An update on the procurement case of Neology UK Ltd v Newcastle-upon-Tyne City Council [2020] EWHC 2958 (TCC) (6 November 2020).
The High Court dismissed an application for summary judgment and lifted an automatic stay on the letting of the contract which had been activated by the issue of the proceedings.
Newcastle City Council’s (Newcastle) decision to award a contract to provide and maintain a system for automatic number plate recognition (ANPR) was challenged by an unsuccessful bidder, Neology UK Ltd (Neology). The ANPR system was needed to enforce a mandatory Clean Air Zone (CAZ).
Neology issued proceedings challenging the award decision, which triggered an automatic statutory suspension of Newcastle’s ability to enter into the contract. Neology also applied for summary judgment on the ground that the defendants had no real prospect of success at trial.
The Court held that:
- It would need to be shown that the defendant had no real prospect of resisting the claim in order to obtain summary judgment. Neology claimed that Newcastle had made a number of evaluation errors and the impact of not being awarded the contract would impact on its business strategy. The court concluded that the case was unsuitable for summary judgment as the evidence did not highlight any indications of unfairness or manifest disparity of treatment between tenderers.
- In the circumstances damages would be a just remedy for Neology. The court concluded that had damages not been a just remedy in all the circumstances, the balance of convenience would have come down in favour of lifting the stay to avoid substantial delay in implementing the mandatory CAZ which was in the public’s interest.
- The case demonstrates that Automatic suspension and summary judgment can be difficult to maintain where there are significant public interest grounds and it underlines the importance for bidders to bring forward well evidenced arguments that the loss of a contract will have more than a negative financial impact on them.