Covanta Energy Ltd v Merseyside Waste Disposal Authority

Covanta Energy had taken part in a procurement process carried out by Merseyside Waste Disposal Authority (“MWDA”), being one of two tenderers involved in detailed discussions prior to the deadline for final tenders.  MWDA subsequently awarded the contract to SITA, the other tenderer involved in detailed discussions, having marked several key elements of Covanta’s tender as “fundamentally unacceptable”.  Aggrieved at this result, Covanta sought to challenge MWDA’s decision, in support of which challenge Covanta applied for an injunction, prohibiting MWDA from entering into a contract with SITA until the conclusion of the trial of Covanta’s case.  This hearing concerned the determination if that application.

Covanta’s primary argument was that regulation 47G of the Public Contracts Regulations 2006 (as amended in 2009) applied, and therefore there was an automatic suspension requiring MWDA to refrain from entering into the proposed contract with SITA.  In the alternative, Covanta sought an injunction on the basis of the principles in American Cyanamid. Rejecting Covanta’s primary argument, Coulson J held that the amended regulations did not apply in this case, as the procurement process had commenced before 20 December 2009.  However, the injunction was granted on the basis that the test in American Cyanamid was satisfied on the facts of the case.