Nuclear Decommissioning Authority (Appellant) v; EnergySolutions EU Ltd (now called ATK Energy EU Ltd) (Respondent)

The Supreme Court heard an appeal from the Nuclear Decommissioning Authority (NDA) against a decision of the Court of Appeal which had allowed a claim by EnergySolutions EU Ltd (now called ATK Energy EU Ltd) for damages arising out of the NDA's alleged breach of the Public Procurement Directive. The NDA had awarded a contract for the decommissioning of 12 Magnox power stations to a consortium known as CFP, rather than to a consortium known as Reactor Site Solutions (RSS), of which ATK was a member. The NDA had failed to award the contract to the tenderer which submitted the most economically advantageous offer determined in accordance with the criteria which the NDA had itself specified. Fraser J held that the NDA had failed to award the contract to the tenderer which submitted the most economically advantageous offer determined in accordance with the criteria which the NDA had itself specified, in breach of obligations under regulations 18(27) and 30(1) to (4) of the 2006 Regulations read against the background of the articles 29.1, 29.7 and 53 of the PP Directive. The NDA erroneously concluded that CFP had provided the most economically advantageous offer, awarding it a score of 86.48%. It awarded RSS a score of 85.42%. Fraser J found (i) that CFP should have been disqualified from the competition for failing two threshold requirements, and (ii) that, in any event, RSS would have won the competition had the NDA not made “many manifest errors” in its assessment of the tenders, but for which the NDA would have awarded RSS a score of 91.48% and CFP a score of only 85.56%. The NDA had informed RSS by telephone and letter delivered on 31 March 2014 that RSS had been unsuccessful. It also informed all bidders that it would voluntarily observe an extended standstill period until 14 April 2014. RSS wrote letters on 6, 8 and 10 April 2014, by which it requested various information and ultimately asked for a further extended standstill period until 23 April 2014, saying that it might otherwise be forced to issue a claim by 14 April to protect its position. On 11 April 2014, the NDA refused to extend the standstill period, and on the same day RSS replied that this was “regrettable” and that it was actively considering commencing a claim, and urged the NDA not to enter into the contract. On 15 April the NDA repeated that it was unable to agree to refrain from taking steps to enter into the contract, explaining that delay would cause it to suffer significant additional cost. Later that day, the NDA entered into the contract with CFP and informed RSS accordingly. On 28 April 2014, and so within the 30 days referred to in para 5(b) above, ATK, though not Bechtel, issued the claim form beginning the present proceedings. The NDA appealed by permission of the Supreme Court. The appeal raised three main issues: (i) whether the Remedies Directive only requires an award of damages to be made when any breach of the PP Directive is "sufficiently serious" and whether the answer to this question is acte clair, so that it need not be referred to the Court of Justice; (ii) whether regulation 47J(2)(c) of the 2006 Regulations confers a power to award damages in respect of any loss or damage suffered by an economic operator (a) in the case of any breach, or (b) only in the case of a "sufficiently serious" breach, of the Regulations; and (iii) whether (and, if so, when) an award of damages under regulation 47J(2)(c) of the 2006 Regulations may be refused on the ground that an economic operator, who issued a claim form in respect of a contract award decision within the 30 day time limit prescribed by regulation 47D of the 2006 Regulations, did not do so and inform the contracting authority that it had done so before the contracting authority entered into the contract. The Court of Appeal had answered issue (i) in the affirmative, and held that the answer to this question was acte clair. It had answered issue (ii) that the 2006 Regulations did confer a power to award damages in respect of any loss or damage suffered by an economic operator in the case of any breach, not only in the case of a "sufficiently serious" breach, of the Regulations. It had answered issue (iii) in the negative. The NDA appealed against issues (i) and (ii). ATK cross-appealed against issue (iii). The Supreme Court allowed the NDA's appeal against issue (ii) and dismissed ATK's cross-appeal against issue (iii). It did not accept ATK's case on issue (i). The Court of Appeal had been correct to hold that European Union law only requires a remedy in damages for a serious breach. Domestic law went no further by requiring a remedy in damages for any breach, whether serious or not. Under issue (i), ATK's case in this Court was that European Union law requires a remedy in damages for any breach, whether serious or not, or that this issue should at least be referred to the Court of Justice. This case would, if accepted, have constituted a reason for reaching the same result as the Court of Appeal did by reference to domestic law. The Supreme Court does not however accept ATK's case on this issue. Under issue (ii), the NDA's case has been the Court of Appeal was wrong to hold that, even though European Union law only requires a remedy in damages for a serious breach, domestic law goes further by requiring a remedy in damages for any breach, whether serious or not. The NDA has succeeded, and its appeal should be allowed, on this issue. Under issue (iii), the NDA also sought to establish that there should be a trial as to whether an award of damages may in the circumstances of this case be refused to an economic operator. The NDA has failed, and its appeal should be dismissed, on this issue.