its more modern 21 enunciation by the House of Lords in the words of Lord Diplock in 22 Council of Civil Service Unions v. Minister for Civil Service, the GCHQ 23 case.” 24 25

¶ [14] Acknowledging as I do the high and stringent test referred to by the Chief Justice, 26 I am nevertheless of the view that a random selection between two competing 27 alternatives is irrational and unreasonable where important public policy 28 considerations may well be engaged. Other much better alternatives are set out in 29 the Dispute Resolution Regulations. Since the members' votes will be cast at least 30 partly on the basis of their own self-interest, a tie-breaking process becomes a 31 Judgment – Cable and Wireless (Cayman Islands) Limited t/a LIME v. The Information and Communications Technology Authority Cause No. 448 of 2010 09.06.11 Page 8 of 9 useful opportunity to have the ultimate decision made by an independent person 1 or body acting solely in the public interest. There are a number of ways in which 2 this could be achieved. The use of a single expert arbitrator at the ultimate 3 expense of the consortium members is one such mechanism to which the 4 Authority might resort when it considers that it would be inappropriate for reasons 5 of policy to make the decision itself. 6 7

¶ [15] One hallmark of rational decision making is predictability. Where a rational 8 process exists, a reasonable observer, in possession of all material facts and a 9 good understanding of the legal and policy issues which arise, will be well placed 10 to predict what the tribunal's decision will be. Where the selection is purely 11 random, the element of predictability is wholly absent. This absence of 12 predictability is, an indication (although not a conclusive one) that a decision- 13 making process is irrational. 14 15

¶ [16] For these brief reasons, I make an order setting aside paragraphs 27 and 28 of the 16 decision under review and direct the Authority to reconsider the question of how a 17 deadlock vote should be resolved. 18 19 20 21 22 Judgment – Cable and Wireless (Cayman Islands) Limited t/a LIME v. The Information and Communications Technology Authority Cause No. 448 of 2010 09.06.11 Page 9 of 9

¶ [17] The Applicant LIME is entitled to its costs of this application on the standard 1 basis. 2 Dated this 9th day of June, 2011 3 4 5 Henderson J. 6 Judge of the Grand Court 7