Clarity amidst confusion! Annulment of the decision of the Ministry of Transport regarding the Concession Contract for the provision of regular intercity public passenger transport services utilising buses.

On 16th February 2021, the Administrative Court annulled the decision of the Ministry of Transport (hereinafter referred to as “the Contracting Authority“) by which the  “Concession Contract F: for the provision of Intercity Public passenger transport Services with the use of buses connecting cities in Cyprus”, was awarded to the company “Υπεραστικά Λεωφορεία Κύπρου (Υ.ΛΕ.ΚΥ) ΛΤΔ” (known under the trade name “Intercity Buses“). This Court’s decision was issued in the Recourse no. 892/2020 filed on behalf of the Consortium Malta Lines Limited and Kapnos Airport Shuttle Limited (hereinafter referred to as “MLKP“).

Facts

MLKP was the company to which the contract was originally awarded. This decision was annulled last year, by the Court’s decision dated 27th April 2020 following a Recourse filed by the company “Intercity Buses”. The decision was annulled due to the inability of the Contracting Authority to investigate an issue concerning the fulfillment of an essential condition of the tender. It was concluded that there was a violation of certain terms of the tender documents regarding the technical and professional skills of MLKP.

A few days earlier, on 7th April 2020, another Court had annulled the decision of the Ministry for awarding the “Concession Contract E: for the provision of public transport services by bus in the province of Famagusta” to MLKP.  This was for reasons related to the ‘Transition and Implementation Plan’ submitted by that company in the context of the said tender.

Both MLKP and the Contracting Authority filed Appeals against the above decisions of 7th and 27th April 2020. The Contracting Authority, in the context of the relevant Appeal against the decision dated 7th April 2020 (regarding the Concession Contract E), strongly promoted the position that the Plan submitted by MLKP met the terms of the tender.

At the same time, the Contracting Authority proceeded to a joint review of its decisions that were annulled by the Administrative Court on 7th and 27th April 2020, this was despite the fact that they were not annulled for the same reasons. During the review, the Tender Board decided that it was satisfied that MLKP had in fact met the conditions for which its initial decision in relation to the Concession Agreement F (with the decision dated 27th April 2020) was annulled.  However, it then proceeded via a majority decision, to reject MLKP’s bid for the concession for being non-compliant with the terms of the tender regarding the drafting of the ‘Transition and Implementation Plan’. Following that decision, the Contracting Authority awarded the Concession Contract F to the company “Intercity Buses”.

MLKP reacted immediately with the filing of the reported recourse no. 892/2020 in September 2020.  In the context of this, it also succeeded in obtaining a unilateral interim order suspending the validity and execution of the decision of the Contracting Authority, thus preventing the signing of the contract in question.

Τhe conclusions of the Court

The pending appeal of the Contracting Authority against the decision of 7th April 2020 (for the Concession Contract E), had a catalytic effect on the judgment of the Administrative Court which concluded that the MLKP raised a well-founded and justified issue of probable error of the Contracting Authority in relation to its decision that MLKP did not meet the disputed condition (for the Drafting of the Transition and Implementation Plan) contrary to its previous position on the matter. The presumption of error, according to the Court, was evident through the very actions and positions of the Contracting Authority, which were manifestly contradictory. Specifically, while the Contracting Authority pointed out the need for uniform treatment of both contracts (Intercity and Famagusta) it adopted the conclusions of the Court’s decision dated 7th of April 2020  (i.e. concerning the Concession Contract E) and it rejected the MLKP Plan. However, at  the same time, it had filed and maintains (to this day) an Appeal, in which it directly questions the correctness of the decision of 7th April 2020 on the issue under consideration and its conclusions as to the legality of the Plan submitted by MLKP. Consequently, the Contracting Authority has put its assumption that the MLKP does not fulfill this condition in serious dispute. By default, this is now sufficient to presuppose the possibility of error on the matter.

The Court further pointed out that the reviewed contradiction is not attributable to those who sometimes represent the Contracting Authority in court (since the Law Office of the Republic assigned the representation of the Contracting Authority to a private lawyer), but exists within the Contracting Authority itself.  On the one hand the Contracting Authority, in its capacity as appellant, supports the misinterpretation given by the court on 7th April 2020 in the contested condition. At the same time, however, as the defendant in the present recourse, it upheld such an interpretation as correct and,  in the contested review here, followed and applied it. The connection of the case there (i.e for the Concession Contract E – Court’s decision dated 7th  April 2020)  with the present one was made by the Contracting Authority itself, whose attitude was neither uniform nor consistent, since with its diametrically contradictory and concomitant positions on the issue, it itself created in the Court the impression of a possible (substantial) error concerning the interpretation of the term in question.

For more information please speak with Andrea Kallis Parparinou, Elena Riga or your usual contact in Elias Neocleous & Co LLC

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