Summary
On an application for an interim injunction in a regulated procurement, the court applies the American Cyanamid principles, while taking account of the statutory and public interest in transparent, equal and non-discriminatory competition.
A procurement may proceed on hypothetical assumptions about future regulatory change if bidders are treated equally and the specification is sufficiently clear to permit fair bids and evaluation. Criteria, weightings and material evaluation methodologies must generally be disclosed in advance where they could affect tender preparation or assessment. Serious arguable breaches do not by themselves justify an injunction. The court must assess the adequacy of damages, the balance of uncompensatable disadvantage, the public interest and the claimant’s realistic prospect of obtaining substantive relief.
Factual background
ALSTOM, a bidder for Eurostar’s proposed purchase of new high-speed trains, sought an interim injunction preventing Eurostar from contracting with Siemens. It alleged breaches of the Utilities Contracts Regulations 2006, including uncertainty caused by pending safety-rule changes concerning distributed power systems and the late disclosure of criteria, weightings and evaluation methodology.
ALSTOM also relied on Eurostar’s preliminary agreement with Siemens. The application arose after Eurostar notified ALSTOM that Siemens had won the procurement and during the statutory standstill period. The central questions were whether there was a serious issue to be tried, whether damages were adequate, and where the balance of convenience or injustice lay.
Held
- Application dismissed. ALSTOM established serious issues to be tried concerning some alleged breaches of the Utilities Contracts Regulations 2006, but the balance of convenience did not favour interim relief.
- The court applied the three-stage approach in American Cyanamid v Ethicon [1975] A.C. 396: serious question to be tried, adequacy of damages, and, if necessary, the balance of convenience. The court must avoid conducting a mini-trial. The public interest may, and should, be considered in procurement cases.
- It was arguable that the unresolved safety rules made the specification insufficiently precise under regulation 12(7), or rendered the process insufficiently transparent or equal under regulation 4(3) and regulation 30. A utility may procure on hypothetical assumptions about future regulatory change, provided bidders are placed in an equal position and the specification permits fair evaluation.
- It was also seriously arguable that Eurostar should have disclosed its NPV-based financial evaluation, its five-point banding system, and the allocation of a material scoring advantage to the lowest bidder. The five-point system appeared inconsistent with the disclosed 100-point system. The complaint that confidence-based scoring was undisclosed was weaker, and the technical evaluation complaint could not be resolved without the evaluation documents.
- The preliminary agreement was not obviously outside the Regulations, but no relief was sought in respect of it and no finding on that issue was necessary.
- Damages would not adequately compensate ALSTOM for the loss of a prestigious contract and associated reputational and market benefits. Nor would damages adequately compensate Eurostar for the likely delay and disruption to its entire business programme. The balance nevertheless favoured Eurostar. ALSTOM had only a small prospect of showing that the alleged breaches would have changed the result, particularly given the substantial scoring gap and evidence that Siemens had treated the procurement as a higher priority.
- The public interest also favoured refusal of the injunction because delay would harm Eurostar’s competitive position and postpone improved competition for Tunnel rail services. The tendering process should not be frozen. ALSTOM’s application was dismissed.
The court’s approach to earlier authorities
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Key cases cited
18 authorities cited.
- American Cyanamid Co v Ethicon Ltd [1975] AC 396
- The Law Society, R (on the application of) v Legal Services Commission [2007] EWCA Civ 1264
- Varney and Sons Waste Management Ltd v Hertfordshire County Council [2010] EWHC 1404
- Lettings International v Newham [2008] EWHC 1583
- Electronic Data Systems Ltd v Transport Trading Ltd [2008] EWHC 2105
- Lion Apparel Systems Ltd v Firebuy Ltd [2007] EWHC 2179 (Ch)
- Partenaire Limited v Department of Finance and Personnel [2007] NIQB 100
- Uniplex (UK) Ltd v NHS Business Services Authority (Uniplex (UK) Ltd v NHS Business Services Authority.) Case C-406/08
- Chandler v Camden LBC [2009] 1 CMLR 19
- National Commercial Bank Jamaica Limited v Olint Corporation Limited 28th April 2009
- Pressetext Nachrichtenagentur GmbH v Republik Österreich Case C-454/06 Pressetext [2008] ECR I-4401
- Emm. G. Lianakis v Dimos Alexandroupolis Case C-532/06 Emm. G. Lianakis v Dimos Alexandroupolis [2008] ECR I-0251
- ATI EAC ATI EAC [2005] ECR I-10109
- Commission v French Republic Case C-340/02 Commission v French Republic [2004] I-9845
- Universale-Bau AG v Entsorgungsbetriebe Simmering GmbH Universale-Bau 2002 ECR I-11617
- Smith v Inner London Education Authority [1978] 1 All ER 411
- Fellowes & Son v Fisher [1976] QB 122
- Shepherd Homes Ltd v Sandham [1971] Ch 340
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Cases citing this case
14 later cases · 8 positive · 3 neutral · 3 caution
Most senior citing decisions:
- CAMELOT UK LOTTERIES LIMITED v THE GAMBLING COMMISSION [2022] EWHC 1664 (TCC) applied
- Neology UK Ltd v The Council of the City of Newcastle Upon Tyne & Ors [2020] EWHC 2958 (TCC) distinguished
- Lancashire Care NHS Foundation Trust & Anor v Lancashire County Council [2018] EWHC 200 (TCC) applied
- Sysmex (UK) Ltd v Imperial College Healthcare NHS Trust [2017] EWHC 1824 (TCC)
- Alstom Transport UK Ltd v London Underground Ltd [2017] EWHC 1521 (TCC)
- Kent Community Health NHS Foundation Trust v NHS Swale Clinical Commissioning Group & Anor [2016] EWHC 1393 (TCC)
- Counted4 Community Interest Company v Sunderland City Council [2015] EWHC 3898 (TCC)
- Solent NHS Trust v Hampshire County Council [2015] EWHC 457 (TCC)
- Group M UK Ltd v Cabinet Office [2014] EWHC 3659 (TCC)
- NATS (Services) Ltd v Gatwick Airport Ltd & Anor [2014] EWHC 3133 (TCC)
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