Lee Ming Hao
Court of Appeal
Civil Appeal No 152 of 2011
Cheung and Chu JJA
Administrative
23 December 2011, 6 March 2012, 14 May 2013

Government procurement— breach of World Trade Organization Agreement on Government Procurement not reasonably arguable

X was a director of a company (“C”) which supplied drugs to the Hospital Authority (the “HA”). In January 2011, the HA informed C that its tender for a supply contract was unsuccessful. C lodged a challenge with the Review Body on Bid Challenges (the “Review Body”), alleging that the HA was in breach of the World Trade Organization Agreement on Government Procurement (the “WTO GPA”).

In March 2011, the HA explained in a letter to C that the tender was rejected because of concerns about the results of financial assessment in respect of C. The Chairman of the Review Body was of the view that there was no prima facie evidence to support the challenge. X applied for leave to apply for judicial review against the Chairman’s decision. The judge in the lower court refused to grant leave. X appealed.

Held, dismissing the appeal, that, inter alia:

Under the tender document, the HA would need to be satisfied that a tenderer had sufficient financial capacity to undertake and fulfil the obligations imposed under the contract before considering awarding the contract to the tenderer.

It also had absolute discretion in deciding whether it was satisfied with the results of financial vetting. As the reason for not selecting C met the standards for selection and vetting, the Chairman could not be faulted for not interfering with the Authority’s decision of not awarding the contract to C. Article XIII(4)(c) of the WTO GPA expressly stated that the award determination shall be made in accordance with the criteria specified in the tender documentation. There were no provisions in the WTO GPA prohibiting or limiting procuring entities from having absolute discretion or taking action by relying on their opinions during their evaluation.

There was also no requirement under the WTO GPA that the procuring entity had to provide reasons in writing.

Further, as the Authority responded to C’s demand for a written reply by issuing the letter in March 2011, C’s challenge had been dealt with. 

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