Judgment — ECLI:EU:C:2007:432
Date: 2007-07-18
Language of the case: German
Court formation: Second Chamber
Based on: Treaty establishing the European Economic Community (1957)
Subject matter: Right of establishment;Approximation of laws;Freedom to provide services
Concepts: Defences;Corrective mechanism in the event of a serious infringement of Community law;Financial penalties in cases of failure to comply with the judgment;Action/actions for damages;General
Procedure: Action for failure to fulfil obligations - successful
Origin: Germany

Summary of the Judgment 1. Actions for failure to fulfil obligations – Judgment of the Court finding a failure to fulfil obligations – Breach of the obligation to comply with the judgment – Financial penalties (Art. 228(2) EC) 2. Approximation of laws – Review procedures in respect of the award of public supply and public works contracts – Directive 89/665 (Arts 226 EC and 228 EC; Council Directive 89/665, Art. 3) 3. Approximation of laws – Review procedures in respect of the award of public supply and public works contracts – Directive 89/665 (Arts 226 EC and 228 EC; Council Directive 89/665, Art. 2(6), second subpara.) 4. Approximation of laws – Review procedures concerning the award of public service contracts – Directive 92/50 (Art. 226 EC; Council Directive 92/50) 5. Member States – Obligations – Failure to fulfil obligations – National system pleaded as justification – Not permissible (Art. 226 EC) 1. In proceedings under Article 228(2) EC, an action does not become inadmissible on the ground that the Commission is no longer requesting the imposition of a periodic penalty payment. Since the Court has jurisdiction to impose a financial penalty not suggested by the Commission, the action is not inadmissible simply because the Commission takes the view, at a certain stage of the procedure before the Court, that a periodic penalty is no longer necessary. (see paras 21-22) 2. The special procedure under Article 3 of Directive 89/665 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, whereby the Commission may intervene with a Member State if it considers that a clear and manifest infringement of Community provisions in the field of public procurement has been committed, constitutes a preventive measure which can neither derogate from nor replace the powers of the Commission under Articles 226 EC and 228 EC. (see para. 23) 3. Although the second subparagraph of Article 2(6) of Directive 89/665 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 permits the Member States to preserve the effects of contracts concluded in breach of directives relating to the award of public contracts and thus protects the legitimate expectations of the parties thereto, its effect cannot be, unless the scope of the EC Treaty provisions establishing the internal market is to be reduced, that the contracting authority’s conduct vis-à-vis third parties is to be regarded as in conformity with Community law following the conclusion of such contracts. If the second subparagraph of Article 2(6) of Directive 89/665 does not affect the application of Article 226 EC, nor can it affect the application of Article 228 EC, without reducing the scope of the Treaty provisions establishing the internal market. Furthermore, that provision relates, as is apparent from its wording, to the compensation which a person harmed by an infringement committed by a contracting authority may obtain from it. That provision, because of its specific nature, cannot be regarded also as regulating the relations between a Member State and the Community in the context of Articles 226 EC and 228 EC. (see paras 33-35) 4. Even if it the principles of legal certainty and of the protection of legitimate expectations, the principle pacta sunt servanda and the right to property could be used against the contracting authority by the other party to the contract in the event of rescission of a contract concluded in breach of Directive 92/50 relating to the coordination of procedures for the award of public service contracts, a Member State cannot in any event rely on those principles or that right in order to justify the non-implementation of a judgment establishing a failure to fulfil obligations under Article 226 EC and thereby evade its own liability under Community law. (see para. 36) 5. A Member State cannot plead provisions, practices or situations prevailing in its domestic legal order to justify the failure to observe obligations arising under Community law. (see para. 38)