Background and Facts

The Remedies Regulations[1] (Remedies Regulations) introduced the concept of an automatic suspension preventing the award of a procurable contract if proceedings are issued challenging the tender procedure for the award of that contract.

Following the decisions of the High Court, affirmed by the Supreme Court for different reasons, in OCS One Complete Solution Limited v Dublin Airport Authority plc[2] in 2014 and 2015, the Minister for Public Expenditure and Reform has made amending Irish Remedies Regulations in both the public and utilities sectors dated 30 April 2015 and published in May 2015 (the 2015 Regulations)[3].

The main object of the 2015 Regulations is to give the High Court jurisdiction to make orders lifting the automatic suspension, at interim or interlocutory stage (not just after full trial), thereby reversing the decision of the Supreme Court in OCS in its interpretation of the Remedies Regulations.

The issue of what test to apply when considering whether to lift an automatic suspension came before the High Court in the OCS case.  The High Court (Barrett J)[4] held that the Campus Oil[5] principles which are: 

  • is there a serious issue to be tried (BAM has demonstrated that already)
  • would damages be an adequate remedy for BAM
  • has the applicant given an undertaking as to damages
  • where does the balance of convenience lie.

was not the applicable test to use.  Judge Barrett considered that the standard in the Remedies Directive 2007[6] was different and it would be contrary to EU law to attach additional burdens (including, for example, requiring an undertaking in damages or in the standard of proof, namely the inadequacy of monetary damages, a stateable or arguable case and the balance of convenience favouring the grant of such an injunction) which might not be consistent with the test elaborated in the Remedies Directive.  This judgment was appealed by daa plc to the Supreme Court.

The Supreme Court decided the case on the basis that the wording of the Remedies Regulations did not permit the Court to make an order lifting the automatic suspension at all where the challenge related to the proposed award of the contract.  The Supreme Court did not therefore give a view in relation to the test to be applied when considering whether to lift an automatic suspension or not.

The 2015 Regulations intend to allow a Court to use the Campus Oil test in determining whether to lift an automatic suspension or not. The New Regulation 8A provides that in deciding whether to make an interim or interlocutory order (such as an order lifting the automatic suspension), the High Court “shall consider whether … it would be appropriate to grant an injunction restraining the awarding authority from entering into the contract, and only if the Court considers that it would not be appropriate to grant such an injunction, may it make an order[7] lifting the automatic suspension.

In other words, if a Court would not grant an injunction then it may grant an order lifting the automatic suspension.

However, Regulation 9(4) of the Remedies Regulations has not been amended, and continues to provide that:

When considering whether to make an interim or interlocutory order, the Court may take into account the probable consequences of interim measures for all interests likely to be harmed, as well as the public interest, and may decide not to make such an order when its negative consequences could exceed its benefits”.

The interplay between the test in the new Regulation 8(A) and Regulation 9(4) is not clear.  Given Regulation 9(4) has not been amended this would suggest the test in Regulation 9(4) ought still to be taken into account by a Court when considering whether to lift an automatic suspension or not.  That may remain to be determined on another occasion.

The 2015 Regulations provide that only an awarding authority may apply to have the automatic suspension lifted.  Thus, for example, the prospective winner of the competition or an aggrieved underbidder is apparently not permitted under the 2015 Regulations to apply for the lifting of the automatic suspension at interim or interlocutory stage.  This may also be a matter for separate determination as to whether that is compatible with the Remedies Directives.

Comment

The introduction of the right of a Court to lift an automatic suspension has been generally welcomed.  These Regulations may not have had laid to rest all of the concerns in relation to the Remedies regime in Ireland and its compatibility with EU law.