UK: Public Procurement: How will the Courts Approach Applications to Lift Automatic Suspension Under The Public Contracts (Amendment) Regulations 2009?

Last Updated: 6 January 2011
Article by Dr. Stacy Sinclair

The case of Exel Europe Ltd v University Hospitals Coventry and Warwickshire NHS Trust [2010] EWHC 3332 (TCC), is the second case within one month to consider an application under Regulation 47H of the Public Contracts Regulations 1996, as amended by the Public Contracts (Amendment) Regulations 2009, better known as the Remedies Directive. Regulation 47G automatically suspends the award of a public contract when a claimant issues a claim form against the contracting authority during the standstill period and Regulation 47H sets out the criteria under which a Court may lift the automatic suspension under 47G(1).

In the first case, Indigo Services v The Colchester Institute, the Court held that in situations where a contracting authority applied to have the automatic suspension lifted, the usual American Cynamid guidelines applied. Here, in Exel Europe v University Hospitals Coventry and Warwickshire NHS Trust, Mr Justice Akenhead confirmed this approach and went further to consider how the courts should go about dealing with procurement processes which have been automatically suspended under the Regulations.

The Facts:

In about 2009, University Hospitals Coventry and Warwickshire NHS Trust, the Defendant, decided to transfer their responsibility for managing and operating the Healthcare Purchasing Consortium ("HPC") by establishing a framework agreement with a single operator. The HPC is a collaborative procurement hub run by the Defendant on behalf of itself and some 40 NHS Trusts in West Midlands and elsewhere and provides a wide variety of medical services, equipment, medications and other medical related items.

In February 2010, it was resolved that a competitive public procurement process should be undertaken and the framework agreement should be established by no later than 30 September 2010. This date was significant as the agreements with all the current HPC subscribers expired on 31 March 2010. The Contract Notice was published on 11 March 2010. On 19 April 2010, five tenderers pre-qualified, including Exel Europe Ltd and HCA International Ltd.

From an early stage in the procurement process, Exel Europe believed that the information provided in the Invitation to Tender ("ITT") was insufficient for the restricted procedure which had been identified in the Contract Notice. As a result, Exel Europe eventually withdrew from the tender process on 28 May 2010. The only tenderer to submit a bid was HCA International. In due course the Defendant chose HCA International as its preferred bidder and notified Exel Europe on 15 July 2010.

Exel complained about the Defendant's lack of contact, lack of communication and lack of a response to its repeated requests regarding various issues. It ultimately issued its claim in the Technology and Construction Court on 28 September 2010, alleging six breaches of duty. On 29 October 2010, the Defendant applied to have the automatic suspension under Regulation 47G lifted.

The Issue:

Do the principles with regard to interim injunctions as set out in the well-known case of American Cyanamid Co v Ethican apply to situations, such as this, where a contracting authority has made an application under Regulation 47G(1) of the Public Contracts Regulations 1996 (as amended) to bring an end to the automatic suspension such that it can enter into contract with its winning tenderer?

The Decision:

Mr Justice Akenhead held that Regulation 47H means that: "...the Court should go about the Cyanamid exercise in the way in which courts in this country have done for many years." He found that the Regulations do not favour maintaining the prohibition on the contracting authority against entering into the contract in question.

Accordingly, the Judge applied the American Cyanamid principles. The first question to be answered is whether or not there is a serious question to be tried and the second question involves considering whether the balance of convenience lies in favour of granting or refusing the interlocutory relief sought. The governing principle in relation to the balance of convenience test is whether or not the claimant would be adequately compensated by an award of damages. The Judge went on to state:

"In reality, however, whether one adopts a strict Cyanamid approach or not probably matters little in many procurement cases. If the claim made by the tenderer was so weak as not to amount to a serious claim, it would be inevitable in most cases that the balance of convenience and discretion of the Court would militate against granting or maintaining the relief... the public interest can be taken into account on a consideration of the balance of convenience... However, that aspect of the public interest does not have, necessarily, an overriding impact."

Here, Mr Justice Akenhead found that there was a serious issued to be tried only in respect of one of the six allegations advanced by Exel Europe. Exel Europe had complained about the pre-tender history as between the Defendant and HCA International. It alleged that the Defendant's discussions/negotiations with HCA International five months immediately prior to the open public procurement process gave them an unfair advantage, distorted competition or breached the principles of equal treatment and transparency. Mr Justice Akenhead found that this was the only serious issued to be tried and that the remaining five issues were at best weak.

With respect to the balance of convenience test, the Judge found that this was an appropriate case which required that public interest to be taken into account. He held that an important area of public interest is the efficient and economic running of the National Health Service and the procurement of medical goods, drugs, equipment and services. Here, the Defendant had clearly established an urgency for the procurement of this contract, as the existing agreements for the provision of the services had expired in March 2010. If the suspension was not lifted, a judgment would not likely be obtained before May or June 2011 at the earliest, thereby further jeopardising the services currently provided by the HPC.

In addition, the Judge was wholly satisfied that damages would be an adequate remedy.

Accordingly, Mr Justice Akenhead found that the automatic suspension imposed by Regulation 47G of the Public Contracts Regulations, as amended, should be brought to an end, thereby allowing the Defendant to enter into an agreement with HCA International.


Mr Justice Akenhead's decision confirms the approach taken by the Court in the recent case of Indigo Services v The Colchester Institute that the American Cyanamid principles apply to applications made under Regulation 47H. Again, contracting authorities will take comfort in the fact that the threshold as to whether or not a tenderer can prevent the award of a contract still remains high.

In addition, those wishing to bring a claim against a contracting authority must be mindful of two further factors Mr Justice Akenhead considered when determining whether or not the issues raised by Exel Europe were "serious issues to be tried".

Firstly, the Judge pointed out that several of Exel Europe's claims may well be time barred. As it had dropped out of the tender process on 28 May 2010, some four months had elapsed before it commenced proceedings. Accordingly, any cause of action for matters about which Exel Europe had knowledge of or ought to have known about prior to 28 June 2010 will be time barred, as Regulation 47D provides that proceedings must be started promptly or in any event within three months. Therefore, its claim that the Defendant was in breach of the Regulations when it continued with the procurement process even though a lack of information and certainty had been provided to the tenderers would likely be time barred.

Secondly, Mr Justice Akenhead stated:

"If an economic operator drops out of the tendering process for good or bad reason, it is difficult to see that it suffers or risks suffering loss or damage as a result of any breach of duty occurring after it dropped out."

He found that it was difficult to see that Exel Europe was a "service provider" in accordance with the definition under the Regulations, after it had dropped out. As it did not wish to be considered for the award of the contract, whether or not it is allowed to claim for a breach of duty after it had dropped out was arguable. Accordingly, a tenderer who withdraws from a public procurement process should carefully analyse its claims prior to commencing any proceedings.

This article is one of a series contributed by Fenwick Elliott to the Building website. To see further articles in this series please go to

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Dr. Stacy Sinclair
In association with
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.