Court of Appeal applies American Cyanamid principles in rejecting application to lift automatic contract suspension

Dervla Broderick

Following the entry into force of the Public Contracts (Amendment) Regulations 2009, which implemented the new public procurement Remedies Directive, an aggrieved economic operator who wishes to prevent a contract award no longer needs to apply for an interim injunction.  Under the new rules, a standstill period of at least 10 to 15 calendar days must be observed following an award decision.  Where a challenge to a procurement procedure is launched during the standstill period, the contracting authority must refrain from entering into the contract until the challenge is determined.  However, a court has the power to lift the automatic suspension upon application (the so-called “automatic suspension” provided for by Regulation 47G).

In DWF v Secretary of State for Business Innovation and Skills, the Court of Appeal considered the application of the new “automatic suspension” in EU procurement litigation for the first time.  In doing so it applied the test for interim injunctions in American Cyanamid v Ethicon, noting that damages would not be an adequate remedy for the claimant and it was improbable that the defendant would have difficulty in sourcing services up to trial.  The court therefore refused to lift the suspension of the contract.

The court’s analysis follows that of Coulson J in Covanta Energy Ltd v Merseyside Waste Disposal Authority.

DWF LLP v Secretary of State for Business Innovation and Skills, Acting on behalf of the Insolvency Service [2014] EWCA Civ 900

Post By Dervla Broderick (16 Posts)

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