Re Lee Ming Hao

Case No.CACV 152/2011[2013] 4 HKLRD 447
Court
Court of Appeal
Date14 May 2013
JudgeCheung JA, Chu JA
Case Document
100%

[ENGLISH TRANSLATION – 英譯本]

CACV 152/2011

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NO. 152 OF 2011

(ON APPEAL FROM HCAL NO. 47 OF 2011)

___________________

LEE MING HAO Applicant (Appellant)

___________________

Before: Hon Cheung JA and Hon Chu JA in Court
Dates of Hearing: 23 December 2011 and 6 March 2012
Date of Judgment: 14 May 2013

J U D G M E N T

Hon Chu JA (giving the judgment of the court):

1.This is an appeal from the refusal of Poon J of the Court of First Instance to grant leave to apply for judicial review.

The factual background

2.The Applicant is a director of Jindun Pharma (HK) Ltd, one of the drug suppliers of the Hospital Authority (HA).

3.In 2010, the HA invited tenders for the contract for the supply of two drug items.  In response to this invitation to tender under the reference number of HAHO(S)/T/10-D208, Jindun Pharma submitted a tender.

4.On 28 January 2011, the HA informed Jindun Pharma by letter that their tender was unsuccessful but did not mention why.

5.On 1 February 2011, Jindun Pharma faxed a letter to the HA, demanding to know why their tender was unsuccessful.  According to what the Applicant said, he had a meeting with the staff of the HA in charge of the procurement of pharmaceuticals on the same day and obtained their promise of a written reply within 7 working days as to why Jindun Pharma’s tender was not selected.  However, no replies were received after the lapse of the said period.

6.On 16 February 2011, Jindun Pharma lodged a challenge with the Review Body on Bid Challenges (“the Review Body”). At the request of the Secretariat of the Review Body set out in their letter dated 18 February 2011, Jindun Pharma submitted supplemental documents and an amended complaint form on 9 March 2011 and 10 March 2011 respectively.

7.On the other hand, in a letter faxed to Jindun Pharma on 10 March 2011, the HA gave an explanation as to why the tender submitted by them was unsuccessful, the full text of which is as follows:

We have been asked to provide you with the reasons why your Tender submission was unsuccessful.

We were concerned when we undertook financial assessment for HAHO(S)/T/10-D208. Please also note we have absolute discretion in deciding whether we are satisfied with the results of the financial vetting (under paragraph 9(b) of Part 1 of the Tender).

Additionally, we are also concerned about the way that Jindun International (HK) Co Ltd dealt with the defective intravenous administration sets under a previous tender.

8.In brief, the HA was concerned about the results of the financial assessment in respect of Jindun Pharma, pointing out that under paragraph 9(b) in part I of the tender document, the HA enjoys absolute discretion as to whether the financial assessment results are satisfactory.  Besides, the HA was also concerned about the way in which the quality problems with the intravenous drugs supplied under a previous tender award were dealt with by Jindun International (HK) Co Ltd, a company connected with Jindun Pharma.

9.In the fax sent to the HA on 11 March 2011, Jindun Pharma indicated that they had had a number of meetings with the HA’s representatives, and that what was said during the meetings was different from what was stated in the letter of 10 March as to why their tender was not selected.  Jindun Pharma also demanded an explanation from the HA on several questions, including the question as to what law confers the absolute power as mentioned by the HA.

10.On 21 March 2011, Jindun Pharma provided the letter of 10 March from the HA and the copy of their letter of reply of 11 March to the Review Body.

11.On 30 March 2011, the Review Body informed Jindun Pharma by letter that after having read and considered the documents concerned, the Chairman of the Review Body was of the view that there was no prima facie evidence to support the challenge by reason of the grounds the Chairman gave in the enclosure of the letter.

12.Jindun Pharma wrote to the Review Body on 30 March 2011 and 31 March 2011 respectively for a review of the Chairman’s decision by the Chairman himself.  On 11 April 2011, the Review Body informed Jindun Pharma by letter that after having reconsidered the case, the Chairman upheld the original decision.

13.The Applicant made an application on 29 June 2011 for leave of the court to apply for judicial review of the decisions of the Chairman of the Review Body.

14.The application was refused by Poon J on 28 July 2011.

15.The Applicant appealed to the Court of Appeal against the decision of Poon J on 9 August 2011.

Jindun Pharma’s challenge

16.The challenge filed by Jindun Pharma with the Review Body alleged that the HA was in breach of some of the provisions of the World Trade Organization Agreement on Government Procurement (WTO GPA), the details of which are as follow:

(1) Jindun Pharma alleged that by the time they made the challenge, the HA still failed to provide written reasons as to why their tender was unsuccessful, thus constituting a breach of Article XVIII(2)(a), (b) and (c) of the WTO GPA.[1]

(2) Jindun Pharma alleged that the HA’s representatives had indicated orally that the fact that their tender was unsuccessful was connected with the dispute between Jindun International (HK) Co Ltd (“Jindun International”) and the HA on the quality of the intravenous drugs, and yet this is not an assessment criterion set out in the tender document.  They also pointed out that although the shareholders of Jindun Pharma and those of Jindun International are the same, there is no mutual “cross”-holding of the shares of each other; the two companies are independent corporations. Thus it would be unfair if Jindun Pharma’s tender was not selected because of this not-yet-conclusive dispute. In addition, Jindun Pharma considered that the HA had discriminated against them by awarding the supply contract to a bidder whose bid price was higher than the price submitted by Jindun Pharma, which, apart from wasting public money, also raised the suspicion of transfer of benefits.  Thus, Jindun Pharma is of the view that the HA was in breach of Article XIII(4)(b) and (c)[2] of the WTO GPA.

(3) Jindun Pharma alleged that the HA had applied a double standard in deciding whether or not to make a tender award, in that the supplier involved in the death-causing incident associated with drugs contaminated with mucor in 2009 was still awarded the contract by the HA despite the fact that it was prosecuted and convicted.  They therefore consider that the HA was in breach of Article VII(1)[3] of the WTO GPA.

The decision of the Chairman of the Review Body

17.Rule 13 of the Rules of Operation of the Review Body on Bid Challenges (“Rules of Operation”) made under the WTO GPA provides that the Chairman of the Review Body shall “decide whether a prima facie case is established for the challenge to be accepted for inquiry and a Panel to be appointed to consider the challenge”.  Rule 13 also stipulates that the Chairman shall, inter alia, take into consideration the 5 conditions set out in the provisions in respect of the challenge with condition (c) being that the information provided by the complainant discloses a reasonable indication that the procurement has not been carried out by the procuring entity involved in accordance with the provisions of the GPA.

18.The Chairman of the Review Body determined that Jindun Pharma had failed to indicate that the HA’s tendering and procurement had not been carried out in accordance with the provisions of the WTO GPA and there was no prima facie case in the challenge. His determination was based on the following grounds:

(1) Regarding the challenge in respect of the breach of Article XVIII(2)(a) to (c) of the WTO GPA:

“This allegation, which is simply procedural in nature, is beside the point with regard to procurement. Should the procuring entity refuse to provide the information concerned to the tenderer, the Review Body could possibly represent the tenderer to call on the procuring entity to make a response. However, if the procuring entity has already provided the information, then it is no longer necessary for the Review Body to take any action irrespective of whether such information has been provided in a timely manner.” (Paragraph 13 of the written reasons)

(2) Regarding the challenge in respect of the breach of Article XIII(4)(b) and (c) of the WTO GPA:

“A procuring entity is entitled to make such rules on tendering and procurement. As highlighted in paragraphs 9(b) and 14 respectively in Part I of the tender document pertaining to the present tender, the HA has “absolute discretion” and “may in its sole opinion …”. Thus, it would not only be without basis but also inappropriate for the Review Body to interfere in the rules made by the HA. Moreover, the Review Body has, in any case, examined the reasons, disclosed by the HA to the complainant, for the complainant’s tender not being selected, and is of the view that even if the Review Body has the power to intervene, there are no grounds to support the taking of such action by the Review Body. Besides, as a selection criterion, the tender price cannot take precedence over such wording as “absolute discretion” and “may in its sole opinion …” as provided in the tender document.” (Paragraph 11 of the written reasons)

(3) Regarding the challenge in respect of the breach of Article VII(1) of the WTO GPA:

“If the complainant is not a party to the tender invitation where the selected tenderer was the mucor-contamination drug supplier, then they shall have no “locus standi” to lodge a challenge.  Furthermore, in any event, according to the tender document, the HA has absolute discretion to conduct a financial assessment of the tenderers for the purpose of selecting the right tenderer.  Thus, it would not be appropriate for the Review Body to interfere in this regard.” (Paragraph 9 of the written reasons)

The Applicant’s grounds for applying for judicial review

19.The Applicant makes his application for leave to apply for judicial review mainly on three grounds:

(1) The decision of the Chairman of the Review Body is illegal and unreasonable

The Applicant is of the view that under Article XIII(4)(b) of the WTO GPA, the tender selection criterion is the public interest instead of absolute discretion or the procuring entity’s opinion (its sole opinion).  In addition, there is no absolute discretion granted to the procuring entity by the WTO GPA.  Thus, it is not legitimate for the Chairman of the Review Body to maintain that the HA can override the provisions of the WTO GPA on the basis of such stipulations in the tender document as those regarding absolute discretion and reliance on its opinions.  The Applicant also considers this decision to be unreasonable, in that absolute discretion is associated with strong personal subjectivity such that using it as a ground for rejecting a bid will result in unreasonable and unfair consequences.

(2) The decision of the Chairman of the Review Body is in breach of the Rules of Operation

The Applicant is of the view that the Chairman of the Review Body has distorted the law by saying that the challenge concerning the HA’s failing to make a prompt written response to Jindun Pharma to explain why their tender was not selected was procedural in nature and beside the point with regard to procurement since there is no such distinction in the WTO PGA.  The Applicant is also of the view that the Review Body should make a determination in relation to the challenge made by Jindun Pharma against the HA’s violation of Article XVIII(2) of the WTO GPA.  However, the Chairman of the Review Body failed to perform his duty.

(3) The procedure for challenge under the Rules of Operation is in breach of the provisions of the WTO PGA

The Applicant is of the view that the stipulation under Rule 13 of the Rules of Operation that whether a prima facie case is established for a challenge shall be the sole decision of the Chairman of the Review Body does not conform with what is provided for in Article XX(6)[4], whereby [challenges shall] be heard by a review body.  This is a clear violation.

20.In the Form 86, the Applicant requests the court to make the following orders:

(1) Order of Certiorari: To quash the decision of the Chairman of the Review Body;

(2) Order of Mandamus:      To require the Chairman of the Review Body to determine on whether or not there was timely provision of information by the HA in accordance with the powers of his office; and

(3) Order of Damages:To demand the payment of the costs spent since the commencement of the challenge until the end of the judicial review, calculated in terms of the salary of the Applicant as a director; and compensation for the costs and expenses in consulting and engaging WTO law experts.

21.The Applicant also requests declarations to be made in relation to the following issues:

(1) Whether the procuring entities in Hong Kong covered by the WTO GPA has absolute discretion in government procuring activities;

(2) Whether the absolute discretion provided for in the tender document may take precedence over the tender selection criteria under the WTO GPA; and

(3) Whether Rule 13 of the Rules of Operation complies with the provision of Article XX of the WTO GPA.

The stance of the Review Body

22.The Applicant made the Chairman of the Review Body the proposed respondent in the Form 86.

23.At the request of the court, the Review Body submitted a written response to the Applicant’s application.  It has taken a neutral stance on the Applicant’s intended judicial review and the present appeal, and has only raised a few points of law for the reference of the court as follow:

(1) The Review Body does not rely on provisions of the law but on the terms and conditions of the contract governing the parties involved in a tender invitation activity for the purpose of receiving bid challenges.  For this reason, the administrative decision of the Review Body does not carry a public element and thus there is no legal basis for initiating a judicial review of its decision.

(2) Members of the Review Body (including the Chairman) act in the capacity of the Review Body in exercising the powers of their office and are therefore not liable for such personal liabilities as compensation or costs. This is provided for under Rule 38 of the Rules of Operation.

(3) Before the appointment of a Review Panel, the Chairman of the Review Body shall represent the Review Body in deciding whether a prima facie case is established in respect of a challenge in accordance with the provisions of Rule 13 of the Rules of Operation.  This is a summary procedure for the purpose of screening out some unmeritorious complaints.

(4) The Rules of Operation has already covered the procedural requirements as set out in Article XX(6)(a) to (g) of the WTO GPA.

The setting up of the Review Body and the Rules of Operation

24.Hong Kong is one of the Parties to the WTO GPA, which applies to the departments of the Hong Kong Government as well as some public bodies including the HA.  What the GPA requires the Hong Kong Government and the bodies within its scope of application to follow is that in carrying out procurement, the treatment provided to the products, services and suppliers of a foreign origin should be no less favourable than that accorded to local products, services and suppliers (see Article III of the WTO GPA).  Besides, Articles VII to XVI of the WTO GPA also impose requirements on procedures for procurement including such matters as the preparation of tender specifications, tender procedures and the selection criteria of the tenderer, etc.  Article XX also requires the Parties to provide a bid challenge system and that challenges should be heard by a court or by an impartial and independent review body.

25.Pursuant to the provisions of Article XX, the Hong Kong Government has set up a review body, which is not a statutory body but an independent administrative body whose operation is governed by the “Rules of Operation”.  Rules 9 to 39 of the Rules of Operation concern the procedure for dealing with bid challenges.  Rule 13 states that:

“13. The Chairman shall decide, within 7 working days from the issue of the ‘Notification of Receipt of Bid Challenge’ under Clause 11, whether a prima facie case is established for the challenge to be accepted for inquiry and a Panel to be appointed to consider the challenge. In making the decision, the Chairman shall, inter alia, take into consideration the following conditions in respect of the challenge:

(a) the challenge is made in respect of a procurement covered by the GPA;

(b) the complainant is a supplier or a potential supplier who has or has had an interest in the procurement concerned;

(c) the information provided by the complainant discloses a reasonable indication that the procurement has not been carried out in accordance with the provisions of the GPA;

(d) the challenge is filed within the prescribed time limits; and

(e) the complainant has filed sufficient information.

The Chairman, on the basis of the information provided in the complaint form, may come to the view that the challenge should not be accepted for inquiry or he may request further information from the complainant to help him decide whether the challenge should be accepted for inquiry.”

26.Under Rule 14 of the Rules of Operation, if the Chairman considers that a challenge should be accepted for inquiry, he shall appoint a Review [Panel] to conduct an inquiry into the challenge.  Rule 24 also prescribes that the Review Panel may in the conduct of an inquiry convene hearings in respect of a challenge and the procedures and practices in detail for conducting hearings are set out in Appendix III.  In addition, Rules 26 and 27 provide that the Review Panel shall determine the validity of a challenge and make recommendations on corrective measures or compensation, as well as such remedy as it considers appropriate, and that it shall make a written report on opinions and recommendations in respect of the challenge as well as a written statement on the relevant grounds.

The first ground of application

27.The Applicant’s first ground of application for judicial review stems from Jindun Pharma’s complaint against the HA for not awarding the supply contract to them, indicating a breach of Article XIII(4)(b) and (c) of the WTO GPA.  This is because the winning bid is higher than the tender price submitted by Jindun Pharma; Jindun Pharma and Jindun International are two independent corporations; and the dispute between Jindun International and the HA over the quality of a drug is not yet conclusive. Thus the HA, by including the dispute as a factor of consideration, has gone beyond the ambit of the assessment criteria set out in the tender document and in addition, has been unfair.

28.The Chairman of the Review Body considered the challenge to be unsubstantiated. This was partly due to the fact that the HA is entitled to make rules governing tendering and procurement and the tender document gave the HA absolute discretion and provided that it may rely solely on its opinions to act. The Review Body cannot and should not interfere in these rules.  On the other hand, having examined the reasons the HA provided for Jindun Pharma’s tender not being selected, the Review Body found that there was no basis for intervention.  The Chairman of the Review Body was also of the view that the tender price submitted cannot take precedence over such stipulations as set out in the tender document that the HA enjoys absolute discretion and may rely solely on its opinions to act.

29.The Applicant considers that the Chairman of the Review Body erred in coming to this decision, in that according to the WTO GPA, the selection criterion is public interest and that the GPA does not provide for granting the procuring entity absolute discretion or the power of relying on its opinions to act.

30.Article XIII(4)(b) of the WTO GPA states that unless in the public interest an entity decides not to issue the contract, the entity shall make the award to the tenderer who has been determined to be fully capable of undertaking the contract and whose tender, whether for domestic products or services, or products or services of other Parties, is either the lowest tender or the tender which in terms of the specific evaluation criteria set forth in the notices or tender documentation is determined to be the most advantageous.  Article XIII(4)(c) also states that awards shall be made in accordance with the criteria and essential requirements specified in the tender documentation.

31.It can be seen from the above that Article XIII(4)(b) does not provide for public interest to be a tender selection criterion; it only allows a procuring entity to withdraw the contract having regard to public interest by not awarding it to any bidder.  Moreover, although the submitted tender price or the lowest tender is one of the evaluation criteria, whether the tenderer is fully capable of undertaking the contract is also an important evaluation criterion.  Thirdly, Article XIII(4)(c) expressly states that the award determination shall be made in accordance with the criteria and essential requirements specified in the tender documentation.

32.Under these circumstances, the Chairman of the Review Body is plainly correct in considering that the procuring entity is entitled to make procuring rules by way of the tender document.  Moreover, the point made by the Chairman of the Review Body that as a selection criterion, the tender price cannot take precedence over the terms and conditions of the tender document is also correct.

33.Under clause 9(b) in Part I of the tender document, the HA will need to be satisfied that a tenderer has sufficient financial capability to undertake and fulfil the obligations imposed under the contract before considering awarding the contract to the tenderer.  If the HA is not satisfied with the results of the financial vetting of the tenderer, then it may disregard the tender submission of the tenderer. The HA also has absolute discretion in deciding whether it is satisfied with the results of the financial vetting.  As mentioned in the HA’s letter dated 30 March 2011, the reason that Jindun Pharma’s tender was not selected was because the results of financial assessment in respect of them raised concerns of the HA.  The letter also indicates that according to what is provided in the tender document, the HA has absolute discretion in deciding whether or not it is satisfied with the results of the financial vetting of the tenderer.  Given that the reason for not selecting the tenderer met the requirements of the standards for selection and vetting, the Chairman of the Review Body considered that there was no basis for interfering in the HA’s decision of not awarding the contract to Jindun Pharma.  His decision could not be faulted.

34.The Applicant also pointed out that the WTO GPA grants no absolute discretion to procuring entities or the power that they can rely on their opinions to act.  Thus, what is provided in the tender document in this regard is in breach of the WTO GPA.  In our view, the crux of the matter does not lie in whether or not these two powers are granted to procuring entities by the GPA but in whether or not the GPA disallows procuring entities to have such powers so that they may not exercise such powers even if there are such stipulations in the tender documentation.  There are no provisions in the WTO GPA prohibiting or limiting procuring entities from having absolute discretion or taking action by relying on their opinions during tender evaluation.  On the other hand, Article XIII(4)(c) states that awards shall be made in accordance with the criteria specified in the tender documentation.  It can therefore be seen that except as otherwise expressly provided in the WTO GPA, the terms and conditions of the tender documentation are binding on procuring entities and tenderers; so are those terms and conditions relating to absolute discretion and reliance on the opinions of procuring entities.  The Applicant’s assertions that the stipulations of the tender document in this respect violate or override the WTO GPA and that the decision of the Chairman of the Review Body in respect of this challenge is illegal and unreasonable are not valid.

The second ground of application

35.The Applicant’s second ground of application for judicial review stems from Jindun Pharma’s complaint against the HA for failing to make a formal or written reply as to why Jindun Pharma’s tender was not selected.  By way of a letter dated 30 March 2011, the HA responded to Jindun Pharma’s demand for reasons to be provided as to why their tender was not selected after Jindun Pharma had lodged a challenge to the Review Body.  The Chairman of the Review Body was of the view that this was a challenge related to procedure.  More importantly, he considered that if the procuring entity has provided the required information, then it is not necessary for the Review Body to take action.  The Applicant disagrees with the decision of the Chairman and seeks an order requiring the Review Body to make a determination on the challenge regarding the HA’s violation of Article XVIII(2) of the WTO GPA.

36.Under Article XVIII(2), a procuring entity should, on request from a supplier, promptly provide such information as set out in that provision, including the reasons why the tender was not selected.  It is important to note that the provision does not require such reasons to be given in writing.  According to the substance of Jindun Pharma’s challenge and the grounds of application of the Applicant, the Applicant had, on the day Jindun Pharma demanded to know why their tender was not selected and thereafter, met the HA’s representatives on several occasions when the representatives did mention the reasons for not selecting Jindun Pharma’s tender.  However, the Applicant does not subscribe to them and demands written reasons to be provided by the HA.

37.Under Rule 27 of the Rules of Operation, where the Review Panel finds that there is a breach of the GPA, it may recommend such remedy as it considers appropriate.  Rule 28 states that the procuring entity shall use reasonable endeavours to implement the recommendations of the Review Panel.

38.If the Chairman of the Review Body accepts this challenge lodged by Jindun Pharma and appoints a Review Panel, which in turn finds that the HA has violated Article XVIII(2), then the reasonable remedy the Penal may recommend will certainly be to require the HA to provide to Jindun Pharma the reasons why their tender was not selected.  Now that the HA had, on their own initiative, responded to Jindun Pharma’s demand subsequently by issuing the letter of 30 March 2011, the core issue of Jindun Pharma’s challenge has been dealt with.  Thus, the Chairman of the Review Body took the view that there was no need to take any action and decided not to accept this challenge.  He was not in breach of the Rules of Operation by so doing.  Nor could he be regarded as refusing to perform his duties.

The third ground of application

39.The Applicant’s third ground of application for judicial review is directed to Rule 13 of the Rules of Operation.  He pointed out that making it the sole decision of the Chairman of the Review Body as to whether a prima facie case is established for a challenge constitutes a breach of Article XX(6) the WTO GPA.

40.Article XX(6) provides that challenges should be heard by a court or by an impartial and independent review body with no interest in the outcome of the procurement and the members of which should be secure from external influence during the term of appointment.  Article XX(6) also provides that a review body which is not a court should either be subject to judicial review or its procedures for examination shall comply with the requirements as set out in (a) to (g) of the provision.

41.As pointed out by the Review Body, a screening mechanism which discriminates between challenges with and without prima facie evidence has been set up under Rule 13 of the Rules of Operation so that challenges without prima facie evidence are screened out, leaving only those having a prima facie case to be heard by an appointed panel.

42.Article XX(2) of the WTO GPA provides that Parties to it shall provide non-discriminatory, timely, transparent and effective challenge procedures[5].  In our opinion, the screening mechanism under Rule 13 of the Rules of Operation is not inconsistent with the requirements of Article XX(2).  The mechanism is conducive to ensuring that procuring entities are not confronted by unmeritorious complaints and that third parties are not troubled by questions over the validity of the decision. In addition, screening out complaints without prima facie evidence facilitates meritorious ones requiring speedy action to be heard in a timely manner.

43.We also consider that there is no violation of Article XX(6) in relation to the fact that the duty of examining complaints and making decisions as to whether a complaint has a prima facie case is performed by the Chairman of the Review Body.  With the Review Body being an organization, challenges must necessarily be heard by it through its members.  As a member of the Review Body, the Chairman is exercising the powers that the Review Body has as well as those granted to him under the Rules of Operation.  When the Chairman exercises the powers of his office and makes decisions, he acts on behalf of the Review Body.

The test to be satisfied in respect of an application for leave to apply for judicial review

44.For leave to apply for judicial to be granted, the Applicant must show that the intended application for judicial review is reasonably arguable with realistic prospects of success (see the ruling of the Court of Final Appeal in Po Fun Chan v Winnie Cheung [2007] 10 HKCFAR 676).

45.Based on the above analyses, the Applicant’s grounds of application for judicial review are not reasonably arguable.  His intended application does not enjoy realistic prospects of success.  Poon J was correct to refuse to grant leave to apply for judicial review.

Other matters

46.Apart from this, there are other problems with the Applicant’s intended application for judicial review. First of all, it was Jindun Pharma which lodged a challenge with the Review Body instead of the Applicant.  Moreover, although the Applicant is a director, he is not a tenderer in the procurement process.  Given that the Applicant and Jindun Pharma are two independent legal entities, it is questionable whether the Applicant has locus standi to apply for judicial review against the decision of the Chairman of the Review Body.

47.Secondly, the Applicant has made the Chairman of the Review Body the proposed respondent and claims compensation from him.  However, Rule 38 of the Rules of Operation states that:

“Members of the Review Body, including the Chairman and the Deputy Chairmen are not liable in law for any act done or not done by them in relation to the exercise or performance or the purported exercise or performance of the Review Body's duties, functions and powers unless it is proved that the act was done or omitted to be done dishonestly or in bad faith.”

The Applicant’s grounds of application have not shown any basis in fact or in law for him to claim compensation from the Chairman of the Review Body.

48.In its response, the Review Body questions whether the Applicant can apply for judicial review of the determination that the challenge has no prima facie evidence.  Although we agree that the Review Body is an administrative organization, and that the challenge was lodged by the tenderer on the basis of the terms and conditions of the tender document (i.e. by way of a business contract or agreement) rather than on legal provisions, we consider that there is still room for argument as to whether it is true that decisions made by the Review Body invariably carry no public elements and cannot become the subject matter of a judicial review.  However, as we find that the Applicant’s grounds of application do not meet the requirements for leave to be granted, it is not necessary for us to make a determination on this issue.

Summary

49.For reasons stated above, we dismiss the appeal.

(Peter Cheung)
Justice of Appeal
(Carlye Chu)
Justice of Appeal

The Applicant (Appellant), Lee Ming Hao, in person, present

Translated by the Judgment Translation Unit of the Judiciary and vetted by Mr. P. Y. Lo, Barrister-at-law.



[1]Each entity shall, on request from a supplier of a Party, promptly provide:

(a) an explanation of its procurement practices and procedures;

(b) pertinent information concerning the reasons why the supplier's application to qualify was rejected, why its existing qualification was brought to an end and why it was not selected; and

(c) to an unsuccessful tenderer, pertinent information concerning the reasons why its tender was not selected and on the characteristics and relative advantages of the tender selected as well as the name of the winning tenderer.

[2]  “(b) Unless in the public interest an entity decides not to issue the contract, the entity shall make the    award to the tenderer who has been determined to be fully capable of undertaking the contract and whose tender, whether for domestic products or services, or products or services of other Parties, is either the lowest tender or the tender which in terms of the specific evaluation criteria set forth in the notices or tender documentation is determined to be the most advantageous.

(c) Awards shall be made in accordance with the criteria and essential requirements specified in the tender documentation.

[3]Each Party shall ensure that the tendering procedures of its entities are applied in a non-discriminatory manner and are consistent with the provisions contained in Articles VII through XVI.

[4]Challenges shall be heard by a court or by an impartial and independent review body with no interest in the outcome of the procurement and the members of which are secure from external influence during the term of appointment. A review body which is not a court shall either be subject to judicial review or shall have procedures which provide that:

(a)  participants can be heard before an opinion is given or a decision is reached;

(b)  participants can be represented and accompanied;

(c)  participants shall have access to all proceedings;

(d) proceedings can take place in public;

(e) opinions or decisions are given in writing with a statement describing the basis for the opinions or decisions;

(f)  witnesses can be presented;

(g) documents are disclosed to the review body.

[5] “Each Party shall provide non-discriminatory, timely, transparent and effective procedures enabling suppliers to challenge alleged breaches of the Agreement arising in the context of procurements in which they have, or have had, and interest.”

Other Judgments in This Case

Further hearings and rulings under CACV 152/2011