Judgment;Summary — ECLI:EU:C:2023:48
Date: 2023-01-26
Language of the case: Lithuanian
Court formation: Fourth Chamber
Subject matter: Approximation of laws
Procedure: Reference for a preliminary ruling
Origin: Lithuania

Summary C-682/21 – 1 
Case C-682/21 
Summary of the request for a preliminary ruling pursuant to Article 98(1) of 
the Rules of Procedure of the Court of Justice 
Date lodged:  
11 November 2021  
Referring court: 
Lietuvos Aukščiausiasis Teismas (Lithuania) 
Date of the decision to refer:  
11 November 2021  
Appellants in cassation and applicants at first instance:  
‘HSC Baltic’ UAB 
‘Mitnija’ UAB 
‘Montuotojas’ UAB 
Other party to the proceedings in cassation and defendant at first instance:  
Vilniaus miesto savivaldybės administracija 
Third parties: 
‘Active Construction Management’ UAB, a company subject to 
insolvency  proceedings 
‘Vilniaus vystymo kompanija’ UAB 
      
Subject matter of the main proceedings 
Claim by the appellants in cassation (applicants at first instance) for a declaration 
that the decision of the other party to the proceedings in cassation (the defendant 
at first instance) to enter them on the list of unreliable suppliers on account of 
improper performance of a public procurement contract by a multi-member 
supplier and termination of that contract on the ground of a substantial breach is 
unlawful. 
EN 
SUMMARY OF THE REQUEST FOR A PRELIMINARY RULING – CASE C-682/21 
 
2  
Subject matter and legal basis of the request for a preliminary ruling 
Interpretation 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 of Article 18(1) and Article 57(4)(g) and (6) thereof, 
and of Council Directive 89/665/EEC 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, in 
particular of the fourth subparagraph of Article 1(1) and Article 1(3) thereof; third 
paragraph of Article 267 of the Treaty on the Functioning of the European Union. 
Questions referred for a preliminary ruling 
1. Are Article 18(1) and Article 57(4)(g) and (6) of Directive 2014/24 and the 
fourth subparagraph of Article 1(1) and Article 1(3) of Directive 89/665 (together 
or separately, but without limitation to those provisions) to be interpreted as 
meaning that a decision of a contracting authority to enter the economic operator 
concerned on the list of unreliable suppliers and thus restrict for a certain period 
its ability to participate in procurement procedures announced subsequently on the 
ground that that economic operator has substantially breached a contract 
concluded with that contracting authority is a measure which may be challenged 
before a court? 
2. If the answer to the first question is in the affirmative, are the provisions of 
EU law cited above (together or separately, but without limitation to those 
provisions) to be interpreted as precluding national rules and the practice for 
applying them under which: (a) the contracting authority, when terminating a 
public procurement contract on the ground of a substantial breach thereof, does 
not take any formal (separate) decision concerning the entry of economic 
operators on the list of unreliable suppliers; (b) an economic operator is not 
informed in advance about forthcoming entry on the list of unreliable suppliers 
and is therefore unable to submit relevant explanations and subsequently to 
contest entry effectively; (c) the contracting authority does not carry out any 
individual examination of the circumstances of improper performance of a 
contract, and therefore, if the public procurement contract has been lawfully 
terminated on the ground of a substantial breach thereof, the economic operator de 
jure responsible for that breach is automatically entered on the list of unreliable 
suppliers? 
3. If the answers to the first two questions are in the affirmative, are the 
provisions of EU law cited above (together or separately, but without limitation to 
those provisions) to be interpreted as meaning that joint-activity partners (entities 
forming a joint supplier) which performed the public procurement contract 
lawfully terminated on the ground of a substantial breach may demonstrate their 
reliability and thus be excluded from the list of unreliable suppliers, inter alia, on 
the basis of the amount of the share (value) of the contract performed, the 
HSC BALTIC AND OTHERS 
 
3 
insolvency of the lead partner, actions on the part of that partner and the 
contracting authority’s contribution to non-performance of the contract? 
Provisions of EU law cited 
Directive 2014/24, in particular Article 18(1), Article 57(3), (4) and (6), Article 90 
and Article 91. 
Council Directive 89/665, in particular the fourth subparagraph of Article 1(1) and 
Article 1(2) and (3). 
Provisions of national law cited 
Lietuvos Respublikos viešųjų pirkimų įstatymas (Law of the Republic of 
Lithuania on public procurement; ‘the Law on public procurement’): Article 2(36) 
(definition of the term ‘supplier’); paragraphs 4(6), 7 and 8 of Article 46, entitled 
‘Grounds for exclusion of a supplier’; Article 91, entitled ‘Non-performance or 
improper performance of a procurement contract’; and paragraphs 1 and 2 of 
Article 101, entitled ‘Right to challenge actions of or decisions taken by the 
contracting authority’. 
Lietuvos Respublikos civilinis kodeksas (Civil Code of the Republic of Lithuania; 
‘the Civil Code’): paragraphs 1 and 3 to 6 of Article 6.6, entitled ‘Joint and 
several obligation of debtors’; Article 6.15(1); Article 6.217, entitled ‘Termination 
of a contract’; Article 6.219; paragraph 1 of Article 6.969, entitled ‘Concept of a 
joint-activity (partnership) agreement’; Article 6.975, entitled ‘Liability of 
partners under joint obligations’; and paragraphs 1(2) and (3) and 3 of 
Article 6.978, entitled ‘End of a joint-activity agreement’. 
Succinct presentation of the facts and procedure in the main proceedings 
1 On 7 December 2016, the defendant at first instance, the Vilniaus miesto 
savivaldybės administracija (Municipal Administration of the City of Vilnius), 
published notice of a procurement procedure for the award of a public works 
contract for the construction of the Lazdynai multifunctional wellness centre in 
Vilnius (‘the procurement procedure’). 
2 In order to participate in the procurement procedure, on 30 January 2017 the 
applicants at first instance – ‘Montuotojas’ UAB, ‘Mitnija’ UAB, ‘HSC Baltic’ 
UAB and ‘Axis Power’ UAB – concluded a joint-activity agreement. The partners 
under the joint-activity agreement agreed that, in the event of award of the 
contract, the proportions of the value of commitments (contribution to the joint 
activity) constituting the total price of the tender would be as follows: ‘Active 
Construction Management’ UAB – 65% (lead partner), ‘HSC Baltic’ UAB – 15%, 
‘Axis Power’ UAB – 10%, ‘Mitnija’ UAB – 5%, and ‘Montuotojas’ UAB – 5%. 
SUMMARY OF THE REQUEST FOR A PRELIMINARY RULING – CASE C-682/21 
 
4  
3 On 5 June 2017, the defendant at first instance concluded a works contract with 
‘Active Construction Management’ UAB, in which the deadline for carrying out 
the construction works was set at 5 December 2018. 
4 The works contract was not performed in due time. On 21 August 2019, after the 
defendant at first instance had acknowledged deficiencies in the technical design, 
the deadline for carrying out the works under the contract was changed and a new 
date of 28 May 2020 was set. However, even after the extension of the deadline, 
the works did not proceed smoothly and fell behind the new schedule. 
5 By order of 28 October 2019, the Vilniaus apygardos teismas (Regional Court, 
Vilnius, Lithuania) instituted insolvency proceedings against ‘Active Construction 
Management’ UAB. The defendant at first instance and the applicants at first 
instance were informed thereof by letter of the insolvency administrator of 
6 December 2019, in which it was also stated that the lead partner would no 
longer perform the works contract and the contract was therefore regarded as 
having come to an end in respect of that partner. 
6 The defendant at first instance and the remaining partners, that is to say, the 
applicants at first instance, failed to reach common agreement on further 
performance of the works contract. 
7 By letter of 22 January 2020, the defendant at first instance informed the 
applicants at first instance of the termination of the works contract on the ground 
of a substantial breach of that contract. 
8 On 21 February 2021, the applicants at first instance brought an action before the 
Regional Court, Vilnius, seeking (1) a declaration that the unilateral termination 
of the works contract by the defendant at first instance on the ground of a 
substantial breach of that contract was unlawful; (2) a declaration that the works 
contract had come to an end due to the fault of the defendant at first instance; and 
(3) a declaration that the decision of the defendant at first instance to enter the 
applicants at first instance on the list of unreliable suppliers in the Central public 
procurement information system was unlawful. 
9 By judgment of 27 August 2020, the Regional Court, Vilnius, dismissed the action 
of the applicants at first instance in its entirety. 
10 The court held that the works contract was terminated lawfully on the ground of a 
substantial breach through non-performance or improper performance of the 
public procurement contract, and that in such a case contracting authorities are 
obliged to enter suppliers (or, in the case of a group of suppliers, all the members 
of the group) in that list of unreliable suppliers. Moreover, the court stated that, 
under the national rules, the applicants at first instance would be able to 
rehabilitate themselves by self-cleaning when participating in other procurement 
procedures, so they were not precluded from participation in them. 
HSC BALTIC AND OTHERS 
 
5 
11 By order of 21 January 2021, the Lietuvos apeliacinis teismas (Court of Appeal, 
Lithuania) dismissed the appeal brought by the applicants at first instance against 
the judgment of the Regional Court, Vilnius. 
12 On 22 January 2021, on the initiative of the defendant at first instance, the Viešųjų 
pirkimų tarnyba (Public Procurement Office) entered the applicants at first 
instance on the list of unreliable suppliers. 
13 On 18 to 22 February 2021, the applicants at first instance appealed against the 
order of the Court of Appeal, Lithuania, to the Lietuvos Aukščiausiasis Teismas 
(Supreme Court of Lithuania; ‘the referring court’). Their request for interim 
measures was granted – they were deleted from the list of unreliable suppliers 
pending the outcome of the proceedings in cassation. 
14 By partial order of 11 November 2021, the referring court upheld those parts of 
the decisions delivered by the first instance and appellate courts by which the 
claims in the action concerning the proper performance of the contract and the 
lawfulness of the termination of that contract were dismissed. 
Principal arguments of the parties to the main proceedings 
15 The applicants at first instance submitted before the referring court that the rules 
set out in Article 91 of the Law on public procurement, even if it is accepted that 
the objective resulting from their application is to exclude dishonest economic 
operators from legal relationships in the field of public procurement, cannot be 
interpreted as meaning that economic operators that formed a multi-member 
supplier (contractor) and de facto did not carry out any works under a public 
procurement contract (prior to the insolvency proceedings, the contracted works 
were carried out exclusively by the lead partner) would be entered on the list of 
unreliable suppliers, where the non-performance (or improper performance) of the 
relevant contractual obligations led to the termination of that contract; otherwise, 
similar situations, where the respective works under a public procurement contract 
have not been carried out by a subcontractor or by the relevant joint-activity 
partner, would be treated unequally, as subcontractors are to be entered on the list 
of unreliable suppliers only when a breach concerns that part of the public 
procurement contract which has been subcontracted to them; the courts misapplied 
Article 91 of the Law on public procurement, and infringed the principles of 
public procurement, by not taking account of the specific actions of the respective 
economic operators in the performance of the works contract, that is to say, of 
their integrity and reliability; Article 91 of the Law on public procurement is 
applicable on the basis of the personal responsibility of an economic operator; it 
was noted in the judgment of the Court of Justice of 7 September 2021, Klaipėdos 
regiono atliekų tvarkymo centras (C-927/19), that joint-activity partners may be 
held liable for actions of one of them only if they had knowledge thereof, that is to 
say, actions of all partners are assessed on the basis of the principle of personal 
responsibility, and not that of joint and several liability. 
SUMMARY OF THE REQUEST FOR A PRELIMINARY RULING – CASE C-682/21 
 
6  
16 The defendant at first instance stated before the referring court that it supports the 
findings made by the courts and that the contracting authority does not have 
freedom of choice in applying Article 91 of the Law on public procurement and is 
therefore obliged to enter the economic operators concerned on the list of 
unreliable suppliers. When implementing that obligation, it does not take into 
account which partner forming a multi-member supplier specifically caused a 
substantial breach of the public procurement contract by his actions; a contrary 
interpretation is incompatible with the joint and several liability of joint-activity 
partners, and thus mitigating circumstances are relevant only for the self-cleaning 
of entities that have already been entered on the list of unreliable suppliers. 
Succinct presentation of the reasons for the request for a preliminary ruling 
17 The referring court points out that the dispute concerning the inclusion of the 
applicants at first instance on the list of unreliable suppliers has arisen as a matter 
of interpretation and application of the provisions of the Law on public 
procurement, a fortiori Article 91 thereof, and their relationship with the 
provisions of the Civil Code concerning joint activities. The arguments of the 
parties to the dispute on the interpretation and application of national rules entail 
closely interrelated points of law and doubts on the part of the court, concerning 
the compliance of the provisions of the Law on public procurement with EU law, 
as to (a) whether the entering of suppliers on the list of unreliable suppliers 
constitutes a decision of the contracting authority amenable to review of legality; 
and (b) if such a decision is challengeable, the basis for its adoption and for 
assessing its lawfulness. 
18 As the first instance and appellate courts held and as the defendant at first instance 
submits, under the rules laid down in Lithuania (Article 91 of the Law on public 
procurement) contracting authorities have no discretion to decide whether to enter 
the economic operator concerned on the list of unreliable suppliers if that 
economic operator has committed a substantial breach of the public procurement 
contract, and that breach has led to the unilateral termination of that contract by 
the contracting authority. The non-discretionary nature of the actions of 
contracting authorities is reflected by their statutory obligation to enter all entities 
forming a multi-member supplier – joint-activity partners – in that list. 
19 In fact, the content of Article 91 of the Law on public procurement suggests that 
the entering of economic operators on the list of unreliable suppliers lacks 
autonomy both in substance and in form. Under the Lithuanian legal rules, such 
entry does not constitute a separate decision, but a legal consequence of another 
decision unilaterally terminating a public procurement contract: if an economic 
operator does not dispute the termination of the contract on the ground of a 
substantial breach at all, or such a decision is found by the court to be lawful, the 
economic operator concerned, which performed that contract on its own or with 
partners, is necessarily entered on the list of unreliable suppliers. 
HSC BALTIC AND OTHERS 
 
7 
20 Such legal rules presuppose that, first, situations where a contracting authority 
would be able to terminate a contract lawfully on the ground of a substantial 
breach thereof but the supplier would not be entered on the list of unreliable 
suppliers due to the circumstances of the individual case are de jure not possible 
and, second, the supplier may, in essence, dispute only the unilateral termination 
of the public procurement contract. 
21 The national legal rules in question do not seem per se incompatible with the 
effective defence of the rights of suppliers, since, as is the situation in the present 
case, the economic operator may effectively contest the unilateral termination of 
the public procurement contract by arguing that it did not commit a substantial 
breach, that the contracting authority is also partly responsible for the failure to 
attain the objectives of the contract, and so forth. However, it should be noted in 
this regard that, under the Lithuanian legal rules, when a contract is terminated on 
the ground of a substantial breach the subjective aspect of the actions of the party 
in breach of the contract is not, in essence, taken into account. 
22 It may be concluded on the basis of the case-law of the Court of Justice that the 
reasons that led to the breach of the contract, the nature of that breach and other 
circumstances are legally relevant for the purpose of deciding on the restriction of 
the right of suppliers to participate in other procurement procedures. In its 
judgment of 19 June 2019, Meca (C-41/18), the Court of Justice noted that, under 
Article 57(5) of Directive 2014/24, contracting authorities must be allowed to 
conduct their own assessment of the acts which an economic operator has 
committed or omitted either before or during the procurement procedure, in any of 
the cases referred to in Article 57(4) of that directive; in the light of this, 
contracting authorities cannot be bound by a previous investigation of an 
infringement, as this would not be in line with the principle of proportionality, a 
principle which inter alia implies the need to assess the nature of an infringement, 
that is to say, its minor or material nature and repetition. 
23 As previously noted, the first instance and appellate courts and the defendant at 
first instance rely, in essence, on the rule of legal interpretation referred to above 
in considering that, at this stage of the dispute, it is not possible and there is no 
need to assess the nature of the actions of the applicants at first instance, as they 
will be able to rehabilitate themselves by self-cleaning when participating in other 
procurement procedures. This model resulting from the national rules is consistent 
with the ratio decidendi of the judgment in Meca (C-41/18), particularly as in 
subsequent procurement procedures the contracting authority concerned does not 
have to be bound by an assessment conducted by another contracting authority, 
which is not, however, the case as regards a decision made by a court. If entry of 
the economic operator on the list of unreliable suppliers were to be held lawful by 
the court, it is questionable whether the contracting authority concerned would be 
able to review such a decision in a non-judicial procedure. 
24 However, in the view of the referring court, that position adopted by the courts 
and by the defendant at first instance leads, in fact, to a paradoxical situation. 
SUMMARY OF THE REQUEST FOR A PRELIMINARY RULING – CASE C-682/21 
 
8  
25 First, in order for it to be possible to take account of the nature of the actions on 
the part of the economic operator concerned, that operator has first to be entered 
on the list of unreliable suppliers; therefore, the circumstances of the performance 
of the contract become relevant when deciding not on its inclusion, but on its ad 
hoc deletion from that list. In that context, inter alia, the past actions of an 
economic operator included on the list of unreliable suppliers for a three-year 
period, as laid down by the legislation in force, may be treated differently. The 
fact that the breach committed by such an economic operator will be considered 
minor by one contracting authority does not mean per se that another contracting 
authority will reach the same conclusions. 
26 Second, under such a model, a decision on the content of the actions of the 
economic operator would be made not by the contracting authority with the best 
knowledge of the breach, but by other contracting authorities which will, in 
essence, rely on explanations provided by the supplier concerned. In any case, the 
ability to assess the circumstances of the breach of the contract only in respect of 
economic operators that have already been entered on the list of unreliable 
suppliers is not justified by a legitimate objective or good practice. 
27 The referring court does not share the view of the defendant at first instance that a 
different interpretation of Article 91 of the Law on public procurement, that is to 
say, an individual assessment of the behaviour of the applicants at first instance in 
performing the works contract, may be incompatible with the joint and several 
liability of joint-activity partners. The question of the importance of joint and 
several liability in assessing the reliability of joint-activity partners under 
Article 57 of Directive 2014/24 has already been raised by the referring court in 
Klaipėdos regiono atliekų tvarkymo centras, cited above; however, as explained 
by the Court of Justice, a contracting authority has to make an individual 
assessment of the actions of every economic operator (partner). As ‘Mitnija’ UAB 
correctly submits, Article 91(1) of the Law on public procurement provides 
expressis verbis that other economic operators on whose capacities the supplier 
has relied and which have assumed joint and several liability with the supplier for 
the performance of the contract under Article 49(5) of that law are also to be 
entered on the list of unreliable suppliers, provided that a breach concerns that part 
of the contract which has been subcontracted to them. It is common ground that a 
joint-activity partner and a provider of economic or financial capacities, 
essentially acting as a financial guarantor, are not identical entities; however, if 
they are jointly and severally liable (the former on the basis of the Civil Code, the 
latter on the basis of the Law on public procurement), a different assessment of 
their actions is not justified. 
28 Nevertheless, the joint and several liability of joint-activity partners for the 
purposes of Article 91 of the Law on public procurement (Article 57(4)(g) of 
Directive 2014/24) is, in general, a secondary aspect if the position were to be 
accepted that the list of unreliable suppliers is to include only those economic 
operators the individual assessment of whose actions entails their being 
considered unreliable (dishonest). In that case, the termination of the public 
HSC BALTIC AND OTHERS 
 
9 
procurement contract on the ground of a substantial breach would not per se entail 
their entry on the list of unreliable suppliers (for example, insolvency, fault on the 
part of other entities, force majeure, and so forth); consequently, there would not 
(should not) be any difference according to whether the contractor that failed to 
perform the public procurement contract acted on its own or as a group of 
independent economic operators (under a joint-activity agreement). Otherwise 
multi-member suppliers would unjustifiably be placed at a disadvantage. 
29 The referring court also has doubts as to the classification of the contracting 
authority’s decision to enter an economic operator on the list of unreliable 
suppliers. According to the case-law of the Court of Justice, the concept of 
‘decisions taken by the contracting authorities’ must be interpreted broadly as 
covering virtually all their decisions without distinguishing between those 
decisions according to their content or time of adoption; Article 1(1) of Directive 
89/665 does not lay down any restriction with regard to the nature and content of 
the decisions it refers to (judgment of 11 January 2005, Stadt Halle and RLP 
Lochau, C-26/03, paragraphs 28 and 30). 
30 Moreover, the present court draws attention to the wording of the fourth 
subparagraph of Article 1(1) of Directive 89/665, which, in the light of language 
versions, is not identical. The Lithuanian and English language versions refer to 
‘su sutartimis … susiję … sprendimai’ [‘decisions connected with contracts’] and 
‘contracts … decisions’ respectively, while the French language version refers to 
‘les procédures de passation des marchés’. The French wording appears not to be 
so broad as it relates specifically to procedures for the conclusion (award) of 
contracts and not to consequences of the termination of those contracts. The 
concept of ‘procedures for the award of contracts’ is also used in Article 1(2) of 
Directive 89/665. Furthermore, Article 1(3) of Directive 89/665 provides inter alia 
that a person who may initiate a review procedure at least should have an interest 
in obtaining a particular contract and should have been harmed by unlawful 
actions on the part of the contracting authority. 
31 It is clear that this dispute has not arisen on account of the contracting authority’s 
decisions granting or restricting the right to be awarded (to conclude) a particular 
public procurement contract, since the works contract was concluded with the 
applicants at first instance; what is more, their actions led to a lawful decision of 
the defendant at first instance to terminate that contract. On the other hand, the 
entry of the economic operators concerned on the list of unreliable suppliers 
restricts their rights to conclude other public procurement contracts, pursuant to 
the ground for exclusion laid down in Article 57(4)(g) of Directive 2014/24. 
Consequently, on the basis of a general trend in the case-law of the Court of 
Justice of giving a broad interpretation to the concept of a ‘decision taken by a 
contracting authority’, it would, in principle, be justified to classify the decision of 
the defendant at first instance at issue in this case as a decision referred to in the 
fourth subparagraph of Article 1(1) of Directive 89/665. 
SUMMARY OF THE REQUEST FOR A PRELIMINARY RULING – CASE C-682/21 
 
10  
32 If the contracting authority’s decision at issue in a part of the national proceedings 
falls within the scope of the fourth subparagraph of Article 1(1) of Directive 
89/665, it is important to establish bases for assessing the lawfulness of such a 
decision. The applicants at first instance place the greatest emphasis on the 
following circumstances as a basis for judging their reliability, irrespective of the 
fact that the works contract has been terminated: the proportion of the contractual 
obligations (contributions) of the contractors in respect of performance of the 
public procurement contract; the fact that, prior to the termination of the works 
contract, all works were carried out only by the lead partner, that is to say, the 
applicants at first instance had not yet started to carry out any contracted works; 
the insolvency proceedings instituted against the lead partner; certain actions on 
the part of the defendant at first instance which may have led to improper 
performance of the works contract, and other circumstances. 
33 In the view of the referring court, the circumstances noted above may be relevant 
for the purpose of assessing the reliability of the economic operators which 
performed the works contract with regard to their entry on the list of unreliable 
suppliers. If, according to the judgment in Meca (C-41/18), such an assessment of 
reliability has to be conducted by contracting authorities which have published 
notice of new procurement procedures, it would not be unreasonable to require 
that the contracting authority that awarded the terminated public procurement 
contract, that is to say, the defendant at first instance, also conduct such an 
assessment.