“It is no part of the court’s function at this stage of the litigation to try to resolve conflicts of evidence on affidavit as to facts on which the claims of either party may ultimately depend nor to decide difficult questions of law which call for detailed argument and mature considerations. These are matters to be dealt with at trial…So unless the material available to the court at the hearing of the application for an interlocutory injunction fails to disclose that the plaintiff has any real prospect of succeeding in his claim for a permanent injunction at the trial, the court should go on to consider whether the balance of convenience lies in favour of granting or refusing the interlocutory relief that is sought.”
“…if it would be unjust to leave a party to his remedy in damages, the damages are by definition an inadequate remedy”
“…Evans Marshall is a decision of the Court of Appeal that predated American Cyanamid. The House of Lords in American Cyanamid did not adopt the Court of Appeal’s formulation, asking instead whether damages in the measure recoverable at common law would be an adequate remedy. However, the courts have routinely adopted either or both formulation, implicitly treating them as two sides of the same coin, even if, in some cases, the formulations may carry slightly different emphasis”. iii). With the greatest respect to Kerr J, the passage in Vodafone to which Ms Hannaford refers does not appear to me either to reflect the exercise that O’Farrell J was in fact carrying out in Draeger or to be consistent with existing authority. iv). In Draeger, O’Farrell J expressly considered the issue of adequacy of damages for the claimant at paragraphs 35 to 41, finally deciding that it was arguable that damages would not be an adequate remedy in circumstances where (at [41]) the procurement “…is being watched by a number of other fire and rescue services and is likely to be perceived as setting the standard for improved protective equipment in this sector”
“[t]hat is conventional in a case where it has been concluded that damages would not be an adequate remedy; but normal application of American Cyanamid principles does not suggest that it can as a matter of course be a substitute reason for imposing interim relief in a case where damages would be an adequate remedy. On the contrary, if damages will be an adequate remedy the period to trial should generally not be an influential factor, though special cases might arise such as if the Court were persuaded that one party was using the period to trial as an instrument of financial oppression or the delay to trial might put the continued existence of a party (for whom damages would in theory be an adequate remedy) at risk”. vi). It was not suggested to me that any such special circumstances applied in this case. At [27] in Openview, Stuart-Smith J went on to say that “[i]f proper application of American Cyanamid principles leads to the conclusion that damages would be an adequate remedy for the aggrieved tenderer, I see no justification in binding authority or in the framework created by the regulations for treating the prospect of a prompt final decision as being of itself a justification for maintaining the automatic suspension.” vii). Accordingly, as Stuart-Smith J went on to sayat [70], absent the identification of a factor which would justify departing from the “normal outcome”, the starting point for the application of the American Cyanamid principles is that “no interlocutory injunction should normally be granted”
“…if the court is satisfied that it would not be unjust to confine the claimant to its remedy in damages, that is usually the end of the inquiry. Lifting the suspension will then almost invariably follow as a matter of course.”
“Irrespective of KBR’s overall profitability, if the automatic suspension was lifted and the Framework awarded to Sodexo, there are very serious consequences KBR will suffer to its FMI business, specifically (including the loss of staff), and to its business more broadly, which cannot be quantified. This is particularly the case because, as noted in paragraph 6 above, KBR GS EMEA Projects and Programmes runs only a relatively small number of major projects, government programmes and joint ventures, at any given time. There will be significant consequences to KBR’s reputation, which could not be remedied by an award of damages.”
“ …in the context of a procurement challenge, although each case must be examined on its merits, if a breach of EU-based law is not sufficiently serious to satisfy the Francovitch conditions for an award of damages, it is unlikely to be sufficiently serious to justify setting aside the contract under challenge ”
“[e]ach case must be considered on its own facts. In most cases, unsuccessful bids are part of the normal commercial risks taken by a business and will not have any adverse impact apart from potential wasted costs of the tender and lost profits. Not every failed bid will result in damage to reputation causing uncompensatable loss. There must be cogent evidence showing that the loss of reputation alleged would lead to financial losses that would be significant and irrecoverable as damages or very difficult to quantify fairly: Alstom Transport v Eurostar International Ltd[2010] EWHC 2747 per Vos J at [129]; NATS (above) at [84]-[85]; DWF (above) at [52]; Openview (above) at [33]-[40]; DHL v Secretary of State for Health and Social Care[2018] EWHC 2213 at [45] & [46]”
“36. … Two questions arise. The first is whether “loss of reputation” is an abstract notion or one that requires to be closely linked to the concept of compensatory damages. The second is whether what matters is “loss of reputation” in general or whether the reputation needs to be lost in the eyes of any particular constituency. The questions are to some extent interrelated. 37. I am not persuaded that loss of reputation as such affects the question of adequacy of damages as a remedy. If damages were otherwise an adequate remedy, I see no reason why the “reputation” of a tendering party as such should affect the giving or withholding of interim relief. With commercial parties, what ultimately matters is whether the loss of the contract in question will reduce their profitability in a way that is not recognised by the normal principles on which damages are awarded. This in turn suggests that what is generally of concern is whether the aggrieved tenderer will lose out on other contracts which it might have obtained if it had added lustre to its reputation by getting the contract at issue. In other words, the real subject of the “loss of reputation” argument is financial losses which the law of damages does not normally recognise. This must surely be the end point of the “specific and uncompensatable benefits” that Alstom would have hoped to achieve if it got the Eurostar contract; equally, DWF must surely have hoped that its reputation as the legal adviser to the Insolvency Service would help it to get other profitable work in the future; and in NATS, what persuaded Ramsey J was the evidence that “the loss of the contract to provide air traffic control at Gatwick airport will significantly impair NATS’s ability to secure international air traffic control contracts and other related contracts.”… 38. This points to the answer to the second question: the constituency of interest is future prospective contracting authorities (or other contracting parties) who might be influenced to give work to a party which has the contract at issue rather than to a party which has not. The answers to the two questions explain in many cases why the “loss of reputation” does not normally sound in damages in the first place: the loss is speculative and legally too remote. They also provide good reason for restraint on the part of a Court which is urged to adopt “loss of reputation” as a reason for holding that the damages that would be awarded are not adequate compensation. 39. What then are the criteria to be applied before a court accepts that “loss of reputation” is a good reason for holding that damages which would otherwise be adequate are an inadequate remedy for American Cyanamid purposes? In the absence of prior authority directly in point (none having been cited by the parties) but with an eye to the approach adopted by the Court in Alstom, DWF and NATS I suggest the following: i). Loss of reputation is unlikely to be of consequence when considering the adequacy of damages unless the Court is left with a reasonable degree of confidence that a failure to impose interim relief will lead to financial losses that would be significant and irrecoverable as damages; ii). It follows that the burden of proof lies upon the party supporting the continuance of the automatic suspension and the standard of proof is that there is (at least) a real prospect of loss that would retrospectively be identifiable as being attributable to the loss of the contract at issue but not recoverable in damages; iii). The relevant person who must generally be shown to be affected by the loss of reputation is the future provider of profitable work. 40. These are general criteria, which need to be reviewed and considered in the light of the facts of each case. I readily accept that there is more to be said on the subject and that principles such as those I have suggested are not to be applied by rote.”
“a reputation for disciplined and successful delivery of large, complex and difficult projects globally – using world class processes…”
“49. Behind this point was, I think, the suggestion that their reputation would not be restored by an award of damages at the end of the case, and that their reputation would only be restored by the award of [the contract]. To the extent that that is Sysmex’s case, I emphatically reject it. There is no evidence put forward by Mr Howes (or anyone else) to support it. 50. Moreover, it is fundamentally wrong in principle to say that an award of damages would not restore a reputation lost because of the rejection of a tender, but the award of the contract itself would. What would matter in those circumstances would be the public acknowledgement that their bid had been wrongly rejected, not the precise remedy which the court provides in consequence of that finding. By way of example, if an individual claimant is wrongly deprived of a contract under which he or she would have provided personal services, the court would be most unlikely to order specific performance of such a contract even if the claimant is successful, so damages are inevitably the claimant’s remedy. It could not be suggested in those cases that damages are not, in principle, proper compensation.”
“[48] The balance of convenience test requires the Court to consider all the circumstances of the case to determine which course of action is likely to carry the least risk of injustice to either party if it is subsequently established to be wrong. As set out by this court in Alstom Transport UK Ltd v Network Rail infrastructure Ltd[2019] EWHC 3585 (TCC) ,[2020] BLR 95 at [51], when determining where the balance of convenience lies: (i). the Court should consider how long the suspension might have to be kept in force if an expedited trial could be ordered: DWF LLP v Secretary of State for Business, Innovation and Skills[2014] EWCA Civ 900 at |[50] per Sir Robin Jacob; (ii). the Court may have regard to the public interest: Alstom Transport v Eurostar International Ltd[2010] EWHC 2727 (Ch) , at [80] per Vos J; (iii). the Court should consider the interests of …the successful bidder, alongside the interests of the other parties: Openview Security Solutions Ltd v London Borough of Merton Council[2015] EWHC 2694 (TCC) ,[2015] BLR 727 at [14] per StuartSmith J; (iv). if the factors relevant to the balance of convenience do not point in favour one side or the other, then the prudent course will usually be to preserve the status quo (or, perhaps, more accurately, the status quo ante), that is to say to lift the suspension and allow the contract to be entered into: Circle Nottingham Ltd v NHS Rushcliffe Clinical Commissioning Group[2019] EWHC 1315 (TCC) at [16]”
“The suggestion that compliance with the law and the benefits of implementing the public procurement scheme are compromised by setting aside the automatic suspension where proper application of American Cyanamid does not justify its continuation seems to be very questionable.” ii). At paragraph [38] in Kent, Stuart-Smith J said this: “I do not ignore or underestimate the public interest in procurement exercises being conducted lawfully. But the likely knock-on effect of even a modest delay in resolving this case at trial must be brought into account as a significant counterbalance since it will prevent the efficient and timely introduction of the arrangements which the CCGs consider to be in the best interest of the people of Kent for whose welfare they too are responsible. As I have indicated, the public interest of the people of Kent is in principle a material factor that may affect the balance of convenience in an appropriate case.” iii). At paragraph [39] in Alstom Stuart-Smith J said this: “Ms Hannaford advanced two submissions in relation to the public interest. Her first was that there is a public interest in procurements being carried out properly. I agree. However, for the reasons that I gave at [27] of Openview, which I repeat and adopt, I do not accept that the undoubted public interest in procurements being carried out properly tends of itself to support the maintenance of the automatic suspension. Ms Hannaford made the point that the Regulations provide more than one possible remedy. I agree; and, in my judgment, that supports the conclusion that the appropriate remedy should be identified without preconception or prejudice as to which one may be appropriate. Despite Ms Hannaford’s submissions to the contrary, I remain of the view that the appropriate course is for the Court to apply established principles and that it will only be in an exceptional case that it can be said that the application of American Cyanamid principles fails to give adequate support to the public interest in procurements being carried out properly. Of course, setting aside the automatic suspension at a time when the Court does not know what the final outcome of the Claimants’ allegations will be gives rise to the possibility that the Defendant will end up paying a contract sum to the successful tenderer and damages to the aggrieved Claimant. However, that possibility is not a reason for maintaining the automatic suspension if it is otherwise inappropriate to do so. On the contrary, the prospect of paying damages as well as a contract price if it breaches its obligations is an integral part of the scheme under the Regulations for encouraging proper and principled procurements since it is to be assumed that contracting authorities will (in general) wish to avoid double payment. If there were even a whiff of corruption in a given case (e.g. that the procurement had deliberately been conducted in breach of the regulations to achieve a given end irrespective of the risk of double payment), I have no doubt that any Court would regard that as a feature tending to support the maintenance of the automatic stay. However, I make plain that there is no evidence to give rise to even a whiff of that sort in the present case.”