Alstom Transport UK Ltd v Network Rail Infrastructure Ltd

On an application to lift an automatic suspension in a procurement challenge, the court applies the American Cyanamid approach. It asks whether there is a serious issue to be tried, whether damages would be an adequate remedy for each side, and, if necessary, where the balance of convenience lies. A claimant’s commercial loss, lost profits, wasted tender costs and loss of market experience will ordinarily be quantifiable in damages. By contrast, urgent safety improvements, disruption to rail users and businesses, abortive replacement costs and delay to a major infrastructure project may not be adequately compensable. The court must consider the likely duration of the suspension, the public interest and the successful bidder’s interests. Where the balance is otherwise even, the relevant status quo ante is generally allowing the contract to proceed.

Alstom challenged Network Rail’s procurement of a framework agreement for delivery of a digital train control system on the East Coast Main Line. Network Rail selected Siemens as the successful tenderer. Alstom alleged breaches of equal treatment, transparency, good administration, proportionality and manifest error or irrationality, and sought to prevent Network Rail entering into the framework contract pending trial.

The proceedings triggered the automatic suspension under regulation 110 of the Utilities Contracts Regulations 2016. Network Rail applied under regulation 111 to lift it. The central issues were whether damages would adequately compensate Alstom if the suspension were lifted and it succeeded, whether damages would adequately compensate Network Rail if the suspension remained and Alstom failed, and where the balance of convenience lay.

1. Application granted. The automatic suspension under regulation 110 of the Utilities Contracts Regulations 2016 was lifted, permitting Network Rail to enter into the framework agreement with Siemens.
2. Network Rail conceded that there was a serious issue to be tried. The governing approach was the American Cyanamid test as explained in the authorities cited at paragraph [28]. Under regulation 111, the court had to consider whether, absent the automatic suspension, an interim order restraining entry into the contract would be appropriate.
3. Damages were likely to be an adequate remedy for Alstom. Wasted tender costs, lost profits, staff redeployment costs and loss of a commercial opportunity could be quantified. The project was important but not unique, and Alstom had relevant experience and opportunities on other ETCS projects.
4. Damages were unlikely to be an adequate remedy for Network Rail. Although reputational harm, labour-relations concerns and contingent liabilities were insufficiently particularised or quantifiable, delayed safety improvements and the wider effects of rail disruption on businesses and the travelling public could not properly or fairly be compensated in damages.
5. Those findings generally favoured lifting the suspension. The balance of convenience also favoured that course. The court considered that an expedited trial in June 2020 would still leave the suspension in place for at least a year after allowing for judgment and a likely appeal. The public interest strongly favoured proceeding because signalling assets were degraded and reaching the end of their design lives. Delay could require urgent conventional replacement works, cause abortive costs and years of delay to ETCS deployment, and jeopardise the project’s funding case.
6. The successful bidder’s interests were relevant. A partial lifting was inappropriate because urgent replacement works affected both the East Coast Main Line and Northern City Line elements, and Siemens’ tender and supply-chain arrangements were based on the package as a whole.