clr/1989/1989_3A_219.pdf

(1989)"And allcopiesof the lender...shallbesignedbythe tenderer or aperson duly authorised to bind the tenderer to the contract. The letter of authorisation shall be authenticated by written power of attorney accompanying the tender." 5 Applicants tender was signed by Mr. Sielios Garanis. However, a certificate issued bytheRegistrarof Companies showed that Mr.Garanis alonecouldnot bind theapplicants. Following the opening of the tenders and the issue of the said 10 certificate, theTender Board invited the applicants tosubmit a powerof attorney, authorising Mr. Garanis to act as he did. The applicants forwarded the power of attorney dated one daybefore theexpiration of the period for the submission of thetenders. 15 Despite the fact that the applicants had been invited to forward the power of attorney, the Tender Board rejected the tender, in view of the applicants' failure to complywith theaforesaid condition. Having reviewed the authorities, the Court concluded that for a 20 tender to be valid,al!theconditions must exist at the time of submitting the tender. It isnot possibletoput thingsrightexpost facto. Inthelight of this principle, the principle of estoppel is not applicable. It follows. therefore, that the fact that theapplicants were invited, after the opening of lenders, to submit a power of attorney, is immaterial. The Tender 25 Board was bound to act on the certificate issued by the Registrar of Companies in respect of the applicants, who were a registered partnership. The crucial criterion in determiningwhether an irregularity is material or not. is whether the irregularity affects the essence of the tender or not. In this case, failure to submil the power of attorney 30 together with the tender, wasamost material irregularity. The question. whether Mr.Garanisboundthepartnership ornot,goestothevery route of the tender. Recoursedismissed. No orderfor costs. 35 Casesreferredto: PapadopoulouandAnother v.Republic(I9S6) 3C.L.R.25. 40 PapadopoulouandAnother v.C.B.C. andAnother

(1987)3 C.L.R. 16S5, 220 3 C.L.R. Tamassos Tobacco Supl. A. Republic &Others J. A'.Chnsiofides Trading Ltd. v. Republic(19S5) 3 C.L R.546. Medcon ConstructionsandOthers \. Republic

(1968)3C.L.R.54S. 5 Kounnas &Sons v.Republic

(1972)3C.L.R.542. .\icola v.Republic

(1987)3C.L.R.

1. Recourse. 10 Recourse against the decision of the respondents to reject applicants' tender for the operation of the duty free shops at Larnaca and Paphos International Airports. 15 R. Stawakis withG. Cacoyannis. for the Applicants. A. Evangeiou. Senior Counsel of the Republic, for the Respondents. 20 Cur. adv. wit. KOURRIS. J. read the following judgment. By the present recourse applicants pray for a declaration that the decision of the respondents contained in their letter dated 12.3.19S
2. 25 whereby they rejected applicants' tender for the operation of the duty free shops at Larnaca and Paphos International Airports isnull and void andof no effect whatsoever. Applicants are a general partnership, the two general 30 partners ofwhich are "Kapnoviomichania Garanis and Petrides Ltd." (Garanis and Petrides Tobacco Industry Ltd.) and Francoudi and Stephanou Ltd.. both of which are private companies limited by shares incorporated in Cyprus under the Companies Law.Cap.
3. 35 On 20.11.
4. the respondents invited tenders for the provision of Sales Facilities QTobacco and Liquors) in the duty free shopsattheLamacaandPaphos International Airports and such tenders were submitted by various tenderers including the 40 applicants,whosubmitted theirtender on26.12.1986 whichwas signed by Mr. Stelios G. Garanis. purporting to bind the said partnership. Therespondents failedto awardthecontracttothe 221 Kourris, J. Tamassos Tobacco Sup], v. Republic &Others

(1989)applicants ortoanyothertenderer. Applicants' tender was rejected by the respondents on grounds which appear in the letter of the respondents dated 12.3.19S7 (exhibit 8to the application) where they contended 5 that the tender failed to comply with the conditions set outin paragraph 8.2 of the Invitation for Tenders which providesas follows: "The original and all copies of the tender shall betyped or 10 written inindelibleinkandshallbesignedbythetendereror apersondulyauthorisedtobindthetenderertothecontract. The letter of authorization shall be indicated by written powerof attorney accompanyingthetender." 15 It appears that the contention of therespondents isthat the applicants'tenderfailedtocomplywiththeaboverequirements on thefollowinggrounds: (

1. a)thatthetenderwasnotsignedby the tenderer: and(
2. b)that theauthorization oftheperson who signed the tender was not indicated by written power of 20 attorney. Before proceeding to examine the substance of the case.I propose to deal with apreliminary point raised bycounsel for the respondents. Counsel for the respondents alleged that 25 applicants have no legitimate interest in the sense of Article 146.2 of the Constitution to file a recourse because they have accepted thesubjudice decision rejecting their tender together withthereturn withaletter ofguarantee. 30 I donot think that thiscontention isvalid. Applicantshave not accepted the rejection of their tender unreservedly. (See PapadopoulouandAnother v. TheRepublic

(1986)3C.L.R. 25 at p.54 and Frini Papadopoulou andAnother r. C.B.C. and Another

(1987)3 C.L.R. 1685). On the contrary.in the 35 circumstances of the present case, applicants filed the present recourse denoting that they have never accepted free and unreservedly thesubjudicedecision. Reverting now to the substance of the case, I propose to 40 examinethefirst point whichisthefollowing: 222 3 C.L.R. Tamassos Tobacco Supl. v. Republic & Others Kourris, J. (a) Tender not signedbv theTenderer. 5 10 In connection with this point the Registrar of companies issued a certificate of the registration of the pannership under O/E 8036, dated15.1.1987. which stated as follows:Ό κ. Στέλιος Γκαράνηςήι ο κ. Λουκής Πετρίδης για την Καπνοβιομηχανία ΓκαράνηςκαιΠετρίδηςΑτδ καιοκ. Νί­ κος Στεφάνουγια την Φραγκούδη και Στεφάνου Ατδ.. είναι εξουσιοδοτημένοι1 να διαχειρίζονταιτην εταιρείακαι να διευθύνουν και να υπογράφουνγι' αυτή με το όνομα της από κοινού.' And in Enelish it reads:- 15 "Mr. Stelios Garanis or Mr. Loukis Petrides for theGaranis andPetridesTobacco Industry Ltd.andMr.NicosStephanou for Frangoudi and Stefanou Ltd. are authorized to manage the partnership andto sign on its behalf iointlv.'" 20 25 30 35 40 It is common ground that the tender was signed by Mr. Stelios Garanis and it was not indicated by written power of attorney accompanying thetender andat alater stage, after the opening of the tenders, respondent 1 requested applicants by letter dated30.12.1986to produceapower of attorney andthey did so. Counsel for the respondents contended that the Tender Board could not ignore the contents of the certificate of the Registrar of Companies dated 5.1.1987 stating expressly the persons authorised to bind the partnership. In point of fact, he saidthatthecertificate was binding ontheTender Board so long as it is in existence and it has not been modified by the appropriate authority which issued it. He went on to say. that thecenificate of registration of the pannership is binding onthe Tender Board which stated that in order to bind the pannership all the panners hadtosign. Counsel for the applicants said that applicants delivered to theOfficial Receiver andRegistrar of Companiesform No.O.E. 1 for the registration of the pannership pursuant to the provisions of s.51 of the Partnership and Business Names Law. 223 Kourns, J. Tamassos Tobacco Supl. \. Republic &. Others

(1989)Cap 116 He went on to say that the form contained a clear statement to the effect that an> one of the partners (acting alone» could bind the pannership but one of the emplovees at theoffice of theRegistrar without authority,deletedby hand (in ink) the typewritten words "any one of the partners" in the 5 Greek language and added mher own hand-wnting in ink the words "jointly" ("apo koinou") Against the refusal of the Registrar to restore the said form to its onginal condition recourse No 345/87was filedby the applicants in theSupreme Coun on 30.4 1987. contending that the alterations to the said 10 form are not and never have been in law binding on them and that in am e\ent. the said alterations were brought to their notice and became known to them for the first time after the submission of the tender which is the subject matter of this recourse Itshouldbe notedthatthesaid recourse was heardb\ 15 the Supreme Coun andwas dismissed on theground that it was not justiciable in the sense of Anicle 146 1of theConstitution because it didnotfall within thedomain of public law Counsel for the applicant submitted that in the light of this 20 factual background b\ virtue of the pro\lsions of s 8 of the Pannership and Business Names Law. Cap 116. b\ which one of the panners could b\ himself alone bind the applicants, one reaches theinevitable conclusion thatthereis nothingindicating am intention on the pan of the panners to exclude the 25 application of the prousions of s 8 Furthermore, hesuggested that thepannerswere ignorani of the fact thatsuchan insertion had been madeby anofficer ofthe appropriatedepartmentand. therefore the alterations made cannot in an\ \va\ bind them since they were brought to their notice and became known to 30 them after the submission of the tender which is the subiect matter of this recourse I ha\e considered thesubmissions of bothcounsel and I hold the view that the Tender Board ought to rel\ on the official 35 cenificate of registration issued b\ the Registrar of Companies dated 5 119S7 In the certificate of registration it is expressh stated 'persons who bind the partnership", and in the present case the persons who were authorised to bind the partnership were all the partners ιοιηΐΐν In these circumstances, it was 40 reasonabh open to therespondentto reach the conclusionthat the applicants contra\ened paiagraph 82 of the invitation for 3 C.L.R. Tamassos Tobacco Supl. Λ.Republic & Others Kourris, J. Tenders in thatthetender was not signed by the tenderer. (

1. b)TheTenderwas notaccompaniedbv aPower of Attorney. 5 Itis commonground that applicants' tender when submitted was signed by Mr.Stelios Garanisandwas not accompanied by a power of attorney,butsuchapower of attorney infact existed as from 26.12.1986. Itis also an admittedfact that thelast date for the submission of thetenders was the27th December, 1986. 10 The grounds on which applicants based their case on this point are the following: 15 20 (
2. i)that in any event, there was at the material time a valid power of attorney authorising Mr. Garanis to sign the tender: (
3. ii)that even so. failure on the pan of the applicants to produce the power of attorney on the date of signingthe tender did not amountto amaterial irregularity; (iii)that such irregularity was cured and/or waived by the respondents themselves; 25 30 35 40 (iv)that the respondents are estopped from putting forward any such alleged irregularity as by their express and/or implied representations and/or by their conduct they inducedthe applicants tobelieve that the production of a power of attorney at alater stagewas acceptable tothem andinreliance onsuchrepresentation and/orconductthe applicants acted to their detriment. Counsel for the applicants submitted that a mere failure to send the power of attorney was. inthe circumstances,breach of a minor formality or of an immaterial irregularity that did not render thetenderof the applicants invalid. Heargued thatwhen the respondents by their letter dated 30.12.1986 requested the applicants to provide themwith therequired power of attorney. the applicants furnished them with a power of attorney dated 26.12.1986. the last date for the submission of tenders, there existed a valid power of attorney authorising Mr. Garanis to sign the tender on behalf of the applicants. In other words, he 225 Kourris, J. Tamassos Tobacco Supl. v. Republic & Others

(1989)said, at the time when tenders could still be submitted Mr. Garanis was, in fact, formally authorizedtosign thetender. On this point he relied on the case of /Λ". Christofides Trading Ltd. v. The Republic

(1985)3 C.L.R. 546 and 5 contended that the failure on the pan of the applicants to sign the power of attorney is an irregularity which does not in any­ way affect theessence of thetender; thatthenon-availability of the power of attorney could not pose difficulties for the respondents in evaluating thetender; that the irregularity was 10 so treated by the respondents themselves who for that reason waived it. I propose to deal first on this point with thegrounds (i).(iii) and (iv). The principles governing the validity of tenders were laid down inthecase of Medcon Constructions and Others v.The Republic

(1968)3 C.L.R. 535. Triantafyllides. J., as he then was. said at p.544 thefollowing: 15 20 "It was notpossible, orpermissible totreattheinterested party as a tenderer at all, because, though the initial noncompliance by the interested party with term 11 of the invitation for tenderscouldhavebeen waived- asitwas done 25 -it was expressly provided by term 13that any tenderwhich would not be accompaniedby a certificate of fitness, of the material offered, given by theDistrict Engineer of thePublic Works Department, would not be taken intoaccount;andit is commongroundthatthetenderof the interestedparty was 30 not accompanied by a certificate of fitness. Thus, the Interested Party was treated as having submitted a valid tender, when by express provision in the invitation for tenders this couldnotbe done; anditwas notpossible toput thingsright,ex post facto,bydecidingthatthecontractwould 35 be awarded to the InterestedParty provided that the quarry andcrushing plant of the interestedparty would be inspected and found to be fit for the purpose (see exhibit 7(a)) - see. also, Decisions of the GreekCouncil of State531

(49)vol. B. p. 13 and 1403

(60)in Zacharopoulos Digest 1953-1960 vol. 40 1 a-k, p.4S9. Moreover, tenderers were entitledto equality of treatment, and to exempt the interested party from 226 3 C.L.R. Tamassos Tobacco Supl. v. Republic & Others Kourris, J. 5 compliance with the express requirement, of term 13 of the invitation for tenders, and from the sanction for such non­ compliance. was, not only contrary to good and proper administration and in abuse and excess of powers, but also contrary to the requirements for equality of treatment laid down by Article 28.1 of the Constitution." From this case it emerges that a tender to be valid all the conditions must exist at the time of submitting the tender and 10 that it is not possible to put things right ex post facto. Furthermore, all the conditions should exist at the time of submitting the tender,otherwise such non-compliancewas not only contrary to good andproper administration and in abuse and excess of powers, but contrary to the requirements of 15 equality of treatment laid down by Article 28.1 of the Constitution. Again, in the case of Kounnas & Sons v. The Republic

(1972)3 C.L.R.542.Triantafvllides. P..atp.546 said:20 25 30 35 40 "If the consideration of tenders takes place in a manner contrarytotheprinciplesoffree competitionorinanirregular manner affecting its outcomethen therelevant administrative decision has to be annulled (see. inter alia, the Conclusions from theCase Law of theCouncilof Statein Greece- 'Πορί­ σματα Νομολογίας του Συμβουλίου τη; Επικράτεια:;' 1929-1959 case 1965/47 at p. 430 and cases 2028/47 at p. 431)." Applying theabove principlestothefacts of thepresent case. 1 am of theviewthatit was notpermissible for respondent 1 to request applicants to provide them with the required power of attorney on 30.12.1986. i.e. after the tenders were openedand, furthermore, the rule of estoppel does not apply in cases of tenders. Whilst on this point. I am not prepared to holdthat waiver or estoppel is not applicable to public law as alleged by counsel for the respondents, because I have not heard full argument on this point. As at present advised. I can only say that estoppel is not applicable to tenders, in view of the principles laid down in the Medcon case (supra). Ishall now deal with point (ii),i.e.whether failure onthepart 227 Kourris, J. Tamassos Tobacco Supl. v. Republic &Others (1989.) of the applicants to send thepower of attorney didamount toa material irregularity or not. This point wastackled in thecase of J.IS'. Christofides Ltd. r. TheRepublic

(1985)3C.L.R. 546 where Pikis.J. at pp.549 5 -550 saidas follows:"The distinction between the observance of 'substantial prerequisites' and 'non substantial formalities' in the consideration of tenders, is examined by L. Loizou, J., in a 10 recent decision, that is. Papadopoulos r. The Republic. Relying on the exposition of the Law on the subject, in Kyriacopoulos on Greek Administrative Law. 4th ed.. Vol. B.. the learned Judge concludes, it is competent for the Tender Board, or other authority, to consider a tender. 15 notwithstanding non compliance with terms of the tender. provided such conditions are of an unessential nature. Consequently, lack of a circulation permit for the machine tendered, was held not to invalidate the tender. In the relevant chapter quoted in the aforesaid judgment. 20 Kyriacopoulos explains it is not an easy task to distinguish between substantial and insubstantial formalities. As a general rule, observance of a formality required by Law or administrative practice, is regarded as an essential prerequisite. The learned author discerns the following test. 25 from Decisions of the Greek Council of State, to determine whether a term is an essential or inessential condition. It is this: Ifcompliance with aformality isa factor influential for the content of the decision,it mav be regarded asessential." 30 Again, the same point came up for decision in the case of Andronikos IS'icoIa v. The Republic

(1987)3C.L.R 5S6. The question asto thenature oftheirregularity isone of fact and depends on the particular circumstances of each case. 35 However, the crucial criterion in determining such aquestion is whetherthe irregularity affects the essence of thetender or not. In the present case, applicants' tender when submitted was not accompanied by a power of attorney inbreach of para. 8.2 40 of the invitation for tenders. Iam oftheview that this isamost material irregularity which affects the essence of the tender. It 228 3 C.L.R. Tamassos Tobacco Supl. v. Republic &Others Kourris. J. goes to the very root of the tender as to whether Mr. Garanis bound the pannership or not. Without the power of attorneyaccompanying the tender. Mr. Garanis could not bind the pannership. For all the above reasons. I am of the view that it was reasonably open for therespondentsto reject applicants'tender for the operation of the duty free shops at Larnaca and Paphos International Airports. Inthe circumstances,therecourse isdismissed with no order for costs. Recourse dismissed. No orderas tocosts. 229