ORDER OF THE GENERAL COURT (First Chamber)
22 October 2021(*)
(Action for annulment – Instrument for Pre-Accession Assistance – Non-member State – National public procurement – Termination of the contract by the contracting authority – Request for enforcement by the contracting authority of a bank guarantee – Countersignature by the Head of the EU Delegation in the Non-member State or his deputy – Lack of jurisdiction)
In Case T‑22/21,
Equinoccio-Compañía de Comercio Exterior, SL, established in Madrid (Spain), represented by D. Luff and R. Sciaudone, lawyers,
applicant,
v
European Commission, represented by D. Bianchi and T. Van Noyen, acting as Agents,
defendant,
APPLICATION under Article 263 TFEU for annulment of the Commission’s letter of 5 November 2020, with reference GK/Regio.ddg.d. 1(2020)6793282, concerning the enforcement of the bank guarantee requested by the Turkish Ministry of Science, Industry and Technology,
THE GENERAL COURT (First Chamber),
composed of H. Kanninen, President, N. Półtorak (Rapporteur) and M. Stancu, Judges,
Registrar: E. Coulon,
makes the following
Order
Background to the dispute
1 The applicant, Equinoccio Compañía de Comercio Exterior, SL, is a company incorporated under Spanish law which provides advisory services to undertakings and entities in the public and private sectors.
2 On 17 July 2006, the Council of the European Union adopted Regulation (EC) No 1085/2006 establishing an Instrument for Pre-Accession Assistance (IPA) (OJ 2006 L 210, p. 82). Under Article 1 of that regulation, the European Union was to assist the countries listed in Annexes I and II, which included the Republic of Turkey, in their progressive alignment with the standards and policies of the European Union, including, where appropriate, the acquis communautaire, with a view to membership.
3 On 21 April 2015, the European Commission published, under reference EuropeAid/134403/IH/SER/TR, a restricted invitation to tender for the supply of technical assistance for the activation of the Speciality Foods Cluster in the South East Anatolia region (Turkey). The purpose of the call for tenders was to conclude a contract for an initial period of 24 months and for a maximum budget of EUR 3 792 000. The contracting authority designated in the call for tenders was the Turkish Ministry of Science, Industry and Technology.
4 On 18 July 2016, the contract in respect of the call for tenders at issue was awarded to a consortium coordinated by the applicant (‘the consortium’). On 9 September 2016, the consortium signed the contract for the provision of services under reference TR 07 R2.04‑04/001 with the contracting authority (‘the contract in question’).
5 It is apparent from Article 40.4 of the special conditions of the contract in question that any dispute arising from the performance of that contract falls within the exclusive jurisdiction of the courts of Ankara, and that only Turkish law is applicable. That provision is reiterated, in essence, in Article 41.1 of the general conditions set out in Annex I to that contract.
6 In accordance with the provisions of Article 30 of the general conditions set out in Annex I to the contract in question, on 20 July 2017 the consortium provided a bank guarantee in favour of the contracting authority in the amount of EUR 689 440. Under that bank guarantee, any request for its enforcement by the contracting authority was to be countersigned by the head of the EU Delegation to Turkey or by his deputy.
7 During the performance of the contract in question, the contracting authority and the consortium encountered several problems arising from communication and coordination difficulties between the key experts and the consortium, which led, inter alia, to the resignation of the team leader responsible for developing the project forming the subject matter of that contract.
8 On 18 August 2017, the contracting authority suspended the execution of the contract in question, pursuant to Article 35 of the general conditions of that contract. It also informed the applicant that, if the necessary measures were not taken, the contract would be terminated in accordance with Article 36 of the general conditions.
9 On 29 November 2017, the contracting authority sent a notice of termination of the contract in question to the applicant.
10 Following the failure of the conciliation procedure provided for in Article 40 of the general conditions set out in Annex I to the contract in question and the actual termination of that contract, the contracting authority requested the enforcement of the bank guarantee.
11 By letter of 5 November 2020 (‘the contested measure’), the Commission informed the applicant that the EU Delegation to Turkey was going to be instructed to proceed with the countersignature of the enforcement of the bank guarantee requested by the contracting authority.
12 In particular, the Commission informed the applicant that, during the summer of 2020, its services had asked the Turkish authorities to ascertain whether the conditions for the enforcement of the bank guarantee had been met, and whether the contracting authority could claim the specific amount required. It also stated that the Turkish authorities had confirmed to it all of those elements, and that they had stated that the expenditure incurred by Turkey in the performance of the contract in question had been fully covered by the Turkish budget.
Procedure and forms of order sought
13 By application lodged at the Court Registry on 14 January 2021, the applicant brought the present action.
14 By separate document lodged at the Court Registry on 21 April 2021, the Commission raised a plea of inadmissibility and lack of jurisdiction under Article 130(1) of the Rules of Procedure of the General Court. The applicant lodged its observations on that plea on 2 June 2021.
15 In its application, the applicant claims that the Court should:
– order certain measures of inquiry;
– annul the contested measure;
– order the Commission to pay the costs.
16 In the plea of inadmissibility and lack of jurisdiction, the Commission contends that the Court should:
– dismiss the action for lack of jurisdiction or, at least, for manifest inadmissibility;
– order the applicant to pay the costs.
17 In its observations on the plea of inadmissibility and lack of jurisdiction, the applicant claims that the Court should:
– dismiss the plea of inadmissibility and lack of jurisdiction;
– order the Commission to pay the costs.
Law
18 Under Article 130(1) and (7) of the Rules of Procedure, if the defendant so requests, the Court may rule on inadmissibility or lack of competence without going to the substance of the case.
19 In the present case, since the Court considers that it has sufficient information from the documents in the file, it has decided to rule on that application without taking further steps in the proceedings.
20 The Commission pleads, primarily, that the Court lacks jurisdiction on the ground that the present dispute is a purely contractual dispute between the contracting authority and the consortium. It adds that the contested measure is inseparable from the contractual framework of which it forms part and that it produces no legal effects that involve the exercise of the prerogatives of a public authority conferred on it in its capacity as an administrative authority. It also submits that neither the contract in question nor the bank guarantee contains a clause conferring jurisdiction on the Court, but, on the contrary, provides that disputes arising from the performance of that contract fall within the exclusive jurisdiction of the courts of Ankara (Turkey).
21 According to the applicant, the contested measure is, on the contrary, a measure adopted by the Commission in the exercise of public powers in the context of a service contract financed by European funds.
22 It must be borne in mind that, under Article 263 TFEU, the Courts of the European Union review only the legality of acts of the institutions intended to produce legal effects vis-à-vis third parties by bringing about a distinct change in their legal position (see order of 25 March 2015, Borde and Carbonium v Commission, T‑314/14, not published, EU:T:2015:197, paragraph 28 and the case‑law cited).
23 It is also apparent from the case-law that public contracts awarded by third countries and capable of benefiting from assistance under the IPA, subject to the principle of decentralised management, remain national contracts which only the national contracting authority responsible for following them through has the power to prepare, negotiate and conclude, the involvement of the Commission representatives in the procedure for the award of those contracts being confined solely to establishing whether or not the conditions for European Union financing are met. Moreover, the undertakings that submit tenders which are awarded the contract in question have legal relations only with the third country which is responsible for the contract and the measures adopted by representatives of the Commission cannot have the effect of substituting, in relation to them, a European Union decision for the decision of that State (see order of 13 September 2012, Diadikasia Symvouloi Epicheiriseon v Commission and Others, T‑369/11, not published, EU:T:2012:425, paragraph 52 and the case-law cited).
24 According to settled case-law, that jurisdiction concerns only the acts referred to by Article 288 TFEU which the institutions must adopt under the conditions laid down in the Treaty (order of 25 March 2015, Borde and Carbonium v Commission, T‑314/14, not published, EU:T:2015:197, paragraph 29 and the case-law cited).
25 By contrast, acts adopted by the institutions in a purely contractual context from which they are inseparable are, by their very nature, not among the measures covered by Article 288 TFEU annulment of which may be sought pursuant to Article 263 TFEU (see order of 25 March 2015, Borde and Carbonium v Commission, T‑314/14, not published, EU:T:2015:197, paragraph 30 and the case-law cited).
26 Lastly, it must also be borne in mind that the powers of the General Court are those set out in Article 256 TFEU, as clarified by Article 51 of the Statute of the Court of Justice of the European Union. Under those provisions and Article 272 TFEU, the General Court has jurisdiction to rule, at first instance, on contractual disputes brought before it under an arbitration clause.
27 In the present case, it is apparent from the documents before the Court that the contested measure forms part of the contract between the contracting authority and the applicant, in that its purpose is the enforcement of the bank guarantee, which is based on the terms of the contract in question.
28 According to Article 30.1 of the general conditions set out in Annex I to the contract in question, the applicant was required to provide the contracting authority with a bank guarantee corresponding to the pre-financing granted to it by that authority. Under Article 30.2 of those general conditions, the bank guarantee was to be provided in accordance with the template set out in Annex IV to that contract. Lastly, Article 30.4 of those general conditions provided that, in the event of termination of the contract, the contracting authority could seek enforcement of the bank guarantee in order to obtain reimbursement of the sums owed by the applicant.
29 In addition, the model bank guarantee which was set out in Annex VI to the contract in question and with which the applicant was required to comply, provided that any request to enforce the bank guarantee granted to the contracting authority was to be countersigned by the Head of the EU Delegation to Turkey or by his deputy. That reference was reproduced verbatim in the bank guarantee actually provided by the applicant, in favour of the contracting authority.
30 Thus, the contested measure does not constitute an administrative act covered by Article 288 TFEU annulment of which may be sought from the EU judicature pursuant to Article 263 TFEU. The fact that the bank guarantee provided for the countersignature of the EU Delegation to Turkey is only an element of the contractual relationship between the applicant and the contracting authority, and the role of the Commission in the enforcement of that guarantee is merely a participation in that private-law contractual relationship, which expressly provided for the possibility of such a request and such a countersignature.
31 Furthermore, there is nothing else in the documents before the Court from which it might be concluded that, in the present case, the Commission acted in the exercise of its powers as a public authority.
32 In that regard, in the context of a decentralised programme providing for an ex ante control, as in the present case, the contracting authority alone takes decisions concerning procedures and the award of contracts and submits them for prior approval by the Commission. The Commission’s involvement therefore relates only to the grant of its authorisation to the financing of the decentralised contracts and the interventions of its representatives, during the decentralised procedures for the conclusion or performance of those contracts, and seeks only to establish whether the conditions for EU funding are met. Thus, those interventions are not intended to and cannot have the effect of undermining the principle that decentralised contracts remain national contracts, which only decentralised contracting authorities have the responsibility of preparing, negotiating and concluding.
33 It is therefore apparent from the documents before the Court and, in particular, from the wording of the contested measure, that the fact that the EU Delegation to Turkey must be instructed to countersign the enforcement of the bank guarantee requested by the contracting authority followed a request, sent by the Commission to the Turkish authorities, for confirmation that the necessary contractual conditions were met (see paragraph 12 above). Consequently, the instruction to countersign the enforcement of the bank guarantee was given following an assessment, carried out by the Turkish authorities at the Commission’s request, concerning the performance of the contract in question, and not following an assessment carried out by the Commission.
34 The contested measure is not an act provided for by EU law, but follows directly from the terms of the contract in question. Only those terms and the specific conditions of performance of that contract are capable of defining the conditions for the Commission’s intervention.
35 Moreover, neither the contract in question, concluded between the applicant and the contracting authority, nor the bank guarantee at issue contains any clause conferring jurisdiction on the Court to hear disputes that might arise in the course of its performance. On the contrary, it is apparent from the contractual terms of that agreement that disputes arising from its performance fall within the exclusive jurisdiction of the courts of Ankara, and that the applicable law is Turkish law (see paragraph 5 above). The same is true of the terms of the bank guarantee, which provide that the law applicable to that guarantee is that of Turkey, and that any dispute connected with that guarantee must be brought before the courts of Ankara.
36 It follows that the Court does not have jurisdiction to hear and determine the application for annulment of the contested measure, and for that reason, the present action must be dismissed.
Costs
37 Under Article 134(1) of the Rules of Procedure, the unsuccessful party is to be ordered to pay the costs if they have been applied for in the successful party’s pleadings. Since the applicant has been unsuccessful, it must be ordered to pay the costs, in accordance with the form of order sought by the Commission.
On those grounds,
THE GENERAL COURT (First Chamber)
hereby orders:
1. The action is dismissed.
2. Equinoccio-Compañía de Comercio Exterior, SL shall pay the costs.
Luxembourg, 22 October 2021.