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No Time To Delay – Challenging Public Procurement Decisions

No Time To Delay – Challenging Public Procurement Decisions

If public bodies were to wish for anything this Christmas, it might be for clarity in relation to the methods of and timings for challenging public procurement decisions not governed by the Public Procurement (Scotland) Regulations 2012.  If that is the case, then Lord Tyre’s decision in Kenman Holdings Limited v Comhairle Nan Eilean Siar and others last week may be an early Christmas present. 

The case relates to a challenge by Kenman Holdings Limited of the award by the Comhairle nan Eilean Siar of a contract for the development and operation of a hotel at Lews Castle to another private company.  The Comhairle advised the company it was the preferred bidder in November 2012 and the agreement was signed in July 2014. 

Fast forward to May 2015 and Kenman Holdings Limited, a company based on the Isle of Lewis, petitioned the Court of Session for the Judicial Review of the Comhairle’s decision.  Lord Tyre heard arguments on preliminary issues at a hearing in October 2015. 

In his decision, Lord Tyre considered the correct procedure and available remedies – and whether Kenman should have followed the procedure set out in the Procurement Regulations, meaning that the petition for Judicial Review would have been incompetent.  The contract fell within an exception to those regulations but the Comhairle had voluntarily adopted the regulations and therefore argued that the regulations should apply in relation to any challenges – thus excluding Judicial Review.

Lord Tyre held that as the contract fell outwith the scope of the procurement regulations, domestic procedure and remedies applied and so the petition was not incompetent on that basis.  Interestingly, he went on to say that as the Comhairle had voluntarily adopted the procurement regulations, parties were also entitled to rely upon the procedure and remedies available under the regulations in addition to those available under domestic law.

The second issue considered by Lord Tyre was whether Kenman had delayed unreasonably to raise proceedings whilst failing to speak out against the decision (mora, taciturnity and acquiescence).

Kenman began questioning the Comhairle’s decision in March 2014 and in June 2014 their solicitors wrote a letter setting out detailed allegations of breach of the Procurement Regulations.  These allegations formed the petitioner’s principal complaints when proceedings were ultimately raised almost a year later.  Lord Tyre considered Kenman’s actions and held that Kenman had delayed unreasonably in raising proceedings and had failed to speak out against the decision. Together these points indicated that Kenman had accepted (albeit reluctantly) the Comhairle’s decision.

Interestingly, Kenman had made numerous Freedom of Information requests but Lord Tyre saw them as seeking further information on grounds of public interest rather than inferring that Kenman was contemplating court proceedings.  Perhaps the result would have been different if the letters had noted Kenman’s intentions.

Lord Tyre was persuaded by the respondents’ arguments on delay and refused Kenman’s petition.  Lord Tyre’s early Christmas present clarifies the remedies available when a public body voluntarily adopts the Procurement Regulations and adds further colour to the ongoing discussion about mora, taciturnity and acquiescence.

Fiona Davidson
Senior Solicitor

LChalmers