Contains public sector information licensed under the Open Justice Licence v1.0.
Construcciones Y Auxiliar De Ferrocarriles S.A. v Iarnr�d Eireann - Irish Rail & Anor (Approved)
Anonymised Summary of Judicial Opinion
Factual and Procedural Background
This judicial opinion, delivered by Judge Twomey on 26 November 2025, concerns judicial review proceedings brought by Company A challenging the award of public contracts for the purchase and maintenance of trains for an intercity rail service (the "Service") operated jointly by Company B. Company C had been identified by Company B as the Most Economically Advantageous Tenderer and the decision to award the Contract to Company C was communicated to Company A in September 2025.
On 17 October 2025 Company A, the disappointed tenderer, issued proceedings under the Remedies Regulations (S.I. No. 131/2010), thereby triggering an automatic suspension by operation of those regulations. Company B applied, on 28 October 2025, for the Court to lift the automatic suspension so that the Contract with Company C could be concluded. That application was heard urgently on 18 November 2025 and judgment was reserved and later delivered on 26 November 2025.
Company B sought expedited relief because it said that Company C required the Contract to be signed by 30 November 2025 in order to retain production slots and thereby enable delivery of trains by 31 December 2029, a deadline said to be critical to secure €165 million in funding from the Programme administered by Company D. Company B conceded, for the purposes of the lift-the-suspension application only, that Company A had raised a fair issue to be tried. The Court was therefore required to decide whether the balance of justice favoured lifting the automatic suspension so that the Contract could be signed immediately.
Legal Issues Presented
- Whether, on the interlocutory application to lift the automatic suspension created under the Remedies Regulations, the balance of justice favours lifting the suspension (i.e. whether Company A has established that the execution of the Contract should be suspended pending trial).
- Whether damages would be an adequate remedy for Company A (if Company B proceeded to conclude the Contract and Company A later prevailed) and, conversely, whether Company A's undertakings as to damages are adequate to protect Company B against loss (including the €165 million funding risk).
- What weight should be given to public interest factors (including the orderly implementation of a prima facie valid procurement process and the public benefits of the Project) and to the risk that continuing the suspension could lead to the extinguishment of the Contract and loss of significant grant funding.
Arguments of the Parties
Company A's Arguments
- Company A challenged the legality of the tender process, alleging breaches of equal treatment and transparency (notably that Company B conducted BAFO negotiations that effectively changed the procurement from eight trains to a four-train contract without giving Company A an opportunity to participate in those negotiations).
- Company A argued that its bid scored higher on certain criteria (Lead Time) and that the evaluation and changes to delivery sequencing disadvantaged it; it submitted that the tender process was tainted and that the automatic suspension should therefore remain in place pending full trial.
- Company A contended that the risk alleged by Company B about the loss of funding was speculative and insufficient to justify lifting the suspension.
- Company A offered an undertaking in damages limited to the additional costs reasonably and directly incurred by Company B in maintaining current service provision, but expressly did not undertake to cover loss of the €165 million funding should that be lost.
- Company A argued that damages would be an inadequate remedy for it if it succeeded at trial, on account of lost commercial opportunities, reputational effects and difficulties in quantifying loss of chance.
Company B's Arguments
- Company B argued that Company C had been identified as the MEAT and that the automatic suspension should be lifted so that the Contract could be signed by 30 November 2025, thereby preserving production slots enabling delivery by 31 December 2029 and securing €165 million in funding from Company D.
- Company B provided sworn evidence (including from Company C) that those production slots would be lost if the Contract was not signed by 30 November 2025 and that, if the Contract could not be signed in that timeframe, the Contract was likely to be extinguished rather than merely delayed.
- Company B relied on the Conditions of Tendering (Conditions 11.3 and 11.4) to justify the BAFO process and the changes arising from it, contending that the changes were permitted by the published tender terms.
- Company B conceded that Company A raised a fair issue to be tried but maintained that, on the balance of justice (including public interest and the scale and irrecoverability of potential funding loss), the suspension should be lifted.
- Company B pointed to public interest and policy reasons (emissions reductions, accessibility improvements and the broader public benefits of the Project) to support immediate continuation of the procurement process.
Table of Precedents Cited
| Precedent | Rule or Principle Cited For | Application by the Court |
|---|---|---|
| CHC Ireland DAC v The Minister for Transport [2023] IECA 229 | The Court must commence consideration as if no automatic suspension had occurred (i.e. the automatic suspension is irrelevant to the legal test). | The Court started the balancing exercise on the basis set out in CHC, treating the matter as if there were no automatic suspension. |
| Word Perfect v Minister for Public Expenditure and Reform [2021] IECA 305 | Approach to suspension cases: onus on applicant to establish why execution should be suspended; relevance to status quo and to adequacy of damages in some cases. | The Court applied the principle that Company A bore the onus of showing the execution of the Contract should be suspended; cited Word Perfect in relation to the correct legal approach. |
| Flynn v Breccia [2017] IECA 74 | Interlocutory approach: do not consider every ground; focus on primary issues. | The Court adopted the approach of addressing the primary contractual issues and not rehearsing every ground at interlocutory stage. |
| Okunade v Minister for Justice and Others [2012] IESC 49 | Interlocutory injunction principle: court must minimise overall risk of injustice when making temporary orders. | The Court applied Okunade's guidance to frame the "balance of justice" assessment, aiming to minimise risk of injustice to all parties. |
| Powerteam Electrical Services v ESB [2016] IEHC 87 | Courts may consider the commercial interests of a successful tenderer and can quantify damages for loss of chance. | The Court cited Powerteam to justify considering the commercial impact on Company C and to explain that damages for loss of chance can be assessed. |
| Owens v Kildare County Council [2020] IECA 361 | Court of Appeal recognition that effect of suspension on successful tenderer is a relevant factor. | Cited to support the consideration of Company C's commercial interests when weighing the balance of justice. |
| BAM PPP PGGM Infrastructure Cooperatie U.A. v National Treasury Management Agency [2015] IEHC 75 | Public interest consideration: the imperative of allowing badly needed public projects to proceed. | The Court cited BAM in support of treating public interest factors (environmental benefits, accessibility) as relevant in favour of lifting the suspension. |
| Francovich (joined cases C-6/89 & C-9/90) | Test for liability of a Member State (and availability of damages) arising from failure to implement EU obligations. | The Court noted that Company B provided an undertaking sufficient to meet the Francovich criteria so that damages could be made available to Company A if appropriate. |
| Vavasour v O'Reilly [2005] IEHC 16; Minister for Communications v Figary Watersports Dev. Co. Ltd. [2010] IEHC 541 | Irish courts have quantified damages in respect of "loss of chance" claims. | Cited to reject the proposition that difficulty in quantifying damages necessarily renders them inadequate. |
| Homecare Medical Supplies Unlimited Company v HSE [2018] IEHC 55 | Absence of an unqualified undertaking as to damages is a factor favouring lifting an automatic suspension. | The Court relied on Homecare to weigh Company A's limited undertaking against Company B's risk, finding the lack of an unqualified undertaking favours lifting the suspension. |
| American Cyanamid v Ethicon Ltd. [1975] A.C. 396 | Classic injunction principles including that difficulty of showing damages does not automatically justify injunction. | The Court invoked the American Cyanamid principle to observe that many cases involve difficult damage assessments and that difficulty does not make damages legally inadequate. |
| Merck Sharp & Dohme Corporation v Clonmel Healthcare Ltd. [2019] IESC 65; [2020] 2 IR 1 | Difficulty of calculation of damages does not make damages legally inadequate. | The Court cited Merck to support the position that difficulty in quantification alone does not make damages an inadequate remedy. |
| Word Perfect Translation Services Ltd v Minister for Public Expenditure and Reform [2023] IECA 189 | Commentary on efficient use of court resources and lawyers' responsibilities regarding costs; referenced in relation to trial listing and costs management. | The Court referred to Word Perfect 2023 in directing parties to take a proportionate approach to costs and to avoid unnecessary further hearings. |
Court's Reasoning and Analysis
The Court began by applying the established legal approach for suspension-lifting applications in procurement judicial review: it proceeded as if no automatic suspension had occurred (CHC) and treated the application as an interlocutory injunction question in which the applicant (Company A) bore the onus of establishing why execution of the Contract should be suspended (Word Perfect).
Company B had conceded, for the purposes of the interlocutory application, that Company A raised a fair issue to be tried. The Court therefore confined itself to the balance of justice assessment. The judgment concentrated on the principal factors that determine where the overall risk of injustice lies, adopting the practice of considering the primary issues without rehearsing every ground (Flynn).
The Court identified a unique and determinative factual feature of this case: Company B produced evidence that, unless the Contract were signed by 30 November 2025, the available production slots would be lost and Company C could not deliver the trains by 31 December 2029. That 31 December 2029 date was material because Company D's Letter of Offer conditioned reimbursement on project costs being defrayed by that date. Company B's evidence and experience with Company D supported a realistic risk that failure to sign by 30 November would result in loss of €165 million of funding and the effective extinguishment of the Contract (not merely a delay).
The Court weighed this risk against Company A's arguments. It observed that:
- The magnitude of the funding at risk (€165 million, about 25% of the project funding) and the character of the potential loss (irrecoverable funding leading to project failure) were important factors favouring lifting the suspension;
- Company A's limited undertaking in damages did not cover loss of the €165 million and was therefore insufficient to protect Company B's position; the absence of an unqualified undertaking weighed in favour of lifting the suspension (Homecare);
- Although Company A contended damages would be inadequate because of difficulties in quantification (loss of opportunity, reputational and strategic commercial effects), established authorities indicate that difficulty in quantification does not automatically render damages legally inadequate and that courts can assess loss of chance damages (Vavasour, Figary, Powerteam, Merck, American Cyanamid); accordingly the Court was not persuaded that damages would necessarily be an inadequate remedy for Company A;
- Public interest considerations (orderly implementation of prima facie valid procurement, environmental and accessibility benefits from the Project) also favoured lifting the suspension (Okunade, BAM); and
- The procedural status quo for the purposes of the balancing exercise is to assume there is no suspension in place; where issues are finely balanced the party seeking to lift the suspension benefits from this starting point (CHC, Word Perfect).
On the evidence before the Court, including affidavits from Company B and Company C and Company B's prior dealings with Company D, the Court concluded that the likely harm from continuing the suspension (extinguishment of the Contract and loss of €165 million funding) outweighed the harms identified by Company A. The Court therefore found that lifting the automatic suspension entailed the least overall risk of injustice.
Holding and Implications
SUSPENSION LIFTED
Holding: The Court ordered that the automatic suspension created by Company A's proceedings be lifted with immediate effect because, on the balance of justice, lifting the suspension minimised the overall risk of injustice to the parties. The Court emphasised that the decisive factor was the realistic risk that continuing the suspension would result in the extinguishment of the Contract and the loss of €165 million in funding administered by Company D.
Direct implications:
- Company B may proceed to conclude the Contract with Company C without the automatic suspension preventing signature.
- The Court listed the matter for mention on 27 November 2025 to deal with final orders and costs, but permitted parties to notify the Registrar if that listing proved unnecessary.
Broader implications: The opinion focuses on application of established principles to the facts of this case and applies existing authority (as catalogued above). The judgment does not purport to establish a new legal precedent beyond applying settled authorities to the uniquely urgent factual combination here (notably the risk of irreversible funding loss). The direct consequence is the immediate lifting of the automatic suspension; no other wider legal development was articulated in the judgment.
Notes on anonymisation: All individuals and corporate parties referenced in the original opinion have been replaced with consistent anonymised placeholders (Company A, Company B, Company C, Company D; Attorney Smyth, Attorney Dietrick, Attorney Warwel, Attorney Lowe; Judge Twomey; Judge Clarke; Judge Costello; Judge Barrett; Judge Barniville; Judge O'Donnell) to preserve confidentiality while maintaining the Court's analysis and reasoning as set out in the provided opinion.
Please subscribe to download the judgment.
Comments