CELEX: 61999CJ0167
Arbitration clause
Late performance of a contract
Penalties for delay
Interim interest

By application lodged at the Registry of the Court of First Instance of the European Communities on 20 April 1999 and received
at the Registry of the Court of Justice on 4 May 1999, the European Parliament brought an action under Article 181 of the
EC Treaty (now Article 238 EC) for annulment of the opinion of the committee of conciliators to which the parties had appealed
and for the payment of penalties for late performance of the contract between it and Société d'aménagement et d'équipement
de la Région de Strasbourg (SERS) and Ville de Strasbourg (City of Strasbourg,
the City). In their defence, the latter counterclaimed for annulment in part of that opinion.
Facts and legal background
According to the documents in the case, the Parliament, the City and SERS signed on 31 March 1994 a contract (
the framework contract) defining the conditions of the long lease and option to purchase relating to a property complex (
the buildings) which SERS undertook to construct for the Parliament on land transferred for that purpose by the City, and the relationship
between the parties during construction of the buildings.
Under clause 3.1 of the framework contract, the lease concluded between SERS and the Parliament was to take effect only on
confirmation of completion of the buildings.
Clause 3.2 of the framework contract stipulates that completion of the buildings
is expected to take place by 31 December 1997 at the latest.
Under clause 3.3 of the framework contract: The work on the superstructure of the buildings is expected to start on 1 October 1994. SERS shall have an estimated period
of 36 months to complete the buildings starting from that date.The period for completion within the meaning of this subclause shall, however, be extended appropriately in the event of delay
duly justified by SERS. That shall apply
inter alia
in the event of:
─
additional modifying work requested by the European Parliament;
─
delay in obtaining administrative authorisation(s) attributable to the authorities responsible for examining or issuing them,
or to third parties;
─
consequences of the putting into administration or judicial winding-up of one (or more) of the parties contracting with the
main contractor;
─
force majeure or accidental occurrence as defined in the case-law and legal writing;
─
strike affecting the site;
─
administrative or judicial decision or order ordering work to stop;
─
vandalism, bad weather, natural disaster, war, terrorism, archaeological excavations;
─
failure to reply or delay in replying on the part of the European Parliament beyond three weeks from the date of communication.
Clause 4 of the framework contract provides: The buildings shall be regarded as completed either on the date of acceptance if there is only one, or on the date of the
last acceptance if they are successive or partial, except in the case of an objection by the European Parliament duly founded
on non-compliance with the programme documentation in its entirety. In the latter case, the date of completion shall be the
subject of agreement between the parties or, failing that, a decision of the competent French court. Acceptance means acceptance
within the meaning of Article 1792-6 of the French Civil Code....SERS shall, by registered letter sent at least 10 calendar days before the date proposed, invite the European Parliament to
a site visit prior to each acceptance and to the acceptance(s). SERS undertakes not to issue one or other acceptance without
taking account of any observations and comments the European Parliament may make which are duly founded on compliance with
the programme documentation in its entirety.Failing agreement between SERS and the undertakings on fixing the date of one or other acceptance, it shall be the date fixed
judicially pursuant to Article 1792-6 of the French Civil Code, and this is expressly accepted by the parties. In the event
of an application for judicial acceptance to be delivered, SERS undertakes to inform the European Parliament thereof forthwith....
Clause 5 of the framework contract, headed
Time-limits and penalties for delay, provides:
5.1
Even if the period of 36 months referred to in clause 3.3 extends beyond the date provided for in clause 3.2, possibly postponed
under clause 5.2, SERS shall be liable as from the date referred to in clause 3.2, possibly postponed under clause 5.2, automatically
and without any formalities being required, solely because of that extension, for a daily penalty of ECU 28 000, subject to
a ceiling of 3% of the confirmed cost of construction (amount of works plus consultants' fees). ... The daily penalty ─ or reduced penalty mentioned above ─ shall cease to run on the date of confirmation of completion referred
to in clause 4, and in any event when the ceiling is reached.
5.2
The period provided for in clause 3.2 shall be extended in the event of:
─
force majeure or accidental occurrence duly confirmed;
─
decision of an administrative or judicial body ordering work to stop;
─
natural disaster, war, terrorism, archaeological excavations;
─
bad weather recognised by the Caisse des congés payés du bâtiment de Strasbourg;
─
delay in obtaining administrative authorisation(s) attributable to the authorities responsible for examining or issuing them,
excluding those within the competence of the City of Strasbourg. In such cases an additional period shall be laid down by common agreement of the parties or, failing that, by the court referred
to in clause 29. SERS shall inform the European Parliament, as soon as it becomes aware thereof, of the occurrence of any possible cause of
delay. If it does not do so, it may not rely thereon to obtain an additional period.
5.3
The date provided for in clause 3.2 does not take account of additional or modifying works requested or accepted by the European
Parliament. For each such work, the additional periods must be fixed in accordance with the procedures defined in the protocol.
Clause 6.3 of the framework contract reads as follows: Interim interest shall apply to all the items of expenditure in the financial statement as from the date of payment by SERS,
until the date of drawing up the first intermediate investment cost statement or the confirmed investment cost for the sums
not taken into account in the intermediate investment cost statement(s).In this respect, interim interest shall apply in particular between the date when a payment is first due and the actual date
of payment.It shall be calculated according to the rates and conditions which appear to be the best on the financial markets, which SERS
shall explore constantly for that purpose, following the procedure laid down in clause 6.4.The calculations concerning the calculation of days and capitalisation of interest shall be done in accordance with banking
methods the description of which shall be an integral part of the financing contract mentioned in clause 6.4.For determining the provisional investment cost, the interim interest has been fixed at an indicative rate of 7.3%.Interim interest shall not be due from the European Parliament for the period between the completion date provided for in
clause 3.2, possibly postponed under clause 5.2, and the actual completion date if the postponement of the completion date
derives from fault on the part of SERS or a delay not accepted as justified by the court referred to in clause 29.
Clause 21.1 of the framework contract provides that the communication of documents or information shall take place officially
by exchange of correspondence between the managing director of SERS and the director-general of the administration of the
Parliament, or in their absence by a person duly delegated, neither party being able to rely on an oral decision or oral agreement
of the other party or on a document in writing not signed by one of those two persons or their expressly appointed delegates.
Under clause 22.1 of the framework contract, SERS is to draw up a detailed report on the progress of the project every month.
Under clause 25 of the framework agreement, the general timetable annexed thereto must be observed and SERS must transmit,
with the monthly report referred to above, the site timetables and identify and explain any delays. In the event of delay,
the Parliament must be informed of adequate remedial measures which SERS intends to implement, that being without prejudice
to the application of the provisions of clause 5 of the framework contract.
Clause 28 of the framework contract states that the law applicable to the contract is French law.
Under clause 29 of the framework contract: In the absence of prior amicable agreement, all disputes relating to this contract shall be brought before the Court of First
Instance of the European Communities, pursuant to Article 181 of the EEC Treaty, Article 153 of the ECSC Treaty and Article
42 of the Euratom Treaty.
As may be seen from the case-file, the parties exchanged a large number of letters and documents. It is apparent from the
documents before the Court
inter alia
that on 22 November 1994 the Parliament communicated to SERS a consultant's opinion on monthly report No 6 drawn up by SERS.
In a letter of 20 December 1994, SERS replied to the criticisms in that opinion, stating in particular that it had been agreed
since August 1994, in other words before the invitation to tender for the contract for the structural work, that the undertakings
for the structural work could have been designated by the beginning of January 1995 and that the reopening of consultations
entailed a delay making it possible to stay well within the time-limits provided for in the framework contract, since the
margin allowed for by SERS in relation to the objective of the contract was not used up and was still largely available.
By an amending memorandum (PEU 008) dated 28 September 1995, the Parliament asked for certain changes to be made to the layout
of the hemicycle. As regards the influence of those modifications on the time-limit for completion, the memorandum provides
that the postponement of the completion date for the work is to be equal to the period between 31 August and the date of receipt
by SERS of approval by the Parliament.
By letters of 1 March, 11 April and 9 July 1996 and 3 February, 9 April and 13 August 1997, SERS communicated to the Parliament
various reports on bad weather which necessitated extending the period for completion of the buildings, pursuant to either
clause 3.3 or clause 5.2 of the framework contract. The reports concerned a total of 152 working days.
The Parliament replied, by letters of 18 March, 21 June and 18 July 1996, firstly, that to be able to rely on clause 3.3 of
the framework contract SERS had to demonstrate that the bad weather in question had actually caused delay in the general progress
of the site. It stated, secondly, that the period provided for in clause 5.2 of the framework contract could be extended only
on the basis of common agreement or a judicial decision, and there was no provision for an exception to that procedure in
the case of bad weather.
Having regard to the delay attributable to the installation of a computer network which had been the subject of another amending
memorandum (PEU 055), the Parliament decided on 29 July 1997 to allow SERS an additional period of five working days for completion
of the buildings.
In a letter of 10 December 1997, the Secretary-General of the Parliament restated the Parliament's position as to the taking
into account of bad weather in calculating the period for completion of the buildings, and formally called on SERS to communicate
to it the intermediate investment cost, as provided for in clause 6.2(c) of the framework contract, within three weeks from
the receipt of that letter.
In its reply of 16 January 1998, SERS stated that the position adopted by the Parliament was contrary to clauses 3.3 and 5.2
of the framework contract. It said that it could not comply with the Parliament's request because, as the buildings had not
yet been completed, clause 6.2 of the framework contract was not yet in force. The Parliament's position was moreover completely
contradictory, in that it wanted, on the one hand, to bring into account penalties for delay because of non-completion and,
on the other, to consider the buildings completed within the meaning of clause 6.2(c) of the contract.
By registered letter of 14 December 1998, SERS informed the Parliament that it had accepted the buildings on 18 November 1998
and that the latter date constituted the date of completion for the purposes of clause 4 of the framework contract.
On 16 December 1998 the Parliament replied that it objected to the buildings being regarded as completed on the date of the
acceptance by SERS.
On 14 January 1999 the City and the Parliament signed three agreements, which were also signed by SERS on 19 January 1999.
These were:
─
a supplement to the framework contract (
the supplementary contract), supplementing clause 29 and concerning the establishment of a committee of conciliators (
the conciliators) strictly for the purpose of resolving the dispute on the differences of interpretation and application as regards the fixing
of the contractual date of completion of the buildings on the basis of clauses 3, 5, 6 and 25 of the framework contract;
─
a conciliation protocol, in which the parties decided to submit to the opinion of the conciliators the dispute as defined
in the supplementary contract;
─
a document recording completion of the buildings, in which the parties agreed
inter alia that the completion date provided for in clause 4(1) of the framework contract was fixed at 15 December 1998 and that the
lease concluded between SERS and the Parliament consequently took effect on that date on the terms provided for in that contract.
In accordance with clause 1(2) of the supplementary contract, the conciliators were to give their opinion exclusively as a
point of law, on the basis of the provisions of the framework contract. In addition, each party was bound to comply with that
opinion, without prejudice to the right of either to make an application, within 30 days from notification of the Opinion,
to the court referred to in clause 29 of the framework agreement.
Before the conciliators, SERS claimed that the following delays had occurred:
─
25 working days caused by the additional works resulting from the modifications requested in amending memoranda PEU 008 and
055;
─
128 working days due to the failure of the first call for tenders for the contract for the structural works;
─
180 working days because of bad weather;
─
106 working days because of defaults of undertakings;
─
4 working days because of a strike;
─
16 working days as a result of road closures because of bad weather and the setting up of road barriers in thaw conditions;
─
20 working days as a result of administrative orders;
─
81 working days because of the abandonment of the site by the DRE-Lefort-Francheteau consortium (
DRE) and the undertaking doing the plastering work.
On 22 March 1999 the conciliators gave the opinion sought (
the Opinion) and notified it to the parties.
In Title V.3 of the Opinion, the conciliators stated as follows: ...... the contract contains two groups of terms which are quite distinct, those of clause 3.3 relating to the estimated period
and those of clauses 3.2 and 5 concerning the completion date;... the contract makes provision for grounds of postponement which are themselves different for the estimated period and the
completion date;... the contract consistently attaches the date of completion fixed in clause 3.2 to the grounds of postponement provided
for in clause 5.2 (see clauses 5.1, 6.3, 7.2);... clause 5.1 provides that:Even if the period of 36 months referred to in clause 3.3 extends beyond the date provided for in clause 3.2, possibly postponed
under clause 5.2, SERS shall be liable as from the date referred to in clause 3.2, possibly postponed under clause 5.2, automatically
and without any formalities being required ... for a ... penalty.That latter provision, notwithstanding the incorrect inflectional endings on the French word
prorogé
(postponed) which confuse its interpretation but which the parties have agreed to accept as mistakes, can only have the following
meaning: any delivery of the work beyond the time-limit fixed by clause 3.2 extended solely by the grounds of postponement
in clause 5.2 gives rise to payment of the penalties for delay laid down in the contract, even if the estimated period fixed
in clause 3.3 has been exceeded as a result of legitimate grounds of delay provided for in clause 3.3 but not repeated in
clause 5.2.Consequently, the very terms of clause 5.1, combined with the provisions which associate clause 3.2 (completion date) with
clause 5.2 (grounds of postponement of the completion date), require a distinction to be drawn between the estimated period
in clause 3.3 and the date of completion.In those circumstances, the College ... is of the opinion that the contractual date of completion is the date of 31 December
1997, possibly postponed in accordance with the effects only of the grounds of postponement provided for in clause 5.2. That
is therefore the date from which the penalties for delay are due.
Title VI of the Opinion, concerning the question of the conditions under which the respective grounds of postponement mentioned
in clauses 3.3 and 5.2 of the framework contract are capable of being implemented, reads as follows: ...Having regard to the terms of clause 3.3, the grounds of postponement it lists can apply only in so far as they have arisen
before 31 December 1997 and can be taken into account only within the three-month limit which follows from clause 3.2 in conjunction
with clause 3.3.In this respect, it is apparent from the document produced by the European Parliament at the meeting on 5 March 1999 (points
24 and 25) that it recognised, implicitly but necessarily, that that three-month limit was properly used by SERS pursuant
to clause 3.3.However, the European Parliament does not make clear which of the grounds put forward by SERS it relies on in accepting that
extension of the estimated period. It is not possible for the same ground of postponement to be used twice, once to extend
the estimated period of 36 months, and again to postpone the contractual date of completion.We ... therefore recommend the parties to come together to determine the grounds of postponement of the period of 36 months,
while of course giving priority to the grounds of postponement allowed under clause 3.3 but not allowed under clause 5.2.It thus follows from the above that the only remaining disagreement between the parties concerns the grounds of the postponement
of the completion date beyond 31 December 1997 under clause 5.2.We ... consider that the grounds of postponement in clause 5.2 for their part entail a postponement of the completion date
provided for in clause 3.2 (31 December 1997) to the due extent, whatever their date of occurrence and even if they occur
after 31 December 1997, provided that they take place during a period of postponement which is permitted under clause 5.2.
In Title VII of the Opinion, the conciliators expressed their view on the various grounds of delay which could be taken into
account for determining the contractual date of completion of the buildings. With respect to the events relied on by SERS
which could be regarded as cases of
force majeure
, Title VII.1, Chapter A, Section 2(a) of the Opinion reads as follows: The first event capable of being a case of
force majeure
is constituted by the delay resulting from the unsuccessful outcome of the call for tenders for the contract relating to
the structural work, based on the assumption of agreement between the tendering undertakings and on the need to carry out
another call for tenders in order to award that contract....However, it must be observed that the letter dated 20 December 1994 addressed by [the] managing director of SERS to [the]
director-general of the administration of the European Parliament suggests that SERS will observe the time-limit laid down
in the framework contract notwithstanding the restart of consultations and the time wasted as a result of that serious incident.We ... consider, however, that the elements which constitute a case of
force majeure
are objective in nature; they must therefore be assessed in themselves independently of the way, which may be incorrect,
in which they may have been assessed by a party at a time when not all the consequences of the event had as yet manifested
themselves.In those circumstances, our position ... is to invite both parties to come together to examine together
a posteriori
the actual effect of the event in question on the progress of the site from the point of view of the obligation of diligence
on the part of SERS.They will have to decide on the basis of that examination whether to reject or to accept in whole or in part that event as
a ground of postponement of the completion date.
In Title VII.1, Chapter A, Section 2(d) of the Opinion, the conciliators examine in the following terms the defaults of undertakings
relied on by SERS to justify a postponement of the date of completion of the buildings: ...
*
In general, such acts are not regarded as cases of
force majeure
in that they cannot, in principle, be regarded as unforeseeable. Defaults on the part of undertakings are comparatively common
in the course of carrying out works and are regarded by the case-law as normal hazards of a building site.
**
However, the default of the [DRE] group assumes a particular aspect in view of the circumstances in which it took place. That
group, after tendering in the context of a call for tenders and having its tender accepted, refused to sign the contract itself.
That situation, taken in itself, could count as
force majeure
, provided that the considerable delay it led to is accepted as insurmountable by the parties for whom it is to examine this
point.Were they to decide it by accepting that there was
force majeure
, we ... would, however, take the view that in this very special case the payment of penalties for delay could not be avoided.
Exemption from such payment would amount to exonerating the group of undertakings in default from the consequences of its
default and making the European Parliament bear a loss which was undoubtedly suffered by SERS, but for which SERS can obtain
compensation from that group.Our opinion is, however, based on the assumption of default on the part of the DRE group which refused to honour its commitments.
If the competent court before which SERS brought the matter reached a contrary conclusion, the question of
force majeure
would then have to be reconsidered by the parties in the light of that judicial decision....
According to Title VII.1, Chapter D of the Opinion, concerning the modifications and additional works: ...The operating protocol constituting Annex 5 to the framework contract provides that:For the application of clause 5.3 of the framework contract, and with respect to modifications having consequences for the
planning, SERS shall inform the European Parliament of the effects of the proposed modifications on the overall time scale.Countersignature of the modifications by the European Parliament shall automatically to the appropriate extent entail postponement
of the time-limit referred to in clause 3 of the framework contract.We ... consider that, pursuant to that provision, the delays resulting from additional works or modifications requested or
accepted by the Parliament must be taken into account in their entirety for postponement of the completion date, where the
conditions laid down in clause 3.2 of the operating protocol are satisfied.This must all the more be so as it is apparent from the documents in the case that the delays resulting from [amending memorandum]
PEU 055 ─ Conference network ─ were taken into account by the European Parliament and those resulting from [amending memorandum]
PEU 008 ─ Modification of the hemicycle ─ were expressly accepted by it, as may be seen from that amending memorandum.
As regards the conditions for taking into account the grounds of postponement of the contractual date of completion of the
buildings, the conciliators considered, in Title VII.2 of the Opinion, that clause 5.2 of the framework contract, which provides
that the grounds of postponement specified there can bring about a postponement of that date only if SERS informs the Parliament
thereof as soon as it becomes aware of their occurrence, must be applied in good faith and
excluding any unnecessary formalism once the information has been brought to the knowledge of the Parliament in a sufficiently
explicit manner.
As regards interim interest, Title VIII of the Opinion states as follows: ...It appears [from the provisions of the final paragraph of clause 6.3 of the framework contract] that the system of interim
interest is independent of the system of penalties for delay; that is attributable to their different objectives.It follows that the European Parliament may benefit from an exemption from the obligation concerning the payment of interim
interest only if two conditions are fulfilled:
─
first, the actual date of completion of the buildings is later than their contractual completion date;
─
second, that slippage is attributable to fault on the part of SERS or is the result of a delay not recognised as justified
by the court mentioned in clause 29.
We ... consider that fault on the part of SERS must be understood as a personal fault of SERS, excluding
inter alia
faults attributable to its contracting parties or their subcontractors.As regards the
delays not recognised as justified by the court mentioned in clause 29, the contract gives no criterion of assessment and refers the matter to the Court of First Instance.We ... have consequently raised the question of what criteria that court or the parties, prior to bringing the matter before
the court, could rely on to determine whether or not a delay relied on by SERS is justified.We consider that, since the grounds of postponement listed in clause 5.2 have already been taken into account simply because
of the wording of the final paragraph of clause 6.3, it is those listed in clause 3.3, which it should be remembered is not
an exhaustive list, which could be of relevance in this respect.
Procedure
The Parliament's application was lodged at the Registry of the Court of First Instance on 20 April 1999.
By letter of 21 April 1999, the Registrar of the Court of First Instance acknowledged receipt of the application and, after
pointing out that the Court of First Instance had no jurisdiction to rule on an application by an institution by virtue of
an arbitration clause under Article 181 of the Treaty, informed the Parliament of his intention to transmit the application
to the Registrar of the Court of Justice, pursuant to the first paragraph of Article 47 of the EC Statute of the Court of
Justice, unless the Parliament informed him before 3 May that its intention was indeed to apply to the Court of First Instance.
On 28 April 1999 the Parliament replied that it had no objection to its application being transmitted to the Registrar of
the Court of Justice.
The application was lodged, by the Registrar of the Court of First Instance, at the Registry of the Court of Justice on 4
May 1999 and registered on the following day.
By separate document lodged at the Registry of the Court of Justice on 23 July 1999, the City and SERS raised a plea of inadmissibility,
pursuant to Article 91(1) of the Rules of Procedure of the Court, on the ground that the application had been brought out
of time and that its transmission to the Court was irregular.
By decision of 7 December 1999, the Court, after hearing the Advocate General, pursuant to Article 91(4) of the Rules of Procedure,
joined the plea of inadmissibility to the substance.
On 7 April 2000 the Parliament made an application for a stay of proceedings in accordance with Article 82a(1)(b) of the Rules
of Procedure, on the ground that negotiations between the parties were taking place.
By letter of 17 April 2000, SERS and the City opposed that request, on the ground that SERS had not taken part in the negotiations
to which the Parliament referred.
In those circumstances, on 10 May 2000, the Court, after hearing the Advocate General, decided not to stay the proceedings.
By application lodged at the Court Registry on 11 October 2002, SERS and the City asked for the oral procedure, which had
been closed on 26 September 2002 following the delivery of the Advocate General's Opinion, to be reopened. That request was
dismissed by order of the Court of 3 February 2003.
Forms of order sought
With respect to the plea of inadmissibility, the City and SERS claim that the Court should:
─
declare the plea admissible and well founded, pursuant to Article 91 et seq. of the Rules of Procedure of the Court;
─
hold and declare that the predetermined period of 30 days for making an application to the competent court against the Opinion
had expired on the date on which the Court of Justice was seised, namely 5 May 1999;
─
declare that the Opinion has become final and irrevocable;
─
order the Parliament to pay the costs and to pay each of them a procedural indemnity of EUR 20 000;
─
in the alternative, and in the highly unlikely event of the Court deciding either to join the plea to the substance or to
reject the plea by separate decision, to grant the City and SERS the necessary time to make submissions on the substance.
With respect to the plea of inadmissibility, the Parliament contends that the Court should:
─
dismiss the plea of inadmissibility as unfounded;
─
dismiss the claim of the City and SERS for payment of a procedural indemnity of EUR 20 000;
─
order those parties to pay the costs;
─
continue the proceedings on the substance or, in the alternative, remit the case to the Court of First Instance.
With respect to the substance, the Parliament claims that the Court should:
─
order SERS to pay penalties for delay from 9 January 1998, the contractual date of completion of the buildings, until 14 December
1998 inclusive, the day before the date of confirmation of the completion of the buildings, or else, in the alternative, order
SERS to pay penalties for delay as from the contractual completion date fixed by the Court;
─
declare unjustified the delays after 9 October 1998, the contractual date of completion of the buildings, and consequently
declare that the Parliament is not liable to pay interim interest from that date until 14 December 1998 inclusive, the day
before the date of confirmation of completion of the buildings, or else, in the alternative, declare that the Parliament is
not liable to pay interim interest as from the contractual completion date fixed by the Court;
─
annul the Opinion;
─
order the City and SERS to pay the costs;
─
declare inadmissible the purported counterclaim brought by those parties against the Opinion;
─
dismiss the claim by those parties for payment of a procedural indemnity of FRF 300 000;
─
dismiss all the other claims of those parties.
With respect to the substance, the City and SERS contend that the Court should:
─
take note that they make submissions on the substance only subject to the plea of inadmissibility of the Parliament's application,
without abandoning that plea, and on the contrary maintaining it;
subject to that reservation:
─
take note that they bring a counterclaim against the Opinion, in so far as the conciliators considered that the period for
completion expired on 31 December 1997 and was extended only on the grounds referred to in clause 5.2 of the framework contract;
─
hold that the time-limit of 31 December 1997 is merely an estimated time-limit which may be postponed for any reason justified
under clause 3 of the framework contract in all its provisions, which constitutes an indivisible whole;
and, as regards the Parliament's application:
─
dismiss that application;
─
hold that the Court has no other power or no more power than the conciliators;
─
hold that the Court can rule only on the principles of law applicable to the dispute, to the exclusion of any analysis of
the facts, and
a fortiori that the Court cannot order or fix a completion date concerning questions of fact not within the competence of the conciliators
and the Court, which is hearing the case on the basis of the devolutive effect of the Parliament's application;
─
confirm the Opinion on all points not the subject of the counterclaim by the City and SERS;
─
order the Parliament to pay the costs and expenses and a procedural indemnity of FRF 300 000.
Admissibility of the application by the Parliament
Arguments of the parties
The plea of inadmissibility raised by the City and SERS against the Parliament's application is based on two distinct pleas
in law.
In support of their first plea in law, based on the expiry of the period for making an application, they submit that, although
the Court of First Instance received the Parliament's application within the applicable period of 30 days, it was not seised
of a proper action registered before the expiry of that period, since, on finding that the Court of First Instance lacked
jurisdiction to rule on the application, the Registrar of the Court of First Instance took no further steps. Moreover, bringing
an action before a court which lacks jurisdiction cannot stop the running of a period for bringing proceedings. They further
argue that, at the date on which the application was registered by the court with jurisdiction, the period had expired. That
delay is accentuated by the fact that it was only on 28 April 1999, after the time-limit had expired, that the Parliament
agreed to its application being transmitted to the Court of Justice.
In support of their second plea in law, based on the irregularity of the procedure by which the application was transmitted
to the Court of Justice, the City and SERS submit, first, that a case cannot be brought before the Court of Justice by a mere
letter. Next, the Registrar of the Court of First Instance cannot bring an action before the Court of Justice in lieu of the
applicant. Finally, the Registrar of the Court of First Instance acted wrongly and with no legal effect in transmitting the
application to the Registrar of the Court of Justice, pursuant to the first paragraph of Article 47 of the EC Statute of the
Court of Justice. That article refers only to cases where
an application or other procedural document addressed to the Court of First Instance is lodged by mistake with the Registrar
of the Court of Justice and vice versa. In the present case there was no mistake, as the application was addressed to the Court of First Instance
and was lodged with the Registrar of that Court. In those circumstances, it was for the Court of First Instance to decide
the question of jurisdiction by making an order pursuant to the second paragraph of Article 47 of the EC Statute of the Court
of Justice.
With respect to the first plea, the Parliament submits that the Court of Justice and the Court of First Instance do not belong
to separate judicial systems but constitute a single Community institution provided for as such by the EC Treaty. It follows,
moreover, from the wording of the first paragraph of Article 47 of the EC Statute of the Court of Justice that the time-limit
for bringing an application is suspended if the application is transmitted from one registry of that institution to another.
An action is validly brought where the application is lodged within the applicable period with one of the institution's registries.
That is so in the present case, since the application was lodged with the Registry of the Court of First Instance before expiry
of the period of 30 days.
With respect to the second plea, the Parliament submits that the argument put forward by the City and SERS is based on an
over-formalistic interpretation of Article 47 of the EC Statute of the Court of Justice. Given that the Court of First Instance
and the Court of Justice are two courts which share the exercise of the jurisdiction of a single institution, it is neither
necessary nor favourable to the proper administration of justice for the procedures laid down in that provision to be applied
with excessive rigidity. In any event, it is apparent from the letter with which the Parliament lodged the application that
it did not have the fixed intention of bringing the case before the Court of First Instance rather than the Court of Justice.
The Registrar of the Court of First Instance could therefore legitimately consider that the lodging of the application with
the Court of First Instance was the result of a mistake which the Parliament had seen as probable and accepted the necessary
consequence, namely the transmission of the application to the Registry of the Court. In the alternative, should the Court
nevertheless hold that the transmission was irregular, the Parliament asks for the case to be remitted to the Court of First
Instance for that Court to be able formally to declare that it lacks jurisdiction and refer the case to the Court of Justice.
Findings of the Court
As regards the first plea in law, concerning the date of lodging of the application to be taken into account for ascertaining
whether the time-limit for bringing the application was complied with, it should be noted that where, pursuant to the second
paragraph of Article 47 of the EC Statute of the Court of Justice, the Court of Justice refers an action to the Court of First
Instance, the action is validly brought before the latter even if the time-limit for bringing the action has expired (see,
to that effect, the order in Case C-72/90
Asia Motor France
v
Commission
[1990] ECR I-2181, paragraphs 16 to 20). The same principle applies where the Court of First Instance refers a case to the
Court of Justice.
Consequently, the first plea must be rejected as unfounded.
As regards the second plea, alleging that the procedure by which the application was transmitted by the Court of First Instance
to the Court of Justice was irregular, it must be observed that, under the second paragraph of Article 47 of the EC Statute
of the Court of Justice, the Court of First Instance should in any event have found that it did not have jurisdiction to hear
the Parliament's application, which falls within the jurisdiction of the Court of Justice, and it would then have had to refer
it to the Court of Justice, without it thereby becoming inadmissible as out of time, as follows from paragraph 53 above. Consequently,
the fact that the Registrar of the Court of First Instance himself transmitted the application to the Registrar of the Court
of Justice cannot have any effect on its admissibility.
The second plea must therefore be rejected as of no effect.
In the light of the above considerations, the plea that the Parliament's application is inadmissible must be rejected.
Admissibility of the counterclaim of the City and SERS
Arguments of the parties
The Parliament has raised a plea of inadmissibility against the counterclaim brought by the City and SERS in their defence.
It submits that on 8 March 2000, when the defence was lodged at the Registry of the Court, the period for bringing an action
against the Opinion had expired. Since the counterclaim does not concern the annulment of a point of the Opinion contested
by the Parliament, it is inadmissible.
The City and SERS contend that their counterclaim is admissible because they were not informed of the Parliament's application
until after the period laid down in clause 1(2) of the supplementary contract had expired and the right to bring such a claim
is closely bound up with the concept of a fair hearing and the principle of
equality of arms.
Findings of the Court
It is apparent from clause 1(2) of the supplementary contract that the opinion to be given by the conciliators was to be binding
on the parties unless one of them brought an action against it before the competent court. Such an action may thus be assimilated
to an appeal against a decision of a court or tribunal. The Rules of Procedure of the Court do not prevent the bringing of
a counterclaim in such a context, where certain conditions are fulfilled.
Article 116(1) of the Rules of Procedure, applicable by analogy in the present case, provides: A response may seek:
─
to dismiss, in whole or in part, the appeal or to set aside, in whole or in part, the decision of the Court of First Instance;
─
the same form of order, in whole or in part, as that sought at first instance and shall not seek a different form of order.
In the present case, the form of order sought in the defence submitted by the City and SERS fulfils those criteria, since
it seeks annulment in part of the Opinion and is aimed at upholding the claim submitted to the conciliators as regards the
determination of the contractual date of completion of the buildings.
As regards the period during which such a counterclaim must be brought, it should be observed that Article 115(1) of the Rules
of Procedure provides that the period for lodging a response is two months from service of notice of the appeal.
Since that time-limit was complied with in the present case, the counterclaim must be declared admissible.
Devolutive effect of the application by the Parliament
Arguments of the parties
The City and SERS submit that, contrary to the Parliament's submissions in the application, the Court cannot order them to
pay penalties for delay, as the application brought by the Parliament does not have devolutive effect and the Court has no
more powers than the conciliators had. Since the conciliators were only to give a ruling in law on the interpretation of certain
provisions of the framework contract, the Court can neither order a party to the proceedings to pay any sum of money nor rule
on the facts and the calculation of the extensions to the period for completion of the buildings or the postponement of the
contractual date of their completion. The City and SERS say that, since the parties decided to settle their dispute amicably
by appealing to conciliators, the Court cannot acquire jurisdiction over the contract if an application is made to it challenging
the Opinion.
The Parliament contends, on the other hand, that under clause 29 of the framework contract and clause 4 of the conciliation
protocol not only does the Court have jurisdiction to rule on the part of the application which seeks annulment of the Opinion,
it may also rule, as the court with jurisdiction over the contract, on the facts and the actual application of the framework
contract.
Findings of the Court
It should be observed, first, that it is apparent from clause 29 of the framework contract that the court referred to in that
clause has jurisdiction to hear all disputes relating to that contract. That clause conferring jurisdiction thus covers both
disputes concerning the payment of a sum of money and disputes between the parties concerning the classification in law of
certain facts or concerning the determination of the date of completion of the buildings which SERS undertook to construct.
Second, neither the fact that the supplementary contract provides that the parties are to appeal to conciliators with a mandate
to resolve the dispute between them on the interpretation and application of clauses 3, 5, 6 and 25 of that contract nor the
fact that in accordance with clause 1(2) of the supplementary contract the conciliators' opinion is to have binding effect
on the parties unless proceedings are brought against it is capable of preventing the Court from exercising full jurisdiction,
since no provision agreed between the parties expressly or impliedly limits the extent of the jurisdiction conferred on the
Court by the arbitration clause in clause 29 of the framework contract.
Accordingly, the Court has full jurisdiction in the present case.
The Opinion
Arguments of the parties
In the Parliament's submission, it follows from clauses 3.2 and 3.3 of the framework contract, read together, that the contractual
date of completion of the buildings is 31 December 1997. That date constitutes one of the terms of an obligation of result,
and, in order for it to be complied with, the framework contract expressly provided for protective provisions, in clauses
3.2, 5.1, 5.2 and 25.
As regards the penalties for delay, the Parliament submits that, in view of the fact that the conditions laid down in clauses
3.2 and 3.3 of the framework contract are not satisfied in the present case, SERS is liable, simply because the time-limit
for completion was not observed, automatically and without any formalities, to pay the penalties for delay provided for in
clause 5.1 of the framework contract. However, it adds that, under amending memorandum PEU 055, it allowed SERS an additional
five working days for completing the buildings. The penalties for delay are thus due only from 9 January 1998. Alternatively,
should the contractual completion date be set at a date later than 9 January 1998, the Parliament submits that SERS should
be ordered to pay the penalties for delay from that date until 14 December 1998, the day before the date on which completion
of the buildings was confirmed.
As regards the interim interest, the Parliament submits that under clause 6.3 of the framework contract it is exonerated from
payment of that interest between the contractual date of completion of the buildings and the date of confirmation of completion,
where the postponement of the completion date is the result of fault on the part of SERS or of a delay not accepted as justified
by the court referred to in clause 29 of the framework contract. In this context the word
postponement refers to passing the contractual completion date.
As to the second alternative, namely delay which is not accepted as justified by that court, the Parliament submits that clause
6 of the framework contract allows a delay to be accepted as justified only under conditions which are independent of the
remainder of the framework contract. Since the final paragraph of clause 6.3 of that contract is intended to apply only after
the contractual date of completion of the buildings, whether or not a delay is justified can follow only from clause 5.2 of
the contract, which determines the postponement of that date. It follows that a delay is justified, within the meaning of
clause 6.3 of the framework contract, only on condition that:
─
the Parliament has been informed by SERS, as soon as SERS became aware thereof, of the occurrence of any possible ground of
delay referred to in clause 5.2 of the framework contract;
─
an extension of the contractual date of completion of the buildings has been requested by SERS and then agreed between the
parties; and
─
SERS has indicated to the Parliament the adequate remedial measures envisaged for remedying the delay.
In the present case, the information was not provided in due and proper form and the Parliament's agreement was not sought
in accordance with the procedure laid down, since the information communicated was incomplete and that on the adequate remedial
measures to be taken was absent.
In those circumstances, apart from the delay resulting from the additional work needed to take account of amending memorandum
PEU 055, all delay beyond 31 December 1997 was unjustified.
As to the first alternative, namely where the delay is due to fault on the part of SERS, the Parliament observes that SERS,
as main contractor, had to play an essential part in carrying out the project of construction of the buildings. In that function,
it should in particular have made sure of the proper progress of the project and paid the undertakings and other creditors
in strict accordance with the due dates agreed. It also had to give the instructions necessary for carrying out the project
and take responsibility for it, those obligations essentially constituting the basis of the remuneration it was to receive
from the Parliament.
According to the Parliament, SERS did not take on those obligations satisfactorily and did not really manage the site. Thus
the absence of remedial measures capable of remedying the delays and the inadequacy of the workforce on the site caused frequent
postponements of the date of completion of the buildings. The deficiencies observed in the conduct of the project are clearly
apparent, moreover, from several audits carried out on behalf of the Parliament.
In those circumstances, the Parliament submits that fault on the part of SERS, within the meaning of clause 6.3 of the framework
contract, has been sufficiently shown, and it is not therefore liable to pay interim interest for the period from 9 January
to 14 December 1998, or, alternatively, for the period between the contractual date of completion of the building adopted
by the Court and 14 December 1998.
As regards Title VII.1, Chapter A, of the Opinion, concerning
force majeure
, the Parliament submits, in the first place, that the delay resulting from the unsuccessful nature of the call for tenders
concerning the contract for the structural work cannot be put down to
force majeure
. First, since it was only after the establishment of the committee of conciliators that SERS requested to benefit from 128
days of delay in this respect, that request was not made within the period prescribed by the framework contract, and is therefore
manifestly inadmissible.
Second, given that SERS admitted in a letter of 20 December 1994 that, despite the unsuccessful outcome of the call for tenders
in question, the margin allowed for completion of the buildings enabled it to remain well within the time-limits provided
for in the framework contract, and that the delay relied on in this respect was not mentioned in the reports on the progress
of the work submitted regularly to the Parliament, the position taken by SERS in that letter cannot, contrary to the conciliators'
view, result from an incorrect assessment of the situation.
It follows, according to the Parliament, that the delay which resulted from the failure of the call for tenders for the contract
for the structural work was neither insurmountable nor irresistible. By regarding that delay as a case of
force majeure
, the conciliators classified the facts incorrectly in law.
The Parliament submits, in the second place, that the conciliators made a further error by classifying the default of DRE
as
force majeure
, in Title VII.1, Chapter A, Section 2(d) of the Opinion. In that the contracts concluded by SERS are, in principle, to result
from calls for tenders, the refusal of a company whose tender has been accepted to sign the relevant contract cannot, contrary
to the conciliators' view in the Opinion, constitute default of a special kind, since any default on the part of an undertaking
giving rise to its withdrawal from the site required SERS to find a replacement for that company within the conditions laid
down by the framework contract.
The Parliament adds that SERS has brought proceedings against DRE for compensation for the loss caused by its conduct, which
constitutes an additional indication that the delay relied on by SERS was caused not by
force majeure
but by the fault of a third party. It is therefore for SERS to seek reimbursement in full of the expense it incurred through
the fault of DRE, including the proportion of the penalties for delay to which it was exposed as a result of DRE's default
and the proportion of the interim interest which it will be obliged to bear because of that default.
As regards Title VII.1, Chapter D, of the Opinion, the Parliament submits that amending memorandum PEU 008 examined there
does not contain any indication as to a delay in connection with the additional works described in the memorandum. Contrary
to what the conciliators stated in the Opinion, that memorandum cannot thus amount to an express acceptance by the Parliament
of a delay of 20 days under clause 5.3 of the framework contract. Furthermore, the Parliament does not accept that the work
carried out to take account of the modifications asked for in the memorandum caused the slightest delay. The timetables notified
to the company responsible for doing the work in question before the memorandum was drawn up were no different from those
notified subsequently. The Opinion should therefore be annulled on this point as well.
With respect to the Parliament's application, the City and SERS submit, in the first place, that, while the Parliament indeed
asks for the contractual completion date to be fixed at 9 January 1998, it does not contest Title V.3 of the Opinion relating
to the determination of the contractual date of completion of the buildings. The Parliament's application should therefore
be dismissed for want of any meaningful challenge to the Opinion.
They submit, in the second place, that, as regards the grounds of delay capable of extending the contractual period for completion
of the buildings, the Parliament has not contested the part of the Opinion relating to the grounds of delay relied on by SERS.
It confined itself to asserting that such grounds may be relied on only on condition that it has been informed of their occurrence,
the additional period has been determined by common agreement, and SERS has adopted adequate remedial measures.
First, however, the Parliament was informed by means of the monthly reports of the occurrence of all the grounds of delay
relied on, and the presence on the site of several of its officials enabled it to have sufficient information on the progress
of the work. Second, agreement of the parties as to an additional period is not indispensable, since under the framework contract
the court referred to in clause 29 of that contract also has jurisdiction to rule on the point, the Parliament not having
a discretion to refuse justified postponements. Third, it has not been shown that SERS did not adopt adequate remedial measures
to absorb the delays. On this point, the Opinion is therefore entirely correct.
The City and SERS submit, in the third place, that it follows from clause 6.3 of the framework contract that there is no automatic
link between the penalty taking the form of an obligation to pay penalties for delay and that consisting in the suspension
of the obligation to pay interim interest. The latter can apply only if fault on the part of SERS is shown and the court referred
to in clause 29 of the framework contract decides that the delay is not justified.
As to the first condition, the College rightly found that it was for the Parliament to establish the existence of fault on
the part of SERS and that this fault had to be a personal fault of SERS, not a fault of one of the undertakings entrusted
with carrying out the works. That approach is consistent with the principles governing the liability of the main contractor
in French law. Moreover, there is a fault to be taken into consideration under clause 6.3 of the framework contract only where
the material and mental elements are both present and there is a causal link between the fault and the delay.
As to the second condition, the City and SERS submit that, even in the case of personal fault on the part of SERS, the court
referred to in clause 29 of the framework contract may, as the conciliators rightly pointed out in the Opinion, decide that
that fault may be excused and should not have any effect on the payment of interim interest.
In support of their counterclaim, the City and SERS submit, in the first place, that it follows from the use of the term
expected in clauses 3.2 and 3.3 of the framework contract, and from its provisions relating to legitimate grounds of delay, that the
date of 31 December 1997 is only an estimated date and that the period for completion of the buildings is not mandatory and
determined irrevocably. That period can be extended for numerous reasons, as is shown by the use of the expression
inter alia
in clause 3.3 of the framework contract. The argument that the date in clause 3.2 of the framework contract is only an estimated
date is supported by the wording of clause 5.3 of that contract, which shows that that date does not take account of additional
work or modifications requested or accepted by the Parliament.
The City and SERS submit, in the second place, that it is not logical that the penalties for delay can have a starting point
earlier than the contractual time-limit for completion of the buildings, or that those penalties can start running in the
absence of breach of that time-limit. Having regard to those considerations, clause 5.1 of the framework contract must be
interpreted as meaning that the penalties for delay are due only where passing the estimated date of 31 December 1997 is not
justified and there is no legitimate ground for extending the estimated period expiring on that date. The conciliators' analysis
in the Opinion amounts to
the paradox of confirming a contractual deadline of 31 December 1997 which cannot be extended on the grounds in clause 3 but
which may give rise to penalties even if not exceeded ... except on the grounds exhaustively set out in clause 5.
The City and SERS further submit that the conciliators' interpretation of clause 5.2 of the framework contract is
illegitimate, uncertain and contrary to logic in that it makes it possible to determine the contractual completion date without taking account of the estimated completion
period and the possible grounds of extension of that period. Moreover, it is contradictory that SERS can, on the basis of
the framework contract, complete the buildings after 31 December 1997 while being liable to pay penalties for delay.
Findings of the Court
It should be observed that it is apparent both from the procedure before the Court and from that before the conciliators,
first, that the Parliament is not calling into question the fact that the maximum extension of three months of the period
for completion of the buildings provided for in clause 3.3 of the framework contract was properly made use of by SERS and,
second, that the dispute does not concern the determination of that period but the determination of the contractual completion
date referred to in clause 3.2 of that contract and the period in respect of which the Parliament may be exonerated from payment
of interim interest.
The counterclaim of the City and SERS
As regards the determination of the contractual date of completion of the buildings referred to in clause 3.2 of the framework
contract, it must be stated that, where a provision in a contract such as that at issue in the present proceedings is to be
interpreted, that provision must not be considered in isolation but must be interpreted in relation to the general structure
of the contract of which it forms part. The interpretation must therefore, as far as possible, be consistent with the other
provisions of the contract and must not deprive them of their effectiveness.
In the present case, the interpretation of clause 3.2 of the framework contract advanced by SERS and the City would deprive
clause 5.1 of the contract of effectiveness, in that it would have the consequence that the date from which the penalty clause
in that provision is to apply would no longer be certain, which would call into question the automatic application without
formalities of the penalties provided for in that provision. The interpretation put forward by the Parliament, on the other
hand, is perfectly consistent with the other provisions of the contract.
The latter interpretation is therefore the one which must be accepted.
That conclusion is not invalidated by the use of the verb
is expected in clause 3.2 of the framework contract, in so far as that verb is also a synonym of the verb
is fixed, so that the date mentioned in that clause must therefore be regarded as constituting a fixed date. Having regard to the
structure of the framework contract and the objective in particular of clause 5.1 of that contract, it is clear that the verb
used must be understood in that sense.
It follows that the date mentioned in clause 3.2 of the framework contract must be regarded as constituting a predetermined
date which can be postponed only under certain conditions.
In this respect, the only grounds capable of affecting the date provided for in clause 3.2 of the framework contract are those
listed in clauses 5.2 and 5.3 of that contract.
First, it is apparent from the wording of clause 3.3 of the framework contract that the non-exhaustive list of grounds of
postponement in that provision is intended to apply only to the completion period of 36 months mentioned there.
Second, it follows from clauses 5.2 and 5.3 of the framework contract that the causes of postponement listed exhaustively
there are those which may have an effect on the contractual date of completion of the buildings fixed in clause 3.2 of that
contract.
It follows that the contractual date of completion of the buildings is 31 December 1997 and that it may be postponed on the
grounds set out in clauses 5.2 and 5.3 of the framework contract.
Consequently, the counterclaim of the City and SERS must be rejected as unfounded.
The Parliament's application
As regards the interpretation of clause 6.3 of the framework contract and the conditions under which the Parliament is released
from its obligation to pay interim interest, it must be observed that that provision does not contain any indication as to
the grounds which may be relied on to justify postponing the actual completion date of the buildings.
Contrary to the Parliament's submissions, those grounds are not limited to the cases set out in clause 5.2 of the framework
contract. First, as may be seen from the wording of that provision, the latter are intended to apply only to the contractual
completion date. Second, exoneration from the obligation to pay interim interest laid down in the final paragraph of clause
6.3 of the framework contract constitutes an exception to the system established by that clause, and the narrow interpretation
which must be given to such an exception precludes, in view of the fact that the provision is silent, the grounds which may
be relied on to prevent the exception applying from themselves being given a narrow interpretation.
Consequently, the conciliators did not err in considering, in Title VIII of the Opinion, that the grounds of postponement
capable of being relied on to reduce the period during which the Parliament is exempted from the payment of interim interest
are not those set out in clause 5.2 of the framework contract, and must rather be sought among those provided for, non-exhaustively,
in clause 3.3 of that contract.
It follows that the Parliament's plea relating to this part of the Opinion must be rejected.
As regards the actual application of the framework contract and the assessment of the various grounds put forward by SERS,
under clause 5.2 of that contract, to justify the delay in completion of the buildings, the justification based on the impact
of bad weather on the progress of the project should be examined first. In this respect, it must be remembered that it is
for SERS not only to prove the existence of the grounds of delay it relies on, but also to show that they affected the date
of completion of the works.
SERS has failed to establish the extent to which that bad weather actually caused delay. Moreover, SERS has not proved that
it adopted, as it is obliged to under clause 25 of the framework contract, adequate remedial measures to correct that delay,
nor shown that the Parliament was informed of the occurrence of the bad weather in accordance with the form and time-limit
laid down in clauses 5.2 and 21.1 of the framework contract.
The bad weather cannot therefore be taken to constitute a ground of postponement within the meaning of clause 5.2 of the framework
contract.
With respect, in the second place, to the cases of
force majeure
relied on by the City and SERS, namely the failure of the first call for tenders for the structural work, the default of
certain undertakings, the closure of roads because of bad weather and the setting up of road barriers in thaw conditions,
and the strike which affected the site, it must be recalled that under French law, which applies to the framework contract,
the concept of
force majeure
is characterised by three constituent elements, namely that it must be external, unforeseeable and irresistible. Whether
the facts relied on constitute
force majeure
must therefore be determined by reference to those three criteria.
It must also be observed that, according to the case-law of the French Conseil d'État, clauses in contracts relating to
force majeure
are to be applied strictly in administrative law. Thus, for example, if he has not put it forward as justification within
the period provided for in the contract, a contracting party may not plead
force majeure
. However, it also appears from that case-law that if the administrative authority has necessarily been aware of the facts
in question, a failure to comply with the formalities laid down in the contract cannot be relied on by it to avoid having
to draw the consequences.
Since clause 5.2 of the framework agreement provides that if it has not informed the Parliament immediately SERS may not rely
on possible cases of
force majeure
, and clause 25 of that contract provides that the Parliament must be informed monthly of the progress of the site and delays
which have occurred must be clearly identified, it is in the light of those clauses that it must be assessed whether the failure
of the first call for tenders for the contract for the structural work, which allegedly produced a delay of 128 working days,
may be relied on as a case of
force majeure
.
It is clear that, while the Parliament was informed, by a letter dated 20 December 1994 at the latest, that the call for tenders
in question had failed, it was nevertheless only in its memorandum to the conciliators dated 2 March 1999, in other words
over four years after that failure and outside the period laid down, that SERS first relied on it as
force majeure
. Moreover, SERS asserted in its letter of 20 December 1994 that the restart of consultations following the failure of the
call for tenders would not prevent it from remaining well within the time-limits provided for in the framework contract. The
fact that it considered that that failure would not have any effect on the progress of the work is confirmed by the general
timetables submitted to the Court, which do not mention any delay produced by the failure of the call for tenders.
In those circumstances, having regard to the principle that contracts must be performed in good faith, the conduct of SERS
prevents it from being still able to rely on the failure of the first call for tenders concerning the contract for the structural
work as a case of
force majeure
.
The Parliament's application must therefore be granted in so far as it relates to the annulment of Title VII.1, Chapter A,
Section 2(a) of the Opinion.
As regards the second series of cases of
force majeure
relied on by SERS, namely the default of certain undertakings and especially the withdrawal from the site of both DRE and
the undertaking carrying out the plastering work, which are said to have caused a total delay of 187 working days, it must
be said that the circumstances in which those defaults took place are not such as to confer unforeseeability on them, since
the main contractor must know, even before the start of work, that there may be a certain number of defaults by undertakings,
and it is up to him to take that into account when determining the period and completion date of the work in question.
In those circumstances, without it being necessary to determine whether the request for the default of DRE to be accepted
as a case of
force majeure
was submitted within the period prescribed by the framework contract, it must be concluded that the defaults of undertakings
relied on by SERS do not constitute cases of
force majeure
, and do not thus justify a postponement of the date laid down in clause 3.2 of the framework contract.
Title VII.1, Chapter A, Section 2(d) of the Opinion must therefore also be annulled.
As to the closure of roads because of bad weather and the consequent setting up of road barriers in thaw conditions, it must
be said that, while those events may in certain cases be capable of constituting cases of
force majeure
, SERS has failed to show, first, that the duration of the road closures was exceptional for the Strasbourg region and, second,
that the consequences for the site could not have been remedied. Since it has not therefore been shown that the facts relied
on were unforeseeable and insurmountable, they cannot be regarded as constituting cases of
force majeure
.
As regards the final ground of
force majeure
relied on by SERS, namely a strike which allegedly caused a delay of four working days, SERS has not submitted to the Court
any element capable of showing that that strike satisfied the criteria of
force majeure
. It follows that it cannot be taken into account under clause 5.2 of the framework contract.
With respect, in the third place, to the delay of 20 working days allegedly caused by administrative orders, it suffices to
state that SERS has not produced any evidence to prove even that such orders existed.
With respect, in the fourth place, to the modifications requested or accepted by the Parliament which may, in accordance with
clause 5.3 of the framework contract, be relied on, under certain conditions, to obtain a postponement of the completion date
fixed in clause 3.2 of that contract, it should be observed, firstly, that the Parliament acknowledges having under amending
memorandum PEU 055 allowed SERS an additional period of five working days for completion of the buildings, and asks for the
contractual completion date to be fixed at 9 January 1998.
It is clear, secondly, from amending memorandum PEU 008 that the postponement of the completion date of the works as a result
of the modifications requested therein is equal to the period between 31 August 1995 and the date of receipt by SERS of approval
of that amending memorandum. As the documents in the case show that SERS received the memorandum in question on 28 September
1995 at the earliest, it must be concluded that it may claim a postponement of the date of completion of the buildings of
20 working days.
Contrary to the Parliament's submission, SERS does not have to prove that the works connected with the modifications requested
actually caused a delay, since it follows from clause 2.3 of the operating protocol annexed to the framework contract that
the countersignature of the modifications by the Parliament entails, automatically and for the number of days laid down by
the amending memorandum, a postponement of the completion date mentioned in clause 3.2 of the framework contract.
In those circumstances:
─
the contractual date of completion of the buildings must be fixed at 6 February 1998;
─
SERS must be ordered to pay the penalties provided for in clause 5.1 of the framework contract from that date, in accordance
with the conditions laid down by that provision.
As regards determination of the period for which the Parliament is exonerated from paying interim interest, it must be noted
that, in accordance with the final paragraph of clause 6.3 of the framework contract, that exemption applies only if the postponement
of the actual completion date results from fault on the part of SERS or from a delay not accepted as justified by the Court.
On this point, it is clear, contrary to SERS's argument, that those two conditions are not cumulative, as the use of the word
or in that provision shows. The Parliament is not therefore required, in order to be released from its obligation to pay interim
interest, to prove that the late completion of the building is due to fault attributable to SERS. It suffices that the delay
in question is not regarded by the Court as justified. It must be recalled that, as may be seen from paragraphs 106 and 107
above, the grounds which may be relied on by SERS to justify postponing the actual completion date of the buildings are not
only those listed in clause 5.2 of the framework contract.
Those are the considerations which must be borne in mind in establishing the period during which the Parliament is exonerated
from paying the interim interest provided for in clause 6.3 of the framework contract.
As regards the first condition, fault on the part of SERS, it must be stated that, while the conduct of which SERS is accused,
which is not cast doubt on by the material before the Court, is capable of constituting fault and undoubtedly contributed
to the buildings not being completed on the date provided for, the Parliament has nevertheless failed to show that the delay
in question was due exclusively to that fault. In the absence of a direct causal link between the alleged fault and the delay
which is said to have resulted, SERS cannot be held liable for the whole of that delay.
As to the condition relating to whether or not the postponement of the actual completion date is justified, it should be recalled
that SERS is entitled to rely on any ground which has not already been taken into account under clause 5.2 of the framework
contract. Since it is only the modifications requested or accepted by the Parliament which postponed the contractual completion
date, it must be examined whether and to what extent the other grounds put forward by SERS are capable of justifying, in the
context of the application of clause 6.3 of the framework contract, the delay which accumulated on completion of the buildings.
As regards, first, the delays allegedly caused by a strike and by administrative orders, it suffices to say that SERS has
not produced any evidence to show even that those facts existed. Consequently, those delays cannot be considered justified.
As regards, next, the delays relied on in respect of bad weather and its consequences and defaults of undertakings, SERS has
not shown that those facts, which are among the usual hazards that may affect any building site and must be taken into account
when drawing up the timetable of works, were of an exceptional nature by reason
inter alia
of their number or their consequences, nor that the resulting delays could not be absorbed. It follows that those delays
cannot be considered justified either.
As regards, finally, the delay due to the failure of the call for tenders relating to the contract for the structural work,
it must be stated that such an event, with which an operator is only very exceptionally confronted, is liable to produce substantial
delay in the completion of a site. As the documents in the case show, that conclusion is moreover not contested by the Parliament,
which was aware from October 1994 of the fact that that failure would very probably have a negative influence on the progress
of the site, and reminded SERS at that time that it was important to comply with the time-limits laid down in the framework
contract.
With respect to the formalities which must be complied with for a delay to be regarded as justified within the meaning of
clause 6.3 of the framework contract, it must be stated that, contrary to the Parliament's submissions, that contract does
not provide that such a delay must be notified within the time-limit and in the form laid down in clause 5.2 or clause 25
of that contract. It follows that the fact that an event causing delay was not communicated immediately to the Parliament
or that SERS considered, when such an event occurred, that the timetable of the works would not be affected by it is not such
as to prevent the consequent delay from being regarded as justified within the meaning of clause 6.3 of the contract.
As regards the delay allegedly caused by the failure of the first call for tenders, 128 working days, it must be stated that,
while a delay of some six months on work which is to extend over 36 months may at first sight seem impossible to catch up,
the fact remains that, since in the present case that delay was prior to the start of work, SERS had the entire anticipated
duration of the works available to attempt to absorb part of it.
In so far as the case-file does not contain any indication as to the measures which were or could have been taken to reduce
the delay or any assessment of the proportion of the delay which could have been made up, the delay which SERS could reasonably
have made up, having regard to the time when the cause of delay occurred and the comparatively long period available to SERS
to take measures which could mitigate the effects on the timetable of works of the failure of the call for tenders, should
be assessed at half the delay relied on, namely 64 working days.
It should be added that it appears all the fairer not to uphold the Parliament's claim that the delay in question should be
rejected in its entirety in that it is apparent from the documents in the case that the renewal of the call for tenders for
the contract for the structural work principally benefited the Parliament, in that it made it possible to reduce substantially
the cost of the structural work and to comply with the financial envelope within which the project was to remain.
In those circumstances, the application by SERS must be granted in part, and it must be allowed to rely, in the context of
the application of clause 6.3 of the framework contract, on a delay of 64 working days on the basis of the failure of the
call for tenders for the structural work.
Consequently, it must be held that the Parliament is exonerated from the payment of the interim interest provided for in clause
6.3 of the framework contract for the period from 10 May to 14 December 1998.
Costs
Under the second paragraph of Article 69(3) of the Rules of Procedure, the Court may order a party, even if successful, to
pay costs which the Court considers that party to have unreasonably or vexatiously caused the opposite party to incur. In
the present case, the City and SERS have asked the Court to order the Parliament to pay costs and expenses and to pay procedural
indemnities of EUR 20 000 and FRF 300 000. Apart from the fact that they have not given reasons for that claim, it must be
stated that the application brought by the Parliament is neither vexatious nor unreasonable and has been successful in part.
There is thus no reason to order the Parliament to pay an indemnity under that provision.
Under Article 69(2) 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. Under the first subparagraph of Article 69(3), however, the Court may order
that the costs be shared or that the parties bear their own costs, if each party is unsuccessful on one or more heads. Since
all parties have been unsuccessful in part, they must be ordered to bear their own costs.
On those grounds,
THE COURT (Sixth Chamber)
hereby:
1.
Declares that the application of the European Parliament and the counterclaim of Ville de Strasbourg (France) and Société
d'équipement et d'aménagement de la Région de Strasbourg (SERS) are admissible;
2.
Declares that the Court has full jurisdiction in the case;
3.
Dismisses the counterclaim;
4.
Annuls Title VII.1, Chapter A, Section 2(a) and (d) of the opinion of the committee of conciliators of 22 March 1999;
5.
Fixes the contractual date of completion of the buildings referred to in the contract of 31 March 1994 between the European
Parliament, Ville de Strasbourg and Société d'équipement et d'aménagement de la Région de Strasbourg (SERS) at 6 February
1998;
6.
Orders Société d'équipement et d'aménagement de la Région de Strasbourg (SERS) to pay the penalties provided for in clause
5.1 of that contract from 6 February 1998 in accordance with the conditions laid down in that provision;
7.
Exonerates the European Parliament from payment of the interim interest provided for in clause 6.3 of that contract for the
period from 10 May to 14 December 1998;
8.
Dismisses the remainder of the application;
9.
Orders the parties to bear their own costs.
Puissochet
Schintgen
Skouris
Macken
Cunha Rodrigues
Delivered in open court in Luxembourg on 10 April 2003.
R. Grass
J.-P. Puissochet
Registrar
President of the Sixth Chamber
–
Language of the case: French.