Judgment;Summary — ECLI:EU:C:2022:973
Date: 2022-12-08
Language of the case: Latvian
Court formation: Tenth Chamber
Subject matter: Right of establishment;Approximation of laws;Freedom to provide services
Procedure: Reference for a preliminary ruling
Origin: Latvia

Translation C-769/21 – 1 
Case C-769/21 
Request for a preliminary ruling 
Date lodged: 
13 December 2021 
Referring court: 
Administratīvā rajona tiesa (Latvia) 
Date of the decision to refer: 
13 December 2021 
Applicant: 
AAS BTA Baltic Insurance Company 
Defendants: 
Iepirkumu uzraudzības birojs 
Tieslietu ministrija 
  
Administratīvā rajona tiesa (District Administrative Court) 
[…] 
DECISION 
Riga, 13 December 2021 
The District Administrative Court […] 
[…] 
[…] [composition of the court and representatives of the parties] 
began its consideration, in a public hearing, of the administrative-law proceedings 
originating in the action brought by AAS BTA Baltic Insurance Company which 
sought to have the decision […] of 21 January 2021 by the Iepirkumu uzraudzības 
birojs (Public Procurement Supervisory Authority) declared illegal. 
Subject matter and relevant facts of the main proceedings 
EN 
REQUEST FOR A PRELIMINARY RULING OF 13. 12. 2021 – CASE C-769/21 
 
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1 The Tieslietu ministrija (Ministry of Justice, ‘the contracting authority’) issued an 
open invitation to tender for the ‘Acquisition of medical insurance to meet the 
needs of officials and staff of the Ministry of Justice, the State Land Service, the 
Data Protection Agency, the Insolvency Service and the Patent Office’ (‘the 
procurement procedure’). 1 
Various tenderers submitted tenders under the procurement procedure, including 
the applicant […] and an undertaking from the same group named Compensa Life 
Vienna Insurance Group SE Latvijas filiāle (Latvian subsidiary of Compensa Life 
Vienna Insurance Group SE). 
By decision of the procurement committee of 19 November 2020, the tender 
submitted by Compensa Life Vienna Insurance Group SE Latvijas filiāle was 
identified as the most economically advantageous tender, but the undertaking 
declined to enter into the procurement contract. 
On 1 December 2020 the procurement committee identified the applicant as the 
next most economically advantageous tenderer eligible to be awarded the contract, 
and at the same time it decided, pursuant to Article 24 of the Ministru kabineta 
2017. gada 28. februāra noteikumi Nr.107 ‘Iepirkuma procedūru un metu 
konkursu norises kārtība’ (Decree No 107 of the Council of Ministers of 
28 February 2017 on the conduct of procurement procedures and design contests, 
‘the Decree on Procurement Procedures’) to ask the applicant to submit 
confirmation and proof that it should not be considered to be the same market 
participant as the originally selected tenderer, Compensa Life Vienna Insurance 
Group SE Latvijas filiāle. 
In its reply to the procurement committee, the applicant stated that the two 
undertakings should be considered a single market participant; it also confirmed 
that it had prepared its tender independently and had not coordinated its tender 
with Compensa Life Vienna Insurance Group SE Latvijas filiāle. 
Having regard to the fact that the applicant and Compensa Life Vienna Insurance 
Group SE Latvijas filiāle had to be considered a single market participant, on 
9 December 2020 the procurement committee re-evaluated the tenderer and 
decided to terminate the procurement procedure pursuant to Article 23 of the 
Decree on Procurement Procedures. 
On 16 December 2020 the contracting authority commenced a new procurement 
procedure […]. 2 
 
1 Information on the procurement is available at: 
https://www.eis.gov.lv/EKEIS/Supplier/Procurement/44904. 
2 Information on the procurement is available at: 
https://www.eis.gov.lv/EKEIS/Supplier/Procurement/49337. 
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2 Following consideration of the applicant’s administrative appeal, by decision […] 
of 21 January 2021 the Public Procurement Supervisory Authority confirmed the 
decision of the contracting authority. 
The decision states that Article 24 of the Decree on Procurement Procedures 
requires the contracting authority to terminate the procurement procedure where 
the originally selected tenderer declined to enter into the procurement contract 
with the contracting authority, and that tenderer and the subsequently selected 
tenderer must be considered to constitute a single market participant. The purpose 
of this rule is to prevent the possibility of concerted action between undertakings 
in the same group in the public procurement procedure once tenders have been 
submitted. Moreover, in any event, where a tenderer which is awarded the 
procurement contract declines to enter into the said contract with the contracting 
authority, the contracting authority is entitled to terminate the procurement 
procedure pursuant to Article 23 of the aforesaid decree, and no other tenderer has 
the right to demand that it be awarded the tender. 
3 The applicant challenged the decision in the administrative court. 
In the applicant’s opinion, the contracting authority was under an obligation to 
evaluate the applicant’s explanation regarding the nature of the relationship 
between the two companies and the preparation of the tenders, thus achieving a 
fair balance between all the principles enshrined in Article 2 of the Publisko 
iepirkumu likums (Law on Public Procurement). The presumption in Article 24 of 
the Decree on Procurement Procedures that undertakings in the same group have 
coordinated their tenders in order to exercise undue influence on competition is 
disproportionate and contrary to the principles in 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, and to the case-law in the 
judgment of the Court of Justice of the European Union of 19 May 2009 in Case 
C-538/07. The applicant stresses that it did not coordinate its tender with the 
originally selected tenderer, as is demonstrated by the fact, amongst others, that 
the originally selected tenderer had tendered a higher price, and therefore its 
withdrawal could not confer any advantage on the undertakings in the group. 
4 In the written pleadings lodged with the [administrative] court, the Public 
Procurement Supervisory Authority rejects the applicant’s claims, and also states 
that the case-law in the judgment of the Court of Justice of 19 May 2009, Case 
C-538/07, cited by the applicant, refers to the right of connected undertakings to 
take part in a procurement procedure and to submit tenders, which has not been 
restricted in the present case. That situation is different from one in which the 
contracting authority must terminate the procurement procedure if the selected 
tenderer declines to enter into the procurement contract. In the former case, once 
the contracting authority has rejected the tenders from the connected undertakings, 
it selects another tender, and the procurement is completed by the conclusion of a 
procurement contract. By contrast, in the latter case the contracting authority 
terminates the procurement procedure without selecting any tender, thereby 
REQUEST FOR A PRELIMINARY RULING OF 13. 12. 2021 – CASE C-769/21 
 
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restoring competition and giving all tenderers the chance to take part in a new 
procurement procedure. 
For its part, the contracting authority considers that, in any event, Article 23 of the 
Decree on Procurement Procedures gives the contracting authority a margin of 
discretion to decide whether or not to continue with the procurement procedure in 
a situation where the successful tenderer declines to enter into the procurement 
contract with the contracting authority. 
5 In the proceedings before the administrative court, it is not disputed that the 
applicant and the tenderer which was originally successful in the procurement 
procedure, Compensa Life Vienna Insurance Group SE Latvijas filiāle, must be 
considered to constitute a single market participant. 
In the present case, the dispute relates to whether that fact affects the right of the 
contracting authority to decide to terminate the procurement procedure and, if so, 
how. 
Legal Framework 
European Union law 
6 Recital 1 of Directive 2014/24: 
‘(1) The award of public contracts by or on behalf of Member States’ authorities 
has to comply with the principles of the Treaty on the Functioning of the 
European Union (TFEU), and in particular the free movement of goods, freedom 
of establishment and the freedom to provide services, as well as the principles 
deriving therefrom, such as equal treatment, non-discrimination, mutual 
recognition, proportionality and transparency. …’ 
Article 18(1) of Directive 2014/24 defines the principles of procurement: 
‘Contracting authorities shall treat economic operators equally and without 
discrimination and shall act in a transparent and proportionate manner.’ 
Article 55 of Directive 2014/24, entitled ‘Informing candidates and tenderers’, 
provides as follows in paragraph 1: 
‘Contracting authorities shall as soon as possible inform each candidate and 
tenderer of decisions reached concerning the … award of the contract …, 
including the grounds for any decision not to conclude a framework agreement, 
not to award a contract for which there has been a call for competition, to 
recommence the procedure ….’ 
Latvian law 
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7 In Latvia, public procurement is governed by the Law on Public Procurement and 
by the Decree on Procurement Procedures adopted pursuant to that Law, 3 which 
also incorporate provisions derived from Directive 2014/24. 
8 Article 2 of the Law on Public Procurement: 
‘The purpose of this Law is to ensure: (1) transparency of procurement; (2) free 
competition between suppliers, and their equal and fair treatment; (3) efficient use 
of the contracting authority’s resources and the minimising of risk to the 
contracting authority.’ 
The Law on Public Procurement does not regulate decisions to terminate 
procurement procedures, […] regulation of which is delegated to the Council of 
Ministers, pursuant to Article 8 of the Law: 
‘(3) The Council of Ministers shall make the following provisions concerning the 
conduct of procurement procedures and design contests, in so far as this Law 
makes no provision therefor: 
[…] 
(5) provisions on the way in which procurement procedures and design contests 
are to be commenced, terminated and concluded’. 
9 The Decree on Procurement Procedures provides for the following action to be 
taken by the contracting authority if the tenderer to whom the procurement 
contract has been awarded declines to enter into the said contract with the 
contracting authority: 
‘23. If the tenderer to whom the procurement contract has been awarded declines 
to enter into the said contract with the contracting authority, the procurement 
committee shall have the power to decide to award the procurement contract to the 
tenderer which has submitted the next most economically advantageous tender or 
to terminate the procurement procedure without selecting any tender. Where a 
decision has been taken to award the procurement contract to the tenderer which 
has submitted the next most economically advantageous tender, if the tenderer in 
question declines to enter into the said contract the procurement committee shall 
make a decision to terminate the procurement procedure without selecting any 
tender. 
24. Before deciding to award the procurement contract to the tenderer which has 
submitted the next most economically advantageous tender, the procurement 
committee shall assess whether the tenderer in question must be considered to be 
the same market participant as the originally selected tenderer which declined to 
conclude the contract in question with the contracting authority. Where necessary, 
 
3 […] 
REQUEST FOR A PRELIMINARY RULING OF 13. 12. 2021 – CASE C-769/21 
 
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the procurement committee shall have the power to ask the next tenderer to 
provide confirmation and, where necessary, evidence that it should not be 
considered the same market participant as the originally selected tenderer. If the 
next tenderer must be considered to be the same market participant as the 
originally selected tenderer, the procurement committee shall make a decision to 
terminate the procurement procedure without selecting any tender.’ 
10 Article 1 of the Konkurences likums (Competition Law) defines what must be 
considered to constitute a single market participant: 
‘(2) decisive influence: the ability, directly or indirectly, to: 
(a) control (whether on a regular or an occasional basis) decision-making in the 
market participant’s management bodies, with or without participation therein; 
(b) appoint a sufficient number of members of the market participant’s 
supervisory board or management board to ensure that the person exercising 
decisive influence has a majority of votes on the board in question; 
[…] 
(9) market participant – … if a market participant or several market participants 
jointly have a decisive influence over one or more market participants, all the 
market participants in question may be considered a single market participant’. 
Reasons why the referring court has doubts over the application and 
interpretation of European Union law 
11 In general terms, the referring court is not calling into question the broad margin 
of discretion enjoyed by a Member State to determine the circumstances in which 
a procurement procedure must be terminated or cancelled. 
That right of Member States to take a decision to cancel the invitation to tender is 
also recognised in the case-law of the Court of Justice of the European Union, 
which also states that the grounds for cancellation may be based on reasons which 
reflect, inter alia, the assessment as to whether it is expedient, from the point of 
view of the public interest, to carry an award procedure to its conclusion, having 
regard, among other things, to any change that may arise in the economic context 
or factual circumstances, or indeed the needs of the contracting authority 
concerned (judgment of the Court of Justice of 11 December 2014, Croce Amica 
One Italia […], C-440/13, EU:C:2014:243[5], paragraphs 33 to 35). 
12 The facts of the case show that, although the tenderer which had been awarded the 
procurement contract declined to enter into the contract with the contracting 
authority, the contracting authority wished to continue with the procurement 
procedure and to conclude the contract with the tenderer which had submitted the 
next most economically advantageous tender. In other words, the contracting 
authority’s needs had not changed (as is also confirmed by the fact that it initiated 
BTA BALTIC INSURANCE COMPANY 
 
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a new procurement procedure), and the next tender met the contracting authority’s 
needs and requirements. 
At the same time, irrespective of the legal provision that was applied, the 
contracting authority terminated the procurement procedure because the applicant 
and the originally selected tenderer, Compensa Life Vienna Insurance Group SE 
Latvijas filiāle, had to be considered a single market participant. 
That ground, which requires the procurement procedure to be terminated, is 
expressly provided for in Article 24 of the Decree on Procurement Procedures. 
The referring court has doubts over whether the regulation in that provision is 
compatible with the principles of the European Union governing procurement 
procedures. 
13 The Latvian legislation does not lay down a prohibition on participation in the 
same tendering procedure by undertakings linked by a relationship of control or 
affiliated to one another. 
The legislation is compatible with the case-law of the Court of Justice of the 
European Union, according to which EU law precludes a national provision which 
lays down an absolute prohibition on simultaneous and competing participation in 
the same tendering procedure by undertakings linked by a relationship of control 
or affiliated to one another, without allowing them an opportunity to demonstrate 
that their tenders are independent. Such a prohibition is contrary to the interests of 
the European Union in ensuring the widest possible participation by tenderers in a 
call for tenders (in this regard, see the judgments of 19 May 2009, Assitur, 
C-538/07, EU:C:2009:317, paragraphs 29 and 30; of 23 December 2009, 
Serrantoni and Consorzio stabile edili, C-376/08, EU:C:2009:808, paragraphs 39 
and 40; of 22 October 2015, Impresa Edilux and SICEF, C-425/14, 
EU:C:2015:721, paragraph 36; and of 8 February 2018, Lloyd’s of London, 
C-144/17, EU:C:2018:78, paragraphs 34 to 36). 
14 If undertakings linked by a relationship of control or affiliated to one another have 
the right to participate in an invitation to tender, then logically they should also 
have the right to be awarded the contract. 
At the same time, Article 24 of the Decree on Procurement Procedures contains a 
mandatory prohibition preventing the contracting authority from awarding the 
contract to the next tenderer if that tenderer must be considered to be the same 
market participant as the originally selected tenderer which withdrew its tender. 
That provision is essentially based on an irrebuttable presumption that the two 
tenderers have coordinated their actions and that the successful tenderer withdrew 
its tender for that reason. The Finanšu ministrija (Ministry of Finance), which is 
responsible for the sector, has stated that the purpose of the regulation is to 
prevent the possibility of concerted action between undertakings in the same 
group in a public procurement procedure once tenders have been submitted. 
REQUEST FOR A PRELIMINARY RULING OF 13. 12. 2021 – CASE C-769/21 
 
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In the view of the referring court, in spite of the wide margin of discretion enjoyed 
by Member States to establish the circumstances in which a procurement 
procedure must be terminated in situations where the needs of the contracting 
authority have not changed and the next tender meets the contracting authority’s 
needs and requirements, that national legislation is also incompatible with the 
principles of procurement defined in Article 18(1) of Directive 2014/24, in 
particular with the requirement for Member States to treat economic operators 
equally and without discrimination, and with the proportionality principle. 
Contrary to the opinion expressed by the contracting authority and by the [Public 
Procurement Supervisory] Authority in these proceedings, the referring court 
considers that the stage reached in the procurement procedure is irrelevant, and 
that the case-law of the Court of Justice of the European Union cited above is 
equally applicable to a decision to terminate the procedure. In other words, even 
in such a situation, a tenderer should have the opportunity to demonstrate that its 
tender is independent. 
15 Since the interpretation and application of EU law are matters for the Court of 
Justice of the European Union and the Court has not so far pronounced on the 
point at issue in the context of the right of the contracting authority to decide to 
terminate the procurement procedure, the referring court considers it necessary to 
refer the legal points at issue in these proceedings to the Court of Justice of the 
European Union for a ruling. 
[…] [procedural references] 
Operative part 
Pursuant to Article 267 of the Treaty on the Functioning of the European Union, 
[…] [reference to national procedural law] the District Administrative Court 
orders 
that the following question be referred to the Court of Justice of the European 
Union for a preliminary ruling: 
Is national legislation which requires the contracting authority to terminate a 
procurement procedure in a situation where the originally selected tenderer, which 
declined to enter into the procurement contract with the contracting authority, 
must be considered to constitute a single market participant with the next tenderer, 
whose tender meets the contracting authority’s needs and requirements, 
compatible with the principles of procurement defined in Article 18(1) 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, in 
particular with the requirement for Member States to treat economic operators 
equally and without discrimination, and with the principle of proportionality? 
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That proceedings be stayed until the Court of Justice of the European Union 
gives judgment. 
[…] 
[…] [procedural references, judges’ signatures and certification of the 
transcription]