What the Apasen v Tower Hamlets ruling means for UK SMEs watching direct awards, urgency justifications, transparency notices, and public contract challenges.
Case citation: Apasen Limited v London Borough of Tower Hamlets [2026] EWHC 2239 (TCC), approved judgment, 28 August 2026.
A High Court ruling handed down in August 2026 is turning into one of the first real tests of how far the Procurement Act 2023 protects suppliers when a council skips competition and awards a contract directly. The case involves a London care charity, a council U-turn the judge himself described using the French term for an about-face, and a legal question that any UK business bidding on public sector contracts should understand. That includes SMEs (small and medium-sized enterprises) and small businesses going after public sector tenders.
How the Dispute Started
Apasen Limited is a registered UK charity providing social care and community support services to vulnerable people across East London. In July 2023, Tower Hamlets Council advertised a new procurement for domiciliary care services on the government's Find a Tender service, split into four geographic lots. Apasen bid for two of them.
That autumn, Apasen received anonymous whistleblowing allegations concerning its own governance and reported them to the council in November 2023. An investigation Apasen itself commissioned did not uphold the allegations. The council separately asked accountancy firm PwC to review its contracts with Apasen, including a forensic review connected to an alleged historic overpayment, something Apasen has disputed throughout.
In October 2024, the council announced its award decisions. Apasen lost one lot and won the other, but that second award was made conditional on the outcome of the ongoing PwC review. Apasen challenged both outcomes and, on 5 November 2024, issued formal legal proceedings. The very next day, facing challenges from Apasen and other bidders, the council abandoned the tender altogether.
The March 2025 Direct Awards
With the existing contracts due to expire and no replacement tender ready, the council turned to the direct award route under the Procurement Act 2023. On 13 March 2025 it published a transparency notice announcing seven interim contracts, awarded without a fresh competition on the grounds of what the law calls extreme and unavoidable urgency. Two of those seven were awarded to Apasen. A separate contract award notice, published a little over three hours later the same day, made no mention of the urgency justification at all.
The council also chose to observe a voluntary eight working day standstill period before signing anything, even though contracts awarded on urgency grounds are not legally required to have any standstill period at all. That detail becomes important later, because it forms the core of the council's defence.
The June U-Turn
On 18 June 2025, the council reversed course specifically where Apasen was concerned. As the judge put it, the council performed a volte face and decided it would not, after all, make either of the two direct awards to Apasen, while the contracts with the other four providers went ahead. The council has set out its own account of this decision in an official statement, saying it followed the outcome of its financial review. Apasen disputes that the review supports the decision, and says the council initially withheld the underlying documents on legal privilege grounds before disclosing them in October 2025, only after Apasen had already begun judicial review proceedings.
Two Legal Tracks, Two Different Results
Apasen pursued its case on two fronts. The first was a judicial review challenging the fairness of its exclusion. The High Court refused permission for that claim in March 2026, finding the council had acted rationally.
The second, separate claim produced the ruling making headlines now. Apasen is not only disputing its own exclusion. Its formal claim also seeks to have the contracts the council signed with the other four providers set aside entirely, arguing that the council's urgency justification does not hold up and that the notices published on 13 March 2025 were legally defective as a result. The council applied to strike out that specific part of the claim before trial, arguing that because it had published a contract award notice and observed a voluntary standstill period, none of the legal conditions for unwinding a contract could possibly apply. On 28 August 2026, the court disagreed and refused to strike it out, meaning the set-aside claim can continue.
What the Judge Actually Decided, and What He Didn't
It is worth being precise here. The court did not rule that the council broke the law, that the March 2025 notices were inaccurate, or that any contract must actually be unwound. What it decided is narrower, that Apasen's argument deserves to be tested at trial rather than dismissed early.
The ruling turns on a single word in the legislation, accurate. Under section 105(4) of the Procurement Act 2023, a contract award notice that fails to give accurate information can be treated in law as though it was never published at all, which reopens the door to a contract being set aside even after a standstill period has passed. The judge drew on an earlier Court of Appeal case, Faraday Development Ltd v West Berkshire Council, for guidance on how much detail a notice needs to give, and accepted that judging whether a notice is accurate may require looking behind its wording at the underlying facts, not just checking that the right boxes were ticked.
On that basis, the judge held that if Apasen's central allegation turns out to be true, that the claimed urgency was not genuinely urgent or unavoidable, then it is at least arguable that a notice asserting otherwise would fail that accuracy test. He was careful to stress he was not deciding whether the allegation is actually true. That question, along with whether the urgency justification should have appeared in the contract award notice itself rather than only in the earlier transparency notice, remains unresolved.
What This Means for SMEs and Small Businesses Bidding for Public Sector Contracts
The practical lesson sits in what the council's defence relied on, and why it wasn't enough on its own. Publishing the required notices and observing a standstill period is good practice, but this ruling shows it is not automatically enough to protect a direct award from later challenge if the substance behind those notices does not hold up under scrutiny. For any SME, small business or larger company bidding on public sector contracts, that makes the actual wording of a transparency notice and contract award notice worth reading closely rather than treating as a formality, particularly whenever a competition has been skipped on urgency grounds.
A direct award means the contract is never opened to competition, so an SME or small business may never get the chance to bid. That is why understanding how urgency grounds work matters for small businesses chasing government contracts.
The case is not over. The questions that matter most, whether the urgency was genuine and whether the notices met the legal standard, remain unresolved. Civil Society News has been following developments from the charity sector's side, and a more technical breakdown of the ruling for legal and procurement teams is available via Lexology. For now, this case stands as an early sign of how closely the courts are willing to examine the paperwork behind direct awards under the newer legislation, which is exactly the kind of detail SMEs and small businesses should watch if direct awards come up in their own sector.