NEWS

Eurostar is not a utility, rules High Court

20 January 2012

Mr Justice Roth today handed down judgment in the latest instalment of the litigation relating to the procurement of new trains by Eurostar International Limited ("Eurostar"). The Claimant and unsuccessful tenderer, ALSTOM Transport, had previously attempted to seek an interim injunction to restrain Eurostar's decision to award the contract to Siemens plc, as well as a declaration that the contract was 'ineffective' under Regulation 45J of the Utilities Contracts Regulations 2006 (as amended). Having failed in those applications, ALSTOM was left to pursue its claim on the merits that the procurement process carried out by Eurostar constituted a breach of its duties under the Utilities Contracts Regulations, and/or obligations under an implied tender contract.

Those allegations, however, raised a preliminary issue which was the subject of today's judgement: is Eurostar a 'utility' for the purposes of the Utilities Regulations? The High Court has unequivocally ruled that it is not, and therefore ALSTOM can no longer proceed with those aspects of its claim based on Eurostar's alleged duties as a utility. The decisive feature of the judgment is Roth J's finding that Eurostar does not operate a network, an essential component of the definition of 'utility' under the Regulations, on the grounds that it does not provide or operate railway infrastructure, nor does it provide services pursuant to relevant conditions laid down by or under the law. However, Roth J has also ruled in Eurostar's favour on a number of other important points, in finding for instance that its services are of a commercial character rather than meeting needs in the 'general interest', and that it does not operate on the basis of special or exclusive rights.

The judgment thus strongly supports Eurostar position in the claim as well as representing an important contribution to the development of procurement law in the utilities context. In terms of its wider significance, the judgment also considers the duty of a national court to disapply provisions of national law that are inconsistent with an EU directive, concluding (again in line with Eurostar's submissions on the point) that there is no general requirement to do so in claims against private parties.

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

To read the judgment, please click here.

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Michael Bowsher QC
Ewan West