Liconic AG v UK Biocentre Limited
Citation: (Unreported, TCC)
This was an application for the striking out of, or summary judgment on, a claim for relief under the European public procurement regime.
UK Biocentre Limited (“the Appellant”), a medical research company, was the wholly owned subsidiary of UK Biobank, a major charitable research project and a contracting authority under Reg.3(1)(w) of the Public Contracts Regulations 2006 (“the Regulations”). Liconic AG (“the Respondent”), who had submitted an unsuccessful tender to carry out work for the Appellant, claimed there had been serious irregularities in the tendering process amounting to breaches of EU law, however to make out the claim the Respondent needed to show that the Appellant was a contracting authority; something that the Appellant denied.
For the purposes of Reg. 3(1)(w), the Appellant (i) must have been established for the purpose of meeting the need in the general interest; and (ii) must not have an industrial or commercial character. There was witness evidence showing that (i) the Appellant did not have an arm’s length commercial relationship with UK Biobank; (ii) its business plan provided for the generation of profit to develop the business where appropriate and for any surplus to be gift-aided to UK Biobank; and (iii) there had been a policy change to stop undertaking commercial work.
The judge, refusing the application, found the pleadings disclosed an arguable case that the Appellant met the criteria for being a contracting authority. It was held that:
(1) a low threshold applied when considering whether a company had been established for the purpose of meeting the need in the general interest. This was a mixed question of law and fact for which it was necessary to consider the facts as a whole (Alstom Transport v Eurostar International Ltd  EWHC 28 (Ch), Arkkitehtuuritoimisto Riitta Korhonen Oy v Varkauden Taitotalo Oy (C-18/01)  E.C.R. I-5321 and Adolf Truley GmbH v Bestattung Wien GmbH (C-373/00)  E.C.R. I-1931 applied). It was at least arguable that the Appellant was established to meet the general needs of medical research and human welfare.
(2) a number of matters had to be weighed in the balance when determining whether a company was of industrial or commercial character (Korhonen applied). It was doubtful that the Appellant had had an industrial or commercial character before the policy change, and it was at least arguably established that it no longer had such a character afterwards.
(3) taking matters as a whole, there were issues of fact and European jurisprudence that should proceed to trial.