Victory against Network Rail in landmark High Court public procurement decision

30 Nov 2011

Elisa Holmes and Fiona Banks successfully represented Photo-Me International Plc in defending a strike out application brought by Network Rail Infrastructure Limited.

In what is set to be a landmark case, the judgment considers the relationship between the Utilities Directive (Directive 2004/17/EC) and the General Directive (Directive 2004/18/EC). In particular, in finding that although Network Rail was a Utility for some purposes, the activities in question (the provision of concessions) were outside of the scope of the Utilities Directive, His Honour Judge Havelock-Allan QC found that the General Directive nevertheless applied to Network Rail in respect of all of its activities in light of the concession made by Network Rail that, for the purposes of the application only, the Court could treat it is as being a contracting authority within the meaning of the General Directive.  There was no concept of “public activities” incorporated into the General Directive, even insofar as utilities are concerned.

The issue of the application of general principles of EU was decided by the Court as if it was a preliminary issue, given it raised a pure point of law.

The judgment also makes an important contribution to the debate about the implication of contractual terms in the context of public procurements. In particular, Judge Havelock-Allan QC found that “I have no difficulty concluding that there is a real prospect of [Photo-Me] being able to establish an implied tender contract”.