Alstom Transport UK Ltd v London Underground Ltd & Anor

INTRODUCTION

By proceedings commenced on 11 May 2017, the claimant (“Alstom”) seeks to challenge the outcome of a tender process which concluded on 13 March 2017, when the defendants (“LUL”) announced an intention to award to Bombardier a contract for the supply of a new traction system for its Central Line fleet. The challenge is made under the Utilities Contracts Regulations 2006.

The commencement of the proceedings has operated automatically to suspend LUL’s ability to enter into the proposed contract. LUL are seeking to lift that suspension. They wrote to the court on 18 May, urgently seeking a hearing for their application on 26 May, a date that had not been suggested to Alstom. I considered the application on paper and concluded that, since the application was going to be contested, this was an absurdly short timetable. Instead I fixed a two day hearing for 6 and 7 June 2017 which I thought was likely to be the soonest available dates that the parties could be ready for the suspension application. LUL did not make me aware of any other communications between the parties that might be relevant to the timetable.

In fact, Alstom had been seeking specific disclosure of various documents for some time and LUL had refused to provide them. Thus, on 19 May 2017, the day after I fixed the hearing of the application to lift the suspension, Alstom made their own application for specific disclosure. A large number of documents were sought. Alstom sought a date for that application to be heard in advance of the hearing on 6/7 June and/or an adjournment of that date to ensure that the application to lift the suspension came after the application for specific disclosure.

In making their respective applications to the court, there was no liaison between the parties of the kind that I would have expected. Instead, both parties wrote unilaterally to the TCC Registry and followed that up with numerous telephone calls in which they each sought to do little more than jockey for position. In the end, because of the staff time that was being taken up by this attritional process, I was obliged to fix a hearing on Friday 26 May 2017 to sort out the directions and, in particular, the sequence in which the applications should be heard. This would have been quite unnecessary if the parties had behaved sensibly and discussed between themselves at the outset the appropriate directions.

At the hearing on 26 May, the principal issue was whether the court should hear the application for specific disclosure before the application to lift the suspension. Alstom said that they would be unfairly treated if the application to lift the suspension was heard before they had seen all the relevant documents sought in their own application. LUL said that there was no reason to alter the date of 6/7 June for the hearing to lift the suspension and stressed the urgency of this application. Bombardier, who had written to the court helpfully setting out their position as the successful tenderer, also indicated that they wanted the application to lift the suspension to be heard as soon as possible.

At the conclusion of the hearing, I ruled that the application for specific disclosure should be heard on 6 June 2017, with the application to lift the suspension following, in front of the same judge, on 15 June. On the material available to me, I concluded that it was appropriate for the application for specific disclosure to be heard in advance of the application to lift the suspension. I gave brief oral reasons for that conclusion but, because the parties had referred to a number of authorities, and because the proper interplay between these two kinds of application regularly recurs in public procurement work, I said I would provide my full reasons in writing. Those are set out in this Judgment.

THE RELEVANT AUTHORITIES

In Pearson Driving Assessments v DVLA [2013] EWHC 2082 (TCC) Akenhead J concluded that, on the facts of that case, a specific disclosure application did not need to take place before the hearing of the application to lift the suspension. He said:

“27.

…Broadly, I form the view that this it is not really fair, just or necessary for there to be this disclosure prior to the Regulation 47(H) hearing. I have formed the view that there is a concern that there may be documents which may well assist the claimant's case ultimately and there is a concern that the court might be bamboozled which I am sure would not be the desire of any party in this case.

28.

The court might be bamboozled into deciding the Regulation 47 application on the basis of controversial facts, but if the facts are controversial and they are challenged and it is only through such facts that the threshold as to whether there is a serious issue to be tried can be considered, then in those circumstances the claimants can rest assured that the court will not, and I consider cannot, make a decision on that aspect of the case.

29.

Miss McCredie QC argues however, that because there may be such further documents, in effect her client would like to have them, because if they were to show that her client's case was very strong, not just a serious issue to be tried, but was a very strong case, that could be deployed on the balance of convenience. In this respect, I am more persuaded overall by the general submissions put forward by Mr Bowsher QC. The American Cyanimid approach is one that is well understood in the English and Welsh courts and it is based usually on uncontroversial facts or pleaded facts by the claimant or a combination of both. One of the reasons for Regulation 47(H) is to give the employing party the opportunity to come to court as soon as is reasonably necessary to seek to have the suspension lifted. There is a policy consideration here which involves consideration as to whether in effect all the steps necessary for the ultimate hearing of the case need to be gone through virtually, before such an application can be made.”

I should make plain that I do not agree with Mr Coppel’s submission that this passage sets out a principle that, in the usual case, an application for specific disclosure will not be heard in advance of an application to lift the suspension. This was an ex tempore judgment, and it related to the particular facts of the case in question. Moreover, it appears that one of the main reasons for the judge’s conclusion that the application for specific disclosure did not need to be listed in advance of the application to lift the suspension was because, again on the facts of that case, the claimant was going to be able to show a serious issue to be tried without the need to see any further documents. Establishing that there is a serious issue to be tried is of course, one of the critical elements of any contractor’s resistance to an application to lift the suspension.

On this topic, Akenhead J said at paragraph 18:

“18.

Now I am not going to decide the Section 47H application now, but it does seem to me that there is more than adequate ammunition and evidence to support the claimant's argument, at least, that there is a serious issue to be tried in relation to this first head of claim. Whether that is the final decision or not, I do not know, because I have not heard all the argument, but there is clearly something there to support the claimant. It is clear just on the face of the pleading, let alone anything else.”

It is unsurprising, therefore, that the judge concluded that there was no need for the specific disclosure application to be heard first. That application would generate documents that went only to the aspect of the suspension hearing concerned with whether or not there was a serious issue, so if the contractor was going to be able to establish a serious issue to be tried in any event, the relevance of any other documents fell away. Moreover, at paragraph 34 of his judgment, Akenhead J confirmed that, if justice could not be done on the suspension hearing without sight of the relevant documents, the suspension hearing would have to be adjourned.

In Bristol Missing Link Limited v Bristol City Council [2015] EWHC 876 (TCC), I said:

“23.

It is a question of balancing the interests of justice against the background facts of the particular case. Contracting authorities have to work out, in fairly short order, whether, having provided the unsuccessful tenderer with the statutory minimum information, they are going to retain all other documents relating to the evaluation and the successful tenderer's bid, and let the unsuccessful tenderer take his own course; or whether they are prepared to be helpful and, providing that the confidentiality of the information is protected, offer to provide as much information about the process as they can. In my view, however, what the authority should not do is to try and have it both ways. It ought not to refuse requests to provide documents relating, say, to the evaluation of the successful tenderer's bid, or the bid itself, but then, on the application to lift the suspension, provide for the first time evidence about the process or the successful bid in support of its case, either that there is no serious issue to be tried, or that he would be prejudiced if the suspension was not lifted. That approach is at least potentially unfair, because it is relying on potentially controversial material which the unsuccessful tenderer has been given no proper opportunity to consider.”

I then referred to parts of the judgment in Pearson Driving and went on:

“25.

I rely on those observations to conclude that controversial material, and/or material which, because of the absence of prior disclosure, the claimant is simply not in a position to address satisfactorily if it is produced for an interlocutory hearing, should not ordinarily be deployed on an application under Regulation 47(H), because of the risk of unfairness. I consider that, in this case, the Council has sought a potentially unfair advantage through its attitude to disclosure. There are two reasons for that.”

In that case, the defendant had failed to provide the documents requested by the claimant but then, in order to argue at the suspension hearing that the claimant had failed to raise a serious issue, the defendant made partial disclosure of certain documents which it said supported their case. I concluded that, on the facts of that case, it was potentially unfair for the defendant “to pick and choose what documents they provided and when, as it suited them.” Because I was also very critical of the defendant’s approach to the claim as a whole, I refused to lift the suspension. On the facts, therefore, it was a very different case to this.

Accordingly, contrary to Mr Coppel’s submissions, I do not consider that either Pearson Driving or Bristol Missing Link set out, or purport to set out, any principle to the effect that an application to lift the suspension will always or even usually be heard regardless or in advance of any application for specific disclosure. There could be no basis for any such principle. These cases always turn on their own facts and it would be dangerous to set out any overarching principle or general rule. Akenhead J was plainly right to say that there is a policy consideration which emphasises the need to have any hearing to lift the suspension heard as quickly as possible, and there will be times when, in consequence, no application for specific disclosure will or can be ordered in advance. But such an outcome will always depend on the facts.

There are, however, two wider observations which should be made. In my experience, on applications to lift the suspension, contracting authorities regularly argue that the claimant has failed to identify a serious issue to be tried. This is itself a slightly surprising tactic, because the threshold for showing a serious issue is quite low, and the claimant regularly surmounts it. But if there is a dispute about whether or not there is a serious issue to be tried, in circumstances where a claimant has raised what appears to be a bona fide application for specific disclosure, the court will be astute to prevent a defendant from obtaining an unfair advantage by refusing to disclose the documents sought, and then relying on the absence of such documents to argue that there is no serious issue to be tried.

Furthermore, the court will also be anxious, as Akenhead J was in Pearson Driving, to avoid the situation where the application to lift the suspension has to be adjourned part-heard because, contrary to the assumptions originally made, the documents which had been sought were or might very well be relevant to that application. Thus if, as here, the matter comes before the court for directions before either application is heard, the safest course will sometimes be to fix the specific disclosure application first in any event.

ANALYSIS

In any case, the question as to whether the application for specific disclosure should be heard in advance of the application to lift the suspension turns on the extent to which any of the documents sought are or may be relevant to the application to lift the suspension. That requires the court to analyse the nature of the documents sought, and what the issues are likely to be on the application to lift the suspension. In the present case, if LUL are seeking to argue that there is no serious issue to be tried, but the documents sought by Alstom would appear to be relevant to that debate then, for the reasons noted in paragraphs 14 and 15 above, it may well be appropriate to fix the application for specific disclosure before the application to lift the suspension.

The documents sought by Alstom were dealt with in detail in their letter of 21 April 2017. The relevant parts of the letter are as follows:

“An unsuccessful tenderer who wishes to challenge the evaluation process is in a uniquely difficult position. He knows that he has lost, but the reasons for his failure are within the peculiar knowledge of the public authority. In general terms, therefore, and always subject to issues of proportionality and confidentiality, the challenger ought to be provided promptly with the essential information and documentation relating to the evaluation process actually carried out, so that an informed view can be taken of its fairness and legality.

We note that, in your paragraph 24, you rightly acknowledge that we are entitled to be provided with information that will establish whether LUL’s contract award decision in this case is well founded. You also refer in your letter to a number of key documents (including the tracker used by LUL in relation to Bombardier’s bid and the evaluation board meeting of 19 July 2016). We assume that, although this procurement was carried out under the Utilities Contracts Regulations 2006, as a responsible utility you have also kept the documentation necessary to justify decisions taken at all stages of the procurement procedure, including communications with tenderers, internal deliberations, negotiations and award of the contract, which is now required under Regulation 99(S) of the 2016 Regulations.

Assertions to the effect that LUL was satisfied with the ultimate outcome do not in any way enable Alstom to determine that LUL’s contract award decision was well founded. At the very least, Alstom is entitled to know exactly what each of Bombardier’s non-compliances were and how LUL addressed these with Bombardier in order to arrive at its position of apparent satisfaction, without prejudice to our contention that the general Treaty principles of equal treatment, transparency and good administration required LUL then formally to re-score Bombardier’s bid and the bids of the other remaining bidders before proceeding to conclude its evaluation of the commercial aspects of the bids.

As to your third assertion, namely that the documents are commercially sensitive, we are content at this stage for genuinely commercially sensitive documents to be provided into a confidentiality ring composed of external lawyers only. We will send you a form of confidentiality undertaking to be signed by members of the ring on Monday together with the names of the proposed members.

In the light of the limited further information provided in your letter of 13 April 2017, we have refined our request for the essential documents and request your confirmation by no later than close of business on Monday 24 April 2017 that you will agree to provide these to our external lawyers:

1.

The document(s) evidencing your decision to request Bombardier to submit further information in relation to its Stage 3 fails, rather than to reject its bid.

2.

Your request(s) to Bombardier to submit further information in relation to its Stage 3 fails (paragraph 12 of your letter).

3.

Bombardier’s responses to the request(s) identified in 2 above.

4.

Correspondence (whether via the online portal or otherwise) and minutes of meetings between LUL and Bombardier to resolve its Non-Compliances (paragraphs 15 and 18 of your letter).

5.

Sections D-01, D-02, D-03 and D-04 of Bombardier’s bid and its Contract Programme.

6.

The evaluators’ and moderators’ contemporaneous comments and score sheets in relation to the above sections of Bombardier’s bid.

7.

Minutes and notes of the moderation meeting (paragraph 25.4 of your letter).

8.

The ranking of the bids (paragraph 13 of your letter).

9.

A copy of the minutes of the evaluation board meeting on 19 July 2016 and any papers submitted to that meeting (paragraph 14 of your letter).

10.

A copy of the document(s) evidencing the decision which was “endorsed” at the above board meeting (paragraph 14 of your letter).

11.

The tracker(s) prepared for Bombardier’s commercial qualifications and technical and deliverability non-compliances, including all updates thereof (paragraph 15 of your letter).

12.

LUL’s review of Bombardier’s response to ensure the requirements in the tracker(s) had been resolved to LUL’s satisfaction (paragraph 19 of your letter).

13.

The document(s) evidencing your consideration of whether Bombardier’s bid was abnormally low and your conclusion that it was not (paragraph 23 of your letter).

14.

The comparative analysis carried out under paragraph 7.1 of the ITT and, if different, that mentioned at paragraph 23(a) of your letter.

15.

Your tender evaluation report.”

I make three observations on this letter. First, although some of these documents relate to LUL’s consideration of Alstom’s own tender, the vast bulk of them relate specifically to LUL’s consideration of Bombardier’s tender. That is obviously information that Alstom would not themselves have. Secondly, the documents sought are extensive and I very much doubt whether disclosure of all the documents in these categories would be necessary before a proper decision could be made on the application to lift the suspension. Thirdly I doubt Ms Hannaford’s submission that these documents might also be relevant to the balance of convenience (the other element of the application to lift the suspension). It seems to me that, if they go to anything, it is only to the question of whether or not there is a serious issue to be tried.

LUL responded to the request for specific disclosure on 8 May 2017. They refused disclosure. The reasons for that were as follows:

“Alstom’s very wide-ranging requests for disclosure do not relate to any particularised or properly arguable breach of duty under the UCR. Alstom’s proposed approach appears to be that its legal team should conduct an audit of LUL’s procurement documents, including a review of the preferred bidder’s tender response, in order to seek to find points to complain about. Having carefully considered the request we do not consider that Alstom is entitled to the disclosure sought; nor do we consider that the proposed exercise is a legitimate or appropriate ones.

Alstom’s letter dated 21 April 2017 asserts that that ‘at the very least, Alstom is entitled to know exactly whet each of Bombardier’s non-compliances were and how LUL addressed these with Bombardier in order to arrive at its position of apparent satisfaction.’ LUL does not agree. Alstom is well aware of the approach that LUL adopted to dealing with issues of non-compliance, not least because LUL engaged in very extensive negotiation with Alstom in order to increase its confidence in, and ultimately regard as acceptable, the multiple non-compliances that arose in respect of Alstom’s response. LUL has already made clear to Alstom that it adopted the same approach towards negotiation on non-compliance points in relation to all bidders who were invited to negotiate. There is no proper basis for Alstom to allege that the way in which this was done in respect of the preferred bidder’s tender response breached the UCR.

The ITT clearly sets out, and Alstom has always known, how LUL would score tender responses for Stages 2 and 3; namely, by reference to the bidder’s proposal, the evidence supplied and how that affected the evaluators’ confidence level. LUL treated all three bidders who were invited to negotiate in the same way. Having scored Stages 1 to 4, issues were identified which LUL wanted to discuss further with all three bidders in the negotiation phase, so as to obtain further information and/or evidence and increase LUL’s confidence in the bidder’s proposal.

LUL engaged with each bidder during the negotiation phase, such that LUL’s confidence increased in respect of each non-compliance for each bidder. All three bidders therefore passed Stages 1-3 and all three bidders were invited to submit a BAFO. There is no proper basis for Alstom to allege that LUL’s approach and/or conclusions in respect of these matters breached the UCR.”

Importantly, in their letter of 15 May 2017, LUL set out their case as to why there was no serious issue to be tried. They summarised their position in four parts, as follows:

“1.

LUL was not obliged to fail or to exclude a bidder who scored a Discretionary Pass/Fail at Stage 2 or Stage 3. Had LUL been obliged to do so, both your client and Bombardier would have been excluded.

2.

The ITT anticipates and provides for LUL to negotiate the issues arising from bidders’ tender responses, including any non-compliances, At the end of the negotiation period, LUL was satisfied that all non-compliances had been addressed.

3.

Bombardier had more Technical non-compliances than your client. However, your client had substantially more numerous (and significant) Commercial non-compliances than Bombardier.

4.

LUL evaluated all Stages of the process in an equal, fair, non-discriminatory and transparent way.

In the circumstances, LUL does not consider that your client had any proper basis for issuing proceedings in this case.”

On the basis of those exchanges, therefore, LUL refused to provide any further documentation relating to their consideration of the Bombardier tender whilst, at the same time, they relied on matters of fact (relating to their consideration of that same tender) in support of their submission that there was no serious issue to be tried. Each of the four points made by LUL in support of their submission that there is no serious issue to be tried rely, to a greater or lesser extent, on matters of fact which are controversial, and involve LUL’s detailed consideration of the tenders of both Alstom and Bombardier.

On the face of it, therefore, it would be inappropriate for the court to decide whether or not there is a serious issue to be tried without a sight of at least some of the documents that Alstom have sought, particularly those going to the heart of LUL’s consideration of Bombardier’s successful tender. The correspondence which I have set out above suggests that, by reference to my observation at paragraph 14 above, LUL may be seeking to gain a potentially unfair advantage by arguing that there is no serious issue to be tried without disclosing any of the documents that may either support or contradict their factual assertions.

Perhaps in recognition of that difficulty, Mr Coppel submitted that, in connection with the application to lift the suspension and the arguments about whether there was a serious issue to be tried, LUL would limit their arguments to questions of construction of the Invitation to Tenderers, and the assertion that LUL did not consider Bombardier’s tender to be abnormally low (a particular matter raised by Alstom), thereby negating the need for the specific disclosure hearing to take place before the suspension application. That new approach seemed superficially attractive. But I have concluded that it would be wrong to try and limit LUL to those arguments at this stage: it might produce an artificial result and would be impossible to police in any event. In addition, I think Ms Hannaford is right to say that, although Mr Coppel labelled some of LUL’s points as pure questions of construction, it may not in practice be so easy to treat them as being wholly divorced from the facts. Still further, the question of what LUL considered was or was not abnormally low seems to me to be a matter of fact in any event.

For all these reasons, therefore, I have concluded that, in order for the court to do justice on the application to lift the suspension, I should set a timetable which allows for the hearing of the application for specific disclosure first. That is a decision reached on the facts of this particular case. I consider that it is not only in accordance with the approach of the court in Pearson Driving and Bristol Missing Link but it is the best way to ensure that the decision on the important application to lift the suspension is reached on as full a basis as possible.

Finally, I should say that I was satisfied that the delay thereby caused will not cause LUL any prejudice. As a result of my order, the hearing of the application to lift the automatic suspension has moved from 6/7 June to 15 June. In the context of this case, where the procurement itself took over two years from start to finish, and LUL twice took 3 weeks to reply to Alstom’s requests (20 March to 13 April; 21 April to 8 May), I consider that the 8 day delay resulting from my order is proportionate and reasonable in all the circumstances.