Legal Updates

A bidder who does not take legal action as to a defect in the tender to enforce its winnings is not entitled to compensation for damage caused by such

June 14, 2021

A tender participant contended that the winning bidder won based on a false affidavit, but its accusations were rejected by the tenders committee. In retrospect, it was discovered that these accusations were true and the losing bidder sought compensation from the tender publisher for the profit lost as a result of not winning the tender.

The Supreme Court dismissed the appeal and held that a bidder who did not take legal action as to the defect in the tender procedure and did not contend that the contract with it should be enforced is not entitled to claim compensation for its failure to win. A bidder who lost in a tender due to a defect in the operation of the tendering authority is entitled to demand compensation from the authority - compensation that will put the bidder in the position it would have been in if it were not for the defect. However, a bidder who is deprived of the tender will not be able to claim compensation for failure to win if it did not pursue a direct attack on the tender procedure and demanded that its winning be enforced. Here, the losing bidder detailed its accusations in writing but despite that did not take any action to enforce its rights to for 32 months. Had the bidder filed for a restraining order and been denied, the bidder would have reserved the right to seek compensation for the damage caused to it but as it did not even bother to take legal actions at real time it is not entitled to compensation.