OCS v DAA: application of the Remedies Directive re EU (Award of Contracts by Utility Undertakings) Regulation 2007

theme7The EU Remedies Directive, amending EU (Award of Contracts by Utility Undertakings) Regulation 2007, does not require Member States to provide a mechanism to lift the automatic stay against contracting parties proceeding where there is a legal challenge to the awarding of the contract made outside of the standstill period provided to challenge the decision (judgment).

Background

The Court issued its ruling in this case in July 2014 and reserved its judgment until now. One Complete Solutions (OCS) was the provider of services to Dublin Airport Authority (DAA). DAA put in place a tendering process for the renewal of that contract. Maybin was the successful bidder. Subject to the Remedies Directive, which amends the Regulation, national legislation must stipulate a standstill period within which the awarding party cannot proceed to finalise the contract, to allow affected parties to challenge the award. The Regulation provides that where an affected party has issued proceedings challenging the award, the awarding party cannot proceed until the deciding body has made a determination on the substantive issue. OCS issued High Court proceedings for review of DAA’s decision to award of the contract to Maybin, outside of the standstill period but before DAA and Maybin finalised the contract.

In the High Court (here), DAA argued that as OCS issued proceedings outside the standstill period there was no automatic prohibition on it proceeding to award the contract to Maybin: OCS was required to seek an interlocutory injunction subject to the test in American Cynamid. It introduced case law from the UK which established that was the procedure applied in similar circumstances in that jurisdiction. Alternatively it argued that the courts had jurisdiction to authorise the awarding party to proceed with the contract. Barrett J held that once an affected party challenged the award of a contract there was an automatic prohibition on the awarding party proceeding before the substantive issue was fully adjudicated upon. He also held, however, that the courts did have jurisdiction to grant the awarding party permission to proceed prior to a determination on the substantive challenge; OCS appealed that finding to the Supreme Court.

Clarke J, writing for the Court, held that the UK case law did not apply in this jurisdiction. The Regulation creates an automatic barrier to an awarding party proceeding where an affected party has challenged the decision until after the deciding body has made a determination on the substantive issue. And there is no prohibition on an affected party challenging a decision outside the standstill period. Furthermore, at a minimum, the Directive does not require Member States to have a mechanism in place which permits the courts to allow the awarding party to proceed before a determination is made on the challenge to the award. It was not necessary for the Court to determine whether the Directive permitted Member States to have such a mechanism.

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