High Court Lifts Automatic Suspension in Procurement Case

In the first case of its kind under the new public procurement remedies rules, the High Court has lifted an automatic suspension of entry into a contract. Under the new rules, when a disgruntled bidder issues and serves a claim form prior to contract signature, the contracting authority is automatically prevented from entering into the contract. It is then incumbent on the contracting authority to apply to court to lift the automatic suspension.

Indigo Services (UK) Limited v The Colchester Institute Corporate (judgment given on 1 December 2010) is the first application by a contracting authority under Regulation 47H of the Public Contracts Regulations 2006 (as amended) to lift an automatic suspension of entry into a contract for cleaning services.

The Court treated the application as though it were an application for an injunction and applied the American Cyanamid test. The Court looked at whether: (i) there was a serious issue to be tried; (ii) the balance of convenience lay in keeping the suspension in place; and (iii) damages would be an adequate remedy.

Based on the balance of convenience (or the "balance of irremediable prejudice"), the suspension was lifted.

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In the first case of its kind under the new public procurement remedies rules, the Public Contracts Regulations 2006, as amended by the Public Contracts (Amendment) Regulations 2009, the High Court has lifted an automatic suspension of entry into a contract. Under the new rules when a disgruntled bidder issues and serves a claim form prior to contract signature, the contracting authority is automatically prevented from entering into the contract. It is then incumbent on the contracting authority to apply to court to lift the automatic suspension.

Indigo Services (UK) Limited v The Colchester Institute Corporate (judgment given on 1 December 2010) is the first application by a contracting authority under Regulation 47H of the Public Contracts Regulations (as amended) to lift an automatic suspension of entry into a contract for cleaning services.

The Court treated the application as though it were an application for an injunction and applied the American Cyanamid test. The Court looked at whether: (i) there was a serious issue to be tried; (ii) damages would be an adequate remedy; and (iii) the balance of convenience lay in keeping the suspension in place.

Based on the balance of convenience (or the balance of...