In the first stage of a judicial review this week over the decision making process by the Authority, the court ruled that a full hearing should be held in May or June next year. The review was over the Merseyside and Halton Resource and Recovery Contract, for which SITA UK had become preferred bidder with rival bidder Covanta Energy losing out.
The legal challenge was brought by Covanta Energy Limited over the Authoritys decision to select a consortium of SITA UK, SEMBcorp Utilities UK and Ituchu Corporation as preferred bidder for a 1.2 billion residual waste contract in April 2013.
Covanta claimed that the High Court had ruled this week in its favour. In a statement, Covanta said: The High Court today ruled in Covanta’s favour and granted an injunction preventing Merseyside Waste Disposal Authority (MWDA) from entering into its Resource Recovery Contract with SITA until there has been a trial of Covanta’s claim that the procurement process was legally flawed. The trial will now take place in April and May 2014. This means that a successful outcome at trial would require the award to be reconsidered.
MWDA said: The High Court agreed with MWDA that the contract was not automatically suspended. However the judge granted Covanta an interim injunction so that the case can be heard and the Court has made provision for an expedited trial.
The Authority explained that Covanta have been informed by the Court to provide a Parent Company Guarantee to MRWA should their legal challenge ultimately be unsuccessful. This means that Covanta would have to pay for the delay caused by the interim injunction and their legal challenge.
Clarification
The Authoritys chief executive, Carl Beer: We are grateful for the clarification from the Court and will now making the required preparation for our full case to be heard as soon as possible.
The Authority regrets that Covanta has decided to pursue litigation. MWDA will be vigorously defending the claim brought against it. Our detailed Defence strongly rejects the various allegations which have been made by Covanta, and sets out the significant risks to which Covantas solution could have given rise for MWDA if it had been taken forward. The Defence also details the serious concerns which were raised by MWDA prior to Covanta choosing to submit its bid.
MRWA will continue to defend the action until the case is resolved and intends in due course to recover its legal costs of defending the claim from Covanta.
Location
A core part of the argument concerning the Merseyside project is where the waste is treated. Covanta’s proposal would see an energy-from-waste plant at a local site owned by Peel Holdings, whereas SITA UK is sending the material by rail to Teesside.
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