OCS One Complete Solution Ltd v Dublin Airport Authority PLC

Factual and Procedural Background

The Applicant, Company A, sought judicial review of the decision by the Respondent, Company B, to award a contract to the Notice Party, Company C, following a procurement process for site services at a major airport. The Applicant brought the review pursuant to specific European Communities Regulations governing award of contracts by utility undertakings and sought relief including setting aside or varying the award decision. The Applicant asserted that the commencement of proceedings triggered an automatic suspension preventing the Respondent from entering into the contract with the Notice Party. The Respondent applied to the court to lift or discharge any such suspension, contending that the Applicant had failed to provide an undertaking in damages necessary to maintain the suspension.

Legal Issues Presented

1. Whether the initiation of proceedings by the Applicant resulted in an automatic suspension preventing the Respondent from concluding the disputed contract with the Notice Party;
2. If such an automatic suspension exists, whether it can be lifted on the interim application brought by the Respondent;
3. If the suspension can be lifted, which party bears the burden of proof and what is the appropriate legal test for lifting the suspension;
4. The outcome of applying that test to the facts of the case.

Arguments of the Parties

Applicant's Arguments

• The Applicant contended that the issuing of proceedings under the Remedies Regulations resulted in an automatic and continuing suspension preventing the Respondent from entering into the contract until the review was fully determined.
• The Applicant relied on the purpose of the Remedies Regulations and relevant European Union Directives emphasizing the importance of pre-contractual remedies and standstill periods to prevent premature contract conclusion.
• The Applicant rejected the Respondent’s application to lift the suspension, asserting that no such lifting is permissible prior to final determination of the review.

Respondent's Arguments

• The Respondent argued that the suspension imposed by the Remedies Regulations is not indefinite and may be lifted by the court prior to final determination of the review proceedings.
• The Respondent contended that the court should apply the legal principles governing interlocutory injunctions (as per the American Cyanamid guidelines) to decide whether to lift the suspension.
• The Respondent maintained that the Applicant’s failure to provide an undertaking in damages justified lifting the suspension.

Table of Precedents Cited

Court's Reasoning and Analysis

The court began by recognizing that the Remedies Regulations, enacted under the European Communities Act and implementing relevant EU Directives, provide for an automatic suspension of contract conclusion upon the initiation of review proceedings by an eligible person. The Applicant, as an eligible person, triggered this suspension by commencing proceedings.

However, the court emphasized that the suspension is not indefinite. The relevant EU Directives and the Remedies Regulations contemplate a "minimum" standstill period designed to prevent premature contract conclusion before the involvement of an independent review body, here the High Court. The duration and potential lifting of the suspension are matters for the court's discretion.

The court rejected the Respondent's submission that the test for lifting suspension should be the traditional interlocutory injunction test (American Cyanamid principles). It found that applying such a test would conflict with the EU law framework and the specific provisions of the Remedies Regulations, which provide a distinct and self-contained test.

The applicable test, as set out in Regulation 9(4) of the Remedies Regulations and reflected in the EU Directive, requires the court to consider the probable consequences of interim measures for all interests likely to be harmed, including the public interest, and to refuse relief if the negative consequences outweigh the benefits.

Regarding the burden of proof, the court held that the moving party—in this case, the Respondent—bears the burden to satisfy the court that the suspension should be lifted.

In applying the test, the court identified several potential negative consequences of lifting the suspension: disruption and risk of redundancy for the Applicant’s transferred staff; loss of expertise and competitiveness for the Applicant; the possibility that damages would not adequately compensate the Applicant; and the public interest in fair and transparent procurement processes and avoiding additional financial burdens on the public purse.

The benefits of maintaining the suspension include preserving the status quo pending final determination, avoiding potentially wasteful double payments, and respecting serious allegations made by the Applicant about the procurement process, which the court was not called upon to determine substantively but was entitled to consider in the public interest context.

Balancing these factors, and mindful of the premium placed by EU law on pre-contractual remedies, the court concluded that the negative consequences of lifting the suspension outweighed the benefits of doing so.

Holding and Implications

The court DECLINED TO LIFT the automatic suspension preventing the Respondent from concluding the contract with the Notice Party.

This decision maintains the status quo pending the final determination of the Applicant’s review proceedings. No new legal precedent was established beyond the application of EU law principles and the Remedies Regulations in this context. The ruling underscores the importance of pre-contractual remedies in procurement law and affirms the court’s discretion in balancing competing interests when considering interim relief under the Remedies Regulations.