INVERCLYDE Council illegally awarded £1.6 million worth of work to a company without inviting other firms to compete for it, a court has ruled.

The judgement at the Court of Session is believed to be the first time that a Scottish local authority has been found to be in breach of strict public contracts regulations.

Municipal Buildings chiefs broke the rules to hand the lucrative street lighting maintenance deal to Amey LLP without giving competitors an opportunity to bid, a judge has declared.

The council has been told it must now cancel the contract under an ‘ineffectiveness order’ issued by Lord Tyre, and also pay the ‘substantial’ legal expenses of the firm that took the local authority to task, Lightways (Contractors) Limited.

Lightways managing director, James Hornall – who has lodged a £250,000 lawsuit with the court – told the Telegraph today that he was ‘delighted’ with the ‘blatantly obvious outcome’.

Mr Hornall said: “I have been told by my lawyers that Inverclyde is the first council in Scotland to be caught and exposed in this way. Other local authorities in the country will now see this ruling and they will have to pay heed to it.

“The council said that it had made a ‘clerical error’ but in my opinion nothing could be further from the truth; I found that to be an astonishing thing for them to claim.”

Mr Hornall added: “It seems that a certain council official is incapable of writing new tender documents, and as far as I am concerned, they devised a scheme to keep me from tendering.”

The Larbert-based businessman said that the council simply dealt directly with Amey LLP, adding: “If we get to the races then we’re in the the race, but if they stop you from getting there then that is very bad for business.”

Officials at the Scottish Courts and Tribunals service today confirmed that an order under the Public Contracts (Scotland) Regulations 2012 had been granted against the council on December 1.

The ruling was made with regard to a section regulatory law which states: “The first ground for ineffectiveness is that the contracting authority has entered into a contract or has concluded a framework agreement without sending a contract notice to the Official Journal in circumstances where the contract or framework agreement was not exempt from the requirement for prior publication of a contract notice.”

A Court of Session spokesman said: “The court found the defender (the council) liable for the expenses of the hearing.”

However, the existing 24-month contract – which began on October 1 and is currently scheduled to run until September 30 2017 –will continue for the time being because the council intends to appeal Lord Tyre’s decision.

Lightways’ Mr Hornall declared that the authority would be ‘throwing good money after bad’ by continuing to contest the case.

He said: “My claim is for £250,000 as it sits within the court papers at the moment and my legal expenses are substantial. They will be around £25,000.

“The case is clear cut and I cannot see logic or sense in the council carrying this on.”

The council today confirmed its intention to have an appeal heard within the court’s Inner House.

A Municipal Buildings spokesman said: “The Court of Session granted an ineffectiveness order which cancels the lighting maintenance contract. No fine has been imposed or damages awarded.

“The council has been granted leave to appeal the decision.

“Pending that appeal, the ineffectiveness order is suspended allowing the current contractor to continue working.”

The court said that the council is yet to lodge its appeal.

A date for the case to call again in open court is yet to be confirmed.