Rail company Stagecoach is taking the UK government to the High Court over its decision to bar it from bidding for franchises last year.
The government rejected bids made by Stagecoach and its franchise partner Virgin Trains in a row over pensions liabilities. At the time, the firm said it was expected to take on too big a financial burden.
Rail firms reportedly face an estimated £7.5 billion pensions gap.
The decision led to Stagecoach and Virgin Trains losing the West Coast Main Line franchise, which was later awarded to Aberdeen-based FirstGroup and Italian firm Trenitalia. East Midlands services were handed over to Dutch operator Abellio.
Stagecoach alleges the Department for Transport mismanaged the bid process and that ministers acted unlawfully in awarding the rail franchises. It is seeking compensation and a judicial review into how the government made decisions on the lines it previously operated.
Its legal action is being backed by Virgin Trains, French firm SNCF and rival operator Arriva.
According to the BBC, the hearing is expected to last four weeks, with a judgement due later this year.
It comes as the country awaits a final report from a review of the rail industry by former British Airways chief executive Keith Williams, who has previously said he believes the government should have a less active role in managing the railways.