The Takeovers Panel has commented on the decision of the Full Court of the Federal Court in Australian Pipeline Limited  v Alinta Limited [2007] FCAFC 55 relating to the Panel’s declaration of unacceptable
circumstances by Alinta in acquiring a relevant interest in stapled securities in Australian
Pipeline Trust in breach of section 606 of the Corporations Act in June
and August 2006.

The Federal Court (Finkelstein J dissenting) declared
that section 657A(2)(b) of the Corporations Act 2001 is invalid. The
Court discussed the operation of section 657A(2)(a) but did not find it
to be invalid. The Federal Court found that section 657A(2)(b) which seeks to
confer on the Takeovers Panel the judicial power of the Commonwealth,
was in contravention of Chapter 3 of the Constitution of Australia.

On the basis that the declaration of invalidity made by the Federal
Court is limited to section 657A(2)(b), and the Federal Court made no
declaration in relation to section 657A(2)(a),the Panel considers that
it is not prevented from operating in reliance on section 657A(2)(a).

Following the decision of the Federal Court the Panel will decline to
accept applications which seek a declaration of unacceptable
circumstances based on section 657A(2)(b) or which make allegations of
contraventions of the Corporations Act.

see 3 May update