The High Court has ordered Merseyside Waste Disposal Authority to delay from entering into a contract with SITA and called for a trial to be held next year to examine claims by runner-up Covanta that the procurement process was legally flawed.
Covanta claimed the economic benefits of its proposal to manage the contract from a plant in Ince Marshes near Frodsham were not properly scored by the waste authority. The authority strongly denies this and said Covanta lost when judged by a transparent scoring system agreed by both bidders.
The trial will take place in April and May 2014. A successful outcome at trial would require the award to be reconsidered.
Mr Justice Coulson said that MWDA had properly accepted for the purposes of the injunction application that Covanta's claim raised serious issues to be tried. The judge noted that the procurement had already taken six or seven years during which time the target date for entering into the contract had slipped considerably and that any impact on the environment of a short delay in achieving further diversion from landfill was modest in the context of this procurement.
In response, Carl Beer, chief executive, of Merseyside Waste Disposal Authority said after the hearing: "We are grateful for the clarification from the court and will now make the required preparation for our full case to be heard as soon as possible.
"The authority regrets that Covanta has decided to pursue litigation. MWDA will be vigorously defending the claim brought against it. Our detailed defence strongly rejects the various allegations which have been made by Covanta, and sets out the significant risks to which Covanta's solution could have given rise for MWDA if it had been taken forward. The defence also details the serious concerns which were raised by MWDA prior to Covanta choosing to submit its bid.
"We will continue to defend the action until the case is resolved and intends in due course to recover its legal costs of defending the claim from Covanta."
SITA UK's appointment will mean waste being transported to the North East and has led to calls for a rethink from a number of politicians, including Ellesmere Port & Neston MP Andrew Miller and Liverpool mayor Cllr Joe Anderson.
Covanta Energy submitted a legal challenge to the decision to appoint SITA UK as preferred bidder for the Merseyside Recycling & Waste Authority's contract in July.
Covanta had proposed an alternative plan in conjunction with Peel Energy which would have led to the construction of an energy from waste plant as part of the Ince Park development at Ellesmere Port, bringing investment and employment opportunities.
Law firm Pinsent Masons advises Covanta. Eversheds advise MRWA