Provisional text

JUDGMENT OF THE COURT (Fifth Chamber)

22 December 2022 (*)

( Reference for a preliminary ruling – Public contracts – Directive 2014/24/EU – Award of the contract without initiating a tendering procedure – Public contracts between entities within the public sector – Article 12(3) – Public contracts subject to in-house awards – Concept of ‘similar control’ – Conditions – Representation of all participating contracting authorities – Article 12(4) – Contract between contracting authorities pursuing common public interest objectives – Concept of ‘cooperation’ – Conditions – Failure to transpose within the time limits laid down – Direct effect )

In Joined Cases C‐383/21 and C‐384/21,

TWO REQUESTS for a preliminary ruling under Article 267 TFEU from the Conseil d’État (Council of State, Belgium), made by decisions of 15 June 2021, received at the Court on 24 June 2021, in the proceedings

**Sambre & Biesme SCRL** (C‐383/21),

**Commune de Farciennes** (C‐384/21)

v

**Société wallonne du logement (SWL),**

THE COURT (Fifth Chamber),

composed of E. Regan (Rapporteur), President of the Chamber, D. Gratsias, M. Ilešič, I. Jarukaitis and Z. Csehi, Judges,

Advocate General: M. Campos Sánchez-Bordona,

Registrar: M. Siekierzyńska, Administrator,

having regard to the written procedure and further to the hearing on 30 March 2022,

after considering the observations submitted on behalf of:

–        Sambre & Biesme SCRL, by J. Laurent and C. Servais, avocats,

–        the Municipality of Farciennes, by J. Bourtembourg and N. Fortemps, avocats,

–        the Belgian Government, by J.-C. Halleux, C. Pochet and L. Van den Broeck, acting as Agents, and by M. Vastmans, avocate,

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

after hearing the Opinion of the Advocate General at the sitting on 9 June 2022,

gives the following

**Judgment**

1        These requests for a preliminary ruling concern the interpretation of Article 12(3) and (4) 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).

2        The requests have been made in proceedings between, first, Sambre & Biesme SCRL, société de logement de service public (SLSP) (‘SLSP Sambre & Biesme’) (Case C‐383/21) and, second, the municipality of Farciennes (Belgium) (Case C‐384/21), and the Société wallone du logement (SWL) concerning the annulment by the latter of decisions of the board of directors of SLSP Sambre & Biesme by which it, first, approved a framework agreement for joint contracts with the municipality of Farciennes and, second, stipulated that a public call for tenders for asbestos surveying services would not be issued in view of the in-house relationship between SLSP Sambre & Biesme and the Intercommunale pour la Gestion et la Réalisation d’Études Techniques et Économiques (the Inter-municipal Cooperative for the Management and Implementation of Technical and Financial Projects) (Igretec).

**Legal context**

*EU law*

3        Recitals 5, 31 and 33 of Directive 2014/24 state:

‘(5)      It should be recalled that nothing in this Directive obliges Member States to contract out or externalise the provision of services that they wish to provide themselves or to organise by means other than public contracts within the meaning of this Directive. The provision of services based on laws, regulations or employment contracts should not be covered. In some Member States, this might for example be the case for certain administrative and government services such as executive and legislative services or the provision of certain services to the community, such as foreign affairs services or justice services or compulsory social security services.

...

(31)      There is considerable legal uncertainty as to how far contracts concluded between entities in the public sector should be covered by public procurement rules. The relevant case-law of the Court of Justice of the European Union is interpreted differently between Member States and even between contracting authorities. It is therefore necessary to clarify in which cases contracts concluded within the public sector are not subject to the application of public procurement rules.

Such clarification should be guided by the principles set out in the relevant case-law of the Court of Justice of the European Union. The sole fact that both parties to an agreement are themselves public authorities does not as such rule out the application of procurement rules. However, the application of public procurement rules should not interfere with the freedom of public authorities to perform the public service tasks conferred on them by using their own resources, which includes the possibility of cooperation with other public authorities.

It should be ensured that any exempted public-public cooperation does not result in a distortion of competition in relation to private economic operators in so far as it places a private provider of services in a position of advantage vis-à-vis its competitors.

...

(33)      Contracting authorities should be able to choose to provide jointly their public services by way of cooperation without being obliged to use any particular legal form. Such cooperation might cover all types of activities related to the performance of services and responsibilities assigned to or assumed by the participating authorities, such as mandatory or voluntary tasks of local or regional authorities or services conferred upon specific bodies by public law. The services provided by the various participating authorities need not necessarily be identical; they might also be complementary.

Contracts for the joint provision of public services should not be subject to the application of the rules set out in this Directive provided that they are concluded exclusively between contracting authorities, that the implementation of that cooperation is governed solely by considerations relating to the public interest and that no private service provider is placed in a position of advantage vis-à-vis its competitors.

In order to fulfil those conditions, the cooperation should be based on a cooperative concept. Such cooperation does not require all participating authorities to assume the performance of main contractual obligations, as long as there are commitments to contribute towards the cooperative performance of the public service in question. In addition, the implementation of the cooperation, including any financial transfers between the participating contracting authorities, should be governed solely by considerations relating to the public interest.’

4        Title I of that directive, entitled ‘Scope, definitions and general principles’, contains a Chapter I, entitled ‘Scope and definitions’, Section 3 of which, itself entitled ‘Exclusions’, comprises Articles 7 to 12.

5        Article 12 of that directive, entitled ‘Public contracts between entities within the public sector’, provides:

‘1.      A public contract awarded by a contracting authority to a legal person governed by private or public law shall fall outside the scope of this Directive where all of the following conditions are fulfilled:

(a)      the contracting authority exercises over the legal person concerned a control which is similar to that which it exercises over its own departments;

(b)      more than 80% of the activities of the controlled legal person are carried out in the performance of tasks entrusted to it by the controlling contracting authority or by other legal persons controlled by that contracting authority; and

(c)      there is no direct private capital participation in the controlled legal person with the exception of non-controlling and non-blocking forms of private capital participation required by national legislative provisions, in conformity with the Treaties, which do not exert a decisive influence on the controlled legal person.

A contracting authority shall be deemed to exercise over a legal person a control similar to that which it exercises over its own departments within the meaning of point (a) of the first subparagraph where it exercises a decisive influence over both strategic objectives and significant decisions of the controlled legal person. Such control may also be exercised by another legal person, which is itself controlled in the same way by the contracting authority.

2.      Paragraph 1 also applies where a controlled legal person which is a contracting authority awards a contract to its controlling contracting authority, or to another legal person controlled by the same contracting authority, provided that there is no direct private capital participation in the legal person being awarded the public contract with the exception of non-controlling and non-blocking forms of private capital participation required by national legislative provisions, in conformity with the Treaties, which do not exert a decisive influence on the controlled legal person.

3.      A contracting authority, which does not exercise over a legal person governed by private or public law control within the meaning of paragraph 1, may nevertheless award a public contract to that legal person without applying this Directive where all of the following conditions are fulfilled:

(a)      the contracting authority exercises jointly with other contracting authorities a control over that legal person which is similar to that which they exercise over their own departments;

(b)      more than 80% of the activities of that legal person are carried out in the performance of tasks entrusted to it by the controlling contracting authorities or by other legal persons controlled by the same contracting authorities; and

(c)      there is no direct private capital participation in the controlled legal person with the exception of non-controlling and non-blocking forms of private capital participation required by national legislative provisions, in conformity with the Treaties, which do not exert a decisive influence on the controlled legal person.

For the purposes of point (a) of the first subparagraph, contracting authorities exercise joint control over a legal person where all of the following conditions are fulfilled:

(i)      the decision-making bodies of the controlled legal person are composed of representatives of all participating contracting authorities. Individual representatives may represent several or all of the participating contracting authorities;

(ii)      those contracting authorities are able to jointly exert decisive influence over the strategic objectives and significant decisions of the controlled legal person; and

(iii)      the controlled legal person does not pursue any interests which are contrary to those of the controlling contracting authorities.

4.      A contract concluded exclusively between two or more contracting authorities shall fall outside the scope of this Directive where all of the following conditions are fulfilled:

(a)      the contract establishes or implements a cooperation between the participating contracting authorities with the aim of ensuring that public services they have to perform are provided with a view to achieving objectives they have in common;

(b)      the implementation of that cooperation is governed solely by considerations relating to the public interest; and

(c)      the participating contracting authorities perform on the open market less than 20% of the activities concerned by the cooperation.

...’

6        Article 90 of that directive, entitled ‘Transposition and transitional provisions’, provides, in paragraph 1 thereof:

‘Member States shall bring into force the laws, regulations and administrative provisions necessary to comply with this Directive by 18 April 2016. They shall forthwith communicate to the Commission the text of those measures.’

*Belgian law*

7        Directive 2014/24 was transposed into Belgian law by the Loi relative aux marchés publics (Law on public contracts) of 17 June 2016 (*Moniteur belge* of 14 July 2016, p. 44219), which entered into force on 30 June 2017, after the date of expiry of the period for transposition of that directive as prescribed in Article 90 thereof.

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

8        SLSP Sambre & Biesme is a cooperative society with limited liability whose main shareholders are the municipalities of Farciennes and Aiseau-Presles (Belgium). As a public service housing company, its supervising authority is SWL, which acts on behalf of the Walloon Government.

9        In 2015, SLSP Sambre & Biesme and the municipality of Farciennes decided to pool their resources in order to create an ecodistrict in Farciennes comprising approximately 150 housing units. For that purpose, the parties planned to enlist the services of Igretec to oversee the implementation of their project.

10      Igretec is a cooperative society with limited liability which carries out public service tasks and is, on that basis, a legal person governed by public law. It carries out its activities in several areas. As set out in its articles of association, its objects include, inter alia, consultancy and management activities.

11      The rules relating to Igretec’s organisation and operation are determined by the Code de la démocratie locale et de la décentralisation (Code on Local Democracy and Decentralisation) and its articles of association. Consequently, as regards its composition, it includes only legal persons governed by public law. At the material time in the main proceedings, Igretec’s members included more than 70 municipalities, including the municipality of Farciennes, and more than 50 other public authorities. In particular, within Igretec’s share capital, divided into five categories, the number of category A shares allocated to municipalities was 5 054 351 and the number of category C shares attributed to ‘other affiliates governed by public law’ was 17 126.

12      As regards Igretec’s method of operation, the municipalities always have the majority of votes and the chairmanship of the various management bodies; decisions by Igretec’s bodies are only passed if they obtain, in addition to the majority of the votes of the board members present or represented, the majority of the votes of the board members from the member municipalities.

13      On 29 October 2015, SLSP Sambre & Biesme decided to acquire a category C share in Igretec to benefit from its services as a member.

14      On 23 March 2016, the municipality of Farciennes concluded a contract with Igretec for project management and legal assistance and a contract on a feasibility study relating to architecture, stability, special techniques, roads, environment and urban planning. In connection with those tasks, Igretec proposed three planning options incorporating SLSP Sambre & Biesme’s project and suggested that a joint contract agreement be concluded between SLSP Sambre & Biesme and the municipality of Farciennes.

15      On 19 January 2017, the board of directors of SLSP Sambre & Biesme agreed, first, on the draft framework agreement for joint contracts with the municipality of Farciennes and, second, on the special list of specifications for the appointment of a firm of experts to draw up the inventory and implement the management programme to address the asbestos problem. That list of specifications drawn up by Igretec was described as the first stage in implementing the ecodistrict project in Farciennes.

16      On 26 January 2017, the conseil communal (municipal council) of the municipality of Farciennes decided to approve that framework agreement with SLSP Sambre & Biesme.

17      Article 1 of that framework agreement, entitled ‘Object’, stipulates inter alia that the municipality of Farciennes and SLSP Sambre & Biesme are to establish, by that framework agreement, their respective rights and obligations in the design and construction of the ecodistrict in Farciennes, and that they are to undertake jointly the public procurement of services, works and project development.

18      In that regard, they designate the municipality of Farciennes as contracting authority with the task of acting on their joint behalf and taking on its own initiative any decision relating to the conclusion and award of contracts, provided that, before any decision is taken pursuant to the framework agreement and in accordance with Article 2 thereof, the parties consult each other within a steering committee composed of representatives of each of the two parties.

19      Article 5 of that framework agreement, entitled ‘Choice of project management assistance in connection with the implementation of contracts for services, works and project development and the urban regeneration project’, provides that ‘the parties agree that the Municipality of Farciennes will conclude with [Igretec] ... an agreement on project management assistance, legal advice and environmental services, within the framework of the in-house relationship which each of the parties has with that inter-municipal cooperative’.

20      On 9 February 2017, the board of directors of SLSP Sambre & Biesme decided, first, to approve the conclusion of the framework agreement on the conclusion of contracts in conjunction with the Municipality of Farciennes and, second, not to issue a public call for tenders for asbestos surveying services, whose list of specifications it had previously approved, in view of the in-house relationship between SLSP Sambre & Biesme and Igretec.

21      By decision of 25 February 2017, SWL, as the supervising authority, annulled those two decisions of the board of directors of SLSP Sambre & Biesme on the ground that the conditions for the in-house exception had not been satisfied as between SLSP Sambre & Biesme and Igretec.

22      SLSP Sambre & Biesme (Case C‐383/21) and the municipality of Farciennes (Case C‐384/21) each brought an action for annulment of SWL’s decision before the Conseil d’État (Council of State, Belgium) on 28 April and 2 May 2017 respectively. They claim that the conditions for such an exception, laid down in Article 12(3) of Directive 2014/24, were satisfied in the circumstances described and therefore it was permissible to make a direct award of the public contracts in question. In addition, the municipality of Farciennes (Case C‐384/21) claims that an award without a call for competition is also justified on the basis of Article 12(4) of that directive since there is cooperation between the contracting authorities for the purposes of that provision.

23      Since the law transposing that directive had not yet entered into force at the time of the facts at issue in the main proceedings, when the time limit laid down in Article 90 of Directive 2014/24 for the purposes of such transposition had already expired, the national court asks, first, whether, in the light of the judgment of 3 October 2019, *Irgita* (C‐285/18, EU:C:2019:829), the disputes pending before it must be resolved on the basis of Article 12(3) and (4) of that directive, while the parties to the main proceedings dispute, inter alia, whether the purpose of those provisions is merely to provide an option for Member States to exclude the award of certain public contracts between entities within the public sector from the scope of that directive.

24      Next, as regards the conditions which must be satisfied in order for a contracting authority exercising control over the legal person concerned jointly with other contracting authorities to able to make an in-house award, it asks how that contracting authority must participate in the bodies of the controlled entity and effectively contribute to its control, in particular by virtue of the requirement referred to in point (i) of the second subparagraph of Article 12(3) of the directive. In that regard, the referring court states that category C members, which include SLSP Sambre & Biesme, were in the position of being a very small minority, which did not allow them to contribute effectively to the control of Igretec.

25      In addition, noting the predominance of municipalities as category A members in the decision-making bodies, the referring court states that the position of category C members as a small minority de facto did not enable them to have a director to represent them on Igretec’s board of directors, while Igretec’s articles of association, in the version applicable to the disputes in the main proceedings, in no way guaranteed the presence of a director nominated by those members to represent them. Noting that those members did not in fact have any representative on the board of directors or the ‘permanent committee on consultancy and management’, the referring court has thus concluded that category C members did not participate in any way in the exercise of joint control over Igretec.

26      On the other hand, the referring court states that the applicants in the main proceedings argue that a councillor from the municipality of Farciennes sat on Igretec’s board of directors and was, at the same time, a director of SLSP Sambre & Biesme as the municipality of Farciennes was a shareholder in both Igretec and SLSP Sambre & Biesme.

27      The referring court states that it has not been shown, however, that that circumstance was provided for and guaranteed by law. Moreover, that person sat on Igretec’s board of directors in his capacity as a municipal councillor in Farciennes, without it being possible to conclude that he was, in that capacity, also deemed to represent the interests of SLSP Sambre & Biesme.

28      That said, in the light of the assessment *in concreto*, as asserted by the applicants in the main proceedings before the referring court, to determine whether a contracting authority exercises over the successful tenderer a control similar to that which it exercises over its own departments, the referring court asks whether a situation such as that set out in paragraphs 26 and 27 above means it is possible to conclude, as the applicants in the main proceedings maintain, that SLSP Sambre & Biesme participated in Igretec’s decision-making bodies and therefore exercised such control over that inter-municipal cooperative jointly with other contracting authorities through the municipality of Farciennes.

29      The referring court states, first, that, although the applicants in the main proceedings argue that the municipality of Farciennes is a shareholder in both SLSP Sambre & Biesme and Igretec and exercises over those two entities a control similar to that which it exercises over its own departments, they do not intend to rely on the possibility of a direct award of a public contract between two entities controlled by the same contracting authority. Second, the referring court expresses doubts as to whether, in any event, the conditions governing the exclusion of such awards from the scope of the rules of EU law on public contracts are satisfied since the municipality of Farciennes exercises its control jointly with other contracting authorities.

30      Lastly, the referring court also asks whether it is possible to award the public contract without a tendering procedure under Article 12(4) of Directive 2014/24 since the municipality of Farciennes relies, in the alternative, on the existence of cooperation between the contracting authorities within the meaning of that provision.

31      In that regard, the referring court has doubts as to whether the concept of ‘cooperation’ referred to in that provision can cover circumstances such as those in the main proceedings solely on the basis that the tasks of project management assistance and legal and environmental services to be entrusted to Igretec form part of the cooperation between SLSP Sambre & Biesme and the municipality of Farciennes with a view to carrying out a joint project for the creation of an ecodistrict in Farciennes, that an in-house relationship exists in any event between that municipality and Igretec, and that that municipality and SLSP Sambre & Biesme are members of Igretec in the sphere of activity covered by its objects, which are specifically concerned with the tasks which they wish to entrust to it.

32      In those circumstances, the Conseil d’État (Council of State) decided to stay the proceedings and to refer the following questions to the Court of Justice for a preliminary ruling:

In Case C‐383/21:

‘(1)      Must Article 12(3) of Directive [2014/24] be interpreted as having direct effect?

(2)      If the answer to the first question is in the affirmative, must Article 12(3) of [Directive 2014/24] be interpreted as meaning that the requirement for a contracting authority, in this case a public service housing company, to be represented on the decision-making bodies of the controlled legal person, in this case an inter-municipal cooperative society, is satisfied solely on the basis that a person who sits on the board of directors of that inter-municipal cooperative society in his or her capacity as a municipal councillor of another participating contracting authority, in this case a municipality, is, due to purely factual circumstances and without any legal guarantee of representation, also a director of the public service housing company, while the municipality is a (non-exclusive) shareholder in both the controlled entity (inter-municipal cooperative society) and the public service housing company?

(3)      If the answer to the first question is negative, must it be considered that a contracting authority, in this case a public service housing company, ‘participates’ in the decision-making bodies of the controlled legal person, in this case an inter-municipal cooperative society, solely on the basis that a person who sits on the board of directors of that inter-municipal cooperative society in his or her capacity as a municipal councillor of another participating contracting authority, in this case a municipality, is, due to purely factual circumstances and without any legal guarantee of representation, also a director of the public service housing company, while the municipality is a (non-exclusive) shareholder in both the controlled entity (inter-municipal cooperative society) and the public service housing company?’

In Case C‐384/21:

‘(1)      Must Article 12(3) of Directive [2014/24] be interpreted as having direct effect?

(2)      If the answer to the first question is in the affirmative, must Article 12(3) of [Directive 2014/24] be interpreted as meaning that the requirement for a contracting authority, in this case a public service housing company, to be represented on the decision-making bodies of the controlled legal person, in this case an inter-municipal cooperative society, is satisfied solely on the basis that a person who sits on the board of directors of that inter-municipal cooperative society in his or her capacity as a municipal councillor of another participating contracting authority, in this case a municipality, is, due to purely factual circumstances and without any legal guarantee of representation, also a director of the public service housing company, while the municipality is a (non-exclusive) shareholder in both the controlled entity (inter-municipal cooperative society) and the public service housing company?

(3)      If the answer to the first question is negative, must it be considered that a contracting authority, in this case a public service housing company, ‘participates’ in the decision-making bodies of the controlled legal person, in this case an inter-municipal cooperative society, solely on the basis that a person who sits on the board of directors of that inter-municipal cooperative society in his or her capacity as a municipal councillor of another participating contracting authority, in this case a municipality, is, due to purely factual circumstances and without any legal guarantee of representation, also a director of the public service housing company, while the municipality is a (non-exclusive) shareholder in both the controlled entity (inter-municipal cooperative society) and the public service housing company?

(4)      Must Article 12(4) of Directive [2014/24] be interpreted as having direct effect?

(5)      If the answer to [the fourth] question is in the affirmative, must Article 12(4) of [Directive 2014/24] be interpreted as meaning that it allows tasks of project management assistance and legal and environmental services to be entrusted, without a prior call for competition, to a contracting authority, in this case an inter-municipal cooperative society, where those tasks form part of a cooperation between two other contracting authorities, in this case a municipality and a public service housing company, where it is not disputed that the municipality exercises ‘joint in-house’ control over the inter-municipal cooperative society and where the municipality and the public service housing company are members of the inter-municipal cooperative society in the ‘consultancy and management and central purchasing’ sector of its object, which is specifically concerned with the tasks they wish to entrust to it, which tasks correspond to activities carried out on the market by consultancy and management firms specialising in the design, execution and implementation of projects?’

33      By decision of the President of the Court of 27 August 2021, Cases C‐383/21 and C‐384/21 were joined for the purposes of the written and oral procedures and of the judgment.

**Consideration of the questions referred**

*The first question in Case C*‐*383 /21 and the first and fourth questions in Case C*‐*384 /21*

34      By its first question in Case C‐383/21 and its first and fourth questions in Case C‐384/21, the referring court asks, in essence, whether Article 12(3) and (4) of Directive 2014/24 must be interpreted as having direct effect in disputes between legal persons governed by public law concerning the direct award of public contracts where the Member State concerned has failed to transpose that directive into national law within the time limit laid down.

35      It is settled case-law that, whenever the provisions of a directive appear, so far as their subject matter is concerned, to be unconditional and sufficiently precise, they may be relied on before the national courts by individuals against the Member State concerned where that state has failed to transpose the directive into national law within the time limit or has transposed it incorrectly (judgment of 14 January 2021, *RTS infra and Aannemingsbedrijf Norré-Behaegel*, C‐387/19, EU:C:2021:13, paragraph 44 and the case-law cited).

36      In accordance with the third paragraph of Article 288 TFEU, the binding nature of a directive, which constitutes the basis for the possibility of relying on it, exists only in relation to ‘each Member State to which it is addressed’. It follows, according to settled case-law, that a directive cannot of itself impose obligations on an individual and cannot therefore be relied on as such against such a person before a national court (judgment of 12 December 2013, *Portgás*, C‐425/12, EU:C:2013:829, paragraph 22 and the case-law cited).

37      However, it should be borne in mind that where a person is able to rely on a directive not as against an individual but as against the State he or she may do so regardless of the capacity in which the latter is acting. It is necessary to prevent the State from taking advantage of its own failure to comply with EU law (see, to that effect, judgment of 7 July 2016, *Ambisig*, C‐46/15, EU:C:2016:530, paragraph 21 and the case-law cited).

38      Thus, provisions of a directive that are unconditional and sufficiently precise may be relied upon by individuals, not only against a Member State and all the organs of its administration, but also against organisations or bodies, even ones governed by private law, which are subject to the authority or control of a public body, or to which a Member State has delegated the performance of a task in the public interest and which possess for that purpose special powers beyond those which result from the normal rules applicable to relations between individuals (judgment of 30 April 2020, *Blue Air – Airline Management Solutions*, C‐584/18, EU:C:2020:324, paragraph 72 and the case-law cited).

39      Consequently, since the obligation on a Member State to take all the measures necessary to achieve the result prescribed by a directive is a binding obligation imposed by the third paragraph of Article 288 TFEU and by the directive itself, compliance with which is a matter for the entities referred to in the preceding paragraph, disputes between those entities involve parties required to apply the directive concerned and against whom, as a consequence, unconditional and sufficiently precise provisions of that directive may be relied on. It follows that those provisions of the directive can be relied on in such disputes whether those entities are complying with their obligations or exercising their rights (see, to that effect, judgment of 12 December 2013, *Portgás*, C‐425/12, EU:C:2013:829, paragraphs 34, 35 and 38).

40      In the present case, as is apparent from the references for a preliminary ruling, the parties to the disputes in the main proceedings are legal persons governed by public law which are required to comply with Directive 2014/24. It follows that, in those disputes, although that directive was not transposed into the national law within the time limit, contracting authorities such as SLSP Sambre & Biesme and the municipality of Farciennes are able to rely on the provisions of that directive in so far as those provisions are unconditional and sufficiently precise.

41      The Court has stated that a provision of EU law is, first, unconditional where it sets forth an obligation which is not qualified by any condition, or subject, in its implementation or effects, to the taking of any measure either by the institutions of the European Union or by the Member States and, second, sufficiently precise to be relied on by an individual and applied by a court where it sets out an obligation in unequivocal terms (judgment of 14 January 2021, *RTS infra and Aannemingsbedrijf Norré-Behaegel*, C‐387/19, EU:C:2021:13, paragraph 46 and the case-law cited). That is the case with Article 12(3) and (4) of Directive 2014/24.

42      As regards, in the first place, the unconditional nature of those provisions, it should be observed, as a preliminary point, that, as was explained in paragraph 23 above, the referring court is uncertain, in the light of the judgment in *Irgita* (C‐285/18 EU:C:2019:829), as to the scope of those provisions, while the parties in the main proceedings hold opposing views as to whether, inter alia, the purpose of those provisions is merely to provide an option for Member States to exclude the award of certain public contracts between entities within the public sector from the scope of that directive. Depending on the circumstances, contracting authorities are unable to rely on such exclusions where, on account of the failure to implement that directive, the Member States concerned do not exercise such an option.

43      In that regard, it should be observed that Article 12 of Directive 2014/24, in accordance with the heading of the section of which it forms part, provides, in essence, that public contracts between entities within the public sector which satisfy the criteria laid down therein are excluded from the scope of that directive, criteria which a contracting authority must therefore comply with if it wishes to award such a public contract directly. In particular, paragraphs 3 and 4 of Article 12 concern, first, public contracts awarded by a contracting authority to a legal person over which it exercises jointly with other contracting authorities a control similar to that which it exercises over its own departments and, second public contracts concluded exclusively between contracting authorities in order to establish or implement a cooperation between them with the aim of ensuring that the public services they have to perform are provided with a view to achieving objectives they have in common.

44      Thus, in Article 12 thereof, Directive 2014/24 codified and made clear the case-law developed by the Court on direct awards, which demonstrates that the EU legislature intended that direct award regime to be linked to that directive (see, to that effect, judgment of 8 May 2019, *Rhenus Veniro*, C‐253/18, EU:C:2019:386, paragraph 27 and the case-law cited).

45      As the Court has found, Article 12 of that directive does not, consequently, thereby deprive the Member States of the freedom to give preference to one means of providing services, performing work or obtaining supplies to the detriment of others. That freedom implies a choice which is at a stage prior to that of procurement and which does not, therefore, fall within the scope of Directive 2014/24 (see, to that effect, judgment of 3 October 2019, *Irgita*, C‐285/18, EU:C:2019:829, paragraph 44; orders of 6 February 2020, *Pia Opera Croce Verde Padova*, C‐11/19, EU:C:2020:88, paragraphs 41 and 47, and of 6 February 2020, *Rieco*, C‐89/19 to C‐91/19, EU:C:2020:87, paragraphs 33, 39 and 40).

46      Furthermore, recital 5 and the second paragraph of recital 31 of Directive 2014/24 reflect the intention of the EU legislature to recognise the freedom of Member States as to the choice of the means of providing services whereby the contracting authorities may meet their needs (see, to that effect, judgment of 3 October 2019, *Irgita*, C‐285/18, EU:C:2019:829, paragraph 45; orders of 6 February 2020, *Pia Opera Croce Verde Padova*, C‐11/19, EU:C:2020:88, paragraphs 42 and 47, and of 6 February 2020, *Rieco*, C‐89/19 to C‐91/19, EU:C:2020:87, paragraphs 34, 39 and 40).

47      First, recital 5 of that directive states that nothing therein obliges Member States to contract out or externalise the provision of services that they wish to provide themselves or to organise by means other than public contracts within the meaning of that directive. Second, the second paragraph of recital 31 states that while the sole fact that both parties to an agreement are themselves public authorities does not as such rule out the application of procurement rules, the application of public procurement rules should not interfere with the freedom of public authorities to perform the public service tasks conferred on them by using their own resources, which includes the possibility of cooperation with other public authorities.

48      Thus, the Court has thereby inferred that just as Directive 2014/24 does not require the Member States to oblige the contracting authorities to have recourse to a public procurement procedure, it cannot compel them to have recourse to the transactions referred to in Article 12 of that directive where the conditions laid down therein are satisfied (see, to that effect, judgment of 3 October 2019, *Irgita*, C‐285/18, EU:C:2019:829, paragraph 46; orders of 6 February 2020, *Pia Opera Croce Verde Padova*, C‐11/19, EU:C:2020:88, paragraphs 43 and 47, and of 6 February 2020, *Rieco*, C‐89/19 to C‐91/19, EU:C:2020:87, paragraphs 35, 39 and 40).

49      It follows from the foregoing that the Member States indeed remain free to lay down, in national legislation, conditions for the use by entities within the public sector of public contracts, such as those referred to in Article 12(3) and (4) of Directive 2014/24. However, the fact remains that where, under national law, contracting authorities are permitted to rely on one of the exclusions from the scope of that directive laid down in those provisions, public contracts which satisfy the conditions laid down therein may be awarded directly, without that being subject to the exercise by the Member State concerned of an option to that effect. Consequently, in so far as the provisions of that article lay down, with regard to those contracting authorities, requirements for the exclusion from the application of the rules laid down by that directive which are not subject, in their implementation or effect, to the taking of any measure, they are unconditional within the meaning of the case-law referred to in paragraph 41 above.

50      As regards, in the second place, the sufficiently precise nature of those provisions, it is sufficient to note that, as was recalled in paragraph 44 above, Article 12 of Directive 2014/24 codifies and makes clear the case-law developed by the Court on direct awards by setting out in unequivocal terms, inter alia in paragraphs 3 and 4, the requirements which the implementation of that direct award regime by contracting authorities must meet, in order, as is apparent from recital 31 of that directive, to overcome the different interpretations of that case-law.

51      It must therefore be concluded that Article 12(3) and (4) of that directive has the required quality of being unconditional and sufficiently precise so as to have direct effect in disputes such as those in the main proceedings between legal persons governed by public law.

52      In the light of the foregoing considerations, the answer to the first question in Case C‐383/21 and the first and fourth questions in Case C‐384/21 is that Article 12(3) and (4) of Directive 2014/24 must be interpreted as having direct effect in disputes between legal persons governed by public law concerning the direct award of public contracts where the Member State concerned has failed to transpose that directive into national law within the time limit laid down.

*The second question in Cases C*‐*383 /21 and C*‐*384 /21*

53      By its second question in Cases C‐383/21 and C‐384/21, the referring court asks, in essence, whether point (i) of the second subparagraph of Article 12(3) of Directive 2014/24 must be interpreted as meaning that, for the purposes of establishing that a contracting authority exercises jointly with other contracting authorities a control over the contracting legal person similar to that which they exercise over their own departments, the requirement laid down in that provision, that a contracting authority be represented on the decision-making bodies of the controlled legal person, is fulfilled solely on the basis that the representative of another contracting authority, who is also a member of the board of directors of the first contracting authority, sits on the board of directors of that legal person.

54      In accordance with settled case-law, when interpreting a provision of EU law, account must be taken not only of its wording but also of its context and the objectives pursued by the rules of which it forms part. The origins of a provision of EU law may also provide information relevant to its interpretation (judgment of 9 June 2022, *IMPERIAL TOBACCO BULGARIA*, C‐55/21, EU:C:2022:459, paragraph 44 and the case-law cited).

55      In the first place, as regards the wording of point (i) of the second subparagraph of Article 12(3) of Directive 2014/24, it should be observed that that provision concerns one of the criteria which must be satisfied for the purposes of establishing, pursuant to point (a) of the first subparagraph of Article 12(3) of that directive, that a contracting authority exercises jointly with other contracting authorities a control over the legal person concerned which is similar to that which they exercise over their own departments.

56      In this case, point (i) of the second subparagraph of Article 12(3) of that directive states that the decision-making bodies of the controlled legal person must be composed of representatives of all participating contracting authorities and individual representatives may represent several or all of the participating contracting authorities.

57      Thus, it follows from the wording of that provision that it requires that a contracting authority exercising joint control over a legal person should have a member acting as a representative of that authority in the decision-making bodies of that legal person, who may, in some circumstances, also represent other contracting authorities.

58      In the second place, that interpretation is supported by the context of that provision.

59      First, it should be observed that the second subparagraph of Article 12(1) of Directive 2014/24, which relates to the situation where a single contracting authority exercises over the legal person to whom a public contract is awarded a control similar to that exercised over its own departments, provides that such control may also be exercised by another legal person, which is itself controlled in the same way by the contracting authority.

60      Furthermore, paragraph 2 of Article 12 provides, inter alia, that paragraph 1 thereof also applies where a controlled legal person which is itself a contracting authority awards a contract to its controlling contracting authority, or to another legal person controlled by the same contracting authority.

61      By contrast, as regards Article 12(3) of that directive, it provides that a contracting authority, which does not exercise over a legal person control within the meaning of paragraph 1 of Article 12, may nevertheless award a public contract to that legal person without applying that directive where that contracting authority exercises jointly with other contracting authorities a control over the legal person concerned. However, it should be pointed out that, unlike paragraphs 1 and 2 of that article, that provision does not provide that the conditions relating to control of the contracting authority over the legal person to whom the contract is awarded may be satisfied indirectly.

62      In particular, the representation requirement laid down in point (i) of the second subparagraph of Article 12(3) of Directive 2014/24 requires that the participation of a contracting authority in the decision-making bodies of the legal person controlled jointly with other contracting authorities be effected through a representative of that contracting authority itself. That requirement cannot therefore be satisfied through a member of those bodies who sits on it merely as a representative of another contracting authority.

63      Secondly, point (ii) of the second subparagraph of Article 12(3) of that directive provides, as one of the conditions to be fulfilled for the purposes of establishing that the contracting authorities exercise joint control over a legal person, within the meaning of point (a) of the first subparagraph of Article 12(3) of that directive, that those contracting authorities must be able to jointly exercise decisive influence over the strategic objectives pursued by the controlled legal person and the significant decisions which it may take.

64      In the light of the scope of the condition set out in point (ii) of the second subparagraph of Article 12(3) of Directive 2014/24, which relates to the determination of the content of those objectives and decisions, the criterion set out in point (i) of the second subparagraph of Article 12(3) of that directive must therefore be understood as seeking to lay down a separate requirement relating to the formal conditions for the participation of those contracting authorities in the decision-making bodies of the legal person concerned.

65      Those findings are confirmed by the origins of the second subparagraph of Article 12(3) of that directive.

66      As is apparent from recital 31 of that directive, whilst noting that there is considerable legal uncertainty as to how far contracts concluded between entities in the public sector should be covered by public procurement rules and that it is therefore necessary to provide clarification in this regard, the EU legislature considered that such clarification should be guided by the principles set out in the relevant case-law of the Court of Justice and, therefore did not intend to call that case-law into question (see, to that effect, judgment of 28 May 2020, *Informatikgesellschaft für Software-Entwicklung*, C‐796/18, EU:C:2020:395, paragraph 66).

67      In that connection, it is clear from that case-law that the question of whether the contracting authority exercises over the legal person concerned a control similar to that which it exercises over its own departments is to be determined in the light of all the legislative provisions and relevant circumstances. Therefore, the factors to be taken into account do not only cover factual circumstances, but also include the legislation applicable and, inter alia, the control mechanisms provided by the articles of association of that legal person (see, to that effect, judgment of 10 September 2009, *Sea*, C‐573/07, EU:C:2009:532, paragraphs 65 and 66 and the case-law cited).

68      In the light of the clarifications in the Court’s case-law concerning the conditions under which contracts concluded between entities within the public sector do not fall within the scope of the rules on the award of public contracts, the EU legislature sought to strengthen the requirement relating to the representation condition.

69      Indeed, it should be observed that prior to the adoption of Directive 2014/24, the fact that the decision-making bodies of the legal person concerned are composed of representatives of contracting authorities exercising joint control over it was one of the factors taken into account for the purposes of establishing whether the contracting authority concerned had the possibility of exercising decisive influence over both the strategic objectives and the significant decisions of that person (see, inter alia, judgments of 13 November 2008, *Coditel Brabant*, C‐324/07, EU:C:2008:621, paragraphs 28, 29, 33 and 34 and the case-law cited, and of 10 September 2009, *Sea*, C‐573/07, EU:C:2009:532, paragraphs 65, 66 and 86 and the case-law cited).

70      However, by referring to them in separate provisions, namely points (i) and (ii) of the second subparagraph of Article 12(3) of that directive, the EU legislature sought to make the conditions for the representation of contracting authorities exercising joint control over the contracting legal person a requirement which is independent of that relating to the possibility of exercising such decisive influence.

71      In the third place, the interpretation to the effect that that provision requires that the participation of a contracting authority exercising such joint control in the decision-making bodies of the controlled legal person be effected through a member acting as a representative of that contracting authority itself, with that member being able, in some circumstances, also to represent other contracting authorities, is supported by the objective pursued by Article 12(3) of that directive.

72      As was observed in paragraphs 46 and 48 above, the exclusion from the scope of Directive 2014/24 of public contracts satisfying the criteria laid down, inter alia, in Article 12(3) thereof follows from the recognition, as is apparent from recital 5 and the second subparagraph of recital 31 of that directive, of the freedom of Member States to provide that public authorities may provide certain services themselves and perform the public service tasks conferred on them by using their own resources.

73      However, it cannot be considered that a contracting authority uses its own resources and acts by itself where it is unable to intervene in the decision-making bodies of the legal person to which the public contract has been awarded through a representative who acts on behalf of that contracting authority itself and, as the case may be, on behalf of other contracting authorities, and that consequently the expression of its interests in those decision-making bodies is subject to those interests being common to those which the other contracting authorities assert therein, through their own representatives in those bodies.

74      In the present case, subject to verification by the referring court, it is apparent from the material supplied to the Court that the requirement laid down in point (i) of the second subparagraph of Article 12(3) of that directive, that the participation of a contracting authority exercising joint control over a legal person in the decision-making bodies of that legal person must be effected through a member acting as a representative of that contracting authority itself, with that member being able, in some circumstances, also to represent other contracting authorities, does not appear to be satisfied in the circumstances at issue in the main proceedings. First, category C members, which include SLSP Sambre & Biesme, had no representative on Igretec’s board of directors and, second, although he also sat on the board of directors of SLSP Sambre & Biesme, the municipal councillor sat on Igretec’s board of directors only as a representative of the municipality of Farciennes, a category A member.

75      In the light of the foregoing, the answer to the second question in Cases C‐383/21 and C‐384/21 is that point (i) of the second subparagraph of Article 12(3) of Directive 2014/24 must be interpreted as meaning that, for the purposes of establishing that a contracting authority exercises jointly with other contracting authorities a control over the contracting legal person similar to that which they exercise over their own departments, the requirement laid down in that provision, that a contracting authority be represented on the decision-making bodies of the controlled legal person, is not satisfied solely on the basis that the representative of another contracting authority, who is also a member of the board of directors of the first contracting authority, sits on the board of directors of that legal person.

*The third question in Cases C*‐*383 /21 and C*‐*384 /21*

76      In view of the answer to the first question in Cases C‐383/21 and C‐384/21, there is no need to answer the third question in those cases.

*The fifth question in Case C*‐*384 /21*

77      By its fifth question in Case C‐384/21, the referring court asks, in essence, whether Article 12(4) of Directive 2014/24 must be interpreted as meaning that a public contract conferring on a contracting authority public service tasks which form part of a cooperation between other contracting authorities is excluded from the scope of that directive.

78      As a preliminary point, it must be observed that paragraphs 1 to 4 of Article 12 of that directive relate to separate cases of what is excluded from public procurement rules, each of which is subject to its own conditions.

79      Under Article 12(4)(a), a contract concluded exclusively between two or more contracting authorities is to fall outside the scope of Directive 2014/24 where that contract establishes or implements a cooperation between the participating contracting authorities with the aim of ensuring that public services they have to perform are provided with a view to achieving objectives they have in common. Furthermore, points (b) and (c) of that paragraph require that the implementation of that cooperation be governed solely by considerations relating to the public interest and that the participating contracting authorities perform on the open market less than 20% of the activities concerned by the cooperation.

80      It follows that circumstances such as the fact that there is an in-house relationship between some of the contracting authorities or that the contracting authorities awarding the public contract concerned are members of the contracting authority entrusted, by means of the public contract concerned, with the performance of certain tasks cannot, in themselves, be taken into account for the purposes of assessing whether Article 12(4) of Directive 2014/24 covers a situation where the performance of a contracting authority’s tasks forms part of a cooperation between other contracting authorities.

81      On the other hand, it should be observed that the wording of that directive confers on the concept of ‘cooperation’ a decisive role in the exclusion which it lays down. In that regard, the requirement of effective cooperation is apparent also from the clarification set out in the third paragraph of recital 33 of that directive that cooperation must be ‘based on a cooperative concept’. Such wording, which is ostensibly a tautology, must be interpreted as referring to the requirement that the cooperation thus established or implemented be effective (see, to that effect, judgment of 4 June 2020, *Remondis*, C‐429/19, EU:C:2020:436, paragraphs 26 and 28).

82      Therefore, the public contract concerned must be discernible as the culmination of a process of cooperation between the contracting authorities party to the agreement. The development of cooperation between entities belonging to the public sector has an inherently collaborative dimension, which is not present in a public procurement procedure falling within the scope of the rules laid down by that directive (see, to that effect, judgment of 4 June 2020, *Remondis*, C‐429/19, EU:C:2020:436, paragraph 32).

83      As the Advocate General observed in point 60 of his Opinion, such a collaborative dimension requires that, in order to fall within the scope of Article 12(4) of Directive 2014/24, the collaboration in question must be intended to achieve objectives common to all the contracting authorities.

84      However, there is no such objective common to all the contracting authorities where, by performing its tasks under the public contract concerned, one of the contracting authorities does not seek to achieve objectives which it shares with the other contracting authorities, but merely contributes to the attainment of objectives which only those other contracting authorities have in common.

85      In those circumstances, the sole purpose of the public contract concerned is that of acquiring a service in return for payment of a fee and therefore it is not covered by the exclusion laid down in Article 12(4) of that directive (see, to that effect, judgment of 4 June 2020, *Remondis*, C‐429/19, EU:C:2020:436, paragraphs 36 to 38).

86      Subject to verification by the referring court, it is apparent from the material supplied to the Court that, in the circumstances at issue in the main proceedings, Igretec’s participation in a public contract for the implementation of the ecodistrict project in Farciennes cannot be covered by that exclusion. As the Advocate General observed in points 69 and 71 of his Opinion, even though Igretec’s performance of its tasks is part of the cooperation between SLSP Sambre & Biesme and the municipality of Farciennes with a view to assisting them in carrying out their joint project to create an ecodistrict in Farciennes, it nevertheless remains the case that such a project does not in itself constitute an objective pursued by Igretec.

87      In the light of the foregoing considerations, the answer to the fifth question in Case C‐384/21 is that Article 12(4) of Directive 2014/24 must be interpreted as meaning that a public contract conferring on a contracting authority public service tasks which form part of a cooperation between other contracting authorities is not excluded from the scope of that directive where, in performing those tasks, the contracting authority to which those tasks have been entrusted does not seek to achieve objectives which it shares with the other contracting authorities, but merely contributes to the attainment of objectives which only those other contracting authorities have in common.

**Costs**

88      Since these proceedings are, for the parties to the main proceedings, a step in the action pending before the referring 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 (Fifth Chamber) hereby rules:

1.      **Article 12(3) and (4) 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 having direct effect in disputes between legal persons governed by public law concerning the direct award of public contracts where the Member State concerned has failed to transpose that directive into national law within the time limit laid down.**

2.      **Point (i) of the second subparagraph of Article 12(3) of Directive 2014/24**

**must be interpreted as meaning that, for the purposes of establishing that a contracting authority exercises jointly with other contracting authorities a control over the contracting legal person similar to that which they exercise over their own departments, the requirement laid down in that provision that, a contracting authority be represented on the decision-making bodies of the controlled legal person is not satisfied solely on the basis that the representative of another contracting authority, who is also a member of the board of directors of the first contracting authority, sits on the board of directors of that legal person.**

3.      **Article 12(4) of Directive 2014/24**

**must be interpreted as meaning that a public contract conferring on a contracting authority public service tasks which form part of a cooperation between other contracting authorities is not excluded from the scope of that directive where, in performing those tasks, the contracting authority to which those tasks have been entrusted does not seek to achieve objectives which it shares with the other contracting authorities, but merely contributes to the attainment of objectives which only those other contracting authorities have in common.**

[Signatures]

---

*      Language of the case: French.