Sustainable Development Capital Llp, R (On the Application Of) v Secretary of State for Business, Energy and Industrial Strategy & Anor

A public authority selling a publicly owned asset may determine the sale process and its objectives, subject to any applicable public-law constraints. Where the process documents reserve discretion to alter the process or accept or reject any offer, a bidder has no general entitlement to have the highest or only apparently compliant bid accepted. A challenge to a commercial evaluation is not converted into a public-law claim merely by alleging irrationality or unfairness. Judicial review claims must be brought promptly, and the pre-action protocol does not suspend the time requirement. Even where permission might otherwise be granted, relief may be refused where delay and the advanced state of the transaction would prejudice third parties or be detrimental to good administration.

The claimant challenged the decision of the Secretary of State and UK Government Investments Limited to appoint a consortium led by the interested parties as preferred bidder for the sale of the UK Green Investment Bank. The claimant argued that its bid complied with the final phase process letter, that the interested parties’ bid did not, and that the defendants had acted unlawfully or unfairly in evaluating particular features of its offer.

The defendants contended that the claim was late, that the decision was not amenable to judicial review, that the process documents preserved broad discretion, and that no public-law error had occurred. The court also considered whether relief should be refused because negotiations with the preferred bidder had reached agreement in principle.

1. Permission refused. The claim was not brought promptly as required by CPR 54.5. Although the claimant was not informed of the decision immediately, it knew sufficient to bring proceedings by 2 November 2016 and then delayed more than four weeks after receiving the defendants’ response before filing on 19 December 2016.
2. The sale of a publicly owned asset pursuant to government policy, with the sale to be reported to Parliament, contained a sufficient public element to be amenable to judicial review. However, complaints which in substance challenge a commercial judgment do not become public-law claims merely because they are labelled irrationality or unfairness.
3. The final phase letter preserved the Secretary of State’s discretion to establish or alter the process and to accept or reject any or all offers. It did not oblige him to contract with a bidder whose offer appeared compliant. The claimant’s offer was in any event capable of being regarded as neither finally binding nor fully certain, because matters including a tranche of financing and the partnership agreement remained unresolved.
4. The defendants were entitled to evaluate the bids using their own judgment on value, transaction certainty, repayment of state-aid funds, financing security and declassification risk. They were not required to obtain the Office for National Statistics’ view before assessing that risk, to give the claimant a further opportunity to improve or explain its bid, or to consider an increased offer received after the decision.
5. The criticisms concerning Project G, restructuring costs, changing assessment templates, the Steering Group’s information, consortium stability and the treatment of declassification risk disclosed no arguable public-law error. The decision to grant the interested parties an exclusive period for negotiation was a lawful working out of the process.
6. Even if permission had been granted and an error established, relief would have been refused under section 31(6) of the Senior Courts Act 1981. Quashing the decision would risk prejudicing completion of the agreed sale, third-party interests and good administration.
7. In judicial review proceedings, disclosure is governed by the specific code in CPR 54 and Practice Direction 54A. A reference to a document in a witness statement does not, before a disclosure order, disclose it for the purposes of CPR 31.2 and does not confer an automatic right of inspection under CPR 31.3(1).

First-instance judicial review proceedings. Permission to apply for judicial review was refused, and the court stated that relief would in any event have been refused as a matter of discretion.