Cemex UK Operations Ltd v Network Rail Infrastructure Ltd & Anor [2017] EWHC 2392 (TCC)

Case No HT-2017-000189[2017] EWHC 2392 (TCC)IN THE HIGH COURT OF JUSTICEQUEEN’S BENCH DIVISIONBUSINESS AND PROPERTY COURTS OF ENGLAND AND WALESTECHNOLOGY AND CONSTRUCTION COURTVenue Rolls BuildingDate Friday, 8 th September 2017
Before
THE HON MR JUSTICE COULSON
Between
Cemex UK Operations LtdClaimantNetwork Rail Infrastructure Ltd & AnorDefendantB E T W E E N:CEMEX UK OPERATIONS LIMITED Claimant- and -NETWORK RAIL INFRASTRUCTURE LIMITED Defendant- and -PCM RAIL.ONE AG Interested Party
Transcribed by Opus 2 International Ltd.(Incorporating Beverley F. Nunnery & Co.)Official Court Reporters and Audio Transcribers5 New Street Square, London EC4A 3BF Tel: 020 7831 5627 Fax: 020 7831 7737civil@opus2.digitalThis transcript has been approved by the Judge
MR M. BOWSHER QC and MR E. WEST (instructed by Gowling WLG (UK) LLP) appeared on behalf of the Claimant.MS S. HANNAFORD QC and MS E. HEALISS (instructed by Addleshaw Goddard LLP) appeared on behalf of the Defendant.MS F. McCREDIE QC (instructed by Morrison & Foerster (UK) LLP) appeared on behalf of the Interested Party.
J U D G M E N TIf this Transcript is to be reported or published, there is a requirement to ensure that no reporting restriction will be breached. This is particularly important in relation to any case involving a sexual offence, where the victim is guaranteed lifetime anonymity (Sexual Offences (Amendment) Act 1992), or where an order has been made in relation to a young person.This Transcript is Crown Copyright.  It may not be reproduced in whole or in part other than in accordance with relevant licence or with the express consent of the Authority.  All rights are reserved.
[1]INTRODUCTION The applications currently before the court arise out of a procurement challenge brought by the claimant, CEMEX UK Operations Limited (‘CEMEX’), against the decision dated 27th June 2017 of the defendant, National Rail Infrastructure Limited (‘NR’), to award a major contract concerning the manufacture and supply of railway sleepers to PCM RAIL.ONE AG (‘RAIL.ONE’).[2]CEMEX sent a letter before claim on 5th July to which NR replied on 12th July. The parties agreed that a contract would not be placed with RAIL.ONE until 4.00 p.m. on 18th July and, on that day, CEMEX issued its claim form that had the effect of automatically suspending the contract. NR have subsequently applied to lift the suspension.[3]The applications for determination now are:(a) The application by RAIL.ONE to be named as an interested party for the purposes of this hearing and the application to lift the suspension currently due to be heard on 22nd September;(b) The application by CEMEX dated 25th July for an extension of time to serve the particulars of claim until a date after the provision of further documents by NR; and(c) The application by CEMEX dated 28th July for specific disclosure from NR. In order to avoid argument about whether the disclosure application should be heard before the application to lift the suspension (see Alstom Transport UK Ltd v London Underground Ltd & Anor [2017] EWHC 1406 TCC), the parties have sensibly agreed that the suspension application will be heard in two weeks’ time, so that if there are any documents to be disclosed, that can happen in advance of the suspension hearing.[4]For reasons which will become apparent below, I shall deal with those three applications in the order that I have set them out above. There is one final point that should be made at the outset. In this procurement exercise, RAIL.ONE won the contract because theirs was the lowest price. In the somewhat convoluted way in which these things are recorded, that gave them a score of 100 percent. The second-place tenderer was not CEMEX. It was another company, X, who was given a score on price of 92 percent. CEMEX came third, so were therefore the last of the three tenderers with whom NR were negotiating. Their score was 82 percent. Thus, as both Ms Hannaford and Ms McCredie pointed out, even if CEMEX’s challenge was successful, they would not be awarded this contract. That is highly relevant to causation and therefore the potential arguments that might arise on the suspension hearing. It is only part of the background of the current applications.[2]THE POSITION OF RAIL.ONE[5]RAIL.ONE’s bid was based on a carousel system of sleeper manufacture. The bids of both X and CEMEX were based on a more conventional long-line system of manufacture.[6]The documents now sought by CEMEX by way of disclosure comprise significant parts of RAIL.ONE’s technical bid. RAIL.ONE says that these documents are highly confidential because they go to their proprietary system of manufacture. They vehemently object to disclosure of the documents into a confidentiality ring which, on CEMEX’s case, would include two technical advisors who have so far refused to sign an undertaking in relation to non-participation in future procurements. RAIL.ONE seeks to be formally named as an interested party and to make representations at both this hearing and the forthcoming suspension hearing.[7]Neither CEMEX nor NR objected to RAIL.ONE making submissions on the applications before me yesterday, although CEMEX has reserved its position in respect of RAIL.ONE’s entitlement to be heard at the suspension hearing. CEMEX also says that because this is not a judicial review application, RAIL.ONE cannot technically be joined as an interested party.[8]The new TCC guide for public procurement disputes makes plain that a party in the position of RAIL.ONE can become an interested party. I consider that on the facts that I have already outlined, RAIL.ONE should be made an interested party for the purposes of this hearing and the hearing of the application to lift the suspension. It seems to me that thereafter, the matter can be reviewed. Depending on the outcome of the applications before me and the application to lift the suspension, RAIL.ONE may have no wish to be further involved in these proceedings.[3]THE APPLICATION FOR AN EXTENSION OF TIME TO SERVE THE PARTICULARS OF CLAIM 3.1. Background[9]The claim form was issued and served on 19th July. Pursuant to the CPR, the particulars of claim had to be served within seven days; that is to say by 25th July. Having earlier indicated that it would be serving the particulars of claim as required by the CPR (see CEMEX’s solicitor’s letter of 19th July) CEMEX changed its mind at the last minute and on 25th July, it issued an application for an extension of time. The application alleged that until NR “provides specific disclosure of evidence relating to its alleged breaches and/or manifest errors of assessment” CEMEX could not plead full and proper particulars of its claim.[10]It is extremely unusual for a claimant in the position of CEMEX to refuse to provide its particulars of claim until after the provision of “evidence” by the utility or contracting authority. Although Mr Bowsher suggested that Eurostar v Alstom was such a case, the position there was that Alstom had provided its particulars of claim at the appropriate time and before the injunction hearing. The issue as to documents went to Alstom’s desire to plead a fuller case. That is not uncommon and is a very different situation to the present case, where there are no particulars at all.[11]I consider that CEMEX’s application raises an important point of principle and practice in procurement cases and it therefore needs to be considered independently of the precise nature and scope of the documents which are sought in the specific disclosure application. In addition, the application for specific disclosure was issued on 28th July, namely after the date for the service of the particulars of claim, and there remains at least the theoretical possibility that, if time was not extended in relation to the particulars of claim, the application for specific disclosure itself could become redundant because the action would have been struck out for non-compliance with the CPR. For all these reasons, therefore, it seems to me appropriate to take the application for an extension of time first. 3.2. The Applicable Principles[12]The application is made pursuant to CPR 3.1(2)(a). The court’s power to extend the time for compliance with CPR 7.4(2) requires a claimant to serve its particulars of claim “no later than the latest time for serving a claim form.” In this case, the claim form was issued on 18th July. So the latest date for service of the particulars of claim was 25th July.[13]The notes in the White Book at paragraph 7.4.3 make plain that:
“An application for an extension may be made either before or after the expiry of the relevant time limit. For commentary on such applications, see paragraph 7.6.8 below.”
That paragraph at 431 states that:
“A court considering whether on such an application it should exercise its general discretionary power ... to extend time for compliance with any rule (in this case Rule 7.4) should adopt the Rule 3.9 (relief from sanctions) framework (Price v Price [2003] EWCA Civ 888).”
That is, of course, because if the application to extend time fails, the particulars of claim will be out of time.[14]It is, of course, right that the fact that an application to extend time is made before the expiry of the relevant time limit is a highly material consideration when the court decides what to do if the extension application is unsuccessful. However, that cannot be a complete answer in every case, otherwise the extension regime could be abused by those seeking more time, whether justified or not.[15]It should be noted that, in the context of procurement challenges, everything has to be done in accordance with a very tight timetable from first to last. Support for that proposition, if it was in doubt, can be found in the decision of the Court of Appeal in Jobsin Co UK PLC (t/a Internet Recruitment Solutions) v Department Of Health [2001] EWCA Civ 1241. There, Dyson LJ (as he then was) said about the previous procurement regime:
“33. ...Regulation 32(4) specifies a short limitation period. That is no doubt for the good policy reason that it is in the public interest that challenges to the tender process of a public service contract should be made promptly so as to cause as little disruption and delay as possible. It is not merely because the interests of all those who have participated in the tender process have to be taken into account. It is also because there is a wider public interest in ensuring that tenders which public authorities have invited for a public project should be processed as quickly as possible. A balance has to be struck between two competing interests: the need to allow challenges to be made to an unlawful tender process, and the need to ensure that any such challenges are made expeditiously. Regulation 32(4)(b) is the result of that balancing exercise. It may often be the case that a service provider is not aware of the intricacies of regulations such as the 1992 regulations, and has little or no understanding of how they should be interpreted. If ignorance of such matters were routinely to be regarded as a good reason for extending the time for starting proceedings, the clear intent of regulation 32(4)(b), that proceedings should normally be started promptly and in any event not later than three months after the right of action first arose, would be frustrated. 38. As for (b), it is a fairly startling proposition that, even where a tenderer knows that he has grounds for starting proceedings, he has a good excuse for not doing so because such proceedings may imperil his relationship with the contracting authority and may jeopardize his prospects of securing the contract. It seems to me that a tenderer who finds himself in such a situation faces a stark choice. He must either make his challenge or accept the validity of the process and take his chance on being successful, knowing that the other tenderers are in the same boat. In my view, it is unreasonable that he should sit on his rights and wait to see the results of the bidding process on the basis that, if he is successful he will remain quiet, but otherwise he will start proceedings. I do not believe that a tenderer who deliberately delays proceedings in an attempt to have his cake and eat it has good reason for an extension of time if the outcome of the process is not to his liking.”
An application for an extension of time to serve the particulars of claim which, on the facts of this case, would have the effect of delaying the service of the particulars of claim by a minimum of seven weeks, must therefore been seen in the context of the required tight timetable in cases of this sort.[16]Perhaps for this reason, applications to extend time for the service of the particulars of claim in a procurement dispute are rare. In my view, given the other time constraints, it is certainly not the sort of application that this court should encourage. In addition, the new vigour with which relief from sanctions is now enforced should also serve to discourage such applications. In my view, in the present case, CEMEX embarked on a risky course when it chose to apply for more time to serve its pleading linked to the provision of extensive documents rather than doing the best it could on the information available to it. 3.3. Abnormally Low Tenders[17]Contrary to Mr Bowsher’s written submissions, I agree with Ms Hannaford and Ms McCredie that the only fair characterisation of CEMEX’s challenge is that RAIL.ONE’s tender should not have been accepted because it was “abnormally low.” That can be seen from a variety of sources including:(a) CEMEX’s letter of 5th July which contained a page of allegations under the heading of “abnormally low tender” and said: “Given the substantial disparity in costs between RAIL.ONE’s bid and the other bids, Network Rail should have carried out investigations in accordance with Regulation 84 of the UCR in order to satisfy itself that RAIL.ONE’s factory costs were not abnormally low. So that we may evaluate Network Rail’s compliance with the UCR, please provide us with pricing information and explanations submitted by RAIL.ONE in respect of the factory cost element of its bid together with the documentary evidence and records which record how Network Rail evaluated RAIL.ONE’s factory costs.”;(b) The claim form itself which said: “The breaches and/or manifest errors of assessment referred to above and which will be particularised in due course arise out of the defendant’s design and conduct of the procurement including, in particular, but without limitation: (a) The defendant’s design and conduct of the evaluation process, including the resubmission of tender material and its rescoring; (b) The defendant’s failure to determine that RAIL.ONE’s tender appeared to be abnormally low;(c) The defendant’s failure to seek explanations from RAIL.ONE and/or otherwise to assess any information provided by RAIL.ONE (whether originally part of its tender or otherwise) as establishing that its tender was abnormally low;(d) The defendant’s failure to reject RAIL.ONE’s tender as being abnormally low...”; and (c) The witness statement of Ms Van Ristell, CEMEX’s solicitor, in support of these applications which contains at paragraphs 19 to 26 a detailed exposition of CEMEX’s case on the abnormally low tender.[18]Indeed, by the end of his oral submissions, I did not understand Mr Bowsher to dissent from that characterisation of CEMEX’s claim. He accepted that the allegation about the abnormally low tender was “the crucial one for today.” It is on that express basis, therefore, that I deal with the application.[19]The regulations relating to abnormally low tenders can be found at Regulation 84 of the Utilities Contracts Regulations 2006. That provides: “(1) Utilities shall require economic operators to explain the price or costs proposed in the tender where tenders appear to be abnormally low in relation to the works, supplies or services. (2) The explanations given in accordance with paragraph (1) may in particular relate to—(a) the economics of the manufacturing process, of the services provided or of the construction method;(b) the technical solutions chosen or any exceptionally favourable conditions available to the tenderer for the supply of the products or services or for the execution of the work;(c) the originality of the work, supplies or services proposed by the tenderer;(d) compliance with the applicable obligations referred to in regulation 76(6);(e) compliance with obligations referred to in regulation 87;(f) the possibility of the tenderer obtaining State aid. (3) The utility shall assess the information provided by consulting the tenderer. (4) The utility may only reject the tender where the evidence supplied does not satisfactorily account for the low level of price or costs proposed, taking into account the elements referred to in paragraph (2). (5) The utility shall reject the tender where it has established that the tender is abnormally low because it does not comply with applicable obligations referred to in regulation 76(6).” (a) the economics of the manufacturing process, of the services provided or of the construction method; (b) the technical solutions chosen or any exceptionally favourable conditions available to the tenderer for the supply of the products or services or for the execution of the work; (c) the originality of the work, supplies or services proposed by the tenderer; (d) compliance with the applicable obligations referred to in regulation 76(6); (e) compliance with obligations referred to in regulation 87; (f) the possibility of the tenderer obtaining State aid.[20]Mr Bowsher made two particular submissions about this regulation. The first was that, as he put it at paragraph 49 of his skeleton:
“A claim alleging the existence of an abnormally low tender is the purest example of the situation where the claimant knows little or nothing.”
I do not agree with that. A party seeking to challenge the award to another tenderer only ever has the information given in the debriefing material by the contracting authority or the utility, whatever the grounds of challenge. If the information indicates that the successful tender was or may have been abnormally low then a claim can be pleaded on that basis, just as when the information indicates that, for example, there has been a manifest scoring error, a claim can be pleaded on that basis. There is, in my judgment, no real difference between them. Further, Mr Bowsher’s submission could, on one view, be taken as an admission that here, CEMEX has launched a challenge with “little or nothing to back it up.” That impression was rather confirmed by one of his oral submissions to the effect that:
“The core element of the cause of action does not exist in CEMEX’s own knowledge.”
[21]Mr Bowsher’s second submission was that in order to sustain a challenge as to RAIL.ONE’s price, CEMEX was entitled to extensive documents relating to RAIL.ONE’s design and proposed methodology. As he put it at paragraph 50 of his skeleton argument:
“In order to establish whether RAIL.ONE has tendered on a viable long term basis, CEMEX needs to see at least the outline of the technical solution proposed.”
[22]I reject that submission. In my view, it is wrong to suggest that a challenger in these circumstances can simply assert that a successful tender was “abnormally low”, and then sit back expecting to be given all the tools to undertake a comprehensive review of the technical detail of that tender and then, in its own time, reach a view as to whether the successful tenderer’s technical solution was “viable on a long-term basis.” That is the job of the contracting authority/utility before the award, not the business of the unsuccessful tenderer after the tender process has been completed.[23]It must be remembered at all times that in a procurement challenge, the issue is limited to whether the contracting authority has made a manifest error of some sort in evaluating the successful tender or the unsuccessful tender. Whether or not a tender is abnormally low is simply a species of manifest error. It involves a very limited review by the court (see BY Development Limited & Ors v Covent Garden Market Authority [2012] EWHC 2546 TCC). It is not a rerun of the entire tender process to see if something might have been done differently. 3.4. The Figures[24]Some information as to price has already been disclosed to CEMEX. The decision/debriefing letter of 27th June contained 23 pages. That indicated that RAIL.ONE’s price was 18 percent lower than CEMEX’s price (see paragraph 4 above). It also said:
“CEMEX’s price for sleepers was more than RAIL.ONE’s being between 0-15 percent more expensive than RAIL.ONE’s price... CEMEX’s price for the factory was significantly more than RAIL.ONE’s being between 75-90 percent more expensive than RAIL.ONE’s price.”
That makes plain that it was the factory cost that was the decisive element.[25]In my view, coupled with the other information in the letter and the other information subsequently made available, together with their own extensive knowledge and experience of the railway manufacturing industry, this was sufficient for CEMEX to plead a case as to the RAIL.ONE tender price and why, if that was their case, it was abnormally low.[26]I note that two further categories of documents relating to the make-up of RAIL.ONE’s figures were sought by CEMEX in a letter of 25th July. They were offered by NR on 26th July. They were category 1, the sleeper costs spreadsheets, and category 18, the pricing document for RAIL.ONE’s final tender. On CEMEX’s case, they were important documents, yet CEMEX has refused to accept service of them because it was not happy that the proposed confidentiality ring into which the documents would be disclosed was ‘lawyer-only’. It has said that it will only accept these documents when the confidentiality ring has been extended to include the two consultants who have not agreed to provide the undertakings as to future involvement.[27]I am bound to say that I regard that stance as inexplicable. To refuse to provide a pleading by the time required by the CPR and then to refuse to accept service of documents, which are said to be directly relevant to that pleading, seems to me to smack of arrogance. It suggests a claimant determined to do everything its own way or not at all. No sensible explanation has been given for that stance. Although it is suggested that the documents would not be understood by lawyers, that is just not a submission that CEMEX can make unless and until it has taken service of the documents and considered what they say. I am bound, therefore, to conclude that, to the extent that these two categories of documents would have assisted the claimant in pleading a fuller particulars of claim as to the abnormally low tender allegation, the fact that no such pleading has yet emerged is CEMEX’s own fault.[28]I deal in more detail with the make-up of the confidentiality ring in section 4 below. 3.5. The Technical Case[29]In the correspondence, CEMEX’s demands for documents has shifted in emphasis from the documents concerned with pricing to those concerned with RAIL.ONE’s technical solutions to the requirements of the contract. CEMEX points to its experience in manufacturing railway sleepers using the long-line method and so they say, as summarised in paragraph 56 of Mr Bowsher’s skeleton:
“In the light of that knowledge, CEMEX does not consider it feasible for RAIL.ONE to be able to meet NR’s requirements on a long-term and sustainable basis at the price which has apparently been submitted.”
Thus, they maintain that RAIL.ONE’s carousel system could not be utilised in this case and so the tender based upon it must be abnormally low. Putting the point another way, CEMEX suggested if it could not do it then nobody could.[30]There is no doubt that in relation to this technical aspect of the case, the battle lines have been drawn for some time. CEMEX has always been concerned that RAIL.ONE’s successful tender was based on the carousel method. That method was identified and confirmed by Ms Dwyer’s letter of 24th July at paragraph 7. The concerns were expressed in Ms Van Ristell’s statement at paragraph 24. The use of the carousel system was confirmed by Ms Dwyer’s statement of 18th August at paragraph 51 and should there have been any doubt about it, Mr Neil’s detailed statement deals with that system at paragraphs 7 to 18. Indeed, Mr Neil’s statement also attaches a three-page expert’s report which CEMEX says supports its position. Thus, Mr Bowsher’s suggestion in the note delivered on the morning of the hearing and repeated orally, that somehow it was only on the service of RAIL.ONE’s material on 4th September that they knew that RAIL.ONE had tendered on the carousel method, was incorrect and seemed to me to be designed to over-emphasise the alleged importance of what was received from RAIL.ONE.[31]In my view, the only “new” information in that material was Mr Bode’s confirmation that the carousel system was a proprietary system unique to RAIL.ONE and the product of 60 years of research and development. I do not regard that as an earth-shattering revelation. In the small world of international railway engineering, CEMEX would have known that RAIL.ONE’s proposed use of a carousel system would have been based on its own designs. Mr Bode’s statement does not justify the suggestion that following its service, CEMEX is now in a position to plead a particulars of claim whereas before it was not. In my view, there is nothing in Mr Bode’s evidence which could explain that volte-face.[32]Of course, it does not necessarily follow that, merely because CEMEX does not understand how the cheaper carousel method can be used to manufacture sleepers of proper quality that RAIL.ONE’s design must be flawed and their bid therefore abnormally low. However, it seems to me plain that such a case is arguable and can therefore be pleaded on that basis. I have already referred to the expert evidence that CEMEX has obtained to the effect that RAIL.ONE’s design solution faces various difficulties and may not be possible. That is the material attached to Mr Neil’s statement. There is therefore no basis for requiring the provision of any further documentation at this stage before CEMEX provides a proper particulars of claim. 3.6. Summary on the Extension Application[33]The various difficulties with the extension application which I have outlined above may explain why, after the end of his submissions on 7th September, Mr Bowsher subsequently indicated that CEMEX could provide particulars of claim by 4.00 p.m. on Tuesday, 12th September, regardless of the outcome of the separate specific disclosure application. Certainly, as I have indicated, there was nothing in the evidence provided by NR or RAIL.ONE in opposition to that application which justifies the change of stance.[34]In my view, although CEMEX appears to have a rather difficult case, it has always had sufficient information to plead a particulars of claim. That document might, in other circumstances, have been a springboard for an application for specific disclosure, but that has not happened and, instead, the court has had to do its best on that application in the absence of a proper particulars of claim. In my view, that situation has been exacerbated by CEMEX’s refusal to acknowledge the realities of its position as the third out of three tenderers and its refusal to accept the documents that have been offered to it. So no extension of time in respect of the particulars of claim has been justified.[35]That conclusion might have given rise to various difficulties as to the application of those parts of the CPR concerning relief from sanctions and the like. Happily, those are not matters which I need to address. That is because, on behalf of NR, Ms Hannaford reiterated that she did not resile from its offer made throughout the correspondence that when the application for an extension of time was refused, CEMEX could have three days to produce the particulars of claim. That would extend time for service of a particulars of claim to 4.00 p.m. on Tuesday, 12th September.[36]By the end of the hearing, Mr Bowsher was anxious to indicate to the court that he accepted that offer. For the reasons I have given, I understand why. It seems to me that it would be unjust for the court to impose a more onerous penalty for the failure of the application given Ms Hannaford’s clear stance. I therefore extend time to 4.00 p.m. on Tuesday.[37]I now turn to the application for specific disclosure. As with the application for an extension of time, I consider that it faces considerable difficulties.[4]THE APPLICATION FOR SPECIFIC DISCLOSURE 4.1. The Applicable Principles[38]CPR 31.12 gives the court the power to order specific disclosure. A party seeking early disclosure has to show that the documents are relevant and that it is proportionate and in accordance with the overriding objective that they be disclosed early. The principles when applied to procurement cases were set out in the judgment in Roche Diagnostics Ltd v Mid Yorkshire Hospitals NHS Trust [2013] EWHC 933 TCC.[39]The most recent procurement case concerned with an application for specific disclosure prior to the hearing of the application to lift the suspension is Alstom Transport UK Ltd v London Underground Ltd [2017] EWHC 1584 TCC. In that case, Mr Justice Stuart-Smith ordered the early disclosure of a relatively small number of documents, a result consistent with the need in procurement cases to focus on the central issues and to guard against ‘fishing’ applications. I also note that, in that case, he did not order the disclosure of large parts of the successful tender.[40]Mr Bowsher submitted that what might be called the conventional approach to pre-action disclosure in procurement cases is no longer applicable as a result of the Supreme Court’s decision in Nuclear Decommissioning Authority (Appellant) v EnergySolutions EU Ltd (now called ATK Energy EU Ltd) (Respondent) [2017] UKSC 34 (see paragraph 26 of his skeleton). In that case, the Supreme Court said that damages would only be available in a procurement case if an entitlement were established in accordance with the Francovich principles governing the liability of the state to make reparation. Mr Bowsher went on at paragraph 27 of his skeleton to say:
“The practical effect of the Supreme Court judgment in EnergySolutions is thus that on an application to lift the automatic suspension, the court can no longer treat the matter of whether there is a serious issue to be tried as a mere threshold, nor consider adequacy of damages purely through a domestic law prism where the focus has been largely, if not exclusively, on whether or not loss can be adequately calculated. These matters in turn affect the nature and amount of disclosure that must be made in order to ensure that the parties are on a more equal footing at the outset of the claim and at the hearing of any application to lift the suspension.”
As I understand it, his argument was that, because of the decision in EnergySolutions, the issues at the suspension hearing as to whether or not there is a serious issue to be tried will require a much more detailed and thorough review than has hitherto been the case which, in turn, will require much more extensive disclosure at the outset. It is a submission which is envisaging the court embarking on a full-blown analysis of the merits of the challenge at a very early stage of the case (and before the contract has been let because this would be taking place during the period of the automatic suspension).[41]I do not accept that that summary represents the law following the decision in EnergySolutions. Such a summary would be contrary to the EU procurement case law, the various iterations of the Public Contract and related Regulations in the UK, and the decisions of the courts, including the decisions of the Technology and Construction Court in procurement disputes over the last ten years. Whilst I acknowledge that that part of the decision in EnergySolutions came as something of a surprise to procurement practitioners, the ramifications for bread and butter procurement disputes of the type with which this court is familiar are not yet clear, mainly because they do not feature in the judgments in the Supreme Court at all. However, there is nothing in those judgments to indicate that the court was making fundamental changes to the way in which the Regulations operate or the way in which the court polices procurement challenges. There is nothing in EnergySolutions which bears on the proper approach to an early application for specific disclosure. 4.2. The Documents Sought[42]The documents sought are set out in an attachment to Ms Van Ristell’s statement. They are not individually numbered. They are in a number of different categories which have different numbers to those that were sought in the letter of 25th July to which NR responded on 26th July. It appears that the documents in what has been called categories 1 and 18 relate to the financial information and those are the documents to which I have already referred in paragraph 26 above. All the other categories relate to the technical and detailed elements of RAIL.ONE’s bid.[43]Examples of those documents are categories 5 and 10. Category 5 is described as:
“3.3 Development, Form and Layout The following should be provided to demonstrate the general approach to each site and building design: Indicative site plan: showing proposed building location, site boundary and security, vehicular and pedestrian access points, rail siding and gantry crane location, stockpile location. Rail siding lengths and extent of gantry crane coverage should be clearly indicated. Stockpile areas should be clearly annotated with the sleeper storage capacity; Indicative building footprint: showing production hall overall dimensions, supporting office area; Indicative building areas: to define Gross Internal Area for supporting offices, Gross Internal Area for production hall; Indicative building massing: showing building heights, including silos; Descriptive text: demonstrating the Supplier’s understanding of the project design requirements; The indicative requirements of the Local Planning Authority should be explicitly addressed by the design information submitted with this tender.”
Category 10 is described as:
“4.7 Supply of fit-out: Confirmation of proposed production method/format; Confirmation of ability to comply with the production capacity requirements; Schedule of component/items to be removed after the initial supply period ends.”
The following should be provided to demonstrate the general approach to each site and building design: Indicative site plan: showing proposed building location, site boundary and security, vehicular and pedestrian access points, rail siding and gantry crane location, stockpile location. Rail siding lengths and extent of gantry crane coverage should be clearly indicated. Stockpile areas should be clearly annotated with the sleeper storage capacity; Indicative building footprint: showing production hall overall dimensions, supporting office area; Indicative building areas: to define Gross Internal Area for supporting offices, Gross Internal Area for production hall; Indicative building massing: showing building heights, including silos; Descriptive text: demonstrating the Supplier’s understanding of the project design requirements; The indicative requirements of the Local Planning Authority should be explicitly addressed by the design information submitted with this tender.” Confirmation of proposed production method/format; Confirmation of ability to comply with the production capacity requirements; Schedule of component/items to be removed after the initial supply period ends.” 4.3. The Documents Offered and the Confidentiality Ring[44]As I have said, on 26th July, NR offered disclosure of the documents in categories 1 and 18 into a proposed confidentiality ring. There is therefore no dispute, in principle, in respect of those documents. The issue is whether or not it is reasonable for that confidentiality ring to be lawyer only at this stage or whether CEMEX is entitled to insist that the ring includes two outside advisors. These would be Mr Darroch on the technical material and, on the figures, Mr Cheetham. As I have said, neither of those individuals have yet been prepared to give the undertaking in relation to future non-involvement.[45]In my view, this issue is easily disposed of, even though I consider that issues as to the precise make-up of confidentiality rings are self-evidently not proper matters for the court and classically matters for the parties to sort out and agree. In the present case, I can see no difficulties whatsoever in the confidentiality ring being restricted to lawyers, at least at this initial stage. It is only if there is some element of the material which the lawyers cannot follow or understand that will lead to the parties needing to consider a modification to the make-up of the ring.[46]I have already said that, in my view, CEMEX has acted unreasonably in refusing to accept the documents in categories 1 and 18.[47]In addition, it is plain that these documents contain highly confidential information. In those circumstances, it is usual for outside advisors or assessors to sign an undertaking that they would not be involved in future procurements in this area. The time period in the proffered version of the undertaking in this case is three years. I have seen nothing to indicate that that is in some way an unreasonable period and I confirm that, in my view, it is reasonable. Mr Cheetham has refused to sign the indemnity at all. On the face of the correspondence, so too has Mr Darroch, although Mr Bowsher indicated in his oral submissions that Mr Darroch was prepared to agree to an undertaking “for a short time”, but no further details have been provided.[48]I am not prepared to sanction the widening of the confidentiality ring in such uncertain circumstances. I do not see how, as Mr Bowsher suggested, Mr Cheetham can be kept apart from anything technical and just confine himself to the figures. The figures relate to elements of the carousel system so we inevitably discover what it was that was being priced. As to Mr Darroch, I note that in the seven weeks of correspondence about the undertaking, he has not offered to sign the proffered undertaking and it does not seem to me, in the present circumstances, that the court should or could modify the terms.[49]I also note that in addition to categories 1 and 18, NR also offered to disclose another category of documents, category 21, which had been sought by CEMEX and which had been offered by NR. That related to NR’s evaluation of the RAIL.ONE bid. It is noticeable that the documents are described by CEMEX as being:
“Any internal reports, memoranda, or the like reporting any view or decision reached within NR as to whether the RAIL.ONE tender appeared to be abnormally low or not, whether there were matters that sufficiently explained the level of the bid, or whether the bid was, in any event, sufficiently realistic to be taken forward as a viable bid.”
[50]Those documents have obviously been refused by CEMEX for the same reasons that I have already noted. This is significant in two ways. The first is because those documents would appear, on the face of it, to lie at the heart of what CEMEX says it needs in order to plead a case in any event. Secondly, it is significant because, as Mr Bowsher confirmed, that category of documents is not repeated in Ms Van Ristell’s list and, indeed, there is no part of that list which includes any documents relating to NR’s evaluation of the RAIL.ONE tender. The documents that are sought in the application are limited entirely to the major elements of RAIL.ONE’s winning bid. 4.4. The Disputed Documents[51]NR has not offered disclosure of any of those bid documents. It says that they are irrelevant to CEMEX’s claim as presently advanced. On the basis of the material that I have seen as it stands, and for the reasons already given, I agree with that but, in addition, there are a number of other reasons why the claim for specific disclosure for the categories of documents identified by Ms Van Ristell has not been made out.[52]First, Ms Van Ristell makes clear at paragraph 5 of her witness statement that the application for specific disclosure is justified because the documents are required in order to allow CEMEX to plead the particulars of claim. That case has fallen away because Mr Bowsher agreed to provide the pleading by next Tuesday regardless of disclosure. It has also not been made out on the merits, for the reasons that I have addressed in section 3 above. So with the collapse of CEMEX’s principal justification for the application for specific disclosure, it is difficult to see how the application can now succeed.[53]Secondly, there is a separate reason why, certainly at this stage, I would not order the disclosure of these documents. That is because they are plainly and obviously highly confidential to RAIL.ONE. They reveal, as Mr Bode puts it, “the DNA of the whole company”. The disclosure of the documents at this stage to representatives of CEMEX as a competitor would be disproportionate and unjustified for all the reasons that I have given.[54]Again, sensing perhaps that the application for specific disclosure was on difficult ground, Mr Bowsher sought to limit the application to categories 5 and 10 which I have set out in full at paragraph 43 above, but there were separate difficulties even with that purported limitation. Category 5 appears to relate entirely to straightforward building elements, location, footprint and so on, and contained nothing on its face that would give any clue to the technical detail of RAIL.ONE’s carousel system. How the documents in category 5 could add anything to the argument about the abnormally low tender, either for the purposes of the production of a particulars of claim or, indeed, for the suspension hearing, was not explained.[55]The application in respect of category 10 was equally difficult. There are three bullet points in category 10: the first two, which refer to ‘confirmations’, are not obviously documents at all, and the third (which is a schedule of components or items to be returned after the expiry of the initial supply period) appears to be irrelevant to any issue in this case. So it does not seem to me that, even on the narrow basis, this application could succeed.[56]Immediately before and during the course of the hearing, the documents which CEMEX focused on varied. At one point, it was suggested that what it wanted was “documents which evidence where RAIL.ONE’s proprietary system has been used”, which appeared to be a request for RAIL.ONE’s historical data, presumably going back years, and relating to the use of its proprietary system. There was no formal application for such documents, so it is not a matter that I could address, but even if there had been, it does not seem to me that specific disclosure could address such documents. For one thing, they would not be in NR’s possession or control. In addition, they do not seem to me to have any relevance to the issues.[57]A potentially more important change was the suggestion that what mattered was NR’s verification of the system and that the documents sought were the “evidence of NR’s verification of these matters.” Mr Bowsher developed that in his oral submissions when he said that what mattered was “what NR knew and what it did about it.”[58]It seems to me that there are two insurmountable difficulties with the presentation of the disclosure application on that basis. First, as noted in paragraph 50 above, none of the documents in Ms Van Ristell’s list go to or touch on NR’s evaluation process. So this change of course is not encompassed in the application and I could not fairly deal with it on an ad hoc basis. Secondly, although NR has offered the evaluative documents going to the abnormally low tender, as set out above, CEMEX has refused to accept them. Therefore, it is completely impossible for the court to conclude that this potential change of focus is one in which CEMEX truly believes. 4.6. Summary on the Specific Disclosure Application[59]For the various reasons which I have indicated, the application for specific disclosure is refused.[5]CONCLUSIONS[60]For the reasons set out in section 2 above, I identify RAIL.ONE as an interested party for this hearing and for the hearing to lift the suspension in a fortnight’s time.[61]For the reasons set out in section 3 above, I refuse the application to extend time for the service of the particulars of claim on the basis on which it was made. I do however extend time, because that is what the parties agreed, for the service of the particulars of claim to 4.00 p.m. on Tuesday, 12th September.[62]For the reasons set out in section 4 above, I refuse the application for specific disclosure.