SIAC Construction Ltd v The National Roads Authority

• Jurisdiction: Ireland
• Judge: Mr. Justice Kelly
• Judgment Date: 16 July 2004
• Neutral Citation: [2004] IEHC 128
• Court: High Court
• Date: 16 July 2004

[2004] IEHC 128

THE HIGH COURT

RECORD No. 323 JR/2004

SIAC CONSTRUCTION LTD v. NATIONAL ROADS AUTHORITY

COMMERCIAL

IN THE MATTER OF COUNCIL DIRECTIVE 89/665/EEC AND IN THE MATTER OF THE EUROPEAN COMMUNITIES (REVIEW PROCEDURES FOR THE AWARD OF PUBLIC SUPPLY, PUBLIC WORKS AND PUBLIC SERVICES CONTRACTS) (NO. 2) REGULATIONS, 1994

BETWEEN

SIAC CONSTRUCTION LIMITED

APPLICANT

and

THE NATIONAL ROADS AUTHORITY

RESPONDENT

Abstract:

Practice and Procedure - Limitation of actions Motion to strike out proceedings - European law - Public procurement - Whether proceedings initiated at earliest opportunity or within time limits provided by Rules of Court - Whether time to challenge award of contract should be extended - Council Directive 89/665/EEC - Rules of the Superior Courts 1986, Order 84A.

Statutory interpretation - Words and phrases - "Date when grounds for application first arose" - Purposive approach - European Communities (Review Procedures for the Award of Public Supply, Public Works and Public Services Contracts) (No. 2) Regulations 1994 (S.I. 309) - Rules of the Superior Courts 1986, Order 84A.

Facts: Order 84A, rule 4 of the Rules of the Superior Courts 1986 provides that "an application for the review of a decision to award or the award of a public contract shall be made at the earliest opportunity and in any event within three months from the date when grounds for the application first arose unless the Court considers that there is good reason for extending such period". Order 84A, rule 9 provides that "at any time after the issue of the originating notice of motion an applicant for review may make any interim or interlocutory application to the Court for the taking of interim measures with the aim of correcting the alleged infringement...including measures to suspend...the procedure for the award of a public contract". The applicant was informed in October 2003 that it had failed to secure a contract for the construction of a road put out to tender by the respondent and sought damages for infringement of its rights under Council Directive 89/665/EEC (the "Remedies Directive"). The applicant instituted proceedings in April 2004. The applicant contended that the respondent was unable to apply and did not apply the relevant award criterion of financial robustness in the tendering process as required under European law and further breached Council Directive 93/37/EEC by the use of a "negotiated procedure" in the tendering process. The respondent raised, as a preliminary issue, a complaint that the applicant was out of time in mounting its action, as the respondent had notified the applicant that it had intended to use the "negotiated procedure" for the tendering in August 2001 and that time began to run against the applicant in relation to the first complaint from August 2003. It contended that the Rules of the Superior Courts had to be read in a manner consistent with European directives which gave rise to them and, therefore, Order 84A of the Rules of the Superior Courts applied to decisions taken by contracting authorities regarding contract award procedures and that where complaints of that sort were made, time began to run from the date when the grounds for such complaint first arose. The applicant contended that time began to run from the date the contracts were awarded in February 2004 and in the alternative, if the respondent was correct in its submissions, the applicant sought an extension of time within which to bring the proceedings.

Held by Kelly J in dismissing the applicant's claim that where a national court is applying national law, it must, as far as possible, in the light of the wording and purpose of a European directive, do so in oder to achieve the result pursued by that directive. The obligation placed on national authorities by Council Directive 89/665/EEC was to take measures necessary to ensure that contract award procedures decisions may be reviewed effectively and as rapidly as possible. National authorities were obliged to ensure that the Remedies Directive was implemented in full and extended to other decisions taken in respect of contract award procedures. Therefore, complaints concerning procedures followed had to be brought at the earliest opportunity and in any event, within three months from the date when grounds for the complaint first arose, regardless of whether the contract had been awarded or not, which was in August 2001 in relation to the negotiated procedure and October 2003 in relation to the applicant's other complaints. Applying a harmonious interpretation in accord with Council Directive 89/665/EEC thereto, Order 84A of the Rules of the Superior Courts 1986 referred to the supervision of the procedure for the award of a public contract or the implementation of any decision taken by the contracting authority and not merely to decisions to award a contract or the award of a contract.

Reporter: P.C.

1 Mr. Justice Kelly delivered the 16th day of July, 2004

INTRODUCTION

2 The applicant was a minority member of a consortium, called EuroLink, which failed to secure the contract for the construction of the Dundalk Western Bypass.

3 It complains that rights and entitlements afforded to it under Council Directive 93/37/EEC (the Works Directive) have been infringed. It brings these proceedings pursuant to Council Directive 89/665/EEC (the Remedies Directive), as applied in this jurisdiction by Statutory Instrument 309 of 1994. It seeks damages.

4 The applicant is not supported in its complaints by the majority member of EuroLink, a company called Cintra Concesiones de Infrastructuras de Transporte SA, (Cintra). In fact, Cintra goes further and states that it does not agree with the applicant's complaint and has no complaints itself about the transparency or objectivity of the process in question. Cintra is not participating in any way in the applicant's complaints or these proceedings.

5 This judgment relates to a preliminary issue raised by the respondent to the effect that the applicant is out of time to mount this action. If the respondent is correct in that regard, the applicant seeks an extension of time within which to bring the proceedings.

6 It is necessary to look in some detail at the background to the application in order to understand the issues which arise.

THE PARTIES

7 The applicant is a limited liability company. It carries on business as a construction company at Clondalkin, Dublin.

8 The respondent is a statutory body created under the provisions of the Roads Act, 1993. Section 17 of that Act provides that it is under a general duty to secure the provision of a safe and sufficient network of national roads. It has been given overall responsibility for the planning and supervision of works for the construction and maintenance of national roads.

THE NATIONAL DEVELOPMENT PLAN

9 The National Development Plan 2000–2006 includes a strategy designed to improve Ireland's physical infrastructure and, in particular, the national road network. £5.59 billion, at 1999 prices, is planned for road construction and improvement works.

10 Public Private Partnerships are identified in the National Development Plan as being essential in helping to deliver its objectives. The Government set a target of securing £1.27 billion of private finance to supplement exchequer and EU investment in the National Roads Programme. If this is not achieved, large sections of the national road network will not be delivered as planned.

11 Nine road projects were identified by the respondent as being suitable for development by means of Public Private Partnerships. One of these is the Dundalk Western Bypass.

THE DUNDALK WESTERN BYPASS

12 The object of the Dundalk Western Bypass project is to complete the motorway between North Dundalk, County Louth and Gormanstown, County Meath, and to operate and maintain the existing section of the road network. It is being carried out on the basis of a design, build, finance and operate contract, having a term of approximately 30 years. The way in which this is done is that a special company, called a Public Private Partnership Company (PPP Co.), is set up for the purposes of contracting with the respondent for the project. That company is obliged inter alia to carry out the works and operations. The respondent acts as the contracting body and has responsibility for the planning of the project. The PPP Co. is responsible for the design, building, financing and operation of the road for the 30 year contract term. The revenue for the PPP Co. is derived from tolls on the road. At the expiration of the 30 year term, the management of the road and the entitlement to the toll revenue will revert to the respondent.

13 In accordance with the Works Directive, which governs the provision of awards of public contracts worth in excess of £5 million, the contract in question was put out to tender.

THE APPLICANT'S COMPLAINTS

14 Three possible procedures are envisaged in the Works Directive. They are an open procedure, a restricted procedure and a negotiated procedure. The respondent chose to use the negotiated procedure. That decision is the first ground of complaint made by the applicant. The respondent notified potential tenderers of its decision to use the negotiated procedure by means of publication in the Official Journal on 10 ^th August, 2001.

15 Notwithstanding the complaint which it now makes concerning the decision to use the negotiated procedure, the applicant participated fully in the negotiated procedure tendering process.

16 By December, 2001 four candidates had been selected to proceed to the invitation to negotiate stage of the procedure.

17 Thereafter extensive consultation and evaluation took place between the respondent and the four shortlisted candidates. That resulted in a decision by the respondent in April, 2003 to the effect that...