Judgment — ECLI:EU:C:2017:549
Date: 2017-07-13
Language of the case: Slovak
Court formation: Second Chamber
Subject matter: Right of establishment;Approximation of laws;Freedom to provide services
Procedure: Reference for a preliminary ruling;Reference for a preliminary ruling - inadmissible
Origin: Slovakia

Summary of the observations of the parties A – The first question 26. The Slovak Government argues that the statement made by a bank that the tenderers had to provide included a guarantee of more than EUR 3 000 000 for the whole period of performance of the contract (48 months). The Slovak Government states that, although the wording of Article 47(1) and (4) of Directive 2004/18 does not provide for such a condition, the scheme and aim of the directive support the proposition that the tenderer is required to have available the necessary funds during the period of performance of the contract. That follows, by analogy, from Article 47(2) of that directive, which permits tenderers to rely on the capacities of other entities for performance of the contract. 27. The Slovak Government submits that it is contrary to the principle of effectiveness of the tendering procedure for a tenderer to participate in that procedure if the contracting authority may not require proof of genuine economic and financial standing, in order for performance of the contract to be guaranteed. 28. The Commission contends that Article 47 of Directive 2004/18 relates to the economic and financial standing of the tenderer at the time of award of the contract. However, the tenderer’s economic and financial standing during performance of the contract is governed by Article 26 of that directive, concerning conditions for performance of the contract. At all events, in the light of the wording of the question, the Commission suggests that the condition imposed on the tenderer should be examined under both Article 26 and Article 47 of Directive 2004/18. 29. According to the Commission, Article 26 of Directive 2004/18 provides that the conditions for performance must appear in the contract notice, a requirement fulfilled in this case, and must be compatible with EU law. Citing the case-law of the Court, the Commission argues that, as Directive 2004/18 does not exhaustively govern the special conditions for performance, those conditions may be assessed in accordance with primary EU law. 30. Having considered the difficulty in the light of Article 47 of Directive 2004/18, the Commission, after accepting that the contracting authority has broad discretion, points out that the difficulty lies in the method of providing evidence of economic and financial standing. The Commission questions whether the contract notice expressed clearly the necessity of having available a loan assigned to performance of the contract (which would afford the contracting authority certainty that the financial resources provided by the bank would actually be used for performance of the contract). In its opinion, given that the conditions for participation must be set out so clearly and precisely in the contract notice, a tenderer may not be excluded for failing to provide evidence of the grant of credit assigned to performance of the contract, unless such a requirement was precisely and unequivocally indicated in the contract notice. B – The second question 31. The Slovak Government states that the group composed of Ingsteel and Metrostav lodged the documents substantiating its economic and financial standing on the date for submission of tenders, but did not prove that it would have funds during the period of performance of the contract, from which it followed that it did not satisfy the conditions of the tender. 32. As regards the question whether a sworn statement is acceptable as a means of proving economic and financial standing in accordance with Article 47(5) of Directive 2004/18, the Slovak Government denies that there were circumstances justifying this, for which purpose it relies on an examination of Slovak banking practice in relation to securing loans allocated for a specific purpose. 33. The Commission cites as sufficient reason for the application of Article 47(5) of Directive 2004/18 the existence of objective facts that cannot be attributed to the tenderer and prevent it from submitting the documents required by the contracting authority to guarantee its economic and financial standing. C – The third question 34. The Slovak Government takes as its starting-point the fact Directive 89/665 does not provide for review proceedings against decisions on the award of public contracts to have suspensive effect and establishes mechanisms for annulment of the decision to award or formally execute the contract and for the award of damages. 35. The Commission submits that, by the third question, the referring court asks whether performance of the contract, even though the decision to exclude a tenderer has been challenged, is sufficient reason to stay the court proceedings. The Commission contends that Directive 89/665 does not provide a sufficient basis for such a stay. V – Assessment A – The first question 36. Although a dividing line, if there is one, cannot easily be drawn between the application, on the one hand, and the interpretation, on the other, of the legal provisions, it is for the referring court to apply its national law (including, in this case, the clauses of the invitation to tender) and for the Court of Justice to provide the national court with an interpretation of Article 47(1)(a) and (4) of Directive 2004/18. It is not the task of the Court of Justice but of the national court to determine whether the documents submitted by Ingsteel and Metrostav as evidence of their economic and financial standing complied with the contract notice. 37. I make that point because, in the first question, the referring court states that the national contracting authority took the view that the tender submitted by Ingsteel and Metrostav did not satisfy one of the criteria in the contract notice. The issue of whether or not that decision was legally correct is a matter which only the national courts can determine. By interpreting Directive 2004/18, the Court of Justice can provide the national courts with certain guidance as to interpretation, but cannot replace those courts for the purposes of carrying out their own tasks, which include that of analysing in detail the documents submitted by the excluded tenderer and establishing whether those documents satisfy the specific terms of the invitation to tender. 38. In accordance with Articles 44 and 47 of Directive 2004/18, in order to verify the suitability of tenderers, they may be asked for minimum levels of economic and financial standing, which they must prove either by means of the references stipulated in the contract notice (Article 47(1) and (4)) or by means of such other documents as the contracting authority considers appropriate (Article 47(5)). 39. In accordance with the Court’s settled case-law, Article 47 of Directive 2004/18 ‘leaves a fair degree of freedom to the contracting authorities’, for, unlike Article 48, it ‘expressly authorises contracting authorities to choose the probative references which must be produced by candidates or tenderers to furnish proof of their economic and financial standing. As Article 44(2) of Directive 2004/18 refers to Article 47, the same freedom of choice exists as regards the minimum levels of economic and financial standing’. (9) 40. Clause III.2.2 of the contract notice required, as evidence of a tenderer’s economic and financial standing, the statement made by a bank concerning the grant of credit for a minimum amount of EUR 3 000 000 to state that that credit would remain effective ‘for the period of performance of the contract (48 months)’. 41. There is no dispute between the parties regarding the necessary level of economic and financial standing (which is reflected in the amount of the bank credit) or regarding the requirement that it should be proved by means of a document issued by a financial institution. Rather, the dispute concerns the temporal scope of the bank loan required in the contract notice: the credit was to remain available ‘for the period of performance of the contract’, that is, for the 48 months during which the contract was to be performed. Does that specific requirement infringe Articles 44 and 47 of Directive 2004/18? For the reasons I shall set out below, I think not. 42. As I have already observed, the Commission distinguishes the rules laid down in Article 26 from those laid down in Article 47 of Directive 2004/18: the latter is concerned with proof of the economic and financial standing of the tenderer at the time the contract is awarded, whereas Article 26 is appropriate for stipulating the conditions relating to the period of its performance. 43. I do not share that view. Article 26 of Directive 2004/18 focuses on certain special conditions for performance of the contract and applies, in particular, to social and environmental objectives. The wording of recital 33 in the preamble to the directive (10) is illuminating when it suggests that conditions for performance of the contract ‘may, in particular, be intended to favour on-site vocational training, the employment of people experiencing particular difficulty in achieving integration, the fight against unemployment or the protection of the environment.’ 44. However, in requiring certain minimum levels of economic and financial standing, the presumption in Articles 44 and 47 of Directive 2004/18 is that the proof of that standing must refer to the period of performance of the contract. It would not be reasonable to require economic and financial standing only at the time of award of the contract and for the contracting authority not to have the right to request guarantees that the future successful contractor will retain its economic and financial standing during the period of performance of the contract. 45. In my view, it is consistent with that interpretation for Article 47(4) of Directive 2004/18 to permit, as an expression of the broad discretion granted to the contracting authority, the addition to the means of furnishing proof provided for in Article 47(1) of ‘which other references’, and for Article 47(2) to authorise a tenderer to ‘rely on the capacities of other entities’, if it proves to the contracting authority that, with their assistance, it will have the resources to carry out its undertaking. 46. The case-law of the Court provides valuable information about the aim of that legislation. While Directive 92/50/EEC was in force, (11) the judgment in Holst Italia (12) stated that ‘the contracting authority is required to verify the suitability of the service providers in accordance with the criteria laid down. That verification is intended, in particular, to enable the contracting authority to ensure that the successful tenderer will indeed be able to use whatever resources it relies on throughout the period covered by the contract.’ That judgment went on to state, in relation to resources resulting from links to other entities that, ‘in order to prove its financial, economic and technical standing with a view to being admitted to participate in a tendering procedure, … it must establish that it actually has available to it the resources of those entities or undertakings which it does not itself own and which are necessary for the performance of the contract’. (13) 47. That finding that economic and financial standing must be assessed as an indicator of suitability for correct performance of the contract remains present in the case-law on the interpretation of Directive 2004/18. In the judgment of 18 October 2012, Édukövízig and Hochtief Solutions, (14) the Court observed that the aspects chosen by the contracting authority (in that case, aspects of the balance sheets of the undertakings) ‘to establish a minimum level of economic and financial standing must be objectively such as to provide information on such standing of an economic operator and … the threshold thus fixed must be adapted to the size of the contract concerned in that it constitutes objectively a positive indication of the existence of a sufficient economic and financial basis for the performance of that contract’. (15) 48. Lastly, in other cases in which the right for tenderers to rely upon the capacities of third parties was analysed, the Court made that possibility conditional on those tenderers proving to the contracting authority that they would have at their disposal the resources necessary for performance of the contract. (16) When financial or economic resources are concerned, it is reasonable that these should not be ephemeral but should last until the contractual obligations have been performed. 49. To my mind, Articles 44 and 47 of Directive 2004/18, while enabling contracting authorities to require of tenderers a minimum level of economic and financial standing, also authorise those authorities to require, in the relevant contract notice, the provision of certain evidence establishing a sufficient economic and financial basis for the performance of the contract throughout the period of performance provided for. As I have already stated, the contracting authorities have broad discretion when it comes to giving concrete expression to that requirement. 50. Relying upon that freedom to formulate the conditions governing economic and financial standing and the means of furnishing proof of that standing, I believe that, in this case, the contract awarder was entitled to request the banking documents in the terms set out in clause III.2.2 of the invitation to tender, because: – The amount of credit of up to EUR 3 000 000 was related and proportionate to the subject-matter of the contract (the overall value of which came to more than EUR 25 000 000), as stipulated in Article 44(2) of Directive 2004/18. – The period to be covered by that guarantee of economic and financial standing, backed by a bank, was the same as the period of performance of the contract, which, I repeat, is consistent (and reasonable) in the light of the above considerations. 51. Those propositions having been set down, it is for the national court to establish whether, specifically, the documentary evidence furnished by Ingsteel and Metrostav satisfied the terms of the invitation to tender relating to their economic and financial capacity, including the term relating to the temporal scope of the bank credit and the assigning of that credit for performance of the contract throughout the period necessary for the contract to be performed. B – The second question 52. Article 47(5) of Directive 2004/18 states that ‘[i]f, for any valid reason, the economic operator is unable to provide the references requested by the contracting authority, he may prove his economic and financial standing by any other document which the contracting authority considers appropriate.’ 53. The application of that provision to the instant case would make it necessary to establish that Ingsteel and Metrostav were not in a position to accept the ‘normal’ conditions which the contracting authority had stipulated for providing proof of their economic and financial standing. That would be the case if, in Slovakia, a tenderer was unable to obtain from a financial institution credit linked to performance of the contract in accordance with the requirements of clause III.2.2 of the contract notice. 54. In those circumstances, the referring court asks whether a sworn statement by the tenderer stating that, if it were awarded the works contract, it would have available in its account a minimum amount of EUR 3 000 000, corresponding to the amount of credit required, both when the contract was concluded with the contract awarder and throughout the period of performance of the contract, is valid. 55. Application of Article 47(5) of the directive means, first, that the economic operator is unable to obtain the references requested by the contracting authority. Second, it means that that inability is due to a ‘valid reason’. Only if both criteria are satisfied can recourse be had to other means of proving economic and financial standing. 56. In the instant case, therefore, the ‘objective’ impossibility (17) of obtaining from a bank credit assigned to performance of the contract, throughout the period of performance of the contract, would have to be established. This is purely a finding of fact that must be made by the national court. That court must examine whether banking practice in Slovakia precludes undertakings bidding for contracts, like Ingsteel and Metrostav, from obtaining a statement made by a bank in the terms set out in the contract documents. (18) 57. If the solution reached by the referring court is that in that country such an undertaking by a bank can be obtained, the argument in support of the application of Article 47(5) of Directive 2004/18 would simply not exist. 58. If, on the other hand, such an undertaking by a bank cannot be obtained, it will be possible to move on to the assessment of the alternative evidence of its economic and financial standing furnished by the tenderer. However, inability to provide the references required in the contract documents must be examined from an objective point of view: the mere fact that, owing to particular circumstances characterised specifically by a lack of economic resources, the tenderers could not obtain credit from a bank in accordance with the terms of the contract documents will not be a ‘valid reason’. 59. According to the order for reference, the tenderer provided, as an alternative reference, the sworn statement to which I referred above. The validity of that self-declaration of economic and financial standing must be examined, first, by the contracting authority, for it is that authority that, under Article 47(5), in fine, of Directive 2004/18, has the power to examine whether the document is ‘appropriate’ for that task. 60. The decision not to accept that document may, as is logical, be challenged before the national court which, in turn, must examine the grounds and the reasoning for the decision when determining whether the contracting authority exceeded the discretion granted to it by Article 47(5), in fine, to ‘[consider] appropriate’ the alternative proof submitted by the tenderer. Again, the Court may not replace the national court for the purpose of making that decision, which is closely connected to factual elements, or for the purpose of determining whether the sworn statement of the tenderer is, in a specific situation, a sufficient economic and financial guarantee for performance of the contract. C – The third question 61. I agree with the Slovak Government that there is a certain lack of clarity in the third question referred by the Najvyšší súd (Supreme Court), in terms both of the facts it describes and of its content. 62. As regards the facts, the referring court transcribes, first, the view of the Regulatory Authority to the effect that the situation was ‘irreversible, and cannot be changed even in the event of a decision reviewing the award of the contract by the Board of the regulatory authority’ because performance of the contracts was already under way. (19) Second, the order accepts, as a premiss for the question referred for a preliminary ruling, the hypothesis that ‘the object of the initial administrative action, that is to say, taking part in the public procurement contract, has ceased to exist, and the tendering procedure cannot be relaunched because the contract has been performed by the successful tenderer.’ 63. Following that approach, the referring court appears to ask, in short, whether, under Article 47 of the Charter, in conjunction with Article 1(1) and Article 2(3), (6), (7) and (8) of Directive 89/665, the fact that the performance of the contract has almost been completed is an impediment preventing the excluded tenderer from bringing the relevant action (review proceedings) against the award decision, including seeking annulment of that decision. 64. The articles of Directive 89/665 transcribed by the referring court are from its original version, no longer in force when the invitation to tender was issued (16 November 2013). Accordingly, the references to legislation must be brought into line with the consolidated text following the entry into force of the amendments introduced by Directive 2007/66. (20) 65. In the Opinion in Connexxion Taxi Services, (21) I pointed out that ‘[w]ith regard to the decisions of contracting authorities (in so far as they concern, obviously, contracts falling within the scope of Directive 2004/18), Member States must ensure that the persons concerned have available review mechanisms suitable for determining, quickly and effectively, whether they have infringed EU law on public procurement or national rules transposing EU law into their respective legal systems. That is, ultimately, the purpose of Directive 89/665.’ 66. With that general aim, Article 2 of Directive 89/665 provides for two different procedural situations: (a) interlocutory proceedings enabling interim measures to be adopted in the period before the contract is concluded, and (b) the other types of review procedure, aimed at securing annulment of the administrative act awarding the contract and, where appropriate, the award of damages; the order for reference refers only to the latter. 67. The action brought by Ingsteel and Metrostav before the Slovak courts being an action for annulment of the decision, if they should be successful in their claims that would, in principle, mean that the decision awarding the contract would be declared null and void. (22) However, the referring court assumes (23) that annulment would not, in practice, lead to retroaction of the procedure so that the situation created could be reversed. 68. As Article 2(4) of Directive 89/665 provides that a review procedure does not have automatic suspensive effect, it is logical that the directive should provide for the possibility that an action for annulment can be brought in relation to a contract which is either being performed or has already been performed. 69. In fact, Directive 89/665 does not provide for an unequivocal solution in that regard. In some cases (Articles 2d to 2f) the rules laid down in the directive are applied, (24) which even provide that national review bodies may not consider a contract ineffective, even though it has been awarded illegally, if there are overriding reasons relating to a general interest requiring the effects of the contract to be maintained, without prejudice to the imposition of the appropriate penalties and the award of damages. (25) However, in other cases (Article 2(7) of the directive), it is the rules of national law that determine the effect that review procedures are to have on concluded contracts. 70. Within that range of possibilities which the referring court (or the review body at first instance) will have to consider, it would be unacceptable for the de facto situation regarding the performance of the contract to be treated as an insurmountable obstacle to determining whether the decision excluding the tenderer was lawful. Whatever the procedural solution may be that is most compatible with Directive 89/665 (and with the national law transposing that directive), and its practical consequences for the effects of the contract, the appellants still have an interest in obtaining the appropriate judgment, at least with a view to obtaining damages, if their action is successful, for the loss and harm suffered as a result of having been unlawfully excluded from the selection process. 71. Once again, it is for the national court to assess the consequences of the possible annulment of the decision for the award of the contract concluded. VI – Conclusion 72. In the light of the arguments set out, I propose that the Court reply as follows to the questions referred by the Najvyšší súd Slovenskej republiky (Supreme Court of the Slovak Republic): (1) Article 47, in particular Article 47(1)(a) and (4), of 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, does not preclude including in a contract notice, as selection criteria relating to economic and financial standing, the criteria included in the contract notice giving rise to the main proceedings. It is for the national court to establish whether the excluded tenderers satisfied those criteria. (2) It is for the referring court to determine whether there was a “valid reason”, for the purposes of Article 47(5) of Directive 2004/18/EC, precluding a tenderer from providing the references requested by the contracting authority. If that should be the case, the referring court must also determine whether, in accordance with Slovak law, a sworn statement by the tenderer concerning its economic and financial standing is acceptable as an appropriate economic and financial guarantee. (3) The fact that the successful tenderer has almost completed performance of the contract does not prevent the excluded tenderers bringing the appropriate proceedings, in accordance with the first and second paragraphs of Article 47 of the Charter of Fundamental Rights of the European Union, in conjunction with Articles 1 and 2 of Directive 89/665/EEC of 21 December 1989 on the coordination of laws, regulations and administrative provisions relating to the application of review procedures to the award of public supply and public works contracts. 1 – Original language: Spanish. 2 Directive 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). 3 Council Directive 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). 4 The wording is transcribed as it results from Directive 2007/66/EC of the European Parliament and of the Council of 11 December 2007 amending Council Directives 89/665/EEC and 92/13/EEC with regard to improving the effectiveness of review procedures concerning the award of public contracts (OJ 2007 L 335, p. 31). 5 Although the Slovenský futbalový zväz (Slovak Football Federation) acted as the contract awarder, in the last stage of the procedure the Úrad pre verejné obstarávanie (Public Procurement Regulatory Authority; ‘the Regulatory Authority’) took part. 6 The contract notice was published on 16 November 2013 in the supplement to the Official Journal of the European Union No 223/2013 and in the Slovak Official Journal for Procurement Notices (reference 18627-MSP). 7 The classification of football stadiums is set out in the UEFA Regulations approved at the meeting of 24 March 2010. Four categories are stipulated in ascending order from 1 to 4, on the basis of criteria relating to the area allocated to players and officials (including parking capacity), spectators and the media. 8 Clause III.2.2. 9 Judgment of 18 October 2012, Édukövízig and Hochtief Solutions, C‑218/11, EU:C:2012:643, paragraph 28. 10 Expressly referred to by the Court in its judgment of 17 November 2015, RegioPost, C‑115/14, EU:C:2015:760, paragraph 56. 11 Council Directive of 18 June 1992 relating to the coordination of procedures for the award of public service contracts (OJ 1992 L 209, p. 1). 12 Judgment of 2 December 1999, Holst Italia, C‑176/98, EU:C:1999:593, paragraph 28. Emphasis added. 13 The Opinion of Advocate General Léger in Holst Italia (C‑176/98, EU:C:1999:447) contains, in points 24 to 26, useful guidance on the powers of the contracting authority to evaluate the suitability of tenderers to perform the contract in the required manner That is the objective of Articles 31 and 32 of Directive 92/50 (concerning economic and financial standing and technical capability, respectively) in seeking to ‘protect the interests of the contracting authority against applications from economic operators more concerned about securing lucrative contracts than about the main task, that is to say, performing them scrupulously.’ 14 Case C‑218/11, EU:C:2012:643, paragraph 29. 15 No italics in the original. That was the ratio decidendi of the judgment and was reflected in the answers to the questions referred for a preliminary ruling. 16 Judgments of 10 October 2013, Swm Costruzioni and Mannocchi Luigino, C‑94/12, EU:C:2013:646, paragraph 29; of 14 January 2016, Ostas celtnieks, C‑234/14, EU:C:2016:6, paragraph 23; and of 7 April 2016, Partner Apelski Dariusz, C‑324/14, EU:C:2016:214, paragraph 33. 17 Paragraph 16 of the order for reference specifically uses the words ‘objective impossibility of obtaining the references required by the contract awarder’. 18 According to paragraph 20 of the order for reference, ‘the regulatory authority relied on the statements of two Slovak banks, which gave their views on the possibility of obtaining a non-binding undertaking to provide credit and a binding undertaking, and the difference between those two options.’ 19 The order sets out these remarks by the Regulatory Authority: ‘The contract awarder, on 3 August 2014, concluded a framework agreement by virtue of which four contracts for work were concluded for construction of the following stadiums: NTC Poprad on 15 August 2014. Baredejov football stadium on 24 February 2015. Zvolene football stadium [on] 20 May 2015. Podbrezová football stadium on 22 May 2015.’ 20 See footnote 4 of this Opinion. 21 Case C‑171/15, EU:C:2016:506. 22 In the Opinion in Prezes Urzędu Komunikacji Elektronicznej and Petrotel, C‑231/15, EU:C:2016:440, points 62 to 69, I stated that, as a general rule, the annulment of an administrative decision leads to the creation of retroactive effects so that, in the absence of an interim measure suspending the effectiveness of that decision, the invalidity of the administrative decision entails the obligation to undo, from the outset, its effects. However, that general rule is open to a number of exceptions which are not unknown in EU law, and I mentioned specifically the scope of the award of public contracts and the review system introduced into Directive 89/665 by Directive 2007/66. 23 As transcribed in paragraph 23 of the order for reference, the Regulatory Authority stated that ‘once the decision of the regulatory authority on the complaint became final, the contract awarder decided to resume the tendering procedure’. 24 On actions for annulment and the ineffectiveness of concluded contracts, the judgment of 11 September 2014, Fastweb, C‑19/13, EU:C:2014:2194, paragraph 42, states that, ‘in the situations contemplated, in particular, in Article 2d of Directive 89/665, the measures that may be taken for the purposes of actions brought against the contracting authorities are to be determined solely by the rules laid down in that directive.’ 25 Article 2d(3). In accordance with Article 2d(2), ‘[n]ational law may provide for the retroactive cancellation of all contractual obligations or limit the scope of the cancellation to those obligations which still have to be performed.’