# 62021CJ0682

JUDGMENT OF THE COURT (Fourth Chamber)

26 January 2023 (
  *1
  )

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(Reference for a preliminary ruling – Public procurement – Directive 2014/24/EU – Article 57(4)(g) – Optional ground for exclusion linked to deficiencies in the context of a prior contract – Contract awarded to a group of economic operators – Early termination of that contract – Automatic inclusion of all members of the group on a list of unreliable suppliers – Principle of proportionality – Directive 89/665/EEC – Article 1(1) and (3) – Right to an effective remedy)

In Case C‐682/21,

REQUEST for a preliminary ruling under Article 267 TFEU from the Lietuvos Aukščiausiasis Teismas (Supreme Court of Lithuania), made by decision of 11 November 2021, received at the Court on 11 November 2021, in the proceedings

‘HSC Baltic’ UAB,

‘HSC Baltic’ UAB,

‘Mitnija’ UAB,

‘Mitnija’ UAB,

‘Montuotojas’ UAB

‘Montuotojas’ UAB

v

Vilniaus miesto savivaldybės administracija,

Vilniaus miesto savivaldybės administracija,

intervening parties:

‘Active Construction Management’ UAB, in liquidation,

‘Active Construction Management’ UAB

‘Vilniaus vystymo kompanija’ UAB,

‘Vilniaus vystymo kompanija’ UAB,

THE COURT (Fourth Chamber),

composed of C. Lycourgos (Rapporteur), President of the Chamber, L.S. Rossi, J.-C. Bonichot, S. Rodin and O. Spineanu-Matei, Judges,

Advocate General: M. Campos Sánchez-Bordona,

Registrar: A. Calot Escobar,

having regard to the written procedure,

after considering the observations submitted on behalf of:

| – | the Lithuanian Government, by K. Dieninis, V. Kazlauskaitė-Švenčionienė and E. Kurelaitytė, acting as Agents, |
| --- | --- |

–

the Lithuanian Government, by K. Dieninis, V. Kazlauskaitė-Švenčionienė and E. Kurelaitytė, acting as Agents,

| – | the Czech Government, by L. Halajová, M. Smolek and J. Vláčil, acting as Agents, |
| --- | --- |

–

the Czech Government, by L. Halajová, M. Smolek and J. Vláčil, acting as Agents,

| – | the European Commission, by P. Ondrůšek, A. Steiblytė and G. Wils, acting as Agents, |
| --- | --- |

–

the European Commission, by P. Ondrůšek, A. Steiblytė and G. Wils, acting as Agents,

having decided, after hearing the Advocate General, to proceed to judgment without an Opinion,

gives the following

Judgment

Judgment

| 1 | This request for a preliminary ruling concerns the interpretation of Article 18(1) and Article 57(4)(g) and (6) of Directive 2014/24/EU of the European Parliament and of the Council of 26 February 2014 on public procurement and repealing Directive 2004/18/EC (OJ 2014 L 94, p. 65) and of Article 1(1) and (3) of Council Directive 89/665/EEC of 21 December 1989 on the coordination of the laws, regulations and administrative provisions relating to the application of review procedures to the award of public supply and public works contracts (OJ 1989 L 395, p. 33), as amended by Directive 2014/23/EU of the European Parliament and of the Council of 26 February 2014 (OJ 2017 L 94, p. 1). |
| --- | --- |

1

This request for a preliminary ruling concerns the interpretation of Article 18(1) and Article 57(4)(g) and (6) of Directive 2014/24/EU of the European Parliament and of the Council of 26 February 2014 on public procurement and repealing Directive 2004/18/EC (OJ 2014 L 94, p. 65) and of Article 1(1) and (3) of Council Directive 89/665/EEC of 21 December 1989 on the coordination of the laws, regulations and administrative provisions relating to the application of review procedures to the award of public supply and public works contracts (OJ 1989 L 395, p. 33), as amended by Directive 2014/23/EU of the European Parliament and of the Council of 26 February 2014 (OJ 2017 L 94, p. 1).

| 2 | The request has been made in proceedings between ‘HSC Baltic’ UAB, ‘Mitnija’ UAB and ‘Montuotojas’ UAB of the one part, and the Vilniaus miesto savivaldybės administracija (Municipal Authority of the City of Vilnius, Lithuania; ‘the City of Vilnius’) supported by ‘Active Construction Management’ UAB, in liquidation, and ‘Vilniaus vystymo kompanija’ UAB of the other part, concerning the consequences, for HSC Baltic, Mitnija and Montuotojas, of the early termination of a public contract awarded to a group of economic operators of which they formed part. |
| --- | --- |

2

The request has been made in proceedings between ‘HSC Baltic’ UAB, ‘Mitnija’ UAB and ‘Montuotojas’ UAB of the one part, and the Vilniaus miesto savivaldybės administracija (Municipal Authority of the City of Vilnius, Lithuania; ‘the City of Vilnius’) supported by ‘Active Construction Management’ UAB, in liquidation, and ‘Vilniaus vystymo kompanija’ UAB of the other part, concerning the consequences, for HSC Baltic, Mitnija and Montuotojas, of the early termination of a public contract awarded to a group of economic operators of which they formed part.

Legal context

Legal context

European Union law

European Union law

Directive 89/665

Directive 89/665

| 3 | Article 1 of Directive 89/665, entitled ‘Scope and availability of review procedures’, provides:
  ‘1.   This Directive applies to contracts referred to in Directive [2014/24] ...
  ...
  Member States shall take the measures necessary to ensure that ... decisions taken by the contracting authorities may be reviewed effectively and, in particular, as rapidly as possible in accordance with the conditions set out in Articles 2 to 2f of this Directive, on the grounds that such decisions have infringed Union law in the field of procurement or national rules transposing that law.
  ...
  3.   Member States shall ensure that the review procedures are available, under detailed rules which the Member States may establish, at least to any person having or having had an interest in obtaining a particular contract and who has been or risks being harmed by an alleged infringement.
  ...’ |
| --- | --- |

3

Article 1 of Directive 89/665, entitled ‘Scope and availability of review procedures’, provides:

‘1.   This Directive applies to contracts referred to in Directive [2014/24] ...

...

Member States shall take the measures necessary to ensure that ... decisions taken by the contracting authorities may be reviewed effectively and, in particular, as rapidly as possible in accordance with the conditions set out in Articles 2 to 2f of this Directive, on the grounds that such decisions have infringed Union law in the field of procurement or national rules transposing that law.

...

3.   Member States shall ensure that the review procedures are available, under detailed rules which the Member States may establish, at least to any person having or having had an interest in obtaining a particular contract and who has been or risks being harmed by an alleged infringement.

...’

Directive 2014/24

Directive 2014/24

| 4 | Recitals 101 and 102 to Directive 2014/24 state:





  ‘(101) | Contracting authorities should ... be given the possibility to exclude economic operators which have proven unreliable, for instance because of violations of environmental or social obligations, ... or other forms of grave professional misconduct, such as violations of competition rules or of intellectual property rights. ...
  [Contracting authorities] should also be able to exclude candidates or tenderers whose performance in earlier public contracts has shown major deficiencies with regard to substantive requirements, for instance failure to deliver or perform, significant shortcomings of the product or service delivered, making it unusable for the intended purpose, or misbehaviour that casts serious doubts as to the reliability of the economic operator. National law should provide for a maximum duration for such exclusions.
  In applying facultative grounds for exclusion, contracting authorities should pay particular attention to the principle of proportionality. ... |
| --- | --- | --- |

4

Recitals 101 and 102 to Directive 2014/24 state:

‘(101)

Contracting authorities should ... be given the possibility to exclude economic operators which have proven unreliable, for instance because of violations of environmental or social obligations, ... or other forms of grave professional misconduct, such as violations of competition rules or of intellectual property rights. ...

[Contracting authorities] should also be able to exclude candidates or tenderers whose performance in earlier public contracts has shown major deficiencies with regard to substantive requirements, for instance failure to deliver or perform, significant shortcomings of the product or service delivered, making it unusable for the intended purpose, or misbehaviour that casts serious doubts as to the reliability of the economic operator. National law should provide for a maximum duration for such exclusions.

In applying facultative grounds for exclusion, contracting authorities should pay particular attention to the principle of proportionality. ...

| (102) | Allowance should, however, be made for the possibility that economic operators can adopt compliance measures aimed at remedying the consequences of any criminal offences or misconduct and at effectively preventing further occurrences of the misbehaviour. Those measures might consist in particular of personnel and organisational measures such as the severance of all links with persons or organisations involved in the misbehaviour, appropriate staff reorganisation measures, the implementation of reporting and control systems, the creation of an internal audit structure to monitor compliance and the adoption of internal liability and compensation rules. Where such measures offer sufficient guarantees, the economic operator in question should no longer be excluded on those grounds alone. ...’ |
| --- | --- |

(102)

Allowance should, however, be made for the possibility that economic operators can adopt compliance measures aimed at remedying the consequences of any criminal offences or misconduct and at effectively preventing further occurrences of the misbehaviour. Those measures might consist in particular of personnel and organisational measures such as the severance of all links with persons or organisations involved in the misbehaviour, appropriate staff reorganisation measures, the implementation of reporting and control systems, the creation of an internal audit structure to monitor compliance and the adoption of internal liability and compensation rules. Where such measures offer sufficient guarantees, the economic operator in question should no longer be excluded on those grounds alone. ...’

| 5 | Article 18 of that directive, entitled ‘Principles of procurement’, provides in paragraph 1:
  ‘Contracting authorities shall treat economic operators equally and without discrimination and shall act in a transparent and proportionate manner.
  ...’ |
| --- | --- |

5

Article 18 of that directive, entitled ‘Principles of procurement’, provides in paragraph 1:

‘Contracting authorities shall treat economic operators equally and without discrimination and shall act in a transparent and proportionate manner.

...’

| 6 | Article 57 of that directive, entitled ‘Exclusion grounds’, provides:
  ‘...
  4.   Contracting authorities may exclude or may be required by Member States to exclude from participation in a procurement procedure any economic operator in any of the following situations:
  ...





  (g) | where the economic operator has shown significant or persistent deficiencies in the performance of a substantive requirement under a prior public contract, a prior contract with a contracting entity or a prior concession contract which led to early termination of that prior contract, damages or other comparable sanctions; |
| --- | --- | --- |

6

Article 57 of that directive, entitled ‘Exclusion grounds’, provides:

‘...

4.   Contracting authorities may exclude or may be required by Member States to exclude from participation in a procurement procedure any economic operator in any of the following situations:

...

(g)

where the economic operator has shown significant or persistent deficiencies in the performance of a substantive requirement under a prior public contract, a prior contract with a contracting entity or a prior concession contract which led to early termination of that prior contract, damages or other comparable sanctions;

...

6.   Any economic operator that is in one of the situations referred to in paragraphs 1 and 4 may provide evidence to the effect that measures taken by the economic operator are sufficient to demonstrate its reliability despite the existence of a relevant ground for exclusion. If such evidence is considered as sufficient, the economic operator concerned shall not be excluded from the procurement procedure.

For this purpose, the economic operator shall prove that it has paid or undertaken to pay compensation in respect of any damage caused by the criminal offence or misconduct, clarified the facts and circumstances in a comprehensive manner by actively collaborating with the investigating authorities and taken concrete technical, organisational and personnel measures that are appropriate to prevent further criminal offences or misconduct.

...

7.   By law, regulation or administrative provision and having regard to Union law, Member States shall specify the implementing conditions for this Article. They shall, in particular, determine the maximum period of exclusion if no measures as specified in paragraph 6 are taken by the economic operator to demonstrate its reliability. Where the period of exclusion has not been set by final judgment, that period shall not exceed ... three years from the date of the relevant event in the cases referred to in paragraph 4.’

| 7 | Article 90(1) of that directive states:
  ‘Member States shall bring into force the laws, regulations and administrative provisions necessary to comply with this Directive by 18 April 2016. ...’ |
| --- | --- |

7

Article 90(1) of that directive states:

‘Member States shall bring into force the laws, regulations and administrative provisions necessary to comply with this Directive by 18 April 2016. ...’

| 8 | Article 91 of Directive 2014/24 provides as follows:
  ‘Directive 2004/18/EC [of the European Parliament and of the Council of 31 March 2004 on the coordination of procedures for the award of public works contracts, public supply contracts and public service contracts (OJ 2004 L 134, p. 114)] is repealed with effect from 18 April 2016.
  ...’ |
| --- | --- |

8

Article 91 of Directive 2014/24 provides as follows:

‘Directive 2004/18/EC [of the European Parliament and of the Council of 31 March 2004 on the coordination of procedures for the award of public works contracts, public supply contracts and public service contracts (OJ 2004 L 134, p. 114)] is repealed with effect from 18 April 2016.

...’

Lithuanian law

Lithuanian law

The Law on public procurement

The Law on public procurement

| 9 | The Lietuvos Respublikos viešųjų pirkimų įstatymas (Law of the Republic of Lithuania on public procurement), in the version applicable to the case in the main proceedings (‘the Law on public procurement’), provides, in Article 2(36):
  ‘“Supplier” – economic operator – means a natural or legal person governed by private or public law, another organisation and its members or a group composed of such persons, including a temporary association of economic operators, which offers on the market to supply goods or services.’ |
| --- | --- |

9

The Lietuvos Respublikos viešųjų pirkimų įstatymas (Law of the Republic of Lithuania on public procurement), in the version applicable to the case in the main proceedings (‘the Law on public procurement’), provides, in Article 2(36):

‘“Supplier” – economic operator – means a natural or legal person governed by private or public law, another organisation and its members or a group composed of such persons, including a temporary association of economic operators, which offers on the market to supply goods or services.’

| 10 | Article 46 of that law provides:
  ‘...
  4.   The contracting authority shall exclude a supplier from the procurement procedure where:
  ...





  (6) | the supplier has failed to perform a contract awarded pursuant to the present law ... or a concession contract, or has performed it improperly, and that constitutes a material breach of the contract, as defined by the Civil Code ... resulting in the early termination of the contract during the preceding three years, or a final judgment delivered during the preceding three years which has granted the claim for compensation made by the contracting authority, the contracting entity or the awarding authority in respect of the damage suffered as a result of significant or persistent deficiencies by the supplier in the performance of a substantive term of the contract, or the adoption by the contracting authority, during the preceding three years, of a decision finding that the supplier’s performance of a substantive term of the contract was vitiated by significant or persistent deficiencies which gave rise, therefore, to the application of a contractual penalty. ... |
| --- | --- | --- |

10

Article 46 of that law provides:

‘...

4.   The contracting authority shall exclude a supplier from the procurement procedure where:

...

(6)

the supplier has failed to perform a contract awarded pursuant to the present law ... or a concession contract, or has performed it improperly, and that constitutes a material breach of the contract, as defined by the Civil Code ... resulting in the early termination of the contract during the preceding three years, or a final judgment delivered during the preceding three years which has granted the claim for compensation made by the contracting authority, the contracting entity or the awarding authority in respect of the damage suffered as a result of significant or persistent deficiencies by the supplier in the performance of a substantive term of the contract, or the adoption by the contracting authority, during the preceding three years, of a decision finding that the supplier’s performance of a substantive term of the contract was vitiated by significant or persistent deficiencies which gave rise, therefore, to the application of a contractual penalty. ...

...

8.   Where a supplier does not meet the requirements set out in paragraphs 1, 4 and 6 of the present article, the contracting authority shall not exclude it from the procurement procedure where both of the following conditions are met:

| (1) | the supplier has provided the contracting authority with information demonstrating that it has adopted the following measures:





  (a) | it has voluntarily paid or given an undertaking to pay compensation in respect of the damage caused by the offence or infringement referred to in paragraphs 1, 4 or 6 of this Article, as appropriate; |
| --- | --- | --- |

(1)

the supplier has provided the contracting authority with information demonstrating that it has adopted the following measures:

(a)

it has voluntarily paid or given an undertaking to pay compensation in respect of the damage caused by the offence or infringement referred to in paragraphs 1, 4 or 6 of this Article, as appropriate;

| (b) | it has cooperated, actively assisted or taken other measures which help to shed light on or clarify the offence or infringement committed by it, as appropriate; |
| --- | --- |

(b)

it has cooperated, actively assisted or taken other measures which help to shed light on or clarify the offence or infringement committed by it, as appropriate;

| (c) | it has taken technical, organisational or staff management measures designed to prevent further offences or infringements; |
| --- | --- |

(c)

it has taken technical, organisational or staff management measures designed to prevent further offences or infringements;

| (2) | the contracting authority has evaluated the information submitted by the supplier under paragraph 1 of the present paragraph and has adopted a reasoned decision to the effect that the measures taken by the supplier to demonstrate its reliability are sufficient. ... |
| --- | --- |

(2)

the contracting authority has evaluated the information submitted by the supplier under paragraph 1 of the present paragraph and has adopted a reasoned decision to the effect that the measures taken by the supplier to demonstrate its reliability are sufficient. ...

| 11 | Article 91(1) of that law provides, in the version cited by the referring court:
  ‘The contracting authority shall publish, at the latest within 10 days, in the central public procurement portal, in accordance with the rules established by the public procurement authority, the information relating to suppliers (in the case of a group of suppliers, relating to all the members of that group) who have not performed the contract or performed the contract improperly, and, where the breach relates to the part of the contract which had been subcontracted to them, information relating to the economic operators whose capacities have been used by the supplier and who had assumed joint and several liability with the supplier for the performance of the contract ...’ |
| --- | --- |

11

Article 91(1) of that law provides, in the version cited by the referring court:

‘The contracting authority shall publish, at the latest within 10 days, in the central public procurement portal, in accordance with the rules established by the public procurement authority, the information relating to suppliers (in the case of a group of suppliers, relating to all the members of that group) who have not performed the contract or performed the contract improperly, and, where the breach relates to the part of the contract which had been subcontracted to them, information relating to the economic operators whose capacities have been used by the supplier and who had assumed joint and several liability with the supplier for the performance of the contract ...’

The Civil Code

The Civil Code

| 12 | Article 6.6 of the Lietuvos Respublikos civilinis kodeksas (Civil Code of the Republic of Lithuania) provides:
  ‘1.   Joint and several liability between debtors shall not be presumed, subject to any exception provided for by law. It shall arise only where provided for by law or by agreement between the parties, and where the subject matter of the obligation is indivisible.
  ...
  3.   Joint and several liability between debtors shall be presumed where the obligation relates to the provision of services, a joint activity or compensation for damage caused by the acts of a number of persons.
  ...’ |
| --- | --- |

12

Article 6.6 of the Lietuvos Respublikos civilinis kodeksas (Civil Code of the Republic of Lithuania) provides:

‘1.   Joint and several liability between debtors shall not be presumed, subject to any exception provided for by law. It shall arise only where provided for by law or by agreement between the parties, and where the subject matter of the obligation is indivisible.

...

3.   Joint and several liability between debtors shall be presumed where the obligation relates to the provision of services, a joint activity or compensation for damage caused by the acts of a number of persons.

...’

| 13 | Paragraph 1 of Article 6.15 of that code provides:
  ‘If it is impossible to perform the obligation on account of the fault of one of the jointly and severally liable debtors, the other jointly and severally liable debtors shall not be released from liability for non-performance of the obligation.’ |
| --- | --- |

13

Paragraph 1 of Article 6.15 of that code provides:

‘If it is impossible to perform the obligation on account of the fault of one of the jointly and severally liable debtors, the other jointly and severally liable debtors shall not be released from liability for non-performance of the obligation.’

The dispute in the main proceedings and the questions referred for a preliminary ruling

The dispute in the main proceedings and the questions referred for a preliminary ruling

| 14 | On 7 December 2016, the City of Vilnius published a notice of a procurement procedure valued at EUR 21 793 166.72, excluding value added tax, for works to build a multifunctional wellness centre (‘the contract at issue’). |
| --- | --- |

14

On 7 December 2016, the City of Vilnius published a notice of a procurement procedure valued at EUR 21 793 166.72, excluding value added tax, for works to build a multifunctional wellness centre (‘the contract at issue’).

| 15 | A joint activity agreement concluded on 30 January 2017 between Active Construction Management, HSC Baltic, Mitnija, Montuotojas and ‘Axis Power’ UAB designated Active Construction Management as the lead partner of that group of economic operators, for the purposes of participating in the procurement procedure at issue and executing the works should the contract be awarded to that group. It was also agreed that the respective share of contributions, by value, to the joint activity would be as follows: Active Construction Management 65%, HSC Baltic 15%, Axis Power 10%, Mitnija 5% and Montuotojas 5%. |
| --- | --- |

15

A joint activity agreement concluded on 30 January 2017 between Active Construction Management, HSC Baltic, Mitnija, Montuotojas and ‘Axis Power’ UAB designated Active Construction Management as the lead partner of that group of economic operators, for the purposes of participating in the procurement procedure at issue and executing the works should the contract be awarded to that group. It was also agreed that the respective share of contributions, by value, to the joint activity would be as follows: Active Construction Management 65%, HSC Baltic 15%, Axis Power 10%, Mitnija 5% and Montuotojas 5%.

| 16 | On 5 June 2017, the City of Vilnius awarded the contract at issue to that group. As the deadline for completion of the works was set at 18 months,the contract had to be performed by 5 December 2018 at the latest. |
| --- | --- |

16

On 5 June 2017, the City of Vilnius awarded the contract at issue to that group. As the deadline for completion of the works was set at 18 months,the contract had to be performed by 5 December 2018 at the latest.

| 17 | As the works were not completed within that period, the deadline was postponed to 28 May 2020. During that additional period, the works did not progress according to the scheduled timetable. |
| --- | --- |

17

As the works were not completed within that period, the deadline was postponed to 28 May 2020. During that additional period, the works did not progress according to the scheduled timetable.

| 18 | By order of 28 October 2019, the Vilniaus apygardos teismas (Regional Court, Vilnius, Lithuania), following an application by the manager of Active Construction Management, instituted insolvency proceedings relating to that company. On 6 December 2019, the insolvency administrator informed HSC Baltic, Mitnija, Montuotojas and Axis Power, and the City of Vilnius, of those insolvency proceedings and that the lead partner would no longer perform the contract at issue. |
| --- | --- |

18

By order of 28 October 2019, the Vilniaus apygardos teismas (Regional Court, Vilnius, Lithuania), following an application by the manager of Active Construction Management, instituted insolvency proceedings relating to that company. On 6 December 2019, the insolvency administrator informed HSC Baltic, Mitnija, Montuotojas and Axis Power, and the City of Vilnius, of those insolvency proceedings and that the lead partner would no longer perform the contract at issue.

| 19 | On 22 January 2020, the City of Vilnius informed HSC Baltic, Mitnija, Montuotojas and Axis Power that it was terminating the contract at issue early, on account of a substantial breach, consisting of having abandoned the building site and having left it unsupervised, having failed to provide a new guarantee, having failed to comply with the schedule for the works and having failed to take out civil liability insurance. |
| --- | --- |

19

On 22 January 2020, the City of Vilnius informed HSC Baltic, Mitnija, Montuotojas and Axis Power that it was terminating the contract at issue early, on account of a substantial breach, consisting of having abandoned the building site and having left it unsupervised, having failed to provide a new guarantee, having failed to comply with the schedule for the works and having failed to take out civil liability insurance.

| 20 | Those companies brought an action before the Vilniaus apygardos teismas (Regional Court, Vilnius) seeking a declaration that the early termination of the contract at issue by the City of Vilnius was unlawful and their entry on the list of unreliable suppliers in the central public procurement portal was unlawful. |
| --- | --- |

20

Those companies brought an action before the Vilniaus apygardos teismas (Regional Court, Vilnius) seeking a declaration that the early termination of the contract at issue by the City of Vilnius was unlawful and their entry on the list of unreliable suppliers in the central public procurement portal was unlawful.

| 21 | By judgment of 27 August 2020, that court dismissed the action, finding that the City of Vilnius had correctly referred to problems in performing the works on the part of the lead partner and of the other members of the group. Since those companies were jointly and severally liable for the proper performance of the contract at issue and since that contract had been terminated early, the contracting authority had no discretion which would allow it not to have all the members of the group entered on the list of unreliable suppliers. That entry on such list did not prevent those companies from rehabilitating themselves and from, thus, participating in other public procurement procedures. |
| --- | --- |

21

By judgment of 27 August 2020, that court dismissed the action, finding that the City of Vilnius had correctly referred to problems in performing the works on the part of the lead partner and of the other members of the group. Since those companies were jointly and severally liable for the proper performance of the contract at issue and since that contract had been terminated early, the contracting authority had no discretion which would allow it not to have all the members of the group entered on the list of unreliable suppliers. That entry on such list did not prevent those companies from rehabilitating themselves and from, thus, participating in other public procurement procedures.

| 22 | HSC Baltic, Mitnija, Montuotojas and Axis Power appealed against that judgment to the Lietuvos apeliacinis teismas (Court of Appeal of Lithuania). That court dismissed that appeal by judgment of 21 January 2021, adopting the reasoning of the court at first instance. |
| --- | --- |

22

HSC Baltic, Mitnija, Montuotojas and Axis Power appealed against that judgment to the Lietuvos apeliacinis teismas (Court of Appeal of Lithuania). That court dismissed that appeal by judgment of 21 January 2021, adopting the reasoning of the court at first instance.

| 23 | On 22 January 2021, the Viešujų pirkimų tarnyba (Public Procurement Office, Lithuania), on the initiative of the City of Vilnius, entered the members of the group on the list of unreliable suppliers. |
| --- | --- |

23

On 22 January 2021, the Viešujų pirkimų tarnyba (Public Procurement Office, Lithuania), on the initiative of the City of Vilnius, entered the members of the group on the list of unreliable suppliers.

| 24 | HSC Baltic, Mitnija and Montuotojas brought an appeal on a point of law before the referring court, the Lietuvos Aukščiausiasis Teismas (Supreme Court of Lithuania), against the judgment of 21 January 2021 of the Lietuvos apeliacinis teismas (Court of Appeal of Lithuania). |
| --- | --- |

24

HSC Baltic, Mitnija and Montuotojas brought an appeal on a point of law before the referring court, the Lietuvos Aukščiausiasis Teismas (Supreme Court of Lithuania), against the judgment of 21 January 2021 of the Lietuvos apeliacinis teismas (Court of Appeal of Lithuania).

| 25 | On 15 March 2021, HSC Baltic, Mitnija and Montuotojas requested the referring court to order, by way of interim measure, that their names be removed from the list of unreliable suppliers. By decision of 31 March 2021, that court granted that request. |
| --- | --- |

25

On 15 March 2021, HSC Baltic, Mitnija and Montuotojas requested the referring court to order, by way of interim measure, that their names be removed from the list of unreliable suppliers. By decision of 31 March 2021, that court granted that request.

| 26 | On 11 November 2021, that court delivered a judgment in which it ruled in part on the appeal, rejecting the grounds of appeal put forward by HSC Baltic, Mitnija and Montuotojas alleging that the early termination of the contract at issue was unlawful. |
| --- | --- |

26

On 11 November 2021, that court delivered a judgment in which it ruled in part on the appeal, rejecting the grounds of appeal put forward by HSC Baltic, Mitnija and Montuotojas alleging that the early termination of the contract at issue was unlawful.

| 27 | In order to rule on the entry of those companies on the list of unreliable suppliers, the referring court considers that certain clarifications of the scope of EU law are necessary. |
| --- | --- |

27

In order to rule on the entry of those companies on the list of unreliable suppliers, the referring court considers that certain clarifications of the scope of EU law are necessary.

| 28 | In that regard, that court states, as a preliminary point, that the Lithuanian legislature’s transposition of Directive 2014/24 was late, taking effect from 1 July 2017, which post-dates 18 April 2016, the date on which the deadline for transposing that directive expired. It takes the view, however, that that directive could apply to the dispute in the main proceedings. |
| --- | --- |

28

In that regard, that court states, as a preliminary point, that the Lithuanian legislature’s transposition of Directive 2014/24 was late, taking effect from 1 July 2017, which post-dates 18 April 2016, the date on which the deadline for transposing that directive expired. It takes the view, however, that that directive could apply to the dispute in the main proceedings.

| 29 | That court is unsure whether the automatic entry, on a list of unreliable suppliers, of any economic operator de jure responsible for the breach which resulted in the early termination of a public contract is compatible with the requirement for an individual assessment when applying the grounds for exclusion laid down by Directive 2014/24. |
| --- | --- |

29

That court is unsure whether the automatic entry, on a list of unreliable suppliers, of any economic operator de jure responsible for the breach which resulted in the early termination of a public contract is compatible with the requirement for an individual assessment when applying the grounds for exclusion laid down by Directive 2014/24.

de jure

| 30 | It observes that, in the light of the scope of the words ‘decisions taken by the contracting authorities’ in Article 1 of Directive 89/665, the entry of an economic operator on a list of unreliable suppliers could constitute an actionable measure. Lithuanian law does not make it possible to challenge that registration, since it is regarded simply as a legal effect of the early termination of the contract. In the present case, it is true that an action was brought before the Vilniaus apygardos teismas (Regional Court, Vilnius) challenging both such early termination and the entry on the list. However, since that entry was made after the decision of the Lietuvos apeliacinis teismas (Court of Appeal of Lithuania) became final, the courts of first instance and the appeal courts were not, in the view of the referring court, able to resolve the part of the appeal concerning the entry on that list. |
| --- | --- |

30

It observes that, in the light of the scope of the words ‘decisions taken by the contracting authorities’ in Article 1 of Directive 89/665, the entry of an economic operator on a list of unreliable suppliers could constitute an actionable measure. Lithuanian law does not make it possible to challenge that registration, since it is regarded simply as a legal effect of the early termination of the contract. In the present case, it is true that an action was brought before the Vilniaus apygardos teismas (Regional Court, Vilnius) challenging both such early termination and the entry on the list. However, since that entry was made after the decision of the Lietuvos apeliacinis teismas (Court of Appeal of Lithuania) became final, the courts of first instance and the appeal courts were not, in the view of the referring court, able to resolve the part of the appeal concerning the entry on that list.

| 31 | In those circumstances, the Lietuvos Aukščiausiasis Teismas (Supreme Court of Lithuania) decided to stay the proceedings and to refer the following questions to the Court of Justice for a preliminary ruling:





  ‘(1) | Are Article 18(1) and Article 57(4)(g) and (6) of Directive 2014/24 and the fourth subparagraph of Article 1(1) and Article 1(3) of Directive 89/665 (together or separately, but without limitation to those provisions) to be interpreted as meaning that a decision of a contracting authority to enter the economic operator concerned on the list of unreliable suppliers and thus restrict for a certain period its ability to participate in procurement procedures announced subsequently on the ground that that economic operator has substantially breached a contract concluded with that contracting authority is a measure which may be challenged before a court? |
| --- | --- | --- |

31

In those circumstances, the Lietuvos Aukščiausiasis Teismas (Supreme Court of Lithuania) decided to stay the proceedings and to refer the following questions to the Court of Justice for a preliminary ruling:

‘(1)

Are Article 18(1) and Article 57(4)(g) and (6) of Directive 2014/24 and the fourth subparagraph of Article 1(1) and Article 1(3) of Directive 89/665 (together or separately, but without limitation to those provisions) to be interpreted as meaning that a decision of a contracting authority to enter the economic operator concerned on the list of unreliable suppliers and thus restrict for a certain period its ability to participate in procurement procedures announced subsequently on the ground that that economic operator has substantially breached a contract concluded with that contracting authority is a measure which may be challenged before a court?

| (2) | If the answer to the first question is in the affirmative, are the provisions of EU law cited above (together or separately, but without limitation to those provisions) to be interpreted as precluding national rules and the practice for applying them under which (a) the contracting authority, when terminating a public procurement contract on the ground of a substantial breach thereof, does not take any formal (separate) decision concerning the entry of economic operators on the list of unreliable suppliers; (b) an economic operator is not informed in advance about forthcoming entry on the list of unreliable suppliers and is therefore unable to submit relevant explanations and subsequently to contest entry effectively; (c) the contracting authority does not carry out any individual examination of the circumstances of improper performance of a contract, and therefore, if the public procurement contract has been lawfully terminated on the ground of a substantial breach thereof, the economic operator de jure responsible for that breach is automatically entered on the list of unreliable suppliers? |
| --- | --- |

(2)

If the answer to the first question is in the affirmative, are the provisions of EU law cited above (together or separately, but without limitation to those provisions) to be interpreted as precluding national rules and the practice for applying them under which (a) the contracting authority, when terminating a public procurement contract on the ground of a substantial breach thereof, does not take any formal (separate) decision concerning the entry of economic operators on the list of unreliable suppliers; (b) an economic operator is not informed in advance about forthcoming entry on the list of unreliable suppliers and is therefore unable to submit relevant explanations and subsequently to contest entry effectively; (c) the contracting authority does not carry out any individual examination of the circumstances of improper performance of a contract, and therefore, if the public procurement contract has been lawfully terminated on the ground of a substantial breach thereof, the economic operator de jure responsible for that breach is automatically entered on the list of unreliable suppliers?

de jure

| (3) | If the answers to the first two questions are in the affirmative, are the provisions of EU law cited above (together or separately, but without limitation to those provisions) to be interpreted as meaning that joint-activity partners (entities forming a joint supplier) which performed the public procurement contract lawfully terminated on the ground of a substantial breach may demonstrate their reliability and thus be excluded from the list of unreliable suppliers, inter alia, on the basis of the amount of the share (value) of the contract performed, the insolvency of the lead partner, actions on the part of that partner and the contracting authority’s contribution to non-performance of the contract?’ |
| --- | --- |

(3)

If the answers to the first two questions are in the affirmative, are the provisions of EU law cited above (together or separately, but without limitation to those provisions) to be interpreted as meaning that joint-activity partners (entities forming a joint supplier) which performed the public procurement contract lawfully terminated on the ground of a substantial breach may demonstrate their reliability and thus be excluded from the list of unreliable suppliers, inter alia, on the basis of the amount of the share (value) of the contract performed, the insolvency of the lead partner, actions on the part of that partner and the contracting authority’s contribution to non-performance of the contract?’

Consideration of the questions referred

Consideration of the questions referred

Preliminary observations

Preliminary observations

| 32 | The second and third questions, which are to be examined before the first question, concern the manner in which economic operators are, following the early termination of a public contract awarded to them, entered on a list of unreliable suppliers in order to exclude them from participating in public procurement procedures. |
| --- | --- |

32

The second and third questions, which are to be examined before the first question, concern the manner in which economic operators are, following the early termination of a public contract awarded to them, entered on a list of unreliable suppliers in order to exclude them from participating in public procurement procedures.

| 33 | The result of the City of Vilnius’s early termination of the disputed contract was temporarily to prevent the applicants in the main proceedings from participating in other procurement procedures. That early termination, which was notified to them on 22 January 2020, was followed, on 22 January 2021, by their entry on a list of unreliable suppliers. Consequently, the second and third questions must be examined in the light of Directive 2014/24, which was in force on those dates, there being no need to examine whether that directive was applicable during the period between 18 April 2016, the date when the period prescribed for its transposition expired, and 1 July 2017, the date of its transposition in Lithuania. |
| --- | --- |

33

The result of the City of Vilnius’s early termination of the disputed contract was temporarily to prevent the applicants in the main proceedings from participating in other procurement procedures. That early termination, which was notified to them on 22 January 2020, was followed, on 22 January 2021, by their entry on a list of unreliable suppliers. Consequently, the second and third questions must be examined in the light of Directive 2014/24, which was in force on those dates, there being no need to examine whether that directive was applicable during the period between 18 April 2016, the date when the period prescribed for its transposition expired, and 1 July 2017, the date of its transposition in Lithuania.

The second question

The second question

| 34 | By its second question, the referring court asks, in essence, whether Article 18(1) and Article 57(4)(g) of Directive 2014/24 must be interpreted as precluding national rules or practice under which, when the contracting authority terminates early a public contract awarded to a group of economic operators on account of significant or persistent deficiencies which have resulted in the non-performance of a substantive requirement in relation to that contract, each member of that group is automatically entered on a list of unreliable suppliers and thereby temporarily prevented, in principle, from participating in new public procurement procedures. |
| --- | --- |

34

By its second question, the referring court asks, in essence, whether Article 18(1) and Article 57(4)(g) of Directive 2014/24 must be interpreted as precluding national rules or practice under which, when the contracting authority terminates early a public contract awarded to a group of economic operators on account of significant or persistent deficiencies which have resulted in the non-performance of a substantive requirement in relation to that contract, each member of that group is automatically entered on a list of unreliable suppliers and thereby temporarily prevented, in principle, from participating in new public procurement procedures.

| 35 | In that regard, it must be stated at the outset that Article 57(4)(g) of Directive 2014/24 makes it possible to exclude from participation in public procurement procedures any economic operator in relation to which significant or persistent deficiencies have been recorded in the performance of a substantive requirement incumbent on it under a prior public contract, in particular where those deficiencies have given rise to the early termination of that contract. |
| --- | --- |

35

In that regard, it must be stated at the outset that Article 57(4)(g) of Directive 2014/24 makes it possible to exclude from participation in public procurement procedures any economic operator in relation to which significant or persistent deficiencies have been recorded in the performance of a substantive requirement incumbent on it under a prior public contract, in particular where those deficiencies have given rise to the early termination of that contract.

| 36 | As is apparent from recital 101 of that directive, the purpose of that optional ground consists in excluding economic operators whose reliability is seriously compromised on account of wrongful or negligent conduct. |
| --- | --- |

36

As is apparent from recital 101 of that directive, the purpose of that optional ground consists in excluding economic operators whose reliability is seriously compromised on account of wrongful or negligent conduct.

| 37 | Where a Member State lays down, in its national legislation, the conditions for the application of that optional ground for exclusion, it must respect the essential characteristics thereof as expressed in Article 57(4)(g) of Directive 2014/24 (see, to that effect, judgment of 19 June 2019, Meca, C‐41/18, EU:C:2019:507, paragraph 33). |
| --- | --- |

37

Where a Member State lays down, in its national legislation, the conditions for the application of that optional ground for exclusion, it must respect the essential characteristics thereof as expressed in Article 57(4)(g) of Directive 2014/24 (see, to that effect, judgment of 19 June 2019, Meca, C‐41/18, EU:C:2019:507, paragraph 33).

| 38 | In addition, the application of that optional ground for exclusion must comply with the principle of proportionality, which is a general principle of EU law, which Article 18(1) of Directive 2014/24 restates as far as concerns public procurement. Compliance with that principle warrants particular attention when applying the optional grounds for exclusion referred to in Article 57 of that directive (see, to that effect, judgment of 30 January 2020, Tim, C‐395/18, EU:C:2020:58, paragraphs 45 and 48 and the case-law cited). |
| --- | --- |

38

In addition, the application of that optional ground for exclusion must comply with the principle of proportionality, which is a general principle of EU law, which Article 18(1) of Directive 2014/24 restates as far as concerns public procurement. Compliance with that principle warrants particular attention when applying the optional grounds for exclusion referred to in Article 57 of that directive (see, to that effect, judgment of 30 January 2020, Tim, C‐395/18, EU:C:2020:58, paragraphs 45 and 48 and the case-law cited).

| 39 | In that regard, that exclusion must, first, be temporary. It follows from recital 101 of Directive 2014/24 that any act of national law laying down the conditions for the application of Article 57(4)(g) of that directive must provide for a maximum exclusion duration. Article 57(7) of that directive states that, where it has not been set by final judgment, that period is not to exceed three years. |
| --- | --- |

39

In that regard, that exclusion must, first, be temporary. It follows from recital 101 of Directive 2014/24 that any act of national law laying down the conditions for the application of Article 57(4)(g) of that directive must provide for a maximum exclusion duration. Article 57(7) of that directive states that, where it has not been set by final judgment, that period is not to exceed three years.

| 40 | Second, during that exclusion period, the economic operator concerned must, unless it has been excluded from any participation in a procedure for the award of a public contract by a final judgment, be allowed to participate in such a procedure if it provides, in accordance with Article 57(6) of Directive 2014/24, evidence showing that the measures which it has taken are sufficient to demonstrate its reliability. Economic operators are accordingly encouraged to adopt corrective measures (see, to that effect, judgment of 19 June 2019, Meca, C‐41/18, EU:C:2019:507, paragraph 40). |
| --- | --- |

40

Second, during that exclusion period, the economic operator concerned must, unless it has been excluded from any participation in a procedure for the award of a public contract by a final judgment, be allowed to participate in such a procedure if it provides, in accordance with Article 57(6) of Directive 2014/24, evidence showing that the measures which it has taken are sufficient to demonstrate its reliability. Economic operators are accordingly encouraged to adopt corrective measures (see, to that effect, judgment of 19 June 2019, Meca, C‐41/18, EU:C:2019:507, paragraph 40).

| 41 | Third, the principle of proportionality requires a specific and individual assessment of the attitude of the operator concerned on the basis of all the relevant factors (judgment of 3 June 2021, Rad Service and Others, C‐210/20, EU:C:2021:445, paragraph 40 and the case-law cited). |
| --- | --- |

41

Third, the principle of proportionality requires a specific and individual assessment of the attitude of the operator concerned on the basis of all the relevant factors (judgment of 3 June 2021, Rad Service and Others, C‐210/20, EU:C:2021:445, paragraph 40 and the case-law cited).

| 42 | In the present case, it is apparent from the request for a preliminary ruling that, in the event of early termination of a public contract on account of significant or persistent deficiencies on the part of the successful tenderer in the performance of a substantive requirement, that early termination results, under the applicable national legislation, in each economic operator which was de jure responsible for the proper performance of that contract being entered on a list intended to enable the contracting authorities to ascertain the names of operators which, having failed to perform or having improperly performed a public contract, are therefore considered not to be reliable providers. Entry on that list gives rise to exclusion from all procurement procedure for a period of three years, unless the economic operator concerned shows that it has adopted adequate corrective measures. |
| --- | --- |

42

In the present case, it is apparent from the request for a preliminary ruling that, in the event of early termination of a public contract on account of significant or persistent deficiencies on the part of the successful tenderer in the performance of a substantive requirement, that early termination results, under the applicable national legislation, in each economic operator which was de jure responsible for the proper performance of that contract being entered on a list intended to enable the contracting authorities to ascertain the names of operators which, having failed to perform or having improperly performed a public contract, are therefore considered not to be reliable providers. Entry on that list gives rise to exclusion from all procurement procedure for a period of three years, unless the economic operator concerned shows that it has adopted adequate corrective measures.

de jure

| 43 | The referring court states that, in practice, once a judicial decision confirming the lawfulness of the early termination of the contract concerned has been delivered, all economic operators who are de jure responsible for the performance of that contract are automatically entered on that list, without a decision to that effect being formally adopted. |
| --- | --- |

43

The referring court states that, in practice, once a judicial decision confirming the lawfulness of the early termination of the contract concerned has been delivered, all economic operators who are de jure responsible for the performance of that contract are automatically entered on that list, without a decision to that effect being formally adopted.

de jure

| 44 | As regards whether such a rule or practice observes the essential characteristics of the optional ground for exclusion laid down in Article 57(4)(g) of Directive 2014/24 and the principle of proportionality set out in Article 18(1) of that directive, it should be noted that those provisions do not preclude the temporary registration, in a portal dedicated to facilitating the management of public procurement procedures, of the names of operators in respect of which a record has been made of significant or persistent deficiencies in the performance of a substantive requirement under a prior public contract. |
| --- | --- |

44

As regards whether such a rule or practice observes the essential characteristics of the optional ground for exclusion laid down in Article 57(4)(g) of Directive 2014/24 and the principle of proportionality set out in Article 18(1) of that directive, it should be noted that those provisions do not preclude the temporary registration, in a portal dedicated to facilitating the management of public procurement procedures, of the names of operators in respect of which a record has been made of significant or persistent deficiencies in the performance of a substantive requirement under a prior public contract.

| 45 | As has been stated in paragraphs 35 and 36 of the present judgment, that optional ground for exclusion seeks to ensure that such operators’ access to public procurement procedures is restricted by a prohibition in principle on participation in those procedures. Such a restriction is, in the present case, set out in Article 46 of the Law on public procurement. The entry, provided for in Article 91 of that law, of the operators concerned on an electronic list accessible to contracting authorities and other bodies responsible for public procurement appears, subject to verification by the referring court, to be intended to facilitate the application of that restriction. |
| --- | --- |

45

As has been stated in paragraphs 35 and 36 of the present judgment, that optional ground for exclusion seeks to ensure that such operators’ access to public procurement procedures is restricted by a prohibition in principle on participation in those procedures. Such a restriction is, in the present case, set out in Article 46 of the Law on public procurement. The entry, provided for in Article 91 of that law, of the operators concerned on an electronic list accessible to contracting authorities and other bodies responsible for public procurement appears, subject to verification by the referring court, to be intended to facilitate the application of that restriction.

| 46 | That being so, in order to observe the essential characteristics of the optional ground for exclusion laid down in Article 57(4)(g) of Directive 2014/24 and the principle of proportionality, such a system must be structured in such a way that, before the entry on the list of unreliable suppliers of an economic operator, which is a member of a group to which a public contract had been awarded and that contract was terminated early, it is necessary to conduct a specific assessment of all the relevant factors adduced by that operator in order to demonstrate that its entry on that list is not justified in the light of its individual conduct. |
| --- | --- |

46

That being so, in order to observe the essential characteristics of the optional ground for exclusion laid down in Article 57(4)(g) of Directive 2014/24 and the principle of proportionality, such a system must be structured in such a way that, before the entry on the list of unreliable suppliers of an economic operator, which is a member of a group to which a public contract had been awarded and that contract was terminated early, it is necessary to conduct a specific assessment of all the relevant factors adduced by that operator in order to demonstrate that its entry on that list is not justified in the light of its individual conduct.

| 47 | It cannot therefore be accepted that such an economic operator, in the event of early termination of that contract on account of significant or persistent deficiencies in the performance of such contract, is automatically categorised as unreliable and is temporarily excluded, without first conducting a specific and individual assessment of its conduct, in the light of all the relevant factors. |
| --- | --- |

47

It cannot therefore be accepted that such an economic operator, in the event of early termination of that contract on account of significant or persistent deficiencies in the performance of such contract, is automatically categorised as unreliable and is temporarily excluded, without first conducting a specific and individual assessment of its conduct, in the light of all the relevant factors.

| 48 | It is true that it is permissible for a Member State to provide, in the event of laying down the conditions for application of the optional ground for exclusion provided for in Article 57(4)(g) of Directive 2014/24, for a presumption that any economic operator de jure responsible for the proper performance of a public contract is deemed to have contributed, in the performance of that contract, to the significant or persistent deficiencies which resulted in the early termination of that contract having arisen or having continued. However, where that contract has been awarded to a group of economic operators whose individual contributions to those deficiencies and any efforts to remedy them are not necessarily identical, such a presumption must, if it is not to adversely affect the essential characteristics of that optional ground for exclusion and the principle of proportionality referred to in Article 18(1) of that directive, be rebuttable. |
| --- | --- |

48

It is true that it is permissible for a Member State to provide, in the event of laying down the conditions for application of the optional ground for exclusion provided for in Article 57(4)(g) of Directive 2014/24, for a presumption that any economic operator de jure responsible for the proper performance of a public contract is deemed to have contributed, in the performance of that contract, to the significant or persistent deficiencies which resulted in the early termination of that contract having arisen or having continued. However, where that contract has been awarded to a group of economic operators whose individual contributions to those deficiencies and any efforts to remedy them are not necessarily identical, such a presumption must, if it is not to adversely affect the essential characteristics of that optional ground for exclusion and the principle of proportionality referred to in Article 18(1) of that directive, be rebuttable.

de jure

| 49 | Irrespective of the joint and several liability of the members of such a group, the application of the optional ground for exclusion laid down in Article 57(4)(g) of Directive 2014/24 must be based on the wrongful or negligent nature of that individual conduct. |
| --- | --- |

49

Irrespective of the joint and several liability of the members of such a group, the application of the optional ground for exclusion laid down in Article 57(4)(g) of Directive 2014/24 must be based on the wrongful or negligent nature of that individual conduct.

| 50 | Consequently, in a situation such as that at issue in the main proceedings, each member of the group which is de jure responsible for the proper performance of a public contract, must, before its name is entered on the list of unreliable suppliers and therefore becomes subject to temporary exclusion from public procurement procedures, have the opportunity to demonstrate that the deficiencies which led to the early termination of that contract were unrelated to its individual conduct. Where it transpires, following a specific and individual assessment of the conduct of the operator concerned in the light of all the relevant factors, that that operator was not the cause of the deficiencies recorded and it could not reasonably be required to do more than it did in order to remedy those deficiencies, Directive 2014/24 precludes that operator from being entered on the list of unreliable suppliers (see, by analogy, judgment of 7 September 2021, Klaipėdos regiono atliekų tvarkymo centras (C‐927/19, EU:C:2021:700, paragraphs 157 and 158). |
| --- | --- |

50

Consequently, in a situation such as that at issue in the main proceedings, each member of the group which is de jure responsible for the proper performance of a public contract, must, before its name is entered on the list of unreliable suppliers and therefore becomes subject to temporary exclusion from public procurement procedures, have the opportunity to demonstrate that the deficiencies which led to the early termination of that contract were unrelated to its individual conduct. Where it transpires, following a specific and individual assessment of the conduct of the operator concerned in the light of all the relevant factors, that that operator was not the cause of the deficiencies recorded and it could not reasonably be required to do more than it did in order to remedy those deficiencies, Directive 2014/24 precludes that operator from being entered on the list of unreliable suppliers (see, by analogy, judgment of 7 September 2021, Klaipėdos regiono atliekų tvarkymo centras (C‐927/19, EU:C:2021:700, paragraphs 157 and 158).

de jure

| 51 | That interpretation is not invalidated by the fact that it is possible for the operator concerned to avoid being excluded from participating in public procurement procedures by showing, in accordance with Article 57(6) of Directive 2014/24, that it adopted corrective measures, such as those listed by way of illustration in recital 102 of that directive. Such an operator cannot be required to show that it has adopted corrective measures even though its individual conduct is unrelated to the deficiencies which resulted in the early termination of the contract. |
| --- | --- |

51

That interpretation is not invalidated by the fact that it is possible for the operator concerned to avoid being excluded from participating in public procurement procedures by showing, in accordance with Article 57(6) of Directive 2014/24, that it adopted corrective measures, such as those listed by way of illustration in recital 102 of that directive. Such an operator cannot be required to show that it has adopted corrective measures even though its individual conduct is unrelated to the deficiencies which resulted in the early termination of the contract.

| 52 | In the light of all the foregoing, the answer to the second question is that Article 18(1) and Article 57(4)(g) of Directive 2014/24 must be interpreted as precluding national rules or practice under which, when the contracting authority terminates early a public contract awarded to a group of economic operators on account of significant or persistent deficiencies which have resulted in the non-performance of a substantive requirement in relation to that contract, each member of that group is automatically entered on a list of unreliable suppliers and thereby temporarily prevented, in principle, from participating in new public procurement procedures. |
| --- | --- |

52

In the light of all the foregoing, the answer to the second question is that Article 18(1) and Article 57(4)(g) of Directive 2014/24 must be interpreted as precluding national rules or practice under which, when the contracting authority terminates early a public contract awarded to a group of economic operators on account of significant or persistent deficiencies which have resulted in the non-performance of a substantive requirement in relation to that contract, each member of that group is automatically entered on a list of unreliable suppliers and thereby temporarily prevented, in principle, from participating in new public procurement procedures.

The third question

The third question

| 53 | By its third question, the referring court asks, in essence, whether Article 18(1) and Article 57(4)(g) of Directive 2014/24 must be interpreted as meaning that an economic operator which is a member of a group which submitted the successful tender for a public contract may, in the event that contract is terminated early on account of failure to comply with a substantive requirement, rely, for the purpose of demonstrating that its entry on a list of unreliable suppliers is unjustified, both on factors relating to its own situation and factors relating to the situation of third parties, such as the lead partner of that group. |
| --- | --- |

53

By its third question, the referring court asks, in essence, whether Article 18(1) and Article 57(4)(g) of Directive 2014/24 must be interpreted as meaning that an economic operator which is a member of a group which submitted the successful tender for a public contract may, in the event that contract is terminated early on account of failure to comply with a substantive requirement, rely, for the purpose of demonstrating that its entry on a list of unreliable suppliers is unjustified, both on factors relating to its own situation and factors relating to the situation of third parties, such as the lead partner of that group.

| 54 | As has been pointed out in paragraph 50 of the present judgment, each member of the group which submitted the successful tender must, in the event of significant or persistent deficiencies, have the opportunity, before its name is entered on a list of unreliable suppliers and thereby becomes subject to temporary exclusion from public procurement procedures, to demonstrate that its individual conduct in the performance of that contract was unrelated to those deficiencies. |
| --- | --- |

54

As has been pointed out in paragraph 50 of the present judgment, each member of the group which submitted the successful tender must, in the event of significant or persistent deficiencies, have the opportunity, before its name is entered on a list of unreliable suppliers and thereby becomes subject to temporary exclusion from public procurement procedures, to demonstrate that its individual conduct in the performance of that contract was unrelated to those deficiencies.

| 55 | In order to demonstrate that its individual conduct was not the cause of those deficiencies and, furthermore, that it could not reasonably be required to do more than it did in order to remedy those deficiencies, the economic operator concerned must be given an opportunity to put forward any factor which it considers relevant. |
| --- | --- |

55

In order to demonstrate that its individual conduct was not the cause of those deficiencies and, furthermore, that it could not reasonably be required to do more than it did in order to remedy those deficiencies, the economic operator concerned must be given an opportunity to put forward any factor which it considers relevant.

| 56 | The words in Article 57(4)(g) of Directive 2014/24 do not clarify the circumstances in which a member of a group of economic operators must be regarded as being involved, or not, in the deficiencies which resulted in the early termination of the contract. Consequently, that provision enables each member of a group which submitted the successful tender to rely on any factor, specific to its situation or that of a third party, which is capable of showing that that ground for exclusion cannot be applied to it. |
| --- | --- |

56

The words in Article 57(4)(g) of Directive 2014/24 do not clarify the circumstances in which a member of a group of economic operators must be regarded as being involved, or not, in the deficiencies which resulted in the early termination of the contract. Consequently, that provision enables each member of a group which submitted the successful tender to rely on any factor, specific to its situation or that of a third party, which is capable of showing that that ground for exclusion cannot be applied to it.

| 57 | It is for the contracting authority for the contract which was terminated early and, as appropriate, the court before which an action has been brought, to determine, as part of the specific and individual assessment required by reason of the principle of proportionality referred to in Article 18(1) of that directive, the weight to be attributed to each factor relied on. |
| --- | --- |

57

It is for the contracting authority for the contract which was terminated early and, as appropriate, the court before which an action has been brought, to determine, as part of the specific and individual assessment required by reason of the principle of proportionality referred to in Article 18(1) of that directive, the weight to be attributed to each factor relied on.

| 58 | In the light of the foregoing, the answer to the third question is that Article 18(1) and Article 57(4)(g) of Directive 2014/24 must be interpreted as meaning that an economic operator which is a member of a group which submitted the successful tender for a public contract may, in the event that contract is terminated early for failure to comply with a substantive requirement, rely, for the purpose of demonstrating that its entry on a list of unreliable suppliers is unjustified, on any factor, including any factor concerning third parties, such as the lead partner of that group, which is capable of showing that it was not the cause of the deficiencies which resulted in the early termination of that contract and that it could not reasonably be required to do more than it did in order to remedy those deficiencies. |
| --- | --- |

58

In the light of the foregoing, the answer to the third question is that Article 18(1) and Article 57(4)(g) of Directive 2014/24 must be interpreted as meaning that an economic operator which is a member of a group which submitted the successful tender for a public contract may, in the event that contract is terminated early for failure to comply with a substantive requirement, rely, for the purpose of demonstrating that its entry on a list of unreliable suppliers is unjustified, on any factor, including any factor concerning third parties, such as the lead partner of that group, which is capable of showing that it was not the cause of the deficiencies which resulted in the early termination of that contract and that it could not reasonably be required to do more than it did in order to remedy those deficiencies.

The first question

The first question

| 59 | By its first question, the referring court asks, in essence, whether Article 1(1) and (3) of Directive 89/665 must be interpreted as meaning that a Member State which provides, when laying down conditions for the application of the optional ground for exclusion provided for in Article 57(4)(g) of Directive 2014/24, that economic operators to which a public contract has been awarded are, in the event of early termination of that contract for failure to comply with a substantive requirement, entered on a list of unreliable suppliers and accordingly temporarily excluded, in principle, from participating in new public procurement procedures must ensure the right to bring an action against their entry on that list of unreliable suppliers. |
| --- | --- |

59

By its first question, the referring court asks, in essence, whether Article 1(1) and (3) of Directive 89/665 must be interpreted as meaning that a Member State which provides, when laying down conditions for the application of the optional ground for exclusion provided for in Article 57(4)(g) of Directive 2014/24, that economic operators to which a public contract has been awarded are, in the event of early termination of that contract for failure to comply with a substantive requirement, entered on a list of unreliable suppliers and accordingly temporarily excluded, in principle, from participating in new public procurement procedures must ensure the right to bring an action against their entry on that list of unreliable suppliers.

| 60 | Article 1(1) of Directive 89/665 provides that Member States must take the measures necessary to ensure that decisions taken by the contracting authorities may be reviewed effectively and, in particular, as rapidly as possible, on the grounds that such decisions have infringed EU law in the field of public procurement or national rules transposing that law. In accordance with Article 1(3) of that directive, those review procedures must be available at least to any person having or having had an interest in obtaining a particular contract and who has been or risks being harmed by an alleged infringement. |
| --- | --- |

60

Article 1(1) of Directive 89/665 provides that Member States must take the measures necessary to ensure that decisions taken by the contracting authorities may be reviewed effectively and, in particular, as rapidly as possible, on the grounds that such decisions have infringed EU law in the field of public procurement or national rules transposing that law. In accordance with Article 1(3) of that directive, those review procedures must be available at least to any person having or having had an interest in obtaining a particular contract and who has been or risks being harmed by an alleged infringement.

| 61 | By those provisions, Directive 89/665 is intended, in the field of public procurement falling under EU law, to ensure full respect for the right to an effective remedy and to a fair hearing enshrined in the first and second paragraphs of Article 47 of the Charter of Fundamental Rights of the European Union (judgment of 7 September 2021, Klaipėdos regiono atliekų tvarkymo centras, C‐927/19, EU:C:2021:700, paragraph 128 and the case-law cited). |
| --- | --- |

61

By those provisions, Directive 89/665 is intended, in the field of public procurement falling under EU law, to ensure full respect for the right to an effective remedy and to a fair hearing enshrined in the first and second paragraphs of Article 47 of the Charter of Fundamental Rights of the European Union (judgment of 7 September 2021, Klaipėdos regiono atliekų tvarkymo centras, C‐927/19, EU:C:2021:700, paragraph 128 and the case-law cited).

| 62 | From that point of view, the concept of ‘decisions taken by the contracting authorities’ in Article 1(1) of Directive 89/665 must be interpreted broadly. Any decision of a contracting authority falling under the EU rules in the field of public procurement and liable to infringe them must be capable of being subject to the judicial review provided for by that directive. That concept therefore refers generally to decisions of a contracting authority without distinguishing between them according to their content or time of adoption and does not lay down any restriction with regard to the nature or content of the decisions to which it refers (see, to that effect, judgment of 7 September 2021, Klaipėdos regiono atliekų tvarkymo centras, C‐927/19, EU:C:2021:700, paragraph 105). |
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62

From that point of view, the concept of ‘decisions taken by the contracting authorities’ in Article 1(1) of Directive 89/665 must be interpreted broadly. Any decision of a contracting authority falling under the EU rules in the field of public procurement and liable to infringe them must be capable of being subject to the judicial review provided for by that directive. That concept therefore refers generally to decisions of a contracting authority without distinguishing between them according to their content or time of adoption and does not lay down any restriction with regard to the nature or content of the decisions to which it refers (see, to that effect, judgment of 7 September 2021, Klaipėdos regiono atliekų tvarkymo centras, C‐927/19, EU:C:2021:700, paragraph 105).

| 63 | The words ‘any person having or having had an interest in obtaining a particular contract who has been or risks being harmed by an alleged infringement’ in Article 1(3) of that directive must also be interpreted broadly, so that the rules contained in that directive apply to all persons whose interest in obtaining such a contract is affected by a decision taken by a contracting authority. |
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63

The words ‘any person having or having had an interest in obtaining a particular contract who has been or risks being harmed by an alleged infringement’ in Article 1(3) of that directive must also be interpreted broadly, so that the rules contained in that directive apply to all persons whose interest in obtaining such a contract is affected by a decision taken by a contracting authority.

| 64 | Where, as in the present case, the members of a group of economic operators are, on account of the early termination of the public contract which had been awarded to them, entered, by or on the initiative of a contracting authority, on a list of unreliable suppliers and thereby temporarily excluded, in principle, from participating in future public procurement procedures, that entry, which affects the interest of each of those operators in obtaining public contracts falling under EU law, constitutes a decision taken by a contracting authority within the meaning of Article 1(1) of Directive 89/665. That decision must, as is apparent from the examination of the second and third questions, observe the essential characteristics of the optional ground for exclusion laid down in Article 57(4)(g) of Directive 2014/24 and must comply with the principle of proportionality set out in Article 18(1) of that directive. In the event of an alleged infringement of those provisions or any other rule of EU law, the person allegedly harmed must, under Article 1(1) and (3) of Directive 89/665 have an effective remedy available. |
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64

Where, as in the present case, the members of a group of economic operators are, on account of the early termination of the public contract which had been awarded to them, entered, by or on the initiative of a contracting authority, on a list of unreliable suppliers and thereby temporarily excluded, in principle, from participating in future public procurement procedures, that entry, which affects the interest of each of those operators in obtaining public contracts falling under EU law, constitutes a decision taken by a contracting authority within the meaning of Article 1(1) of Directive 89/665. That decision must, as is apparent from the examination of the second and third questions, observe the essential characteristics of the optional ground for exclusion laid down in Article 57(4)(g) of Directive 2014/24 and must comply with the principle of proportionality set out in Article 18(1) of that directive. In the event of an alleged infringement of those provisions or any other rule of EU law, the person allegedly harmed must, under Article 1(1) and (3) of Directive 89/665 have an effective remedy available.

| 65 | The possibility of bringing an action against the early termination of the public contract giving rise to their entry on the list of unreliable suppliers does not constitute, for the members of the group which submitted the successful tender, an effective remedy against the decision to enter them on that list and thereby to exclude them, in principle, from future public procurement procedures. The lawfulness under EU law of that early termination, on the one hand, and of such entry and exclusion, on the other hand, may be dependent, as is apparent from the analysis relating to the second question, on different factors. |
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65

The possibility of bringing an action against the early termination of the public contract giving rise to their entry on the list of unreliable suppliers does not constitute, for the members of the group which submitted the successful tender, an effective remedy against the decision to enter them on that list and thereby to exclude them, in principle, from future public procurement procedures. The lawfulness under EU law of that early termination, on the one hand, and of such entry and exclusion, on the other hand, may be dependent, as is apparent from the analysis relating to the second question, on different factors.

| 66 | Consequently, where the contract which was terminated early had been awarded to a group of economic operators, each member of that group must be given an opportunity to bring an action against its entry on the list of unreliable suppliers, from which its exclusion, in principle, from future public procurement procedures arises. |
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66

Consequently, where the contract which was terminated early had been awarded to a group of economic operators, each member of that group must be given an opportunity to bring an action against its entry on the list of unreliable suppliers, from which its exclusion, in principle, from future public procurement procedures arises.

| 67 | In the light of the foregoing, the answer to the first question is that Article 1(1) and (3) of Directive 89/665 must be interpreted as meaning that a Member State which provides, when laying down conditions for the application of the optional ground for exclusion provided for in Article 57(4)(g) of Directive 2014/24, that the members of a group of economic operators which submitted a successful tender for a public contract are, in the event of early termination of that contract for failure to comply with a substantive requirement, entered on a list of unreliable suppliers and accordingly temporarily excluded, in principle, from participating in new public procurement procedures, must ensure the right of those operators to bring an effective action against their entry on that list. |
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67

In the light of the foregoing, the answer to the first question is that Article 1(1) and (3) of Directive 89/665 must be interpreted as meaning that a Member State which provides, when laying down conditions for the application of the optional ground for exclusion provided for in Article 57(4)(g) of Directive 2014/24, that the members of a group of economic operators which submitted a successful tender for a public contract are, in the event of early termination of that contract for failure to comply with a substantive requirement, entered on a list of unreliable suppliers and accordingly temporarily excluded, in principle, from participating in new public procurement procedures, must ensure the right of those operators to bring an effective action against their entry on that list.

Costs

Costs

| 68 | Since these proceedings are, for the parties to the main proceedings, a step in the action pending before the national court, the decision on costs is a matter for that court. Costs incurred in submitting observations to the Court, other than the costs of those parties, are not recoverable. |
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68

Since these proceedings are, for the parties to the main proceedings, a step in the action pending before the national court, the decision on costs is a matter for that court. Costs incurred in submitting observations to the Court, other than the costs of those parties, are not recoverable.

| | On those grounds, the Court (Fourth Chamber) hereby rules: |
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On those grounds, the Court (Fourth Chamber) hereby rules:

| | 1. | Article 18(1) and Article 57(4)(g) of Directive 2014/24/EU of the European Parliament and of the Council of 26 February 2014 on public procurement and repealing Directive 2004/18/EC


  must be interpreted as precluding national rules or practice under which, when the contracting authority terminates early a public contract awarded to a group of economic operators on account of significant or persistent deficiencies which have resulted in the non-performance of a substantive requirement in relation to that contract, each member of that group is automatically entered on a list of unreliable suppliers and thereby temporarily prevented, in principle, from participating in new public procurement procedures. |
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1.

1.

Article 18(1) and Article 57(4)(g) of Directive 2014/24/EU of the European Parliament and of the Council of 26 February 2014 on public procurement and repealing Directive 2004/18/EC

Article 18(1) and Article 57(4)(g) of Directive 2014/24/EU of the European Parliament and of the Council of 26 February 2014 on public procurement and repealing Directive 2004/18/EC

must be interpreted as precluding national rules or practice under which, when the contracting authority terminates early a public contract awarded to a group of economic operators on account of significant or persistent deficiencies which have resulted in the non-performance of a substantive requirement in relation to that contract, each member of that group is automatically entered on a list of unreliable suppliers and thereby temporarily prevented, in principle, from participating in new public procurement procedures.

must be interpreted as precluding national rules or practice under which, when the contracting authority terminates early a public contract awarded to a group of economic operators on account of significant or persistent deficiencies which have resulted in the non-performance of a substantive requirement in relation to that contract, each member of that group is automatically entered on a list of unreliable suppliers and thereby temporarily prevented, in principle, from participating in new public procurement procedures.

| | 2. | Article 18(1) and Article 57(4)(g) of Directive 2014/24


  must be interpreted as meaning that an economic operator which is a member of a group which submitted the successful tender for a public contract may, in the event that contract is terminated early for failure to comply with a substantive requirement, rely, for the purpose of demonstrating that its entry on a list of unreliable suppliers is unjustified, on any factor, including any factor concerning third parties, such as the lead partner of that group, which is capable of showing that it was not the cause of the deficiencies which resulted in the early termination of that contract and that it could not reasonably be required to do more than it did in order to remedy those deficiencies. |
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2.

2.

Article 18(1) and Article 57(4)(g) of Directive 2014/24

Article 18(1) and Article 57(4)(g) of Directive 2014/24

must be interpreted as meaning that an economic operator which is a member of a group which submitted the successful tender for a public contract may, in the event that contract is terminated early for failure to comply with a substantive requirement, rely, for the purpose of demonstrating that its entry on a list of unreliable suppliers is unjustified, on any factor, including any factor concerning third parties, such as the lead partner of that group, which is capable of showing that it was not the cause of the deficiencies which resulted in the early termination of that contract and that it could not reasonably be required to do more than it did in order to remedy those deficiencies.

must be interpreted as meaning that an economic operator which is a member of a group which submitted the successful tender for a public contract may, in the event that contract is terminated early for failure to comply with a substantive requirement, rely, for the purpose of demonstrating that its entry on a list of unreliable suppliers is unjustified, on any factor, including any factor concerning third parties, such as the lead partner of that group, which is capable of showing that it was not the cause of the deficiencies which resulted in the early termination of that contract and that it could not reasonably be required to do more than it did in order to remedy those deficiencies.

| | 3. | Article 1(1) and (3) of Council Directive 89/665/EEC of 21 December 1989 on the coordination of the laws, regulations and administrative provisions relating to the application of review procedures to the award of public supply and public works contracts, as amended by Directive 2014/23/EU of the European Parliament and of the Council of 26 February 2014,


  must be interpreted as meaning that a Member State which provides, when laying down conditions for the application of the optional ground for exclusion provided for in Article 57(4)(g) of Directive 2014/24, that the members of a group of economic operators which submitted a successful tender for a public contract are, in the event of early termination of that contract for failure to comply with a substantive requirement, entered on a list of unreliable suppliers and accordingly temporarily excluded, in principle, from participating in new public procurement procedures, must ensure the right of those operators to bring an effective action against their entry on that list. |
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3.

3.

Article 1(1) and (3) of Council Directive 89/665/EEC of 21 December 1989 on the coordination of the laws, regulations and administrative provisions relating to the application of review procedures to the award of public supply and public works contracts, as amended by Directive 2014/23/EU of the European Parliament and of the Council of 26 February 2014,

Article 1(1) and (3) of Council Directive 89/665/EEC of 21 December 1989 on the coordination of the laws, regulations and administrative provisions relating to the application of review procedures to the award of public supply and public works contracts, as amended by Directive 2014/23/EU of the European Parliament and of the Council of 26 February 2014,

must be interpreted as meaning that a Member State which provides, when laying down conditions for the application of the optional ground for exclusion provided for in Article 57(4)(g) of Directive 2014/24, that the members of a group of economic operators which submitted a successful tender for a public contract are, in the event of early termination of that contract for failure to comply with a substantive requirement, entered on a list of unreliable suppliers and accordingly temporarily excluded, in principle, from participating in new public procurement procedures, must ensure the right of those operators to bring an effective action against their entry on that list.

must be interpreted as meaning that a Member State which provides, when laying down conditions for the application of the optional ground for exclusion provided for in Article 57(4)(g) of Directive 2014/24, that the members of a group of economic operators which submitted a successful tender for a public contract are, in the event of early termination of that contract for failure to comply with a substantive requirement, entered on a list of unreliable suppliers and accordingly temporarily excluded, in principle, from participating in new public procurement procedures, must ensure the right of those operators to bring an effective action against their entry on that list.

| | [Signatures] |
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[Signatures]

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(
  *1
  )	Language of the case: Lithuanian.

*1