Tecnoedi: An overlooked distortion of the ECJ’s approach to the assessment of cross-border interest for public contracts? (C-318/15)

In its Judgment of 6 October 2016 in Tecnoedi Construzioni, C-318/15, EU:C:2016:747, the European Court of Justice (ECJ) declared inadmissible a request for a preliminary reference sent by the Piedmont Regional Administrative Court, Italy. The case concerned the (in)compatibility with Arts 49 and 56 TFEU of an Italian public procurement rule applicable to (well) below-threshold contracts (ie tenders for works of a value below €1M), which allowed for the automatic rejection of tenders that exceeded an ‘anomaly threshold’ set by the contracting authority, without inter partes procedure.

The case offered the ECJ an opportunity to revisit very close issues to those decided in SECAP and Santorso, C-147/06 and C-148/06, EU:C:2008:277 -- which could also, conversely, have given it the opportunity of determining that the question was unnecessary and that the first principles of that decision stood. However, the ECJ decided to reject the receivability of the case for other reasons. By rejecting the request for a preliminary ruling, the ECJ did not take the opportunity to clarify (or rather, develop) the law in this area. So far, so good.

Given that it does not advance our understanding of the constraints that general EU free movement rules (or possibly general principles of EU public procurement law) impose on the treatment of apparently abnormally low tenders, the Tecnoedi case may easily fall under the radar of both practitioners (with some exceptions, see here and here) and academics (save for readers of the PPLR, which featured a comment by A Brown, 'The requirement for "certain cross-border interest" before EU Treaty obligations apply to below-threshold contacts: the EU Court of Justice ruling in case C-318/15 Tecnoedi', 2017 (1) PPLR NA14) —or, at least, that is the excuse I have given myself to seek justification for having overlooked this case for almost six months... However, not paying attention to Tecnoedi may lead us to miss a potential distortion in the ECJ’s approach to the assessment of the existence of cross-border interest for public (works) contracts.

This is an area where the ECJ’s approach is far from consistent, to say the least. The proper way of determining the (in)existence of cross-border interest for a contract remains elusive and the ECJ has not hammered down an unequivocal or clear test. In one of its most flexible and functional approximations (which I favour), the ECJ accepted that a (concession) contract of very limited financial value (due to the inclusion of a prohibition on profit-making activity) could still be of cross-border interest for business strategy reasons, such as an undertaking's goal to 'establish itself on the market of that State and to make itself known there with a view to preparing its future expansion' [see Comune di Ancona, C-388/12, EU:C:2013:734, para [51] ,discussed here].

Even if that is seen as a relative outlier, or contextualised in the line of case law aimed at establishing basic principles for the tender of services concessions prior to their subjection to the 2014 Concessions Directive, the ECJ’s more general approximation to the existence of cross-border interest for a public contract can be understood, as the referring court put it in Tecnoedi, as establishing that:

In accordance with the Court’s case-law, a contract (sic, tender) may have a certain cross-border interest not only as a result of the financial value of the contract to which it relates, but also as a result of the technical characteristics of the work and the place where the work is to be carried out (para 15).

Furthermore, in accordance with the Court’s case-law, there may be certain cross-border interest, without its (sic) being necessary that an economic operator has actually manifested its interest (judgment of 14 November 2013, Belgacom, C-221/12, EU:C:2013:736, paragraph 31 and case-law cited) (para 16).

This (seemingly) creates the need to carry out a case by case analysis based on rather open-ended indicators and aimed at demonstrating (or excluding) the scope for potential (ex ante) rather than evidenced or actual (ex post) cross border interest for the tendered contract [for discussion, see C Risvig Hansen, Contracts Not Covered or Not Fully Covered by the Public Sector Directive (DJØF, 2012) 121-160].

In the case at hand, the referring court understood that there was potential for cross-border interest for the contract because

… notwithstanding the fact that the works contract at issue … is for an estimated value of EUR 1,158,899.97, it cannot be ruled out that the contract does not have certain cross-border interest as Fossano [the place of execution of the works] is located within 200 km of the border between France and Italy and several of the tenderers admitted to the tender procedure are Italian companies which are established in regions which are not neighbouring, such as … at a distance of approximately [between 600 and 800 km] from Fossano (para 16, emphasis added).

In my view, a reasonable application of the ECJ’s previous approach/test would have waved through the case as (potentially) having cross-border interest. However, in Tecnoedi, this would have required the ECJ to deal with a very complex question and, more importantly, to keep developing non-statutory EU public procurement law on the basis of general internal market freedoms (or possibly general principles of EU public procurement law). Thus, in my view in order to avoid this difficult issue and (likely) criticisms for its judicial activism, the ECJ took a very strict approach to the assessment of potential cross-border interest in this case.

The ECJ first proceeded to recast its test for the assessment of potential cross-border interest as follows:

As regards the objective criteria which may indicate certain cross-border interest, the Court has previously held that such criteria may be, in particular, the fact that the contract in question is for a significant amount, in conjunction with the place where the work is to be carried out or the technical characteristics of the contract and the specific characteristics of the products concerned (para 20, emphasis added).

This can in itself be seen as a significant deviation -- if not an outright partial reading -- of previous case law and, in particular of SECAP and Santorso, C-147/06 and C-148/06, EU:C:2008:277, paragraph 31, on which the ECJ relies expressly in Tecnoedi. In fact, in that very paragraph, the ECJ indicated that

It is permissible ... for legislation to lay down objective criteria ... indicating that there is certain cross-border interest. Such criteria could be, inter alia, the fact that the contract in question is for a significant amount, in conjunction with the place where the work is to be carried out. The possibility of such an interest may also be excluded in a case, for example, where the economic interest at stake in the contract in question is very modest (see, to that effect, Case C‑231/03 Coname [2005] ECR I‑7287, paragraph 20). However, in certain cases, account must be taken of the fact that the borders straddle conurbations which are situated in the territory of different Member States and that, in those circumstances, even low-value contracts may be of certain cross-border interest (SECAP, para 31, emphasis added).

Thus, the ECJ seemed in Tecnoedi rather open to a certain conflation of value and cross-border interest (a move that can ow be traced back to Enterprise Focused Solutions, C-278/14, EU:C:2015:228, para 20, on which the ECJ also relies in Tecnoedi), which did not seem to follow from the previous case on which it relied. On this basis, and taking into account the arguments of the referring court on Fossano’s proximity to France and the evidence that domestic tenderers located further away decided to participate, the ECJ then established that

… a conclusion that there is certain cross-border interest cannot be inferred hypothetically from certain factors which, considered in the abstract, could constitute evidence to that effect, but must be the positive outcome of a specific assessment of the circumstances of the contract at issue. More particularly, the referring court may not merely submit to the Court of Justice evidence showing that certain cross-border interest cannot be ruled out but must, on the contrary[,] provide information capable of proving that it exists. …

… it may not be argued that a works contract … for an amount which does not equate even to a quarter of the threshold laid down by EU law and whose place of performance is located 200 km away from the border with another Member State can be of certain cross-border interest solely because a certain number of tenders were submitted by undertakings established in the Member State in question, which are located at a considerable distance from the place where the work at issue is to be carried out.

That evidence is clearly insufficient having regard to the circumstances of the case …, and, in any event, cannot be the only evidence which must be taken into account, in so far as potential tenderers from other Member States may face additional constraints and burdens relating, inter alia, to the obligation to adapt to the legal and administrative framework of the Member State where the work is to be carried out, as well as to language requirements [Tecnoedi, paras 22-25, emphases added].

This assessment by the ECJ is bound to create perplexity, not least because it adopts an anti-integrative logic that comes to say: “since there are clear regulatory and language barriers to the functioning of the internal market for public contracts, let’s not even bother to consider the extent to which fundamental market freedoms have a role in bringing them down”.

It also seems to encapsulate an approach that could limit the relevance of its case law on the application of general principles of EU public procurement law to contracts that are sufficiently close to the thresholds triggering the application of the substantive directives. This triggers questions such as how close must the value be to the directive’s thresholds for cross-border interest to be likely? If very close, then what is the purpose of this line of case law anyway, and would it not have been better to stick (strictly) to the value thresholds as redlines for EU competence (including that of the ECJ)? If not very close, then how many shades of grey do we have in this area, and how can a contracting authority (or review tribunal or court) reasonably establish the (likelihood of) applicability of general principles and fundamental internal market freedoms?

To me, these defects alone are sufficient to consider Tecnoedi a troubling distortion of the ECJ’s approach to the assessment of cross-border interest for public contract—fundamentally because it creates a crack in (if not smashes) the normative and functional logic of previous case law and, on the whole, creates a risk of significant restriction of application of the general principles of EU public procurement law going forward.

Moreover, and at a lower level of generality, I also harbour the strong suspicion that the ECJ sees this as a relatively safe or unobjectionable assessment because it concerns a rule on the treatment of (automatically identified) abnormally low tenders that may be (improperly) considered not to create a barrier to free movement because it applies at evaluation rather than selection stage—and also because the request for the preliminary ruling was clearly defective in its lack of clarity of both the content of the Italian rule and its application to the specific case (which seems not to be possible on the basis of the limited information provided in the ECJ’s judgment). Thus, the ECJ probably may have seen this approach to the assessment of cross-border interest as an easy way to return the hot potato to the referring court without burning its hands.

However, in my opinion, this approach is clearly unsafe and objectionable when put in a different (broader perspective). Let’s imagine that the challenge had been directed at a rule on selection or exclusion (eg a rule restricting participation in tenders for this type of works contracts to undertakings located in the relevant Italian region, in this case Piedmont). In that case, the ECJ may (would) have been more willing to accept that the (same) test of (potential) cross-border interest based on the exact same indicia of economic irrelevance of a 200 km distance lent itself the opposite conclusion, and thus resulted in jurisdiction of the ECJ to interpret the relevant Italian (regional) rule against Arts 49 and 56 TFEU – or, even further, in its jurisdiction to (uphold) an Art 258 TFEU decision of the European Commission finding Italy in breach of EU law for such blatantly discriminatory rule, ultimately based on the tenderers’ nationality (which could easily dwarf the ECJ’s qualms about accepting the existence of potential cross-border interest in cases such as this).

Overall, for these reasons, I consider the Tecnoedi judgment very troubling. I can only hope that it will not go unnoticed and that the ECJ will backtrack from this rigid approach to the existence of (potential) cross-border interest in a tender for a public (works) contract.

Again, on the 'tricky' concept of State resources under EU State aid law: GC rules on German financial support for renewable energy (T-47/15)

In its Judgment of 10 May 2016 in Germany v Commission, T-47/15, EU:T:2016:281, the General Court (GC) has revisited once more the tricky issue whether publicly-mandated payments between private economic operators can constitute State aid. The GC has followed the functional approach of the Court of Justice (ECJ) in Vent De Colère and Others (C-262/12, EU:C:2013:851, see here), continuing a line of case law that distinguishes PreussenElektra (C-379/98, EU:C:2001:160, see here), and further minimising the 'outlier' decision in Doux Élevages and Coopérative agricole UKL-AREE (C-677/11, EU:C:2013:348, see here).

In the case at hand, the relevant German scheme of financial support for the production of renewable energy created both mandatory purchase obligations of energy from renewable sources ('EEG energy') at above-market prices (the 'support scheme'), and reductions in such surcharges for certain types of electric-intensive undertakings in the manufacturing sector (or 'EUIs') (the 'compensation scheme'). Thus, the EEG energy financial scheme included both measures in support of producers and of 'heavy-users' of electricity. Importantly, all these financial measures were managed by intermediaries in the energy markets. The Commission had found this scheme in breach of EU State aid rules, unless stringent conditions applied.

One of Germany's main submissions against the application of State aid rules by the Commission (mainly, Art 107 TFEU) to prohibit was that the EEG energy support and compensation schemes was that 'according to the case-law, payments between individuals which are ordered by the State without being imputable to the budget of the State or of another public body and in respect of which the State does not relinquish any resources, in whatever form (such as taxes, duties, charges and so on), retain their private-law nature' (para 73).

This submission triggers an analysis of whether such payments qualify as State resources, which mainly hinges on whether the State has control over those funds. Seeking to rely on PreussenElektra and Doux Élevages, the arguments submitted by Germany focused on the fact that the aid was administered 'at arms length' by the energy intermediaries. On the contrary, seeking to rely on a functional approach to the assessment of 'public control' of the private funds that derived from the EEG energy financial scheme, the Commission's arguments were closer to the position of the ECJ in Vent De Colère.

In order to assess these issues, the GC reiterated consolidated case law of the ECJ and stressed that 'Article 107(1) TFEU covers all the financial means by which the public authorities may actually support undertakings, irrespective of whether or not those means are permanent assets of the public sector. Therefore, even if the sums corresponding to the measure in question are not permanently held by the Treasury, the fact that they constantly remain under public control, and therefore available to the competent national authorities, is sufficient for them to be categorised as State resources' (para 83).

In the assessment of the EEG energy support and compensation schemes, the GC engaged in a reasoning that, fundamentally, relied on two main issues: 1) the fact that German law imposed on specific energy intermediaries (in the case, on transmission system operators, or TSOs) obligations oriented towards the administration of the EEG energy financial schemes that 'can be assimilated, from the point of view of their effects, to a State concession' (para 93); and 2) the fact that the funds raised through the EEG energy financial schemes are ring-fenced by law or, in other words, 'the funds are not paid into the TSOs’ general budget or freely available to them, but are subject to separate accounting and allocated exclusively to the financing of the support and compensation schemes, to the exclusion of any other purpose' (ibid).

As a result of these two circumstances, the GC concludes that 'the funds generated by the EEG surcharge and administered collectively by the TSOs remain under the dominant influence of the public authorities in that the legislative and regulatory provisions governing them enable the TSOs, taken together, to be assimilated to an entity executing a State concession' (para 94, emphasis added). Or, even more clearly, that 'the fact that the State does not have actual access to the resources generated by the EEG surcharge, in the sense that they indeed do not pass through the State budget, does not affect ... the State’s dominant influence over the use of those resources and its ability to decide in advance, through the adoption of the EEG 2012, which objectives are to be pursued and how those resources in their entirety are to be used' (para 118).

The second key element in the analysis, in my view, is that the GC gives significant relevance to the fact that the payments ultimately required from consumers derived necessarily from the existence of the German law enacting the . In other words, the GC relied heavily on the fact that the surcharges amounted to '20% to 25% of the total amount of an average final consumer’s bill. Having regard to the extent of that burden, its passing on to final consumers must therefore be regarded as a consequence foreseen and organised by the German legislature. It is thus indeed on account of the EEG 2012 that final electricity consumers are, de facto, required to pay that price supplement or additional charge. It is a charge that is unilaterally imposed by the State in the context of its policy to support producers of EEG electricity and can be assimilated, from the point of view of its effects, to a levy on electricity consumption in Germany. Indeed, that charge is imposed by a public authority, for purposes in the general interest, namely protection of the climate and the environment by ensuring the sustainable development of energy supply and developing technologies for producing EEG electricity, and in accordance with the objective criterion of the quantity of electricity delivered by suppliers to their final customers' (para 95, emphasis added).

In my view, the GC is right on both points, and both the functional analysis of the control the State exercises over ring-fenced mandatory charges and the stress given to the (para)fiscal nature of the charge are good justifications for the enforcement of State aid rules against this type of State intervention--thus closing the gap created by cases such as Doux Élevages. 

However, the case also leaves a strange aftertaste due to the references to a 'State concession'. Given the increasing body of EU economic law applicable to concessions (notably, Dir 2014/23, which does not seem to have much to do with what the GC assessed in Commission v Germany), it would probably have been preferable for the GC to keep a stricter use of language.

In that regard, if the GC actually wanted to stress that the intermediaries administering the EEG energy financial scheme were exercising (quasi) delegated public powers or (quasi) delegated State prerogatives (which was the language used in Doux Élevages, para 32), then it better ought to say so in those terms. Otherwise, there is a risk of generating additional confusion in an area of EU economic law that, honestly, is getting ever more complex.

When a commercial lawyer is (also) a consumer: Excessive paternalism by the CJEU (C-110/14)

In its Judgment in Costea, C-110/14, EU:C:2015:271, the Court of Justice of the European Union (CJEU) has engaged in extreme formalism in the interpretation of the notion of 'consumer' under EU law [and, more precisely, under Article 2(b) of Council Directive 93/13/EEC of 5 April 1993 on unfair terms in consumer contracts]. Costea is, in my view, a criticisable Judgment because it pushes legal fiction too far and departs from what I would have considered a sensible functional approach to the concept of consumer. It is worth looking closer at the reasoning of the CJEU.

The CJEU provides a very useful summary of the facts of the case: 

Mr Costea practises as a lawyer and, as such, primarily handles cases in the field of commercial law... he concluded a credit agreement with Volksbank. The repayment of that loan was secured by a mortgage registered against a building belonging to Mr Costea’s law firm ... That credit agreement was signed by Mr Costea, not only in his capacity as borrower but also in his capacity as representative of his law firm, owing to the latter’s status of mortgage guarantor (C-110/14, para 9, emphasis added).

In short, then, Mr Costea was legally acting in several capacities in a single commercial transaction, where he was both borrowing money personally and representing the legal entity that acted as his guarantor. However, he claimed protection under EU law so as to detach both legal positions and avoid his professional qualification from reducing the protection that he would otherwise be afforded as a lay consumer.

His claim was, in very simple terms, that he was at the same time a commercial lawyer acting for his firm and a consumer acting for himself. Given the impossibility of splitting the human mind and detaching oneself from knowledge already acquired, it is very hard to understand how--beyond the legal fiction derived from his ability to represent a legal entity created and owned by himself, as well as his own personal interests--he could ever be considered to functionally hold two very opposite positions: ie that of the knowledgeable commercial lawyer that acts under the general duties of his lex artis, and that of the unknowing consumer that deserves special protection when it enters into complex transactions.

However, the CJEU does precisely that. Following the Opinion of AG Cruz Villalón (see a comment here), the CJEU engages in the following reasoning:

17 It is ... by reference to the capacity of the contracting parties, according to whether or not they are acting for purposes relating to their trade, business or profession, that the directive defines the contracts to which it applies (judgments in Asbeek Brusse and de Man Garabito, C-488/11, EU:C:2013:341, paragraph 30, and Šiba, C-537/13, EU:C:2015:14, paragraph 21).
18 That criterion corresponds to the idea on which the system of protection implemented by that directive is based, namely that the consumer is in a weaker position vis-à-vis the seller or supplier, as regards both his bargaining power and his level of knowledge. This leads to the consumer agreeing to terms drawn up in advance by the seller or supplier without being able to influence the content of those terms (judgments in Asbeek Brusse and de Man Garabito, C-488/11, EU:C:2013:341, paragraph 31, and Šiba, C-537/13, EU:C:2015:14, paragraph 22).
21 The concept of ‘consumer’, within the meaning of Article 2(b) of Directive 93/13, is ... objective in nature and is distinct from the concrete knowledge the person in question may have, or from the information that person actually has (C-110/14, paras 17-18 and 21, emphasis added).

In setting up this analytical framework, the CJEU conflates two arguments. The first one relates to the weak position of the consumer in terms of unequal bargaining power. The second one relates to the information imperfection that can affect the consumer. At least on this second point, the CJEU is extremely formalist and engages in an interpretation of EU law that is not adjusted to commercial reality, but simply aimed at the world of ideas. By  flatly rejecting that the specific knowledge and expertise of the consumer can alter its legal position, the CJEU preempts any granularity in EU consumer law, at least when it comes to a potential reduction of the standard of protection of the savvy consumer--which is also functionally in stark contrast with the increased protection afforded to the particularly vulnerable consumer, and thus creates a clear imbalance in the development of this area of EU economic law.

Moreover, this formalism exacerbates the paternalism of the CJEU in its aim to protect consumers, even when they are in a situation where they do not actually deserve protection because they are not affected by an information asymmetry or imperfection [for extended discussion on this rationale for consumer protection law, see F Gomez Pomar, 'EC Consumer Protection Law and EC Competition Law: How related are they? A Law and Economics perspective' (2003) InDret 113, pp. 10 and ff]. Thus, the Costea Judgment is bound to expand consumer protection beyond its desirable remit.

The line of argument based on the consumer's limited bargaining power is the one that allows the CJEU to afford protection to Mr Costea as an individual. It is harder to take issue with the reasoning of the CJEU in paras 24-27 because the CJEU assesses the relative bargaining power of a lawyer in the abstract and concludes that 'even if a lawyer were considered to display a high level of technical knowledge ..., he could not be assumed not to be a weak party compared with a seller or supplier'. However, this should have been left for a factual assessment under the circumstances of the case, in which it could actually be proven (not presumed or assumed) that the lawyer was in no weaker position.

This is where the CJEU again engages in a line of reasoning that is extremely formalistic, particularly because it loses perspective of the fact that several legal persons are actually embodied in a single natural person. According to the CJEU

28 As regards the fact that the debt arising out of the contract in question is secured by a mortgage taken out by a lawyer in his capacity as representative of his law firm and involving goods intended for the exercise of that lawyer’s profession, such as a building belonging to that firm, it should be held that ... it has no bearing on the assessment carried out in ... this judgment.

29 The case in the main proceedings concerns the determination of the status (that of consumer or of seller or supplier) of the person who has concluded the main agreement (the credit agreement) and not the status of that person under the ancillary agreement (the mortgage), securing the payment of the debt arising from the main agreement. In a case such as that at issue in the main proceedings, the categorisation, as a consumer or as a seller or supplier, of the lawyer in the context of his taking out a mortgage cannot, consequently, determine his status under the main credit agreement (C-110/14, paras 28-29, emphasis added).

In my view, this is simply functionally absurd. The CJEU failed to look at the transaction as a whole and afforded protection beyond what might have been necessary. Moreover, the reasoning seems exceedingly simplistic in its dichotomy: ie in a given contract, each of the parties is either a consumer or a seller/supplier. This is not in line with the fact that, as AG Cruz Villalón pointed out in his Opinion, 'the contrast between the concepts of seller or supplier and consumer does not operate in completely symmetrical terms' (para 21). A functional approach should certainly allow for a more nuanced approach, so that a specific party (ie the one that demands the services in the transaction) can be categorised as consumer/no-consumer. This is certainly the case with legal entities [Judgment in Cape and Idealservice MN RE, C-541/99 and C-542/99, EU:C:2001:625, para 16], and there seems to be no good reason to automatically exclude such analysis in the case of professionals.

Overall, then, the Costea Judgment seems like an exceedingly formalistic exercise and leaves a flavour of undue expansion of consumer protection that could well backfire by allowing professionals to access unnecessary protection by the simple use of separate legal entities (which they can create and control). Will this lead to a future extension of the doctrine of lifting the corporate veil to the area of consumer protection? That would certainly be bonkers...

A new European Dynamics challenge rejected: let's focus on admissibility of claims (T-553/11)

In its Judgment of 23 May 2014 in case T-553/11 European Dynamics Luxembourg v ECB, the General Court (GC) has ruled on yet another challenge filed by European Dynamics (ED) against procurement decisions of the EU Institutions and, in this case, the European Central Bank (for previous episodes in the appeals saga, see here).

In this case, the legal framework applicable to the procurement is basically contained in Decision ECB/2007/5 of the ECB of 3 July 2007 laying down the rules on procurement. However, the issues discussed are fundamentally common to those under the EU procurement Directives, which makes the case generally relevant.

 

Generally, the challenges brought by ED concern the duty to state reasons and potential abuses of power by the contracting authorities and, with some small differences based on the specific content of the procurement decision appealed, they tend to be subjected to exactly the same legal tests (which tend to result in the dismissal of their appeals). In my view, this case is not materially different from the previous ones as those issues are concerned.

 

However, there is an element in this saga of cases that is often overlooked because it is purely procedural, which relates to the admissibility of the challenges themselves (as, oftentimes, ED is rather 'non-selective' or not sufficiently precise in the identification of the procurement decision subjected to appeal). In that regard, the Judgment in T-553/11 is interesting (?) in that it assesses two points: a) the admissibility of (independent) challenges against confirmatory decisions in internal appeal procedures, and b) the admissibility of claims requesting the annulment of all decisions related to the 'core' procurement decision subject to challenge.

 

(Independent) appeals against internal review confirmatory decisions In the first part of the Judgment, the GC engages in a rather lengthy discussion on the admissibility of a challenge against both the initial decision not to invite ED (as leading undertaking in a grouping) to submit an offer in a negotiated procedure and the subsequent decision of the procurement review body (PRB) to dismiss the internal appeal and confirm the initial decision. The GC clearly indicates that those are two separate decisions and that both are open to challenge. However, it immediately stresses that:

there is no need to specifically examine the legality of the decision of [the PRB], but [...] it is appropriate to conduct a review of the legality of the rejection of the consortium’s application taking into account all the reasons relied on during the procedure, bearing in mind that in public procurement, the obligation to state reasons pertaining to a decision may be fulfilled in several stages (see, to that effect and by analogy, Case T‑50/05 Evropaïki Dynamiki v Commission [2010] ECR II‑1071, paragraph 133 and the case-law cited, and judgment of 22 May 2012 in Case T‑6/10 Sviluppo Globale v Commission, not published in the ECR, paragraph 29), and must be assessed in the light of information available to the applicant at the time of bringing the action (Case T‑183/00 Strabag Benelux v Council [2003] ECR II‑135, paragraph 58, and Case T‑4/01 Renco v Council [2003] ECR II‑171, paragraph 96) (T-553/11 at para 49, emphasis added).

Both parts of the reasoning on admissibility seem functionally contradictory, given that the individualisation or distinction between the decisions should make them amenable to different grounds for a challenge. However, the 'holistic' approach adopted by the GC comes to institute de facto a full review of the (content) of all decisions involved in a procurement process prior to the application for judicial review. 

 

Hence, the valuable message derived from this lengthy discussion is, in my view, that regardless of the number of formal decisions adopted in a procurement procedure and the possibility to challenge them separately, the reviewing court must take the content of all of them (ie the full procurement file, at least as regards that candidate or tenderer) into account when a challenge is actioned against a decision adopted at any stage of the process. However, this may not be particularly new and should not have been controversial, as it seems to derive rather plainly from the power to conduct full reviews of the findings in fact and in law in which a procurement decision is based.

 

Appeals against 'all decisions related' to the main challenged decisionIn my opinion, this discussion is very formalistic and, to a certain extent, unnecessary. It revolves around whether the claimant submits a valid challenge if it requests the annulment of 'all decisions related' to the main procurement decision object of the appeal. The argument against the admissibility of such (secondary) claim is that it is inespecific and, consequently, does not meet the requirements of precision that are common to most judicial review systems. In the reasoning of the GC

54 Heads of claim [...] that seek the annulment of acts related to challenged acts which are not identified must be declared inadmissible as a result of the lack of precision of their subject-matter (see, to that effect, order in Case T‑166/98 Cantina sociale di Dolianova and Others v Commission [2004] ECR II‑3991, paragraph 79).

55 That finding is not undermined by the fact that it has been held, first, that the identification of the contested act could be implicitly inferred from the indications contained in the application and from the argument therein as a whole and, secondly, that an action formally brought against an act that is part of a series of acts forming a whole could be regarded as directed also, so far as necessary, against the others (order in Case T‑320/09 Planet v Commission [2011] ECR II‑1673, paragraph 23). Indeed, such a deduction is impossible specifically when the arguments contained in the application manifestly lack clarity and precision (order in Case T‑64/96 Jorio v Council [1997] ECR II‑127, paragraph 35), as is the case in the present case (T-553/11 at paras 54-55, emphasis added).

Hence, in the case at hand, the GC dismisses the claim for annulment of  'all related decisions of the ECB'. However, materially, this may not have any effect on the final outcome of the process if the appeal is upheld. In this regard, it must be taken into consideration that, (possibly) differently from other areas of (contract) law, the remedies against the illegal conclusion of a public contract may or may not involve the annulment of the contract depending on the grounds on which the illegality is founded, and irrespective of the specific claims brought forward by the applicant.

 

In the specific case of the review of EU institutional procurement, this discussion may have some purpose, as Article 263 TFEU  does not expressly regulate the remedies available. However, more generally, outside the scope of the review of the procurement decisions of the EU Institutions, the Remedies Directive allows Member States to restrict the ineffectiveness (ie voidability?) of public contracts to certain very grave cases (see art 2d) so, other than in those cases (where ineffectiveness must be declared, even if it was not expressly required by the appellant, as a matter of direct effect and supremacy of the Remedies Directive itself), the ineffectiveness of those decisions may be barred by domestic rules, regardless of the content of the action exercised by the appellant.

 

In my view, given the possibility for Member States to balance public and private interests in their domestic rules concerned with the effectiveness of illegally awarded public contracts, in public procurement litigation, the annulment of 'all related decisions' or their preservation (with a consequent indemnification of damages and, if applicable, the imposition of fines) is a matter of determination of the adequate remedy by the review court and, consequently, the discussion on the admissibility of this head of claim remains fundamentally superfluous.