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Co-op vs Tesco: procurement, public works and planning

26 March 2012

The Administrative Court recently handed down judgement on the Co-op’s judicial review of Birmingham City Council’s decision to sell land to Tesco and to authorise a compulsory purchase order in order to facilitate Tesco’s development of a retail site.

The Co-op argued that the sale amounted to a public works contract subject to the Public Contracts Regulations as it formed part of a wider development project. The Council argued neither the sale nor the development project amounted to public works.

The Court applied the ECJ case of Muller, ruling that the Council’s decision was sound for several reasons, the two most interesting being:

Firstly, Tesco was under no obligation to develop the site as a result of the sale of land, meaning that the sale itself did not amount to public works.

Secondly the development of the site was a condition of a s.106 planning agreement, falling outside the Regulations.

As we had all hoped after Muller, the court here was content that obligations contained in 106 agreements are sufficiently detached from the sale of land by authorities to ensure they do not bring into play the Regulations.

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