Ofcom and BT's in-house legal teams have won a Court of Appeal battle against Herbert Smith Freehills (HSF) client Sky, after it was found that a 2012 decision to block the regulator from forcing a discount of Sky's sports channels was "inadequate".

Yesterday (17 February), LJ Aikens concurred with an appeal by BT, ordering the Competition Authority Tribunal (CAT) to re-examine its decision.

Aikens said the CAT did not properly investigate the level of discounts BSkyB supposedly gave to its rivals for its sports channels.

In 2010, Ofcom enforced a new pricing structure after accusing BskyB of abusing its position by not offering high discounts to rival networks. Sky and the Football Association Premier League rejected the decision, arguing Ofcom's move was beyond its regulatory jurisdiction.

"There remain significant, independent, competition concerns based on the rate- card price and penetration discount, as found by Ofcom in the statement," Aikens said in the judgement, calling on the CAT to pursue "further consideration, findings and conclusions".

The decision is a major victory for BT Legal, which instructed Monckton Chambers' Jon Turner QC and Gerry Facenna and Brick Court's Sarah Ford for the appeal.

Ofcom also decided not to instruct an external law firm, but turned to Blackstone's Dinah Rose QC and Jessica Boyd and Monckton's Josh Holmes.

Meanwhile, Herbert Smith Freehills instructed Brick Court's James Flynn QC and David Scannell and Monckton's Meredith Pickford.

Brick Court's Gerard Rothschild also took a role, instructed by Virgin's counsel Ashurst, while the chambers' Helen Davies QC and Richard Blakeley were called upon by DLA Piper on behalf of the Premier League.

"Ofcom welcomes the Court of Appeal's decision that the judgment of the CAT failed properly to consider Ofcom's findings that there was ineffective competition in the market," said a spokesman for the regulator.

"Ensuring fair and effective competition in the pay TV market has always been Ofcom's objective. Ofcom's 2010 decision that Sky must offer premium sports channels to other providers was designed to deliver choice and innovation to consumers through greater competition."

Sky said in a statement: "This does not alter in any way the CAT's fundamental findings, overturning Ofcom, that Sky engaged constructively with other distributors over the supply of its premium sports channels, and that Virgin Media is able to compete effectively with Sky on the basis of Sky's rate card prices."