£400m claim by offshore wind firm that lost out on bid for site dismissed as irrelevant

£400m claim by offshore wind firm that lost out on bid for site dismissed as irrelevant

A commercial judge has dismissed a £400 million action by an offshore energy company that alleged it had suffered loss by means of an unlawful means conspiracy perpetrated by another company and its partners in a bidding process for offshore wind farm sites.

Moray Offshore Renewable Power Ltd, an indirectly wholly owned subsidiary of OW Offshore SL, alleged that Bluefloat Energy UK Holdings Ltd had grossly exaggerated its claims of experience in offshore wind in a proposal to secure a particular site. The defender sought the dismissal of the action as irrelevant or alternatively the exclusion of certain items from probation.

The case was heard by Lord Sandison in the Outer House of the Court of Session. DM Thomson KC and Tariq, advocate, appeared for the pursuer and the Dean of Faculty, Dunlop KC, and McWhirter, advocate, for the defender.

Statements of opinion

In 2017, Crown Estate Scotland launched a project known as ScotWind Leasing with the objective of granting lease options over parts of the Scottish seabed for offshore wind farms. The pursuer made bids for 5 of the 17 lease sites made available in 2021 with particular interest in one site, NE6. While it was successful in other bids, NE6 went to a consortium consisting of the defender and ten other corporate entities.

The action was launched after the pursuer became aware that the defender was making claims about its relevant experience in the field that it considered to be untrue, particularly about members’ experience in a previous wind farm project known as Windfloat Atlantic. The pursuer further claimed that the experience of individual employees of BlueFloat Energy as set out in the bid was grossly exaggerated, false and misleading.

It was the pursuer’s case that the defender and others had a common intention to injure the interests of other bidding parties for NE6 and had done so by unlawful means, namely the making of false claims. Crown Estate Scotland could not award the contract for the NE6 site to the pursuer as its bid ranked below the defender’s but in a process based on accurate statements it was averred that the pursuer would have won.

On behalf of the defender it was submitted that the pursuer had not established that the defender knew it was bidding for the NE6 site and so the requirement of intention was not met. Further, the statements relied on to establish exaggeration were all statements of opinion, or “puffs”, that could not be used to establish a material misstatement of fact. In any event, the pursuer’s score was not affected, and it had suffered no loss to itself.

Purely speculative

In his decision, Lord Sandison said of the unlawful means test: “The pursuer’s averments fail to disclose a relevant case that the defender’s actions amounted to the wrong of breach of contract actionable at the instance of Crown Estate Scotland. Given the general antipathy of the law to misrepresentation, it seems at least possible that a characterisation of the relevant wrong as other than a breach of contract might have been found relevant [but] no attempt was made to argue that Crown Estate Scotland had a right of action against the defender other than one based on breach of contract.”

On whether the defender’s actions affected Crown Estate Scotland’s freedom to deal with the pursuer, he continued: “While it would in most circumstances be very unusual for an unfair business practice consisting of false self-praise to affect the freedom of anyone to deal as he or she saw fit in the market, in the context of a bidding process with clearly-defined rules for the evaluation of material put forward, and a requirement to make the highest scorer in the process the successful bidder, it is clearly unrealistic to claim that a distortion of the process by the statement of falsehoods capable of affecting the scoring outcome cannot affect the ultimate dealing freedom of the relevant third party.”

Addressing causation, Lord Sandison said: “The difficulty for the pursuer in this context in the present case is that does not know (and has made no very strenuous effort to find out) whether what the defender is alleged to have done resulted in loss to it by causing it not to win the bidding contest for the NE6 site. It is perfectly possible that there were several bidders in the NE6 lease option competition and that the pursuer would never have won it even if the defender had not done what is alleged. Another bidder, including the defender, might have won the competition in any event.”

He concluded: “If the pursuer proved every primary fact it offers to prove, the Court would still be entirely unable to conclude that it would have won the NE6 site competition, or indeed that the defender’s alleged falsehoods deprived it of a chance of winning the competition capable of reasonable estimation at any particular level. Any conclusion on those matters would be purely speculative because of the high- level nature of the averred primary facts and the absence of any indication of how the similarly high-level scoring rules were in fact interpreted and applied by Crown Estate Scotland in its evaluation of every bid put forward.”

The pursuer’s action was therefore dismissed.

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