Cemex UK Operations Ltd v Network Rail Infrastructure Ltd & Anor

In a procurement challenge, a claimant must plead its case within the short timetable required by the Civil Procedure Rules 1998. An application for more time made before expiry is material, but does not automatically justify an extension. A claimant cannot postpone pleading by demanding extensive disclosure to investigate whether a successful tender was abnormally low.

An abnormally low tender issue is a species of manifest error. The court conducts a limited review of the contracting authority’s evaluation; it does not rerun the procurement. Early specific disclosure must be relevant, proportionate and consistent with the overriding objective. Highly confidential technical material belonging to a competing tenderer will not ordinarily be disclosed at that stage.

CEMEX challenged Network Rail’s decision to award a railway-sleeper manufacturing and supply contract to PCM RAIL.ONE AG. CEMEX sought an extension of time to serve particulars of claim until further documents were disclosed, and also sought specific disclosure of financial and technical material concerning RAIL.ONE’s tender.

The court also considered RAIL.ONE’s status in the proceedings and whether the Supreme Court’s decision in Nuclear Decommissioning Authority v EnergySolutions EU Ltd affected the approach to early disclosure or the suspension application.

The central issues were whether CEMEX had sufficient information to plead its procurement challenge and whether the requested disclosure was relevant, proportionate and justified at that stage.

1. Orders and extension of time. RAIL.ONE was made an interested party for the hearing and the later suspension hearing. CEMEX’s application for an extension based on the requested disclosure was refused. However, by agreement and to avoid an unjust consequence, time for serving particulars of claim was extended to 4.00 p.m. on 12 September 2017.
2. Timetable and pleading. Under the Civil Procedure Rules 1998, particulars of claim had to be served within seven days. The court adopted the Price v Price relief-from-sanctions framework. The fact that an application was made before expiry was highly material, but could not provide a complete answer in every case. Procurement challenges require a particularly tight timetable in the public interest.
3. Abnormally low tender. Regulation 84 of the Utilities Contracts Regulations 2006 requires the utility to investigate and assess an apparently abnormally low tender. The challenger nevertheless had sufficient information to plead its allegation. A claimant cannot simply assert that a tender is abnormally low and require disclosure of the successful tenderer’s technical solution in order to formulate its case. That investigation is primarily the contracting authority’s responsibility before award.
4. Scope of review. Whether a tender is abnormally low is a species of manifest error. The court’s review is limited and does not involve rerunning the procurement to identify matters that might have been done differently. The information already available, together with CEMEX’s industry knowledge and expert material, was sufficient to plead an arguable case.
5. Specific disclosure. Under CPR 31.12, early disclosure requires relevance, proportionality and consistency with the overriding objective. The requested technical documents were highly confidential, disclosed the core of RAIL.ONE’s proprietary system and were not shown to be necessary for pleading or the suspension hearing. Disclosure was therefore refused. The financial documents offered by Network Rail could initially be disclosed to a lawyers-only confidentiality ring. Any later widening could be considered if lawyers could not understand the material.
6. EnergySolutions. The judgment in Nuclear Decommissioning Authority v EnergySolutions EU Ltd did not indicate any fundamental change to the established approach to procurement challenges or early specific disclosure.

Not an appeal. The judgment determined interlocutory applications in the procurement challenge.