Provisional text
OPINION OF ADVOCATE GENERAL
CAMPOS SÁNCHEZ-BORDONA
delivered on 7 September 2023 (1)
Case C‑303/22
CROSS Zlín a.s.
v
Úřad pro ochranu hospodářské soutěže,
intervener:
Statutární město Brno
(Request for a preliminary ruling from the Krajský soud v Brně (Brno Regional Court, Czech Republic))
(Reference for a preliminary ruling – Review concerning public supply and public works contracts – Directive 89/665/EEC – Obligation for Member States to provide for review mechanisms – Access to review – Conclusion of the contract prior to judicial review – Effectiveness of the judgment – Interim measure suspending the effects of the contract)
1. A court in the Czech Republic has asked the Court of Justice whether national rules on review in the area of public procurement are compatible with Directive 89/665/EEC (2) and Article 47 of the Charter of Fundamental Rights of the European Union (‘the Charter’).
2. The Czech court is unsure, in particular, whether domestic rules permitting public contracts to be concluded before a court has ruled on an action brought by a tenderer challenging his or her exclusion from the procedure and the award of the contract to a competitor comply with Directive 89/665 and Article 47 of the Charter.
I. Legal framework
A. European Union law. Directive 89/665 (3)
3. Article 1 (‘Scope and availability of review procedures’) provides:
‘1. This Directive applies to contracts referred to in Directive 2014/24/EU of the European Parliament and of the Council [of 26 February 2014 on public procurement and repealing Directive 2004/18/EC (OJ 2014 L 94, p. 65)] unless such contracts are excluded in accordance with Articles 7, 8, 9, 10, 11, 12, 15, 16, 17 and 37 of that Directive.
…
Member States shall take the measures necessary to ensure that, as regards contracts falling within the scope of Directive [2014/24] …, decisions taken by the contracting authorities may be reviewed effectively and, in particular, as rapidly as possible in accordance with the conditions set out in Articles 2 to 2f of this Directive, on the grounds that such decisions have infringed Union law in the field of public procurement or national rules transposing that law.
…
3. Member States shall ensure that the review procedures are available, under detailed rules which the Member States may establish, at least to any person having or having had an interest in obtaining a particular contract and who has been or risks being harmed by an alleged infringement.’
4. Article 2 (‘Requirements for review procedures’) states:
‘1. Member States shall ensure that the measures taken concerning the review procedures specified in Article 1 include provision for powers to:
(a) take, at the earliest opportunity and by way of interlocutory procedures, interim measures with the aim of correcting the alleged infringement or preventing further damage to the interests concerned, including measures to suspend or to ensure the suspension of the procedure for the award of a public contract or the implementation of any decision taken by the contracting authority;
(b) either set aside or ensure the setting aside of decisions taken unlawfully, including the removal of discriminatory technical, economic or financial specifications in the invitation to tender, the contract documents or in any other document relating to the contract award procedure;
(c) award damages to persons harmed by an infringement.
2. The powers specified in paragraph 1 and Articles 2d and 2e may be conferred on separate bodies responsible for different aspects of the review procedure.
3. When a body of first instance, which is independent of the contracting authority, reviews a contract award decision, Member States shall ensure that the contracting authority cannot conclude the contract before the review body has made a decision on the application either for interim measures or for review. The suspension shall end no earlier than the expiry of the standstill period referred to in Article 2a(2) and Article 2d(4) and (5).
4. Except where provided for in paragraph 3 and Article 1(5), review procedures need not necessarily have an automatic suspensive effect on the contract award procedures to which they relate.
5. Member States may provide that the body responsible for review procedures may take into account the probable consequences of interim measures for all interests likely to be harmed, as well as the public interest, and may decide not to grant such measures when their negative consequences could exceed their benefits.
…
6. Member States may provide that where damages are claimed on the grounds that a decision was taken unlawfully, the contested decision must first be set aside by a body having the necessary powers.
7. Except where provided for in Articles 2d to 2f, the effects of the exercise of the powers referred to in paragraph 1 of this Article on a contract concluded subsequent to its award shall be determined by national law.
Furthermore, except where a decision must be set aside prior to the award of damages, a Member State may provide that, after the conclusion of a contract in accordance with Article 1(5), paragraph 3 of this Article or Articles 2a to 2f, the powers of the body responsible for review procedures shall be limited to awarding damages to any person harmed by an infringement.
…
9. Where bodies responsible for review procedures are not judicial in character, written reasons for their decisions shall always be given. Furthermore, in such a case, provision must be made to guarantee procedures whereby any allegedly illegal measure taken by the review body or any alleged defect in the exercise of the powers conferred on it can be the subject of judicial review or review by another body which is a court or tribunal within the meaning of Article 234 of the Treaty and independent of both the contracting authority and the review body.
…’
5. Article 2a (‘Standstill period’) reads:
‘1. The Member States shall ensure that the persons referred to in Article 1(3) have sufficient time for effective review of the contract award decisions taken by contracting authorities, by adopting the necessary provisions respecting the minimum conditions set out in paragraph 2 of this Article and in Article 2c.
2. A contract may not be concluded following the decision to award a contract falling within the scope of Directive [2014/24] … before the expiry of a period of at least 10 calendar days with effect from the day following the date on which the contract award decision is sent to the tenderers and candidates concerned if fax or electronic means are used or, if other means of communication are used, before the expiry of a period of either at least 15 calendar days with effect from the day following the date on which the contract award decision is sent to the tenderers and candidates concerned or at least 10 calendar days with effect from the day following the date of the receipt of the contract award decision.
Tenderers shall be deemed to be concerned if they have not yet been definitively excluded. An exclusion is definitive if it has been notified to the tenderers concerned and has either been considered lawful by an independent review body or can no longer be subject to a review procedure.
Candidates shall be deemed to be concerned if the contracting authority has not made available information about the rejection of their application before the notification of the contract award decision to the tenderers concerned.
…’
B. Law of the Czech Republic
1. Zákon č. 134/2016 Sb., o zadávání veřejných zakázek (Law No 134/2016 on the award of public contracts)
6. Under Paragraph 246(1):
‘The contracting authority may not conclude a contract with the supplier:
…
(d) within 60 days of commencement of the procedure to review the acts of the contracting authority, provided that the application for review was not submitted out of time; however, the contracting authority may conclude the contract before expiry of that period where the [Úřad pro ochranu hospodářské soutěže (Office for the Protection of Competition; ‘the ÚOHS’)] has rejected the application for review or where the administrative proceedings related to the review have been discontinued and the decision thereon has become final.’
7. Paragraph 257(j) provides:
‘The ÚOHS shall, by order, discontinue proceedings if
…
(j) during the administrative proceedings, the contracting authority concluded a contract for performance of the subject matter of the public contract under review
…’.
2. Zákon č. 500/2004 Sb., správní řád (Law No 500/2004 establishing the Code of Administrative Procedure)
8. Paragraph 61 provides:
‘1. In the proceedings, the administrative body may, by decision, on its own initiative or on the application of a party, before the proceedings have closed, adopt an interim measure where necessary in order to regulate on a temporary basis the position of the parties to the proceedings. … An interim measure may require a party or another person to act, to refrain from acting or to countenance an action, and may secure an item capable of serving as evidence or being the subject of enforcement.
…
3. The administrative body shall, by decision, revoke the interim measure immediately upon the ground which justified its adoption ceasing to exist. Failing that, the interim measure shall expire on the day on which the decision on the merits of the case has become enforceable or has otherwise begun to produce legal effects.
…’.
3. Zákon č. 150/2002 Sb., soudní řád správní (Law No 150/2002 establishing the Code of Procedure before the Administrative Courts)
9. Paragraph 38 provides:
‘1. Where an action has been filed and it is necessary to regulate on a temporary basis the situation of the parties, on account of the risk of serious harm, the court may, by order, adopt an interim measure requiring the parties to act, to refrain from acting or to countenance an action. On the same grounds, the court may also impose such an obligation on a third party, provided there is a legitimate basis for doing so.
…’.
10. According to Paragraph 72(1):
‘An administrative action may be filed within two months of service of the decision on the plaintiff by means of the delivery of a certified copy of the decision or by other means provided for by law, unless a special law lays down a different period.’
11. Under Paragraph 78:
‘(1) If the administrative action is well founded, the court shall annul the contested decision on the ground that it is unlawful or is vitiated by procedural defects. The court shall also annul the contested decision on the ground that it is unlawful if it finds that the administrative body has overstepped the limits, as established by law, of its administrative discretion, or has misused that discretion.
…
(4) If the court annuls the decision, it shall also order that the case be referred back to the defendant for further proceedings.’
II. Facts, proceedings and question referred for a preliminary ruling
12. On 27 September 2019, the Statutární město Brno (City of Brno, Czech Republic) launched a tender procedure for the award of a public contract concerning the expansion of the functions of the traffic control centre – traffic light system. (4)
13. The companies CROSS Zlín a.s. (‘CROSS’) and Siemens Mobility, s.r.o. participated in the procedure, each submitting a bid.
14. On 6 April 2020, the contracting authority excluded CROSS from the procedure for failing to meet the tender conditions.
15. On 7 April 2020, the contracting authority selected Siemens Mobility as supplier.
16. CROSS challenged the decision of 6 April 2020 before the same contracting authority, which dismissed that challenge on 4 May 2020.
17. CROSS submitted an application for review of the decision of 4 May 2020 before the ÚOHS, seeking the annulment of its exclusion and of the selection of Siemens Mobility as supplier.
18. On 3 July 2020, the ÚOHS – of its own motion – adopted an interim measure prohibiting the contracting authority from concluding the contract before completion of the review procedure.
19. On 5 August 2020, the ÚOHS rejected CROSS’s application for review.
20. CROSS brought an administrative appeal against the decision of 5 August 2020 before the President of the ÚOHS.
21. On 9 November 2020, the President of the ÚOHS dismissed the administrative appeal. That decision became final (in administrative terms) (5) on 13 November 2020.
22. On 18 November 2020, the contracting authority concluded the public contract with Siemens Mobility.
23. On 13 January 2021, CROSS brought an administrative action against the decision of the President of the ÚOHS of 9 November 2020 before the Krajský soud v Brně (Brno Regional Court, Czech Republic).
24. CROSS asked the court to grant suspensive effect to the action and, on a provisional basis, to prohibit the contracting authority from concluding the contract.
25. On 11 February 2021, the Krajský soud v Brně (Brno Regional Court) dismissed CROSS’s applications, holding that:
– as the contract had already been concluded, there were no grounds for prohibiting the contracting authority from concluding it;
– even if the contested decision were annulled, the result would be the referral of the case back to the ÚOHS, which would discontinue the proceedings;
– it would also not be possible to prohibit the contracting authority from performing the contract since there was no legal impediment to its conclusion when it was entered into, the decision of the President of the ÚOHS having become final.
26. On 28 March 2022, the Krajský soud v Brně (Brno Regional Court) heard the parties to the proceedings on the question of whether a reference for a preliminary ruling should be made, in the light of the concerns as to the compatibility of the national rules with Directive 89/665 and Article 47 of the Charter.
27. In that court’s view, those national rules, which allow a public contract to be concluded as soon as the decision of the President of the ÚOHS has become final (in administrative terms), might be at odds with Article 2(3) and Article 2a(2) of Directive 89/665, as they do not ensure effective judicial protection for tenderers excluded from the selection procedure.
28. After hearing the parties, the Krajský soud v Brně (Brno Regional Court) decided to refer the following question to the Court of Justice for a preliminary ruling:
‘Is it compatible with [Article 2(3) and Article 2a(2)] of Directive 89/665/EEC, interpreted in the light of Article 47 of the Charter …, for Czech legislation to permit a contracting authority to conclude a public contract before an action is brought before a court competent to review the legality of a second-instance decision of the [ÚOHS] to exclude a tenderer?’
III. Procedure before the Court
29. The request for a preliminary ruling was registered at the Court on 9 May 2022.
30. Written observations were submitted by the ÚOHS, the Czech and Cypriot Governments and the European Commission. All of them, together with CROSS, appeared at the hearing held on 25 May 2023.
IV. Assessment
A. Preliminary remarks
1. Non-judicial character of the ÚOHS
31. According to the order for reference, even though Czech legislation treats the ÚOHS as a ‘review body’ for the purposes of Directive 89/665, it cannot be classified as an independent and impartial tribunal within the meaning of Article 47 of the Charter and paragraph 73 of the judgment of 21 December 2021, Randstad Italia. (6)
32. The Court must have regard to the national legal framework as described by the referring court, which is the authoritative interpreter of its domestic law. (7) Accordingly, the referring court’s assessment of the legal nature of the ÚOHS must be taken at face value.
33. The fact of the matter is that, in its written observations before the Court, (8) the ÚOHS does not claim that it is a judicial body, but merely states that it is a ‘body responsible for review procedures’ within the meaning of Article 2 of Directive 89/665.
2. Subject matter of CROSS’s challenge
34. Notwithstanding the concerns expressed by the Commission, (9) CROSS’s challenge was also directed against the award of the contract to Siemens Mobility, as is apparent from the order for reference. (10)
35. That is consistent with the content of the question referred for a preliminary ruling, in which the Court is asked to interpret Article 2(3) of Directive 89/665, that is, the rule governing the suspensive effect of ‘review[ing] a contract award decision’.
B. Interpretation of Article 2(3) of Directive 89/665
36. With regard to the decisions of contracting authorities (in so far as they concern, obviously, contracts falling within the scope of Directive 2014/24), Member States must ensure that the persons concerned have available review mechanisms suitable for determining, quickly and effectively, whether those decisions have infringed EU law on public procurement or national rules transposing EU law into their respective legal systems. That is, ultimately, the purpose of Directive 89/665.
37. Article 1(5) of that directive allows Member States to require a person seeking review of a decision of the contracting authority to do so, in the first place, with that same contracting authority.
38. The procedural autonomy of the Member States thus extends to the – optional – introduction of an initial review (claim) (11) before the contracting authority. That step entails the suspension of the possibility of concluding the contract, as occurred here.
39. Apart from that claim before the contracting authority, Directive 89/665 also provides for genuine review before ‘bodies responsible for review procedures’. Article 2 of that directive refers to those bodies, acknowledging that they may be ‘judicial in character’ or may not, as confirmed by paragraph 9 thereof (which lays down the applicable rules in the case of non-judicial bodies). (12)
40. In particular, Article 2(3) of Directive 89/665 provides for a review of a contract award decision by ‘a body of first instance, which is independent of the contracting authority’. As I will explain below, that provision neither requires the body of first instance to be judicial in character nor prevents it from being so.
1. Concept of ‘body of first instance, which is independent of the contracting authority’
41. The term used in Article 2(3) of Directive 89/665 is a broad one. (13) It encompasses the following:
– Non-judicial bodies entrusted with the administrative oversight (review) of decisions of the contracting authority. (14)
– Judicial bodies on which the Member State’s procedural rules confer jurisdiction at first instance to rule directly on actions against decisions of the contracting authority which have not been challenged before administrative bodies. By definition, those judicial bodies are independent of the contracting authority.
42. The emphasis in the wording of Article 2(3) is on the term ‘body of first instance’ (and, possibly, on its independence from the contracting authority), but not, I repeat, on the judicial or non-judicial character of that body.
43. Accordingly, a court may, if national legislation so provides (which does not appear to be the case in the Czech Republic), act as a body of first instance under Article 2(3) of Directive 89/665.
2. Suspensive effect of review before a body of first instance
44. Under Article 2(3) of Directive 89/665, Member State law must ensure that the contracting authority does not conclude the contract before the review body of first instance has taken a decision on the application either for interim measures or for review. The suspension is to end no earlier than the expiry of the period established in other provisions of Directive 89/665. (15)
45. Under Article 2(3) of Directive 89/665, the automatic standstill period applies only until the body of first instance (here, the ÚOHS) has taken a decision on the application either for interim measures or for review.
46. Except in the situations envisaged in Article 2(3) (and Article 1(5)), Directive 89/665 does not require review procedures necessarily to have automatic suspensive effect. Article 2(4) of the directive makes that clear.
47. Automatic suspensive effect therefore applies to review procedures which Article 2(3) classifies as reviews before a body of first instance. It is that characteristic (together with independence from the contracting authority) which determines whether the provisional prohibition on concluding the contract comes into play.
48. Directive 89/665 does not, I repeat, necessarily extend automatic suspensive effect to subsequent judicial reviews of the decision of the body of first instance, if it is an administrative body. The general provision of Article 2(4) of Directive 89/665 applies to such judicial reviews.
49. At a later stage in this Opinion, I will consider whether Article 47 of the Charter requires such judicial reviews (subsequent to the decision of the ‘body of first instance’) to have the same suspensive effect as that governed by Article 2(3) of Directive 89/665.
3. Different review bodies, under Czech law, and the suspensive effect of applications for review brought before them
50. It follows from the information provided to the Court that, in the Czech Republic, concerned parties have the following means of obtaining a review (‘review’ in the broad sense) of contract award decisions.
– An initial claim before the contracting authority itself. In the present case, CROSS submitted a claim before the Statutární město Brno (City of Brno), which was the contracting authority. Its claim therefore falls within the scope of Article 1(5) of Directive 89/665 and, in accordance with that provision, the contracting authority refrained from concluding the contract while the claim was pending.
– A subsequent review of the award decision before the ÚOHS, acting as a ‘body of first instance … independent of the contracting authority’. That review, which is not judicial in nature, falls within the scope of Article 2(3) of Directive 89/665. That is why the ÚOHS provisionally prohibited the contracting authority from concluding the contract.
– A final review, which is judicial in nature, before the administrative courts, like the review sought in the present case. That review will not necessarily and automatically have the suspensive effect referred to in Article 2(3) of Directive 89/665 if use has previously been made of the ‘administrative channel’ before the ÚOHS.
51. It should be noted that, in principle, there is nothing in Directive 89/665 to prevent the contract being concluded before or during the judicial review, where such judicial review is preceded by the review conducted and decided on by the ÚOHS.
C. Effective judicial remedies. Article 2(9) of Directive 89/665 and Article 47 of the Charter
52. As regards Directive 89/665, the Court has held that ‘… the right to an effective remedy and to a fair hearing, enshrined in the first and second paragraphs of Article 47 of the Charter, is relevant, in particular, when the Member States establish, in accordance with that obligation, detailed procedural rules governing the judicial remedies which safeguard the rights conferred by EU law on candidates and tenderers harmed by decisions of contracting authorities’. (16)
53. Article 1 of Directive 89/665 requires Member States to take the legislative measures necessary to ensure that decisions taken by the contracting authorities may be reviewed effectively in accordance with the conditions set out in Articles 2 to 2f of that directive.
54. The requirement of effectiveness naturally extends to actions brought before the courts, which are governed by Article 47 of the Charter. That requirement has consequences for the interim stage of those actions.
55. As I have already pointed out, Article 2(3) of Directive 89/665 confers suspensive effect on reviews before bodies of first instance. Suspension does not, however, automatically extend to subsequent judicial reviews of the decision of the (administrative) body of first instance. They are governed by Article 2(4) of Directive 89/665.
56. However, it is worth bearing in mind the Court’s case-law on the interim protection that must be available in proceedings adjudicating on rights deriving from EU law.
– As a general rule, ‘a national court seised of a dispute governed by European Union law must be in a position to grant interim relief in order to ensure the full effectiveness of the judgment to be given on the existence of the rights claimed under European Union law’. (17)
– ‘The principle of effective judicial protection of an individual’s rights under Community law must be interpreted as requiring it to be possible in the legal order of a Member State for interim relief to be granted until the competent court has given a ruling on whether national provisions are compatible with Community law, where the grant of such relief is necessary to ensure the full effectiveness of the judgment to be given on the existence of such rights’. (18)
57. In keeping with the objective of ‘ensur[ing] full respect for the right to an effective remedy …, in accordance with the first and second subparagraphs of Article 47 of the Charter’, (19) the Court partners those guarantees with the protection of the rights conferred by EU law on candidates and tenderers harmed by decisions of contracting authorities. (20) That is why it has found that interested parties must be afforded ‘a real possibility of bringing proceedings and, in particular, of applying for interim measures’ pending conclusion of the contract. (21)
58. If, as here, the bodies responsible for review procedures are not judicial in character (that is, they do not form part of the system of judicial protection stricto sensu), the case-law cited immediately above requires it to be possible to apply to a court for a ruling on the decisions of those bodies.
59. That is confirmed by Article 2(9) of Directive 89/665 in the field of public procurement: where Member States opt for review bodies with an administrative set-up, it must be possible for the decisions of those bodies to ‘be the subject of judicial review …’.
60. In such cases, Article 2(9) of Directive 89/665 requires judicial review to be available as a means of challenging ‘any allegedly illegal measure taken by the review body or any alleged defect in the exercise of the powers conferred on it’.
61. That judicial review must incorporate the possibility for the court to adopt interim measures (or to review interim measures already ordered in earlier proceedings), so that the infringement committed by the review body does not become irreversible as a consequence of it not having corrected the contracting authority’s unlawful conduct. (22) That is the only way to ensure that the judicial protection guaranteed by Article 47 of the Charter is effective.
62. It is against that background that the prospect (second subparagraph of Article 2(7) of Directive 89/665) of the judicial response being limited to an award of damages, to which I will refer below, must be understood.
63. Considered in isolation, the second subparagraph of Article 2(7) of Directive 89/665 might suggest (as one of the participants at the hearing argued) that Member States are entitled to provide, without any conditions, that the only response to an unlawful act is limited to an award of damages.
64. It is my view, however, that that proposition is misconceived and that only a combined view of Article 2(7) and (9) of Directive 89/665 respects the right to an effective remedy. Any infringement or allegedly unlawful measure adopted by a non-judicial review body of first instance must be subject to review by a judicial body stricto sensu which has had the opportunity to give an interlocutory ruling, before deciding whether annulment of the contract warrants damages alone.
65. Of course, the fact that that possibility exists does not mean that an interim measure must be adopted in every case: it will be for the court, after assessing the interests at stake, to determine whether there is periculum in mora and whether the party seeking the measure has, at least, a prima facie case. What is at issue, I repeat, is that the court must have full capacity to decide on the interim measure.
66. In my view, there is no reason to exclude from such interim protection cases in which the contract was concluded prior to the judicial review. It is true that, in such a situation, a court would not be able to suspend the conclusion of something which has already been concluded, but it retains the ability to take other types of measures, such as the provisional suspension of the effects of the signed contract.
67. At the hearing, the Czech Government and the ÚOHS argued that, if that possibility were to be accepted, the public interest in expeditious and effective public procurement might be undermined, since judicial proceedings are generally protracted and the delay would be indefensible.
68. I do not think that that objection is insurmountable.
– First, the impact of the delay due to judicial oversight would not extend to the judicial process as a whole, but only to the short period which the court has to adopt or refuse the interim measure. (23) Since the contested decisions are normally enforceable, any delay would be limited to the time needed for the court to give an interlocutory ruling. (24)
– Second, the practical difficulties recorded were based on a comparison between the human resources made available to the ÚOHS and those made available to the Czech administrative courts. In those circumstances, it is for the State with an interest in ensuring that public procurement is flexible to take appropriate procedural measures to avoid delay. That circumstance cannot be relied on to favour an interpretation of the directive which weakens the judicial protection guaranteed by Article 47 of the Charter.
69. My proposed solution is feasible under Czech law because, as acknowledged at the hearing, Paragraph 38 of Law No 150/2002 permits the adoption of ‘an interim measure requiring the parties to act, to refrain from acting or to countenance an action’. That provision does not, as such, prohibit the suspension of the effects of a contract which has already been concluded.
70. I share the Commission’s view (25) that care should be exercised when making use of that possibility and that vexatious or frivolous applications for interim measures should be rejected. In my view, the court must strictly require, in addition to periculum in mora, a body of legal argument which, in itself, suggests that the substantive claim has some likelihood of success (fumus boni juris).
71. The court hearing the application for interim measures will also have to consider carefully whether overriding reasons relating to a general interest (which cannot simply be equated with the economic interests directly linked to the contract) (26) require the effects of the contract to be provisionally maintained after it has been concluded.
72. The considerations set out above do not entail extending the automatic suspension mechanism provided for in Article 2(3) of Directive 89/665 to court proceedings. To my mind, it is not necessary to force the wording of that provision, stretching the effects of automatic suspension beyond what the legislature intended. Quite simply, if the independent review body is not a judicial body, Article 47 of the Charter provides that the court must retain full jurisdiction to rule on the interim measure, in accordance with the rules of its national law.
73. In those circumstances, two scenarios are possible.
– The contract between the contracting authority and the successful tenderer has not been signed. The decision on the interim measure will focus on the provisional suspension of the possibility of concluding the contract.
– If the contract has been signed, the decision on the interim measure may affect the application of the effects of the contract, which the court has the power to suspend.
D. Effectiveness of judgments annulling the contract
74. The considerations set out above answer the referring court’s question concerning the interpretation of Article 2(3) of Directive 89/665.
75. That said, in its request for a preliminary ruling, the referring court raises concerns which, although related to interim measures, fall outside the scope of those measures and instead concern the effectiveness of the judgment bringing the proceedings to a close. In that connection, it makes the following observations.
– If the ÚOHS’s decision is annulled by a court, the case will be referred back to it for further proceedings. However, if the contract has already been concluded, the ÚOHS will not re-examine the application for review of the contracting authority’s acts, but will discontinue the proceedings.
– Accordingly, the situation may arise whereby an excluded tenderer has no chance of being awarded the contract, despite a court having upheld its claims, since the contract will already have been concluded by the time the administrative action has been conducted and decided on.
– In those circumstances, a plaintiff who has secured a court declaration that the tender procedure is null and void is only entitled to claim, in civil proceedings, compensation for the damage caused by the contracting authority’s unlawful acts. (27)
76. I will deal with those concerns in the interests of completeness, although I am not persuaded that it is strictly necessary to do so in order to provide a useful answer to the question which the referring court itself summarises at the end of its request for a preliminary ruling.
77. I have previously argued (28) that the rationale for the system of appeals against the decisions of an authority (such as the ÚOHS) subject to judicial review means, as a rule, that where those decisions are annulled by a court having jurisdiction, their nullity must extend also to the effects they have produced, since these are deprived of the legal foundations from which they derived.
78. In other words, the judgment annulling the award of a public contract should, as a rule, prevent the contract from producing its effects. The annulment of the award would be retroactive (ex tunc) to the point in time when the award was made. That is, moreover, the general rule set out in Directive 89/665, following its amendment in 2007, for contracts entailing the most serious infringements of that directive. (29)
79. That general rule is nevertheless subject to exceptions and provision to that effect is made by Directive 89/665 (in particular for public contracts which have already been concluded) due to the problems associated with a declaration that a contract is ineffective. (30) Member States may, for example, where formal requirements have been infringed, ‘consider the principle of ineffectiveness to be inappropriate. In those cases Member States should have the flexibility to provide for alternative penalties’. (31)
80. Following its amendment by Directive 2007/66, in the case of contracts which should be declared ineffective in principle on account of their unlawful origin, Directive 89/665 (recitals 21 (32) and 22 (33) of Directive 2007/66 and Articles 2d and 2e of Directive 89/665, as amended) allows for the ‘recogni[tion of] some or all of [their] temporal effects’, that is to say, the effects of the contract are maintained, without prejudice to the imposition of appropriate penalties and the award of damages.
81. Directive 89/665 therefore envisages the possibility that a judgment upholding an action for annulment may concern a contract which has already been concluded without applying the consequences associated with its nullity in full.
82. In that respect, Directive 89/665 provides for different approaches depending on the circumstances.
– The general rule (Article 2(7)) is that ‘except where provided for in Articles 2d to 2f, the effects of the exercise of the powers referred to in paragraph 1 of this Article on a contract concluded subsequent to its award shall be determined by national law’.
– Article 2d(2) confirms that ‘the consequences of a contract being considered ineffective shall be provided for by national law’. National law, in turn, ‘may provide for the retroactive cancellation of all contractual obligations or limit the scope of the cancellation to those obligations which still have to be performed’. (34)
– Article 2d(3) also allows Member States to provide that ‘the review body independent of the contracting authority may not consider a contract ineffective, even though it has been awarded illegally on the grounds mentioned in paragraph 1, if the review body finds, after having examined all relevant aspects, that overriding reasons relating to a general interest require that the effects of the contract should be maintained’.
– Article 2e(1) states that, in certain circumstances, (35) ‘Member States shall provide for ineffectiveness in accordance with Article 2d(1) to (3), or for alternative penalties’.
– Under that provision, ‘Member States may provide that the review body independent of the contracting authority shall decide, after having assessed all relevant aspects, whether the contract should be considered ineffective or whether alternative penalties should be imposed’.
83. It follows from all those provisions that, in accordance with Directive 89/665, national rules may, in certain circumstances, provide that a judgment annulling the award of a public contract either: (a) has retroactive effect, affecting ex tunc all contractual obligations; or (b) does not inevitably have the result of depriving that contract of its effects.
84. Those provisions of Directive 89/665 seek to strike a balance between the usual consequences of an annulment judgment and the protection of other public interests inherent in the provision of the services covered by the contract. In this field, as in others, national law may provide that the judgment declaring the contract null and void be deprived of its ‘natural’ effect, replaced by an obligation to pay compensation or by other alternative measures.
85. The abovementioned provisions of Directive 89/665 (and the national rules transposing them) do not run counter to Article 47 of the Charter, (36) provided that the judicial protection to which all tenderers are entitled enables them, in the event of the subsequent annulment of a contract award not in their favour, to obtain damages for the harm caused to them.
86. The right protected by Article 47 of the Charter does not imply an unequivocal solution to difficulties which may arise in relation to the effects of judgments annulling administrative acts (or contracts). Admittedly, the general rule I have mentioned can be inferred from Article 47, but that rule does not preclude the possibility of making use of the exceptions referred to above. (37)
87. The ineffectiveness of a contract will, however, be maintained if a national court of a Member State (which has made provision to that effect in its legislation) delivers a judgment declaring a contract award null and void, attaching consequences ex tunc to its ruling.
88. In the present case, the foregoing considerations may be particularly relevant if, after conclusion of the contract, the court having jurisdiction to adjudicate on the ÚOHS’s decisions does not adopt any interim measures. In those circumstances, if the judgment bringing an end to the administrative action annuls the ÚOHS’s decision (and the contract which it accepted) and national rules require the case to be referred back to that authority for further proceedings, the ÚOHS will have to assess, in accordance with Article 2d of Directive 89/665, what consequences flow from the declaration that the contract is ineffective.
V. Conclusion
89. In the light of the foregoing, I propose that the following answer be given to the Krajský soud v Brně (Brno Regional Court, Czech Republic):
Article 2(3) and (9) and Article 2a(2) of Council Directive 89/665/EEC of 21 December 1989 on the coordination of the laws, regulations and administrative provisions relating to the application of review procedures to the award of public supply and public works contracts, read in the light of Article 47 of the Charter of Fundamental Rights of the European Union,
must be interpreted as not precluding national legislation under which, once proceedings before an independent (non-judicial) review body have been exhausted, a contracting authority may conclude a public contract prior to an administrative action being brought before a judicial body having jurisdiction to review the legality of the decision to exclude a tenderer or to award that contract, provided that, in the context of that administrative action, the court which is to adjudicate on the case has the power to adopt interim measures consisting, where appropriate, in suspending the effects of the signed contract.