To suspend or expedite? The Court considers the American Cyanamid principles in a procurement

A contracting authority is automatically suspended under the Public Contracts Regulations 2015 (“PCR 2015”)  from entering into a contract with a supplier as soon as a claim has been issued in respect of its decision to award that contract. In the recent decision of MAK Systems Group Limited -and- Velindre University NHS Trust [2026] EWHC 8 (TCC), the Court provided a useful summary of the factors it will consider on whether to grant an application to lift such a suspension or instead keep the suspension in place and expedite proceedings.

The Court decided to lift the suspension and refuse the application for expedition. In applying the American Cyanamid principles, the Court arrived at a commercial, pragmatic decision, recognising the opportunity costs of implementing a new contract within agreed timescales, and emphasising that complex regulatory issues in dispute should be properly heard in a full trial.

Background

The dispute arose out of the procurement of a new blood establishment computer system (“BECS”) by the Welsh Blood Service, an operating division of the defendant Velindre University NHS Trust (the “NHS Trust”).

GPI SpA (“GPI”) was the successful bidder. The incumbent supplier MAK Systems Group Limited (“MAK”) alleged that there had been various breaches of the PCR 2015 and it brought a claim against the NHS Trust. GPI is an interested party in the proceedings.

The commencement of the proceedings brought into effect an automatic suspension under Regulation 95(1), PCR 2015 preventing the NHS Trust from entering into the new BECS contract with GPI. The NHS Trust made an application to lift the suspension. In response, MAK sought expedited proceedings and invited the Court to maintain the suspension pending the outcome of the full trial.

The hearing of the parties’ applications was before Mrs Justice Jefford DBE, who was careful not to stray into considering the merits, stressing that it would be inappropriate to undertake a “mini-trial” of the issues at the interim stage of the proceedings.

Principles

Application to lift the suspension

The courts will have regard to the principles established in American Cyanamid Co (No 1) v Ethicon Ltd [1975] UKHL 1 (05 February 1975) in considering whether to grant an interim injunction:

1. Is there a serious issue to be tried?
2. If so, what is the balance of convenience?

For applications to lift a suspension, the courts have expanded on the American Cyanamid principles as follows in Camelot Lotteries Ltd v Gambling Commission [2022] EWHC 1664 (TCC):

1. Is there a serious issued to be tried?
2. If so, would damages be an adequate remedy for the claimant(s) if the suspension were lifted and they succeeded at trial; is it just in all the circumstances that the claimant(s) should be confined to a remedy in damages?
3. If not, would damages be an adequate remedy for the defendant if the suspension remained in place and it succeeded at trial?
4. Where there is doubt as to the adequacy of damages for either of the parties, which course of action is likely to carry the least risk of injustice if it transpires that it was wrong; that is, where does the balance of convenience lie?”

Expedited trial

On whether to order an expedited trial, the courts will consider the following factors set out in W L Gore & Associates GmbH v Geox SpA [2008] Civ 622:

1. Has the applicant shown good reason for expedition?
2. Would expedition interfere with the good administration of justice?
3. Would expedition cause prejudice to the other party?
4. Are there any other special factors?

The Court noted that in considering whether there is a good reason for expedition, the same factors in respect of the adequacy of damages and the balance of convenience will be engaged. The nature and practicalities of the hearing and the allocation of court resources are other factors for consideration.

The Court’s decision and reasoning

The NHS Trust succeeded in its application to lift the suspension. MAK’s application for expedition was dismissed. The Court’s reasoning is summarised below.

Adequacy of damages

As the NHS Trust had conceded that there was a serious issue to be tried, the focus was whether damages would be an adequate remedy.

The Court held that damages were an adequate remedy for MAK, as its contract with the NHS Trust was modest compared against its overall business. MAK’s arguments that it would suffer reputational damage that could not be adequately remedied in damages were roundly dismissed. There was no independent evidence to support MAK’s assertion that that the loss of a contract by an incumbent supplier was more significant than usual because BECS contracts were in a special category where suppliers rarely changed. It could also not be said that BECS contracts were “prestigious” simply because they were contracts awarded by the NHS. Furthermore, there was no evidence that the BECS contract was of any particular interest to the wider market, or would be regarded as setting any standard. MAK’s evidence that the BECS contract might affect future bids was vague and speculative.

Conversely, the Court agreed with the NHS Trust that damages would not be an adequate remedy if the suspension remained in effect. There was no dispute that the new BECS contract would deliver more benefits than MAK’s existing offering, since GPI offered full implementation of a product equivalent to the current system plus optional modules with additional functionality. The issue was one of timing. The NHS Trust’s invitation to tender (“ITT”) had provided for an implementation period of two and a half years. GPI required a minimum of two years and the suspension had already resulted in a six month delay to the start of the implementation period.

The Court held that the loss of opportunity to introduce those benefits within expected timescales could not be adequately remedied in damages. MAK’s contention that its contract could readily be extended was rejected. Even if the NHS Trust agreed to an extension of the existing contract, MAK would need 15 months to update its current system to the latest software and to implement added functionality. These costs would be entirely wasted if the NHS Trust were successful at trial, which further militated against delaying the implementation of the new contract.

Expedition

MAK initially requested the expedition of the full trial but subsequently amended its position to propose an expedited hearing on whether GPI’s offering was compliant with the applicable regulatory regime (the “Compliance Issue”).

For context on the Compliance Issue, one aspect of MAK’s pleaded case was that BECS fell within the definition of an in vitro medical diagnostic device within Regulation 2 or an accessory within Regulation 32 of EU Regulation 2017/746 (the “IVDR”). MAK’s contention was that GPI’s product was not compliant with the IVDR, which posed or may pose a risk to patient safety. MAK asserted that GPI’s bid should have been excluded from the ITT and it would not be lawful for the NHS Trust to enter into a contract for the supply of a product that was not compliant with the relevant regulations.

The Court found no justification for the expedition of the full trial, noting that the time estimate of four weeks was more realistic that the proposed two-week expedited trial. Even if a two week trial were possible, there would be a substantial delay in implementation. The Court also gave weight to the NHS Trust’s plan to secure earlier delivery of benefits through the new BECS, which would respond to recommendations of the Infected Blood Inquiry to prioritise the digital transformation of transfusion systems. 

MAK similarly failed in its attempt to have an expedited hearing on the Compliance Issue only. The Court declined to prejudge regulatory questions or patient safety concerns, noting that questions as to what the ITT required, what it ought to have required, and whether GPI’s offering was compliant could not be determined on an interim application and did not justify maintaining the suspension or agreeing to expedition. In reaching this conclusion, the Court noted that GPI’s product was already in use worldwide and there had been no evidence of any issues relating to patient safety.

Balance of convenience

The Court held it was not necessary to consider the balance of convenience, which only needs to be considered if there is doubt as to the adequacy of damages for either party. In any event, the Court found that the balance of convenience was very much in favour of lifting the suspension.

Comment

The Court arrived at a commercially sensible and practical decision to enable the NHS Trust to deliver new benefits to patients. In this instance, the NHS Trust’s application was decided primarily on the question of whether damages would be an adequate remedy under American Cyanamid framework. Contracting authorities have traditionally enjoyed a high success rate in their applications to the court to intervene in the automatic suspension.

This case was brought under the PCR 2015 because the procurement began in 2024, in advance of the Procurement Act 2023 (“PA 2023”) coming into force. 

From 24 February 2025, Section 102 of the PA 2023 replaced the old American Cyanamid test for interim remedies in procurement challenges, introducing a new statutory test that requires courts to consider the public interest in lawful procurement and service continuity alongside suppliers’ interests, particularly whether damages are adequate compensation.

While similar in principle, the new test aims to balance upholding legal processes with ensuring essential goods and services are not unduly delayed. There have been no cases decided under the PA 2023 as yet, but we expect to see PA 2023 cases coming through the courts soon. It will be interesting to see if the statutory test shifts the balance in favour of suppliers mounting similar procurement challenges in the future.

For further information, please email the authors or your usual CMS contact.