Summary

The Irish Supreme Court has dismissed an appeal taken by Dublin Airport Authority (DAA) against the ruling of Mr Justice Barrett in the High Court on 30 May 2014 refusing to lift the automatic suspension that arose on the initiation of proceedings by an unsuccessful bidder.

Background

The case relates to a tender process run by the DAA for a contract for the provision of site services at Dublin Airport. The High Court found that the DAA was prevented from concluding the contract following the initiation of proceedings (see summary of the High Court case - High Court Declines to Lift Automatic Suspension).

On appeal, the Supreme Court confirmed that an automatic suspension had arisen on initiation of the proceedings. The Supreme Court also held that Irish courts do not have jurisdiction under the Remedies Regulations to hear an application by a contracting authority to lift the automatic suspension. This effectively means that upon initiation of proceedings for review of a contract award decision, a contracting authority will be prevented from concluding the contract until the Court has made a decision on the substantive case or the case is discontinued or otherwise disposed of.

Analysis

The Supreme Court judgment will be welcome news for unsuccessful tenderers intending to seek review of a contract award decision pursuant to the Irish Remedies Regulations. Following initiation of proceedings and provided that the contract has not yet been concluded, a contracting authority will be prevented from concluding the contract until the substantive case has been decided or the case is discontinued or otherwise disposed of.

There is also no requirement for an unsuccessful tenderer to proffer an undertaking in damages to cover any loss that might be suffered by the contracting authority as a result of the automatic suspension remaining in place. This was an issue that had arisen in the High Court case where Mr. Justice Barrett had decided that the requirement for such an undertaking would be contrary to the overall scheme contemplated by EU law. Given that the Supreme Court decided that the Court did not have jurisdiction to hear an application by a contracting authority to lift the automatic suspension, the questions of whether an undertaking is required and the appropriate test to be applied were matters that did not arise for the Supreme Court.

It remains to be seen whether the judgment will lead to an increase in procurement challenges in the Irish courts. It is likely that any increase would be marginal given that procurement challenges are taken in the High Court. In that regard, it is notable that Ireland has one of the lowest rates of procurement challenges in the EU.

A full written judgment will be delivered by the Supreme Court in due course.