Irish Court of Appeal

THE COURT OF APPEAL

CIVIL

NEUTRAL CITATION No. [2025] IECA 45

RECORD No. 2022/72

[APPROVED]

COURT OF APPEAL

[NO REDACTION NEEDED]

BARNIVILLE P.

EDWARDS J.

FAHERTY J.

 

BETWEEN

 

WORD PERFECT TRANSLATION SERVICES LIMTIED

APPELLANT

AND

 

MINISTER FOR PUBLIC EXPENDITURE AND REFORM

RESPONDENT

 

 

JUDGMENT of Mr. Justice David Barniville, President of the High Court, delivered on the 28^th day of February 2025

Index

1. Introduction

2. Brief Overview and Summary

3. Factual Background

     (1) Introductory Remarks

     (2) The Parties

     (3) The 2015 Framework

     (4) The Market and Market Shares

     (5) Process leading up to adopting of RFT

     (6) The Sourcing Strategy

     (7) The RFT for the 2020 Framework

     (8) Procurement Guidelines and Circular 10/14

4. Challenge to the RFT

5. Relevant Provisions of the 2014 Directive

     (1) Introductory Remarks

     (2) The Recitals

     (3) Articles of the 2014 Directive

6. The Judgment of the High Court

     (1) Background and context

     (2) Economist's "speculation"

     (3) The 'lots decision'

     (4) The 'one lot rule'

           (a) Burden of Proof

           (b) Article 18 of 2014 Directive

           (c) Unlawful distortion of competition?

           (d) Word Perfect prevented from building market share?

           (e) Breach of principle of equal treatment?

           (f) Breach of principle of proportionality?

           (g) Irrelevant considerations and objective bias?

           (h) Other arguments

7. Word Perfect's Appeal

     (1) Grounds of appeal

     (2) Respondent's response

8. Submissions on the Appeal

    (1) Word Perfect's submissions

           (a) Overarching submissions

           (b) The 'lots decision'

           (c) The 'one lot rule'

                (i) Impact on operators

                (ii) Need for compatibility with Treaties and general principles

                (iii) No margin of discretion

                (iv) Burden of proof

                (v) Breaches of general principles?

                     (I) Equal Treatment

                   (II) Proportionality

                 (III) Principle of Competition

                (vi) Article 18 of 2014 Directive

                (vii) Freedom to Conduct a Business/Provide Services - Article 16 of the Charter and Article 56 TFEU

                (viii) Duty of Sincere Cooperation: Article 4(3) TEU

           (d) Irrelevant Considerations

           (e) Apparent/Objective Bias

           (f) Word Perfect's Criticism of the Judge's Treatment of Expert Evidence

    (2) The Respondent's Submissions

          (a) Overarching submissions

          (b) The 'lots decision'

          (c) The 'one lot rule'

                (i) Rationale for the rule

                (ii) Margin of discretion

                (iii) Burden of proof

                (iv) Segmentation of market

                (v) Distortion of competition: "Classic trade-off"

                (vi) Linkage to subject matter of contract

                (vii) Breach of general principles

                      (I) Equal Treatment

                     (II) Proportionality

                    (III) Principle of Competition

                (viii) Article 18 of 2014 Directive

                (ix) Freedom to Conduct a Business/Provide Services - Article 16 of the Charter and Article 56 TFEU

                (x) Duty of Sincere Cooperation: Article 4(3) TEU

        (d) Irrelevant Considerations

        (e) Apparent/Objective Bias

        (f) Response to Word Perfect's Criticism of Judge's Treatment of Expert Evidence

9. Analysis and Decision

    (1) Introductory Remarks

    (2) Significance of Article 46 of 2014 Directive

    >(3) The 'lots decision'

        (a) Aspects of the challenge considered

        (b) Absence of concluded contract

        (c) Interpretation of Article 46 of 2014 Directive

        (d) The "technical" argument: A contract

        (e) Designation of lots

        (f) Article 37 of 2014 Directive

    (4) The 'one lot rule'

        (a) Approach to determination of the issue

        (b) Background to Article 46(2) and Recital (79)

        (c) Interpretation and application of Article 46(2) of 2014 Directive and Recital (79)

        (d) Principles governing exercise and discretion under Article 46(2)

        (e) Relevance of the general principles and "manifest error" test

        (f) Burden of proof

        (g) Equal Treatment

        (h) General Principle of Competition

        (i) General principle of Proportionality

    (5) Article 18 of 2014 Directive

    (6) Freedom to Provide Services (Article 56 TFEU) and Freedom to Conduct Business (Article 16 of the Charter)

        (a) Article 56 TFEU

        (b) Article 16 of the Charter

    (7) Duty of Sincere Competition: Article 4(3) TEU

    (8) Irrelevant Considerations

    (9) Apparent/Objective Bias/Principles of Good Administration and Objectivity

    (10) Judge's Treatment of Expert Evidence

       (a) Burden of Proof on Mr. Massey: Alleged Misunderstanding of Role of Expert

       (b) Alleged Failure to Engage with the Expert Evidence

       (c) Failure to Discharge Burden of Proof

       (d) Final Observation on the Experts

10. Article 267 Reference

11. Summary of Conclusions

12. Provisional View on Costs

 

1. Introduction

1. This is my judgment on an appeal by the Appellant, Word Perfect Translation Services Limited ("Word Perfect" or the "Appellant"), from a decision of the High Court (Twomey J.) in a judgment given on 24^th February 2022 ([2022] IEHC 101), and from the order of the High Court perfected on 11^th March 2022. In that judgment and order, the High Court dismissed Word Perfect's challenge to the decision of the Minister for Public Expenditure and Reform (the "Minister" or the "Respondent"), through the Office of Government Procurement (the "OGP") to adopt and publish a Request for Tenders (dated 27^th May 2020) to establish "four single supplier framework contracts for the provision of interpretation services (excluding Irish language services)" (the "RFT"). The procurement, the subject of the RFT, has not been proceeded with pending the determination of the proceedings in the High Court and this appeal. 

2. Brief Overview and Summary

2. The purpose of the RFT was to establish a framework for the award of four single supplier framework contracts for the provision of interpretation services (excluding Irish language services (the "2020 Framework"). Word Perfect sought to challenge two aspects of the RFT:

(i)         the decision by the OGP on behalf of the Minister to divide the procurement, the subject of the RFT into lots (the 'lots decision'); and

(ii)        the provision that any one tenderer could only win one lot (the 'one lot rule').

3. Word Perfect challenged these two aspects of the RFT on several grounds, including on the grounds of an alleged breach of certain provisions of the applicable EU Directive, Directive 2014/24/EU of the European Parliament and of the Council of 26^th February 2014 on public procurement and repealing Directive 2004/18/EC (the "2014 Directive" or the "Directive"), of certain provisions of the EU Treaties (the TEU and the TFEU) and the EU Charter of Fundamental Rights (the "Charter") and of a number of the general principles of EU law, including equal treatment, competition and proportionality. In addition to challenging the RFT on these EU grounds, Word Perfect also raised other grounds including the alleged taking into account by the Minister/OGP of irrelevant considerations and alleged objective or apparent bias. The Minister disputed all of those grounds of challenge. The case was heard by the High Court on the basis of affidavit evidence as well as the evidence of expert economists, who provided reports verified by affidavit and who were subjected to cross- examination.
4. In a comprehensive judgment delivered with extremely impressive speed, following a hearing which extended over six days, the High Court (Twomey J.) dismissed all of the grounds of challenge to the RFT advanced by Word Perfect. The High Court rejected Word Perfect's claims that the 'lots decision' and the 'one lot rule' were unlawful on any of the grounds advanced by Word Perfect. Having dismissed Word Perfect's challenge, the High Court made various ancillary orders (including an order for costs) which stayed the implementation of the RFT and the commencement of the procurement competition until Word Perfect's appeal was first listed for direction in the Court of Appeal. Thereafter, implementation of the RFT has awaited the conclusion of Word Perfect's appeal and the delivery of this judgment.
5. In very brief summary, for the reasons set out in this judgment, I am satisfied that the judge was correct in his decision as to the lawfulness of the two aspects of the RFT which were challenged by Word Perfect, namely, the 'lots decision' and the 'one lot rule'. I am satisfied that the judge was correct in concluding that neither the 'lots decision' nor the 'one lot rule' breached the 2014 Directive, any of the provisions of the EU Treaties or the Charter or any of the general principles of EU law relied upon by Word Perfect. I am also satisfied that the High Court Judge was correct in rejecting Word Perfect's challenge to the decision to adopt the RFT on the grounds of the taking into account of irrelevant considerations and on the grounds of alleged objective or apparent bias. I am satisfied, therefore, that Word Perfect's appeal should be dismissed.

 

3. Factual Background

                                           (1) Introductory Remarks

6. Most of the relevant facts were not in dispute between the parties. There was significant dispute between them in relation to some of the background facts, but it was not necessary for the High Court to resolve those disputes. There was also significant dispute between the expert economists retained by the parties: Mr. Patrick Massey of Compecon Limited, who was engaged by Word Perfect and Dr. Kevin Hannigan of KHSK Economic Consultants, who was engaged by the Respondent. The judge referred to and addressed relevant aspects of their evidence in his judgment. Word Perfect, on this appeal, criticised the manner in which the judge dealt with the expert evidence, and that is an issue which I consider later in this judgment.
7. For the most part, the background facts were not in dispute. They were set out by the judge, at paras. 12 - 42 of his judgment. Those background facts were contained in affidavits sworn on behalf of the parties. Most of the affidavits on behalf of Word Perfect were sworn by Agim (Jimmy) Gashi (a Director and Operations Manager of Word Perfect [1]). Most of the affidavits on behalf of the Respondent were sworn by Randal MacDonnell (a Category Manager in the OGP). An affidavit was also sworn on behalf of the Minister/OGP by Roisín Killeen, (the Portfolio Manager in the OGP) which addressed certain criticisms made by Mr. Gashi of comments made on an Excel spreadsheet which commented on a report prepared by Mr. Massey in the proceedings. Ms. Killeen explained that the comments complained of were made in relation to the proceedings and did not her role in the design of the procurement competition the subject of the proceedings.
8. In addition to the affidavit evidence of the parties, expert economic evidence was provided by Mr. Massey (on behalf of Word Perfect) and Dr. Hannigan (on behalf of the Respondent) in the form of reports (which were verified on affidavit). Very helpfully, the experts engaged and produced a document setting out the areas on which they were in agreement and other areas on which they disagreed (the "Joint Report"). Both experts gave evidence and were cross-examined.
9. I propose to set out the relevant background facts in relatively high-level terms. It will, however, be necessary to refer, in more detail, to some of the relevant documents. 

 

                                                                (2) The Parties

10. Word Perfect was established in 2001. It provides interpretation and translation services to public and private sector bodies. The vast majority of its business (approximately 90%) is for public sector clients. Word Perfect has competed over many years in various public sector tender competitions. It is considered a small enterprise with a turnover of less than €5m. The OGP is a constituent office of the Department of Public Expenditure and Reform. It is tasked with sourcing goods and services on behalf of the public service. The OGP designed and would have oversight of the conduct of the procurement competition provided for in the RFT.

(3)   The 2015 Framework

11. Prior to the RFT in respect of the 2020 Framework, there were framework agreements in 2015 (the "2015 Framework") and in 2011 for the provision of interpretation services (excluding Irish language services).
12. The purpose of the 2020 Framework was to replace the 2015 Framework. The 2015 Framework itself was established following a procurement competition. Suppliers were invited to compete to be admitted to the 2015 Framework. Thereafter, contracts (or lots) were awarded by means of mini-competitions to the suppliers who were admitted to the framework. Under the RFT for the 2015 Framework, admission to the framework was on the basis of the Most Economically Advantageous Tender ("MEAT") which takes account of quality and price. The award criteria for the competition for admission to the 2015 Framework were 75% of marks for quality, and 25% of marks for price. Three suppliers were successful in the competition and were admitted to the 2015 Framework.
13. The 2015 Framework was established on 25^th January 2016 and contained eight lots which were categorised according to the public service body client. For example, lot 1 was for Central Government Departments (excluding the Department of Justice and Equality), lot 2 was for An Garda Síochána, lot 3 was for the Courts Service and the Irish Prison Service and lot 4 was for the Immigration Service and the Legal Aid Board. There were four other lots. As noted, the award of contracts or lots under the 2015 Framework was on the basis of mini-competitions which were run on the basis of price only or on the basis of quality and price criteria. A decision under the 2015 Framework to award a contract to Translation.ie following a mini -competition was successfully challenged by Word Perfect (see the judgment of the Supreme Court in Word Perfect Translation Services Limited v. Minister for Public Expenditure and Reform [2019] IESC 38).
14. The time period of the 2015 Framework was for 24 months, and the contracts awarded under the framework were 12-month contracts. There was the option of two 12-month extensions, which were exercised. The 2015 Framework, therefore, had a final expiry date of 24^th January 2020. There were ten contracts awarded under the 2015 Framework. Three contracts were awarded to Word Perfect (with a total estimated value of €1m) and seven contracts were awarded to Translation.ie (with a total estimated value of €3.22m). The third supplier, Context Language Translating ("Context"), who was successful in being admitted to the 2015 Framework, did not obtain any of the contracts under the 2015 Framework.
15. The 2015 Framework was not an exclusive one in the sense that contracts with the public bodies covered by the framework for interpretation services could be allocated outside the 2015 Framework by means of separate tender processes. The evidence of Dr. Hannigan, the expert retained by the Respondent, was that less than 25% (23.8%) of public sector interpretation services supplied during the term of the 2015 Framework were provided under that framework. 

 

(4)   The Market and Market Shares

16. The evidence before the High Court was that 90% of the demand for interpretation services in the State was from public sector bodies. The evidence further disclosed that approximately 90% of Word Perfect's translation and interpretation services are provided to public sector clients. As of the date on which the RFT was published, Word Perfect's share of the interpretation services market in Ireland was approximately 30%. The market shares of Translation.ie was estimated at 35–45%. Context.ie (the third supplier admitted to the 2015 Framework) had an estimated market share of 10–15%. One other supplier also had a similar market share. These were estimated market shares, as it was not possible for exact figures to be provided.

(5)   Process leading up to adopting of RFT

17. By way of affidavit evidence, Mr. MacDonnell of the OGP provided information in relation to the background to the RFT. He explained that an initial Project Initiation Document ("PID") was prepared in 2018 to inform discussions on lessons learnt from the 2015 Framework. Following the preparation of the PID, a number of actions were undertaken by the OGP including a review of the market size, contract duration, and structure of the 2015 Framework. The review was broad in scope and different contracting authorities were consulted for their views as to whether it was worth pursuing a further framework. In February 2019, an initial meeting was held with key users of the 2015 Framework to discuss issues such as the composition of a sourcing team to assist in the preparation of a new framework, an overview of current arrangements and the business case for any new framework. A number of meetings were held as part of that initial review.
18. Following the review, a Request for Information for the provision of interpretation and translation services ("RFI") was developed for publication by the OGP. A Customer Servicing Group ("CSG") was requested to approve and sign off the RFI for publication. The CSG included key stakeholders such as representatives from An Garda Síochána, the Courts Service, the Department of Employment Affairs and Social Protection ("DEASP"), the Legal Aid Board and the Department of Justice. Other departments and agencies also participated in some of the work of the CSG. The HSE and Tusla also engaged at a later stage. Further discussions were undertaken with individual members of the CSG in relation to their specific requirements. The RFI was published on 25^th June 2019.
19. Following publication, the OGP undertook continuing market research and analysis of available data and requested the CSG to assist in the collation of data and in ensuring that that data was relevant for the purpose of developing specifications in any new framework. Twelve valid submissions were received by the deadline in response to the RFI. Mr. MacDonnell prepared an analysis report. The analysis report was sent to all members of the CSG, and discussions took place with the CSG in relation to the RFI report and the themes identified in it. A meeting was held with the Irish Translators' and Interpreters' Association ("ITIA") in order to understand the market from the ITIA's perspective. The ITIA is the only professional association in Ireland representing translators and interpreters.  The OGP continued to discuss issues with the CSG and other interested parties, including the HSE and Tusla. Tender documentation was developed and was informed by these discussions.

(6)   The Sourcing Strategy

20. The final document prepared by the OGP prior to the finalisation of the terms of the proposed new framework to replace the 2015 Framework was a document entitled "EMS051F Interpretation Services Sourcing Strategy" (the "Sourcing Strategy"). The Sourcing Strategy was prepared on an iterative basis as the consultations and preparation of the RFI for the proposed new strategy were ongoing. Since considerable attention was given to the Sourcing Strategy by both parties in this appeal, it is appropriate to refer to it in some detail.
21. The project objectives were described in the executive summary as follows:

"To provide a viable Framework whereby PSB's can access interpretation services through a user-friendly process with limited calls for legal challenges, while meeting the client's requirements.

Determine how best to meet client needs for interpretation services in an unregulated market.

Consider multiple solutions that will best deliver a solution that is fit for purpose.

Reduce administrative burden on clients & OGP.

Develop 'ease of use' FW that will encourage submissions from the market.

Bring quality to forefront of service delivery.

Develop an innovative solution that meets the requirements of different clients across the sectors,

Minimise the risk of legal challenges to the second generation FW and subsequent drawdowns."

22. The executive summary then referred to what emerged from the consultation with key users.  The "key issues" with respect to the 2015 Framework were:

"related to service delivery and the lack of quality in the services provided and the litigious nature of a FW member when MEAT criteria was used in subsequent mini-competitions".

The aim of the strategy for the new framework was stated to be "to generate quality back into the service delivery through offering longer-term contracts to successful tenderers without the utilisation of subsequent mini-competitions based on cost only." A further part of the strategy was stated to be "to put the onus on framework clients to conduct proactive contract management for the duration of contracts under this framework".

The overall strategy was stated to be "the development of stronger supplier relationships between framework clients and framework members". The strategy referred to in the document was then described as involving:

"four single supplier frameworks for four lots by PSB (largest spends), to deliver the key language groups, and offer four year contracts (2+1+1) to the highest ranked tender in each lot (lots 1 - 4). While tenderers may submit tenders for each of lots 1 - 4, tenders will be limited to being awarded one (1) lot in respect of lots 1 - 4. Where tendering for more than one of lots 1 - 4, tenderers must confirm in each of their tender submissions which lot or lots they are tendering for and their preference ranking in order of appointment in respect of those lot(s)."

23.  An exception to the award of lots was where the RFT did not generate four unique suppliers who passed the selection and award criteria and, in that situation, it was stated that the RFT would have a provision providing that tenderers who met an additional capacity requirement could be awarded two lots. That option was, however, not adopted in the RFT.
24. The Sourcing Strategy noted that each of the lots, lots 1 - 4, would result in a separate services contract.
25. The Sourcing Strategy then provided a "supply market analysis". It described (in Section 1.1) the supply market for interpretation services as being "very fragmented" and having suppliers ranging from "individuals providing bespoke interpretation services, small organisations operating in specific regions... and larger organisations with 100+ interpreters on their books". The document stated that the majority of the larger organisations providing interpretation services are located in Dublin and may have regional offices in the West or South of the country. Analysis carried out in the form of a "Business Intelligence Report" indicated that the spend on interpretation services was spread across four suppliers, but that 91% of the spend on such services was with two suppliers. Although not named, they were Translation.ie and Word Perfect). It was noted that there are no barriers to entry in the market for the provision of interpretation services, and that it is "very difficult" for contracting authorities to determine what standards are adhered to by the current service providers. Reference was then made to the RFI, and an analysis was provided in respect of the twelve valid responses to the RFI.
26. In terms of competition, the Sourcing Strategy referred (in Section 1.2) to the allocation of work under the 2015 Framework (those admitted to the framework would compete for contracts through mini-competitions, most of which were on the basis of cost/price only). The document stated that "competition on [the 2015 Framework] was purely price driven between two FW members", though it noted that there were three members of the 2015 Framework. With respect to quality issues, the document noted (in Section 1.4) a number of issues including that the mini-competitions were designed on the basis of price/cost which pushed rates downward, that quality suffered and that it was not possible to build up business relationships between service providers and clients in the case of 12-month contracts (under the 2015 Framework).
27. In referring to the proposed new framework (which was to become the 2020 Framework), the document noted that it was the policy of the OGP "to encourage participation on a fair and equal basis by Small and Medium Enterprises ('SMEs') in this competition", and that the proposed strategy was to encourage as many submissions in response to the RFT as possible and to generate "three or more unique suppliers". The 2020 Framework was ultimately designed to produce four unique suppliers, one for each lot. It was further noted that in contrast to the contracts entered into following mini- competitions under the 2015 Framework, under the new proposal a tenderer would have the opportunity of tendering for the supply of services for four years. At that point in time, it was envisaged that it might be possible for a tenderer to be awarded two lots under the new framework, but that was ultimately changed in the RFT. The Sourcing Strategy noted that to have three or more unique suppliers across four lots would have the potential "to raise the standard of service delivery across the sector". The longer term of the contracts to be awarded would provide the opportunity to develop "better working relationships". Suppliers would be enabled "to get a better understanding of a client's requirements" and to "increase the level of professionalism across the sector". These provisions of the Sourcing Strategy were discussed at paras. 20 to 22 of the judgment of the High Court.
28.  In its conclusion on the analysis of the supply market (in Section 2.0), the Sourcing Strategy referred again to the "fragmented supply market" which it said did meet the requirements of government users that there be access to interpretation services, but noted that there were criticisms of the quality of the services provided. While noting that contracts with public service bodies are attractive to the suppliers of interpretation services, the feedback from the public bodies was that quality of service was lacking. It was further noted that no one interpretation service provider had market leverage, and that there was "vibrant competition" in the market. The analysis concluded that there were "ample suppliers in the market" but a requirement to provide for more stringent quality and service delivery elements into the framework to ensure high-quality interpretation services and to reverse the "race to the bottom" with price only RFTs [2] was noted. It was further observed that barriers to entry to the market were low, and that "the structure and lotting development may encourage more interpretation organisations to make a submission for this RFT".
29. The Sourcing Strategy document explained how the 2015 Framework operated (as summarised earlier) and noted that the spend to date under the 2015 Framework had not materialised and that the mini- competitions had been subject to legal challenge. There were several references in the Sourcing Strategy to quality issues with the services provided under the 2015 Framework. Reference was made in the document to reports of "very poor service" by the interpretation service providers, and "very poor level of interpreter language proficiency". I should note here that in the affidavits which he swore on behalf of Word Perfect, Mr. Gashi rejected any allegations of poor quality made against Word Perfect, although it was not disputed by Word Perfect or its expert that quality issues were raised in the consultation process leading to the adoption of the RFT. 
30. The Sourcing Strategy document referred (in Section 3.0) to there being high demand for interpretation services across the public sector and that "key users" of services under the 2015 Framework were enthusiastic about the prospect of a new framework.
31. The Sourcing Strategy then explained (in Section 5.0) how the feedback received during the review process led to the development of the proposed RFT for the 2020 Framework, under which there were to be four single supplier contracts, with the contracts initially being for two years with the potential to extend for a further two years. In terms of the proposed design of the procurement competition for the new framework, the document noted that various approaches were considered, including various forms of multi-supplier frameworks, a single supplier framework and a dynamic purchasing system. The need to minimise administrative requirements in terms of the drawdown of services from the new framework was stressed. The proposed approach was stated to be also driven by the need to ensure quality in the delivery of interpretation services. On that basis, it was proposed that the new framework would have a different direct drawdown mechanism which would allow public sector clients to have greater input into the management of their contracts with less administrative work. The proposed framework was considered to be "the most optimal solution to meet the needs of all clients". The feedback received during the review process was taken on board, and the proposed framework was to involve four single supplier contracts offering two-year contracts with the potential to extend (for, in total, two further years). It was explained how the "lotting structure" had been devised (based on the spend of users of the services under the 2015 Framework). Critically, it was noted that "longer term contract[s] will be offered for these lots to drive quality back into the service" and that "[a] key element in devising the strategy is for the clients to devise strong contract management structure and build a business relationship with the supplier". 
32. Reporting on the feedback from public service clients under the 2015 Framework, the Sourcing Strategy noted that the clients stated:

"...that a key issue was the lack of quality in the interpretation services provided and the litigious nature of a FW member when MEAT criteria was used in subsequent mini-competitions."

33. It was stated that the aim of the proposed new framework was to seek to improve quality in the delivery of interpretation services "through offering longer term contracts to potential successful tenderers without the utilisation of subsequent mini-competitions based on MEAT or cost only". The new framework was to be similar to the 2015 Framework but the number of lots would be reduced to four (rather than eight), there would be the potential for four-year contracts for the highest ranked tenderer in each of the four lots and there would be a limit on the number of lots which could be awarded to any tenderer. In setting out the potential advantages to the new proposed framework, reference was specifically made to the framework being "SME friendly". It was envisaged also that longer contracts would provide opportunities for public sector bodies and tenderers to develop better business relationships, that those bodies could improve quality through managing the contracts by building better relationships with the suppliers and with the interpreters, that successful tenderers would be in a better position to make long-term plans and that better relationships with their clients would be forged. It was stated also that the absence of mini-competitions would reduce the risk of legal challenge and would reduce the administrative burden of such competitions which, the document stated, had proven to be unsuitable for this particular market. 
34. The four lots (which ultimately made their way into the RFT) were then set out. At that stage, it was envisaged that a tenderer could be awarded a second lot if the competition did not generate four successful tenderers (so that the maximum number of lots that could be awarded to a successful tenderer was two). That changed in the RFT, which provides for the 'one lot rule'. 

 

(7)   The RFT for the 2020 Framework

35. The structure of the RFT for the 2020 Framework gave effect to the proposed design of the procurement competition set out in the Sourcing Strategy (with some changes, including the introduction of the 'one lot rule'). On its cover page, the RFT stated that it was to establish "four single supplier framework contracts" for the provision of interpretation services (excluding Irish language services). At para. 1.1, it was stated that the Minister was issuing the RFT as a central purchasing body for use by Framework Clients ("Framework Clients"). They comprise the Courts Service (lot 1), An Garda Síochána (lot 2), the Department of Justice and Equality, the Legal Aid Board and the DEASP (lot 3) and, in the case of lot 4, entities defined in para. 1.4.2 as being certain Ministers, central government departments, offices and agencies, local authorities, entities in the health sector, including the HSE and HIQA, third level educational institutions, Education and Training Boards, the Irish Prison Service and the Defence Forces. The "Minister" and the "OGP" are also Framework Clients.
36. The RFT noted that tenders were being sought for the award of four "single supplier framework contracts" for the provision of interpretation services and that the framework would be divided into four lots (lots 1 - 4), each of which would result in a separate framework contract. The lots are:

Lot 1:               The Courts Service

Lot 2:               An Gardaí Siochana

Lot 3:              The Department of Justice and Equality, the Legal Aid Board and DEASP

Lot 4:               All other framework clients (as defined in para. 1.4.2)

37. The RFT stated that tenderers may submit tenders for one lot, a combination of lots or for all lots, and that each lot would be evaluated separately.
38. With respect to the award of lots to successful tenderers, the RFT stated that while tenderers would submit tenders for any or all of the four lots, they would be limited to being awarded one lot. When submitting a tender for more than one lot, tenderers were required to confirm their lot preference ranking in respect of each lot for which they are submitting a tender. Where the tender submitted by the tenderer was identified as the MEAT in more than one lot, and the tenderer had set out its preference ranking, the tenderer would be awarded a lot in accordance with its lot preference ranking only. In the case of other lots in which the tender of the tenderer was identified as the MEAT, the lot would be awarded to the next most economically advantageous tenderer. Where such tenderer did not provide a lot preference ranking, the OGP could decide, in its absolute discretion, which lot was to be awarded to that tenderer. If there were insufficient compliant tenderers to allow for each lot to be awarded to separate tenderers, the OGP would not award the relevant lot to any tenderer. Where a tenderer was successful in being awarded one of the four lots, Framework Clients could activate the purchase of services from the successful tenderer for that lot in accordance with the rules set out in Clause 23 of the Framework Contract, set out at Appendix 5 of the RFT. In turn, this would result in a Client Contract between the Framework Client and the successful tenderer for that lot.
39. The Procurement Competition under the RFT was to be conducted in accordance with the open procedure under the relevant EU Regulations, namely, the European Union (Award of Public Authority Contracts) Regulations 2016 (S.I. No. 284 of 2016) (the "2016 Regulations"). Any framework contract resulting from the competition would be issued for a term of two years but could be extended for two further periods of twelve months each. Thus, the term of framework contracts under the 2020 Framework could not exceed four years in aggregate.
40. The OGP estimated the possible value of work under each lot over the four-year period was up to €5m. It was noted by Twomey J (at para. 33 of his judgment), that it would be possible for public sector bodies to obtain interpretation services outside the 2020 framework from all suppliers (including those who successfully tendered for lots in the Procurement Competition established by the RFT). The evidence before the High Court, however, was that the OGP was hoping that more services would be provided under the 2020 Framework than was the case under the 2015 Framework. 
41. Very significantly, in terms of the objective of the RFT for the 2020 Framework, para. 1.8 of the RFT stated:

"Contracting Authority policy seeks to encourage participation on a fair and equal basis by Small and Medium Enterprises ('SMEs') in this competition. SMEs that believe the scope of this competition is beyond their technical or business capacity are encouraged, subject to para. 2.5, to explore the possibilities of forming relationships with other SMEs or larger enterprises. Through such relationships they can participate and contribute to the successful implementation of any client contracts that may result from this competition and therefore increase their social and economic benefits. Larger enterprises are also encouraged, subject to para. 2.5, to consider the practical ways that SMEs can be included in their proposals to maximise the social and economic benefits of any client contracts that may result from this competition."

 

(8)   Procurement Guidelines and Circular 10/14

42. The Respondent maintained that the objective of the RFT was to promote greater participation by SMEs in the Procurement Competition for the 2020 Framework and contended that the structure of the RFT is consistent with the Public Procurement Guidelines for Goods and Services issued by the OGP (January 2019) (the "Guidelines") and Circular 10/14 issued on behalf of the Minister in April 2014 entitled "Initiatives to assist SMEs in Public Procurement" (the "Circular"). The Guidelines and the Circular were exhibited to one of Mr. MacDonnell's affidavits. The Guidelines make particular reference to encouraging SME participation in public sector procurement competitions. They refer (at para. 31) to the 2016 Regulations and note that those Regulations contain provisions to make it easier for SMEs to tender for public sector procurement contracts and contain measures specifically designed to improve access to tender for SMEs. The measures mentioned in the Guidelines include:

"Discretion to divide public contracts into lots, with the proviso that opting not to divide a contract into lots must be explained in the procurement documents or the report on the procurement process."

43. The Guidelines also refer to the Circular and note that it too contains particular provisions to encourage SME participation in such competitions (para. 32 of the Guidelines). As outlined in the Guidelines, the measures mentioned in the Circular include:

"Subdividing contracts into lots - the sub-division of contracts into lots facilitates access by SMEs, both quantitively (the size of the lots may better correspond to the productive capacity of the SME) and qualitatively (the content of the lots may correspond more closely to the specialised sector of the SME."

44. The Guidelines also make reference to the use of consortia by SMEs in tendering for public sector contracts. They note that:

"SMEs are encouraged to consider using consortia where they are not of sufficient scale to tender in their own right."

45. Reference is also made to framework agreements where it is noted that "breaking framework agreements into lots can be an effective way of opening up opportunities to SMEs" and that "depending upon requirements, framework agreements can be divided into lots on the basis of geography, specialisation and/or value".
46. In its submissions, Word Perfect strongly disagreed that the RFT promoted greater participation by SMEs and maintained that the structure of the RFT would have the opposite effect by fundamentally undermining the opportunity of market access for itself and for other SMEs and that it would discourage participation by SMEs in the procurement. Relevant to that dispute are the provisions of the RFT concerning the selection criteria (s. 3.2 and, in particular, the turnover requirement and the requirement to demonstrate a "proven track record" in providing interpretation services). Tenderers had to have a minimum annual turnover of €750,000 for each of the previous three financial years. They also had to provide details of two separate clients to whom they successfully provided interpretation services within the three years prior to the tenderer's submission deadline, with the value of services to be in excess of €500,000.
47. The award criteria for the award of framework contracts to the successful tenderers in respect of each lot is on the basis of the MEAT, as identified in accordance with criteria set out in para. 3.3 of the RFT. 

4. Challenge to the RFT

48. The Minister, through the OGP, published the RFT on the eTenders national platform on 30^th May 2020. Shortly thereafter, Word Perfect's solicitors wrote to the Minister taking issue with the RFT. Correspondence was exchanged between them. Word Perfect commenced the proceedings on 26^th June 2020, and they were ultimately heard with another set of proceedings brought by Word Perfect in January 2022 (the other set of proceedings also came before this Court on appeal and were the subject of a judgment delivered in June 2022 [2022] IECA 131). 
49. The elements of the RFT challenged by Word Perfect in these proceedings in the High Court, and on appeal to this Court were:

(i)        the decision to divide the procurement into lots (i.e. the 'lots decision'); and

(ii)       the provision that a tenderer could only win one lot (i.e. the 'one lot rule'). 

50. Before turning to the judgment of the High Court, and in order to better understand the arguments made by the parties before that court and on appeal to this Court, it is necessary to set out in some detail the relevant provisions of the 2014 Directive. 

5. Relevant Provisions of the 2014 Directive

(1) Introductory Remarks

51. As is clear from the judgment of the High Court, several recitals and several articles of the 2014 Directive are relevant to the issues in this appeal. As noted earlier, the 2014 Directive was given effect in Irish law by the 2016 Regulations. There is no material difference between those measures and, for the most part, I will refer only to the relevant provisions of the 2014 Directive.
52. It should be noted at the outset that the 2014 Directive repealed the earlier Public Sector Directive (Directive 2004/18/EC) ("the 2004 Directive"). While the 2014 Directive introduced many changes to the regime which existed under the 2004 Directive, the most significant ones for the purposes of this appeal are those concerning lots. The 2014 Directive introduced new obligations and provisions concerning the division of contracts into lots. Those provisions were introduced to provide greater opportunities for SMEs, which might not otherwise have been in a position to participate in procurement competitions in the public sector: see, for example, Arrowsmith "The Law of Public Utilities Procurement: Regulation in the EU and UK" (3^rd Ed.) 2018 (Vol.1) paras. 12-149, p. 1299, (Vol. 2) paras. 20-48 p. 727 and paras. 20-124 and 20-125, pp 782-783, Caranta and Sanchez-Graells "European Public Procurement: Commentary on Directive 2014/24/EU" (2021) paras. 46.01-46.02, p. 499 and Trybus "The division of public contracts into lots under Directive 2014/24: minimum harmonisation and impact on SMEs in public procurement" (2018) E.L.Rev. 43(3), 313-342.
53. Member States were permitted, under the pre-2014 Directive regime, to divide procurement into lots. One of the significant changes in the 2014 Directive was that it made express provision that contracting authorities may decide to award contracts in the form of separate lots (Article 46(1)). Another important change under the 2014 Directive was that Member States could make it obligatory to award contracts in the form of separate lots (Article 46(4)). Ireland did not go down that path. A third significant change was that if a contracting authority decides not to divide the relevant contract or contracts into lots, it must give an indication of the main reasons for that decision (the so-called "divide or explain" duty) (Article 46(1) and Recital 78). The final significant change for present purposes was that provision was made for the first time in the 2014 Directive for contracting authorities to limit the number of lots that could be awarded to any one tenderer in a procurement competition (Article 46(2)). This is the provision under which the OGP introduced the 'one lot rule' in the RFT for the 2020 Framework, which is challenged by Word Perfect in these proceedings. Caranta and Sanchez-Graells state that "lot division appears...to be a provision aimed at fostering competition by preventing 'winner-takes-all' scenarios" and that it is "also seen as one of the vehicles to foster the participation of SMEs in public procurement..." (paras. 46.01 - 46.02, p. 497).

 

 

(2) The Recitals

54. Several of the recitals are relevant to the issues in this appeal. The judge refers to many of them in the course of his judgment. It should, of course, be recalled that while the recitals themselves do not lay down binding legal provisions, they are of considerable assistance in the interpretation of the substantive provisions of the 2014 Directive. These include Recitals (1), (2), (59), (61), (69), (78) and (79) as will be outlined below.
55. Recital (1) makes reference to the general principles of EU Law including equal treatment, non-discrimination and proportionality. It states that the award of public contracts must comply with the principles contained in the TFEU, as well as the general principles. It also states that public procurement must be "opened up to competition".
56. Recital (2) makes specific reference to one of the purposes of the 2014 Directive as being to facilitate "the participation of small and medium enterprises (SMEs) in public procurement". This is only one of a number of references in the recitals and in the body of the Directive itself to one of the fundamental objectives of the 2014 Directive as being to encourage, promote and facilitate the participation of SMEs in public procurement. That objective and the objective of opening up the procurement to competition are both critically important to the Minister/OGP's design and adoption of the RFT the subject of these proceedings.
57. Recital (59) is directed to the centralisation of public procurement by the Member States in the form of centralised purchasing bodies which are provided for in Article 37 of the 2014 Directive. Recital (59) states that the aggregation and centralisation of purchases "should be carefully monitored in order to avoid excessive concentration of purchasing power and collusion, and to preserve transparency and competition, as well as market access opportunities for SMEs". Word Perfect strongly stressed this recital in its submissions and it is clearly relevant also to the objectives sought to be achieved by the RFT insofar as it refers to the preservation of competition and of market access opportunities for SMEs.
58. Recital (61) concerns framework agreements which are, in turn, provided for in Article 33. The recital states that contracting authorities should be given "additional flexibility" when procuring under framework agreements. It further states that:

"Framework agreements should not be used improperly or in such a way as to prevent, restrict or distort competition...".

59. Recital (69) notes that centralised purchasing techniques, including awarding framework agreements, in view of the large volumes purchased, "may help increase competition and should help to professionalise public purchasing".
60. Two very important recitals for the purposes of this appeal are Recitals (78) and (79). They refer to the entitlement of contracting authorities to divide contracts into lots (for which provision is made under Article 46) and to limit the number of lots that could be awarded to any one tenderer. Recital (78) starts by stating that public procurement must be "adapted to the needs of SMEs". It provides that contracting authorities should be encouraged to make use of a Code of Best Practices to facilitate access by SMEs to public procurement contracts set out by the EU Commission which provides guidance on how authorities may apply the public procurement framework in a way that "facilitates SME participation". The recital continues:

"To that end [i.e. to facilitate SME participation] and to enhance competition, contracting authorities should in particular be encouraged to divide large contracts into lots. Such division could be done on a quantitative basis, making the size of the individual contracts better correspond to the capacity of SMEs, or on a qualitative basis, in accordance with the different trades and specialisations involved, to adapt the content of the individual contracts more closely to the specialised sectors of SMEs or in accordance with different subsequent project phases."

61. The fundamental importance of the objectives of facilitating access by SMEs to public procurement contracts and of enhancing competition is acutely evident from this recital.
62. Recital (78) goes on to state that the "size and subject matter of the lots should be determined freely by the contracting authority". It then states:

"The contracting authority should have a duty to consider the appropriateness of dividing contracts into lots while remaining free to decide autonomously on the basis of any reason it deems relevant, without being subject to administrative or judicial supervision. Where the contracting authority decides that it would not be appropriate to divide the contract into lots, the individual report or the procurement documents should contain an indication of the main reasons for the contracting authority's choice. Such reasons could, for instance, be that the contracting authority finds that such division could risk restricting competition, or risk rendering the execution of the contract excessively technically difficult or expensive..."

63. The recital is providing here for the duty to 'divide or explain" on contracting authorities (see, for example, Sanchez-Graells "Public Procurement and the EU Competition Rules" (2^nd Ed.) (2015) pp. 347 - 348). This provision is considered later but for present purposes, it can be said that a contracting authority is required to consider whether to divide contracts into lots, and, where it decides that it would not be appropriate to do so, it must give an indication of its main reasons for that decision. These reasons can include where the contracting authority believes that such division could risk restricting competition.
64. In further highlighting the objective of facilitating the participation of SMEs, the third paragraph of Recital (78) states:

"Member States should remain free to go further in their efforts to facilitate the involvement of SMEs in the public procurement market, by extending the scope of the obligation to consider the appropriateness of dividing contracts into lots to smaller contracts, by requiring contracting authorities to provide a justification for a decision not to divide contracts into lots or by rendering a division into lots obligatory under certain conditions."

65. Article 46(4) of the 2014 Directive provides that Member States may make it obligatory to award contracts in the form of separate lots under certain conditions. As noted above, Ireland has not made such provision in the 2016 Regulations. 
66. Recital (79) refers to what is to happen when contracts are divided into lots. It says:

"Where contracts are divided into lots, contracting authorities should, for instance, in order to preserve competition or to ensure reliability of supply, be allowed to limit the number of lots for which an economic operator may tender; they should also be allowed to limit the number of lots that may be awarded to any one tenderer."

67.  This is a very significant recital, and its meaning was the subject of considerable debate between the parties on this appeal. Particular focus was placed on the meaning of the need "to preserve competition" and whether it could encompass the preservation of competition at the end of the 2020 Framework. As I explain below, I have concluded, on the basis of persuasive authority, that it clearly does. The reference to the entitlement of contracting authorities to limit the number of lots that can be awarded to any one tenderer is directly relevant to Word Perfect's challenge to the 'one lot rule' and must, of course, be read with Article 46(1) and (2) of the 2014 Directive itself. 
68. The second paragraph of Recital (79) makes further reference to "the objective of facilitating greater access to public procurement by SMEs" by providing that that objective might be "hampered if contracting authorities would be obliged to award the contract lot by lot", in other words, without imposing any limit on the number of lots that can be awarded to any one tenderer.
69. There are many other references to the importance of encouraging or facilitating access for SMEs to the procurement of public contracts, including Recitals (83), (87), (124) and (134). Recital (124) states:

"Given the potential of SMEs for job creation, growth and innovation it is important to encourage their participation in public procurement, both through appropriate provisions of this Directive as well as through initiatives at the national level. The new provisions provided for in this Directive should contribute towards an improvement of the level of success, by which is understood the share of SMEs in the total value of contracts awarded.  It is not appropriate to impose obligatory shares of success, however, the national initiatives to enhance SME participation should be closely monitored given its importance."

70. Apart from the recitals to which I have already referred, other recitals also make reference to some of the general principles of EU law, including the principle of proportionality. They include Recitals (101) and (136). 

 

(3) Articles of the 2014 Directive

71. I now turn to the relevant provisions of the 2014 Directive. Title I sets out the scope, definitions and general provisions. Title II contains the rules in relation to public contracts.  This title is divided into four chapters and, in turn, some of the chapters are divided into different sections. This is relevant to some of the submissions advanced by the parties as to the proper interpretation of some of the provisions of the Directive.
72. Chapter I of Title II sets out the procedures (open procedure, restricted procedure and so on). Chapter II sets out the techniques and instruments for electronic and aggregated procurement and includes provisions for framework agreements (Article 33) and centralised purchasing activities and central purchasing bodies (Article 37). Chapter III provides for the conduct of the procurement procedure. It is divided into three sections. Section 1 contains the provisions governing preparation. Article 46 (providing for the division of contracts into lots) is contained in this section. Section 2 concerns publication and transparency. Section 3 provides for the choice of participants and the award of contracts. Included in Section 3 is Article 67, which provides for contract award criteria. Titles III, IV and V are not directly relevant to this appeal. 
73. Article 18 is contained in Title I, Chapter II (General rules) and is a very important provision in the context of this appeal. It is headed "Principles of procurement". Article 18(1) has been described as "perhaps the most important article of all" in the 2014 Directive (Caranta and Sanchez-Graells, para. 18.01, pp. 187 - 188). It provides for the general procurement principles (which are also mentioned in Recital (1)). Compliance with these principles must be ensured at all stages of a procurement procedure, as well as in the performance of a public contract. The principles in Article 18 have been described as "the very essence of the public procurement rules" and it has been said that "to a very large extent, one can argue that the 2014 Directive is merely setting a framework to ensure these principles are safeguarded" (Caranta and Sanchez-Graells, para. 18.01, pp. 187 - 188).
74. Article 18(1) states:

"Contracting authorities shall treat economic operators equally and without discrimination and shall act in a transparent and proportionate manner. 

The design of the procurement shall not be made with the intention of excluding it from the scope of this Directive or of artificially narrowing competition.  Competition shall be considered to be artificially narrowed where the design of the procurement is made with the intention of unduly favouring or disadvantaging certain economic operators."

75. There was considerable debate between the parties as to the proper interpretation of this provision and as to whether the intention referred to in the context of any alleged artificial narrowing of competition is one which must be assessed subjectively or objectively. Ultimately, there was agreement that it had to be assessed objectively, and I have concluded that that is correct.
76. Article 33 which is in Title II, Chapter II provides for framework agreements. A framework agreement is defined in Article 33(1) as meaning:

"An agreement between one or more contracting authorities and one or more economic operators, the purpose of which is to establish the terms governing contracts to be awarded during a given period, in particular with regard to price and, where appropriate, the quantity envisaged."

77. The term of a framework agreement is not to exceed four years, save in exceptional cases (Article 33(1).  The procedures for the award of contracts based on a framework agreement are set out in the subsequent provisions of Article 33. Article 33 does not make reference to contracts being awarded on the basis of lots. That is provided for in Article 46. 
78. The 2020 Framework is a framework agreement between the Minister and the successful tenderers, as was the 2015 Framework and the differences between them have been noted earlier. 
79. Article 37 (also in Title II, Chapter II) provides for centralised purchasing activities and central purchasing bodies. Word Perfect relied on this provision in conjunction with Recital (59), referred to earlier.
80. Title II, Chapter III contains the provisions governing the conduct of the procurement procedure. Section 1 contains the provisions for the preparation of the procedure. That section starts with Article 40 which provides that, before launching a procurement procedure, contracting authorities may conduct market consultations for the purpose of preparing the procurement and informing economic operators of their procurement plans and requirements.  Contracting authorities can seek advice from independent experts or authorities or from market participants which can be used in planning and conducting the procurement procedure, provided that the advice "does not have the effect of distorting competition and does not result in a violation of the principles of non-discrimination and transparency". 
81. Article 42 provides that the technical specifications must be set out in the procurement documents and must lay down the characteristics required in relation to the proposed works, services, or supplies.
82. The most important article for the purpose of this appeal is Article 46. It is headed "Division of contracts into lots". It is appropriate to set it out in full:

"1.       Contracting authorities may decide to award a contract in the form of separate lots and may determine the size and subject matter of such lots. 

                        Contracting authorities shall, except in respect of contracts whose division has been made mandatory pursuant to paragraph 4 of this Article, provide an indication of the main reasons for their decision not to sub-divide into lots, which shall be included in the procurement documents or the individual report referred to in Article 84. 

2.         Contracting authorities shall indicate, in the contract notice or in the invitation to confirm interest, whether tenders may be submitted for one, for several or for all of the lots.

                        Contracting authorities may, even where tenders may be submitted for several or all lots, limit the number of lots that may be awarded to one tenderer, provided that the maximum number of lots per tenderer is stated in the contract notice or in the invitation to confirm interest.  Contracting authorities shall indicate in the procurement documents the objective and non-discriminatory criteria or rules they intend to apply for determining which lots will be awarded where the application of the award criteria would result in one tenderer being awarded more lots than the maximum number.

3.         Member States may provide that, where more than one lot may be awarded to the same tenderer, contracting authorities may award contracts combining several or all lots where they have specified in the contract notice or in the invitation to confirm interest that they reserve the possibility of doing so and indicate the lots or groups of lots that may be combined. 

4.         Member States may implement the second subparagraph of paragraph 1 by rendering it obligatory to award contracts in the form of separate lots under conditions to be specified in accordance with their national law and having regard to union law. In such circumstances, the first subparagraph of paragraph 2 and, where appropriate, paragraph 3 shall apply."

83. Much of the argument and legal submissions in this appeal centred on Article 46 and Recitals (78) and (79), as it is under those provisions that the Minister/OGP decided to divide the proposed contracts the subject of the 2020 Framework into lots and to apply the 'one lot rule'. Word Perfect contended that the Minister/OGP was not entitled to make either of those decisions under Article 46, or in conformity with the general principles, and the other provisions relied upon. 
84. Section 2 of Title II, Chapter III provides for the publication of notices and for transparency in the procurement. Section 3 then provides for the choice of participants and the award of contracts. Article 67 (contract award criteria) is contained in this section which, it should be noted, provides for a separate stage in the procurement process to the preparation stage which is contained in section 1. Before turning to Article 67, it should be noted that Article 56 headed "General principles" provides that contracts must be awarded on the basis of criteria laid down in accordance with Articles 67 - 69, provided that certain specified conditions are fulfilled. Article 57 provides for the grounds on which an economic operator can be excluded from participation in a procurement procedure. Article 58 contains selection criteria. It provides that those criteria may relate to various matters including (a) suitability to pursue the professional activity, (b) economic and financial standing, and (c) technical and professional ability. With respect to the requirements for participation imposed by contracting authorities on economic operators, Article 58(1) provides that such requirements "shall be related and proportionate to the subject matter of the contract".
85. Article 67 is in Subsection 3 of Section 3 of Title II, Chapter III, which provides for the award of the contract in the public procurement competition. Article 67 is headed "Contract award criteria" and provides for the award of contracts on the Most Economically Advantageous Tender basis (i.e. the MEAT).
86. Article 67 provides:

1.      "Without prejudice to national laws, Regulations or administrative provisions concerning the price of certain supplies or the remuneration of certain services, contracting authorities shall base the award of public contracts on the most economically advantageous tender.

2.       The most economically advantageous tender from the point of view of the contracting authority shall be identified on the basis of the price or cost, ... and may include the best price-quality ratio, which shall be assessed on the basis of criteria, including qualitative, environmental or social aspects, linked to the subject matter of the public contract in question..."

3.      Award criteria shall be considered to be linked to the subject matter of the public contract where they relate to the works, supplies or services to be provided under that contract in any respect and at any stage of their life cycle..."

87. Article 70 (contained in Chapter IV of Title II) which concerns "contract performance" provides for conditions to be laid down for the performance of contracts.  Contracting authorities may lay down conditions in relation to the performance of a contract "provided that they are linked to the subject matter of the contract within the meaning of Article 67(3)...". Word Perfect, in its submissions in the appeal, contended that a similar requirement of linkage to the subject matter of the contract applied to the decision to divide a contract(s) into lots and to limit the number of lots that could be awarded to any one tenderer (even though Article 46 contains no such express requirement). As I explain below, I reject that contention.

 

6. The Judgment of the High Court

88. The High Court judge delivered a comprehensive judgment with highly commendable expedition on 24^th February 2022 following a hearing which extended over six days. At the outset of his judgment, the judge noted the two aspects of the 2020 Framework which were the subject of challenge by Word Perfect: (i) the 'lots decision', and (ii) the 'one lot rule'. 

(1)   Background and context

89. The judge explained the context in which Word Perfect's challenge was brought and referred to the position which existed under the 2015 Framework. He noted that Word Perfect and Translation.ie were the only firms to obtain public contracts for interpretation services under the 2015 Framework. He stated that Word Perfect is an SME (but provided a figure for Word Perfect's turnover at para. 13 of the judgment which does not appear to have been correct). There is no doubt, however, but that Word Perfect is an SME. The judge noted the objective of the Respondent in introducing the 'lots decision' and the 'one lot rule' into the 2020 Framework which was to facilitate the participation of SMEs, and not just Word Perfect and Translation.ie in procurement competitions for public contracts. The judge also noted the further objective behind the two disputed aspects of the 2020 Framework, which was to ensure that, at the end of that framework, the Respondent would not be left with just one or two providers of interpretation services who were prepared to tender for public contracts, bearing in mind that only two providers obtained contracts under the 2015 Framework.
90. In his analysis of the background to the 2020 Framework, the judge noted that it was common case between the parties that the public sector accounts for over 90% of the demand for interpretation services in the State. He then set out the process leading up to the decision by the OGP to finalise and publish the RFT for the 2020 Framework. The various steps taken, as outlined in Mr. MacDonnell's affidavit, were also explained. I have described those steps earlier.
91. When referring to the Sourcing Strategy, the judge noted that the OGP had identified quality as being an issue in respect of services provided under the 2015 Framework. He noted further that a workable solution to the quality issue was to provide for four-year contracts which would also allow supplier/purchaser relationships to develop and the providers of services to understand better the purchasers' requirements (para. 21). The judge also noted that the aim of the 2020 Framework was to improve the quality of the services provided by dispensing with mini-competitions based on cost only (which, for the most part, was what happened under the 2015 Framework). This had led to the two suppliers (Word Perfect and Translation.ie) obtaining all of the contracts under that framework. The judge referred to evidence that dispensing with mini-competitions could reduce the administrative burden for the public sector bodies. He referred to parts of the Sourcing Strategy document which referred to feedback from clients, noting that clients had referred to the poor service received by them during the period of the 2015 Framework. He then referred to various extracts from the Sourcing Strategy and drew attention to Mr. MacDonnell's affidavit evidence that the decision on the design of the 2020 Framework was "one of prospective commercial policy". The judge concluded that, when designing the 2020 Framework, the Respondent was looking not just at the market for interpretation services in 2021, but "the potential market in 2024 and beyond." (para. 25). Word Perfect took issue with the entitlement of the Respondent to have regard to future competition when designing a framework such as this. However, as I will expand on later, there is ample support in the authorities for those designing public procurement competitions to take into account preservation of competition in the market for future public contracts (see, for example, Arrowsmith at para. 20-124, 20-125 and Sanchez-Graells at p. 348 - 349). 
92. The judge noted that there was evidence that the design of the lot structure was to facilitate competition and was "motivated by a desire to provide a viable framework where public service bodies can access interpretation services through a user-friendly process with limited cause for legal challenges" (para. 26).
93. Having referred to the information set out in the Sourcing Strategy as to the spend on interpretation and translation services between 2015 and 2017 (€9.26m, with €4.98m paid to Translation.ie and €3.52m paid to Word Perfect), the judge then outlined what happened under the 2015 Framework. As noted earlier, of the ten contracts awarded under that framework, three went to Word Perfect and seven went to Translation.ie. The third provider which had qualified for the 2015 Framework, Context, did not succeed in winning any of the contracts under that framework. It responded to the RFI by indicating that it was considering leaving the market. 
94. The judge noted that as the 2015 Framework was not an exclusive one, public sector bodies could procure interpretation services outside the framework by means of separate tender processes. He noted further that only 23.8% of public sector interpretation services during the period of the 2015 Framework were awarded under the framework, with the balance of 76.2% being procured outside the framework (the percentages appear to come from Dr. Hannigan's evidence on Day 2, see the Transcript, Day 2 pp. 94, 97 and 126). The judge noted that a similar, non-exclusive approach was also provided for in the 2020 Framework. It would be possible, therefore, for public sector bodies to procure interpretation services outside the framework, although the OGP was hopeful that the 2020 Framework would be used more often than was the case under its predecessor. 

 

(2)   Economist's "speculation"

95. The judge then referred to some of the expert evidence of the economists, Mr. Massey on behalf of Word Perfect and Dr. Hannigan on behalf of the Respondent, concerning the market for interpretation services in Ireland and the claim by Word Perfect that the 2020 Framework distorted competition. The judge noted the estimated market shares of the two largest providers of such services to the public sector (35% - 45% for Translation.ie and approximately 30% for Word Perfect). He referred to the Respondent's anticipation that smaller SMEs would be likely to seek to form consortia in order to submit a tender under the 2020 Framework, having regard to the minimum turnover requirement of €750,000 for each of the previous three years (referred to earlier). The judge also noted that two non-Irish firms (one US and one UK firm), replied to the RFI, and considered that it seemed reasonable to conclude that they may potentially be interested in providing interpretation services to the State. The judge noted that Mr. Massey was of the view that four - six firms (and closer to four than six) would be likely to submit tenders for the four lots in the 2020 Framework and that Dr. Hannigan was of the view that eight - nine firms would be likely to do so. The judge set out Mr. Massey's rationale and described it as "speculation" from which the court could not conclude that there would only be four suppliers who would be likely to submit a tender under the 2020 Framework procurement process. The judge then set out the evidence of Dr. Hannigan and stated that an "equally arguable point" was made by him in his opinion that a guarantee of obtaining 25% of a European market, worth up to €5m over four years, was an attractive proposition for a US firm (para. 41). The judge observed that the question of the likely number of tenderers was relevant to the argument made by Word Perfect that there might only be four tenderers for the four lots under the 2020 Framework and that it was, therefore, anti-competitive to have a 'one lot rule', as that would reduce competition and encourage collusion.

 

(3)   The 'lots decision'

96. The judge then turned to consider the lawfulness of the 'lots decision' (having correctly stated that unless that decision was a valid one, it would not be lawful to provide for the 'one lot rule'). He noted that one of the main claims made by Word Perfect was that it was not lawful under the 2014 Directive to divide four contracts into four separate lots and that that was what was being provided for in the 2020 Framework agreement. He then carefully analysed what he understood Word Perfect's arguments on this issue to be.
97. The judge noted that Word Perfect was relying on the use of the singular term, 'a contract' in Article 46(1). In interpreting Article 46, the judge pointed out that the parties were agreed that Article 46(1) had to be interpreted in light of its "wording, context and objectives" (relying on what Advocate General Kokott had said in Case C-278/05 Robins v. Secretary for State for Work and Pensions [2007] ECR I-01053 at para. 34). The word "contract" in Article 46 had to be interpreted, not in isolation, but in the context in which it is used and in light of the objectives of the Directive (para. 50). The judge found that it was clear from a number of the recitals, and from a number of articles of the 2014 Directive itself, that one of the main objectives of the Directive was that "public procurement should be structured so as to facilitate competition and to facilitate SMEs participating in State contracts" (para. 51). The judge referred to a number of recitals by way of example, namely, Recitals (1) and (2). He referred also to Article 46 itself, and to the first paragraph of Recital (78) in which specific reference was made to the objective of facilitating the participation by SMEs in public procurement competitions. He described that objective as being "strong" (para. 54) and said that the decision to divide a procurement into lots, for the purpose of facilitating SME participation, is expressly stated in the second paragraph of Recital (78) as not being subject to "administrative or judicial supervision" although he was, of course, reviewing that decision in the proceedings. He referred also to Recital (79) and to the possibility, where contracts are divided into lots, of contracting authorities limiting the number of lots for which an operator could tender and the number of lots that could be awarded, in order, for instance, "to preserve competition or to ensure reliability of supply". The importance of the objective of dividing a procurement into lots so as to facilitate the participation by SMEs and competition, the judge noted, was further underlined by the so-called "divide or explain" requirement in Article 46(1) (and Recital (78)). He noted (at para. 57) that:

"... in the interest of facilitating SME participation, reliability of supply and competition in the award of public contracts, the default position is that procurement should be divided into lots."

98. The judge then went on to consider Word Perfect's admittedly "technical" contention that the 'lots decision' was unlawful and that the Respondent was precluded from dividing the procurement in this case into lots on the basis of the use of the singular form of "contract" (i.e. a contract) in Article 46(1), combined with the description of the RFT as being to establish "four single supplier framework contracts". The judge rejected that contention and concluded that the interpretation relied on by Word Perfect was contrary to the overall objective of the 2014 Directive which was "to make every possible effort to have procurement divided into lots in order to facilitate the participation of SMEs in the tender process" (para. 59). He held, however, that that there was a "more fundamental objection" to this part of Word Perfect's argument and its reliance on the word "contract" in Article 46(1). That objection derived from the fact that Article 46 of the 2014 Directive is contained in Title II, Chapter III, Section 1 of the Directive which, as noted earlier, is headed "Preparation" and deals with matters which are "preparatory to the finalisation of a tender" and not with a situation "where a contract has come into being" (para. 62). The judge concluded that it was clear that there is "no contract in existence" when the tender is being prepared by the contracting authority. Therefore, there were not, in fact, four contracts (or any contracts) in existence at the time that the RFT was being prepared. The judge referred to the 2020 Framework itself and concluded that it made clear that a contract would only come into existence when an activation notice was executed and served under Clause 23 of the Services Framework Contract at Appendix 5 of the RFT.
99. Although not directly relevant to the outcome of the appeal, I observe here that this does not appear to be a correct analysis of the contractual situation, in that once the Framework Contract is signed by the Contracting Authority (the Minister/OGP and the relevant public sector body) and the tenderer that successfully tendered for one of the lots, there would be a contract in existence. Clause 23 provides that where the Framework Client wishes to draw down services from the successful tenderer, it must serve the activation notice under Clause 23, at which point a separate Client Contract comes into existence.
100. The judge was correct, however, in his analysis that at the time of the RFT, there were no actual concluded contracts in existence. They remained proposed or contemplated contracts. The judge held that what is meant by the term "contract" in Article 46(1), when properly interpreted, is a "prospective procurement, which may be divided into lots, and not a binding contract, since one is at the preparatory stage of the tender process, when there is no such contract, as is clear from [the Framework Contract] annexed to the RFT" (para. 66). This is undoubtedly correct and was not in dispute between the parties on the appeal, although Word Perfect maintained that it had never argued otherwise.
101.  The judge rejected Word Perfect's contention that the lots decision breached Article 46(1) and was, therefore, unlawful. This was primarily on the basis that it was not necessary that there be a binding contract at the preparatory stage of the procurement process, and that a merely "prospective procurement", i.e. a prospective or contemplated contract would be in existence at that preparatory stage. As will be seen, Word Perfect contended in the appeal that it did not make the case before the High Court that there had to be a concluded contract in order for the contracting authority to exercise its discretion to divide the procurement into lots. Its position was that the judge had misunderstood its argument and decided a point which had not been argued. It maintained that the judge did not decide the essential point made as to the lawfulness of the 'lots decision'.

 

                                         (4) The 'one lot rule'

(a) Burden of Proof

102. The judge then considered the challenge to the 'one lot rule' by first addressing the issue of the burden of proof. He concluded that the burden rested on Word Perfect to prove that the rule was unlawful. The judge applied the general principle in civil litigation that "he who asserts must prove" (and cited Hogan J's dictum in Wicklow County Council v. Fortune [2012] IEHC 406, at para. 19). Word Perfect had relied on the judgment of the CJEU in Deutsche Parkinson Vereinigung eV v. Zentrale zur Bekӓmpfung unlauteren Wettbewerbs eV ECLI: EU:C:2016:776 ("Deutsche Parkinson") to support its contention that the burden lay on the Respondent to justify the alleged breach of the principles of competition, equality and proportionality to which the 'one lot rule' gave rise . However, the judge distinguished that case on the basis that Deutsche Parkinson involved a breach of the free movement of goods provisions under Article 34 TFEU, and the burden was on the Member State to justify the restriction at issue on the grounds of the protection of health and the life of humans under Article 36 TFEU. The judge held that the restriction on the number of lots that could be awarded to any one tenderer was permitted by Article 46, and that the burden of proof lay on Word Perfect to prove that the decision was in breach of the general principles on which it relied. In coming to that conclusion, the judge also relied on the judgment of McDermott J. in Copymoore v. Commission of Public Works in Ireland (No. 2) [2016] IEHC 709 ("Copymoore No. 2") (and, in particular, paras. 159 and 174 of the judgment in that case). He held, therefore, that the burden of proof lay on Word Perfect to prove that the 'one lot rule' was in breach of the various general principles on which it relied.
103. Before considering the legal arguments advanced by Word Perfect to challenge the 'one lot rule', the judge considered some of the expert economic evidence (at paras. 79 - 96 of his judgment). He considered Mr. Massey's evidence that there might only be four tenderers for the four lots and that the 'one lot rule' would incentivise tenderers to "compete less aggressively" in the procurement competition and that it "facilitates collusion". The judge had already concluded that he did not accept what he called Mr. Massey's "speculation" that there would be only four tenderers. He also rejected the contention advanced by Word Perfect, in reliance on the evidence of Mr. Massey, that if the 'one lot rule' were omitted from the 2020 Framework, a greater number of operators would seek to enter the Irish market. He further rejected the contention that there would likely be collusion between tenderers on the basis that there was no evidence that an operator submitting a tender under the 2020 Framework would ever be sure about the precise number of other tenderers (para. 85). The judge, therefore, rejected the claim that the 'one lot rule' meant that it was likely that there would only be four tenderers and that there would be an "unlawful distortion of competition" or a risk of collusion greater than might otherwise exist (para. 86).
104. Having considered some case law (including the judgment of O'Donnell J. in Hanrahan v. Minister for Agriculture, Fisheries and Foods [2017] IESC 66, and his reference to the "high ball - low ball" approach in the context of expert evidence), the judge expressly stated that he was not criticising the "undoubted expertise" of Mr. Massey or Dr. Hannigan, both of whom he found to be "very professional" (para. 88). Nonetheless, in light of the cases to which he referred, he felt that the court should exercise caution when considering expert opinions "where a party to the litigation is the paying customer of the expert". I would like to make clear that having considered the expert evidence of both Mr. Massey and Dr. Hannigan, I have no reason in any way to doubt the independence and highly professional expertise of both experts and I commend the approach taken by both experts to the discharge of their duty to the court as experts. I will elaborate on this later in my judgment.
105. Having made those comments about the role of experts, the judge then stated (at para. 93) that the burden was on Mr. Massey to persuade the court to prefer his evidence over Dr. Hannigan's. The judge used similar phraseology later in his judgment (at paras. 94, 95 and 151). This was the subject of considerable criticism by Word Perfect in the appeal. I do not believe that the judge meant that the burden was on Mr. Massey himself and I suspect that he was intending to convey in short hand that the burden was on Word Perfect and that it was seeking to discharge the burden through, amongst other things, Mr. Massey's expert evidence, although I do accept that the judge could have expressed this more clearly and avoided personalising the burden as being on Mr. Massey. The judge concluded that if he was of the opinion that the subjective views of the two experts were "equally plausible" or if he found it "difficult to choose between them because of the high ball/low ball approach adopted", he would have to conclude that Word Perfect/Mr. Massey had failed to discharge the burden of proof which rested on it/him (para. 94). In that context, he referred to, what he regarded as "equally plausible claims" made by Mr. Massey and Dr. Hannigan concerning the restriction or guarantee of a 25% share of the market to a successful supplier (depending on the perspective from which it was looked at). It was said by the experts that this would either discourage or encourage an international operator to enter the market. The judge concluded that where the views of the experts were equally plausible, it was open to him to conclude that Word Perfect/Mr. Massey had failed to discharge the burden of proof (para. 95). The judge returned to that theme when considering Word Perfect's claim that the 'one lot rule' would distort competition in the market (paras. 152 - 156). 

 

(b) Article 18 of 2014 Directive

106. The judge then turned to consider Article 18 of the 2014 Directive (which he did by reference to Regulation 18 of the 2016 Regulations). He noted that, in reliance on Article 18, Word Perfect was contending that the RFT did artificially narrow competition, as it was "unduly favouring" other operators and "disadvantaging" Word Perfect, where Word Perfect got 30% of the contracts awarded under the 2015 Framework but were being limited to 25% of contracts which could be allocated to it (if successful) under the 2020 Framework by reason of the operation of the 'one lot rule'. Having referred to the use of the words "intention" and "unduly" in Article 18 (and in the equivalent provisions of Regulation 18 of the 2016 Regulations), the judge concluded that it was clear that if the provisions of a tender had the effect of favouring one tenderer over another, they would only be unlawful under Article 18 if they "unduly favour certain tenderers and if they are inserted with the intention of so doing" (para. 101). He stated that a term in a procurement competition which happened to favour one operator over another would not breach Article 18/Regulation 18 unless it was intended to unduly favour/disadvantage a supplier (para. 103). The judge elaborated on this at para. 104 of his judgment. He explained that a requirement or term in a tender competition would only be unlawful where it was "intended to unduly favour one supplier over another" such as where the requirement or term was inserted for "no objective reason". In his view, if an RFT could be struck down as unlawful simply because its effect, as distinct from its intention, was to favour one supplier over another, it would be very difficult for a contracting authority to properly address its business needs and requirements and to protect its legitimate interests. He concluded, therefore, that a term would only breach Article 18/Regulation 18 if it was included with the "intention of unduly favouring one supplier over another and not where its effect is to unduly favour other suppliers" (para. 106).
107. The judge held that in this case, there was no such intention in the introduction of the 'one lot rule', since there was evidence that the rule was introduced with (a) the objective of facilitating the participation of SMEs generally, and not just that of Word Perfect, and (b) of ensuring that when that framework expired, there would be more than just one or two suppliers of interpretation services in the market (para. 107). In that context, he noted again that the level of quality was an issue under the previous framework and that longer term (four year) contracts would address this and would also form part of the solution towards preserving competition and facilitating the participation by SMEs. Having noted and accepted the Respondent's case that the 'one lot rule' would prevent one or two operators winning all of the contracts under the 2020 Framework and, as a consequence, would ensure that there would be more than just one or two operators after that framework expired, the judge rejected Word Perfect's argument that there was any breach of Article 18/Regulation 18. 

(c) Unlawful distortion of competition?

108. The judge then turned to what he described as a "key claim" made by Word Perfect in the proceedings, namely, that the 'one lot rule' unlawfully distorted competition. That claim underpinned the contention that the rule (combined with the turnover requirement) breached Article 18/Regulation 18 and its claim that, as a result of the alleged unlawful distortion of competition, that the 'one lot rule' breached the duty on the State of sincere cooperation under Article 4(3) TEU, as well as the following further claims that the rule:

(a)        meant that the MEAT may not obtain a contract;

(b)        distorted competition by segmenting the market;

(c)        distorted competition by preventing a supplier from building market share;

(d)       breached State's obligation under Article 4(3) TEU not to undermine competition rules (i.e. the duty of sincere cooperation).

109. The judge considered each of those claims and concluded there was no unlawful distortion of competition for various reasons (set out by him at paras. 117 - 158). The first reason given by the judge (which he described as not being "determinative" of his decision) was that it was not the case that the amount of business available to a successful tenderer to whom a lot is awarded under the 2020 Framework would necessarily be limited to 25%. Further, the consequential effect that such a definite limit would have on a tenderer of then being precluded from securing business under the other 75% of the market was not what was proposed under the framework. He said that this was so because the 2020 Framework would not be exclusive. Under the 2015 Framework, more than 75% of the work was awarded outside the framework. On that basis, the judge concluded that the market which Word Perfect would be shut out of, if successful in getting one of the lots under the 2020 Framework, would only be that part of the work which is allocated under the 2020 Framework, and not the market for public sector interpretation services as a whole.
110. The second reason the judge gave was that the 'one lot rule' was something which was expressly permitted under Article 46(2) of the 2014 Directive. In that context, he noted that the Respondent did not dispute that the rule would distort competition in the market for interpretation services, in the sense that if an operator was awarded one lot under the framework, it could not be awarded any of the other lots. The judge described that as "clearly a distortion of competition" (at para. 122). However, it was expressly permitted by Article 46(2) and was not, therefore, an unlawful distortion. The judge observed that Article 46(2) expressly contemplated the precise situation provided for in the RFT and noted that "the very thing about which Word Perfect complains" is permitted by that provision. The judge then observed that if the market segmentation brought about by the 'one lot rule' and expressly permitted by Article 46(2), breached the TEU or the TFEU, then it followed that Article 46(2) itself would have had to be challenged, which Word Perfect had not done in the proceedings.
111. The third reason given by the judge was that the recitals to the 2014 Directive provided support for the distortion of competition effected by the 'one lot rule'. He noted the numerous references in the recitals to the aim of the 2014 Directive as being to provide for greater SME participation in public procurement competitions, and the facilitation of competition between SMEs for those contracts. He referred in that regard to Recitals (1), (2), (59), (61), (69), (78), (79) and (124). He concluded from those recitals that it was an "absolute and very clear objective" of the EU legislature to do "everything possible" to facilitate the participation of SMEs in public procurement competitions, to enable SMEs to obtain a greater share in the contracts awarded, and to increase competition among SMEs for public contracts (para. 129). He held that it was clear from the recitals, and from the 2014 Directive itself, that one of the "key ways" of achieving these aims was by dividing the procurement into lots. With respect to Word Perfect's key claim that the RFT distorted competition and was unlawful, the judge stated that:

"...limiting the number of lots which may be awarded to a tenderer are clearly anti-competitive measures, but yet they are explicitly permitted in the interests of achieving, inter alia, greater SME participation in public contracts." (para. 132)

112. The judge concluded that the approach taken by the Respondent in the RFT was "precisely the type of means, envisaged by the EU legislature, which should be taken by a contracting authority to seek to facilitate market access opportunities for SMEs (including, but crucially not limited to, Word Perfect and indeed Translation.ie)" (para. 134). 
113. With respect to the point that the 'one lot rule' might prevent the MEAT from being awarded a contract, which he described as the "substance" of the complaint about the 'one lot rule', the judge stated that the fact that the contracting authority was being permitted under Article 46(2) to limit the number of lots which could be awarded to any one tenderer meant that if a tenderer is the MEAT tenderer for more than one contract or lot, it would only be awarded one contract and, by definition, the MEAT could not be awarded any of the other contracts. That was something permitted by Article 46(2) and expressly recognised in Recital (79). Further, he held that it was justified by the objective to facilitate greater access to public procurement by SMEs.
114. The judge then addressed Word Perfect's contention that restricting a tenderer to being able to win just one out of the four lots was so distortive of competition as to be unlawful, and that if the market was segmented or divided up in this way by an undertaking or an agreement between undertakings, it would amount to a hardcore restriction of competition. Word Perfect contended that such was the distortion of competition caused by the 'one lot rule', that it amounted to a breach of the general principle of free competition. The judge did not accept that argument. He stressed that since the OGP is not an undertaking, the invocation of the hardcore restriction of competition, which would exist if undertakings were involved, was misplaced. What was at issue here, the judge noted, was not a case of suppliers of a service seeking to fragment the market. Rather, it was an issue of the purchaser of services that wished to purchase those services from four separate suppliers with the aim of ensuring (amongst other things) that there would be a sufficient number of suppliers in the market when the 2020 Framework expired. He described the situation here, where the RFT was designed with the intention of encouraging market participation by SMEs, as being very different to suppliers colluding together to exclude others from the market. The judge drew attention to the evidence before the court that the RFT was designed to ensure that there would be more than just one or two suppliers when the 2020 Framework expired, and to facilitate competition.
115. The judge concluded that the RFT was consistent with the 2014 Directive and was not in breach of the general principle of free competition, or of Article 101 (TFEU). He further concluded that Article 46(2) made clear that market segmentation is expressly permitted since it is a consequence of limiting the number of lots which could be awarded to a tenderer. Accordingly, he held that the 'one lot rule' did not amount to a breach of the fundamental principle of competition law. 
116. The judge then addressed the case made by Word Perfect that there were other means by which the Respondent could achieve its objectives of ensuring reliability of supply, greater SME participation and more competition and concluded that, under the 2014 Directive, considerable flexibility was given to the Respondent with some of its decisions being free from judicial supervision (Recital (78). More significantly, however, the judge concluded that he was not persuaded that Word Perfect/Mr. Massey had discharged the burden of proof in establishing that there was anything unlawful in the manner in which the Respondent sought to achieve those objectives.
117. The next reason given by the judge for rejecting Word Perfect's case that the 'one lot rule' unlawfully distorted competition was centred on the objectives of the Respondent in introducing the rule, one of those objectives being to ensure that there would be sufficient competition when the 2020 Framework expired. The judge referred to evidence that the Respondent was concerned that unless measures were taken to address "reliability of supply" and the opening up of the market to competition, there would only be one or two suppliers in the market when the 2020 Framework expired.
118. The judge commented on the evidence of Mr. Massey and Dr. Hannigan on this issue. He noted Mr. Massey's evidence that the more bidders in the procurement competition, the better it is for competition. He also referred to Dr. Hannigan's evidence that having only two suppliers, and consequently two competitors in the market, would be unstable and that a measure such as the 'one lot rule' would allow for more sustainable competition. He also referred to Dr. Hannigan's evidence that having four operators to whom contracts would be awarded under the 2020 Framework would ensure proper competition now and into the future. He noted that if only two suppliers obtained all the contracts under the 2020 Framework (as they had under the 2015 Framework), then those two operators would be in a very strong position, having had the benefit of, at least, a four-year relationship with the relevant public sector client (under the frameworks). The judge noted Dr. Hannigan's evidence that those two suppliers would have a "massive advantage" over others and could dominate the market or cause other operators, who did not have the benefit of that four-year relationship, to "recoil" from dealing with public sector bodies. Dr. Hannigan's opinion, therefore, was that it was necessary to introduce the 'one lot rule' to prevent this from happening in the future. The judge noted, however, Mr. Massey's evidence that the 'one lot rule' distorted competition and that without it, there would be a sufficient number of operators after the expiry of the 2020 Framework. Noting that the burden was on Word Perfect and Mr. Massey to persuade the court that Mr. Massey's evidence should be preferred over Dr. Hannigan's, and that while the views of both experts were "in many respects plausible", the judge was not persuaded that Mr. Massey's evidence should be preferred over Dr. Hannigan's (para. 156). The inference from this is that he was not persuaded that the 'one lot rule' unlawfully distorted competition. 

 

(d) Word Perfect prevented from building market share?

119. The judge then considered the argument made by Word Perfect that the 'one lot rule' would prevent operators from building their market share or growing their business. He held that Word Perfect was not being confined to 25% of the market for public contracts for interpretation services since, under the 2015 Framework, more than 75% (76.2%) of the contracts for such services were awarded outside the framework. If that situation prevailed under the 2020 Framework, an operator would still have the possibility of growing its market (up to 82.15% of the market for public sector contracts, according to the judge, for reasons he explained at para. 165 of his judgment). Further, and "more significantly", the judge found that the Respondent's entitlement to limit an operator's share of the market was "inherently recognised" by the terms of Article 46(2) which permitted a cap on the number of lots which could be awarded to one tenderer and which, therefore, imposed a "limit on the ambitions of a tenderer to win all contracts in the market" (para. 158). He concluded that any restriction on an operator from building its market share was expressly permitted by Article 46(2). 

 

(e) Breach of principle of equal treatment?

120. The judge then addressed a number of other grounds on which Word Perfect challenged the 'one lot rule' and the decision to adopt that rule. He first considered the claim that the rule breached the general principle of equal treatment and non-discrimination and the particular principle in Article 18(1) that contracting authorities must treat economic operators equally and without discrimination. He noted Word Perfect's claims that the 'one lot rule' made arbitrary distinctions between SMEs by favouring SMEs with a smaller market share than Word Perfect over bigger companies such as Word Perfect and that it amounted to unequal treatment for one SME (such as Word Perfect) to be penalised for being competitive when compared with another supplier who threatened to withdraw from the market (in an answer to the RFI).
121. The judge did not accept that that amounted to unequal treatment for four reasons. First, he noted that all tenderers were being treated equally under the RFT as they were all subject to the 'one lot rule'. Second, and in his view, more importantly, the judge held that Word Perfect's complaint that it would no longer be able to obtain a greater percentage of contracts under the new framework as it had under the 2015 Framework was a reality which arose by virtue of the legitimate objectives of the new framework in seeking (a) to facilitate SMEs generally in participating in public tender processes as opposed to just facilitating Word Perfect and (b) to ensure that when the 2020 Framework expired, there would be more than one or two suppliers available to tender for public sector interpretation services. Third, the judge concluded that Word Perfect would retain the possibility of obtaining public sector interpretation contracts within and outside the new framework. By a series of calculations, (based on the experience under the 2015 Framework) he calculated that Word Perfect could still obtain approximately 82% of such contracts (para. 165). The judge concluded that Word Perfect's argument, namely, that it, as a large supplier, was being treated the same as a small supplier, and therefore, unequally, and had to be viewed through the lens of Word Perfect, "as a large supplier", still being able to "corner a large share of overall market", both inside and outside the 2020 Framework (para. 166). The judge did, however, advert to the hope of the Respondent that there would be greater take-up of contracts under the 2020 Framework than there was under its predecessor. Fourth, the judge concluded that insofar as there was any discrimination in the sense that operators of different sizes and with different capacities to provide interpretation services were being treated in the same way, this was a permissible form of discrimination under Article 46(2) which permits a limit on the number of lots that could be awarded to one tenderer. The judge concluded that this provision entitled contracting authorities to treat operators of different sizes in the same manner, which must have been envisaged by the EU legislature. If the EU legislature had intended that a limitation could be placed on the number of lots which could be awarded to one tenderer only where tenderers with the same capacity or of the same size have the same limit, it could have expressly so stated but had not done so. 

 

(f) Breach of principle of proportionality?

122. The judge then considered the claim that the 'one lot rule' breached the general principle of proportionality (and it should again be noted in this context that the principle of proportionality is also expressly incorporated as one of the general rules of procurement in Article 18(1) and is referred to elsewhere in the 2014 Directive). The judge rejected Word Perfect's claim that the rule breached the principle of proportionality by excessively restricting operators to the market (by confining them to one of four lots or 25% of the market). He held that that was not disproportionate having regard to the legitimate objective of the Respondent in seeking to ensure that, after the expiry of the 2020 Framework, there would be more than one or two suppliers available to provide interpretation services to the public sector. The judge gave two further reasons for this conclusion. The first was that because of the extent of the work allocated outside of the relevant framework, the rule would only apply to a relatively small proportion of the market. Second, and more significantly in his view, the judge concluded that the rule which was intended to ensure that there would be at least four suppliers of interpretation services to the public sector was not disproportionate. He referred again to the legitimate concern on the part of the Respondent that there would be more than one or two suppliers of public interpretation services to the public sector after the expiry of the 2020 Framework. He concluded that provision being made for four lots in the framework rather than a different number of lots, such as three lots did not, in light of that objective, render the framework disproportionate. Finally, he held, following the decision of the High Court in Copymoore (No. 2), that the burden was on Word Perfect to establish a breach of the principle of proportionality, and it had not discharged that burden. The judge was not satisfied that Mr. Massey's evidence enabled Word Perfect to discharge the burden as, while Mr. Massey had given evidence that there were other ways in which the same objectives could have been achieved, he had not carried out any independent surveys of the market or of purchasers of the relevant services, as the Respondent had done. 

 

(g) Irrelevant considerations and objective bias?

123. The judge then addressed Word Perfect's claim that the decision to adopt the 'one lot rule' was based on irrelevant considerations and was tainted by objective bias because of the Respondent's reliance on the alleged "litigious nature" of Word Perfect in the context of other tender procedures. Word Perfect relied on parts of the Sourcing Strategy which referred to a member of the 2015 Framework (i.e. Word Perfect) as having a "litigious nature". The judge held that that was a statement of fact, and that it was not unreasonable for the OGP to describe Word Perfect as litigious in circumstances where it had brought proceedings arising out of previous tender processes. Further, he concluded that there was nothing unlawful about the Respondent designing a tender process in a way that sought to avoid legal challenges. The judge went further and said that it would be "imprudent" of the Respondent not to take into account previous challenges when designing a tender process, and he referred to dicta in other cases which referred to the public interest in preserving public funds (para. 179).
124. The judge rejected the claim that the decision to adopt the 'one lot rule' was tainted by objective bias and concluded that it was "a perfectly legitimate objective for the framers of a tender process to take account of previous litigation in framing the terms of subsequent tender processes and in order to avoid future litigation costs" (para. 180). He further concluded that the RFT was not an adjudicative process, and that the principles outlined by McKechnie J. in Greenstar v. Dublin City Council [2013] 3 I.R. 510 applied. The normal standards of impartiality which would apply in the case of courts or tribunals did not apply in the case of decisions taken on policy issues and "lofty detachment" was not required (para. 183). The judge held that the decision to adopt the 'one lot rule' in the RFT was not done as part of an adjudicative process by a quasi-tribunal but was rather a decision made for policy reasons, and the OGP was not required to adopt the "lofty detachment" (being the term used by editors of De Smith and cited by McKechnie J in Greenstar) required in an adjudicative process by a quasi-tribunal. The judge, therefore, rejected the allegation of objective bias and repeated that it was a "laudable objective" for the Minister/OGP to take steps to design a tender process which seeks to minimise future litigation costs.

 

(h) Other arguments

125. The judge then considered various other arguments advanced by Word Perfect. The first was that the 'one lot rule' breached Article 56 TFEU by making it less attractive for operators to provide interpretation services by limiting them to 25% of the market in the 2020 Framework. He rejected that argument and held that the fact that public sector bodies chose not to buy as much of an operator's services as the operator would like did not amount to a violation of the operator's role to provide services and noted that the impugned rule was expressly permitted by Article 46(2). 
126. The judge turned then to Word Perfect's claim that the decision to divide the procurement into lots was unlawful as it is not expressly permitted by Article 37 of the 2014 Directive (which, as noted earlier, applies to centralised purchasing activities and central purchasing bodies). As understood by the judge, Word Perfect's case was that Article 46 did not permit the OGP, as a central purchasing body, to divide a procurement into lots and that, in doing so, it breached Article 37. The judge rejected that argument. He held first that there was nothing in Article 37 or elsewhere in the 2014 Directive which prevented the OGP, as a central purchasing body, from dividing a procurement into lots. Second, he noted that the default position under the 2014 Directive was the division of a procurement into lots in order to facilitate SME participation and to preserve competition. The judge could not see how, as a matter of policy, the EU legislature would not have intended that the same objectives should apply where the procurement is carried out by a central purchasing body. If it had so intended, it would have been easy to expressly state it. The alleged breach of Article 37 was, therefore, rejected.
127. All of Word Perfect's claims were rejected and the judge refused to grant the reliefs sought.

 

7. Word Perfect's Appeal

(1) Grounds of appeal

128. Word Perfect appealed the judgment and order of the High Court. It raised ten grounds of appeal in its Notice of Appeal, and pursued nine of those grounds. In summary, in its Notice of Appeal, Word Perfect contended that the judge erred in (a) his interpretation and application of Article 46 of the 2014 Directive (and Regulation 46 of the 2016 Regulations); (b) his interpretation and application of Article 37 of the 2014 Directive (and Regulation 37); (c) his interpretation and application of Article 46(2) (and Regulation 46(4)); (d) in his interpretation and application of Article 18 (and Regulation 18); (e) failing to find that the 'one lot rule' was in breach of the general principles and, in particular, the principles of equal treatment, proportionality and competition and also in failing to find that the rule was in breach of Article 18 (and Regulation 18) in a number of different respects and in failing to hold that the burden of establishing that the 'one lot rule' was justified or pursued a legitimate aim and was necessary and appropriate, rested on the Respondent; (f) failing to find that the decision to adopt and publish the RFT was vitiated by apparent bias arising from claims by the Respondent that Word Perfect had a "litigious nature" and from the manner in which the competition was structured; (g) failing to hold that the decision to adopt and publish the RFT was based on irrelevant considerations and/or was manifestly erroneous, including in failing to find that the risk of legal challenge was an irrelevant consideration in structuring the procurement competition; (h) failing to hold that the decision to adopt and publish the RFT was contrary to and in breach of Article 4(3) TEU in conjunction with Article 56 TFEU and/or Article 101 TFEU and (i) in failing to find that the decision breached Article 56 TFEU and/or Article 16 of the Charter. Word Perfect raised another ground alleging apparent bias in a different respect which was not pursued at the hearing.

 

(2) Respondent's response

129. The Respondent joined issue with the grounds of appeal raised by Word Perfect in its Notice of Appeal and rejected in its Notice the claims that the judge had erred in his interpretation and application of any of the provisions of the 2014 Directive (and the 2016 Regulations) and rejected also the contention of Word Perfect that the judge had erred in holding that the impugned RFT was not in breach of any of the provisions of the 2014 Directive (or the 2016 Regulations), the provisions of the Treaties, the Charter or the general principles.

8. Submissions on the Appeal

130. It is difficult to summarise concisely the impressive and comprehensive submissions made in writing and orally at the hearing by Word Perfect and by the Respondent. The summary below, while undoubtedly extensive, cannot fully capture the full detail and nuances of those submissions.   

(1) Word Perfect's Submissions

(a) Overarching submissions

131. An overarching theme in Word Perfect's submissions was that the RFT for the 2020 Framework applied to the entire public sector market for interpretation services (which, as noted by the judge, amounted to 90% of the entire market) and that Article 46 of the 2014 Directive did not permit the Minister/OGP to group together or sweep up four different contracts for interpretation services provided to that market and to divide them into lots. According to Word Perfect, it only permitted a single contemplated public contract to be so divided. On that basis, Word Perfect submitted that the RFT is unlawful on a proper interpretation of Article 46(1). Alternatively, it submitted that if it was open to the Minister/OGP to combine a number of different contemplated contracts and to divide them up into lots, the structure of the RFT was nonetheless unlawful, principally because of the 'one lot rule'. Word Perfect described this rule as being a "unique", "radical" and "extreme" intervention in the market, which no regulator or competition authority would have the power to effect. It described the structure of the RFT as amounting to "full scale mark market regulation". Word Perfect relied on what it alleged were multiple breaches of EU law, comprising of breaches of the 2014 Directive itself, as well as breaches of the Treaties, the Charter and the general principles. It submitted that the judge did not engage fully with its arguments and had merely provided a superficial analysis of them.
132. In its survey of the provisions of the 2014 Directive, Word Perfect drew particular attention to a number of the recitals (many of which were referred to earlier). Its particular focus was on Recitals (78) and (79). It also referred to a number of the recitals which made reference to the general principles. When discussing the relevant articles of the 2014 Directive, Word Perfect made particular reference to Articles 1, 18 and 37 as well as several articles contained in Chapter III of the Directive. It highlighted the references in a number of articles in that chapter to the claimed requirement for there to be a linkage between a particular specification or requirement and the subject matter of the particular contract (for example in Articles 42, 43, 45, 56 and 67). While noting that the Respondent had discretion to divide a contemplated contract into lots and to limit the number of lots that could be awarded to a single tenderer, it submitted that that was a discretion which had to be exercised in a manner which was compatible with the Treaties and with the general principles.

 

(b) The 'lots decision'

133. Turning to the first aspect of the RFT for the 2020 Framework challenge by Word Perfect, namely, the 'lots decision', it submitted that the judge had incorrectly interpreted and applied the provisions of Article 46 of the 2014 Directive. It argued that that provision had to be interpreted by reference to its words, context and objectives (relying on Advocate General Kokott, as the judge had found, in Robins). While it noted that the words used in Article 46(1) were that contracting authorities could decide to award "a contract" in the form of separate lots, the use of the singular "a contract" was not, it maintained, critical to its argument. As regards the word "contract", Word Perfect pointed out that it had not argued before the High Court that it was necessary for there to be a concluded contract before the contract could be awarded in the form of lots. In that respect, Word Perfect submitted that the judge decided an issue which it had not argued. It maintained that, at all times, it had made clear that all that would be in existence at the particular stage of the procurement process would be a "contemplated contract" and that the judge appeared to have misunderstood its argument in that respect.
134. While it noted that the objective of the division of a contract into lots was to facilitate greater participation of SMEs in public procurement, Word Perfect submitted that the RFT in this case would not achieve that objective in at least two respects. On that basis, it submitted that the 'lots decision' was not compatible with Article 46 and that, in holding that it was, the judge had erred in his interpretation of that provision. The two respects in which Word Perfect submitted that the objectives of facilitating greater SME participation would not be met by the RFT and, in particular, by the 'lots decision', were as follows.
135. First, it said that the decision did not involve the division of a contract or a contemplated contracts into lots but, rather, the aggregation together under Article 37 of four separate contracts covering the entire public sector and the relabelling of those separate contracts as lots. Word Perfect submitted that this would not achieve the objective of facilitating greater SME participation having regard to the high turnover requirement in the RFT (€750,000) in circumstances where the turnover requirement under the 2015 Framework was €150,000 and where six of the twelve operators who responded to the RFI had turnovers of less than €500,000 and would (according to the respondent's expert, Dr. Hannigan) have to form consortia in order to participate in the procurement competition. Word Perfect also relied on the requirement in the RFT to show a proven track record of involvement in substantial contracts. These requirements, it submitted, would prejudice the ability of SMEs to participate in the procurement process for the 2020 Framework. Word Perfect argued that this result gave rise to precisely the concerns which Recital (59) was referring to in relation to the need to "carefully monitor" the aggregation and centralisation of purchases to preserve competition and market access opportunities for SMEs. It also highlighted the tension between Article 37 (which is concerned with centralised purchasing activities and central purchasing bodies) and Article 46 by pointing to the concerns referred to in Recital (59).
136. Second, Word Perfect drew attention to the fact that the division of the contracts into lots in the RFT in this case was being done not by reference to quality, quantity or geography but rather by reference to public sector bodies, covering almost all of the public sector bodies with the demand for interpretation services.  
137. While accepting that its argument based on the singular "a contract" in Article 46(1) could be said to be a technical argument, Word Perfect submitted that it was nonetheless a serious one in terms of its consequences, particularly as the 'lots decision' was a gateway into the 'one lot rule'. While it put forward and maintained this point, Word Perfect stressed that its essential case did not turn on the use of the singular "a contract" in Article 46(1).  

 

(c) The 'one lot rule'

138. Turning to the second aspect of its challenge to the RFT for the 2020 Framework, namely, the 'one lot rule', Word Perfect submitted that if, as it contended, the 'lots decision' was unlawful, then the 'one lot rule', which flows from that decision, must also be unlawful.

 

(i) Impact on operators

139. Word Perfect referred to the impact of the rule which it described as being "stark" for operators and for the public sector clients. Under the 2020 Framework, operators would be limited to, at most, 25% of the public sector interpretation market. Its effect would be to divide the market and to reduce the business available to operators. It would also mean that the MEAT tenderer would not be successful in obtaining a lot in the procurement process where it had already been awarded another lot. Word Perfect submitted that the judge proceeded on the mistaken premise that because more than 75% (76.2%, in fact) of the public sector interpretation work was awarded outside the 2015 Framework, the impact of the 2020 Framework would not be so significant for operators. It submitted that the judge was incorrect in that respect as it was contrary to the rationale for the 2020 Framework (which was to increase the use by public sector bodies of the new framework to procure their interpretation services) and was also inconsistent with the evidence given by Dr. Hannigan where, at one point, he referred to there being a "guarantee" of 25% of the market under the new framework.

 

(ii) Need for compatibility with Treaties and general principles

140. Word Perfect submitted that the 'one lot rule' was not permitted under Article 46(2). That provision had to be interpreted in a manner compatible with the Treaties and the general principles, as must a decision under Article 46 to divide a contract into lots and to limit the number of lots that can be awarded to any one tenderer. Similarly, this must also be compatible with those provisions. In that respect, Word Perfect relied on a number of authorities including a passage from 'The General Principles of EU Law' by Tridimas (2^nd ed) at para. 1.71, Advocate General Mischo in joined Cases C-20/00 and C-64/00 Booker Aquaculture Limited ECLI:EU:C:2001:469 as well as passages in Sanchez-Graells at pp. 410-411. Word Perfect also relied on the judgment of the CJEU in Case C-413/99 Baumbast & R. v. Secretary of State for the Home Department EU:C:2002:493 and Case 5/88 Wachauf v. Germany ECLI:EU:C:1989:321. It further submitted that the decision to include the 'one lot rule' in the RFT was not immune from review by the court and was, on the contrary, subject to review by the courts. It relied in this respect on a number of cases, including Case C-391/15 Marina Del Mediterraneo EU:C:2017:268.

(iii) No margin of discretion

141. As noted earlier, Word Perfect alleged breaches of a number of the general principles, as well as the Treaties and the Charter. With respect to the general principles, Word Perfect submitted first that, in the exercise of the discretion under Article 46(2), no margin of appreciation or discretion applies where the decision would involve a breach of the general principles in contrast to an evaluative-type decision, to which such a margin of appreciation or discretion would apply. Word Perfect relied on the judgment of the Supreme Court in SIAC Construction Limited v. Mayo County Council [2002] 3 IR 148 and the well-known dicta of Fennelly J. in that case. There, Fennelly J confirmed that the margin of discretion does not apply where a breach of the general principles "is clearly made out" and is "clearly established" (at p. 176).
142. Word Perfect also relied on a number of other cases to similar effect including Fresenius Medical Care Ireland Ltd v HSE [2013] IEHC 413 (at para. 39), Somague Engenharia SA & Anor v Transport Infrastructure Ireland [2016] IEHC 435 (at para. 37) and Transcore LP v. National Roads Authority & Ors [2018] IEHC 569 (at paras. 177 - 187).
143.   Word Perfect submitted that the judge was fundamentally wrong in holding that there was no breach of the general principles where the contracting authority was exercising a discretion expressly conferred by Article 46, and pointed to a number of occasions on which the judge gave, as the answer to Word Perfect's complaint of a breach of the general principles, that the decision to adopt the 'one lot rule' was permitted under Article 46 (for example at paras. 75, 76, 122 etc.). It submitted that the judge should have considered whether the discretion under Article 46(2) was being exercised in a manner which was compatible with the general principles and that, in failing to do that, the judge had misdirected himself on the hierarchy of EU norms. It submitted also that the judge failed to interpret and apply Article 46(2) in light of its words, context and objectives.

(iv) Burden of proof

144. On the question of the burden of proof of establishing breaches of the general principles, Word Perfect submitted that the judge was wrong in distinguishing this case from Deutsche Parkinson. Word Perfect accepted that it had the burden of establishing a prima facie breach of the general principles, including a breach of the principle of proportionality, but submitted that once a prima facie breach was established, the burden shifted to the Respondent. It was a matter for the respondent to adduce evidence demonstrating that the measures at issue, and in particular, the 'one lot rule', were proportionate or otherwise justified by reference to the objectives in the 2014 Directive. Word Perfect pointed out that, with respect to one of the general principles, the principle of competition, the respondent had not disputed that competition was distorted and the judge made a finding to that effect in his judgment. On that basis, Word Perfect submitted that the burden ought to have shifted to the respondent to justify the distortion.

 

(v) Breaches of general principles

145. With regard to the alleged breaches of the general principles, and its contention that the judge erred in failing to hold that the decision to adopt and publish the RFT was in breach of those general principles, Word Perfect advanced a number of detailed submissions which I now summarise.

 

(I) Equal Treatment

146. Word Perfect relied on the general EU principle of equal treatment as well as the specific reference to equality and non-discrimination in Article 18(1) of the 2014 Directive. It relied on the statement of the principle by the CJEU in cases C-21/03 and C-34/03 Fabricom ECLI:EU:C:2005:127, where the CJEU stated that the principle of equal treatment required that "comparable situations must not be treated differently and that different situations must not be treated in the same way unless such treatment is objectively justified" (para. 27). It also relied on the statement of the principle, in a public procurement context, by the CJEU in Case C-598/19, Conacee EU:C:2021:80, where the CJEU stated that tenderers "must be in a position of equality when they formulate their tenders" (at para. 37)

147. Word Perfect submitted that the 'one lot rule' breached the general principle of equality by disadvantaging it (and other tenderers) while providing an advantage to others. It relied in that respect on the affidavit evidence of Mr. Gashi to the effect that the impact of the 'one lot rule' in the context of public sector clients under two of the lots referred to in the RFT (lots 3 and 4) would lead to a loss of between 23% and 27% of Word Perfect's turnover, even where it was the MEAT tenderer for three lots, if it obtained one of the four lots. Word Perfect also relied on documentation from the OGP (referred to in the appeal as 'the Excel spreadsheet') which, it was submitted, showed an intention to favour another tenderer (Context) after it complained that the market was too competitive. Word Perfect submitted that it and Translation.ie were being penalised for being too competitive whereas the other tenderer was being favoured because it apparently found the market to be too competitive. It submitted that as an SMEs, in a comparable position, Word Perfect was being treated differently and less favourably. It submitted that it was in breach of the principle of equal treatment for the Respondent to adopt a structure which was intended to assist one set of SMEs with a lower market share and to disadvantage other SMEs which are more competitive or have a greater capacity to provide the relevant services. Word Perfect submitted that the judge did not properly address these issues by concluding simply that all tenderers were being treated equally because they were all being subject to the 'one lot rule'.

 

 

(II)  Proportionality

148. Word Perfect submitted that the judge was wrong in failing to find that the 'one lot rule' breached the general principle of proportionality, and also the particular principle of proportionality which applies to procurement as set out an Article 18(1) of the 2014 Directive. Word Perfect relied, in particular, on the general principle stated by the CJEU in Case C-395/18 Tim SpA EU:C: 2020:58 where the Court referred both to the principle of proportionally as a general principle of EU law and to proportionality as a principle of procurement set out in Article 18. Word Perfect submitted that once it established a prima facie breach of the principle of proportionality, the burden shifted to the Respondent to demonstrate compliance with the principle of proportionality. In that regard, it submitted that the Respondent would have to:

(a)        identify a legitimate aim or objective which was said to provide the justification for the decision (to adopt the 'one lot rule');

(b)        demonstrate that those means (i.e. the 'one lot rule') were appropriate to achieve that aim or objective; and

(c)        demonstrate that those means did not go beyond what is necessary in order to achieve that aim or objective, including whether it was possible to do so by means which were less restrictive of the rights or principles at issue (such as equal treatment or competition).

149. Word Perfect submitted that the judge was wrong to conclude that the principle of proportionality was not breached on the basis that Article 46(2) permitted a limit to be placed in the number of lots that could be awarded to one tenderer. It submitted that the principle infringed various general principles, as well as rights and freedoms under the Treaties and that the judge ought to have held that the burden had shifted to the Respondent to justify the 'one lot rule', and to demonstrate compliance with the principle of proportionality. Word Perfect submitted that Copymoore (No. 2) did not provide a sound basis for the judge's conclusion that Word Perfect had not discharged the burden of demonstrating a breach of the general principles, including proportionality and equality. It submitted that the judge was wrong in failing to require the Respondent to demonstrate that the measures taken went no further than were necessary to achieve the objectives sought to be attained. It argued that the judge failed to carry out a proper proportionality assessment by reference to the aims and objectives identified by the Respondent, including the encouragement of greater SME participation in the procurement competition, the improvement in the quality of interpretation services, and a reduction in the risk of litigation (which Word Perfect contended was not, in any event, a legitimate aim). 

 

(III) Principle of Competition

150. Word Perfect relied on the general EU principle of competition, as well as on Article 18(1) of the 2014 Directive and submitted that the judge was wrong to hold that there was no breach of either the general principle of competition or of the particular principle referred to in Article 18(1). It relied on the reference to the fundamental principle of competition as being a general principle of EU law in a number of cases including Case C-240/83 Waste Oils EU:C:1985:59 (which was not a public procurement case) and cases such as Case C-538/07 Assitur EU:C:2009:317 and Case C-568/13 Data Medical Service ECLI:EU:C:2014:2466 (both public procurement cases). Word Perfect also referred to Case C-305/08 CoNISMa EU:C:2009:807 in support of its contention that undistorted and open competition is in the interest of contracting authorities and, ultimately, consumer welfare. Finally, in this respect, it relied on the statement of Advocate General Stix-Hackl in Case C-247/02 Sintesi EU:C:2004:399 that the principle of competition is "one of the fundamental principles of Community law on the award of public contracts" (at para. 33).
151. Word Perfect submitted that the judge ought to have found that the RFT breached the general principle of competition by reference to the undisputed facts and by reference to the evidence of the respondent's expert, Dr. Hannigan. It submitted that there was no dispute that the 'one lot rule' would have an adverse impact, in particular for Word Perfect. It relied on part of the evidence of Dr. Hannigan as well as on the affidavit evidence of Mr. Gashi to the effect that the operation of the 'one lot rule' would have grave consequences for Word Perfect's business and that it would reduce its available market and reduce its income and profitability as well as losing, at least, 23% - 27% of its turnover and the benefits of economies of scale and scope. It submitted that another adverse impact of the application of the rule would be that public sector bodies would not obtain the best value for money under the proposed tender competition.
152. Word Perfect submitted that there was no dispute between the parties as to market participants having an entitlement to grow market share (and referred to an extract from Dr. Hannigan's evidence in that respect). It submitted that it was clear from the evidence in the High Court that the intention of the Respondent was that the 2020 Framework would have an impact on the market and would lead to a segmentation of the market between different suppliers and would, therefore, impact on all market participants. It further submitted that the 'one lot rule' would give rise to unequal treatment between SMEs (a point relevant to a number of the general principles relied on by Word Perfect). Word Perfect maintained that the rule was expressly intended to assist competitors of Word Perfect (and Translation.ie) which had a smaller market share and to favour certain SMEs over others. In its submission, the rule was, in fact, geared towards assisting less competitive operators than Word Perfect and, therefore, penalised Word Perfect for being more competitive than others. It argued that the rule would not, therefore, achieve the objectives of Article 46 of the 2014 Directive and would involve a breach of the general principles of competition, equal treatment and proportionality. 
153.  Word Perfect submitted that the 'one lot rule' would have a negative impact on public sector bodies themselves and on consumer welfare by enabling a tenderer other than the MEAT to be awarded lots in the procurement process. It noted that, while the extent of the adverse impact was in dispute, it was not in dispute that there would be some adverse impact. It argued that the rule went beyond providing that the "winner does not take all" (and referred in that context to an extract from an article by Trybus) and that a more proportionate and less restrictive application of Article 46(2) would have ensured that one tenderer did not obtain all of the lots, as opposed to limiting each tenderer to one lot. Word Perfect submitted that the combined effect of the 'lots decision' and the 'one lot rule' amounted to a far reaching intervention in the market which was not justifiable on a proper interpretation of Article 46, and on the basis of the evidence.
154. It submitted that the judge had erred due to failing to give effect to his finding that the 'one lot rule' did give rise to a distortion of competition and was wrong to conclude, in light of that finding, that there was no breach of the general principle of competition (or of the particular principle stated in Article 18). Further, having concluded that the rule gave rise to a distortion of competition, Word Perfect submitted that the judge ought then to have concluded that the burden shifted to the Respondent to justify the rule. It was submitted, however, that it was not necessary for the court to conclude that the burden shifted, as Word Perfect could make out its case even on the basis that it continued to bear the burden of proof. 
155. In addressing the Respondent's reliance on the justifications for the rule, Word Perfect pointed to the absence of any analysis on behalf of the Respondent of the impact on competition or on the other general principles, or on the ability of SMEs to grow their market shares, in the process leading to the adoption of the RFT. It submitted that since there was no assessment of those issues, there could be no basis for the application of any margin of appreciation or discretion.
156. With respect to the non-exclusive nature of the 2020 Framework, a factor referred to on various occasions by the judge, Word Perfect pointed to a number of alleged flaws in the judge's analysis. It said first that Dr. Hannigan's evidence was that one would expect public sector bodies to use the new framework. Next, it said that the rationale for the new framework was to increase the use of the framework by public sector bodies and that it ran counter to that rationale to suggest that the take up might not be so significant. It also relied on evidence adduced on behalf of the Respondent which demonstrated a keen interest on the part of public sector bodies to use the new framework. It further noted that public sector bodies going outside the new framework would be acting contrary to the Guidelines, which were to the effect that public bodies should use such frameworks. It further submitted that the non-exclusive nature of the framework would hinder Word Perfect further in that if it were to succeed in obtaining one of the four lots and be precluded from obtaining any of the other lots, there would be no guarantee that public sector clients would procure services from Word Perfect under the framework in respect of that lot. In effect, it was submitted that the judge allowed a situation where the Respondent was enabled to place undue weight on the non-exclusive nature of the framework. Further, it was argued that the findings made by the judge were essentially inferences of fact which could be reviewed and interfered with by this Court.
157. Word Perfect then addressed the justifications for the 'one lot rule' put forward by the Respondent and disputed the validity of those justifications. First, it rejected the contention that the rule would facilitate greater SME participation in light of the high turnover requirements and the requirement to establish a track record, (as outlined earlier). Word Perfect confirmed at the hearing that it was not challenging the turnover requirement itself. It submitted that there was evidence that the design of the RFT was to encourage multinationals into the market and that that was difficult to reconcile with the objective of assisting SMEs.
158. Second, it disputed the contention that the rule would assist in improving the quality of interpretation services provided and noted that despite the quality issues raised, contracts continued to be awarded to the same tenderers (including Word Perfect) which somewhat undermined the complaints about quality. It also argued that the quality issues were likely to have arisen as a result of the fact that the mini-competitions conducted under the 2015 Framework were on the basis of price only and not on the basis of quality. It noted that the Respondent's evidence (through Dr. Hannigan) was that the 'one lot rule' had, at best, an indirect relevance to quality. Word Perfect submitted that there were other mechanisms to secure quality including devising selection criteria focusing on quality and including performance conditions in the contracts.
159. Third, Word Perfect disputed the legitimacy of the objective of preserving competition in the future and ensuring reliability of future supplies in the market. It contended that those objectives were illegitimate and went beyond the permitted subject matter of procurement as they were not linked to the subject matter of the relevant contracts. Word Perfect relied on an extract from Sanchez-Graells (at p. 411) in support of this submission (although it should be said that other extracts in that textbook from the same author somewhat undermined the force of the submission, as do commentaries from other academic writers on the issue, such as Arrowsmith, to which reference will be made later). Word Perfect submitted that these were not legitimate objectives for procurement and amounted, in effect, to regulation and market intervention. It submitted that if it were wrong about that, the evidence before the High Court was not sufficient to justify the existence of the contested rule as the threshold referred to in Recital (79) which, it said, required an imminent or immediate risk to competition or the reliability of supply, has not been met in this case.
160. Fourth, Word Perfect submitted that the objective of reducing the risk of litigation in a procurement process is not a legitimate factor to take into account in designing the process. It submitted that this risk is not something which is linked to the subject matter of the contract which it submitted was a necessary requirement. Designing the framework to avoid mini-competitions, so as to prevent challenges to the running or outcome of those mini-competitions was not a legitimate objective under the 2014 Directive, according to Word Perfect. Finally, Word Perfect submitted that even if all of the objectives relied on by the Respondent were legitimate objectives, the 'one lot rule' was far reaching and did not comply with the proportionality test. It contended that there were other ways which are less restrictive of competition and of the other rights and principles involved, to increase SME participation in procurement, such as by providing for a greater number of lots, by lowering the turnover requirement and by lessening the requirement to establish a proven track record with previous contracts. In relation to the number of lots, Word Perfect relied on views expressed by Sanchez-Graells (at p. 351) to the effect that as a default, division into a large number of lots is preferable to a division into an "insufficient number of exceedingly big lots" (although it is necessary to consider those comments in their context along with other observations of the same author on this issue). Word Perfect submitted that if the Respondent wished to achieve more competition in the market, there were other ways of doing so, such as by increasing the number of lots (and relied on an extract from Dr. Hannigan's evidence in that respect). If the objective was to improve and ensure quality, it further submitted that there were alternative means of doing so (such as selection criteria, award criteria and contractual provisions).

 

(vi) Article 18 of 2014 Directive

161. Word Perfect submitted that the RFT also breaches Article 18(1) and that the judge incorrectly interpreted that provision in reaching a conclusion to the contrary. It will be recalled that Article 18(1) provides that a procurement competition must not be designed "with the intention of excluding it from the scope [of the 2014] Directive or artificially narrowing competition". The provision goes on to state that competition will be considered to be artificially narrowed where the design of the procurement is "with the intention of unduly favouring or disadvantaging certain economic operators". Word Perfect submitted that the judge incorrectly interpreted that provision by holding that the intention referred to was a subjective intention. Relying on case law of the CJEU and the views of Sanchez-Graells, Word Perfect submitted that the judge ought to have interpreted the provision under Article 18(1) in such a way as to require the element of intention of "artificially narrowing competition" to be ascertained from a reasonable objective assessment of the circumstances so that the necessary intention could be inferred or derived from the effects or consequences of the way in which the procurement was designed and carried out by the contracting authority. Word Perfect submitted that even if it were necessary to establish a subjective intention on the part of the Respondent, the judge nonetheless erred in failing to hold that the necessary subjective intention to artificially narrow competition and to unduly favour or disadvantage certain operators was established on the evidence. It referred to the purpose of the 'one lot rule' as being to disadvantage the two SMEs with the greatest market shares and contended that the intention of the rule was to limit the share of the market for any one SME. It submitted that the judge ought to have concluded that that was a breach of Article 18(1) and that the inclusion of the 'one lot rule' was done with the intention of artificially narrowing competition and of unduly favouring certain undertakings. Word Perfect submitted that it would also disadvantage the two SMEs with the largest market share (Word Perfect and Translation.ie).

 

(vii) Freedom to Conduct a Business/Provide Services - Article 16 of the Charter and Article 56 TFEU

162. Word Perfect submitted that the judge ought to have concluded that the inclusion of the 'one lot rule' amounted to a breach of Word Perfect's freedom to conduct its business, which is protected by Article 16 of the Charter. It relied on a number of decisions of the CJEU, including Case C–283/11 Sky Ӧsterreich ECLI:EU:C:2013:28. Word Perfect submitted that it had an entitlement to conduct its business in circumstances of free competition, and that that entitlement had been breached. It also contended that the RFT (and, in particular, the 'one lot rule') amounted to a breach of Article 56 TFEU by interfering with its freedom to provide services (also relying in this context on the decision of the CJEU in Case C–147/06 SECAP ECLI:EU:C:2008:277).  

 

(viii) Duty of Sincere Cooperation: Article 4(3) TEU

163. Word Perfect submitted that the judge erred in failing to find that the design of the 2020 Framework was in breach of Article 4(3) TEU when read in conjunction with other provisions of the treaties, including Article 56 TFEU (freedom to provide services) and Article 101 TFEU (the prohibition on anti-competitive agreements, decisions and practices).  Word Perfect relied on a number of judgments of the CJEU in support of this aspect of its appeal including Case C-393/08 Sbarigia v. Azienda USL R.M./A EU:C:2010:388, Cases C-94 and 202/04 Cipolla EU:C:2006:758 and Case 66/86 Ahmed Saeed EU:C:1989:140. It submitted that, although Articles 101 and 102 TFEU are concerned solely with the conduct of undertakings, those articles, when read in conjunction with Article 4(3), which lays down a duty to cooperate, required Member States "not to introduce or maintain in force measures, even of a legislative or regulatory nature which may render ineffective the competition rules applicable to undertakings" (Sbarigia at para. 31). Word Perfect submitted that measures which favour, encourage or re-enforce the effects of agreements or practices which undermine Article 101 would be in breach of Article 4(3). Word Perfect further submitted that Article 4(3) TEU and Article 101 TFEU would be infringed where a Member State required or encouraged the adoption of agreements, decisions or concerted practices contrary to Article 101 or reinforced their effects (Cipolla at para. 46). Relying on Ahmed Saeed, Word Perfect submitted that Article 4(3) prohibits Member States from giving "encouragement, in any form whatsoever", to the adoption of agreements or concerted practices contrary to Article 101 TFEU. It contended that the effect of the 'one lot rule' segmented the market for interpretation services and amounted, in effect, to an allocation of the market between four undertakings, which amounts to a restriction of competition by object and would be considered a hardcore restriction of competition and, therefore, a serious breach of competition law. It submitted that the 'one lot rule' mandated such market segmentation and was a measure which rendered ineffective the competition rules in the TFEU and, therefore, amounted to a breach by the Respondent of the duty of sincere cooperation in Article 4(3) TEU, in conjunction with Articles 56 and 101 TFEU. Word Perfect submitted that the judge did not adequately deal with this point and considered that the fact that the Respondent was not a private undertaking was a complete answer to the point. It submitted, therefore, that the judge did not consider whether the Respondent had acted in breach of Article 4(3) TEU at all. 

 

(d) Irrelevant Considerations

164. Word Perfect submitted that the judge erred in failing to hold that the Respondent took into account irrelevant considerations in designing the RFT for the 2020 Framework by having regard to the "litigious nature" of Word Perfect and by designing the framework with a view to reducing the risk of legal challenge. This, it submitted, was an irrelevant consideration and the judge ought to have so found.

 

(e) Apparent/Objective Bias

165. Word Perfect submitted that the judge ought to have found that the decision to adopt the RFT for the 2020 Framework was vitiated by apparent or objective bias in light of the Respondent's reliance on the alleged "litigious nature" of Word Perfect. It submitted that the judge incorrectly applied the principles in Greenstar and ought to have held that as the decision to adopt the RFT (including the 'lots decision' and the 'one lot rule') adversely affected Word Perfect and it ought to have been set aside on the grounds of objective bias.
166. On a related point, Word Perfect submitted that the judge ought to have held that the design of the RFT and the objectives sought to be achieved by it breached the principles of objectivity and impartiality which form part of the general principle in EU law of good administration, and which are contained in the European Commission Code of Good Administrative Behaviour (although it did not develop this point in its written or oral submissions in the appeal).

 

(f) Word Perfect's Criticism of the Judge's Treatment of Expert Evidence

167. Word Perfect was very critical of the way in which the judge dealt with the expert evidence presented. While submitting that it should succeed on the basis of the affidavit evidence and on the basis of the evidence of the Respondent's expert, Dr. Hannigan, Word Perfect submitted that the approach taken by the judge in respect of the expert evidence displayed a fundamental misunderstanding of the principles of the independence of an expert. Word Perfect was particularly critical of the judge's treatment of Mr. Massey's evidence and the judge's statement (at a number of points in his judgment) that Mr. Massey had failed to discharge the burden of proof upon him to establish the anti-competitive features of the RFT. Word Perfect pointed out, understandably and correctly, that there is no burden of proof on an expert, whose fundamental and overriding duty is to the court. 
168. Word Perfect also submitted that the judge failed to engage with the expert evidence. It contended that the judge did not make any findings on the conflicts of evidence between the experts and did not fulfil his duty to resolve such conflicts and to decide which expert's evidence he preferred. Word Perfect relied on Doyle v. Banville [2012] IESC 25, Donegal Investment Group plc v. Danbywiske [2019] 1 IR 150 and McDonald v. Conroy [2020] IECA 239 in support of this aspect of its appeal. 
169. Word Perfect submitted that the judge ought to have found in its favour on the basis of the affidavit evidence and Dr. Hannigan's evidence without even needing to take into account Mr. Massey's evidence. If it were necessary for the court to accept Ms. Massey's evidence in order to find in favour of Word Perfect, it submitted that this Court would have to consider remitting the matter to the High Court in order to make findings on whether it accepted or rejected Mr. Massey's evidence. Word Perfect went on to outline some areas in which Mr. Massey added to or supported Word Perfect's case and submitted that Mr. Massey's evidence went further than that of Dr. Hannigan. It noted that Mr. Massey had examined Word Perfect's accounts (unlike Dr. Hannigan) in order to deal with the point concerning the economies of scale and scope. Mr. Massey gave his view on the approach taken by the OGP in designing the RFT whereas Dr. Hannigan was not in a position to do so and made clear that he was not second guessing what the OGP had done. It was noted that Mr. Massey was not persuaded that the 'one lot rule' was necessary to ensure competition after the expiry of the 2020 Framework, and also identified additional adverse impacts that the rule would have on competition, as well as its alleged role in facilitating collusion in the procurement process. Word Perfect submitted that the judge did not adequately address this evidence and did not properly explain why Mr. Massey's evidence was not preferred.

(2) The Respondent's Submissions

(a) Overarching submissions

170. The Respondent urged the Court to uphold the decision of the High Court and to dismiss the appeal. It contended that (a) it was open to the Respondent to make the 'lots decision' under Article 46(1) and (b), the 'one lot rule' was a necessary feature of the structure of the RFT for the 2020 Framework, and was a proper exercise of the Respondent's discretion under Article 46(2) and did not breach any of the provisions of the 2014 Directive, the Treaties, the Charter or the general principles. The Respondent rejected the contention that a tension exists between Article 46, Article 37 (concerning central purchasing bodies) and Article 67 (the contract award criteria). The Respondent rejected the contention that the requirement in Article 67 for the contract award criteria to be linked to the subject matter of the contract is applicable to Article 46 which is, as noted earlier, contained in the section in Chapter III of the 2014 Directive concerning preparation of the procurement procedure.

 

(b) The 'lots decision'

171. With respect to the interpretation of Article 46 (and the other provisions of the 2014 Directive at issue), the Respondent agreed that the provision had to be interpreted by reference to the words used in the article, its particular context and the objectives sought to be achieved by the Directive (Robins). The Respondent submitted that in interpreting Article 46(1), in order to determine whether it was open to the Minister/OGP to adopt the 'lots decision', it was necessary to interpret the term "contract" in Article 46(1) as referring to a proposed or contemplated contract, and not a concluded contract. The Respondent submitted that the judge had correctly understood Word Perfect's argument in the High Court that there had to be a concluded contract in order for a decision to be made to award the contract in the form of separate lots and that the judge had correctly rejected that contention. I should observe here that it seems to me that this is something of a red herring in this appeal as both parties accepted during the hearing of the appeal that there could never be a concluded contract at the stage at which the decision to divide a contract or contracts into lots or, more accurately, to award a contract in the form of lots, must be taken (i.e. at the preparatory stage of a procurement). All that would exist at that early stage would be a proposed or contemplated contract or contracts.
172. The Respondent submitted that Article 46(1) confers a wide discretion on a contracting authority as to whether to decide to award a contract in the form of lots. It submitted that the exercise of that discretion would depend on the specific characteristics of the relevant market and the objective and purposes of the procurement at issue. The existence of discretion is reflected in the use of "may" in Article 46(1) in the context of the decision as to whether to award a contract in the form of lots and as to the size and subject matter of the lots. The Respondent submitted that Article 46(1) makes clear that these are matters within the discretion of the contracting authority. The Respondent pointed to the "divide or explain" requirement in Recital (78) and referred to, what it submitted, was a quite limited form of immunity from judicial review referred to in that recital. This was, namely, that the decision as to whether or not to decide to award a contract in the form of lots was outside the reach of judicial supervision, albeit that Recital (78) and Article 46(1) imposed obligations on contracting authorities where they decide not to subdivide into lots. 
173. The Respondent contended that the design of the RFT for the 2020 Framework was precisely what was envisaged by Recital (78) and was expressly permitted by Article 46 of the 2014 Directive. The objective was to facilitate greater participation by SMEs, to improve quality in the interpretation services provided to public sector bodies and to ensure competition in the market at the end of the 2020 Framework. It submitted that the 'lots decision' was permitted by Article 46 and that the 'one lot rule' was a necessary consequence of the (up to) four-year contracts under the 2020 Framework which were necessitated by the need to ensure quality, and so as to ensure that at the end of the framework period, there were more than just two operators (Word Perfect and Translation.ie) in the market. 
174. The Respondent disputed Word Perfect's contention that there had to be one overall contemplated contract in order for there to be a division into lots. It maintained that what was at issue here was the procurement of interpretation services for the entire public sector and that under the proposed framework contracts would be awarded in the form of lots. The Respondent contrasted the proposed 2020 Framework with the 2015 Framework. Under the latter, there was one framework contract between the Minister and the successful tenderers (of which there were three in total). Work was then allocated amongst the successful tenderers on the basis of mini-competitions for the award of contracts for the provision of interpretation services to particular public sector clients (those contracts were described as lots, and there were eight of them). For the 2020 Framework, the procurement of interpretation services for the public sector was to be on the basis of "four single supplier framework contracts" representing the four lots. The Respondent submitted that that approach is permitted by Article 46 and that it was not necessary for there to be one contemplated overarching contract before there could be a division into lots. Nor was it necessary for there to be more lots than contracts, as Word Perfect appeared to be contending. Each lot would itself be a separate contract. The Respondent's position was, therefore, that Article 46 permitted the Minister/OGP to aggregate the procurement services for the public sector and to allocate the work to four separate suppliers by using the lot division mechanism in Article 46. It submitted, therefore, that the 'lots decision' was compatible with Article 46 and sought to achieve the objectives behind that provision which are expressly set out in Recitals (78) and (79). The RFT for the 2020 Framework, it submitted, is exactly what is permitted by Article 46 of the 2014 Directive.

 

(c) The 'one lot rule'

(i) Rationale for the rule

175. In elaborating on the rationale for the 'lots decision' and then for the 'one lot rule', the Respondent relied heavily on the process leading up to the adoption of the RFT. It pointed to the establishment of the Customer Service Group and to the complaints made concerning the poor quality of the interpretation services provided to public sector bodies, and to the need to address the quality issue. Part of the solution (as outlined in the Sourcing Strategy) was to have longer term contracts (up to four years) rather than the twelve-month extendable contracts which were awarded under the 2015 Framework. The Respondent noted that Mr. Massey agreed that that was a reasonable approach to take to address the alleged quality issues raised.
176. The Respondent referred then to the concern that if longer term contracts were awarded under the 2020 Framework, and if there was no cap or limit on the number of contracts that could be awarded to any one operator, it was likely that one or two suppliers would obtain all of the work under the framework (being Word Perfect and Translation.ie) and that, since they were the only two suppliers who had, in fact, obtained contracts under the 2015 Framework, this would lead to a situation whereby Word Perfect and Translation.ie would be the only two suppliers providing services under the two frameworks for a total period of eight years. That, it contended, would be the opposite of opening up the market or facilitating competition or greater participation by SMEs. It submitted that, for that reason, once the contracts to be awarded under the 2020 Framework would be up to four years, it would be necessary to have a cap or limit on the number of contracts that could be awarded to any one operator. The Respondent relied heavily on the references in the recitals to the 2014 Directive and on a number of articles that made reference to the requirement to ensure that public procurement would be opened up to competition and the facilitation of greater participation by SMEs in general. It submitted that that is precisely what is sought to be achieved (and would be achieved) under the 2020 Framework.
177. The Respondent submitted that Word Perfect was looking at the issue through the wrong end of the telescope, i.e. from its own perspective, and not from the perspective of the public sector bodies purchasing a critical service which they were reasonably entitled to expect would be of a high quality. The Respondent further relied on the other outcomes from the consultation process which led to the design and adoption of the RFT, including the move away from mini-competitions, as they were administratively burdensome and the experience under the 2015 Framework showed that they increased the risk of litigation. In order to address these various issues which were raised in the consultation exercise, it was decided to proceed on the basis of the four single supplier contracts for up to four-year terms.

 

(ii) Margin of discretion

178. With respect to other aspects of the design of the RFT challenged by Word Perfect, such as the manner in which the lots were described (in terms of the public sector bodies assigned to the different lots), and the 'one lot rule', it was submitted that those issues involved a multifactorial polycentric assessment and on an appreciation of all of the issues arising in the market and consideration of how best to achieve the objectives of improving quality and ensuring competition in the market at the end of the 2020 Framework. It was submitted that the Minister/OGP should be afforded a margin of appreciation or discretion in deciding on those questions and that its decision should only be open to challenge on the basis of a manifest error (relying on SIAC and other Irish cases such as Fresenius and Baxter Healthcare Ltd v HSE ([2013] IEHC 413) per Peart J. at paras. 34 and 39) and on the more recent judgment of the Supreme Court (O'Donnell J.) in Word Perfect Translations Services Limited v. Minister for Public Expenditure and Reform [2019] IESC 38). In support of the significant discretion on contracting authorities in deciding on the detail of the 'lots decision', the Respondent relied on the terms of Recital (78) and Article 46(1). It was submitted by the Respondent that the burden of establishing manifest error rested on Word Perfect, and that it had failed to discharge that burden. The Respondent accepted that the RFT could not breach the general principles of EU law relied on by Word Perfect, but it submitted that Word Perfect bore the burden of establishing such breaches and that the judge correctly decided that it had not discharged that burden.

 

(iii) Burden of proof

179. On the issue of the burden of proof, the Respondent commended the approach taken by the judge to this Court. It submitted that the judge had correctly distinguished this case from Deutsche Parkinson on the ground that, in that case, the Member State measure at issue amounted to a quantitative restriction or measure having equivalent effect to such a restriction for the purpose of Article 34 TFEU and was, therefore, prima facie, unlawful. It was a matter for the Member State then to show why the restriction was justified by reference to one of the exceptions in Article 36 TFEU. In this case, the Respondent submitted that Article 46(2) (and Recital (79)) expressly permitted the Minister/OGP to limit the number of lots that could be awarded to one tenderer (provided the required information was set out in the contract notice) and that it could do so where it decided that it was necessary "to preserve competition or to ensure reliability of supply" (Recital (79)). It was a matter for Word Perfect to demonstrate that a manifest error had been made in determining that the 'one lot rule' was necessary to achieve one of the permitted objectives under the 2014 Directive and that a margin of appreciation or discretion should be afforded to the Respondent in that respect. It submitted that on the evidence, once contracts of up to four-year terms were to be awarded under the new framework (to improve the quality of services provided), the 'one lot rule' was necessary in order to preserve competition and that the Court should not second -guess the careful appreciation of the facts and the assessment carried out by the OGP in deciding that the rule was necessary. The Respondent further urged the court to follow the approach taken by the High Court (McDermott J.) in Copymoore (No. 2) on the question of the burden of proof and the application of the manifest error test. 

 

(iv) Segmentation of the market

180. With respect to Word Perfect's contention that in making the 'lots' decision and in incorporating the 'one lot rule' in the RFT, the Minister/OGP was, in effect, engaged in the allocation and segmentation of the market and acting as a type of competition authority (albeit exercising greater powers than a competition authority could typically do), the Respondent disputed that contention and maintained that in deciding to award a contract or contracts in the form of lots and to limit the maximum number of lots that could be awarded to each successful tenderer, the Minister/OGP was (a) doing precisely what is permitted under Article 46 of the 2014 Directive, and (b) doing so in order to achieve the objectives of the Directive by opening up the market for interpretation services, facilitating greater market access for SMEs and ensuring future competition in the market once the 2020 Framework came to an end.

 

 

 

(v) Distortion of competition: "Classic trade-off"

181. On the point made by Word Perfect (and supported by Mr. Massey's evidence) that the RFT distorted competition because the MEAT tenderer would not succeed in winning all of the tenders which it submitted and in which it was the most economically advantageous tenderer, the Respondent submitted that that was something which was "baked in" or "hard wired" into the structure of Article 46(1) and (2). Such a situation would arise whenever a cap or limit on the number of tenderers that could be awarded to any one tenderer is imposed by a contracting authority. The Respondent described this as a "classic trade off" in the sense that the MEAT tenderer will not be the successful tenderer for each of the lots in respect of which it submitted the most economically advantageous tender, rather, a limit on the lots that can be awarded will ensure that others can participate in the market which, among other things, will preserve competition for the future. The Respondent relied on Dr. Hannigan's evidence and, in particular, his evidence that the price to be paid was worth it to preserve competition in the future. 
182. The Respondent acknowledged that it had accepted, and that the judge had found (at paras. 122 and elsewhere of the judgment) that the 'one lot rule' would distort competition in the market for interpretation services but contended that the judge was correct in holding that such distortion was permitted by Article 46 and was not an unlawful or impermissible distortion of competition. The Respondent accepted that a limit imposed by a contracting authority on the number of lots that can be awarded to any one tenderer would be seen as an anti-competitive measure but maintained that it was expressly permitted under the 2014 Directive in order to achieve greater access to public procurement by SMEs and to preserve competition.

 

 

(vi) Linkage to subject matter of contract

183. With respect to Word Perfect's argument that the 'one lot rule' and its objectives were not "linked to the subject matter of the contract", the subject of the procurement, and were, therefore, unlawful, the Respondent made the point that that argument had not been advanced in the High Court. Word Perfect contended that the point had been made but accepted that more reliance was being placed on the argument in the appeal to this Court. On the substance of the argument, the Respondent acknowledged that Article 67 expressly provides that the contract award criteria must be linked to the subject matter of the public contract at issue. It submitted, however, that there is no such requirement in Article 46. Article 46 is to be found in a different part of the 2014 Directive (dealing with preparatory matters) and performs a different role to that of Article 67, which applies to the contract award criteria. It submitted, therefore, that there is no such linkage requirement when deciding to award a contract or contracts in the form of lots and in imposing limits to the number of lots that can be awarded to any one tenderer.

 

(vii) Breach of general principles

184. With regard to the alleged breaches of the general principles and Word Perfect's submissions that the judge erred in failing to hold that the decision to adopt and publish the RFT was in breach of those principles, the Respondent advanced a number of submissions which are summarised below in relation to each of the general principles relied on by Word Perfect. 

(I)        Equal Treatment

185. The Respondent submitted that the RFT and, in particular, the 'one lot rule', does not breach the principle of equal treatment. It pointed out that all tenderers were treated equally in the procurement provided for in the RFT. All were subject to the 'one lot rule'. All interested operators who fulfilled the criteria set out in the RFT could submit a tenderer tender and be considered for the award of one of the four lots on offer. The same rules applied to all operators. The Respondent submitted that the Minister/OGP was not seeking to favour inefficient operators, but to promote participation by SMEs and to preserve future competition.

 

(II)       Proportionality

186. The Respondent submitted that the RFT and, in particular, the 'one lot rule' did not breach the principle of proportionality. Like Word Perfect, it too relied on a number of decisions of the European Courts in support of its submission. It relied on the judgment of the Court of First Instance in Case T-211/02 Tideland Signal Limited v. Commission of the European Communities ECLI:EU:T:2002:232 as an example of the application of the principle of proportionality in a public procurement context. There, the Court noted that the principle of proportionality meant that the Community measure at issue must not exceed the limits of what is appropriate and necessary in order to achieve the objectives pursued and that where there is a choice between a number of different appropriate measures, "recourse must be had to the least onerous" (para. 39). It also cited the judgment of the CJEU in Fabricom and other case law to the effect that in order to comply with the principle of proportionality, measures must not go beyond what is necessary to achieve the relevant objective of the measure. The Respondent acknowledged that the principle of proportionality is a general principle of EU law. There was no dispute about any of this or about the fact that the principle of proportionality is also identified as a principle applicable to public procurement in Article 18 of the 2014 Directive.
187. Relying on its submission that the burden of establishing a breach of the principle of proportionality rested on Word Perfect (and urging the court to apply Copymoore (No. 2), the Respondent submitted that Word Perfect had failed to discharge that burden and supported the judge's conclusion on this issue.
188. The Respondent relied on the objectives sought to be achieved by the 'one lot rule', in particular, and submitted that (a) the objectives (including the encouragement and facilitation of participation by SMEs in the procurement and the preservation of competition in the future) were legitimate objectives to pursue, (b) the means chosen by the Minister/OGP in the RFT (including the 'one lot rule') were appropriate to achieve those objectives and were expressly permitted under Article 46 of the 2014 Directive, and (c) the measures adopted did not go beyond what was necessary. With respect to the last point, the Respondent relied on the margin of appreciation or discretion which it said applied to its assessment of the measures adopted and their necessity (including aspects such as the level of required turnover provided for in the RFT). It noted that the Minister/OGP had looked at various different alternatives to the final version of the RFT which was adopted, as was disclosed in the Sourcing Strategy.
189. With respect to the alternatives outlined in submissions advanced by Word Perfect, such as having no 'one lot rule', the Respondent maintained that the rule was necessary because of the decision to have longer term contracts in the 2020 Framework (of up to four years) which were required in order to address the quality issues which had been raised in the consultation process. On the point that the RFT could have provided for mini -competitions based on quality alone rather than on price to address the quality issues raised, the Respondent submitted that the Minister/OGP was entitled not to follow that approach on the grounds that it was administratively burdensome (as explained on affidavit by Mr. MacDonnell), that the shorter contract periods for which mini- competitions could be held would be insufficient to enable the necessary relationship to be built up between the public sector clients and the operators and to allow the improvement of quality and that reliance on mini-competitions would also give rise to a greater risk of litigation (as had been experienced under the 2015 Framework). As regards the suggestion that the RFT could have provided for more than four lots, the Respondent noted that there were eight lots in the 2015 Framework and only three successful tenderers (with all the work under that framework going to just two of them). The Respondent stressed the application of the margin of appreciation and the need to demonstrate manifest error in terms of the assessment of the alternatives to the final version of the RFT adopted.

 

(III)     Principle of Competition

190. Some of the Respondent's submissions on this issue have been summarised earlier. The Respondent submitted that no aspects of the RFT, including the 'one lot rule', breached any principle of competition and did not unlawfully distort competition in the market for interpretation services to public sector bodies. In its written submissions, the Respondent contended that there is no general principle of competition in the 2014 Directive but rather a particular principle referred to in Article 18(1) (its submissions on Article 18(1) are separately summarised). The Respondent rejected the contention that the allocation or segmentation of the market by the 'lots decision' and the 'one lot rule', in particular, amounted to a breach of competition law. It rejected the contention that the 'one lot rule' involved the Respondent using a decision in a public procurement competition to engage in full-scale market regulation in the market for interpretation services. The Respondent relied on the judgment of the CJEU in Case T-319/99 FENIN [2003] ECR II-00357 in support of its contention that, in adopting the RFT, including the 'one lot rule', the Minister/OGP was not acting as an undertaking. It also relied on Copymoore (No. 2) as authority for the proposition that the Minister/OGP was not acting as an undertaking but was rather developing a public procurement process on behalf of the State under a framework agreement. The Respondent further relied on its submission that while the division into lots and the limitation on the number of lots that could be awarded to any one tenderer might have a distortive effect, this was something which was permitted under Article 46 and so was not a breach of any general principle of competition law.
191. The Respondent relied on the evidence of its expert, Dr. Hannigan, that having only two suppliers in the market (as was the case under the 2015 Framework) was unstable and that, instead of distorting competition, the 'one lot rule' would maintain sustainable competition in the market. Moreover, having four suppliers fully engaged in the 2020 Framework would indirectly improve quality and preserve competition. The Respondent further submitted that Word Perfect had failed to discharge the burden of establishing unlawful and artificial distortion of competition in the market and submitted that the judge's conclusion on that issue should not be disturbed.
192. The Respondent relied again, in response to this aspect of Word Perfect's case, on the margin of appreciation in the Minister/OGPs design of the RFT in order to achieve its objectives. It submitted that the division into lots and the 'one lot rule' were essential pro-competitive measures because they were intended to encourage the participation of SMEs and preserve competition. As noted earlier, it described the restrictive elements of the RFT (including the 'one lot rule') as being a necessary trade-off in order to achieve these objectives which it submitted were expressly provided for under the 2014 Directive. These were matters of assessment and evaluation by the Minister/OGP for which it was entitled to a margin of appreciation and its decision on the design and adoption of the RFT should only be struck down on the basis of manifest error which, it was submitted, had not been established by Word Perfect.
193. In its submissions at the hearing, the Respondent carefully reviewed the evidence of the two experts, Mr. Massey and Dr. Hannigan, by reference to what was agreed and not agreed (as set out in the Joint Report) and by reference to their evidence under cross examination. The Respondent contended that Mr. Massey's sole objection, ultimately, was to the 'one lot rule' which he believed served to prevent, restrict or distort competition in a number of respects. However, the Respondent submitted that Mr Massey's objections were answered by the fact that Article 46 permits both division into lots and a limit to be placed on the number of lots that could be awarded to any one tenderer. It noted that Mr. Massey agreed under cross examination that the provision for contracts of up to four years was a reasonable response to the quality issues which he accepted had been raised by public service clients in the consultation process. The Respondent also noted Mr. Massey's acceptance that the 'one lot rule' provided some incentivisation for SME participation in the procurement, albeit that he considered that that was marginal. The Respondent stressed that the ultimate decision on the form of the RFT was within the margin of appreciation of the Minister/OGP. It stressed that the risk of collusion relied on by Mr. Massey in the High Court was not being pressed by Word Perfect on the appeal. For these reasons (and for those summarised earlier) the Respondent contended that Word Perfect had not discharged the burden of proving a breach of any general principle of competition. 

 

(viii) Article 18 of 2014 Directive

194. The Respondent rejected Word Perfect's contention that any aspects of the RFT, including the 'one lot rule', breached Article 18 of the 2014 Directive. The Respondent supported the judge's interpretation of Article 18 in its written submissions and contended that a term in the RFT would only breach Article 18 if it was included with the intention of unduly favouring one operator over another and not where its effect is to do so. The Respondent submitted that any such term must unduly favour other operators, and also be done with that intention. It submitted that the burden was on Word Perfect to establish a breach of Article 18 and that the judge was correct in concluding that it had failed to discharge that burden.
195. In its oral submissions, the Respondent agreed with Word Perfect that the intention referred to in Article 18, namely, the intention of artificially narrowing competition which is considered to arise where the procurement is designed with the intention of unduly favouring or disadvantaging certain operators, had to be assessed objectively and with regard to the evidence and materials before the court. The respondent contended that the judge did, in fact, adopt such an objective approach and relied on in that regard on the judge's reference to the need for an "objective reason" for the impugned requirement at para. 104 of his judgment. The Respondent further submitted that the judge did, in fact, assess the evidence to determine whether, objectively, the design of the procurement was made with the intention of unduly favouring or disadvantaging certain economic operators and had concluded that, objectively, the intention of the 'one lot rule', in particular, was to incentivise SME participation and to preserve future competition. Accordingly, the judge had correctly concluded that there was no breach of Article 18.

 

(ix) Freedom to Conduct a Business/Provide Services - Article 16 of the Charter and Article 56 TFEU

196. The Respondent disputed the arguments advanced by Word Perfect on this ground. In response to Word Perfect's reliance on Sky Ӧsterreich, the Respondent contended that that case was concerned with a completely different situation and should be distinguished. It made the point that any operator which complied with the criteria set out in the RFT could submit a bid and that no such operator was being excluded from the opportunity of doing so. While the Respondent accepted that Word Perfect might not succeed in obtaining as many of the lots as they would like, there were objective justifications for that, namely, the desire to encourage SME participation and to promote and preserve future competition.

 

(x) Duty of Sincere Cooperation: Article 4(3) TEU

197. The Respondent contended that there was no breach of the duty of sincere cooperation in Article 4(3) TEU. It contended that this was not a case where a Member State is encouraging the adoption of agreements or concerted practices which would breach Article 101 (or Article 102) TFEU. It submitted that the Minister/OGP, as a relevant contracting authority, which has sought to develop a public procurement process under a framework agreement in accordance with the 2014 Directive, is not an undertaking for the purposes of Article 101 (or Article 102) TFEU, and is not a party to any agreement between undertakings or abusing any dominant position as an undertaking. In this regard, the Respondent relied on the judgment of the CJEU in FENIN and on Copymoore (No. 2). The Respondent rejected the contention, therefore, that in adopting the RFT, it was encouraging the adoption of agreements or concerted practices contrary to Article 101 TFEU or any abuse of any alleged dominant position (and it is noted that it was not alleged by Word Perfect that the Minister/OGP or any of the public sector bodies or any of the operators in the interpretation market are in a dominant position in that market). 

 

(d)Irrelevant Considerations

198. The Respondent supported the judge's conclusion that the Minister/OGP did not take into account irrelevant considerations when designing the RFT. It submitted that it was a relevant consideration in the design of the procurement to attempt to ensure that the procurement process was legally robust. It submitted that that was a desirable aim and was not irrelevant. 

(e)Apparent/Objective Bias

199. The Respondent agreed with the High Court and supported the High Court's reasoning that the decision to adopt the RFT was not vitiated by apparent or objective bias. It submitted that the process of designing an RFT, generally, and in this case, is not an adjudicative process where the rights of different parties or the rights as between the Minister/OGP and a particular operator are being determined. Rather, it was a policy decision which did not involve the adjudication of rights. In that respect it relied on the judgment of McKechnie J. in Greenstar. It also relied on Fitzpatrick v. Minister for Agriculture [2018] IEHC 772.
200. The Respondent submitted that it was entitled to take into account the fact that Word Perfect had been involved in previous litigation in relation to the 2015 Framework and that there was no question of any apparent or objective bias arising from the reference to this fact in the Sourcing Strategy or elsewhere, and nothing to prevent the Minister/OGP from endeavouring to make sure that the procurement competition was not vulnerable to legal challenge where there was an obligation on the Minister/OGP to comply with procurement law and to ensure that public funds were properly spent.

 

(f) Response to Word Perfect's Criticism of Judge's Treatment of Expert Evidence

201. The Respondent rejected the contention that the judge misunderstood the role of an expert witness and, in particular, Mr. Massey's role as expert retained by Word Perfect. With respect to Word Perfect's criticisms of the judge stating that Mr. Massey bore the burden of persuading the court that his opinion on the issues in dispute was to be preferred, the Respondent submitted that that was just shorthand for the judge explaining how he was going to address the evidence of the two expert witnesses and was making the point that he regarded the burden of proof which rested on Word Perfect as being critical in his assessment of the evidence of the two experts. Ultimately, the judge found that Word Perfect (on whom he stated the burden rested - see, for example, para. 78 of the judgment) had failed to discharge that burden.
202. The Respondent also rejected Word Perfect's criticisms that the judge failed to engage with the expert evidence. The Respondent contended in its written and oral submissions that the judge did, in fact, engage with the expert evidence. It submitted that the judge considered all of the points made by Mr. Massey in support of his view that the 'one lot rule' was distortive of competition and referred to the judge's consideration of the expert evidence at paras. 34 - 44, paras. 79 - 88 and paras. 110 of his judgment onwards, where the judge considered the evidence of Mr. Massey and the response of Dr. Hannigan on the impact of the 'one lot rule' on competition. The Respondent brought the Court through the judgment of the High Court and the judge's consideration of the evidence of Mr. Massey and Dr. Hannigan. It submitted that, contrary to Word Perfect's contention, the judge did engage with the expert evidence. While noting that the judgment was relatively short bearing in mind the amount of material before the court, the Respondent maintained that the judge considered all of the key points and had engaged with all of the relevant evidence. The Respondent contended that the judge had expressly engaged with all of the points made by Mr. Massey in the Joint Report and that he was entitled to take the view, in circumstances where the views of both experts were plausible in many respects but where the burden of proof was on Word Perfect, that Word Perfect had not discharged that burden. That was so where the judge was not persuaded that Mr. Massey's evidence should be preferred to that of Dr. Hannigan. In those circumstances, the Respondent rejected Word Perfect's criticism that the judge did not adequately address the expert evidence and did not properly explain why the evidence given by Mr. Massey was not accepted. 

 

 

9. Analysis and Decision

(1) Introductory remarks

203. While wide ranging and detailed submissions were advanced by the parties in the High Court and on this appeal, ultimately, two essential issues had to be determined by the judge, namely, (a) whether the Minister/OGP was lawfully entitled to take the 'lots decision' and to divide the procurement at issue into separate lots, and (b) whether the inclusion of the 'one lot rule', which restricted the number of lots that could be awarded to any one tenderer to just one, was unlawful. Before addressing those two issues, it is appropriate to make a few brief observations in relation to the two relevant significant changes introduced into the EU public procurement regime in the 2014 Directive by Article 46. 

 

(2) Significance of Article 46 of 2014 Directive

204. While, as noted earlier, the division of public contracts into lots was permitted under previous Directives and was a matter for Member States, the 2014 Directive expressly provided and indeed encouraged Member States to divide public contracts awarded under public procurement procedures into separate lots to be awarded to one or more operators.  The purpose of doing so was expressly stated in Recital (78) of the 2014 Directive to be for the purpose of promoting the participation of SMEs in public procurement and of enhancing competition. In their leading work on 2014 Directive, Caranta and Sanchez-Graells described Article 46 of the 2014 Directive as being aimed at "fostering competition by preventing 'winner-takes-all' scenarios" (para. 46.01, p. 497). They described lot division as "one of the vehicles to foster the participation of SMEs in public procurement" which "allows smaller suppliers to compete for parts of what would have been a larger contract" (para. 46.02, p. 497). The authors further stated:

"Lot division increases competition for the contract and competition in general terms outside of the specific procurement. This is either because more suppliers can submit competitive tenders more likely to win the competition, or simply because if the contracting authority makes use of its option to cap the number of lots a single supplier can be awarded, several suppliers will be awarded a contract.  This could also imply that better offers are received in general, as even large suppliers would be exposed to competitive pressure... a division also prevents 'winner-takes-all' scenarios, which, in certain sectors with a high presence of public buyers - such as healthcare or education - may have large and adverse effects in the medium to long run. This is because suppliers dependent on public purchases may be pushed out of the market temporarily or indefinitely. Thus, lot division supports competition outside of the specific procurement too. Furthermore, lot division is a tool to limit the incumbency problem as it makes it more likely, and at times even inevitable, that there will be at least two different suppliers for parts of the contract. However, lot division alone, while generally positive, might be insufficient if not adequately structured accompanied by other measures or thought of as part of a procurement policy beyond the contract at hand." (para. 46.03, p. 498)

205. In addition to expressly providing for and encouraging the division of public contracts into lots in a public procurement process (by including, amongst other things, the "divide or explain" requirement), Article 46 made provision for a second significant change to the pre-existing situation by enabling contracting authorities to limit the number of contracts or lots that could be awarded to any one tenderer. That is provided for in Article 46(2) and Recital (79)). 
206. The Minister/OGP relied on both of these significant changes in the 2014 Directive in designing the RFT for the 2020 Framework by dividing the procurement at issue (the four single supplier framework contracts for the provision of interpretation services (excluding Irish language services)) into four separate lots to be awarded (the 'lots decision') and by limiting the number of lots that could be awarded to any one tenderer to just one lot (the 'one lot rule'). The lawfulness of both those decisions was at the heart of Word Perfect's challenge to the RFT before the High Court and on this appeal. The judge found both decisions to be lawful. I agree. I will now explain in respect of each of those decisions why I agree with the judge's ultimate conclusions in respect of both of those decisions.

 

(3) The 'lots decision'

(a) Aspects of the challenge considered

207. There were a number of different aspects to Word Perfect's challenge to the 'lots decision'. The first was its overarching argument that it was not open to the Minister/OGP to group together or sweep up four separate contracts representing the entire public sector for interpretation services (apart from Irish language interpretation) and to then divide them into lots. This argument required an interpretation of Article 46 and also of Articles 33 and 37 of the 2014 Directive. The second aspect of Word Perfect's challenge to the lots decision was its more technical argument which was centred on the use of the singular "a contract" in Article 46(1) which it said meant that it was not open to the Minister/OGP to aggregate together a number of different contracts and to divide them into lots. A third aspect of its challenge to the lots decision was its contention that the division into lots in this case, where the lots were designated by reference to public sector bodies, was not carried out on a basis permitted under Article 46. Finally, Word Perfect advanced an argument based on Article 37.

 

(b) Absence of concluded contract

208. I will address each of these aspects of Word Perfect's challenge to the lots decision in turn but must first address a point which the judge described as a "more fundamental objection" to Word Perfect's challenge to the decision based on the use of the term "contract" or "contracts" in Article 46. As noted earlier, the judge appeared to understand Word Perfect to be arguing that it was not lawful for the Minister/OGP to divide the procurement or the contracts at issue into lots on the grounds that there was, at that stage of the procurement process (i.e. the preparation stage), no concluded contract in existence but merely what he termed a "prospective procurement" or a proposed or contemplated contract.  Word Perfect contended that it never made that argument in the High Court.
209. While the Respondent sought to argue to the contrary in the appeal, I have reviewed the written submissions relied on by the parties in the High Court as well as the transcripts of the oral submissions made by the parties and can find no reference to Word Perfect advancing the argument that there could be no division into lots because there was no concluded contract in existence at the time of the relevant decision. The point was not made in Word Perfect's written submissions to the High Court or in the Respondent's responding written submissions. It was, however, raised by the Respondent in its oral submissions to the High Court where the Respondent's counsel said that the Minister/OGP was not sweeping up four separate contracts and then relabelling them as lots since there were no contracts at all in existence at that particular stage in the procurement process (the preparation stage), there being only, a "proposed" or "contemplated" contract or proposed procurement. The description of the "contemplated contract" was adopted by Word Perfect's counsel in her reply in the High Court. I agree that Word Perfect did not advance a challenge to this aspect of the decision on the basis of the absence of any concluded contract. Therefore, the judge appears to have decided and rejected an argument which was not advanced by Word Perfect.
210. It is axiomatic that all that would be in existence at the preparation stage of the procurement process under the 2014 Directive (Title II, Chapter III, section 1) would be a proposed or contemplated contract or contracts, or to use a neutral term, a proposed procurement and not a concluded contract. A concluded contract would only arise at the end of the procurement process when the contract is awarded in accordance with the principles set out in Title II, Chapter III, section 3(3) of the 2014 Directive. In this case, a concluded contract would only come into existence when the framework agreement (the Framework Contract) is entered into between the Minister/OGP and the relevant public sector body, on the one hand, and the successful tenderer for each lot on the other hand, the subject of the procurement process, with further contracts arising when the Framework Client (the relevant public sector client) activates the procedure described in the RFT by serving an activation notice bringing a separate Client Contract for the provision of the required services into existence in accordance with Clause 23 of the Framework Contract. I now turn to consider the grounds actually advanced by Word Perfect in its challenge to the 'lots decision'.

 

(c) Interpretation of Article 46 of 2014 Directive

211. Although the judge considered and rejected the concluded contract point which was not advanced by Word Perfect, he did go on to consider the other arguments it had advanced in challenging the lawfulness of the 'lots decision'. In doing so, he proceeded to interpret Article 46 and Recitals (78) and (79). He concluded that what was being proposed in terms of lot division in the RFT was permitted under those provisions and was not precluded by other provisions of the 2014 Directive or under any other provisions of EU law.
212. The CJEU has consistently held that when interpreting a provision of EU law, it is necessary "to take into account not only the wording of the provision concerned, but also its context and the general scheme of the rules of which it forms part and the objectives pursued thereby" (Case C - 395/18 Tim SpA EU:C:2020:58 at para. 36, citing the earlier judgment of the court in Case C - 213/17 X EU:C:2018:538 at para. 26). The parties had correctly urged the judge to interpret the relevant provisions of the 2014 Directive by reference to their words, context and objectives (relying on Advocate General Kokott in Robins) and that was the approach duly adopted by the judge. He did consider the words, context and general scheme and objectives of Article 46 and Recitals (78) and (79) and other relevant provisions of the 2014 Directive, such as Article 37.
213. In considering Word Perfect's challenge to the 'lots decision' it is, therefore, appropriate to start with a consideration of the words in Article 46(1) of the Directive. The relevant provisions of Article 46 have been set out in full earlier in this judgment. Article 46 is headed "Division of contracts into lots" and Article 46(1) provides that contracting authorities "may decide to award a contract in the form of separate lots and may determine the size and subject matter of such lots". It is clear that this provision confers a discretion on contracting authorities both in relation to the decision as to whether to award a contract in the form of lots and in relation to the determination of the size and subject matter of those lots. There is no doubt that both as a matter of EU law and Irish law, the exercise of the discretion conferred by Article 46(1) is subject to review by the court (see, for example, Marina del Mediterraneo), and the Respondent did not contend otherwise. Nor was there any dispute between the parties that the exercise of a discretion such as that contained in Article 46(1) must comply with the general principles of EU law, the Treaties, the Charter and the 2014 Directive itself. Word Perfect did allege breaches of those provisions with reference to the 'one lot rule', and the relevant principles will be considered further in that connection.
214. It is sufficient for present purposes to stress the discretionary nature of the decisions which contracting authorities are permitted to take under the first paragraph of Article 46(1). Under the second paragraph of Article 46(1), except in the case of contracts where a division has been made mandatory under Article 46(4), contracting authorities are required to provide an indication of the main reasons for their decision not to subdivide contract into lots. That requirement, described as the "divide or explain" requirement and elaborated on in Recital (78) was, according to Prof. Arrowsmith, "designed to ensure that procuring entities give due attention to whether contracts should be divided into lots for the benefit of SMEs, and articulate the reasons for any decision not to do this" (Arrowsmith Vol 2, para. 20 -49, p. 728). She noted, however, that the rule does not limit a contracting authority's discretion to decide not to divide a procurement into lots where it considers that the cost of doing so would outweigh the benefits.
215. Further assistance in the interpretation of Article 46(1) is found in Recital (78) (the terms of which have been quoted in full earlier). That recital puts the needs of SMEs to the forefront of contracting authorities' consideration as to whether to divide a procurement into lots. They are encouraged to follow official EU Commission guidance on how the public procurement framework may be applied in a way that facilitates the participation of SMEs. The recital then states that "to that end and to enhance competition", contracting authorities should be encouraged "to divide large contracts into lots" and that such division "could be done on a quantitative basis, making the size of the individual contracts better correspond to the capacity of SMEs, or on a qualitative basis...". My reading of Recital (78) is that it does not limit the manner or basis on which contracts can be divided into lots but gives examples of how such division may be made in the exercise of the relevant contracting authority's discretion. The second paragraph of Recital (78) provides that "the size and subject matter of the lots should be determined freely by the contracting authority", further stressing the discretion enjoyed by the authority.
216. The recital goes on to state the contracting authority "should have a duty to consider the appropriateness of dividing contracts into lots" but should remain "free to decide autonomously on basis of any reason that deems relevant, without being subject to administrative or judicial supervision". There is no issue in this case about the Minister/OGP considering the appropriateness of dividing the relevant contracts or the procurement into lots. It did give such consideration and made the 'lots decision'.
217. While there has been some academic criticism of the purported (albeit limited) immunity from judicial supervision referred to Recital (78) (see, for example, Trybus) again, it was not suggested by the Respondent that any of the decisions which it had taken, and which were challenged in these proceedings, were subject to any form of immunity from judicial supervision. It is unnecessary, therefore, to offer a concluded view as to the precise scope of the immunity purportedly provided by Recital (78).
218. The recital does go on to elaborate on the "divide or explain" requirement referred to in the second paragraph of Article 46(1). That requirement was, in my view, correctly relied on by the judge as highlighting and underlining the importance of the objective of dividing a procurement into lots "in the interest of facilitating SME participation, reliability of supply and competition in the award of public contracts" (at para. 57 of the judgment) and provides support for the judge's conclusion that the "default position" is that a proposed procurement should be divided into lots. That conclusion is further strengthened by the third paragraph of Recital (78) which provides that Member States "should remain free to go further" in seeking to facilitate the involvement of SMEs in public procurement by extending the obligation on contracting authorities to consider the "appropriateness of dividing contracts into lots to smaller contracts", by requiring a justification for any decision not to divide contracts into lots or by making it obligatory to render a division into lots in certain circumstances. Finally in this context, under Recital (79), power is given to contracting authorities to limit the number of lots that can be awarded to certain tenderers "where contracts are divided into lots". The scope of this provision is more relevant perhaps to the 'one lot rule' and I will consider this further in that context.
219. I am satisfied that there is nothing in Article 46 of the 2014 Directive or in Recitals (78) and (79) or elsewhere in the Directive to preclude the Minister/OGP from dividing the procurement for the 2020 Framework into lots. There is nothing in the wording, or indeed in the context, scheme, or objectives of Article 46, (the two principal objectives of which are to promote greater SME participation in public procurement and to preserve and enhance competition including, as I conclude later, future competition), which prevented the Minister/OGP from dividing the proposed procurement for interpretation services into lots. If the relevant contracting authority wished to group together the number of contracts as part of a single procurement and then to divide the procurement into lots, that is permitted under Article 46 and not, in my view, precluded by Article 33 or Article 37 of the 2014 Directive. Subject to Word Perfect's "technical" argument centred on the use of the singular "a contract" in Article 46(1) (with which I do not agree), my view is that the words used in the Article 46(1) are wide enough in scope to cover and permit the Minister/OGP's decision to divide the proposed procurement into lots. A decision to do so is also entirely consistent with the objective of promoting and facilitating the participation of SMEs in public procurement and, as I explain later, is also consistent with the objective of enhancing competition. It is relevant in that context to note that Word Perfect's expert, Mr. Massey, did not take objection on competition grounds to the 'lots decision' itself but, rather, to the 'one lot rule'. The Minister/OGP's view that the division of the proposed procurement into lots would assist greater SME participation is a decision which, in my view, it was entitled to take in light of the experience under the 2015 Framework and the feedback it obtained as part of the process leading up to the adoption of the RFT, including the material contained in the Sourcing Strategy document.

(d) The "technical" argument: A contract

220. Turning then to Word Perfect's argument based on the use of the singular "a contract" in Article 46(1), Word Perfect's position was that its challenge to the validity of the lots decision did not turn on this point, which it accepted was a "technical" point, albeit a serious and important one in terms of its consequences for Word Perfect. In my view, the judge correctly rejected that technical argument, and I agree with the reason he provided which was, essentially, that the argument was contrary to the overall objective of the 2014 Directive which supported contracting authorities to make "every possible effort to have procurement divided into lots in order to facilitate the participation of SMEs in the tender process" (para. 59 of the judgment).
221. To that reason I would add some other reasons for rejecting Word Perfect's contention. The fact that it is a technical argument does not, of course, mean that it cannot be correct. In my view, however, excessive reliance is placed in support of that argument on the use of the singular "a contract" in Article 46(1). Article 46 is not consistent in its use of the singular "a contract" and the plural "contracts". As I have already mentioned, the heading of Article 46 is entitled "Division of contracts into lots". While the first paragraph of Article 46(1) refers to the decision to award "a contract" in the form of separate lots, the second paragraph refers to "contracts whose division has been made mandatory" under Article 46(4). Article 46(4) empowers Member States to make it obligatory "to award contracts in the form of separate lots". Recitals (78) and (79) use the singular and plural, "contract" and "contracts". For example, the first paragraph of Recital (78) refers to contracting authorities being encouraged "to divide large contracts into lots". It then refers to "individual contracts" on two occasions in the first paragraph. The second paragraph of Recital (78) refers to the obligation on a contracting authority to consider the appropriateness of "dividing contracts into lots" and also refers later in the subparagraph to the division of "the contract" into lots. The third paragraph refers to the appropriateness of "dividing contracts into lots" and uses the plural "contracts" again later in that paragraph. Recital (79) refers to the powers a contracting authority has "where contracts are divided into lots". There is no consistency, therefore, in the use of the singular "contract" and the plural "contracts" in those provisions and it would, in my view, be attaching excessive weight to form over substance by reading Article 46(1) as conferring a power on a contracting authority only to divide into lots a single proposed contract, rather than a series of proposed contracts bundled together.
222. The wording of the relevant provisions does not, therefore, support Word Perfect's argument. Nor is it consistent with the context and objectives of those provisions to facilitate the greater participation of SMEs. In this case, the proposed or contemplated contract or procurement is for the entire market for public sector interpretation services. The fact that the RFT referred to four single supplier framework contracts which were then to be divided into lots by means of the 'lots decision' has to be seen in the context of what is involved in the procurement, namely, provision of interpretation services (excluding Irish language services) for all, or almost all, of the public sector. It makes sense, therefore, in order to promote greater participation by SMEs, to divide that procurement into lots. In my view, it would be allowing form to trump substance and would be inconsistent with the objectives sought to be achieved by Article 46 to preclude its use to divide the proposed procurement into lots. That was done by means of the 'lots decision'.

 

(e) Designation of lots

223. Another aspect of Word Perfect's challenge to the 'lots decision' is that the division into lots was not done on a basis permitted by Article 46. The essential point made by Word Perfect was that the division into lots was not done on a quantitative basis or on a qualitative basis or by reference to geography but rather by reference to public sector bodies. As explained in the Sourcing Strategy (p. 14), the structure of the lots was based on the expenditure incurred by other clients under the prior framework, with larger spending bodies being assigned to their own lot (lots 1 and 2) and other public sector bodies being combined to make up the remaining two lots (lots 3 and 4). I agree with the Respondent that it was open to the Minister/OGP to divide up the lots in this manner. As I have already indicated, Article 46(1) confers a discretion on the contracting authority when it decides to award a procurement in the form of lots to determine the size and subject matter of those lots.
224. The appropriateness of leaving that to the discretion of the contracting authority is supported by Prof. Trybus. He commented as follows:

"The number, subject matter, size and geographical dispersion of the lots affect competition in the procurement procedure, the contracting authorities' budget and value from money. Economic theory supports this discretion to be left to the contracting authorities. Determining the number, size and subject matter of the lots has to take account of the frequency evolving market structure, which is determined by the number and the behaviour of the potential bidders, otherwise competition and ultimately value for money will be compromised. Therefore, these characteristics can only be determined by the contracting authority, possibly advised by centralised procurement authority or private consultant. In other words, this should not be determined in abstract rules by the EU or national legislators. It is therefore submitted that the approach in Article 46 of Directive 2014/24 of 'leaving the details to be determined by the contracting authorities is appropriate'." (p. 326 and 327)

225. Some guidance is given in Recital (78), where, as noted earlier, it is stated that division into lots "could" be done on a quantitative basis or on a qualitative basis. Caranta and Sanchez-Graells state (at para 46.10):

"Contracting authorities are also free to 'determine the size and subject matter of such lots' which implies the existence of lots based on quantity (that is, their monetary value or quantities of goods, services or works to provide the contracting authority with) or depending on characteristics (what kind of goods or services or works will be provided and which are typically going to be connected with compatibility between them). Nothing prevents the contracting authority from dividing some lots in terms of quantity and others in terms of subject matter/characteristics, or dividing the procurement in accordance with different subsequent project phases." (p. 500)

226. In this case, the Minister/OGP chose to divide the lots by reference to different public bodies according to what they spent on interpretation services under the previous framework. In my view, it was entitled to structure the lots on that basis given the extent of the discretion and the flexibility permitted by Article 46(1) when read with Recital (78).

 

(f) Article 37 of 2014 Directive

227. Word Perfect also relied on Article 37 of the 2014 Directive in support of its contention that the lots decision was invalid. As noted earlier, Article 37 deals with centralised purchasing activities and central purchasing bodies. The judge dealt with what he understood to be Word Perfect's argument in reliance on that provision at paras. 189 to 192 of his judgment. The judge understood the argument to be that the lots decision breached Article 37 in circumstances where it is not expressly provided that the power to divide a procurement into lots in Article 46 applies to procurement by a central purchasing body. The judge rejected that argument. However, Word Perfect submitted on the appeal that the judge had misunderstood the argument it was making by reference to Article 37.
228. As explained in its written or oral submissions on the appeal, Word Perfect's reliance on Article 37 and what it claimed to be the unresolved tension between that provision and Article 46 was focused on the admonition contained in Recital (59) that the "aggregation and centralisation of purchases" by central purchasing bodies or contacting authorities should be "carefully monitored" in order "to avoid excessive concentration of purchasing power and collusion, and to preserve transparency and competition, as well as market access opportunities for SMEs". The argument advanced by Word Perfect, on the appeal at least, was that four separate contemplated contracts were aggregated together under Article 37 and then relabelled as lots, thereby giving rise to the risk referred to in Recital (59).
229. The Respondent did not understand that argument to be a separate and independent ground for challenging the lots decision. Nor do I. I do not believe that Article 37, read on its own or with Recital (59), precluded the making of the 'lots decision'. I do agree with Word Perfect that particular features of the RFT, such as the 'one lot rule', would have to be carefully monitored to address the various concerns around competition and market access opportunities for SMEs. I note again here that Word Perfect's expert, Mr. Massey, did not object to the 'lots decision' itself on competition grounds, but to the 'one lot rule'. I am satisfied that Article 37 did not preclude the making of the 'lots decision' by the Minister/OGP.
230. Nor, for completeness, did Article 33 (which concerns framework agreements). Article 46 applies to framework agreements, as it does to other types of public contracts. There is nothing in Article 33 or Article 46 to suggest otherwise. Previous framework agreements (such as the 2015 Framework) also provided for the award of contracts on the basis of lots. Paragraph 32 of the Guidelines expressly stated that framework agreements could be divided into lots and that that could be "an effective way of opening up opportunities to SMEs". The 'lots decision' was, therefore, consistent with the Guidelines (and with the Circular).
231. I am satisfied, therefore, the judge's conclusion that the 'lots decision' was not unlawful was correct.

 

(4) The 'one lot rule'

(a) Approach to determination of the issue

232. Since I have agreed with the judge's conclusion that the lots decision is not unlawful, it is now necessary to proceed to consider whether the judge was correct in his conclusion that the other impugned aspect of the RFT, namely, the 'one lot rule', was similarly not unlawful.
233. As is clear from the judgment under appeal and from the extensive submissions advanced by the parties on this part of the appeal, Word Perfect challenged the 'one lot rule' on several different grounds. Those grounds were comprehensively addressed and rejected by the judge. I agree with the judge's ultimate conclusion that the 'one lot rule' is not unlawful, although I differ in some respects from the reasoning provided by the judge for some of his conclusions.
234. The Respondent relied on Article 46(2) as the legal basis for the decision by the Minister/OGP to include the one lot rule in the RFT for the 2020 Framework. It will, therefore, be necessary to consider the proper interpretation of Article 46(2) and the relevant recital, Recital (79), in order to determine whether the judge was correct in concluding that Article 46(2) provided a proper lawful basis for the decision to incorporate the one lot rule in the RFT. I agree with the parties that a conclusion that Article 46(2) provided a proper legal basis for the decision is not the end of the matter. It would still be necessary to consider whether the decision breached any of the general principles (including the general procurement principles in Article 18(1) of the 2014 Directive) or any of the provisions of the Treaties or of the Charter relied on by Word Perfect. While the judge rejected most of the grounds of challenge advanced by Word Perfect to the 'lots decision' on the basis that that decision was expressly provided for in Article 46(2), he did nonetheless consider in detail all of the other complaints and grounds of challenge advanced by Word Perfect, including its claims that the one lot rule breached the general principles, the Treaties and the Charter.
235. At various points in his judgment, the judge stated that as the decision to adopt the 'one lot rule' was expressly provided for in Article 46, in order for Word Perfect to succeed on a number of the arguments it was advancing, it would have to have made the case that Article 46 itself was invalid (see, for example, para. 126 of the High Court judgment). I do not agree. The Respondent did not advance that argument in the appeal. It was open to Word Perfect to challenge the impugned decision as to contracts on the grounds of alleged breaches of EU law without necessarily having to challenge the validity of Article 46 itself.

 

(b) Background to Article 46(2) and Recital (79)

236. Before considering the proper interpretation of Article 46(2) and Recital (79), it is appropriate to set out some background context to those provisions. I do so by reference to the views of a number of the well-known academic commentators on the 2014 Directive. I referred earlier to the views of Caranta and Sanchez-Graells in their 2016 text on the 2014 Directive when considering the proper interpretation of Article 46(1) and Recital (78). Their views on Article 46(2) are also relevant to the lawfulness of the 'one lot rule'. Having noted (at para. 46.03) that the division of a procurement into lots "increases competition for the contract and competition in general terms outside of the specific procurement" as more operators can submit competitive tenders or, if the contracting authority limits the number of lots that can be awarded to a single operator, several suppliers will be awarded a contract, the authors went on to consider the provisions of Article 46(2) in some detail. While their observations must of course be read in context, the authors noted that under Article 46(2), "a tenderer may bid for all lots, but it may not be awarded more than a certain number of lots". They state that: "in this way, the contracting authority can seek to maximise competition for each lot, and at the same time cap the number of awards per tender". (para. 46.16, p. 503)
237. Further on, having referred to the formal requirements in Article 46(2) to ensure transparency in the process, the authors note that a contracting authority "must have market knowledge prior to the publication of the procurement notice to anticipate the possibility of several tenderers and therefore trigger the positive effects of lot decision for procurement competition" (para. 46.18 at p. 503). The authors further stated that limiting the number of lots that can be awarded to a particular tenderer, even where that tenderer may have submitted the most economically advantageous tender for more of the lots than it can be awarded:

"...is in a way counter-intuitive, as the provision's goal is to limit contract awards to the tenderer who has the best tender for multiple lots - and thus award contract(s) to an economically less efficient tenderer" (para 46.18, p. 503).

238. The authors averred that the provision to limit the number of lots that could be awarded to the same tenderer is a discretionary one. These views reflect the views previously expressed by Prof. Sanchez-Graells (cited previously) where, in considering the economic theory behind Article 46, he stated:

"...contracting authorities should be able to restrict the maximum number of lots that a single tenderer can be awarded - if awarding the entire contract to a single contractor can generate a negative impact on competition; and particularly when ensuring that one or more lots are available for non-incumbent contractors is relevant to preventing distortions of competition in future contracts and/or in the market concerned". (p. 351)

239. The author continued:

"[Article 46(2) of the 2014 Directive] allows for restrictions on the number of lots that can be awarded to the same tenderer, establishing that even where tenderers may be submitted for several or all lots, contracting authorities may limit the number of lots that may be awarded to one tenderer. In that case, the Directive sets up a double requirement of transparency to avoid distortions in the award decision-making, establishing that such awarding constraint will be applicable provided that the maximum number of lots per tenderer is stated in the contract notice or in the invitation to confirm interest, and as long as the procurement documents disclose the objective and non-discriminatory criteria or rules the contracting authority will apply for determining which lots will be awarded where the application of the award criteria would result in one tenderer being awarded more lots than the maximum number. All these rules remain, however, discretionary. Hence, it is still necessary to rely on the principle of competition and its requirements in order to inform their implementation." (p. 351)

240. The author then stated:

"The general criterion, in my view, should then be that in the exercise of this discretion as regards the division or aggregation of requirements, the fixing of the number of lots tendered...contracting authorities must ensure that competition in the market is not distorted and, where possible and feasible, promote competition for the contract - particularly by avoiding the configuration of contracts which result in potentially interested competitors being excluded." (p. 351)

241. He commented that as a "default rule, division into a large number of lots will be preferable to a division into an insufficient number of exceedingly big lots...". He then stated:

"as a preliminary conclusion,... despite the discretionary terms of Article 46 of Directive 2014/24 and on the basis of the final goal of maximising competition, contracting authorities should resort to division of contracts into lots whenever it is not unfeasible technically or economically, and should set rules that ensure that, while still giving tenderers the largest possible flexibility to submit package and conditional bids, competition is not to be distorted by undue contract division or aggregation." (p. 352)

242. Prof. Arrowsmith observed, with respect of the power to limit the number of lots that may be awarded to a particular tenderer under Article 46(2), as follows:

"Contracting authorities might sometimes wish to divide the procurement into lots and to limit the number of lots that may be awarded to a specific tenderer, even though the best tenderer for the lots in question has the capabilities and resources to deliver all those lots. This may be considered desirable, for example, to assist SMEs (who might not be able to take on the whole procurement), to provide security of supply for the particular requirement, or to preserve competition for future contracts." (Arrowsmith Vol. 1, para. 12–149, p. 1299).

243. Commenting further on the power to limit the number of lots that may be awarded to any one tenderer, Prof. Arrowsmith commented that a procuring entity may wish to exclude an operator from consideration for certain lots of a procurement because other lots have been awarded to that operator for a reason unrelated to the performance of the lot in question. She observed that that might be the case because the procuring entity wished to support SMEs in obtaining work in a procurement process, which she noted is an objective which the 2014 Directive seeks to support. She referred to another reason why a procuring entity might wish to divide a contract into lots, namely, "to preserve competition in the market, either for future public contracts or more generally" (Arrowsmith Vol. 2, para. 20–124, p. 782).  
244. Prof. Arrowsmith noted that both of those reasons would involve the use of public procurement "to promote industrial development policy going beyond the contract being awarded". She observed that "such action may amount to excluding firms from particular lots even though they are qualified and submit the most economically advantageous tender for the lot in question" and commented that explicit provision allowing this is provided for in the 2014 Directive (Article 46) (Arrowsmith Vol. 2 para. 20–125, pp. 782–783).
245. A similar view was expressed by Prof. Trybus where he observed (Trybus at p. 335) that while Article 46(2) permits bids or tenders to be submitted for several lots, "that does not necessarily mean that the contracting authority must be obliged to award several or all lots to one bidder if he or she submitted the economically most advantageous bid for all relevant lots". He referred to this as being a situation where "the winner does not take all". He continued (at p. 337):

"The Directive allows leaving all decisions regarding lot bundling and limitation to the contracting authorities. Again, this is considered a wise approach since only the earlier are close enough to the market to make these decisions. It would thus be difficult to subject them to abstract rules in national procurement laws, although the Directive allows that as well. France, Germany, Ireland, Austria and the UK left bundling and limitation decisions to the contracting authorities. According to Sanchez-Graells, Article 46 largely reflects economic theory regarding lot bundling, by allowing: (1) multiple bidding, and (2) restrictions on the number of lots to be awarded to the same bidder. The limitation of the number of lots an economic operator can bid for is possible but not required under the Directive, however, is more problematic as competition is compromised because larger bidders are prevented to use their advantages." (p. 337)

246. Among the principles that can be derived from these commentaries are: (i) the decision to limit the number of lots that can be awarded to any one tenderer is a discretionary decision for a contracting authority under Article 46(2), (ii) a decision to provide for such a limit or cap may mean that a tenderer who has submitted a MEAT for more than the number of lots than can be awarded to it, will not be awarded the lot in respect of a tender for which it has submitted the MEAT; (iii) a decision to impose a limit or cap on the number of lots that can be awarded to any one tenderer may compromise or promote or preserve competition and (iv) a decision to impose such a limit or cap may be made (a) to support SMEs in obtaining work in a procurement process and (b) to preserve competition in the relevant market for future public contracts or more generally. To those principles, I would add another. Save for where a breach of one or more of the general principles is established by a party challenging a discretionary decision of a contracting authority which involves an appreciation of facts and of the relevant market, such party must establish a "manifest error", and a significant margin of discretion is afforded to the contracting authority: see SIAC and other cases referred to below.

 

(c) Interpretation and application of Article 46(2) of 2014 Directive and Recital (79)

247. As a matter of interpretation of Article 46(2), there is no doubt that the Minister/OGP had discretion to limit the number of lots that could be awarded to any one tenderer even where (as provided for in the RFT) tenders could be submitted for all of the lots. That is clear from the words, context and general scheme of Article 46(2) when read with Recital (78) and, particularly, Recital (79).  
248. The position was clearly stated in the RFT. It was not suggested by Word Perfect that any of the formal requirements in Article 46(2), the purpose of which are to ensure compliance with the general principle of transparency, were not complied with in the case of the RFT. The Minister/OGP did indicate in the RFT that tenders could be submitted for any (or all) of the four lots (para. 1.3.1). The RFT made clear that while they could tender for all lots, they would be limited to being awarded one lot. When tendering for more than one lot, they were informed that they had to confirm their lot preference ranking for each lot for which they had tendered. They were further informed that where a tenderer was identified as the most economically advantageous tenderer in more than one lot, and that tenderer had clearly set out its preference ranking, then the tenderer would be awarded a lot in accordance with its lots preference ranking only. The other lot (or lots) in respect of which it had been identified as the most economically advantageous tenderer would be awarded to the next such tenderer. The RFT provided that where a tenderer was identified as the most economically advantageous for more than one lot but failed or declined to provide a preference ranking, the Minister/OGP could, in its absolute discretion, decide which lot would be awarded to the tenderer.
249. The formal requirements in Article 46(2) were complied with in the case of the RFT. However, that is not the end of the matter in terms of the lawfulness of the 'one lot rule'. Before turning to the other matters to be considered, I should also note the relevant provisions of Recital (79) (quoted in full earlier). That recital provides that where contracts are divided into lots, contracting authorities are permitted to limit the number of lots for which an operator may submit a tender and limit the number of lots that could be awarded to any one tenderer. That power is set out in Article 46(2). Examples of the circumstances in which contracting authorities may do so are identified in Recital (79) as being "in order to preserve competition or to ensure reliability of supply". These are just examples as those words are prefaced in the recital by the words "for instance". It will be recalled from the extracts from the academic commentators just referred to that where the recital refers to the preservation of competition, that includes the preservation of competition in the future. That would, in my view, clearly cover the preservation of competition on the expiry of the 2020 Framework. While Word Perfect argued that Recital (79) required an imminent or immediate risk to competition or the reliability of supply, I do not believe that that argument is supported by the words of Recital (79), by the context or objectives of the 2014 Directive as I have previously outlined them, or by the academic commentators to which I have referred. The terms of Recital (79) are, in my view, wide enough in scope to cover the imposition of a limit on the number of lots that can be awarded to a tenderer to preserve competition and to ensure that competition exists on the expiry of the 2020 Framework. Since Recital (79) is providing examples of when a limit on the number of tenders that can be awarded to a tenderer can be imposed, having regard to the fact that to one of the fundamental objectives of lot division under Article 46, and under the 2014 Directive as a whole, is to facilitate greater participation of SMEs, reliance on that objective as a basis to impose a limit would, in my view, also be permissible under and be consistent with Article 46(2) and Recital (79), which makes express reference to that objective in the second paragraph.

 

(d) Principles governing exercise of discretion under Article 46(2)

250. Having concluded that Article 46(2) conferred a discretion on the Minister/OGP to limit the number of lots that could be awarded to one tenderer, it is necessary to proceed to consider other factors relevant to the exercise of that discretion in order to determine whether the judge correctly decided that the adoption of the one lot rule was not unlawful. Word Perfect contended, the Respondent accepted and I agree that (i) Article 46 must be interpreted in a manner that is compatible with the general principles: Tridimas at para. 1.7.1; (ii) the exercise by the Minister/OGP of the discretion under Article 46(2) to adopt the one lot rule is not immune from review by the court, for example, Marina del Mediterraneo; and (iii) the exercise by the Minister/OGP of that discretion must comply with the general principles, the Treaties and the Charter: Wachauf and Baumbast. The judge did consider all of these matters and did review the impugned decision of the Minister/OGP to adopt the 'one lot rule' by reference to these principles and provisions. 

(e) Relevance of the general principles and "manifest error" test

251. The general principles of EU law which featured most prominently in Word Perfect's challenge were the principles of equal treatment, proportionality and competition (to the extent that the principle of competition is a general principle of EU law, which I accept for the purposes of this appeal). The principles of equal treatment and proportionality are, along with other general principles, referred to in the context of public procurement in Recital (1) of the 2014 Directive. That recital also refers to the objective that public procurement, be "opened up to competition".  
252. In Case C-63/18 Vitali SpA ECLI:EU:C:2019:787, the CJEU observed that the 2014 Directive:

"...as is apparent, in essence, from Recital (1), seeks to ensure compliance, in the award of public contracts, with, inter alia, the free movement of goods, freedom of establishment and freedom to provide services, as well as with the principles deriving therefrom, in particular, equal treatment, non-discrimination, proportionality and transparency, and to ensure that public procurement is opened up to competition." (para. 23)

253. Particular principles applicable to procurement are referred to in Article 18(1). Those principles are equal treatment, transparency and proportionality. In addition, there is a specific reference to competition in a particular context where the second paragraph of Article 18(1) precludes the design of a procurement being made with the intention of excluding the procurement from the scope of the 2014 Directive or of "artificially narrowing competition". That paragraph then states that competition "shall be considered to be artificially narrowed where the design of the procurement is made with the intention of unduly favouring or disadvantaging certain economic operators". Various aspects of that part of Article 18(1) require separate consideration including the nature of the intention which must be established in order for competition to be considered to be artificially narrowed. 
254. The case law of the CJEU demonstrates that consideration often has to be given to a number of the general principles in the context of a particular procurement challenge: see, for example, Fabricom (paras. 26 - 27), Vitali (paras. 23 and 27) and Tim (para. 45). The principles often go hand in hand. Article 18(1) was also considered by the CJEU in Vitali, Tim and more recently by that court in Case C-737/22 Staten og Kommunernes Indkobsservice A/S v. BibMedia A/S. In that more recent case, the CJEU stated that the objective of the principle of equal treatment as set out in Article 18(1):

"[i]s to encourage the development of healthy and effective competition between undertakings taking part in a public procurement procedure and lies at the very heart of the EU rules on public procurement procedures. In accordance with that principle, tenderers must be on an equal footing both when they formulate their tenders and when those tenders are being assessed by the contracting authority..." (para. 30)

255. In the judgment of the High Court which is concerned in the appeal, the judge concluded that the burden of proof to demonstrate that the exercise by the Minister/OGP to adopt the one lot rule was in breach of any of the relevant general principles or of Article 18(1) or of the Treaties was on Word Perfect (at times he said that the burden was on Mr. Massey or on Mr. Massey and Word Perfect and this is the issue I address below). The judge concluded that Word Perfect had failed to discharge the burden of establishing that the decision breached any of the general principles or any of the other provisions relied on. I agree with the judge's conclusion. However, his conclusion with respect to the principle of competition and the consequences of his conclusion that the one lot rule distorted competition (at para. 122 of the judgment) and was a "clearly anti-competitive" measure (at para. 132), albeit one permitted by Article 46, does require some further consideration below. 
256. Perhaps the most significant judgment in this jurisdiction on the significance and application of the general principles is SIAC, which was understandably relied on by both parties in the appeal. The Supreme Court judgment of Fennelly J. (delivered on 9^th May 2002, Record Number 329/97) is also highly relevant to the test to be applied when reviewing a decision taken by a national contracting authority in the public procurement context as well as, by inference, being of significance to that Court's indication of where the burden of proof lies when breaches of the general principles are alleged.
257. In referring to the judgment of the CJEU on the earlier reference from the Supreme Court in Case C–19/2000 SIAC v. Mayo County Council [2001] ECR I-07725, Fennelly J. observed, with particular reference to the general principle of equal treatment, that: "the principle of equal treatment of tenderers lies, as the European Court has said, at the heart of the Directive" (per Fennelly J at p.169).
258. Having referred to the development of the case law of the European courts in terms of the standard of review of a decision of a contracting authority required by European law, Fennelly J. confirmed that the test was that of "manifest error" in the sense that a decision of the contracting authority involving the appreciation of facts by the relevant decision-maker will be annulled only if a "manifest error" is demonstrated (see per Fennelly J. at p.175). Fennelly J. further observed that the word "manifest" was not to be "equated with any exaggerated description of obviousness" and that the Community courts are prepared to annul decisions where "an error has clearly been made" (per Fennelly J. at p. 176). He added that in the public procurement area, the "decisive additional consideration" is "explicit concession of a wide margin of discretion to awarding authorities". (p. 176)
259. Drawing together the significance of compliance with the general principles, the test applicable to a review of decisions of contracting authorities in the procurement area and, by inference at least, to where the burden of proof lies in such a challenge, Fennelly J. then stated:

"The courts must be ready, in general, to render effective the general principles of the public procurement, already discussed. Where a failure to respect the principles of equality, transparency or objectivity is clearly made out, there is, of course, no question of permitting a margin of discretion." (p. 176)

260. Fennelly J. then stated:

"... the courts, while recognising that awarding authorities have a wide margin of discretion, must recognise that this cannot be unlimited. The courts must exercise their function of judicial review so as to make the principles of the public procurement directives effective. In the case of clearly established error, they must exercise their powers." (p. 176).

261. The Supreme Court in SIAC therefore made clear: (i) the significance of the general principles of EU law, (ii) the test to be applied when seeking to annul a decision of a contracting authority in the area of public procurement where the decision involved an appreciation of facts, namely, "manifest error" and existence of a "wide margin of discretion" (further considered by O'Donnell J. in the Supreme Court in Word Perfect Translation Services v. Minister for Public Expenditure and Reform [2019] IESC 38 (at paras. 36 - 40); (iii) where there is a failure to comply with the general principles, there is no question of permitting a margin of discretion (see also in this context also Baxter per Peart J. at paras. 34 and 39, Somague (per Baker J. at paras. 16 and 37) and Transcore (per Barniville J. at paras. 176 - 187); and (iv) a failure to comply with the general principles must be "clearly made out" and the alleged error must be "clearly established", (per Fennelly J. at p. 176) strongly suggesting, therefore, that the burden of proof lies on the party alleging the breach or the error.
262. Word Perfect is, therefore, correct in contending that where a breach of the general principles has been established, there can be no question of a margin of discretion or a margin of appreciation which could protect or insulate the decision of the Minister/OGP to incorporate the 'one lot rule' into the RFT from successful challenge. Correctly, the Respondent did not dispute that contention on the appeal. The authorities to which I have just referred clearly establish that there can be no question of a margin of discretion or a need to establish manifest error where a breach of the general principles has been established, although it is quite possible that in any particular case that a successful challenge will involve both the establishment of manifest error and, separately and independently, the establishment of a breach of the general principles. Contrary to a submission advanced by Word Perfect on the appeal, I do not believe that McDermott J. in Copymoore (No. 2) was saying more than that. As noted earlier, Word Perfect submitted that McDermott J. had suggested in his judgment in that case that a pre-condition to the establishment of a breach of the general principles was the establishment of a "manifest error". I do not believe that that is what McDermott J. actually said. The relevant passage is in para. 102 of his judgment in that case (at pp. 56–57) There, McDermott J. said:

"I am satisfied that the test of 'manifest error' applies in this case to the formulation of the criteria set out in the Request for Tenders. It is, like the actual tendering process itself which will follow in respect of contracts under the framework agreement, subject to the same principles of proportionality and non-discrimination applicable in the area of public procurement. The protection of these principles in respect of the Request for Tenders which has been issued as part of the procurement process also falls to be protected under a remedy which is derived from and sought under the Directive and O.84A. I am satisfied at the same standard of judicial review applies in this case in respect of the domestic application of the principles established by Directive 2004/18/EC and the Regulations made there under. As Fennelly J. noted [in SIAC]...the courts must be ready to render effective the general principles of public procurement and to grant a remedy when there is a 'manifest error' which gives rise to a failure to respect the principles of equality, transparency or objectivity. Though there is a margin of appreciation vested in the decision-makers within the procurement framework of law, it is not unlimited and the courts will act to ensure that the principles underlying the Directive are rendered effective."

263. Reading his comments in context, I do not believe that McDermott J. was in fact saying that in order to establish a breach of the general principles that it is necessary to establish "manifest error". If I am wrong about that and if that is what Dermott J. was saying, it would be incorrect, in light of the clear line of authority to which I have just referred. To be absolutely clear, therefore, the position is that it is not necessary to establish "manifest error" in order to establish a breach of the general principles and there is no margin of appreciation or margin of discretion when assessing whether a breach of the general principles has taken place.

 

(f) Burden of Proof

264. The judge decided that the burden of proof of establishing the breaches of the general principles and other EU provisions relied on rested on Word Perfect. I am satisfied that the judge was correct in so deciding. The judge referred to and applied the general principle applicable in civil proceedings, namely, that the party who asserts must prove and cited the dictum of Hogan J. in the High Court in Wicklow County Council v. Fortune [2012] IEHC 406 at para. 19 in support. It is well established, as a matter of general principle, that the legal burden lies on the party who asserts the cause of action to prove the facts necessary to establish the cause of action relied upon in accordance with the relevant standard of proof (in this, and most if not all cases cited, the balance of probabilities) (see, for example, McGrath on "Evidence" (2^nd Ed.) (2014) at paras. 2–119 - 2–121, p. 64).  
265. In the procurement area, that is the approach which was taken by McDermott J. in Copymoore (No. 2) where he held that the applicants failed to discharge the burden of establishing that there was a manifest error or a breach of the general principles of equal treatment or proportionality or a breach of any principle of competition. In relation to the competition claims advanced in that case, the judge held that the applicants failed to establish on the balance of probabilities that the relevant framework agreement prevented, restricted or distorted competition in the manner alleged. As I have just indicated, it would be impossible to read the judgment of Fennelly J. in the Supreme Court in SIAC in any way other than as accepting that the burden of proving or establishing a breach of the general principles, or a "manifest error", lay on the party who so alleged and that the breach of the general principles must be "clearly made out" and the alleged error "clearly established".
266. I am satisfied that the judge correctly decided that the burden lay on Word Perfect to establish the breaches relied on including the alleged breaches of the principles of equal treatment, proportionality and competition. With respect to Word Perfect's contention that insofar as the breach of competition is concerned, the judge ought to have concluded that the burden of proof shifted to the Respondent, I do not agree. The basis on which Word Perfect advanced that contention was that the judge found that the 'one lot rule' gave rise to a distortion of competition in the market for interpretation services (at para. 122) and amounted to a measure which was "clearly anti-competitive" (at para. 132). However, the judge made very clear that Article 46 expressly permitted the Minister/OGP to limit the number or cap the number of lots that could be awarded to a tenderer and that in adopting the 'one lot rule' it was doing precisely what was envisaged by Article 46. The judge's conclusion was that there was no unlawful distortion of competition or anti-competitive effects but, rather, pro-competitive effects of the rule, both in terms of facilitating greater access to SMEs and the preservation of competition at the end of the 2020 Framework. I agree with the judge. His conclusion as to distortion and anti-competitive effect must be considered in the context of Article 46 and what is permitted under that article. The judge did not decide that there was a prima facie breach of the general principle of competition relied on by Word Perfect so as to give rise to any shifting of the burden of proof to the Respondent. In my view, the judge decided correctly and proceeded throughout on the basis that the burden of proof remained on Word Perfect to establish the breaches of the general principles and other EU provisions which it relied upon.
267. I also agree with the judge's treatment of the judgment of the CJEU in Deutsche Parkinson. As submitted by the Respondent, and as held by the judge, in that case there was a prima facie restriction on the rule requiring the free movement of goods under Article 34 TFEU which, in order to be lawful, had to be justified as an exception to the general rule on one of the grounds set out in Article 36 TFEU. The CJEU decided that the German legislation at issue did constitute a measure having equivalent effect to a quantitative restriction on imports within the meaning of Article 34 TFEU. It then had to consider the potential application of one of the exceptions in Article 36 TFEU. The German government (and others) contended that the national measure at issue was justified in order to ensure a safe and high-quality supply of medicinal products in Germany. The CJEU held that although that objective could, in principle, come within Article 36 TFEU, the impugned measure which was capable of restricting the free movement of goods, a fundamental freedom guaranteed by the TFEU, could be properly justified only if it was appropriate for securing the attainment of the objective relied on and did not go beyond what was necessary to attain it. In other words, it had to be appropriate and proportionate. While not expressly referring to the shifting of the burden of proof, the CJEU held that it was a matter for the relevant national authorities to provide the necessary evidence to demonstrate appropriateness and proportionality. It held that the reasons which might be invoked by a Member State by way of justification of a measure such as that at issue had to be accompanied by "an analysis of the appropriateness and proportionality of the measure adopted by that State, and by specific evidence substantiating its arguments..." (para. 36). The CJEU then stated:

"It follows that, where a national court examines national legislation in the light of the justification relating to protection of the health and life of humans under Article 36 TFEU, that court must examine objectively, through statistical or ad hoc data or by other means, whether it may reasonably be concluded from the evidence submitted by the Member State concerned that the means chosen are appropriate for the attainment of the objectives pursued and whether it is possible to attain those objectives by measures that are less restrictive of the free movement of goods..." (para. 36)

268. In the case, therefore, the CJEU held that in a case where there was a breach of Article 34 TFEU and where reliance was sought to be placed by the relevant Member State on one of the justifications contained an Article 36 TFEU, it was for the Member State to put forward evidence in support of the justification to be examined objectively by the court in order to determine whether reliance on some justification was appropriate and proportionate.
269. I agree with the judge and the Respondent that that is a completely different situation legally and factually to the issues arising in relation to the 'one lot rule' in the RFT and the judge was correct in concluding that the approach taken by the CJEU in Deutsche Parkinson was not appropriate or applicable in this case. The Minister/OGP was expressly permitted on the basis of Article 46 of the 2014 Directive to limit the number of lots that could be awarded to any one tenderer. That was not the case in relation to Article 34 TFEU which prohibits a restriction on the free movement of goods which can only be permitted if justified on one of the grounds set out in Article 36 TFEU. I am satisfied, therefore, that the judge was correct in distinguishing Deutsche Parkinson and in concluding that a similar approach was not required to be taken in this case.
270. As I explain below, I am satisfied that the judge was entitled to hold that Word Perfect had not discharged the burden of proof as regards the case it was making in relation to the impugned aspects of the RFT on the basis that he was not satisfied that the evidence put forward by Word Perfect (including that of Mr. Massey) should be preferred over the evidence put forward in response by the Respondent (including that of Dr. Hannigan). I should also say, however, that I do not believe that the judge could have been criticised if he had rejected the evidence put forward by Word Perfect in relation to the 'one lot rule' and preferred and accepted the evidence put forward by the Respondent. He did not go so far as to do that, and it was not necessary for him to do so once he was satisfied that Word Perfect, on whom the burden lay, had not discharged that burden. It was open to the judge to adopt that approach: see, for example, Quinn (A Minor) v. Midwestern Health Board [2005] 4 IR 1, per Kearns J. at paras. 57–59, pp. 21–22 (discussed further below).

(g) Equal Treatment

271. I now turn to consider Word Perfect's contention that the High Court judge was wrong in failing to conclude that there was a breach of the general principle of equality by the incorporation of the one lot rule in the RFT. As Fennelly J. observed in SIAC, the CJEU has repeatedly held that the principle of equal treatment of tenderers lies "at the heart of" the public procurement directives and requires equal access for tenderers to public contracts. It is expressly referred to as one of the general principles of EU law in Recital (1) of the 2014 Directive and is also referred to as a particular principle applicable to public procurement in Article (1). The CJEU has held that the application of the principle of equal treatment to public procurement procedures "does not constitute an end in itself, but must be viewed in the light of the aims that it is intended to achieve" (Case C - 336/12 Manova ECLI:EU:C:2013:647 at para. 29). As I have already stated, the aims of the 2014 Directive include facilitating the participation of SMEs in public procurement, and the opening up and preservation of competition. As the CJEU stated in Manova, in order to pursue the objectives of the public procurement rules, the "EU applies, inter alia, the principle of the equal treatment of tenderers and the corollary obligation of transparency" (para. 28). The CJEU in the same case cited with approval its earlier judgment in Fabricom, a case on which Word Perfect relied, and stated:

"It is settled case law that the principle of equal treatment requires that comparable situations must not be treated differently, and that different situations must not be treated in the same way, unless such treatment is objectively justified...".

272. The principle of equal treatment requires contracting authorities to treat operators equally (and that includes tenderers participating in the procurement procedure and potential tenderers). The CJEU held in Case C-27/15 Pizzo ECLI:EU:C:2016:404 that the principle of equal treatment "requires tenderers to be afforded equality of opportunity when formulating their tenders, which therefore implies that the bids of all tenderers must be subject to the same conditions" (para. 36). The principle, therefore, requires that tenderers are given the same opportunities and information in order to ensure competition for the relevant public contract the subject of the tender (see Caranta and Sanchez Graells para. 18.10 at pp. 190 - 191).
273. The judge rejected Word Perfect's claim under this heading, and, in my view, he was correct in doing so. As noted earlier, he gave a number of reasons for his decision. However, in my view, the most fundamental reason for rejecting this claim is that all operators who were interested in tendering for the 2020 Framework were subject to the same rules. They were all subject to the 'one lot rule' which was clearly stated in the RFT. Word Perfect and all of the other potential tenderers were placed on an equal footing and were not subject to different rules. They were subjected to the same rules and Guidelines and given the same opportunities and information.
274. It is not a breach of the principle of equality that an incumbent may suffer loss by the application of the rules designed for a new competition where those rules are applied equally to all potential tenderers. The fact, therefore, that Word Perfect claimed that it would suffer a loss of its business by not being in a position to obtain all of the lots in the procurement for the 2020 Framework is not an indication of any breach of the principle of equality. If it were subject to different rules, such a breach might exist but that is not the situation here. Word Perfect and the other tenderers were "in a position of equality" when formulating their tenders which the CJEU stated in Case C-598/19 Conacee was required by the principle of equal treatment.
275. I do not accept that the rule amounts to Word Perfect (or any other potential tenderer) being penalised for being more competitive than other potential tenderers, or that any other potential tenderers were being treated more favourably than Word Perfect. The objective of the 'one lot rule' was to promote greater participation by SMEs (and not just Word Perfect) and to ensure that at the end of the 2020 Framework that there were more than just one or two operators in the market. Those objectives are entirely consistent with the principles discussed by Caranta and Sanchez-Graells (at p. 351), and Arrowsmith Vol. 1 (para. 12–149, p. 1299) referred to earlier.   
276. The judge's conclusion that there was no breach of the principle of equal treatment in that all potential tenderers were subject to the same rules, including the one lot rule, is also supported by the judgment of the CJEU in another case on which Word Perfect relied, Tim.  In that case, the CJEU held that there was no breach of the principle of equal treatment in the national legislation at issue. It stressed (at para. 47) that "all of the economic operators and subcontractors indicated in those operators' tenders were subject, in the course of the procurement procedure, to a verification process carried out under identical conditions by the contracting authority" and that, as a result, "those operators and subcontractors should be considered to have been treated on an equal footing in that regard during the procurement procedure". The court held that the principle of equal treatment did not preclude the provision of a different rule where the failure to fulfil obligations could not be established until a later stage (something which does not arise here). Just as the operators in Tim were treated as being on an equal footing, so too were the operators in this case in the context of the RFT for the 2020 Framework.
277. In my view, therefore, the judge was correct in holding that there was no breach of the principle of equal treatment. I should add that some of the reasons given by the judge in support of his conclusion went further than was necessary to support the conclusion. Apart from simply pointing out that it would be open to Word Perfect to seek to obtain work outside the 2020 Framework, the fact that it could do so or the extent of the work that might potentially be available outside of the new Framework seems to me to be entirely irrelevant to the issue as to whether there was a breach of the principle of equal treatment. The principal and fundamental reason as to why there was no such breach is that the rules applied to all operators and, insofar as the 'one lot rule' is concerned, the rule was adopted for the legitimate objective of facilitating the greater participation of SMEs in public procurement and ensuring competition existed at the end of the 2020 Framework.

 

(h) General Principle of Competition

278. The High Court judge described distortion of competition as the "key claim" made by Word Perfect in its challenge to the 'one lot rule'. Word Perfect advanced a challenge to that rule on the basis that it breached the principle of competition in public procurement (and Article 18(1) of the 2014 Directive) by distorting competition in a number of different respects. The judge rejected all of Word Perfect's claims under this heading, many on the basis that Word Perfect had failed to discharge the burden of proving its case on the evidence.
279. Before outlining my conclusions on the respective contentions of the parties on Word Perfect's challenge to the 'one lot rule' under this heading, it is appropriate to set out briefly where the principle of competition fits into the EU public procurement regime. The opening up of public procurement to competition is one of the main goals and objectives of the 2014 Directive (as it was in the case of the previous public procurement directives). This objective is specifically mentioned in Recital (1) of the 2014 Directive. It has also been repeatedly mentioned by the CJEU as being one of the objectives which other principles, such as the principles of equal treatment and transparency, are intended to promote and achieve. It is only necessary to refer to a few examples of this. In Fabricom, having referred to the principle of equal treatment, the CJEU stated that that principle was at the "very heart" of the public procurement directive which is stated:

"...are intended, in particular, to promote the development of effective competition in the fields to which they apply and which lay down criteria for the award of contracts which are intended to ensure such competition (Case C-513/99 Concordia Bus Finland [2002] ECR I-7213, para. 81 and the case law cited there)." (para. 26)

280. In Case C-538/07 Assitur [2009] ECR I-04219, having referred to the requirement that compliance with community law of the national legislation at issue in the case ought to be examined in light of the principle of proportionality, the CJEU stated:

"          25. It should be recalled, in this connection, that the Community rules on public procurement were adopted in pursuance of the establishment of the internal market, in which freedom of movement is ensured and restrictions on competition are eliminated (see, to that effect, Case C‑412/04 Commission v Italy [2008] ECR I‑619, paragraph 2).

          26.  In this context of a single internal market and effective competition it is the concern of Community law to ensure the widest possible participation by tenderers in a call for tenders." (paras. 25 and 26)

281. These observations have been made in numerous subsequent cases including Case C-305/08 CoNISMa [2009] I-12129 (para. 37) and Case C-144/17 Lloyds of London v. Agenzia Regionale per la Protezione Dell's Ambient dela Calbria ECLI:EU:C:2018:78 (at paras. 33 and 34). 
282. In CoNISMa, the CJEU held that "one of the primary objectives of Community rules on public procurement is to attain the widest possible opening up to competition...and that it is the concern of Community law to ensure the widest possible participation by tenderers in a call for tenders" (para. 37). The Court then added the following:

"It should be added that the widest possible opening-up to competition is contemplated not only from the point of view of the Community interest in the free movement of goods and services but also the interest of the contracting authority concerned itself, which will thus have greater choice as to the most advantageous tender which is most suitable for the needs of the public authority in question..." (para. 37)

283. The Court then referred to the "spirit of opening up public contracts to the widest possible competition" (para. 38).  The CJEU has made similar observations in other cases including Case C-568/13 Data Medical Service ECLI:EU:C:2014:2466 (at para. 34). 
284. In Vitali, the CJEU expressly referred to the 2014 Directive and described one of its objectives as being "to ensure that public procurement is opened up to competition" (para. 23).  The Court also noted in that case (by reference to settled case law) and by reference to Recital (78) of the 2014 Directive that:

"...it is in the interests of the European Union to ensure, in the field of public procurement, that the opening up of competition in tendering procedures is enhanced. The use of subcontractors, which is likely to facilitate access of small and medium-sized undertakings to public contracts, contributes to the pursuit of that objective (see, to that effect, judgment of 5 April 2017, Borta, C‑298/15 EU:C:2017:266, paragraph 48 and the case-law cited)." (para. 27)

285. A useful summary of the position is found in Sanchez-Graells where, having referred to the recognition of a "strong pro-competition rationale and orientation" in the previous public procurement directives, the author stated:

"Indeed, EU case law has repeatedly held that the Directives are designed to eliminate practices that restrict competition in general and to open up the procurement market concerned to competition - i.e., to ensure free access to public procurement, in particular for undertakings from other Member States. The reasons behind this pro-competitive approach to public procurement are that effective competition is expected firstly to remove barriers that prevent new players from entering the market, secondly to benefit contracting authorities which will be able to choose from among more tenderers and thus, will be more likely to obtain value for money, and finally, to help maintain the integrity of procurement procedures as such." (pp. 198 - 199)

286. It is unnecessary to resolve the debate between a number of academic commentators (such as Prof. Sanchez-Graells and Prof. Arrowsmith) as to whether there is a general principle of competition in the procurement area or whether it is just an important aim or objective of EU public procurement rules. That issue was not the subject of argument before the High Court and was, therefore, not addressed by the judge in his judgment. I am prepared to assume for the purposes of the appeal that such a principle of competition does exist in the procurement field. Support for the existence of such a principle can be found in the case law of the CJEU and in some of the recitals to the 2014 Directive. Competition is also referred to, in a particular context, in Article 18(1) of the Directive. I address the specific issue which arises under Article 18(1) later on in this judgment. I will proceed, however, on the basis that there does exist a general principle of competition, but I agree with the judge's conclusion that Word Perfect did not discharge the burden of proof of establishing that any of the features of the RFT and, in particular, the 'one lot rule', breached the principle.
287. I turn now to consider the various arguments advanced by Word Perfect to challenge the 'one lot rule' as being in breach of the principle of competition. It is important at the outset to state that, in my view, the evidence did clearly establish that the exercise undertaken by the OGP, which informed the design of RFT for the 2020 Framework, revealed that the alleged poor quality of the interpretation services provided under the 2015 Framework was had been raised by public sector bodies and caused the OGP to provide for longer term contracts to be available to successful tenderers under the 2020 Framework. Rather than shorter term 12-month (extendable) contracts which could be awarded under the 2015 Framework, contracts of up to four years (to include extensions) were to be provided for in the 2020 Framework. The evidence disclosed that longer term contracts enabled better and more enduring relationships to be built up between the operator and the public service body and that that would lead to an improvement in the quality of interpretation services provided. Mr. Massey, the expert economist engaged by Word Perfect, agreed that the provision for the longer-term contracts (of up to four years) was a reasonable response to the quality issues which had been raised. It should also be acknowledged that another reason for the proposal of contracts with longer terms under the 2020 Framework, which was apparent from the evidence, was the wish on the part of the Minister/OGP to move away from mini-competitions under which contracts or lots were awarded in order to attempt to address the proliferation of litigation arising under the previous framework. The legitimacy of reliance on that consideration is addressed separately below.
288. The evidence also established that a real concern on behalf of the OGP was that there was a likelihood that one or two operators (including Word Perfect) would obtain all of the contracts under the 2020 Framework (as they had under the 2015 Framework) and that there would, at the expiry of the 2020 Framework, only be one or two operators providing those services in the market (having done so for a total of approximately eight years, being the period covering the 2015 Framework and 2020 Framework). The Minister/OPG's concern was that were that scenario to continue, it would lead to a significant restriction in the market rather than opening up or facilitating competition or the greater participation of SMEs. Therefore, in order to preserve competition, particularly at the end of the 2020 Framework, and to address the reliability of supply in the market for interpretation services to public bodies at that stage, it was necessary to provide for the 'one lot rule'. That approach was supported by Dr. Hannigan's expert evidence but was disputed by Mr. Massey. Mr. Massey's opinion was that the 'one lot rule' was a distortion of competition in a number of respects which were summarised at para. 17 onwards in the Joint Report.
289. Ultimately, as noted earlier, the judge concluded that while the views of both Mr. Massey and Dr. Hannigan were "in many respects plausible", he was not persuaded that Mr. Massey's evidence should be preferred over that of Dr. Hannigan and, therefore, he was not satisfied that Word Perfect had discharged the burden of proof of establishing the unlawful distortion of competition claimed by it, with the support of Mr. Massey's expert evidence. I am satisfied that the judge was entitled to reach that conclusion on the evidence although, as noted already, I do not believe that the judge could have been criticised for preferring Dr. Hannigan's evidence on the basis that the adoption of the 'one lot rule', in fact, served a pro-competition purpose by seeking to ensure greater access for SME operators to the framework and to ensure that at the end of the framework, competition would be preserved rather than restricted. It will be recalled that Dr. Hannigan stated that competition restriction would be the case were the number of lots that could be awarded to a tenderer not limited in the manner provided for in the RFT. It would, in my view, have been open to the judge to have preferred Dr. Hannigan's evidence and to have accepted that having only one or two suppliers in the market at the end of the 2020 Framework would amount to a restriction or distortion of competition and that the 'one lot rule' would address that by maintaining sustainable competition in the market by ensuring that four operators were engaged in the 2020 Framework.
290. The judge would have been perfectly entitled to prefer the evidence of Dr. Hannigan. However, he was certainly entitled to conclude that Word Perfect had not discharged the burden of establishing an unlawful distortion of competition. On the contrary, it seems that the RFT, by promoting greater participation of SMEs in the procurement, was addressing the fact that only two operators provided services under the 2015 Framework. By seeking to promote competition amongst SMEs in the procurement for the 2020 Framework with a view to preserving competition at the expiry of that framework, the Minister/OGP was adopting a pro-competitive approach rather than one that was anti-competitive, designed to ensure greater participation in the procurement, a greater number of service providers under the 2020 Framework and a greater number of operators in the market at the expiry of the framework.
291. I reject the submission by Word Perfect that it was not open to the Minister/OGP to rely on the objective of preserving competition in the market for interpretation services in the future (at the expiry of the 2020 Framework) and of ensuring reliability of future supplies in the market at that stage. Word Perfect argued that these were not legitimate objectives and that they went beyond the permitted scope of procurement as they were not linked to the subject matter of the relevant contracts. There are a number of answers to that argument.
292. First, Recitals (78) and (79) make clear that one of the purposes of dividing a procurement into lots is to enhance competition and one of the options available to a contracting authority where contracts are divided into lots is to limit the number of lots that can be awarded to any one tenderer in order to "preserve competition or to ensure reliability of supply". There is nothing in the 2014 Directive to suggest that the objectives of enhancing or preserving competition or ensuring the reliability of supply is only intended to apply at the time of the tender procedure or when the contract is being awarded. Nor does the Directive provide that provisions designed to achieve these objectives must be linked to the subject matter of the contract.
293. Second, academic commentary on the 2014 Directive provides strong support for the entitlement to take into account the preservation of competition in the future in deciding whether to limit the number of lots that can be awarded to a particular tenderer. Prof. Arrowsmith addressed this issue in both volumes of her leading text. At para. 12–149, she stated,

"Contracting authorities might sometimes wish to divide a procurement into lots and to limit the number of lots that may be awarded for specific tenderer, even though the best tenderer for the lots in question has the capabilities and resources to deliver all those lots. This may be considered desirable, for example, to assist SMEs (who might not be able to take on the whole procurement), to provide security of supply for the particular requirement, or to preserve competition for future contracts..." (Arrowsmith Vol. 1, para. 12–149, p. 1299)

294. Prof. Arrowsmith made the point that apart from limited circumstances in which security of supply may be relevant, it was not possible under the 2004 Directive to limit the number of lots that could be awarded to a particular tenderer for any of those purposes, or at all. However, when referring to the 2014 Directive, and the power in Article 46(2) to limit the number of lots that could be awarded to a single tenderer, Prof. Arrowsmith stated (at para. 12–150):

"Thus under [the 2014 Directive] there appears to be no difficulty in principle in limiting the number of lots to be awarded for the various reasons referred above." (Arrowsmith Vol. 1, para. 12–150 p. 1299).

295. Prof. Arrowsmith returned to the issue in Vol. 2. She considered the scenario where a contracting authority wished to reject an operator from consideration for certain lots in a procurement because other lots have been awarded to that operator "when this is done for a reason unrelated to the performance of the lot in question" (Arrowsmith, Vol. 2, para. 20–124, p. 782). The circumstances in which that might arise include where the contracting authority wishes to support SMEs in winning work in a procurement, one of the objectives of the 2014 Directive. Prof. Arrowsmith continued:

"Another reason for wanting to divide a contract into lots may be to preserve competition in the market, either for future public contracts or more generally." (para.  20–124, p. 782).

296. Similar views were expressed by Prof. Sanchez-Graells, where he noted that dividing contracts into lots might, in most instances, increase competition "not only for the specific public contract but also for future contracts" (Sanchez-Graells, p. 348). Later, Prof. Sanchez-Graells noted that:

"...contracting authorities should be able to restrict the maximum number of lots that a single tenderer can be awarded - if awarding the entire contract to a single contractor can generate a negative impact on competition; and particularly when ensuring that one or more lots are available for non-incumbent contractors is relevant to preventing to distortions of competition in future contracts and/or in the market concerned..." (Sanchez-Graells at p. 351).

297. These academic commentators make clear, therefore, that it is a legitimate objective when considering whether to limit the number of lots that can be awarded to a single tenderer to seek to preserve competition for future public contracts in the relevant market and that provision for a limit to be imposed on the number of lots that can be awarded to a tenderer can be included in the rules for a procurement, even where that is done for reasons unrelated to the performance of the particular contract or lot in question.
298. Third, there is no requirement in Article 46 of the 2014 Directive for the 'one lot rule' and its objectives to be "linked to the subject matter of the contract" the subject of the procurement. There is an express requirement for such linking in Article 67 and in a number of other articles of the 2014 Directive. However, there is no such linkage requirement in Article 46. As observed earlier, it is understandable that such requirement is contained in Article 67, which sets out the provisions in respect of contract award criteria and requires that such criteria must be "linked to the subject matter of the public contract in question" (Article 67(2) and (3)). I agree with the Respondent that the absence of an express requirement for such linkage in Article 46 is telling. The absence of such an express requirement, combined with the clear academic authority to the effect that a procurement competition may include a provision unrelated to the particular contract being tendered for, has persuaded me that this aspect of Word Perfect's challenge to the 'one lot rule' must also fail.
299. I also reject Word Perfect's submission that the judge ought to have found that the 'one lot rule' amounted to an unlawful segmentation of the market for public interpretation services and, effectively, a full-scale market regulation by the Minister/OGP which was so distortive of competition as to give rise to a breach of the general principle of competition. The judge addressed and correctly rejected that submission. He held that rather than segmenting the market or engaging in full-scale market regulation, the Minister/OGP was doing precisely what Article 46 of the 2014 Directive provides that it can do and that the RFT was designed to achieve a number of the objectives of the 2014 Directive, including, the promotion of greater participation in public procurement by SMEs and the preservation of competition at the end of the 2020 Framework. The position is that the Minister/OGP had the power to impose a limit on the number of lots that could be awarded to any one tenderer. It exercised that power by determining that the 'one lot rule' should be included. It did so in pursuit of legitimate objectives under the 2014 Directive.
300. In my view, the assertion by Word Perfect that the 'one lot rule', if contained in an agreement between undertakings or in the situation where an undertaking was in a dominant position, would amount to a hardcore restriction of competition, is misplaced. The judge correctly held that the OGP is not an undertaking. Nor are the public bodies which would, in turn, be entering into contracts with the successful tenderers under the 2020 Framework: see, for example, the judgment of the CJEU in FENIN (at para. 37) and Copymoore (No. 2) (per McDermott J. at para. 173, p. 92). I do not agree, therefore, that by adopting the 'one lot rule', the Minister/OGP was engaging in a full-scale regulation of the market or unlawfully seeking to segment the market. It was doing precisely what Article 46 entitled it to do. I reject Word Perfect's challenge to the 'one lot rule' on this ground.
301. One of the main objections of Word Perfect and of Mr. Massey to the 'one lot rule' on competition grounds was that the rule would mean that if a tenderer submitted the MEAT for more than one lot, it would only be awarded one lot and the other lots for which it had submitted the MEAT would be awarded to other tenderers who had not submitted the MEAT.  Mr. Massey's view was that that amounted to a prevention, restriction or distortion of competition.  He felt that there would have to be a larger number of tenderers (20 - 30 tenderers) than would likely be the case in order to reduce the risk of such an outcome to a low level. He further stated that the award of lots to non-MEAT tenderers would prevent public service bodies obtaining value for money. Dr. Hannigan disagreed and supported the approach taken by the Minister/OGP, as did the High Court judge. I agree with the judge's conclusion that no breach of the principle of competition or distortion of competition arises from the fact that the operation of the 'one lot rule' would mean that not every lot would be awarded to the tenderer who submits the MEAT (for more than one lot). I agree also that the operation of the rule in this manner does not otherwise render the 'one lot rule' unlawful. I am satisfied that the judge was correct in his conclusion for a number of reasons.
302. First, this outcome is something which is envisaged by Article 46(1) and (2) and Recital (79). It is, as the Respondent submitted at the hearing, "baked in" or "hardwired" into the architecture of those provisions which permit a limit to be imposed on the number of lots that may be awarded to one tenderer. That can mean that the contracting authority may limit the number of lots that might be awarded to a tenderer even though the tenderer may have submitted the best tender and may have the capacity and resources to perform the work required under all of the lots, or may have submitted the MEAT.
303. Second, this precise outcome is expressly recognised by many of the leading academic commentators, including Arrowsmith, Caranta and Sanchez Graells and Trybus. The relevant extracts from their leading texts have been quoted earlier (see paras. 238, 243 and 245 above). For example, Prof. Arrowsmith stated that a contracting authority may limit the number of lots that may be awarded to the best tenderer for a number of lots where that is considered necessary to facilitate greater SME participation in the procurement or to preserve competition for future contracts (Arrowsmith, Vol. 1, para. 12-149, p.1299). She further stated that where it is sought that such a policy be pursued in the procurement, the imposition by the contracting authority of a limit on the number of lots that could be awarded to any one tenderer "may amount to excluding firms from particular lots even though they are qualified and submit the most economically advantageous tender for the lot in question" (Arrowsmith, Vol. 2, para. 20-125, pp. 782 - 783). Further, Article 46(2) expressly permits such an outcome. Similar views were expressed in Caranta and Sanchez-Graells (at para. 46.18, p. 503) where the authors noted that Article 46(2) permitted contracts to be awarded to "an economically less efficient tenderer" where that was necessary to achieve another legitimate objective, although they stressed that the decision to impose a limit is a discretionary one. Similar views were also expressed by Trybus where he referred to a "winner does not take all" approach underlying Article 46(2) (citing De Smith at p. 335). 
304. Each of these commentators made clear that the decision to divide a procurement into lots is a discretionary one and can be taken by a contracting authority where necessary to achieve other legitimate objectives under the 2014 Directive, such as promotion and facilitation of the participation of SMEs in procurement and the preservation of competition, including competition in the future. The point was also made by Prof. Sanchez-Graells that a contracting authority should be able to impose a restriction on the number of lots that can be awarded to any one tenderer if awarding all of the lots to one operator could negatively impact on competition or where there is a need to ensure that more lots are available to non-incumbent operators so as to prevent distortion of competition in future contracts or in the particular market (Sanchez-Graells at p. 351). 
305. Third, and following on from the last point, the decision to impose a limit on the number of lots that can be awarded to a tenderer is quintessentially a matter for the discretion of the contracting authority, albeit that the discretion is not untrammelled and is subject to review. The outcome that the MEAT will not succeed in obtaining all of the lots was described by the Respondent at the hearing of this appeal as a "classic trade-off", the trade-off of the 'one lot rule' being that it would mean that the Minister/OGP would not get the benefit of the MEAT for all of the lots the subject of the procurement, but could expect to see greater participation by other SMEs in the procurement and the presence in the market at the end of the 2020 Framework of more than one or two operators. The Minister/OGP was in the best position to carry out the complex assessment required in reaching the conclusion that the 'one lot rule' was necessary to achieve these objectives, even though it would mean that the tenderer submitting the MEAT for more than one tender would not obtain all of the relevant lots. I agree with the Respondent that the assessment can fairly be described as a multifactorial polycentric assessment involving a consideration of factors going beyond the particular interest and concerns of Word Perfect and extending to market and policy considerations, including the desire to have more SME participation (even in the form of consortia) and to ensure that there is a sufficient number of operators in the market at the end of the framework. Prof. Trybus expressed the opinion that it was a "wise approach"to leave the decision as to whether to impose a limit on the number of lots that could be awarded to a tenderer to the contracting authority on the basis that it was "close enough to the market to make these decisions" (Trybus at p. 337) 
306. While competition may be said to be distorted by the operation of the 'one lot rule' in the sense that without the rule the lots would go to the tenderer who submitted the MEAT for each lot (which would not be permitted by the operation of the 'one lot rule'), that is something which is expressly provided for in Article 46(2) and, in this case, the rule was included in order to achieve other legitimate and pro-competitive objectives under the 2014 Directive. It was not, therefore, in my view, an unlawful distortion of competition or intervention in the market and was not a breach of the principle of competition relied on by Word Perfect. The judge was, in my view, clearly entitled to reach the conclusion that there was no breach of the general principle of competition. 
307. While the judge did not put it in these words, the lawfulness of the decision to adopt the one lot rule distils itself to a consideration of whether the decision to adopt the 'one lot rule' which had the effect that the MEAT tenderer would not get all of the lots for which it had submitted the MEAT amounted to a "manifest error" which would have to have been "clearly established" by Word Perfect. The judge would have been perfectly entitled to conclude on the evidence that the inclusion of the one lot rule was necessary to address the likely consequences of the longer term (up to four year) contracts which Mr. Massey agreed was a reasonable response to address the quality issues which had been raised in the consultation process, and to combat the prospect of there only being one or two suppliers left in the market at the end of the 2020 Framework. The judge would have been perfectly entitled to conclude that Word Perfect had not established any "manifest error" on that ground, and I am satisfied that it did not do so.
308. The judge addressed various other submissions made on competition grounds concerning the 'one lot rule' made by Word Perfect, including the argument that (a) the limit to 25% on the number of lots that could be awarded to any one tenderer was so distortive of competition as to be unlawful and in breach of the competition principle, and (b) the rule prevents operators (and, in particular, Word Perfect) from building their market share. Both of these arguments were rejected by the judge. 
309. The latter point overlaps, to a degree, with Word Perfect's claim that the 'one lot rule' involved a breach of its freedom to provide services and its right to carry on a business, and I will deal with it further in that context. It is sufficient at this point to observe that while it may well be the case that operators in the market are entitled to seek to grow their market share, that must always be subject to possible intervention by the State in permitted circumstances where necessary to pursue legitimate objectives. An operator has no legal right to grow its market share simpliciter. There is always the possibility that intervention by the State will affect the ability of one or more operators to grow their market share. Here, Article 46 does permit such intervention by the State, first by providing that a contracting authority may divide a procurement into lots and, second, by enabling the authority to impose a limit on the number of lots that can be awarded to one tenderer. The existence of those powers may inevitably adversely affect the ability of one or more operators to grow their market share if they are not entitled to be awarded all of the lots in a particular procurement.
310. That adverse effect flows directly from the exercise of the powers concerned by Article 46 of the 2014 Directive. In this case, it applies to all operators in the market, and not just to Word Perfect. For what are, perhaps, understandable reasons, Word Perfect chose to focus on the issue from its own perspective. The Minister/OGP was required to do so by reference to all operators and potential tenderers in the market and not just by reference to Word Perfect, as one of the incumbents in the market following the expiry of the 2015 Framework. The Minister/OGP was best placed (subject to review in accordance with the relevant test by the court) to determine whether and how best to exercise its discretion under Article 46(2) to divide the procurement into lots and to limit the number of lots that could be awarded to one tenderer in order to "attain the widest possible participation by tenderers" in response to the RFT (in the words consistently used by the CJEU in, for example, Assitur, Lloyds of London and CoNISMa) and to "attain the widest possible opening up of competition" and to seek to open up the procurement "to the widest possible competition" (as in, for example, CoNISMa). The Minister/OGP was also best placed to decide what was appropriate in order to seek to attain fundamental objectives of the 2014 Directive, including promoting greater access to procurement for SMEs in general (and not just Word Perfect) and preserving competition at the end of the new framework. I agree with the judge that the 'one lot rule' does not breach any general principle of competition on the basis that it prevents or hinders an operator's ability to build its market share, or indeed to benefit from economies of scale. I am also satisfied that Word Perfect has not established any "manifest error" on this ground on the part of the Minister/OGP in adopting the 'one lot rule'.
311. While the judge was right to point out, in various parts of his judgment, that the 2020 Framework was not intended to be exclusive and that public sector bodies could seek to procure interpretation services outside that framework, I think that he may have placed somewhat excessive weight on that point (at paras. 157 and 165 of his judgment). In my view, the making of this point was relevant in terms of assessing the effects of the 'one lot rule' (particularly in terms of proportionality) and was relevant also to setting out that operators would have the opportunity of providing services outside the 2020 Framework. However, in my view, it was taking the point too far to conclude, on the basis that under the 2015 Framework, 76.2% of public interpretation services were procured outside that framework, that Word Perfect would retain the possibility of winning up to 82.15% of public sector contracts for interpretation services under the 2020 Framework. That was a simple calculation carried out by the judge, but his conclusion does not appear to have been supported by any of the expert evidence. However, notwithstanding that I would question the judge's entitlement to draw the specific conclusion which he drew in terms of the possibility of work which might be available outside the 2020 Framework, I do not believe that that conclusion has any effect on the judge's ultimate decision that the 'one lot rule' was not unlawful and that it did not constitute a breach of any principle of competition (nor was the rule otherwise unlawful). It was relevant (particularly to the question of the proportionality of the rule) that there remained the possibility of obtaining work outside the 2020 Framework, despite the Guidelines that public sector bodies should utilise such frameworks and despite the confidence on the part of the Minister/OGP that there would be greater take up of work under the 2020 Framework than was the case under the 2015 Framework. However, I do not believe that it was possible to conclude, with any degree of reliability, what the likely or possible percentage of work that could be obtained outside the new framework would be. Nonetheless, the judge was correct in concluding that Word Perfect would still, at least, have the possibility of growing its market share outside the 2020 Framework. 
312. That last point is also relevant to the judge's treatment of the claim by Word Perfect that the limit of 25% on the number of lots that could be awarded to any one tenderer was so distortive of competition as to be unlawful and in breach of the competition principle. I am satisfied that the judge was entitled to conclude that the 'one lot rule' was not such a distortion or alteration of competition as to be a breach of the principle of competition, or otherwise unlawful. The judge was not persuaded that Word Perfect had discharged the burden of establishing such a breach. He was entitled to reach that conclusion, having regard to the evidence of the Minister/OGP and that of Dr. Hannigan in terms of the two objectives sought to be pursued by the 'one lot rule' (the promotion of participation of SMEs and the preservation of competition at the end of the 2020 Framework). He was entitled to reach that decision in light of the discretion conferred on the Minister/OGP under Article 46 in terms of the division of the procurement into lots, the size and subject matter of those lots and the imposition of a limit on the number of lots that could be awarded to any one tenderer. While I do not necessarily agree that the reference to "additional flexibility" in Recital (61) in the context of framework agreements (which was cited by the judge at para. 151 of his judgment when dealing with this point) necessarily supports the point, it does not undermine the judge's ultimate conclusion on the point.
313. Further, I do not believe that the judge's reference to the freedom or immunity from judicial supervision (referred to in Recital (78)) was particularly relevant in this context either. The fact is that the judge did engage in judicial supervision of the Minister/OGP's decision and no form of immunity from such supervision was given effect to by the judge. As I noted earlier, any immunity from judicial or administrative supervision in Recital (78) would be extremely limited (if it exists at all) and could well fall foul of the established case law of the CJEU as to the reviewability of decisions made in a public procurement context (such as Marina Del Mediterraneo) and might well also fall foul of the principle of effective judicial protection enshrined in Article 19(1) TEU and Article 47 of the Charter see Trybus at p. 330). In any event, the judge did not regard the decision as being immune from judicial supervision and so, the reference to freedom from supervision and Recital (78) in para. 151 seems unnecessary. However, I would emphasise that that does not in any way undermine the validity of the judge's ultimate conclusion on the point. He was entitled to regard as the more significant point that Word Perfect had not discharged the burden of proving that the limit of 25% on the lots that could be awarded to any one tenderer was a breach of the competition principle. Nor did Word Perfect establish on the evidence that the fixing of that limit at 25% amounted to a "manifest error" on behalf of the Minister/OGP. 
314. I will deal with specific issues that arise in relation to Article 18(1) of the 2014 Directive in a separate section of this judgment below. Those issues concern Word Perfect's allegation that the Minister/OGP artificially narrowed competition by means of the RFT and that it had established the Minister/OGP's intention to do so for the purposes of Article 18(1). Before that, I address the issues which arise in relation to the principle of proportionality. I consider this appropriate because an integral element of Word Perfect's challenge to the 'one lot rule' on competition grounds was its contention that the rule was disproportionate, not necessary to achieve legitimate objectives, and went beyond what might have been regarded as necessary to achieve any such objectives.

 

 

 

 

 

(i) General principle of Proportionality

315. The claim by Word Perfect that the 'one lot rule' breached the principle of proportionality traverses and overlaps with a number of its grounds of challenge to the 'one lot rule', including the competition grounds, as is often the case in procurement challenges.
316. The principle of proportionality is a general principle of EU law and is also a general procurement principle provided for in Article 18(1). Under the latter provision, contracting authorities are required to act in a "transparent and proportionate manner".
317. A good modern statement of the principle of proportionality, both as a general principle and as a procurement principle contained in Article 18(1) of the 2014 Directive, is to be found in the CJEU's judgment in Tim. In that case, the CJEU stated:

"... in accordance with the principle of proportionality, which is a general principle of EU law, the rules laid down by the Member States or contracting authorities in implementing the provisions of [the 2014 Directive],... must not go beyond what is necessary to achieve the objectives of that Directive (see, to that effect, judgments of 7 July, 2016, and Ambisig, Case C - 46/15, EU:C: 2016:530, para. 40, and of 8 February, 2018, Lloyds of London, Case C - 144/17, EU: C: 2018:78, para. 32 and the case-law cited)". (para. 45)

318. Caranta and Sanchez-Graells described the purpose of the principle of proportionality as being to ensure that measures taken by contracting authorities "are appropriate for attaining the legitimate objectives pursued by procurement rules and that these measures do not go beyond what is necessary to achieve them." (at para. 18.20, p. 195)
319. In Sky Ӧsterreich (another case relied on by Word Perfect which is not a procurement case), the CJEU further stated that where there is a choice between several appropriate measures "recourse must be had to the least onerous, and the disadvantages caused must not be disproportionate to the aims pursued..." (at para. 50).
320. In order for a national measure to be proportionate (for the purposes of the general EU law principle of proportionality and the procurement principle), it is necessary that the measure (i) seeks to advance a legitimate objective or objectives under the relevant EU measure, in this case the 2014 Directive; (ii) uses means which are appropriate to achieve that objective or those objectives; and (iii) does not go beyond what is necessary to achieve the relevant objective or objectives and must be the least onerous or restrictive measure reasonably feasible in the circumstances.
321. Word Perfect accepted that, with respect to the alleged breaches of the general principles, with the exception of the principle of competition, it bore the burden of establishing a prima facie breach of those principles. It submitted that it had established such a prima facie case in respect of those principles, such as the principle of equal treatment and proportionality, and that the burden then shifted to the Respondent to justify its contention that the interference with those principles was undertaken in the pursuit of a legitimate aim or objective of the 2014 Directive and was proportionate. With respect to the alleged breach of the principle of competition, as noted earlier, Word Perfect submitted that the judge had, in effect, held that there was a prima facie breach of that principle on the basis that he found that the 'one lot rule' gave rise to a distortion of competition and that the burden then shifted to the Respondent to justify the alleged breach. I have already rejected that submission and have distinguished this case from Deutsche Parkinson. I have concluded that the judge correctly decided that the burden remained on Word Perfect to establish the alleged breaches of the general principles and that it had failed to discharge that burden. The judge was also correct to rely on the judgment of McDermott J. in Copymoore (No. 2) in support of his conclusion that the burden of proof remained with Word Perfect.
322. Contrary to the submission advanced by Word Perfect in its written submissions (at para. 109), the judge did not conclude (at para. 75 of the judgment) that the principle of proportionality did not apply on the basis that the 2014 Directive contained a provision which permitted a limit to be imposed on the number of lots that could be awarded to a single tenderer. On the contrary, the judge considered the proportionality of the 'one lot rule' and held (for the reasons set out at paras. 170 - 174 of the judgment) that Word Perfect had not discharged of the burden of establishing a breach of the principle. Among the reasons relied on by the judge were that the 'one lot rule' pursued legitimate objectives (including facilitating greater SME participation in the proposed new framework and seeking to ensure that there would be competition at the end of the framework period) and that the 2020 Framework would not be exclusive in the sense that it was likely that public sector interpretation work would be available outside the 2020 Framework. The judge further noted that Mr. Massey had expressed the view that there were other ways in which the Minister/OGP could have sought to achieve those objectives. However, he was not persuaded by Ms. Massey's evidence and held that Word Perfect had failed to discharge the burden of demonstrating that the measures taken by the Minister/OGP were disproportionate. 
323. The judge was correct to hold that the burden remained on Word Perfect to establish the alleged breaches relied on, including the alleged breach of proportionality. There was no breach of EU law in holding that the burden remained on Word Perfect. I have explained why the situation in Deutsche Parkinson was entirely different to the position in this case. 
324. The 'one lot rule' clearly sought to advance legitimate aims and objectives under the 2014 Directive. The promotion of greater SME participation in the procurement competition for the 2020 Framework, the opening up to competition of the procurement for the 2020 Framework from increased SME participation and the preservation of competition at the expiry of the 2020 Framework were all legitimate aims and objectives under the 2014 Directive. While the 'one lot rule' was not introduced directly to improve the quality of the services provided, it was introduced in order to address a problem that the Minister/OGP believed would arise at the end of the (up to) four year contracts that would be available under the 2020 Framework, namely, that there would only be one or two operators left in the market at that stage, being the effective incumbents in respect of the entire period of the 2015 Framework and the 2020 Framework. Provision for the longer-term contracts under the 2020 Framework was regarded by Ms. Massey as a reasonable response to the quality issues which were raised in the consultation process leading to the adoption of the RFT. It was also accepted by Mr. Massey that the 'one lot rule' did provide some incentive for greater SME participation in the procurement competition, although he described that incentive as marginal.
325. I have no doubt that the aims and objectives which the Minister/OGP sought to achieve by the introduction of the 'one lot rule' were legitimate and appropriate objectives under the 2014 Directive. I also accept that it was a legitimate consideration for the Minister/OGP to seek to structure the procurement so as to reduce the risk of legal challenges which were a reality under the previous framework when the approach of using mini-competitions was adopted, albeit that that consideration in itself might not have been sufficient to justify the 'one lot rule'.
326.  I am also satisfied that the means chosen were reasonable and appropriate to achieve those aims and objectives and that Word Perfect did not demonstrate that they went beyond what was necessary to achieve those objectives or that there were any less onerous or restrictive measures reasonably open to the Minister/OGP which could have achieved those objectives. Several alternatives were addressed in the evidence of Mr. Massey and Dr. Hannigan and were considered in the parties' submissions before the judge and in this appeal. The judge adverted to this but was not persuaded by the evidence that the Minister/OGP ought to have adopted any of those alternatives in order to achieve the objectives (see, for example, para. 174 of the judgment).
327. The alternatives suggested on behalf of Word Perfect included not having the 'one lot rule', having more than four lots and having mini-competitions based on quality alone rather than on price. While, of course, accepting that there can be no margin of discretion where there is a breach of a general principle of EU law, I also accept that in carrying out an evaluative assessment of the market and of what means are best to achieve the legitimate objectives sought to be achieved by the Minister/OGP, there should be a margin of discretion or appreciation. Also, Word Perfect would have to establish the breach of principle or error relied on. I do not think that it could be said, on the evidence, that Word Perfect had established any breach of the principle of proportionality and, in the event that it was relying on an error in the evaluation and appreciation of what was required in order to achieve those legitimate objectives, I do not believe that Word Perfect was in a position to clearly demonstrate, with the required degree of confidence, that the decision to adopt the 'one lot rule' was an error (see earlier, the discussion on SIAC).
328. Having carefully reviewed the evidence before the High Court and the submissions before that court and on this appeal, I am satisfied that the judge was correct in holding that Word Perfect had not discharged the burden of proof upon it of establishing a breach of the principle of proportionality or any error in the approach taken by the Minister/OGP in deciding to adopt the 'one lot rule' in the RFT.

 

(5)   Article 18 of 2014 Directive

329. I will deal very briefly with the remaining issues which arise under Article 18, as most have been already addressed in the context of my consideration of Word Perfect's arguments based on the general principles of equal treatment, proportionality and competition. There are, however, two aspects of Article 18(1) which do require some further brief consideration in the context of the competition arguments advanced by Word Perfect. The first concerns the scope of what is intended to be covered by the second subparagraph of Article 18(1). The second concerns the nature of the requisite intention that has to be established in order to demonstrate a breach of the competition principle referred to in that provision.
330. As noted earlier, Article 18(1) was considered by the CJEU in Vitali, Tim and in BibMedia. However, the CJEU did not specifically address the reference to competition in the second subparagraph of Article 18(1) in those cases. It will be recalled that the second subparagraph of Article 18(1) states:

"The design of the procurement shall not be made with the intention of excluding it from the scope of this Directive or of artificially narrowing competition. Competition shall be considered to be artificially narrowed where the design of the procurement is made with the intention of unduly favouring or disadvantaging certain economic operators."

331. Caranta and Sanchez-Graells observed, with respect to this subparagraph of Article 18(1), that:

"...competition is mentioned in the Article [18(1)] under the general rules placing emphasis on the importance of ensuring that tenderers are given equal opportunities to pursue a public contract." (at para. 18.27, pp. 196 - 197)

The authors made reference to an EU Commission document which set out the reason given for including a reference to competition in Article 18(1): Council document 11266/12 dated 14^th June 2012 entitled 'Proposal for a Directive of the European Parliament and of the Council on Public Procurement - Cluster 8: Sound Procedures.' The document attached an annex prepared by the EU Commission on a proposal for a new Article 15 (which was ultimately to become Article 18 of the 2014 Directive). The second sentence of the proposed Article 15 stated:

 'The design of the procurement shall not be made with the objective of excluding it from the scope of this Directive or of artificially narrowing competition'.            

The Commission stated in the Annex that:

 "Practice has shown that tailor-made procurement design e.g. an extremely narrow description of the subject-matter or very specific selection criteria which are not justified by the object of the procurement) is a common method of discriminating between economic operators.  The second sentence of Article 15 has been added to give a clear signal that these malpractices are unacceptable and to facilitate the fight against them."

332. The focus of what became the second paragraph of Article 18(1), therefore, was on combating procurements where the design of the procurement discriminated between economic operators (by having an extremely narrow description of the subject matter of the procurement or very specific selection criteria). There is no question in this case of there being any intention or attempt to exclude the procurement from the scope of the 2014 Directive. The issue then is whether the procurement was designed with the "intention...of artificially narrowing competition". Leaving aside the nature of the intention that must exist for the purpose of this provision (the second residual issue addressed below), it can immediately be stated that the objective, at least of the 'one lot rule', was not to artificially narrow competition but rather to widen competition by promoting greater SME participation and the opening up of the procurement beyond just the incumbents as well as to preserve competition at the end of the proposed new framework. The objective, therefore, was to adopt a pro-competition approach rather than to artificially narrow competition.
333. That leads to the second residual issue, namely, the intention that would have to be established in order to demonstrate a breach of the principle set out in the second paragraph of Article 18(1). 
334. Both Word Perfect and the Respondent accepted that the requisite intention in the second subparagraph of Article 18(1) had to be assessed objectively rather than subjectively. That approach is supported by a number of the academic commentators including Prof. Sanchez-Graells (see, for example, Sanchez-Graells pp. 210–214; and also Sanchez-Graells "Deformed Principle of Competition? The subjective drafting of Article 18(1) of Directive 2014/24" in Olykke and Sanchez-Graells "Reformation or Deformation of the EU Public Procurement Rules" (2016).
335. Word Perfect contended that the judge had incorrectly interpreted that paragraph of Article 18(1) as requiring it to establish that the Minister/OGP had the subjective intention of artificially narrowing competition in the design of the procurement and, in that context, the subjective intention of unduly favouring or disadvantaging certain economic operators. It submitted that the judge ought to have assessed the requisite intention objectively and ought to have concluded that the intention was established by reference to the effects or consequences of the way in which the procurement was designed and carried out by the Minister/OGP. As noted earlier, Word Perfect advanced the alternative submission that if it were necessary for it to establish a subjective intention on the part of the Minister/OGP, the judge ought to have found that such intention was present. The Respondent accepted that the requisite intention had to be assessed objectively and contended that the judge did in fact assess it as such.
336. In light of the parties' agreement that intention in the second subparagraph of Article 18(1) had to be determined objectively, it is unnecessary to delve in detail into the academic commentary on the point. It suffices to say that Prof. Sanchez-Graells, in particular, reached the conclusion that an objective approach was warranted in circumstances where it would be very difficult to ascertain the subjective intention of a contracting authority and that in similar circumstances the CJEU interpreted what, on the face of it, appeared to be a subjective intention requirement in an objective fashion and that to do otherwise would undermine the purpose behind the second subparagraph of Article 18(1).
337. I will proceed on the basis, therefore, that assessment of intention under Article 18(1) must be determined objectively rather than subjectively. Word Perfect, therefore, bore the burden of establishing that, assessed objectively by reference to all of the relevant surrounding materials and circumstances, the Minister/OGP had designed the competition with the intention of "artificially narrowing competition" in the sense that it intended to "unduly" favour or disadvantage certain operators. I also accept that in carrying out that objective assessment of intention, regard should be afforded to the objective effect of the design of the relevant procurement.
338. While the judge could have been a little clearer in stating whether he was assessing intention from an objective or subjective perspective, I agree with Respondent that he probably was assessing intention objectively (at paras. 100 - 109 of the judgment) in that he made specific reference, in the context of one of the examples he gave, to the absence of an "objective reason" for a particular requirement in a procurement competition as being an indication of an intention to unduly favour one operator over another (at para. 104).
339. It is important, however, to consider all of the relevant provisions in the second paragraph of Article 18(1) and not simply to focus, as Word Perfect did, on the effect of the 'one lot rule' on Word Perfect. The mere fact that Word Perfect could be adversely affected by the operation of the rule does not mean that the rule excessively narrows competition or unduly favours other operators or disadvantages Word Perfect when compared with other operators. The favouring or disadvantaging of Word Perfect or other operators has to be something which was "unduly" done. In other words, this would have to have been done to an excessive, impermissible or inappropriate extent. While the parties struggled to understand the judge's Chinese example, (at para. 102 the judgment), my understanding of it is that the judge was seeking to highlight the need to establish an intention to unduly favour or disadvantage certain operators over others.
340. The judge was not persuaded that Word Perfect had established any such intention (assessed objectively) to "artificially narrow competition" or "unduly" favour or disadvantage some operators over others. I agree with his conclusion in that respect. Firstly, objectively assessed, the aim, objective and intention of the 'one lot rule' was to secure a number of the legitimate objectives of the 2014 Directive discussed earlier. Second, the effect of the 'one lot rule' was pro-competitive in that it sought to increase the number of SME operators providing services under the new framework compared to those providing it under the previous framework. Third, objectively, the rule could not be said to "unduly" favour or disadvantage certain operators simply by virtue of its operation. Where the operation of the rule has the effect of favouring or disadvantaging a particular operator in circumstances where, when objectively assessed, the intention is to promote legitimate objectives under the 2014 Directive and where a breach of the general principles, including proportionality, has not been established. I do not believe that the favouring or disadvantaging of certain operators over others has been effected "unduly". In any procurement competition, some tenderers or potential tenderers may be disadvantaged, in that they may not achieve the same level of work they may have had prior to the procurement, but that does not mean that they have been "unduly" disadvantaged, less still that there was an intention "unduly" to do so.
341. Following objective assessment by reference to all of the evidence and the materials before the court, I am satisfied that the judge correctly concluded that the Minister/OGP did not have the requisite intention to "excessively narrow competition" or to "unduly" favour or disadvantage certain operators when compared with others in the RFT for the 2020 Framework. I agree, therefore, with the judge's conclusion that Word Perfect failed to establish a breach of the principle of competition referred to in Article 18(1).

 

(6) Freedom to Provide Services (Article 56 TFEU) and Freedom to Conduct Business (Article 16 of the Charter)

342. Word Perfect also advanced arguments challenging the 'one lot rule' by reference to Article 56 TFEU (freedom to provide services) and Article 16 of the Charter (freedom to conduct a business). However, the argument based on those provisions received very little attention in the parties' written submissions or in the oral submissions made at the hearing. The judge dealt briefly with and rejected Word Perfect's ground of challenge based on Article 56 TFEU. He did not expressly address the ground based on Article 16 of the Charter. I will deal with both grounds briefly here.  

 

(a) Article 56 TFEU

343. Article 56 TFEU provides for the fundamental freedom to provide services which is expressly referred to in Recital (1) to the 2014 Directive. The first paragraph of Article 56 states:

"Within the framework of the provision set out below, restrictions on freedom to provide services within the union shall be prohibited in respect of nationals of member states who are established in a member state other than that of the person for which the services are intended."

344. By virtue of Article 62 TFEU, free movement of services is subject to a number of the same exceptions as are applied to the provisions governing free movement of workers and self-employed persons. Word Perfect's written submissions on the appeal contain just one sentence in support of its contention that the RFT (and, in particular, the 'one lot rule') breaches Article 56 TFEU on freedom to provide services, for which there is no justification (para. 97). In its oral submissions, it made a brief passing reference to the judgment of the CJEU in SECAP. The judge succinctly rejected Word Perfect's claim under this heading (at paras. 186–188). In essence, he held that the fact that a successful tenderer could only win one of the lots and that, therefore, the tenderer was limited in the amount of work it could receive under the proposed new framework was not a breach of the freedom to provide services of the tenderer or other operators in the market. The reason for that conclusion was that the Minister/OGP was entitled under Article 46(2) to impose such a limit which, if imposed, would implicitly restrict the rights of the operator to supply its services under the framework. The inherent restriction on the freedom to provide services was, therefore, provided for and permitted by Article 46(2).
345. While not expressly adverted to by the judge, it is difficult to see how Word Perfect can make the case that there was any breach of Article 56 TFEU in circumstances where, at least in its case, there did not appear to be any cross-border issue. The freedom to provide services in Ireland has not been prohibited in respect of nationals or operators from other Member States by virtue of the 'one lot rule' and no complaint was made in the proceedings by any operator based in another Member State based on the terms of the RFT and, in particular, the 'one lot rule'. In any event, even if Word Perfect could rely on a potential cross border- issue, I cannot see how any breach of Article 56 arises. The rules contained in the RFT are non-discriminatory and applied equally to operators and potential tenderers in Ireland and in other Member States of the European Union. Precisely the same rules applied to all operators and potential tenderers, wherever they are located. No argument based on direct or indirect discrimination in respect of operators for the Member States was advanced by Word Perfect in the High Court or in the appeal to this Court.  
346. Word Perfect's reliance on the judgment of the CJEU in SECAP was misplaced, in my view, and the judgment does not provide support for Word Perfect's claim under this heading. SECAP involved a challenge to Italian legislation under which all abnormally low tenders in tender procedures were automatically excluded. The claimants in the case had submitted tenders for the award of contracts which were below the threshold provided for under the then Community rules. They were considered to be abnormally low tenders and were automatically rejected under Italian law. Although they were below the relevant threshold, the CJEU held that, nonetheless, the contracting authorities were bound to comply with the fundamental rules of the EC Treaty (as it then was) and the principle of non-discrimination on the grounds of nationality (para. 20). However, the CJEU held that the application of those fundamental rules and general principles of the Treaty to the procedures for the award of contracts below the relevant threshold was based on the premise that the contracts in question were of a certain cross- border interest (para. 21). The Court held that the legislation could undermine the general principle of non-discrimination in procurement procedures which were of a cross-border interest. It held that the application of the rule requiring the automatic exclusion of tenderers considered to be abnormally low to contracts of certain cross-border interests could constitute indirect discrimination since it could, in practice, place operators at a disadvantage from other Member States, who, if they had different cost structures, could benefit from significant economies of scale or who, intending to cut their profit margins, could be in a position to make a competitive bid which was genuine and viable but which the contracting authority would be unable to consider by virtue of the relevant Italian law. The CJEU held that the application of the rule requiring the automatic exclusion of abnormally low tenders to such contracts could deprive economic operators from other Member States of the opportunity of competing more effectively with operators located in the Member State concerned (Italy) and would thereby affect their access to the market in that State, impeding the exercise of their freedom of establishment and freedom to provide services and restricting those freedoms (see para. 28). The Court held that, in those circumstances, contracting authorities could not comply with their obligation to observe the fundamental rules of the EC Treaty on freedom of movement or the general principle of non-discrimination and that it was contrary to their own interests to be deprived of the power to assess the validity of abnormally low tenders since they would not be able to assess tenders submitted to them under conditions of effective competition and, therefore, to award the relevant contracts by applying the criteria of the lowest price or the most economically advantageous tender.
347. I find it impossible to see an analogy between what was at issue in SECAP and what is at issue in this case. While there may be a potential cross-border interest in the tender process for the 2020 Framework, no issue was raised by any operators or potential tenders from other Member States, and Word Perfect did not advance anything but the most vague and hypothetical submission on this ground. I do not see how, on the basis of the submission advanced by Word Perfect, any breach of Article 56 TFEU arises. The decision to impose a limit on the number of lots that could be awarded to anyone tenderer is one which the Minister/OGP had the power to make under Article 46(2) and, while in an appropriate case a challenge could potentially be advanced in reliance on Article 56 TFEU, I am not satisfied that Word Perfect has made out any basis for a challenge on that ground. Further, even if it had established a prima facie breach of Article 56 TFEU, I would have been satisfied that the decision was justified in the public interest by reason of the necessary and proportionate pursuit by the Minister/OGP of a number of fundamental objectives under the 2014 Directive, including the promotion of greater SME participation, the opening up of the procurement to competition and the need to preserve competition at the expiry of the 2020 Framework. I am satisfied, therefore, that the judge was correct to reject Word Perfect's challenge on this ground, albeit for slightly different reasons than those given by the judge.

 

 

(b) Article 16 of the Charter

348. Article 16 of the Charter is headed "Freedom to conduct a business" and provides;

"The freedom to conduct a business in accordance with Community law and national laws and practices is recognised". Reference must also be made to Article 52 of the Charter which concerns the "Scope of guaranteed rights". Article 52 provides:

"1.       Any limitation on the exercise of the rights and freedoms recognised by this Charter must be provided for by law and respect the essence of those rights and freedoms. Subject to the principle of proportionality, limitations may be made only if they are necessary and genuinely meet objectives of general interest recognised by the Union or the need to protect the rights and freedoms of others.

2.         Rights recognised by this Charter for which provision is made in the Treaties shall be exercised under the conditions and within the limits defined by those Treaties..."

349. Word Perfect submitted that the RFT for the 2020 Framework and, in particular, the 'one lot rule' interfered with its freedom to conduct a business under Article 16 of the Charter and to carry on economic activity in circumstances of free competition. It submitted that the interference with its right to do so was not justified on the grounds of proportionality. Word Perfect relied principally on the judgment of the CJEU in Sky Ӧsterreich in support of this aspect of its case. The Respondent disputed any breach of Article 16 and contended that the judgment in Sky Ӧsterreich did not support Word Perfect's case.
350. The judge did not expressly deal with Word Perfect's case based on Article 16 of the Charter, although the point was advanced by Word Perfect in its submissions to the High Court. There is no difficulty, however, in this Court dealing with the point. I am satisfied that there is no merit to the point and that the judgment in Sky Ӧsterreich does not provide support for Word Perfect's case. While Word Perfect was correct to draw attention to the CJEU's treatment of the extent of the protection afforded by Article 16 of the Charter at para. 42 of the Sky Ӧsterreich judgment and to the Court's analysis of the proportionality of the provision of the impugned Directive in the case, there was an important qualification of the right to conduct a business highlighted by the CJEU in its judgment. The CJEU provided that the protection afforded by Article 16 covers "the freedom to exercise an economic or commercial activity, the freedom of contract and free competition" (para. 42). However, very significantly, the CJEU made clear that the freedom to conduct a business is not unqualified and is subject to intervention on the part of Member States in a broad range of circumstances, as is made clear in Article 52(1) of the Charter, provided that there is compliance with the principle of proportionality.
351. In that respect, the CJEU stated:

"However, in accordance with the Court's case law, the freedom to conduct a business is not absolute, but must be viewed in relation to its social function (see to that effect, joined cases C-184/02 and C-223/02 Spain and Finland v. Parliament and Council [2004] ECR I-7789, paras. 51 and 52, and Case C-544/10 Deutsches Weintor (para. 54 and the case law cited)." (para. 45)

The Court continued:

"On the basis of that case‑law and in the light of the wording of Article 16 of the Charter...the freedom to conduct a business may be subject to a broad range of interventions on the part of public authorities which may limit the exercise of economic activity in the public interest." (para. 46)

352. The Court then explained that, having regard to Article 52(1) of the Charter, any such intervention or limitation on the exercise of the right must be provided for by law and must comply with the principle of proportionality in that it must be "necessary and actually meet objectives of general interest recognised by the European Union or the need to protect the rights and freedoms of others" (para. 48). It is clear, therefore, that the right or freedom to conduct a business is not absolute but is subject to intervention by a Member State in a broad range of circumstances provided that there is compliance with the principle of proportionality. In Sky Ӧsterreich, the CJEU considered the extent of the restriction contained in the impugned provision of the Directive and held that it was lawful and complied with the principle of proportionality. In those circumstances, the Court found that the restriction provided for in the relevant provision was lawful.
353. I do not believe that the judgment in Sky Ӧsterreich assists Word Perfect in this case.  Word Perfect undoubtedly does have a freedom to conduct its business, and to do so in circumstances of free competition. However, that right or freedom is not absolute and is subject to restriction by intervention by the State in the public interest once the restriction is provided by law and there is compliance with the principle of proportionality. The restriction challenged by Word Perfect is the 'one lot rule' in the RFT. As I have already concluded, the Minister/OGP had the power to adopt that rule under Article 46(2), albeit that its decision to do so had to comply with the general principles of EU law and could not be affected by "manifest error".  The rule was adopted in order to give effect to fundamental objectives contained in the 2014 Directive, including promotion of greater SME participation, the opening up of the procurement to competition for SMEs and the preservation of competition at the end of the 2020 Framework. I have also concluded that Word Perfect bore the burden of establishing a breach of the principle of proportionality with respect to the 'one lot rule' and agreed with the judge's conclusion that Word Perfect failed to discharge that burden. For the same reasons, I am satisfied that Word Perfect's challenge to the 'one lot rule' based on Article 16 of the Charter must also fail. 

 

(7) Duty of Sincere Cooperation: Article 4(3) TEU

354. Word Perfect advanced another argument which was related to its submission that the design of the RFT and, in particular, the 'one lot rule', breached the general principle of competition. This argument put forward by Word Perfect is linked also to its contention that the design of the RFT breached its freedom to conduct a business in circumstances of free competition. This related argument was based on Article 4(3) TEU. I have rejected Word Perfect's grounds of appeal based on the alleged breaches of the general principle of competition (and of the other general principles on which it relied) and have also rejected its argument based on the alleged unlawful breach of its freedom to conduct a business, for the detailed reasons already set out. As I will now explain, I am also satisfied that Word Perfect's argument based on Article 4(3) TEU must also fail.
355. Article 4(3) TEU provides:

"Pursuant to the principle of sincere cooperation, the Union and the Member States shall, in full mutual respect, assist each other in carrying out tasks which flow from the Treaties.

The Member States shall take any appropriate measure, general or particular, to ensure fulfilment of the obligations arising out of the Treaties or resulting from the acts of the institutions of the Union.

The Member States shall facilitate the achievement of the Union's tasks and refrain from any measure which could jeopardise the attainment of the Union's objectives."

356. Word Perfect's argument was that the Minister/OGP breached Article 4(3) TEU when read in conjunction with Articles 56 and 101 TFEU. While Article 102 TFEU was also mentioned by Word Perfect in its oral submissions on the appeal, it does not appear to have any relevance to this case in circumstances where it was not suggested that any of the relevant parties is an undertaking in a dominant position in the market for interpretation services at issue here.
357. Word Perfect relied on dicta of the CJEU in three cases in support of its argument under this heading: Ahmed Saeed, Cipolla, and Sbarigia. Word Perfect's argument was essentially that the effect of the 'one lot rule' was to segment the market for interpretation services by allocating the market as between four undertakings which would be regarded as a hardcore restriction of competition, in the same way as conduct such as price fixing, if carried out by undertakings on the basis of an agreement between them. It said that the 'one lot rule' created a distortion of competition and amounted to a measure which would render ineffective the competition rules under the TFEU and would amount to a breach of the duty of sincere cooperation imposed on the State under Article 4(3) of the TEU, when read with Articles 56 and 101 TFEU. Word Perfect submitted that the judge's analysis of its argument under this heading was deficient and that he regarded the fact that the Minister/OGP was not an undertaking as a complete answer to this point and did not consider whether, the Respondent could nonetheless be in breach of the duty of sincere cooperation under Article 4(3).
358. While the judge did not expressly refer to Article 4(3) TEU or the duty of sincere cooperation, he rejected Word Perfect's competition arguments based on the segmentation or allocation of the market for a number of reasons including (i) that the Minister/OGP is not an undertaking and could not, therefore, be in breach of Article 101 TFEU in that instance, (ii) that there was no 'carve up' of the market as between the suppliers and operators in  the market but, rather, a decision could be taken by a purchaser of services who decided that it wished to purchase those services from four separate suppliers for various reasons (these reasons included aiming to ensure that there would be a sufficient number of suppliers in the market at the end of the proposed new framework), and (iii) that Article 46(2) gave the Minister/OGP lawful authority to introduce the impugned rule.
359. I agree with the Respondent that there is no basis for this ground of appeal and that the argument was properly rejected by the High Court, although I do so again for slightly different reasons to those given by the judge. I have reached the view that this aspect of Word Perfect's case does not provide a persuasive ground of appeal for many of the same reasons as were given earlier when rejecting Word Perfect's contention that the judge ought to have found that the 'one lot rule' amounted to an unlawful segmentation or allocation of the market. Word Perfect's argument based on Article 4(3) TEU is not only related to but is, in my view, dependent on it succeeding on its arguments based on the alleged breaches of the general principle of competition and the alleged breach of Article 56 TFEU. Since I have rejected Word Perfect's arguments on those grounds, it seems to me that its argument based on Article 4(3) must similarly be rejected. 
360. There is no dispute between the parties as to the legal principles applicable to a consideration of the duty of sincere cooperation under Article 4(3) TEU. In Ahmed Saeed, the CJEU stated that, notwithstanding that the competition rules set out in what are now Articles 101 and 102 TFEU concerned the conduct of undertakings and not measures taken by the authorities to Member States, Article 4(3) TEU (previously Article 5 of the EEC Treaty) "nevertheless imposes a duty on those authorities not to adopt or maintain in force any measure which could deprive those competition rules of their effectiveness" (para. 48). The CJEU held that that would be the case if the Member State "were to require or favour the adoption of agreements, decisions or concerted practices contrary to Article 85 [now Article 101 TEU] or reinforce their effects..." (para. 48). The Court concluded that the tariff agreements which were at issue in that case were contrary to what was then Article 85(1) of the EC Treaty and the approval of those agreements by the national authorities was not compatible with Article 5 of the Treaty (now Article 4(3) TEU). It was also held by the Court that those authorities were required to refrain from taking any measure which might be construed as "encouraging undertakings to conclude agreements contrary to the Treaty" (para. 49). The Court later held that the Treaty strictly prohibited the national authorities from "giving encouragement, in any form whatsoever, to the adoption of agreements or concerted practices with regard to tariffs contrary to Article 85 [now Article 101] or Article 86 [now Article 102], as the case may be" (para 52). The fundamental difference between this case and Ahmed Saeed was the statement that the relevant tariff agreements between undertakings were contrary to Article 85 of the EC Treaty. A similar situation does not arise here. There are no agreements between undertakings on the evidence here which could be said to amount to a breach of Article 101 TFEU.
361. In Sbarigia, the CJEU referred to its earlier judgment in Cipolla and reiterated that the duty of sincere cooperation, (which by then was contained in Article 10 of the EEC Treaty) when read in conjunction with the competition rules of the EEC Treaty, required Member States not to "introduce or maintain in force measures, even of a legislative or regulatory nature, which may render ineffective the competition rules applicable to undertakings..." (para. 31). On the basis of many of the reasons already given when dealing with the competition grounds and Article 56 TFEU arguments raised by Word Perfect, I do not accept that by adopting the 'one lot rule' in exercise of the power conferred by Article 46(2), the Minister/OGP was encouraging the adoption of agreements or concerted practices contrary to Article 101 TFEU or reinforcing the effects of such agreements or practices. Nor do I accept that, in doing so, that the Minister/OGP was rendering ineffective the competition rules applicable to undertakings. As I outlined when dealing with Word Perfect's grounds of appeal based on alleged breaches of the general principles including breach of the competition principle, in exercising the power to oppose a limit on the number of lots that could be awarded to any one tenderer, the Minister/OGP was exercising a power conferred by Article 46(2) of the 2014 Directive in order to attain fundamental aims and objectives of the Directive, including the promotion of greater SME participation in the procurement, the opening up of the particular procurement competition to more SMEs and ensuring the preservation of competition at the end of the proposed new framework. The rule was intended to operate as a pro-competitive measure in order to promote and to seek to attain these aims and objectives. The judge found that Word Perfect had not discharged the burden of proof which rested upon it to establish the breaches of the competition principle and the other principles relied on. As I concluded earlier in this judgment, the judge was entitled to make that finding.
362. The judge was correct in concluding on the basis of the judgments of the CJEU in FENIN and the judgment of McDermott J. in Copymoore (No. 2) that since the Minister/OGP is not an undertaking and, therefore, the Framework Contract between the Minister/OGP and each of the four successful tenderers is not an agreement between undertakings, and since the public sector bodies which may enter into Client Contracts with the successful tenderers are also not undertakings, those Client Contracts would not, therefore, be agreements between undertakings. However, that is not the end of the analysis required under Article 4(3). That is clear from the judgments of the CJEU in Ahmed Saeed, Cipolla and Sbarigia referred to above. It is necessary to go on to consider whether the adoption of the 'one lot rule' amounted to an encouragement to undertakings to act in breach of competition and of the other provisions of the TFEU, or whether it deprived the competition rules of their effectiveness. For the reasons outlined earlier when dealing with the competition arguments advanced by Word Perfect, I agree that the judge correctly rejected those arguments. The argument advanced by Word Perfect based on Article 4(3) TEU (read in conjunction with Articles 56 and 101 TFEU) must similarly be rejected.

(8) Irrelevant Considerations

363. Word Perfect contended that the Minister/OGP took into account an irrelevant and illegitimate consideration in deciding to adopt the RFT for the 2020 Framework. That consideration was the alleged "litigious nature" of Word Perfect and the consequent decision by the Minister/OGP to structure the 2020 Framework in such a way as to reduce the risk of, and the opportunities for, legal challenge. The judge rejected this ground of challenge, and it was subsequently maintained by Word Perfect in its appeal. It is not a sound ground of appeal, in my view.
364. The Sourcing Strategy document referred to the "litigious nature" of a member of the 2015 Framework (which was accepted by the parties and by the judge to be a reference to Word Perfect). It will be recalled that under that framework, work was allocated to framework members (including Word Perfect) on the basis of mini-competitions. Word Perfect brought proceedings by way of challenge to one of the mini-competitions under which work was allocated under the 2015 Framework and was successful in those proceedings in the Supreme Court in 2019. It has also brought other proceedings in relation to supplemental Request for Tenders under the 2015 Framework and in respect of different procurement competitions.
365. Word Perfect contended that it was not lawful for the Minister/OGP to base its decision as to how to structure the 2020 Framework, in whole or in part, on the alleged litigious nature of one of the potential tenderers in order to avoid the possibility of challenges being brought by those tenderers to vindicate their rights. It submitted that the structure of the proposed 2020 Framework was motivated by the desire to reduce the possibility for tenderers to bring challenges under the new framework. It is fair to say that the Respondent did not shirk the fact that one of the considerations taken into account by the Minister/OGP when designing the proposed new framework, in light of the issues which were raised during the consultation process, was to provide for a legally robust framework and that references to the "litigious nature" of Word Perfect had to be seen in that light. It maintained that it was entitled to design a framework which was legally robust and which complied with the law. The Respondent did not dispute Word Perfect's entitlement to bring proceedings to vindicate its rights but contended that the RFT for the 2020 Framework was structured so as to reflect the legitimate desire on the part of public service bodies (who participated in the consultation process) that the design of the new framework should not present "avoidable occasions for challenge" (as stated at para. 38 of Mr. MacDonnell's replying affidavit). It was submitted that that was a reasonable and lawful objective. It was also pointed out that the competition was not designed to exclude any tenderer (such as Word Perfect) who had previously brought proceedings but to ensure that, as far as possible, the new framework was legally sound and achieved its aim of ensuring competition in the market.
366. It is clear from the evidence before the High Court that the Minister/OGP was seeking to attain the fundamental aims and objectives of the 2014 Directive, including the promotion of greater SME participation in the procurement of public contracts and the opening up and preservation of competition. I agree with the judge's conclusion on this ground of appeal. I am satisfied that he correctly rejected Word Perfect's contentions, and I would dismiss its appeal on this ground.
367. The judge correctly stated the relevant legal principle that a decision maker must "have regard to all relevant and legitimate factors which are before it and must disregard any irrelevant or illegitimate factor which might be advanced" (per Finlay C.J. in P. & F. Sharpe Limited v. Dublin City and County Managers [1989] I.R. 701). The principle is clearly and succinctly stated in this dictum of Finlay C.J. I am satisfied that the Minister/OGP's desire to structure the framework in a way which was legally robust in the context of several previous challenges brought by Word Perfect under the previous framework and in other procurements was a relevant and legitimate factor to which the Minister/OGP could have regard. In my view, in deciding on the design and structure of the new framework, it was entirely unobjectionable for the Minister/OGP to do so in such a way that it felt would withstand legal challenge, provided, of course, that it complied with the 2014 Directive, the 2016 Regulations and EU law, including procurement law. The Respondent acknowledged, as it had to, the entitlement of Word Perfect to seek to vindicate its legal rights in respect of the proposed new framework. Equally, in my view, there was nothing to prevent the Minister/OGP from seeking to minimise the risk of such challenges, provided that the proposed new framework complied with the relevant law.
368. It is important to note that the RFT for the 2020 Framework was not designed to exclude Word Perfect or any other potential tenderer from the new framework by reason of its involvement in previous proceedings. That would have been an illegitimate factor to take into consideration and would have left the RFT open to challenge. Provided that the new framework complied with the Directive and otherwise with EU and procurement law, there was, in my view, nothing unlawful about the Minister/OGP having regard to the fact that there have been challenges to decisions made under the previous framework and in other procurements. The Respondent was, in my view, entitled to design the proposed new framework by seeking to minimise the risk of such challenges (while ensuring compliance with the relevant law). I agree with the judge that that was a prudent, reasonable and legitimate approach for the Minister/OGP to adopt. Consequently, this ground of appeal must also fail.

(9) Apparent/Objective Bias/Principles of Good Administration and Objectivity

369. While Word Perfect maintained its grounds of appeal based on the alleged apparent/objective bias on the part of the Minister/OGP and the alleged breach by the Minister/OGP of the EU principles of good administration and objectivity in relation to the decision to adopt the RFT for the 2020 Framework, it made only very brief written submissions on these grounds and did not really develop the submissions at all during the course of the hearing. For reasons I set out below, I am not satisfied that Word Perfect has put forward a sound ground of appeal under this heading.
370. Word Perfect's case, as I understand it, and as was presented to the High Court was that the Minister/OGP considered that Word Perfect had a "litigious nature" and that there was a "lack of quality" in the interpretation services it provided. As a consequence, the RFT setting out the structure of the competition for the 2020 Framework was designed so as to reduce the risk of legal challenge by Word Perfect. It was alleged by Word Perfect that the circumstances were such as to give rise to a reasonable apprehension of bias on the part of the Minister/OGP against Word Perfect, and that the decision to adopt the RFT was vitiated by that objective bias.
371. That point was rejected by the judge. He concluded that the decision to adopt the RFT was not an adjudicative decision but rather a "commercial" decision on part of the Minister/OGP as to the means by which public interpretation services would be purchased by public sector bodies. He held also that it was a reasonable policy decision by the Minister/OGP to structure the procurement competition so as to reduce the prospect of successful legal challenge under the new framework. The judge relied on the judgment of McKechnie J. in the High Court in Greenstar in support of his conclusion that the decision to adopt the RFT was not made as part of any adjudicative process, but rather for policy reasons. The judge's decision on that issue was supported by the Respondent in the appeal.
372. In its written submissions, Word Perfect advanced the argument that reliance on the judgment in Greenstar was misplaced as that case was concerned with the question of structural bias and whether automatic bias might arise due to structural issues.
373. It is true that the extract from the judgment of McKechnie J. in Greenstar on which the judge relied was directed to the issue of structural bias. The decision challenged in that case was a decision by a number of local authorities in Dublin to vary the waste management plan for the Dublin region so that the rights to collect certain waste in their areas would be vested in a single operator who could either be the relevant local authority or a nominated private operator. The applicant claimed that, by virtue of the fact that the local authorities were both operators in the market and regulators of those operators, there was a structural bias built into the system and that decisions made by the local authorities in relation to the market gave rise to, at least, a perception of objective bias. In dealing with that claim, McKechnie J. expressly noted that he was not dealing with the question of whether the variation decision was vitiated by objective or subjective bias by reason of any actions on the part of the local authorities and that the only issue which he was considering was whether, because of the relevant statutory framework, there was inevitable structural bias in the decision to vary a waste management plan in circumstances where the authorities were both operators and regulators in the relevant market. McKechnie J. rejected the argument that a structural bias arose but noted that the role of the authorities as both regulator and operator inevitably increased the likelihood of objective bias, and that precautions should be taken to counter that risk. The case was, therefore, really about structural bias, and that issue does not arise here. However, the judgment is helpful in that McKechnie J. quoted from a passage from De Smith's Judicial Review (6^th Ed.), Sweet & Maxwell, 2007) in which the authors distinguished between the standards of impartiality applicable in the case of adjudicative decisions and those applicable in other circumstances in which the same "lofty detachment" would not be required (at p. 530 of De Smith and quoted by McKechnie J. at para. 45 of his judgment).
374. The decision to adopt the RFT was not an adjudicative decision in which the rights, liabilities or entitlements of Word Perfect or other potential tenderers were being adjudicated upon by the Minister/OGP. The decision was based on structuring the procurement in such a way that SMEs could be encouraged to participate, and that competition would be preserved at the end of the 2020 Framework. In making that decision, the Minister/OGP had regard to the feedback received from public sector bodies who were involved in the consultation process. The Sourcing Strategy document (on which Word Perfect relied to support its objective bias claim) noted that key issues raised by public sector bodies in the consultation process were quality issues and the "litigious nature" of one of the members of the 2015 Framework (i.e. Word Perfect). However, in taking into account that feedback and in structuring the procurement competition in a way which sought to minimise the risk of successful legal challenge, the Minister/OGP was not adjudicating upon or making any final decision in relation to the quality issues raised or in relation to Word Perfect's "litigious nature". I cannot see how, in those circumstances, any question of objective bias could arise.
375. The position was somewhat similar to that which arose in Fitzpatrick & anor v The Minister for Agriculture, Food and The Marine & anor [2018] IEHC 772 (a case on which the Respondent relied) where Ní Raifeartaigh J. in the High Court held that the decision challenged in the case as to the methodology to be used for the purpose of determining fishing quotas was a decision to use a general method of calculating those figures and not a determination or adjudication of the type which would attract the rules of fair procedures.  The decision was not an individual determination of the relevant issues, but rather a generalised type of decision to which those principles did not apply (see the judgment of Ní Raifeartaigh J. at paras. 69 - 76). The case is obviously not identical to the present case, but the judge did draw a useful distinction between the type of individual decision to which the rules of fair procedures might apply and the more general type of decision to which they might normally not apply. While I would not go so far as to say that the rule against bias would not always apply in the case of generalised decisions, the circumstances in which the issue is likely to arise will be very rare.
376. More fundamentally, however, in this case I cannot see how any question of objective bias arises. The well-established test is whether there is a reasonable apprehension of bias by a reasonable person with knowledge of the relevant facts (see Bula Limited v. Tara Mines Limited (No. 6) [2000] 4 I.R. 412, O'Callaghan v. Mahon [2008] 2 IR 514 and Kenny v. Trinity College Dublin [2008] 2 IR 40). I cannot see any basis on which it could be said that the reference to the feedback received from public sector bodies in the consultation process and the decision to design the RFT in a way which minimised the risk of successful legal challenge gave rise to a reasonable apprehension of bias on the part of a reasonable person with knowledge of all the facts. I have reached that conclusion for at least the following reasons:

(i)        The Minister/OGP was reporting on what was said by public sector bodies as part of the consultation process which preceded the decision to adopt the RFT;

(ii)       It was factually accurate to state that Word Perfect had been involved in previous proceedings and some of those proceedings were referred to in the Sourcing Strategy document itself;

(iii)      There was no suggestion in the Sourcing Strategy that Word Perfect was not entitled to bring proceedings to vindicate its rights, and reference was made to proceedings successfully brought by Word Perfect under the 2015 Framework;

(iv)      The Minister/OGP was not making any final decision on the rights, liabilities or entitlements of Word Perfect when deciding on the appropriate structure for the RFT;

(v)       The decision to adopt the RFT for the proposed 2020 Framework was intended to apply to all potential tenderers and not just Word Perfect; and

(xi)      The Minister/OGP was entitled to structure the RFT in a way so as to reduce the risk of successful legal challenge while, at the same time, complying with the law.

377. For these reasons, but again differing slightly from the reasons given by the High Court judge for his conclusion, I am satisfied at this aspect of Word Perfect's appeal must fail.
378. Word Perfect adopted a fallback position by relying on the EU principle of good administration, including the principles of objectivity and impartiality. However, apart from making a passing reference to those principles in its written submissions in the appeal, and an even more brief reference to them in its oral submissions, Word Perfect did not develop the argument on this ground at all. I do not find it necessary, therefore, to deal with this argument in any detail. It is sufficient to state that, insofar as Word Perfect relies on any lack of objectivity or lack of impartiality on the part of the Minister/OGP with respect to the decision to adopt the RFT for the 2020 Framework, I am not satisfied that there is any basis to that claim and I would adopt the reasons I have just set out in relation to its objective bias claim for rejecting its claim under this heading also.

 

(10) Judge's Treatment of the Expert Evidence

379. Word Perfect made a number of criticisms of the manner in which the judge dealt with the expert evidence in the case. I have addressed most of those criticisms earlier in the judgment but will deal with some of them here again for completeness. I also add some further observations of my own in relation to the expert evidence in the case. 

 

(a)        Burden of Proof on Mr. Massey: Alleged Misunderstanding of Role of Expert

380. I have addressed this point earlier in my judgment. Word Perfect took issue with the High Court judge's description, in a number of places in his judgment of the burden of proof being on Mr. Massey, the expert economist engaged by Word Perfect, to persuade the court that his opinion on a particular disputed issue should be accepted. For example, at para. 93, the judge stated that "burden is upon Mr. Massey to have his evidence preferred to the evidence of Dr. Hannigan". At para. 94, the judge pointed to a scenario where Mr. Massey might have "failed to discharge the onus upon him to have the Court prefer the key claims in his evidence over those of Dr. Hannigan...". At para. 95, the judge again referred to the burden of proof being on Mr. Massey and that, where faced with "two equally plausible claims from the experts", the Court could consider that Mr. Massey had "failed to discharge the burden of upon him". Word Perfect contended that by describing the burden as being on Mr. Massey rather than on it, the judge displayed a fundamental misunderstanding of the independent role of an expert, whose fundamental and overriding duty is to the court and on whom no burden of proof lies. 
381. In other parts of the judgment, for example, at para. 151, the judge described the burden as being on Mr. Massey and Word Perfect. In that paragraph, the judge said that he had not been persuaded that "Mr. Massey/Word Perfect have discharged the burden of proof upon them...". Again, at para. 156, the judge said that the burden was on "Word Perfect and Mr. Massey to persuade this Court that his evidence should be preferred to that of Dr. Hannigan's". In a number of other parts of the judgment, the judge was clear that the burden of proof was on Word Perfect. At para. 72 of his judgment, he referred to the general rule as being that the applicant or plaintiff in civil proceedings had the burden of proving its case. At para. 78, he referred to the burden as being on Word Perfect to prove its claims. At para. 174, the judge again described the burden as being on Word Perfect to establish a breach of the principle of proportionality.
382. As I have indicated earlier in this judgment, I think it is likely that when he referred to the burden being on Mr. Massey or on Mr. Massey and Word Perfect, the judge was using those descriptors as shorthand to describe the burden being on Word Perfect and that it was seeking to discharge that burden, in part, through the independent expert evidence of Mr. Massey. The fact that the judge referred on occasions to the burden being on Word Perfect does indicate that he was fully conscious of the fact that it was Word Perfect that bore the burden of proving its case. It is, of course, obvious that the burden of proof lay on Word Perfect, and not on its independent expert. The judge could have expressed himself more clearly and could have avoided referring to the burden of proof being on Mr. Massey when, in all likelihood, he meant that the burden was on Word Perfect, which was relying on the independent expert evidence of Mr. Massey in seeking to discharge that burden. However, I do not believe that an experienced judge such as the trial judge here would have misunderstood the position and, further, I do not believe that he actually understood that the burden of proof to be resting on an independent expert engaged by a party. The judge's use of such terminology may perhaps be explained by the fact that the judge prepared his judgment with exceptional expedition after he had heard not one but two public procurement cases together and gave judgment in both cases within a matter of weeks after the hearing. Despite the terminology used on occasions, which could perhaps have been clearer, I reject the criticisms made against the judge on this ground. This ground of appeal is not made out.

 

(b)        Alleged Failure to Engage with the Expert Evidence

383. Word Perfect also contended that the judge failed to engage with the expert evidence and that he did not make findings on the conflicts of evidence between the experts and did not, therefore, fulfil his duty to resolve such conflicts.  As noted earlier, Word Perfect relied on a number of cases including Doyle, Donegal Investment Group and McDonald in support of this aspect of its appeal. I have summarised its arguments earlier. The Respondent disputed those arguments, and I have summarised its submissions earlier also. 
384. I am not satisfied that Word Perfect's criticisms on this ground are well placed. I have carefully reviewed the judgment and in my view, the judge did engage with the essential elements of the evidence of Mr. Massey and Dr. Hannigan.
385. The relevant legal principles applicable to this aspect of Word Perfect's appeal were very helpfully summarised by Collins J. in the Court of Appeal in McDonald. Having referred to Hay v. O'Grady [1992] 1 IR 210 and the judgment of the Supreme Court in Doyle, Collins J. noted that in Doyle, Clarke J. stated:

            "Any party to any litigation is entitled to a sufficient ruling or judgment so as to enable that party to know why the party concerned won or lost. To that end it is important that the judgment engages with the key elements of the case made by both sides and explains why one or other side is preferred.  Where, as here, a case turns on very minute questions of fact as to the precise way in which the accident in question occurred, then clearly the judgment must analyse the case made for the competing versions of those facts and come to a reasoned conclusion as to why one version of those facts is to be preferred.  The obligation of the trial judge, as identified by McCarthy J. in Hay v. O'Grady, to set out conclusions of fact in clear terms needs to be seen against that background." (para. 10, pp. 509-510)

386. Clarke J. observed that the obligation on the trial judge is to analyse "the broad case made on both sides" and "simply to address, in whatever terms may be appropriate on the facts and issues of the case in question, the competing arguments of both sides" (at para 11, p. 510). Later, Clarke J. stated that the court had to "address the broad drift of the argument on both sides so that the parties may know where the court came to its conclusion" (para. 12, p. 510). The obligation on the judge was, according to Clarke J, to "address the main arguments put forward by the competing parties..." as to how the particular accident, the subject of those proceedings, had occurred (para. 13, p. 511). However, the judge was not required to "address each and every possible point that might have been canvassed, however tangentially, in the course of the evidence or argument" and that any failure to do so would not provide a "legitimate basis for maintaining an appeal" (para. 21, p. 513). The judge was entitled to prefer one piece of evidence over another for "a stated and credible reason" (para. 14, p. 511) and an appellate court has no function in second guessing the judge's view in that situation. 
387. In McDonald, Collins J. referred to the decision of the Supreme Court in Healy v. Ulster Bank [2015] IESC 106, and to the decision of the Court of Appeal in Keegan v. Sligo County Council [2019] IECA 245, where in both cases the appellate court held that the trial judge had not engaged in a meaningful way with some of the evidence and with the conflicting accounts given in the case. However, in Leopardstown Club Limited v. Templeville Developments Limited [2017] 3 IR 707, MacMenamin J. observed in the Supreme Court:

"Save where there is a clear non-engagement with essential parts of the evidence, therefore, an appeal court may not reverse the decision of a trial judge, by adverting to other evidence capable of being portrayed as inconsistent with the trial judge's primary findings of fact." (para. 109, p. 748).

388. MacMenamin J. emphasised that non-engagement with evidence meant "there was something truly glaring, which the trial judge simply did not deal with or advert to, and where what was omitted went to the very core, or the essential validity of his findings". He described it as being a "a high threshold" (para. 110, p. 748).
389. Collins J. in McDonald in the Court of Appeal then referred to Donegal Investment Group, where the principles in Hay v. O'Grady and Doyle were applied to findings made by a judge on the basis of expert evidence. That case involved a dispute about the valuation of shares. The High Court heard conflicting expert evidence on the valuation issue. The court reached a conclusion as to the value of the shares which did not reflect the position of either of the parties' experts. The decision was reversed by the Court of Appeal and the Supreme Court upheld that decision. In the Supreme Court, Clarke J. observed that there was "somewhat greater scope" for an appellate court to assess whether the reasons given by a trial judge for preferring the evidence of one expert over that of another could "stand up to scrutiny" (para. 46, p. 193). Nonetheless, he stated that an appeal court should still show significant deference to the views of the judge and the question of findings based on expert evidence. In terms of the level of explanation required of a trial judge in the context of expert evidence, Clarke J. stated in Donegal Investment Group that "it may not require any great deal of explanation for adopting a particular view on a straightforward issue governed by expert evidence" (para 62, p. 198). In such a situation, all that may be required is an indication "in brief terms [of] the reason why the views of one expert was preferred" (p. 62, p. 198). Clarke J. concluded that the judge in the High Court in that case had not adequately explained the basis on which he had adopted the approach he had taken in his judgment. 
390. Clarke J. further observed in Donegal Investment Group that in the context of a judgment arrived at the end of an open and transparent trial process where the case was fully pleaded, the evidence fully heard, witness statements and expert reports exchanged, "...it will often be possible readily to infer why a particular finding was made even if there is no express statement in the judgment" (para. 79, p. 202).
391. Clarke J. did note that there might be cases where "...it is just not possible to ascertain, with any degree of confidence, the reasons why" a trial judge adopted a particular approach to an important part of the facts of the case (para. 80, p. 202).
392. Similar views in the case of disputed legal issues were expressed by Irvine J. in the Court of Appeal in O'Driscoll v. Hurley [2015] IECA 158. Having quoted from a number of English authorities including the decision of the Court of Appeal of England and Wales in English v. Emery Reinbold and Streick Limited [2002] I WLR 2409, Irvine J. rejected the contention that a trial judge was required to set out in judgment a synopsis of the evidence in the case. She explained the purpose of a judgment in a case as follows:

"[the] purpose of the judgment is to explain to the parties why a particular conclusion was reached so that they may properly understand why they won or lost and whether, in the circumstances, an appeal is or is not warranted. As is clear from the decision in English, there is no particular template to which a trial judge must conform when writing his or her judgment and their duty is confined to giving a clear explanation for their decision." (para. 19)

393. As Collins noted in McDonald at para. 32, that was a "very helpful synopsis" of the position and, while not going further than Hay v. O'Grady and Doyle, which were actually concerned with findings of fact, Irvine J's summary in O'Driscoll was a "useful reminder that where there are disputed legal issues which are critical to the ultimate resolution of an action, the judge's resolution of those issues must also be sufficiently explained 'so that [the parties] may properly understand why they won or lost'" (para. 32, pp. 22 - 23).
394.  I agree with Collins J. when he said that while the Court of Appeal should not overstep its appellate function by substituting itself as a fact finder, it is important that the court "should not surrender its proper appellate function" and that it is its duty to ascertain whether the judge made a significant and material error in reaching a conclusion on the facts of a case. 
395. I do not agree with Word Perfect's contention that the judge failed to engage with the expert evidence in this case. He gave a detailed judgment in which he referred to and addressed all of the essential points made by Mr. Massey and by Dr. Hannigan. He provided a comprehensive analysis of the issues in his judgment and provided an explanation for adopting the view that he had on the issues which were disputed between the experts. It is true that he ultimately concluded that the evidence of both experts on some of the disputed issues was "equally plausible" and found that in respect of those issues, Word Perfect had not discharged the burden of proof upon it. Nonetheless, the judge did clearly engage with the evidence. It could not be said that this was a case of "clear non-engagement with essential parts of the evidence", in the words of MacMenamin J. in Leopardstown. Nor could it be said that it was "just not possible to ascertain, with any reasonable degree of confidence" why the judge adopted the approach which he had to those disputed issues of fact and law (to use the words of Clarke J. in Donegal Investment Group). Nor either could it be said that the judge did not provide a sufficient explanation to the parties as to why he reached the particular conclusions he reached so that they could properly understand why they won or lost or whether an appeal was warranted (which Irvine J. described in O'Driscoll as being the purpose of a judgment).
396. I am satisfied that the judge did carefully analyse the legal and factual issues, including the expert evidence of Mr. Massey and Dr. Hannigan, and engaged with that evidence. It is true that the judge could have set out in even greater detail what that evidence was, but I do not believe that he was required to do so. I am not satisfied, therefore, that the judge failed to properly engage with the expert evidence in the case. In those circumstances, this ground of appeal must also fail.

 

(c)        Failure to Discharge Burden of Proof

397. As I have outlined at various stages of this judgment, on a number of the disputed issues, the judge took the view that the burden of proof rested on Word Perfect to establish certain critical parts of its case and that it had failed to discharge that burden of proof. That was the case, for example, in relation to Word Perfect's claims that the RFT for the 2020 Framework and, in particular, the 'one lot rule', breached a number of the general principles of EU law including the principles of equality, competition and proportionality. The judge concluded that on a number of the disputed issues relevant to its claim, the evidence of the independent experts engaged by the parties was "equally plausible" or "in many respects plausible" and that, as a consequence, Word Perfect had not discharged the burden of proving its case on those issues. I have indicated that in respect of some of those areas, the judge could not have been criticised had he preferred the evidence put forth by the Respondent, including the expert evidence adduced on behalf of the Respondent and dismissed Word Perfect's case on that basis.  However, that is not the course that the judge adopted. I have explained earlier why, in my view, the judge was entitled to adopt the approach that he did.
398. While it is, of course, clearly preferable that a trial judge would seek to resolve all conflicts of evidence and disputes of fact and law in each case, there may, however, be exceptional cases in which a judge may find themselves unable to resolve a particular disputed issue of fact, such as where the judge finds the evidence of both sides on a technical issue to be plausible or "equally plausible", as happened in this case. Where, despite the judge's best efforts, the judge is unable to resolve the dispute between two witnesses, particularly expert witnesses, then the judge is entitled to decide the case on the basis that the plaintiff or applicant on whom the burden of proof rests, must fail. This will, however, be a very exceptional situation and, in most cases, it will be possible for the judge to reach a considered view as to which party's evidence should be preferred.
399. The fact that it may not be possible to do so in all cases, particularly in cases where there is a dispute between experts on scientific or technical issues, where both of the experts are credible can be seen in Quinn (A Minor) v. Mid-Western Health Board [2005] 4 IR 1. It is unnecessary to consider the facts of that case in any great detail. The case was a medical negligence case in which the plaintiff was born with severe brain damage. She claimed that she ought to have been delivered no later than week 35 gestation when, it was contended, she would have avoided all, or substantially all, of the brain damage which occurred. While the defendants admitted negligence in the management of the pregnancy, and that the plaintiff should have been delivered earlier than she was, they contended that the plaintiff's brain damage was caused by an acute episode between weeks 28 and 30 of her gestation and that the outcome would not have been any different had she been delivered earlier than she was. There was a major conflict between the experts. The trial judge was unable to resolve that conflict and held that the plaintiff had failed to establish on the balance of probabilities that she would have avoided her catastrophic injuries had she been delivered by week 35 of her gestation and accordingly, he dismissed her claim. An appeal from his decision to the Supreme Court was dismissed.
400. In his judgment for the Supreme Court, Kearns J. considered how a trial court should approach the task of finding primary facts and cited with approval the dicta of Finlay C.J. in Best v. Wellcome Foundation Limited [1993] 3 I.R. 421, where he said:

"The function which a court can and must perform in the trial of a case in order to acquire a just result, is to apply common sense and a careful understanding of the logic and likelihood of events to conflicting opinions and conflicting theories concerning a matter of this kind." (at p. 462)

401. Finlay C.J. adverted to the difficulty which can arise in the case of disputes between experts on complex scientific matters. He said:

"...it is not possible either for a judge of trial or for an appellate court to take upon itself the role of a determining, scientific authority resolving disputes between distinguished scientists in any particular line of technical expertise. (per Finlay C.J. at p. 462)

402. In Quinn, Kearns J. observed:

"In the ordinary course, however, a trial judge will, and must, use his best endeavours to resolve conflicts of fact by deciding those issues in accordance with the legal requirement that he do so on the balance of probabilities. Exceptional cases however can and do arise, and this is clearly one such case, where it may not be possible to do so." (per Kearns J. at para. 56 p. 21)

403. Kearns J. held that in the case before the court, there was a "complete standoff between the respective medical experts on both sides", both as to causation and as to the timing of the relevant injury and that, in those circumstances, it was not necessary for the trial judge ultimately to decide in favour of one proposition or another. He held that it was open to the trial judge to decide the case by holding that the plaintiff had not discharged the burden of proof to establish on the balance of probabilities that her injury had occurred in a manner or at a time contended for by her experts. The evidence provided by the experts on both sides was found by the trial judge to be credible. That ultimately left the judge in a position where he was "driven to the conclusion that the onus of proof had thus not been discharged" (per Kearns J. at para. 57, p. 21). Kearns J. found support for the proposition that a trial judge is not under an obligation in all cases to find positively in favour of one version over another in the decision of the House of Lords in Rhesa Shipping Co. S.A. v. Edmunds [1985] 1 WLR 948 and, in particular, in a passage from the speech of Lord Brandon in that case. In addressing the duty of fact finding which a trial judge has to perform in a case, Lord Brandon said:

"...the judge is not bound always to make a finding one way or the other with regard to the facts averred by the parties. He has open to him the third alternative of saying that the party on whom the burden of proof lies in relation to any averment made by him has failed to discharge that burden. No judge likes to decide cases on burden of proof if he can legitimately avoid having to do so. There are cases, however, in which, owing to the unsatisfactory state of the evidence or otherwise, deciding on the burden of proof is the only just course for him to take...the legal concept of proof of a case on a balance of probabilities must be applied with common sense. It requires a judge of first instance, before he finds that a particular event occurred, to be satisfied on the evidence that it is more likely to have occurred than not.  If such a judge concludes, on a whole series of cogent grounds that the occurrence of an event is extremely improbable, a finding by him that it is nevertheless more likely to have occurred than not, does not accord with common sense. This is especially so when it is open to the judge to say simply that the evidence leaves him in doubt whether the event occurred or not, and that the party on whom the burden of proving that the event occurred lies has therefore failed to discharge such burden." (per Lord Brandon at p. 955)

404. In commenting on that passage, Kearns J. observed that "[a] trial judge must not, of course abdicate his duty to endeavour to resolve issues" but sometimes "even the most conscientious effort" may still leave a judge in the position where he or she is unable to resolve the disputed issues (para. 59, p. 22). Kearns J. concluded that if "credible evidence existed which left [the judge] in such a quandary", the judge "effectively had no option but to decide the case as he did" (per Kearns J. at para. 59, p. 22). He found that there was such evidence in that case and therefore, the judge had no alternative but to decide the case on the basis of the burden of proof. 
405. In my view, a similar position arises here. The judge was satisfied that the views of both experts, who he described as "very professional" and as having "undoubted expertise", were "in many respects plausible" and "equally plausible" and while it is certainly arguable that he could have resolved the disputes between the experts, I am satisfied that it was open to the judge to decide the case as he did, namely, on the basis that Word Perfect had not discharged its burden of proof. In those circumstances, I am not satisfied that there was a significant and material error in the way in which the judge reached his conclusions on the issues which were in dispute between the two experts, Mr. Massey and Dr. Hannigan. 

 

(d)       Final Observation on the Experts

406. In light of the general comments made by the judge on the evidence of experts (at paras. 87 - 92 of the judgment), I believe that it is appropriate for me to make a few concluding remarks in relation to the experts in this case. It is important to point out, as I have already done, that the judge appropriately acknowledged the "undoubted expertise" of both Mr. Massey and Dr. Hannigan and stated that he found them both to be "very professional" (at para. 88). However, the judge then made a number of observations in relation to expert evidence in general (by reference to dicta of Irvine J. in the Court of Appeal in Byrne and of O'Donnell J. in the Supreme Court in Hanrahan). Those observations included his statement that "...the reason that it is no coincidence that expert evidence in court always seems to support the party engaging the expert, is simply because it is human nature to act in one's own financial interests and this can often occur subconsciously" (para. 91). The judge then stated that the comments of the Supreme Court and of the Court of Appeal "would lead any court to exercise caution when considering expert opinions, where a party to the litigation is the paying customer of the expert" (para. 92). While these observations are no doubt correct, in a general sense, I do not believe that the comments are particularly apposite to the role played by both of the experts in this case. 
407. Having carefully considered their reports and their evidence at the hearing before the High Court, I would like to make clear that, in my view, the two experts performed their independent role as expert witnesses in an exemplary and model fashion. Their reports were clear and comprehensive. Before they gave their evidence at the trial, the experts met and produced the Joint Report. The Joint Report was a model of its kind, and I found it immensely helpful in understanding the issues and the points of agreement and disagreement between the experts on the complex issues which arose in this case. A careful review of the Joint Report demonstrated that the differences between the experts boiled down to a very small number of net issues, principally directed to the competition implications of the 'one lot rule'. The experts are to be commended for the constructive approach which they took in the preparation of the Joint Report. They are similarly to be commended for the manner in which they gave their evidence under cross-examination. Both experts were prepared to make appropriate concessions (some of which I have referred to earlier in my judgment). I would not, therefore, want any of the judge's comments in relation to expert evidence generally to detract from the significant assistance provided by both Mr. Massey and Dr. Hannigan to the judge in the High Court and to this Court on appeal.

 

10. Article 267 Reference

408. Word Perfect contended that the Court could decide the appeal in its favour without the need to make a preliminary reference to the CJEU under Article 267 TFEU. It submitted, however, that if the Court considered that it required assistance from the CJEU on issues including the proper interpretation of Articles 18 and 46 of the 2014 Directive, or otherwise in relation to the interpretation and application of EU law to the circumstances arising in this case, the Court should make such a preliminary reference. At the conclusion of the hearing of the appeal, Word Perfect reiterated that some of the issues raised in relation to the 2014 Directive, including the proper interpretation of Article 46 and the meaning of "intention" in Article 18 have not been the subject of any decision of the CJEU. It submitted that the Court should consider making a reference on these issues and, potentially, on other issues unless it was disposed to grant Word Perfect's appeal. 
409. I do not believe that it is necessary for the Court to make a reference to the CJEU under Article 267 on any of the issues decided in this judgment. The Court is not obliged to make such a reference. It was decided in In the Matter of Permanent TSB Holdings Group plc [2020] IECA 1 (at para. 130) that the Court of Appeal is not a court "against whose decisions there is no judicial remedy under national law", for the purposes of Article 267(3). It is not a "court of last resort" (per Collins J in Permanent TSB Holdings at para. 130). The Court is, however, free to make a reference if it considers that a decision on any of the issues of EU law including the interpretation of provisions of the 2014 Directive are "necessary" to enable the Court to give its judgment on the appeal. I am satisfied that it is not necessary for such a reference to be made to enable the Court to give decision on this appeal. I have concluded that the issues of interpretation of the various provisions of the 2014 Directive which arose in this case can readily be determined without the need for a reference. None of the other issues of EU law arising in the case, in my view, require a reference to be made. I do not, therefore, believe that the Court should make any preliminary reference to the CJEU under Article 267.

 

11. Summary of Conclusions

410. In summary, for the reasons set out in this judgment, I am satisfied that the High Court judge was correct in his decision as to the lawfulness of the two aspects of the RFT for the 2020 Framework which were challenged by Word Perfect, namely, 'the lots decision' and the 'one lot rule'. I have concluded that the judge was correct in his decision that neither the 'lots decision' nor the 'one lot rule' is unlawful on any of the grounds advanced by Word Perfect. 
411. In those circumstances, I would dismiss Word Perfect's appeal and affirm the order of the High Court. 

 

 

12. Provisional View on Costs

412. As Word Perfect has been unsuccessful in its appeal, it is my provisional view that, having regard to the provisions of ss. 168 and 169 of the Legal Services Regulation Act 2015, and O. 99 of the Rules of the Superior Courts, Word Perfect should be ordered to pay the Respondent's costs of the appeal, such costs to be adjudicated upon in default of agreement. However, if Word Perfect wishes to dispute this provisional view on costs or to seek any other order, it should provide short written submissions on the issue within 14 days of the date of the electronic delivery of this judgment. Those submissions should be provided to the Registrar and to the Respondent's solicitors within that time period. The Respondent will then have 14 days to respond. The submissions should also address the terms of the final orders which the parties maintain should be made. The Court will then consider whether the issue of costs and the terms of the final orders can be dealt with on the basis of the submissions made, or whether a further hearing is required. 
413. In circumstances where this judgment is being delivered electronically, Edwards J. and Faherty J. have indicated their agreement with it.