OCS One Complete Solution Limited v Dublin Airport Authority PLC [2014] IEHC 306

In public procurement contract awards, if a losing tenderer challenges the public authority’s decision before contract signing, the contract cannot then be concluded with the winner – there is an “automatic suspension”.  This is effectively an injunction preventing the new contract from being signed or going into effect.  

Following a decision by the Dublin Airport Authority (the “Awarding Authority”) to award a contract for the provision of site services to a new operator, the losing and incumbent tenderer, OCS, started a High Court challenge to the Awarding Authority’s decision.  The disputed contract award followed a public procurement process subject to the Remedies Regulations (EC (Award of Contracts by Utility Undertakings) (Review Procedures) Regulations 2010). These Regulations provide that, when a challenge is commenced before the new contract is signed, an injunction (or suspension) prevents that contract from being concluded.  The Awarding Authority applied unsuccessfully to both the High Court and Supreme Court to have this suspension lifted.

The Awarding Authority argued that the test applied by the Courts to an injunction application should also apply to the application brought by OCS.  It also argued that this would include requiring OCS to undertake to pay damages to the Awarding Authority if OCS was unsuccessful in its challenge.  The Court held, however, that this obligation to pay damages would impose pre-conditions on OCS which were not provided for by the Remedies Regulations.

The High Court found as follows:

  • The High Court can lift an automatic suspension of a contract award before the court case is concluded, if the authority (here the Awarding Authority) proves that the suspension should be lifted.
  • The test for whether to lift a suspension is set out in the Remedies Regulations, ie, that the Court may take into account “all interests likely to be harmed as well as the public interest” and may decide not to lift the suspension when the negative consequences of doing so could exceed its benefits.
  • The Court held that an offer of an undertaking as to damages could be considered but it did not then consider this. 
  • Although the Court referred to the “all interests likely to be harmed” test in the Remedies Regulations, on its face the judgment did not seem to apply that test. For example, the interests of the incoming tenderer who had won the contract were not consi dered. 

The Supreme Court has dismissed the Awarding Authority’s appeal, though it has not yet published its full judgment.  One of the principal conclusions by the Supreme Court was that the Courts do not have jurisdiction to entertain an application to conclude the challenged contract before the case is over.

The Remedies Regulations appear to provide for the Courts granting leave to lift a suspension.  Regulation 8(2) provides that the contract shall not be concluded until “(a) the High Court has determined the matter or (b) the court gives leave to lift any suspension of a procedure or (c) the proceedings are discontinued or otherwise disposed of” (emphasis added).  This also appears to be the manner in which similar (though not identical) regulations are applied in the UK.  The Supreme Court has concluded, however, that the Irish Courts do not have jurisdiction to consider such an application.  Thus, if court proceedings are issued in time by a losing incumbent tenderer, that tenderer will remain under contract until the court case is finalised.