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Court of Appeal considers the application of public procurement law to development agreements

DATE: 12 Jun 2018

The Court of Appeal (Lewison, Lindblom and Flaux LJJ) today heard Faraday Development Ltd. v West Berkshire District Council, an appeal from the judgment of Holgate J. [2016] EWHC 2166 (Admin) that the development agreement between West Berkshire Council and St Modwen Developments Ltd regarding the regeneration of the London Road Industrial Estate in Newbury was not a “public works contract” within the meaning of the Public Contracts Regulations 2006 and therefore did not need to be subject to public procurement. Holgate J.’s principal reasoning was that this was because (i) any obligation on St Modwen to carry out works did not arise until it exercised its right under the agreement to draw down relevant land and (ii) St Modwen was under no legal obligation to exercise that right, following Hickinbottom J in R (on the application of Midlands Co-operative Society Ltd) v Birmingham City Council [2012] B.L.G.R. 393.  Judgment has been reserved.

Charles Banner acts for Faraday Development Ltd, with Nigel Giffin QC, instructed by DAC Beachcroft LLP. 

David Elvin QC acts for West Berkshire Council, with Joseph Barrett, instructed by Womble Bond Dickinson LLP.