Bombardier Transportation UK Ltd v Hitachi Rail Europe Ltd & Ors (Rev 2)

In applications under the Utilities Contracts Regulations 2006 to lift an automatic suspension, the court applies the American Cyanamid test required by regulation 45H(2). It considers whether there is a serious issue, whether damages adequately compensate each side, and where the balance of convenience lies, including the public interest. An unsuccessful bidder must provide cogent evidence that reputational loss will cause significant financial loss that is irrecoverable or difficult to quantify. The court should assess the realistic duration of the suspension and may refuse expedition where a technically complex trial cannot be heard promptly. It should not speculate about delay from a future re-tender if maintaining the suspension would then have been correct.

London Underground Limited conducted a procurement under the Utilities Contracts Regulations 2006 for new Deep Tube rolling stock and related services. Siemens was selected as the successful tenderer. A Bombardier-Hitachi joint venture and Alstom challenged the award, alleging defects in evaluation and procedure and seeking setting aside of the award or damages.

LUL applied to lift the automatic suspensions preventing contract signature. Hitachi applied for an expedited trial, with the other claimants supporting expedition. Siemens was joined as an interested party. The court considered the serious-issue threshold, adequacy of damages, the balance of convenience, public interest, trial timing and open justice.

Open justice

The application for part of the hearing to be held in private was refused. Hearings are ordinarily public under Article 6 and CPR 39.2. Confidentiality alone does not justify exclusion. Any derogation must be exceptional, proportionate and strictly necessary. Redactions, written submissions and confidentiality rings were sufficient.

Automatic suspension

1. Applicable test. Regulation 45H(2)(a) required the court to consider whether, absent the automatic suspension, an interim order restraining LUL from entering the contracts would be appropriate. The court applied the American Cyanamid v Ethicon principles, as summarised in Fellowes & Son v Fisher [1976] 1 QB 122. There was a serious issue to be tried, and the court declined to assess the likely merits on incomplete evidence.
2. Adequacy of damages. In procurement cases, a failed bid ordinarily reflects commercial risk. Cogent evidence is required before reputational loss will make damages inadequate. This procurement was unusually prestigious and its loss could cause significant financial consequences that would be difficult to quantify fairly. Other alleged losses, including research expenditure, employment and facilities, were capable of compensation. Damages for breaches of the UCR 2006 were subject to the sufficiently serious breach requirement explained in Nuclear Decommissioning Agency v Energy Solutions EU Ltd [2017] UKSC 34. LUL’s concession that an award to the wrong bidder would satisfy that requirement was sufficient at this stage.
3. Balance of convenience. The court considered the likely duration of the suspension and refused expedition. Disclosure had scarcely begun, the claims were technically complex, expert evidence might be required, and a four-week trial could not be accommodated before November 2019. LUL and Siemens would suffer substantial non-financial prejudice from delay, while the public interest favoured early delivery of the new trains and the benefits of the upgrade.
4. The court rejected reliance on delay from a possible future re-tender. If the award were ultimately set aside, maintaining the suspension would have been correct. It would be wrong to grant interim relief which the court would not grant on final determination. Critical health, safety or deadline considerations might affect other cases, but none arose here.

The automatic suspensions were lifted and LUL was permitted to enter into the contracts with Siemens.