CA-2024-002472 - [2025] EWCA Civ 1407

The claimant, URE Energy Ltd, is a start-up company purchased by Mr Gary Ensor with the aim of supplying electricity to the Genesis Housing Association on a long-term basis. His idea, developed in discussions with Mr Paul Jameson, then the Procurement Director at Genesis, involved the installation of LEDs across Genesis’s entire estate and the construction by URE of a solar farm to generate electricity which URE could then supply to Genesis along with energy from other renewable sources. This would involve substantial capital outlay funded by borrowing, which would be recovered over a period of 25 years, while simultaneously delivering savings to Genesis through reduced consumption and lower energy charges than would be payable to a conventional supplier. It was therefore critical to the success of this scheme that URE would be able to conclude a long-term contract with Genesis, although such contracts were uncommon in the industry.

While these discussions were at an early stage, on 25^th July 2017 Genesis launched a tender process for a fixed term supply contract for the supply of electricity over a three or four year period. However, this tender process was cancelled and replaced, on 31^st August 2017, by a second tender process which included the opportunity to bid for a 25 year contract. On 11^th September 2017 URE submitted a bid for the 25 year contract which included the installation of LED lighting in the communal areas of the entire Genesis estate, the construction of a 5 megawatt solar farm, and the upgrade of all existing electricity meters to smart meters with automated meter reading (or ‘AMR’).

URE’s bid was successful, but the parties were not in a position to conclude a 25 year contract at that point, not least because URE still needed to obtain funding for the construction of the solar farm. It was therefore agreed that they would start negotiations for such a contract, but in the meanwhile would enter into a four year short-term contract as a ‘placeholder’, to be superseded by the long-term contract in due course. However, as Genesis had made clear in its tender documents, it was not committed to any long-term contract and was at liberty to withdraw from negotiations at any stage, although it appears that Mr Ensor had not appreciated this.