Alstom Transport UK Ltd v London Underground Ltd

On an application to lift an automatic suspension in procurement proceedings, the court applies the American Cyanamid principles flexibly and asks whether it is just in all the circumstances to confine the claimant to damages. Difficulties in valuing loss, loss of competitive advantage, or wider business effects do not by themselves make damages inadequate. The court should avoid conducting a mini-trial of the procurement challenge. Relative strength of the parties’ cases is relevant only where the evidence permits a confident conclusion that one case is disproportionately stronger. The public interest in lawful procurement does not ordinarily justify maintaining the suspension, although evidence of deliberate corruption or comparable exceptional conduct may do so.

Alstom challenged the validity of a procurement by London Underground Ltd and Transport for London for AC traction motors for Central Line trains. Bombardier Transportation (UK) Ltd was selected as the winning bidder, with Alstom second. Alstom alleged, among other matters, that Bombardier had failed a stated threshold and should not have proceeded to the commercial evaluation stage.

The defendants applied under regulation 45G of the Utilities Contracts Regulations 2006 to lift the automatic suspension on contract-making. The central questions were whether damages would be an adequate remedy for Alstom, whether it would be unjust to confine Alstom to damages, and whether the balance of convenience or public interest required the suspension to remain in force.

1. Application granted. The automatic suspension was lifted so that the defendants could conclude the contract with Bombardier.
2. The court adopted the established American Cyanamid approach. The modern formulation asks whether it is just in all the circumstances to confine the claimant to damages. If damages are adequate, that will normally defeat an application to maintain an interim restraint, though the court retains flexibility.
3. Alstom’s claimed losses, including lost profits and wasted tender costs, were capable of assessment. The case did not involve the exceptional valuation difficulties present in undisclosed-criteria or highly uncertain loss-of-chance cases.
4. Alstom had not shown a real prospect of irremediable or uncompensatable loss through closure of its traction expertise or loss of competitive edge. The evidence was incomplete and lacked credibility. Alstom remained part of a substantial global group, had access to wider expertise, and had made a significant long-term investment in its Widnes facility.
5. The public interest in lawful procurement did not itself support maintaining the suspension. The statutory scheme contemplated damages as a remedy and the possibility of a contracting authority having to pay both the contract price and damages. Exceptional facts, such as a procurement tainted by corruption, might justify maintaining a suspension, but there was no such evidence here.
6. The court declined to conduct a mini-trial on the construction of the invitation to tender or the alleged defects in evaluation. Although Alstom’s case raised arguable issues, it could not be said on the evidence that its case was disproportionately stronger. The balance of convenience favoured lifting the suspension.

First-instance decision. No appellate history was stated in the judgment.