Siemens Mobility Ltd v High Speed Two (HS2) Ltd
| Jurisdiction | England & Wales |
| Judge | Mrs Justice O'Farrell DBE,Mrs Justice O'Farrell |
| Judgment Date | 17 August 2022 |
| Neutral Citation | [2022] EWHC 2190 (TCC) |
| Docket Number | Case No: HT-2021-000231 Case No. HT-2021-000391 Case No. HT-2021-000399 Case No. HT-2021-000424 Case No. HT-2021-000434 Case No. HT-2022-000168 Claim No: CO/3119/2021 Claim No: CO/3523/2021 Claim No: CO/3897/2021 Claim No: CO/1729/2022 |
| Court | Queen's Bench Division (Technology and Construction Court) |
and
[2022] EWHC 2190 (TCC)
Mrs Justice O'Farrell DBE
Case No: HT-2021-000231
Case No. HT-2021-000344
Case No. HT-2021-000391
Case No. HT-2021-000399
Case No. HT-2021-000424
Case No. HT-2021-000434
Case No. HT-2022-000168
Claim No: CO/3119/2021
Claim No: CO/3523/2021
Claim No: CO/3897/2021
Claim No: CO/1729/2022
IN THE HIGH COURT OF JUSTICE
BUSINESS AND PROPERTY COURTS OF ENGLAND AND WALES
TECHNOLOGY AND CONSTRUCTION COURT (QBD)
Royal Courts of Justice
Rolls Building, London, EC4A 1NL
Fionnuala McCredie QC, Ewan West & John Steel (instructed by Osborne Clarke LLP) for the Claimant
Sarah Hannaford QC, Simon Taylor & Ben Graff (instructed by Herbert Smith Freehills LLP) for the Defendant
Azeem Suterwalla (instructed by Allen & Overy LLP) for the Interested Party
Hearing date: 25 th July 2022
Approved Judgment
I direct that pursuant to CPR PD 39A para 6.1 no official shorthand note shall be taken of this Judgment and that copies of this version as handed down may be treated as authentic.
This judgment will be handed down by the judge remotely by circulation to the parties' representatives by email and release to The National Archives. The date and time for hand-down is deemed to be Wednesday 17 th August 2022 at 10.30am
The matter before the Court is the application by the Claimant (“Siemens”) for permission under CPR 35.4(1) for each party to adduce and rely upon evidence from an independent expert witness in the field of rolling stock dwell time, door configuration, seat configuration and rolling stock platform interface.
The procurement challenge
The proceedings concern a challenge by Siemens in respect of a procurement exercise carried out by the defendant (“HS2”) under the Utilities Contracts Regulations 2016 (“the Regulations”) relating to (i) a manufacture and supply agreement of a minimum fleet of 54 rolling stock units for the HS2 railway; and (ii) a train services agreement for a minimum period of 12 years with optional extensions over the life of the rolling stock.
The procurement was commenced on 21 April 2017 by a notice published in the Official Journal of the European Union and was conducted using a negotiated procedure, with five stages of evaluation to identify the lead tenderer:
i) Stage 1 comprised the submission of the tender, including a declaration that the bid complied with the mandatory Train Technical Specifications (“TTS”);
ii) Stage 2 consisted of three scored elements: Stage 2.1 – levels of compliance with the TTS; Stage 2.2 – deliverability of the trains to the stated TTS; and Stage 2.3 — the maintenance technical plan response;
iii) Stages 3 and 4 concerned assessment of the delivery plans;
iv) Stage 5 comprised evaluation of the whole life value (“WLV”) of the bids.
On 31 March 2021 HS2 approved as ‘lead tenderer’ a joint venture between the interested parties, Bombardier and Hitachi, (“the JV”). On 29 October 2021 HS2 notified Siemens that it had decided to award the contract to the JV. On 30 November 2021 HS2 entered into the contract with the JV.
On 18 June 2021, Siemens issued proceedings in the TCC by way of a Part 7 claim under the Regulations. It also issued a claim for judicial review on 24 June 2021. Subsequently, additional Part 7 claims and judicial review claims were issued, all of which have been consolidated, and consolidated pleadings have been served.
The grounds of challenge include the following pleaded allegations in the Re-re-re-amended consolidated Particulars of Claim dated 13 May 2022 (“the POC”):
i) the JV was permitted to continue to Stage 5 of the procurement exercise despite its failure to satisfy the evaluation threshold for testing (DP1.5) and therefore submitting a shortfall tender;
ii) HS2 consented to a change of control of the JV, following Alstom's acquisition of Bombardier, permitting a change of circumstances and sharing confidential and commercially sensitive information with Alstom and the JV, giving them an unfair advantage;
iii) HS2 identified an operational problem in respect of the JV's train design, in that the number of doors on each side of the train unit gave rise to a significant risk to its ability to achieve the required two-minute dwell times on conventional rail network stations but, despite that, failed to verify whether the JV satisfied TTS-94, TTS-2635 or TTS-1963 and/or decided to permit a substantial modification to the JV design to be made post contract;
iv) the Stage 5 WLV evaluation was flawed in that the differential between the assessed price of Siemens and that of the JV failed to take into account the impact of modifications necessary to rectify the JV design issues concerning dwell time;
v) HS2 wrongly concluded, following an abnormally low tender review, that the JV's pricing was explained and justified;
vi) HS2 acted in manifest error in its decision to make the JV ‘lead tenderer’ without accounting for evidence of earlier failures of both Bombardier and Hitachi in relation to other rolling stock contracts;
vii) the decision by HS2 to award the contract to the JV was manifestly erroneous because the JV no longer had the ability, resources or financial standing to perform the contract.
The Re-re-amended Defence dated 14 June 2022 (“the Defence”) includes the following responses to the allegations:
i) the JV met the overall DP1 evaluation threshold; HS2 exercised its discretion in accordance with the tender conditions to deem the JV's shortfall tender as meeting the evaluation threshold for testing, as confirmed to Siemens in January/February 2021;
ii) following the merger, Alstom and the JV were obliged to notify HS2 of the change in circumstances, including which tenderer would continue in the procurement exercise; there was no improper sharing of information;
iii) the mandatory dwell time was based on based on a model designed to assess compliance at a station on the HS2 network, rather than conventional rail network stations; the JV's stage 2.2 scores supported its stated compliance with mandatory TTSs, including TTS-94, which contained the two-minute dwell time as a fixed parameter; TTS-2635 and TTS-1963 were generic, non-mandatory requirements;
iv) although modelling was carried out to consider potential improvements to dwell time and accessibility, no decision was made and no technical or commercial change process was initiated with the JV prior to contract; in any event, the differential between the assessed price of Siemens and that of the JV would not have been material to the tender outcome;
v) HS2 carried out an abnormally low tender review on both Siemens' tender and the JV tender, and concluded that the pricing in both was explained and justified;
vi) HS2 carried out pre-contract award checks which did not give rise to any grounds to reconsider the status of the JV as lead tenderer;
vii) HS2 acted properly and within its margin of discretion in finding that none of the issues considered in the pre-contract award checks presented grounds to reconsider the award of the contract to the JV.
The trial is fixed for 14 November 2022 with an estimate of 16 days.
The application
By paragraph 10 of the Order dated 25 November 2021, the court ordered that any party wishing to rely on expert evidence must seek permission from the court to do so by no later than 4.30pm on 28 January 2022.
On 28 January 2022 Siemens issued an application, seeking an order permitting the parties to call up to two independent expert witnesses each in the fields of: (a) rolling stock design, engineering and testing; and (b) rolling stock manufacturing and maintenance costs. On 4 February 2022 that application was adjourned by consent.
On 27 May 2022 Siemens issued a revised application for permission under CPR 35.4(1) for each party to adduce and rely upon evidence from an independent expert witness in the field of rolling stock dwell time, door configuration, seat configuration and rolling stock platform interface.
The application is supported by the fourth witness statement of Craig McCarthy, solicitor of Osborne Clarke LLP, dated 27 May 2022 and his fifth witness statement dated 19 July 2022.
The application is opposed by HS2 and reliance is placed on the fifth witness statement of Nusrat Zar, solicitor of Herbert Smith Freehills LLP, dated 15 July 2022.
The applicable test
The principles applicable to any application by a party to rely on expert evidence are not in dispute.
CPR 35.1 provides that:
“Expert evidence shall be restricted to that which is reasonably required to resolve the proceedings.”
Although the court's permission is not generally required to instruct an expert, the court's permission is required before an expert's report can be relied upon or an expert can be called to give oral evidence ( CPR 35.4).
Experts may provide evidence on any matter relevant to the issues to be decided by the court on which the expert is qualified to give expert evidence, including an issue in the proceedings, although they may not usurp the role of the court in determining such issues: Civil Evidence Act 1972 s.3(3); Liddell v Middleton [1996] PIQR (CA) per Stuart-Smith LJ at p.43:
“We do not have trial by expert in this country; we have trial by judge.”
In R. (AB) v Chief Constable of Hampshire Constabulary [2019] EWHC 3461 (Divisional Court) at [117], Dame Victoria Sharp, PQBD made the following observations as to the value of expert evidence in claims for judicial review:
“… it follows from the very nature of a claim for judicial review that expert evidence is rarely reasonably required in order to resolve such a claim … While there will be some...
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