Construcciones Y Auxiliar De Ferrocarriles S.A. v Iarnród Éireann — Irish Rail and Another

• Jurisdiction: Ireland
• Judge: Mr. Justice Twomey
• Judgment Date: 26 November 2025
• Neutral Citation: [2025] IEHC 645
• Court: High Court
• Docket Number: RECORD NUMBER 2025/1548 JR

In the Matter of the Review of the Award of a Public Contract Pursuant to the European Communities (Award of Contracts by Utility Undertakings) (Review Procedures) Regulations 2010 (As Amended) and Order 84A of the Rules of the Superior Courts (As Amended)

Between

Construcciones Y Auxiliar De Ferrocarriles, S.A

Applicant

and

Iarnród Éireann – Irish Rail and Northern Ireland Railways Company Limited

Respondents

and

Stadler Rail Schweiz Ag

Notice Party

[2025] IEHC 645

RECORD NUMBER 2025/1548 JR

COMMERCIAL COURT

THE HIGH COURT

Tender – Award of contracts – Suspension – Respondents seeking to lift the suspension of a contract – Whether the balance of justice favoured the lifting of the suspension

Facts: A pair of inter-related contracts (the Contract) were awarded pursuant to a competitive tender process run by the respondents, Irish Rail and Northern Ireland Railways Company Ltd (IR/NI Rail). The Contract was for the purchase and maintenance of trains (and associated infrastructure upgrade works) for the Dublin-Belfast railway line. The notice party, Stadler Rail Schweiz AG (Stadler), was identified by IR/NI Rail as the Most Economically Advantageous Tenderer on 10 July 2025. The applicant, Construcciones Y Auxiliar De Ferrocarriles, S.A. (CAF), was informed of the decision to award the Contract to Stadler on 18 September 2025. On 17 October 2025, CAF, which was at that point the only other tenderer, issued proceedings. Under Reg. 8 of the European Communities (Award of Contracts by Utility Undertakings) (Review Procedures) Regulations 2010, CAF, as a disappointed tenderer was entitled to challenge the award of the Contract and Reg. 8(2) provides that the contracting entity ‘shall not conclude the contract’ (hence the automatic suspension of the contract); this suspension lasts until the High Court ‘gives leave to lift’ that suspension. Thus, in this case, the Contract could not be signed by IR/NI Rail and Stadler. On 28 October 2025, IR/NI Rail applied to the High Court to lift the suspension and enable the Contract to be signed.

Held by Twomey J that, in light of the urgency of the case, IR/NI Rail conceded (albeit, only for the purposes of the application to lift the suspension) that CAF’s complaints about the legality of the tender process raised a fair issue to be tried; accordingly, the Court was asked to only consider whether the balance of justice favoured the lifting of the suspension. He held that a more accurate way to consider the question was not whether the balance of justice favoured the continuation of the suspension, but rather whether the balance of justice favoured granting CAF the suspension. this was because it is clear from Word Perfect v Minister for Public Expenditure and Reform [2021] IECA 305, at para. 56 (per Barniville J) that this is the correct approach to these suspension cases. He held that even though the automatic suspension was in place as a matter of law, the onus of proof was on CAF to establish that the execution of the Contract should be suspended; otherwise, the suspension would be lifted.

Twomey J held that, primarily because of the risk that the Contract would be extinguished and that the funding which was being sought under the Peace-Plus EU Programme of €165 million for the Dublin-Belfast rail line would be lost if the suspension was continued, the balance of justice favoured the lifting of the suspension with immediate effect and that lifting the suspension led to the least risk of injustice to the parties.

Application granted.

JUDGMENT of Mr. Justice Twomey delivered on the 26 ^th day of November 2025

INTRODUCTION

1 Normally, for A to be able to stop B from signing a contract, which A alleges is unlawful, A would have to convince a court that his claims about that contract had merit. Yet, when it comes to the judicial review of important infrastructural projects which are subject to public procurement (such as a contract for over half a billion euro to supply new trains for the Dublin-Belfast line, in this instance), such a contract can be suspended without court involvement.

2 This may come as a surprise to many people; however, it arises because these public procurement contracts are automatically suspended by the simple act of a disappointed tenderer issuing proceedings, irrespective of whether those proceedings have any merit. A disappointed tenderer has, in effect, ‘an injunction for the asking’ which halts the signing of the contract, and this Court is not aware of any other instance where an injunction like this is obtained, not from a court, but by the simple act of issuing proceedings (irrespective of the merit of those proceedings).

3 It is of course important to note that there are policy reasons for this right of a disappointed tenderer to an automatic suspension of a public procurement contract. It is a right which arises under Regulations 8(1)(b) and 8(2) of S.I. No. 131/2010, the European Communities (Award of Contracts by Utility Undertakings) (Review Procedures) Regulations 2010 (the “ Remedies Regulations”), which was enacted pursuant to the Council Directive 92/13/EEC, as amended by Directive 2007/66/EC. Accordingly, it is important to note that an applicant who obtains an automatic suspension, by issuing proceedings, is simply exercising its rights under Irish law.

4 Nonetheless, the result of this legislation is that there is a hugely powerful legal tool in the hands of a disappointed tenderer. This is particularly striking, when one is dealing with multi-million-euro contracts for significant infrastructure projects (in this case, the contract is worth €650 million). Indeed, from a disappointed tenderer's perspective, even if there is only a minor chance of the merits of their challenge to the tender being upheld, with so much money at stake, one can see the attraction of challenging the tender they had lost, even if there is a slim hope that the contract will be awarded to them. It is of course important to note that it is not being suggested in any way that the substantive claims (made by the disappointed tenderer in this case, the applicant, a Spanish global transportation company, “ CAF”) are without merit or that CAF does not believe that it has a good chance of success at the trial of the action. As noted hereunder, at this interlocutory stage, this Court is not in a position to make a finding about the merits of CAF's claims regarding the procurement process.

5 The foregoing comments, regarding automatic suspensions in procurement cases, are however important background to why there was such an urgency in this case. This urgency arose, in part, because the automatic suspension of a €650 million contract was obtained by CAF, not by court order, but simply by the fact that it issued proceedings on 17 October 2025. This led the respondents (“ IR/NI Rail”) to bring an urgent application to lift the automatic suspension, which was heard by this Court on Tuesday 18 November 2025. After a day-long hearing, judgement was reserved. The following Tuesday (25 November), IR/NI Rail came into court to inquire as to when the judgment might be delivered. This is because IR/NI Rail needed to have the relevant contract signed by 30 November and they were seeking to ensure that there was sufficient time for an appeal to be heard by Friday 28 November, in the event of the automatic suspension not being lifted by this Court. The reason IR/NI Rail want the automatic suspension urgently lifted is because they believe they will lose funding of €165 million, from the EU, if they are not permitted to sign the contract within eight working days of the hearing of this matter, i.e. by 30 November 2025.

6 Finally, in this regard, it is important to bear in mind that the foregoing comments regarding the fact that large infrastructural projects can be suspended without court involvement, and so without having to show merit, have been outlined solely to provide context to the urgency which arose in this case. They have no application to the legal test to be applied in applications such as this one. This is because, as noted by the Court of Appeal in CHC Ireland DAC v The Minister for Transport [2023] IECA 229, this Court must start its consideration of the matter, as if no automatic suspension had occurred (and so the fact that a party has obtained an automatic suspension ‘for the asking’ is irrelevant).

The Contract which has been subjected to an automatic suspension

7 The challenge in this case is to the award of a pair of inter-related contracts (the “Contract”) worth €165 million pursuant to a competitive tender process run by IR/NI Rail. The Contract is for the purchase and maintenance of trains (and associated infrastructure upgrade works) for the Dublin-Belfast railway line, which is known as the Enterprise Service (“ Enterprise Service”).

8 The notice party, a Swiss company, Stadler Rail AG (“ Stadler”) was identified by IR/NI Rail as the Most Economically Advantageous Tenderer (“ MEAT”) on 10 July 2025. CAF was informed of the decision to award the Contract to Stadler on 18 September 2025. On 17 October 2025, CAF, which was at that point the only other tenderer, issued these proceedings.

9 Under Regulation 8 of the Remedies Regulations, CAF, as a disappointed tenderer was entitled to challenge the award of the Contract and Regulation 8(2) provides that the contracting entity, in this case IR/NI Rail, ‘ shall not conclude the contract’ (hence the automatic suspension of the contract). This suspension lasts until the High Court ‘gives leave to lift’ that suspension. Thus, in this case, the Contract for a total of €650 million cannot be signed by IR/NI Rail and Stadler, even though Stadler was the winner of the tender process.

10 It is not surprising therefore that, on 28 October 2025, 11 days after the issue of the proceedings by CAF, IR/NI Rail brought this application to lift...