Projects & Construction Law Update - July 2017


"Me first... No me first!" - Applications to challenge public procurement decisions

Alstom Transport UK Ltd v (1) London Underground Limited (2) Transport for London [2017] EWHC 1406 (TCC)

Debates around the proper interplay of applications to lift suspension of a contract and applications for specific disclosure regularly recur in public procurement work. Which one should come first? Is there a standing principle that applies in all cases? The recent case of Alstom Transport UK Ltd v (1) London Underground Limited (2) Transport for London [2017] EWHC 1406 (TCC) answers these questions, clearly setting out the relevant principles and considerations involved.

Challenges to public procurement processes are not uncommon in the UK. When such proceedings are commenced, the award of the contract in question is automatically suspended. This can often lead to a 'battle of the applications' where the authority seeks an urgent application to lift the suspension and the unsuccessful tenderer seeks specific disclosure of documents to show a serious question to be tried and resist the application. The question is who comes first?

Briefly, Alstom sought to challenge the outcome of a tender process in which it was unsuccessful. As a result, London Underground Limited ('LUL') could not award the contract to the successful tenderer. LUL sought an urgent application to lift the suspension under Regulation 47H of the Public Contracts Regulations 2006. Alstom subsequently applied for specific disclosure of documents relating to the tender, which LUL had continually refused to provide. The principal issue before the court was whether it should hear the application for specific disclosure before the application to lift the suspension.

LUL argued that the "usual case" was for specific disclosure applications to be heard after those to lift the suspension of the contract. However, Coulson J rejected this argument, stating that he did not agree there was any established principle to this effect: "These cases always turn on their own facts and it would be dangerous to set out any overarching principle or general rule".

Coulson J confirmed that the standard American Cyanamid test for interim injunctions applies when a court is considering any application to lift an automatic suspension and, accordingly, a critical element for an unsuccessful tenderer to successfully resist such an application is to show there is a serious question to be tried. If its ability to show this turns on the disclosure of the specific documents sought, such that justice cannot be done without sight of the relevant documents, then the suspension hearing would have to be adjourned.

He acknowledged the need to balance this against policy considerations which emphasise that hearings to lift should be heard as soon as possible. However, he also observed that the courts must be astute to prevent a defendant from obtaining an unfair advantage by refusing to disclose the documents sought, and then pointing to the absence of such documents to show there is not a serious issue to be tried: "the safest course will sometimes be to fix the specific disclosure application first in any event".

The court found in favour of Alstom and re-ordered the hearing dates so its application for specific disclosure came first. The specific circumstances of each case are paramount and there is no overarching rule that can be applied across the board, as to which application should come first. However, if a party can show that disclosure of certain documents will go to the substance of a serious question to be tried, it is likely to be successful in having its application heard first.

"It does what it says on the tin" - A more lenient approach to exemption clauses

(1) Persimmon Homes Ltd (2) Taylor Wimpey UK Ltd (3) BDW Trading Ltd v (1) OVE Arup & Partners Ltd (2) OVE Arup & Partners International Ltd [2017] EWCA Civ 373

This case dealt with an exemption clause in a professional appointment (and related warranties) which limited the consultant's aggregate liability and which also contained a specific exclusion for liability relating to asbestos. After commencement of...

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