Eurostar procurement stays on track

04 Nov 2010

On Friday, Mr Justice Vos dismissed an urgent application by ALSTOM Transport for an interim injunction preventing Eurostar International Limited from entering into a contract with Siemens plc for the provision of 10 new trains.  The trains were the subject of a procurement commenced in 2009 and are required to enhance the business’s customer offering, open up the possibility of new, direct services beyond Eurostar’s existing destinations and position the business to compete in an open-access world of on-rail competition through the Channel Tunnel.

ALSTOM’s challenge, alleging breaches of the Utilities Contracts Regulations 2006, and/or general EU Treaty principles of equal treatment, transparency, proportionality and good administration and/or an implied tender contract relied essentially on two main grounds.  First, at the time the tender was taking place, the safety authorities responsible for the Channel Tunnel were  considering whether to change the applicable safety rules to permit so-called “distributed power”  trains (such as those submitted by both Alstom and Siemens during the bid process) to operate in the Tunnel.   Alstom claimed that uncertainty as to the relevant safety rules meant that the tender process was insufficiently certain to enable bidders to prepare their tenders or for Eurostar to evaluate which was the most economically advantageous to it.  Second, ALSTOM alleged that Eurostar did not properly inform bidders about the criteria, weightings and evaluation methodology that it intended to use to assess bids.

Although Mr Justice Vos determined that there was some merit in Alstom’s case and that damages would not provide ALSTOM with an adequate remedy, he also noted that Alstom’s case was not strong and did not grant the interim injunction that was sought.

Mr Justice Vos did not consider that Eurostar could be adequately compensated in damages, given that it needed to be able to compete with new operators and that any further delay in procuring new trains could affect its business model.  Further, in applying the balance of convenience, he considered that ALSTOM was unlikely to obtain an order setting aside Eurostar’s decision at trial and that the public interest militated in favour of refusing interim relief.  The delay to Eurostar would be costly and affect its competitive position;  and the travelling public would be affected by having new trains delayed.  The public interest would be served by the introduction of timely and effective competition for Tunnel train services and preventing Eurostar from commissioning its new fleet as quickly as the regulatory procedures would allow would damage that competition.

Permission to appeal was refused.

Michael Bowsher QC and Ewan West (instructed by Burges Salmon LLP) appeared on behalf of Eurostar.

Rob Williams (instructed by Freshfields Bruckhaus Deringer) appeared on behalf of Siemens.

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Michael Bowsher QC
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Ewan West