Introduction

In the case of Abundance Investment Ltd and Another v Scottish Ministers ([2020] CSOH 12), the Scottish Court of Session addressed significant questions regarding the scope of judicial review, specifically concerning the standing of third-party investors to challenge administrative decisions made by public authorities. The petitioners, Abundance Investment Limited and Donald Francis Irwin Houston, sought judicial review of decisions by the Scottish Government concerning grant payments awarded to Celtic Renewables Limited (CRL) under the Low Carbon Infrastructure Transition Programme (LCITP).

The core issues revolved around the refusal to authorize grant payments due to alleged non-compliance with grant conditions, such as match funding and financial viability. The petitioners argued that these decisions were unlawful and irrational, seeking a declaration for payment of £1,483,587 originally claimed under the grant. Central to the dispute was whether the petitioners, as significant investors in CRL, possessed the standing to invoke judicial review over decisions that were fundamentally contractual in nature.

The respondents contended that the petition was both incompetent and lacked merit, asserting that the matters were strictly contractual and not amenable to judicial review by third parties.

Summary of the Judgment

The Court, presided over by Lord Clark, meticulously analyzed the arguments surrounding both competency and standing. The judgment concluded that the petition was non-competent because the decisions in question were made within the confines of a contractual relationship between CRL and the Scottish Ministers. Judicial review under the supervisory jurisdiction was deemed inappropriate for third-party investors without direct contractual rights or obligations.

Moreover, the Court assessed the grounds of challenge regarding grant conditions related to match funding, financial models, and products to end-users. Upon detailed examination, the Court found that the respondents acted within their contractual rights and the stipulations set forth in the grant agreement. The petitioners' claims of unlawfulness and irrationality were dismissed, leading to the refusal of the petition.

The decision reinforced the principle that judicial review is primarily accessible to parties directly involved in a contractual relationship with a public authority, particularly when remedies are available through ordinary contractual channels.

Analysis

Precedents Cited

The judgment extensively referenced several key cases to delineate the boundaries of judicial review, especially regarding contractual disputes involving public authorities:

• West v Secretary of State for Scotland (1992): Established the tripartite relationship test for supervisory jurisdiction in judicial review.
• Wightman v Advocate General for Scotland (2019): Emphasized the fundamental purpose of supervisory jurisdiction to uphold the rule of law.
• Boyle v Castlemilk East Housing Association (1998): Demonstrated scenarios where a tripartite relationship exists, justifying judicial review.
• Blair v Lochaber District Council (1995): Reinforced that contractual rights and obligations under public contracts are generally outside the scope of judicial review.
• Gray v Braid Logistics UK Ltd (2015): Highlighted that decisions arising from bilateral contractual relationships lack supervisory jurisdiction unless broader public law contexts are involved.

These cases collectively underscored that judicial review is not a tool for third-party enforcement of contractual obligations but is reserved for ensuring that public bodies act within their legal bounds when performing statutory or quasi-statutory functions.

Legal Reasoning

The Court's reasoning hinged on the distinction between public law and private law spheres. It affirmed that judicial review under the supervisory jurisdiction is designed to oversee the lawful exercise of power by public authorities, not to adjudicate contractual relations unless those decisions transcend imposed contractual duties and enter the realm of public administration.

In this case, the grant offered to CRL was a contractual agreement subject to specific terms and conditions. The decisions to withhold grant payments were based on CRL's alleged failure to meet these conditions. Since the petitioners were neither signatories to the grant nor holders of direct contractual rights, their standing to challenge these decisions via judicial review was fundamentally flawed.

The Court further elucidated that allowing third-party investors such as the petitioners to invoke judicial review in purely contractual disputes could undermine the doctrine of privity of contract and flood public authorities with enforcement claims, thereby impeding administrative efficiency.

Impact

This judgment has significant implications for future cases involving third-party interests in administrative decisions. It clarifies that judicial review remains a mechanism for controlling the legality of public authority actions, not for enforcing contractual rights or addressing grievances of parties not directly involved in the contract.

Stakeholders and investors must recognize that their recourse in contractual disputes with public bodies lies within the ordinary judicial processes rather than through judicial review. This delineation preserves the integrity of both contractual law and administrative oversight, ensuring that each operates within its appropriate domain.

Complex Concepts Simplified

Conclusion

The Abundance Investment Ltd v Scottish Ministers judgment serves as a pivotal reaffirmation of the boundaries of judicial review concerning third-party involvement in administrative decisions. By denying the petitioners' application, the Court emphasized that judicial review is not a vehicle for third-party enforcement of contractual rights, particularly in scenarios where the relationship is strictly bilateral and governed by private contractual terms.

This decision safeguards the autonomy of contractual agreements and preserves the intended scope of supervisory jurisdiction. It underscores the necessity for stakeholders to pursue appropriate legal avenues—such as contractual litigation—when seeking remedies for breaches or disputes within contractual frameworks involving public bodies.

Moreover, the judgment highlights the importance of understanding the distinct roles of public law mechanisms and private law remedies, ensuring that each operates within its designated sphere to uphold fairness, efficiency, and the rule of law.