CHC Ireland DAC v The Minister for Transport

• Jurisdiction: Ireland
• Judge: Ms. Justice Costello
• Judgment Date: 02 October 2023
• Neutral Citation: [2023] IECA 229
• Court: Court of Appeal (Ireland)
• Docket Number: Court of Appeal Record Number: 2023/183

In the Matter of Council Directive 2014/24/EU

and

In the Matter of the European Communities (Award of Public Authority Contracts) Regulations 2016 (S.I. 284 of 2016)

and

In the Matter of Council Directive 89/665/EEC (As Amended)

and

In the Matter of the European Communities (Public Authorities' Contracts) (Review Procedures) Regulations 2010 (S.I. 130 of 2010) (As Amended)

Between/

CHC Ireland DAC

Applicant/Appellant

and

Minister for Transport

Respondent/Respondent

and

Bristow Ireland Limited

Notice Party/Respondent

[2023] IECA 229

Costello J.

Noonan J.

Faherty J.

Court of Appeal Record Number: 2023/183

High Court Record Number: 2023/680 JR

THE COURT OF APPEAL

CIVIL

[Unapproved]

JUDGMENT of Ms. Justice Costello delivered on the 2 ^nd day of October 2023

Introduction

1 . These proceedings concern the decision of the respondent (“the Minister”) at the conclusion of a tender competition to award the contract at issue in these proceedings to the successful tenderer in the competition, Bristow Ireland Ltd. (“Bristow”). The contract in question concerns the provision of the Irish Coast Guard (“IRCG”) aviation service. The decision was communicated by the Minister to the unsuccessful tenderer and the current provider of the service, CHC Ireland DAC (“CHC”), on 31 May 2023. The new contract is due to replace the existing contract on 1 July 2025.

2 . CHC commenced proceedings by originating Notice of Motion dated 14 June 2023, challenging the decision of the Minister. The effect of the issuance of the proceedings was to automatically suspend the Minister's entitlement to conclude the contract with the successful tenderer, by virtue of the operation of Regulation 8(2) of the European Communities (Public Authorities' Contracts) (Review Procedures) Regulations 2010 (as amended).

3 . The Minister applied for an order pursuant to Regulation 8(A) of the European Communities (Public Authorities' Contracts) (Review Procedures) Regulations 2010 ( S.I. No. 130 of 2010) (the “ 2010 Regulations”), as inserted by the European Communities (Public Authorities' Contracts) (Review Procedures) (Amendment) Regulations 2015 ( S.I. No. 192 of 2015) (the “ 2015 Regulations”) and as amended by the European Communities (Public Authorities' Contracts) (Review Procedures) (Amendment) Regulations 2017 ( S.I. No. 327 of 2017) (the “ 2017 Regulations”) (together the “ Remedies Regulations”), permitting the Minister to sign the contract, the subject of the proceedings, with Bristow. By a judgment delivered on 25 July 2023, the High Court (Twomey J.) granted the relief sought, lifted the automatic suspension of the right of the Minister to conclude the contract and ordered that the Minister be permitted to conclude the contract, the subject of the proceedings, with Bristow. The High Court stayed the operation of its order until the hearing of any appeal by the Court of Appeal. CHC appealed the decision of the High Court. The court heard the appeal on 27 July 2023 and extended the stay until 10 a.m. on 28 July 2023. At 9.30 a.m. on 28 July 2023, the court indicated that it would dismiss the appeal and lift the automatic suspension, and indicated that it would give its reasons for its decision at a later date.

4 . This judgment sets out my reasons for that decision.

Background

5 . The contract to provide the IRGC aviation service involves both search and rescue and helicopter emergency medical services. The contract is of immense importance to the State and is vital for preventing loss of life, serious injury and prolonged hospitalisation. Between 800 and 850 missions are undertaken per year by the IRCG. IRCG saved 563 lives in 2022 and 277 lives up to 21 June 2023. The estimated value of the contract is €800m. The contract is due to commence on 1 July 2025 and is for a period of ten years with the possibility of extending the contract for a maximum of three years thereafter.

6 . CHC, the appellant, is the incumbent provider of the IRGC service under a contract concluded for that purpose in 2010 (“the existing contract”). That contract was also for a period of ten years and was extended for the maximum permissible three years. It will expire on the 30 June 2025. It tendered for the new contract but was unsuccessful.

7 . CHC is part of the CHC helicopter group of companies, which is a global commercial helicopter service company, headquartered in the United States. While CHC has previously conducted other business in Ireland, and tenders for additional work in Ireland, the existing contract is currently CHC's sole business in Ireland. The CHC Group has a significant operational presence in Canada, the United Kingdom, Norway, Brazil, the Netherlands and Australia as well as Ireland. As of 1 June 2023, CHC employed 141 people in Ireland directly related to the existing contract.

8 . Bristow is part of a U.S. based group of companies which provides helicopter services throughout the world. It provides vertical flight solutions offering helicopter, offshore energy, transportation, and search and rescue services to civil and government organisations worldwide. The Bristow Group is currently the largest operator of S-92 and AW189 and AW139 aircraft globally (the aircraft at issue in these proceedings) and to date, the group has conducted more than 31,000 search and rescue missions. Bristow was incorporated as part of the Bristow Group for the purpose of tendering for the new contract.

9 . Between December 2021 and May 2023, the Minister undertook a public procurement process in connection with the award of the contract. Bristow was identified as the successful tenderer by letter on 31 May 2023. CHC commenced these proceedings on 14 June 2023, by originating notice of motion. The Statement of Grounds runs to 58 pages.

10 . In its High Court written submissions, CHC summarised its challenge to the decision as follows:-

“(i) The Respondent failed to provide sufficient reasons for the Decision including the characteristics and relative advantages of the Successful Tenderer's Final Tender;

(ii) The Respondent commenced the standstill period provided for in Regulation 5 of the Remedies Regulations (the “Standstill Letter”) notwithstanding that the Respondent had failed to provide CHC with the characteristics and relative advantages of Bristow's Final Tender and/or failed to re-commence the Standstill Period having provided information in this regard to CHC in the Respondent's 9 June Letter;

(iii) The Respondent provided the Successful Tenderer with information which was proprietary and confidential to CHC during the course of the Competition including during the Negotiation Stage and in so doing, has breached various Regulations and acted in breach of confidence;

(iv) The Respondent's evaluation of the final tenders submitted by CHC and the Successful Tender was unlawful in multiple respects;

(v) The pricing aspect of the Successful Tenderer's Final Tender were based on an abnormally low tender;

(vi) Aspects of the Competition were conducted by the Respondent (vis-a-vis CHC) in a manner which breached the General Principles of EU law, and in particular, the principle of transparency and/or CHC's legitimate expectations;

(vii) The Respondent afforded the Successful Tenderer more favourable treatment than it did CHC in the manner in which it conducted the Competition in breach of the principles of equal treatment and non-discrimination;

(viii) The Respondent took into account irrelevant considerations in making the Decision, and in particular CHC has pleaded that the Respondent inappropriately took into account political influence which was brought to bear on it in respect of the Competition. There is direct evidence to support this plea in a statement made by

Senator Gerard Craughwell in the Seanad on 31 May 2023 (i.e. the day that CHC was informed of the Decision) in which he stated inter alia that:

“The Department of Transport has set out its preferred tenderer for the search and rescue contract and that is Bristow Ireland, which I congratulate on the job. I am not one bit sorry to see that CHC has not gotten over the line. … From our point of view, this House and committee [i.e. the Joint Oireachtas Committee on Transport and Communications] did much work that influenced the way this contract went. It was a good day for Ireland that we did what we did.”

(ix) Certain of evaluators appointed by the Respondent to assess tender submissions had a conflict of interest. Indeed, it has been acknowledged by the Respondent on affidavit that two of the evaluators are former employees of the Successful Tenderer.”

11 . The proceedings were entered into the Commercial List of the High Court on 26 June 2023 and the application to lift the suspension of the award of the contract was heard the following week on 4 July 2023. The parties mentioned the matter further to the trial judge on 12 July 2023. The High Court judge delivered an extremely comprehensive judgment, within a remarkably short period of time, on 25 July 2023. He did so because, as will be discussed further, the time afforded to Bristow to implement and complete its transition plan to enable it to commence provision of the service on 1 July 2025 is very tight, and any delay in the commencement of the transition plan would jeopardise its ability to meet all the required milestones in the plan and thus to be in a position to “go live” on 1 July 2025. The judgment of the High Court will be considered in greater detail later in this judgment.

12 . Reflecting the urgency involved in these proceedings, on 24 July 2023, the day before the High Court delivered judgment, the parties mentioned the case to the Court of Appeal seeking an extremely urgent hearing of the anticipated appeal. The court felt it was inevitable, given the interests at stake for the parties, that an appeal would be brought by the...