Summary
Applications to lift an automatic suspension in a procurement challenge are determined by applying ordinary American Cyanamid principles. Where damages adequately compensate the unsuccessful tenderer, the court will normally lift the suspension. The availability of a speedy trial does not, by itself, make damages inadequate or justify maintaining the suspension. Loss of reputation must be supported by cogent evidence of a real prospect of significant financial loss which is attributable to losing the contract and irrecoverable in damages. If damages are inadequate for both parties, the court assesses the balance of convenience, including delay, public interest and the successful bidder’s interests.
Factual background
Kellogg Brown & Root Limited challenged the award by the Mayor’s Office for Policing and Crime of a framework agreement and proposed property-services contract to Sodexo Limited. The challenge triggered the automatic suspension under regulation 95(1) of the Public Contracts Regulations 2015. MOPAC applied under regulation 96(1)(a) to lift the suspension. KBR applied for an expedited trial.
The court considered whether KBR had a serious issue to be tried, whether damages would be adequate for either party, where the balance of convenience lay, and whether expedition was appropriate.
Held
- Applicable test. The application to lift the automatic suspension was governed by ordinary American Cyanamid principles. The court considered whether there was a serious issue to be tried, whether damages would be an adequate remedy for KBR, whether damages would be adequate for MOPAC, and, if necessary, where the balance of convenience lay.
- MOPAC had conceded that there was a serious issue to be tried. In the absence of exceptional circumstances or a clear knockout point, it was inappropriate to revisit the merits at the balance-of-convenience stage or conduct a mini-trial.
- The court rejected the submission that the prospect of a speedy trial could make damages inadequate. The alternative formulation asking whether it was just to confine the claimant to damages was treated as expressing the same principle. The availability of an expedited trial was not, without more, a reason to maintain the suspension.
- KBR’s alleged redundancies, loss of efficiencies, loss of knowledge, reputational harm and reduced competitiveness were either quantifiable, speculative, unsupported by sufficient evidence, or ordinary commercial consequences of losing a tender. KBR had not shown a real prospect of significant financial loss attributable to loss of the contract which would be irrecoverable in damages.
- MOPAC had shown a serious risk of difficult-to-quantify non-financial prejudice if implementation of the proposed contract were substantially delayed, including delay to enhanced technological and operational services. The application for expedition was refused because disclosure, amendments and witness evidence meant that expedition would prejudice MOPAC and interfere with the proper administration of justice.
- The balance of convenience clearly favoured lifting the suspension. The public interest in lawful procurement did not, without exceptional circumstances, require continuation of the suspension. It was just in all the circumstances to confine KBR to damages. MOPAC’s application was granted and KBR’s application for expedition was refused.
The court’s approach to earlier authorities
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Key cases cited
19 authorities cited.
- National Commercial Bank Jamaica Ltd v Olint Corpn Ltd (Practice Note) [2009] UKPC 16
- American Cyanamid Co v Ethicon Ltd [1975] AC 396
- DWF Llp v Secretary of State for Business Innovation And Skills [2014] EWCA Civ 900
- WL Gore & Associates GmbH v Geox SPA [2008] EWCA Civ 622
- Draeger Safety UK Ltd v London Fire Commissioner [2021] EWHC 2221 (TCC)
- Vodafone Ltd v Secretary of State for Foreign, Commonwealth, & Development Affairs [2021] EWHC 2793 (TCC)
- Alstom Transport UK Ltd v Network Rail Infrastructure Ltd [2019] EWHC 3585 (TCC)
- Circle Nottingham Ltd v NHS Rushcliffe Clinical Commissioning Group [2019] EWHC 1315 (TCC)
- Bombardier Transportation UK Ltd v Hitachi Rail Europe Ltd & Ors (Rev 2) [2018] EWHC 2926 (TCC)
- Sysmex (UK) Ltd v Imperial College Healthcare NHS Trust [2017] EWHC 1824 (TCC)
- Alstom Transport Limited v London Underground [2017] EWHC 1521
- Kent Community Health NHS Foundation Trust v NHS Swale Clinical Commissioning Group [2016] EWHC 1393
- Openview Security Solutions Ltd v The London Borough of Merton Council [2015] EWHC 3694 (TCC)
- Counted4 Community Interest Co v Sunderland County Council [2015] EWHC 3898
- Covanta Energy Ltd v Merseyside Waste Disposal Authority [2013] EWHC 2922 (TCC)
- Roche Diagnostics Ltd v The Mid Yorkshire Hospitals NHS Trust [2013] EWHC 933 (TCC)
- Alstom Transport v Eurostar International Ltd [2010] EWHC 2727 (Ch)
- Alstom Transport v Eurostar International Limited & Siemens PLC [2010] EWHC 2747
- Evans Marshall & Co Ltd v Bertola SA [1973] 1 WLR 349
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Cases citing this case
2 later cases · 1 positive · 1 caution
Most senior citing decisions:
- Involve Visual Collaboration Ltd v The Secretary of State for Work and Pensions [2025] EWHC 2664 (TCC) explained
- Medequip Assistive Technology Limited v The Mayor and Burgesses of the Royal Borough of Kensington and Chelsea & Ors [2022] EWHC 3293 (TCC) followed
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