Order of the President of the Court of 22 April 1994. - Commission of the European Communities v Kingdom of Belgium. - Application for interim measures - Interim measures - Urgency - Balance of interests - Public safety - Public procurement - Transport sector - Council Directive 90/531/EEC. - Case C-87/94 R



European Court reports 1994 Page I-01395



Summary

Parties

Grounds

Operative part



Keywords

++++

Application for interim measures ° Interim measures ° Conditions for granting ° Urgency ° Consideration given to the applicant' s failure to display due diligence before lodging an application for interim measures ° Balance of interests at stake ° Public safety ° Application to suspend a decision awarding a public supply contract already in course of performance

(EEC Treaty, Art. 186; Rules of Procedure of the Court of Justice, Art. 83(2))

Summary

The Commission may, in its capacity as guardian of the Treaties, bring proceedings for the adoption of interim measures in parallel with an action against a Member State for failure to fulfil its obligations, in connection with a disputed procedure for the award of a public contract. Failure to comply with a directive in this field constitutes a serious threat to the legality of the Community order, and a subsequent declaration to the effect that the Member State in question has failed to fulfil its obligations, usually after the contract has been performed, cannot reverse the damage suffered by the Community legal order and by all the tenderers whose rights have been impaired.

Since the directives on that subject give precedence at national level to review before conclusion of the contract, the Commission must act at Community level as far as possible before the contract is concluded, or at least inform the Member State concerned, quickly and unambiguously, that it is in the process of reviewing possible infringements of the rules applicable to the contract at issue and that it intends to seek the suspension of the procedure for awarding the contract, or of the contract itself. If, on the basis of that information, the Member State proceeds with the award of the contract or with its performance, it does so at its own risk.

By allowing more than three months to elapse between receiving a complaint alleging irregularities in the procedure for awarding the contract and informing the Member State of its intention to seek suspension of the contract, the Commission did not display the diligence to be expected of a party which subsequently lodged an application for interim measures.

Furthermore, the Member State concerned cannot, in principle, on the basis of the balance of the interests at stake, rely on the risk to which a delay in the performance of the contract would expose users of a public utility when it is that State' s own inaction that has given rise to the situation in question; the Court may, however, in certain circumstances and in cases where the risk involved is serious, consider that it must not itself exacerbate that risk by granting the measure applied for.

Parties

In Case C-87/94 R,

Commission of the European Communities, represented by Hendrik van Lier, Legal Adviser, acting as Agent, with an address for service in Luxembourg at the office of Georgios Kremlis, of its Legal Service, Wagner Centre, Kirchberg,

applicant,

v

Kingdom of Belgium, represented by Jan Devadder, Director in the Ministry of Foreign Affairs, Foreign Trade and Cooperation with Developing Countries, acting as Agent, assisted by Michel Waelbroeck and Denis Waelbroeck, of the Brussels Bar, with an address for service in Luxembourg at the Belgian Embassy, 4 Rue des Girondins,

defendant,

APPLICATION for the adoption of interim measures suspending the legal consequences of the decision taken on 6 October 1993 by the Société Régionale Wallonne du Transport (Walloon Regional Transport Company) awarding a public contract for the supply of buses to Espace Mobile International SA, and suspending the legal consequences of the contractual links established between those two companies as a result of the decision awarding the contract,

THE PRESIDENT OF THE COURT

makes the following

Order

Grounds

The dispute

A - Procedure

1 By application lodged at the Court Registry on 11 March 1994, the Commission of the European Communities brought an action before the Court under Article 169 of the EC Treaty for a declaration that:

- by taking into account, in the procedure for the award of a public contract by the Société Régionale Wallonne du Transport (hereinafter "SRWT"), amendments made to one of the tenders after the opening of tenders,

- by admitting to the procedure for awarding the contract a tenderer who did not meet the selection criteria laid down in the contract documents,

- and by accepting a tender which did not meet the criteria for the award of the contract laid down in the contract documents,

the Kingdom of Belgium has failed to fulfil its obligations under Council Directive 90/531/EEC of 17 September 1990 on the procurement procedures of entities operating in the water, energy, transport and telecommunications sectors (OJ 1990 L 297, p. 1), and to comply with the principle of equal treatment, which governs all procedures for the award of public contracts.

2 By a separate document, lodged at the Court Registry on the same date, the applicant made an application for interim measures, pursuant to Article 186 of the Treaty, Article 36 of the Protocol on the Statute of the Court of Justice and Article 83 of the Rules of Procedure of the Court of Justice, in which it sought an order requiring the Kingdom of Belgium to adopt all necessary measures to suspend the legal consequences of SRWT' s decision of 6 October 1993 awarding the contract, together with all necessary measures to suspend the legal consequences of the contractual links established between SRWT and the company to which the contract was awarded, namely Espace Mobile International SA (hereinafter "EMI"), pending the Court' s final ruling in the main proceedings.

3 The Kingdom of Belgium lodged its written observations on 30 March 1994. The parties were given the opportunity to submit their oral observations on 14 April 1994.

B - Background

4 SRWT, which is based in Namur (Belgium), put out an invitation to tender with a view to awarding a public contract for the supply, over a period of three years, of eight lots of public transport buses, comprising 307 standard vehicles, for the estimated sum of BFR 2 022 918 000 (excluding VAT). A contract notice was published in the Official Journal of the European Communities on 22 April 1993.

5 By 7 June 1993, the final date indicated in the contract notice, five tenders had been received from EMI (Aubange), Van Hool (Koningshooikt), Mercedes-B Belgium (Brussels), Berkhof (Roeselaere) and Jonckheere (Roeselaere) respectively.

6 During the months of June and July, SRWT examined those tenders. A memorandum was drawn up in preparation for the meeting of the Board of Directors to be held on 2 September 1993. It recommended that the contract for Lot No 1 (37 vehicles) be awarded to Jonckheere, and for Lots Nos 2 to 6 (280 vehicles in all) to Van Hool.

7 On 3, 23 and 24 August 1993, the contracting authority received three additional memoranda from EMI.

8 In those memoranda, EMI amplified its observations, particularly with regard to the following items in its tender:

- memorandum of 3 August: quantity discount; offer of financing; waiver of the price-variation clause with respect to buses ready for delivery during the course of 1994; fuel consumption rates of the vehicles; data required for the evaluation, both quantifiable and non-quantifiable, of the technical quality of the vehicles offered;

- memorandum of 23 August: estimated number of replacement engines and gear-boxes;

- memorandum of 24 August: fuel consumption rates.

9 On 31 August 1993 the contracting authority circulated an internal memorandum which concluded, following an analysis of the three additional memoranda, that they contained amendments to the original tender. It accordingly confirmed that the proposals regarding the award of the lots, set out in the abovementioned memorandum prepared for the Board meeting of 2 September 1993, were justified.

10 On 2 September 1993 the Board of Directors of SRWT took the view that they did not have sufficient information at their disposal to take a final decision and resolved to continue the discussion at a later meeting.

11 In his letter of 14 September 1993, the Walloon Minister for Transport communicated to the managing director of SRWT various observations concerning the tenders submitted by Van Hool and EMI, including the three memoranda mentioned above. He concluded with the suggestion that the company' s Board of Directors undertake a further review of the file, in the light of his observations.

12 On 28 September 1993, SRWT asked EMI to confirm the rates of fuel consumption quoted in the memorandum of 24 August, together with the maximum number of engine and gear-box replacements, as estimated in the memorandum of 23 August. EMI confirmed those details of its tender by letter of 29 September 1993.

13 The management of SRWT drafted a new memorandum comparing the tenders in preparation for the Board meeting on 6 October 1993. That memorandum, which took into consideration the information contained in EMI' s three additional memoranda, proposed that Lot No 1 (37 vehicles) be awarded to Jonckheere and Lots Nos 2 to 6 (reduced to 278 vehicles) to EMI.

14 By a decision of 6 October 1993, the Board of Directors of SRWT decided to postpone the order for 30 buses until 1996, while awarding the contract for Lot No 1 (37 vehicles) worth a total of BFR 212 759 250, excluding VAT, to Jonckheere, and Lots Nos 2 to 6 (278 vehicles) worth a total of BFR 1 797 719 210, excluding VAT, to EMI.

15 On the same day, Van Hool applied to the Belgian Conseil d' Etat for an order suspending the operation of the decision in question under the emergency procedure.

16 By judgment of 7 October 1993, the President of the Sixième Chambre des Référés (Sixth Chamber hearing applications for interim measures) of the Conseil d' Etat ordered provisional suspension of the enforcement of the decision taken on 6 October 1993 by the Board of Directors of SRWT.

17 However, by judgment of 17 December 1993, the Conseil d' Etat failed to confirm that order and dismissed the applications for suspension and for the adoption of interim measures lodged by Van Hool.

18 By letter of the same date, SRWT notified EMI of the order for Lots Nos 2 to 6.

19 On 30 November 1993 the Commission, with whom Van Hool had lodged a complaint, gave the Kingdom of Belgium formal notice to submit its observations, pursuant to Article 169 of the Treaty. The Commission alleged that the Kingdom of Belgium had failed to fulfil its obligations under Council Directive 90/531/EEC or to comply with the principle of equal treatment, which governs all procedures for the award of public contracts.

20 In its observations, which were communicated to the Commission on 15 December 1993, the Kingdom of Belgium claimed that the alleged failure to fulfil its obligations had not been proved.

21 On 8 February 1994, the Commission delivered a reasoned opinion to the Kingdom of Belgium, requesting it to adopt the measures necessary for compliance within a period of ten days, particularly by using its influence with the competent authorities to secure the suspension of the legal consequences of the contract concluded by SRWT and EMI.

22 In its reply of 18 February 1994, the Kingdom of Belgium maintained its point of view.

Grounds

23 According to Article 186 of the Treaty:

"The Court of Justice may in any cases before it prescribe any necessary interim measures."

24 Pursuant to Article 83(2) of the Rules of Procedure, an order for interim measures is conditional upon the existence of circumstances giving rise to urgency and of pleas of fact and law establishing a prima facie case for granting the relief sought. As the Court has consistently held, it also presupposes that the balance of the interests at stake is conducive to granting such relief.

25 Those conditions are cumulative.

26 The urgency of the application must be assessed in relation to the necessity for an order granting interim relief in order to prevent serious and irreparable damage to the party requesting the interim measure.

27 Moreover, the risk of serious and irreparable damage, which is the criterion for assessing urgency, is the first factor to be taken into account in determining the balance of interests.

28 In the present case, it is necessary to consider, overall, whether the conditions with regard to urgency and the balance of interests are satisfied.

29 The Commission claims that urgency is manifest. Delivery of the 1994 instalment (128 buses out of the total of 278) may begin during April 1994. Thus there is a risk of serious and irreparable damage being caused, in that the award of the contract and especially the first deliveries would confront the Commission, as guardian of the Treaties responsible for ensuring the application of Community law, with a fait accompli, and would pose a serious and immediate threat to the legality of the Community order. The greater the number of deliveries completed, the more difficult it would be to reverse the damage caused. If no interim measures were adopted, the judgment in the main proceedings would, if it upheld the action, be rendered ineffective.

30 According to the Kingdom of Belgium, the condition of urgency is not satisfied where the applicant has been too slow in taking action, or has itself brought about the urgent situation which it seeks to rely upon. That is so in the case of the Commission, which waited for more than five months after the decision awarding the contract was taken before initiating these proceedings. In an action against a Member State for failure to fulfil its obligations, the Commission should, in order to substantiate the existence of serious and irreparable damage, also demonstrate the existence of a special requirement necessitating the adoption of interim measures, such as the need to prevent a breach of Community law before the decision awarding the contract is taken; it cannot confine itself to the general allegation that it has sustained damage in its capacity as guardian of the Treaties, an allegation that falls to be made whenever Community law is infringed by a Member State.

31 It should be noted that failure to comply with a directive applicable to a public contract constitutes a serious threat to the legality of the Community order and that the ensuing declaration by the Court on the basis of Article 169 of the Treaty - usually after the contract has been performed - to the effect that the Member State in question has failed to fulfil its obligations, cannot reverse the damage suffered by the Community legal order and by all the tenderers who were either rejected or deprived of the opportunity to compete effectively in compliance with the principle of equal treatment. The Commission, in its capacity as guardian of the Treaties, may therefore bring proceedings for the adoption of interim measures in parallel with an action against a Member State for failure to fulfil its obligations, in connection with a disputed procedure for the award of a public contract.

32 Furthermore,

- 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 (OJ 1989 L 395, p. 33), and

- Council Directive 92/13/EEC of 25 February 1992 coordinating the laws, regulations and administrative provisions relating to the application of Community rules on the procurement procedures of entities operating in the water, energy, transport and telecommunications sectors (Official Journal 1992 L 76, p. 14),

impose an obligation to ensure at national level that decisions which have infringed Community law with respect to the award of public contracts or national rules implementing Community law are reviewed effectively and as rapidly as possible; in the present case, Van Hool sought such redress before the Belgian Conseil d' Etat but failed ultimately to secure the suspension applied for.

33 As the Belgian Government has emphasized in the proceedings before the Court, both the travaux préparatoires and the actual provisions of those directives reveal that the Community legislature, aware of the differences between national laws and mindful of the need not to undermine in any way the principle of legal certainty, at first gave precedence to review before conclusion of the contract. In deciding that the consequences of review for a contract which has already been concluded are determined by national law, and by permitting Member States to limit those consequences to the award of damages to the injured party, the Community legislature acknowledged that a State may refuse at national level to set aside a contract which has already taken effect.

34 In those circumstances, the Commission itself must act at Community level as far as possible before the contract is concluded, or at least inform the Member State concerned, quickly and unambiguously, that it is in the process of reviewing possible infringements of the rules applicable to the contract in issue, and that it intends to seek the suspension either of the procedure for awarding the contract or of the contract entered into. That being so, the Member State may proceed with the award of the contract or with its performance, at its own risk.

35 At the hearing, the parties acknowledged that under the relevant provisions of national law, the contract was deemed to be concluded as a result of the notification of the order to EMI by SRWT on 17 November 1993. At the same time, they also recognized that, contrary to a statement in the defendant' s written observations, the substantive provisions of Belgian law, according to the most recent case-law, do not preclude a public contract which has already been concluded from being set aside.

36 It is common ground that, in principle, the first deliveries of buses were scheduled to take place at the end of April 1994.

37 Thus, on the date that proceedings for interim measures were initiated, the application for relief concerned a contract which had not only been concluded but was already being carried out. The process of obtaining the necessary materials and of manufacturing and assembling the buses called for the implementation of an appropriate plan several months before the first deliveries.

38 After stating in its application in the main action that a complaint from Van Hool had first been laid before it on 6 October 1993, the Commission pointed out orally on 14 April 1994, then in writing on 15 April, that in fact it had been apprized of the matter by letter of 29 October 1993, as recorded in the case-file. In any event, the Commission evinced the intention of seeking the suspension of the contract only in its reasoned opinion of 8 February 1994, that is to say, more than three months after receiving the letter of 29 October 1993 and more than two months after sending its letter of formal notice of 30 November 1993, which did not contain any reference to that point. Therefore, the Commission failed to act in such a way as to make the contracting authority aware as early as possible that it could proceed only at its own risk with the performance of a contract which had been concluded with exceptional speed on the same day - 17 November 1993 - as the decision of the Belgian Conseil d' Etat. Yet, in its complaint of 29 October 1993, Van Hool had stressed in alarmist terms the urgent need for action by the Commission. In those circumstances, the Commission has not displayed the diligence to be expected of a party which has subsequently lodged an application for interim measures.

39 On the question of the balance of interests, the Kingdom of Belgium disputes the Commission' s allegation of serious and irreparable damage by referring to the state of SRWT' s bus fleet. That fleet contains numerous old vehicles, in particular 194 vehicles which were brought into service during 1976, 1977 and 1978. The condition of those vehicles has given rise to urgent requests for replacements from some of SRWT' s regional managers. It is likely to cause problems, even accidents, which could have dramatic consequences for the staff, the passengers and the good name of the company generally. A woman passenger has already been the victim of an accident necessitating hospital treatment: her foot went through the deck of a bus which she had just boarded. Suspension of the contract would entail its immediate termination, followed by the opening of a new procedure for the award of a public contract, which would delay each of the scheduled deliveries by approximately thirteen months.

40 The defendant' s submissions regarding the state of the buses to be replaced are supported by the documents produced. Their condition effectively undermines the safety requirements which should govern all public utilities. However, the defendant has itself contributed significantly to the creation of this state of affairs. While, according to its own recommendations, the normal length of service for the buses to be replaced should have been from ten to twelve years, it did not consider it necessary to ensure the timely replacement of the vehicles, a large number of which have now been in use for 16 to 18 years. What is more, it allowed more than two years to elapse between a request for the replacement of 103 buses whose state of dilapidation was emphasized by the local management concerned, and the publication of the contract notice on 22 April 1993. Thus the Kingdom of Belgium has omitted to ensure that all appropriate measures were taken to avoid endangering the safety of SRWT' s customers and staff, as well as that of other road-users.

41 In principle, such an omission is likely to prevent the balance of interests from tilting in favour of the party in default (see the order of the President of the Court in Case 194/88 R Commission v Italy [1988] ECR 5647, at paragraph 16). However, in the circumstances of the present case and in view of the seriousness of the risk involved, it is likewise incumbent on the Court not to exacerbate that risk.

42 In the light of the foregoing it is clear that the Commission has failed to display the diligence required of a party relying on the urgency of interim measures, and that the balance of interests tilts in favour of the Kingdom of Belgium.

43 In those circumstances, the application for interim measures must be dismissed without there being any need to consider whether the Kingdom of Belgium, in its pleadings and documents adduced in support, has successfully established that the Commission' s ostensibly well-founded submissions as to the existence of a prima facie case are in fact groundless.

Operative part

On those grounds,

THE PRESIDENT OF THE COURT

hereby orders:

1. The application for interim measures is dismissed.

2. Costs are reserved.

Luxembourg, 22 April 1994.