The Two Towers: Land Transactions And Concessions - Public Procurement

The two towers on either side of the Hammersmith Flyover as the A4 enters west London are not the stuff of the shire and the imagination of JRR Tolkien. On the contrary they were the focus of a dispute before the Technology and Construction Court about the application of the public procurement regime to a lease of a site which had been developed for use for the display of electronic adverts.

In dismissing the claim against the Council Mrs Justice Holgate analyses the nature of services, concession contracts and the boundaries between such contracts and land transactions which fall outside the scope of the public procurement regime.

Our public procurement and real estate experts consider the key issues addressed in the judgement.

The facts of the case

In 2009 Ocean Outdoor UK Ltd ("Ocean") constructed two towers to support digital advertising screens and their operating software on land owned by Hammersmith and Fulham LBC ("the Council") on either side of the Hammersmith Flyover in London.

In 2010 the Council granted Ocean a lease in respect of each plot of land ("the Original Leases"). The permitted use was "the installation, maintenance and operation of the Two Towers for the display of electronic advertisements of two plots of land and operation of two metal towers, with media screens and supportive software, one on each plot, in West London." After an extension granted in 2012 the leases expired on 20 June 2017.

After a tender process on 30 June 2017 the Council granted new leases for 10 years to Outdoor Plus Limited ("Outdoor") who submitted the highest financial offer. Ocean submitted a lower bid and challenged the grant of the leases under the remedies provisions of the Concession Contract Regulations 2017 ("CCR") claiming a declaration of ineffectiveness, penalty and damages. They alleged a failure to comply with the CCR 2016 and/or the Concessions Directive and/or general principles of EU law. Ocean also sought permission for a judicial review.

Both claims were heard together and failed. Mrs Justice Holgate held that the leases were not concession contracts for the purposes of the CCR. Even if they were concession contracts they were excluded from its ambit because of the land transaction exemption in the CCR itself.

In her judgement Mrs Justice Holgate analysed a number of issues before the Court.

The character of a services concession

The CCR reg 3 states that a services concession contract is a contract "for pecuniary interest concluded in writing by means of which one or more contracting authorities or utilities entrust the...