Ocean Outdoor UK Ltd v Hammersmith And Fulham

A transaction is a services concession only where the contracting authority entrusts the operator with services benefiting the authority or its residents, supported by mutually binding and legally enforceable obligations, consideration consisting of a right to exploit the services, and transferred operating risk. A lease remains a land transaction where its essential features are exclusive possession and rent, even if the tenant may exploit the land commercially. Such a transaction falls within the land exemption in the Concession Contracts Regulations 2016. General EU procurement principles require sufficient cross-border interest and do not apply to a purely internal land transaction. Apparent bias requires a real danger of bias assessed on the relevant circumstances.

The claimant occupied two advertising sites under leases granted by the defendant local authority. Following a tender exercise, the authority granted new ten-year leases to Outdoor Plus, the successful bidder.

The claimant brought a Part 7 claim and judicial review proceedings. It argued that the new leases were services concessions governed by the Concession Contracts Regulations 2016, or alternatively that general EU procurement principles applied because the opportunity had potential cross-border interest. It also alleged procedural unfairness, breach of confidence, conflict of interest, apparent bias and actual bias.

The central issues were whether the new leases were concessions or excluded land transactions, whether EU principles applied, and whether the tender and award decisions were unlawful.

1. Part 7 claim and judicial review. The Part 7 claim was dismissed. Permission to amend the judicial review grounds was refused, permission to proceed with judicial review was refused, and the judicial review was dismissed.
2. Services concession. Regulations 3 and 10 of the Concession Contracts Regulations 2016 require: entrustment of services by the contracting authority; a mutually binding and legally enforceable obligation to provide those services; a right to exploit the services as consideration; transfer of operating risk; and absence of an applicable exclusion.
3. The advertising was not provided for the Council or its residents, did not discharge a statutory obligation, and created no public benefit of the kind contemplated by the Concessions Directive. The Council’s rental income was payment for use of land, not consideration for a service.
4. The tenant’s covenant to use reasonable endeavours to market the towers did not require any defined advertising service, volume or value of advertising. There was permission to advertise, but no enforceable obligation to provide advertising. The legally enforceable obligation to pay rent was insufficient.
5. Outdoor Plus assumed real operating risk because it bore refurbishment, maintenance and advertising costs while remaining liable for the fixed rent. That requirement would have been satisfied if the arrangement had otherwise been a services concession.
6. Land exemption. The essential character of the transaction was the grant of exclusive possession of land and structures in return for rent. The advertising rights were a permitted commercial use and did not alter the transaction’s main object. The new leases therefore fell within regulation 10(11), even if they could otherwise be characterised as concessions.
7. General EU principles. Article 56 TFEU principles did not apply. The transaction was a land transaction, not an agreement requiring Outdoor Plus to provide services for the Council. In any event, the parties, bidders and land were in the United Kingdom, no non-UK bidder expressed interest, and there was no realistically hypothetical bidder who would have bid if the opportunity had been advertised more widely.
8. Judicial review grounds. The Council was entitled to disclose the claimant’s offer to its appointed consultants. There was no evidence that details were disclosed to other bidders or that the offer affected the tender outcome. The conduct of the Council and Wildstone did not establish a real danger of bias. Errors in Wildstone’s material were careless or misleading, but did not show actual bias and did not affect the outcome. The claim based on tender-document defects was also out of time.