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In Construcciones y Auxiliar de Ferrocarriles S.A. v Iarnród Éireann and Northern Ireland Railways Company Ltd and Stadler Rail Schweiz AG [2025] IECH 645, the High Court in Ireland lifted an automatic suspension of the award of a contract, triggered when the applicant challenged the award of two inter-related contracts worth €650 million for the purchase and maintenance of trains for the Dublin–Belfast Enterprise Service. The respondents applied to the Court to urgently lift the suspension to avoid losing €165 million of EU Peace-Plus funding, receipt of which was conditional on contract delivery by 31 December 2029. The respondents' position was that, if the contracts were not signed by 30 November 2025, production slots would be lost and the critical deadline missed.
Given the urgency, the respondents conceded (only for the purpose of their application to lift the suspension) that the applicant's complaints about the tender process raised a fair issue to be tried. The Court therefore focused on whether the balance of justice favoured lifting the suspension. The Court's key conclusions are set out below.
- If suspension continued, the contract would likely be extinguished, not just delayed. It was significant that the EU funding comprised 25% of the overall funding. It was relevant that the applicant refused to give an undertaking to cover the value of lost EU funding.
- The applicant argued that damages would be an inadequate remedy and it offered to give an undertaking to pay damages to the respondents if the Court ultimately finds the suspension was wrongly continued. However, the Court considered this to be undermined somewhat by the fact that the undertaking was limited to the additional costs (if any) actually and reasonably directly incurred by the respondents in maintaining the current service provision until such time as the applicant's proceedings were disposed of, not the lost EU funding. Further, though it may be a difficult task to calculate certain elements of the applicant's damages if it were successful at trial, that did not make damages inadequate.
- The substantive issues in the case required a detailed investigation to determine the strength of the applicant's case. It was not so clear-cut and strong as to support the lifting of the suspension.
- Lifting the suspension would avoid the loss of EU funding and taxpayers bearing the shortfall. Further public interest benefits in the contract going ahead included emissions reduction, accessibility improvements for disabled passengers, and the imperative of allowing badly needed public projects to proceed.
The Court lifted the suspension for all the reasons set out, but primarily because of the risk that the contract would be extinguished and the EU funding lost. The balance of justice favoured lifting the suspension with immediate effect and this led to the least risk of injustice to the parties.
This article contains a general summary of developments and is not a complete or definitive statement of the law. Specific legal advice should be obtained where appropriate.
