Judgment — ECLI:EU:C:2010:168
Date: 2010-03-25
Language of the case: German
Court formation: Third Chamber
Subject matter: Right of establishment;Approximation of laws;Freedom to provide services
Procedure: Reference for a preliminary ruling
Origin: Germany

Summary of the Judgment 1. Approximation of laws – Procedures for the award of public works contracts, public supply contracts and public service contracts – Directive 2004/18 – Public works contracts – Concept (European Parliament and Council Directive 2004/18, Art. 1(2)(a) and (b)) 2. Approximation of laws – Procedures for the award of public works contracts, public supply contracts and public service contracts – Directive 2004/18 – Public works contracts – Concept (European Parliament and Council Directive 2004/18, Art. 1(2)(b)) 3. Approximation of laws – Procedures for the award of public works contracts, public supply contracts and public service contracts – Directive 2004/18 – Public works contracts – Concept – Requirements specified by the contracting authority – Concept (European Parliament and Council Directive 2004/18, Art. 1(2)(b)) 4. Approximation of laws – Procedures for the award of public works contracts, public supply contracts and public service contracts – Directive 2004/18 – Public works concessions – Concept (European Parliament and Council Directive 2004/18, Art. 1(3)) 5. Approximation of laws – Procedures for the award of public works contracts, public supply contracts and public service contracts – Directive 2004/18 – Scope (European Parliament and Council Directive 2004/18, Art. 1(2)(a)) 1. The concept of ‘public works contracts’, within the meaning of Article 1(2)(b) of Directive 2004/18 on the coordination of procedures for the award of public works contracts, public supply contracts and public service contracts, does not require the works that are the subject of the contract to be materially or physically carried out for the contracting authority, provided that they are carried out for that authority’s immediate economic benefit. The latter condition is not satisfied through the exercise by that contracting authority of regulatory urban-planning powers. Under Article 1(2)(a) of Directive 2004/18, ‘public contracts’ are contracts for pecuniary interest concluded in writing. The pecuniary nature of the contract means that the contracting authority that has concluded a public works contract receives a service pursuant to that contract in return for consideration. That service consists in the realisation of works from which the contracting authority intends to benefit. In that regard, the concept of ‘public works contracts’ within the meaning of Article 1(2)(b) of Directive 2004/18 requires the works that are the subject of the contract to be carried out for the contracting authority’s immediate economic benefit; it is not, however, necessary that the service should take the form of the acquisition of a material or physical object. However, it is not the purpose of the mere exercise of urban-planning powers, intended to give effect to the public interest, to obtain a contractual service or immediate economic benefit for the contracting authority, as is required under Article 1(2)(a) of Directive 2004/18. (see paras 45, 48, 54, 57-58, operative part 1) 2. The concept of ‘public works contracts’, within the meaning of Article 1(2)(b) of Directive 2004/18 on the coordination of procedures for the award of public works contracts, public supply contracts and public service contracts, requires the contractor to assume a direct or indirect obligation to carry out the works that are the subject of the contract and that obligation to be legally enforceable in accordance with the procedural rules laid down by national law. With regard to a contract for pecuniary interest, a public works contract is based on the premiss that the contractor undertakes to carry out the service that is the subject of the contract in return for consideration. Since the obligations under the contract are legally binding, their execution must be legally enforceable. In the absence of rules provided for under European Union law, and in accordance with the principle of procedural autonomy, the detailed rules governing implementation of those obligations are a matter for national law. (see paras 60, 62-63, operative part 2) 3. The ‘requirements specified by the contracting authority’, within the meaning of the third variant set out in Article 1(2)(b) of Directive 2004/18 on the coordination of procedures for the award of public works contracts, public supply contracts and public service contracts, cannot consist in the mere fact that a public authority examines certain building plans submitted to it or takes a decision in the exercise of its regulatory urban-planning powers. In order for it to be possible to establish that a contracting authority has specified its requirements within the meaning of that provision, the authority must have taken measures to define the type of the work or, at the very least, have had a decisive influence on its design. (see paras 67-69, operative part 3) 4. In a situation in which a public authority sells land on which the purchaser was subsequently to carry out works corresponding to the urban-planning objectives of a local authority, there is no public works concession within the meaning of Article 1(3) of Directive 2004/18 on the coordination of procedures for the award of public works contracts, public supply contracts and public service contracts. In order for a contracting authority to be able to transfer to the other contracting party the right to exploit a work within the terms of that provision, that contracting authority must be in a position to exploit that work. That will normally not be the case where the only basis for the right of exploitation is the right of ownership of the economic operator concerned. The owner of land has the right to exploit that land in compliance with the applicable statutory rules. As long as an economic operator enjoys the right to exploit the land which he owns, it is in principle impossible for a public authority to grant a concession relating to that exploitation. In addition, the essential characteristic of the concession is that it is the concessionaire himself who bears the main, or at least the substantial, operating risk. In that regard, the concessionaire’s uncertainty as to whether the urban-planning service of the local authority concerned will, or will not, approve its plans is linked to the contracting authority’s regulatory powers in respect of urban planning and not to the contractual relationship arising from a concession. Consequently, the risk is not linked to exploitation. In any event, with regard to the duration of concessions, there are serious grounds, including the need to guarantee competition, for holding the grant of concessions of unlimited duration to be contrary to the European Union legal order, as stated by the Advocate General in points 96 and 97 of his Opinion. (see paras 72-80, operative part 4) 5. The provisions of Directive 2004/18 on the coordination of procedures for the award of public works contracts, public supply contracts and public service contracts do not apply to a situation in which one public authority sells land to an undertaking, even though another public authority intends to award a works contract in respect of that land but has not yet formally decided to award that contract and neither of the public authorities nor the undertaking concerned has assumed any legally binding contractual obligations in that regard. Even if it is prudent not to exclude from the outset the application of Directive 2004/18 to a two-phase award procedure in the form of the sale of land which will subsequently form the subject of a works contract, by considering those transactions as a unity, the mere intentions to award a contract do not however constitute binding obligations and cannot in any way satisfy the requirement of a written contract which is inherent in the very concept of a public contract set out in Article 1(2)(a) of Directive 2004/18. (see paras 82, 84, 88-89, operative part 5)