RTÉ lost out on €160,000 when it opted not to award the contract for sponsorship of its television weather forecasts to Smart Telecom, the High Court was told yesterday.

In proceedings heard yesterday by Mr Justice Peter Kelly, Smart Telecom contended the process under which the contract was purportedly awarded to Glanbia was invalid because of RTÉ's allegedly contradictory position on the issue of preferential bids. RTÉ and Glanbia denied the claims.

The hearing concluded yesterday afternoon and the judge reserved his decision.

Paul Gardiner SC, for Smart, said it had offered to pay 5 per cent above the highest bid received in order to secure a two-year deal to sponsor the weather forecast. Counsel said the terms of the tender did not exclude preferential bids and stated the contract had to go to the highest bidder.

Before the deadline for bids expired, RTÉ had informed another interested party (not Glanbia) that it was not entitled to make a preferential bid, counsel said. However, this information was never passed on to Smart Telecom during the bidding process.

Had RTÉ accepted Smart Telecom's bid, it could have found itself in a difficulty with the bidder that had been informed that preferential bids were not acceptable, Mr Gardiner said. Given the circumstances, the sensible thing to have done would have been to re-tender the contract, he argued.

In submissions for RTÉ, Patrick Hanratty SC said RTÉ did not accept that any preferential bids were acceptable when it came to awarding this particular sponsorship deal because it wanted to ensure the fairness and transparency of the tendering process.

RTÉ was very specific about the kind of bid it wanted in its invitation to tender and wanted potential sponsors to provide them with an exact figure of how much they were prepared to bid over the two years, counsel said. Smart Telecom did not do this.

It was made clear to an agent of Smart Telecom's that a preferential bid was not permissible, counsel argued.