Judgment of the Court (Fifth Chamber) of 4 May 1995. - Commission of the European Communities v Hellenic Republic. - Failure of a Member State to fulfil its obligations - Directive 77/62/EEC - Framework agreement for the exclusive supply of dressing material for use in Greek hospitals and by the Greek army. - Case C-79/94.



European Court reports 1995 Page I-01071



Summary

Parties

Grounds

Decision on costs

Operative part



Keywords

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1. Approximation of laws ° Review procedures in connection with the award of public supply and public works contracts ° Directive 89/665 ° Procedure allowing the Commission to intervene in the event of a clear and manifest breach of the Community rules on the award of contracts ° Procedure unrelated to proceedings for failure to fulfil obligations under Article 169 of the Treaty

(EC Treaty, Art. 169; Council Directive 89/665)

2. Approximation of laws ° Procedures for the award of public supply contracts ° Directive 77/62 ° Scope ° Derogations from common rules ° Conditions

(Council Directive 77/62, as amended, Arts 5(1)(a) and 6(4)(c))

Summary

1. The procedure under which the Commission, pursuant to 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, may, if it forms the view that there has been a clear and manifest breach of the Community provisions relating to the award of public contracts, take the matter up with a Member State is a preliminary measure which can neither derogate from nor replace the powers of the Commission under Article 169 of the Treaty, with the result that the manner in which the Commission has employed that procedure is immaterial in deciding on the admissibility of an action for failure to fulfil obligations which it has brought by reason of the breach by the Member State concerned of the Community provisions on the award of public contracts.

2. A Member State cannot bring the conclusion of a public supply contract outside the scope of application of the rules laid down in Directive 77/62 by claiming that the contract in question merely constitutes a framework agreement which is no more than a structure within which numerous contracts are to be awarded, the value of none of which will exceed the threshold laid down in the first indent of Article 5(1)(a) of the directive. Nor can that Member State have recourse to the derogation permitted under Article 6(4)(c) of the directive by arguing that the successful suppliers were the only ones who had expressed an interest in contracting.

Parties

In Case C-79/94,

Commission of the European Communities, represented by X.A. Yataganas, Legal Adviser, acting as Agent, with an address for service in Luxembourg at the office of G. Kremlis, also of the Legal Service, Wagner Centre, Kirchberg,

applicant,

v

Hellenic Republic, represented by V. Kontolaimos, Deputy Legal Adviser to the State Legal Council, and E.-M. Mamouna, Secretary in the Special Department for Community Legal Affairs in the Ministry of Foreign Affairs, acting as Agents, with an address for service in Luxembourg at the Greek Embassy, 117 Val Sainte-Croix,

defendant,

APPLICATION for a declaration that, by concluding a framework agreement for the exclusive supply by six Greek textile undertakings of dressing material for use in Greek hospitals and by the Greek army and by failing to publish the relevant notice in the Official Journal of the European Communities, the Hellenic Republic has failed to fulfil its obligations under Council Directive 77/62/EEC of 21 December 1976 coordinating procedures for the award of public supply contracts (OJ 1977 L 13, p. 1), as last amended by Directive 88/295/EEC of 22 March 1988 (OJ 1988 L 127, p. 1),

THE COURT (Fifth Chamber),

composed of: C. Gulmann, President of the Chamber, J.C. Moitinho de Almeida (Rapporteur), D.A.O. Edward, J.-P. Puissochet and L. Sevón, Judges,

Advocate General: C.O. Lenz,

Registrar: L. Hewlett, Administrator,

having regard to the Report for the Hearing,

after hearing oral argument from the parties at the hearing on 26 January 1995,

after hearing the Opinion of the Advocate General at the sitting on 16 February 1995,

gives the following

Judgment

Grounds

1 By application lodged at the Court Registry on 1 March 1994, the Commission of the European Communities brought an action under Article 169 of the EC Treaty for a declaration that, by concluding a framework agreement for the exclusive supply by six Greek textile undertakings of dressing material for use in Greek hospitals and by the Greek army and by failing to publish the relevant notice in the Official Journal of the European Communities, the Hellenic Republic has failed to fulfil its obligations under Council Directive 77/62/EEC of 21 December 1976 coordinating procedures for the award of public supply contracts (OJ 1977 L 13, p. 1), as last amended by Directive 88/295/EEC of 22 March 1988 (OJ 1988 L 127, p. 1) ("the directive").

2 By a decree of 19 July 1991, the Greek Ministry for Industry, Energy and Technology ratified the framework agreement which it had signed with six Greek textile undertakings. Under that agreement, all hospitals and health-care units, as well as the Greek army, were required to purchase certain types of dressing material from the above undertakings under the conditions set out in the framework agreement and for a period of three years which could be extended for two further years.

3 It is common ground that no tendering procedure was set in motion for those supplies and that no notice relating to the contract in question was published in the Official Journal of the European Communities.

4 By letter of 9 September 1991 the Commission drew the Greek Government' s attention to the fact that such an agreement and the procedure used to conclude it failed to comply with the directive and in particular Article 9 thereof. Since no reply was forthcoming, the Commission, by letter of 14 November 1991, put the Greek Government on notice to take all measures necessary to comply with the directive. The Commission refused to accept the views expressed by the Greek Government in its reply of 8 January 1992 and addressed to it a reasoned opinion requesting it to adopt within two months the measures necessary to comply with the directive.

5 In its letters of 10 December 1992 and 13 February 1993, the Greek Government accepted that it was in breach of the directive. It also declared its intention unilaterally to rescind the agreement before its expiry date and to launch a new call for tenders for the supply of dressing material during 1993. Since these declarations were not acted upon, the Commission brought the present action.

Admissibility

6 The Hellenic Republic contests the admissibility of the present action.

7 It first points out in this connection that, in the letters referred to above, it acknowledged the breach of which the Commission accuses it and undertook to adopt the measures necessary to ensure that Community law would be complied with in future. It contends that in the proceedings which resulted in the judgment in Case 199/85 Commission v Italy [1987] ECR 1039, the Commission treated as sufficient a written undertaking by the Municipality of Milan that it would comply in future with all the provisions of Council Directive 71/305/EEC of 26 July 1971 concerning the coordination of procedures for the award of public works contracts (OJ, English Special Edition 1971 (II), p. 682). In bringing the present action, it argues, the Commission has thus failed to respect the principle that Member States should be treated in the same way.

8 The Hellenic Republic then goes on to submit that under Article 3(1) 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 (OJ 1989 L 395, p. 33), the Commission must act prior to conclusion of the contract in question if it forms the view that there has been an infringement of Community provisions relating to the award of public contracts. In the present case, the Commission took action only once the agreement in question was in the course of being performed.

9 That argument cannot be accepted.

10 So far as the alleged breach of the principle of equal treatment is concerned, suffice it to point out that, even assuming that the Commission v Italy case, mentioned above, was comparable to the present case ° which it was not, as the Advocate General has demonstrated at point 17 of his Opinion ° the Commission was not in any event obliged to take the same view in the present case. It may also be observed that if the Commission were always bound to satisfy itself with mere undertakings by Member States binding for the future, this would provide Member States with an easy way of protecting themselves against proceedings under Article 169 of the Treaty for failure to fulfil obligations.

11 With regard to the argument derived from Article 3(1) of Directive 89/665, cited above, it must be pointed out (judgment of 24 January 1995 in Case C-359/93 Commission v Netherlands [1995] ECR I-0000, paragraph 13) that the special procedure provided for by that directive can neither derogate from nor replace the powers of the Commission under Article 169 of the Treaty.

12 In those circumstances, the action must be declared admissible.

Substance

13 Explaining the reasons for its non-compliance with the advertising rules laid down in Article 9 of the directive, the Greek Government states that the framework agreement is no more than a structure within which numerous supply contracts are awarded, the value of none of which exceeds the threshold of ECU 200 000 laid down in the first indent of Article 5(1)(a) of the directive. The Greek Government also states that the dressing material in question could have been supplied only by the six Greek producers which were parties to the framework agreement since no producer established in any other Member State has as yet expressed any interest in this type of contract. For those reasons, the Greek Government argues, the framework agreement was concluded in accordance with the derogation provided for in Article 6(4)(c) of the directive.

14 That argument cannot be accepted.

15 So far as concerns the argument based on the value of the contracts in question, the framework agreement turns into a whole the various contracts which it governs and the total value of those contracts is greater than ECU 200 000. Furthermore, as the Commission has correctly pointed out, any other interpretation of the first indent of Article 5(1)(a) of the directive would allow contract awarders to circumvent the obligations which it imposes.

16 With regard to the Greek Government' s assertion that only the six producers party to the framework agreement could supply the products in question, even if this were proved, this circumstance would not come within the scope of the derogations provided for in Article 6(4) of the directive and, in particular, that under heading (c).

17 It must accordingly be held that there has been a failure to fulfil obligations within the terms of the forms of order sought by the Commission.

Decision on costs

Costs

18 Under Article 69(2) of the Rules of Procedure, the unsuccessful party is to be ordered to pay the costs. Since the Hellenic Republic has been unsuccessful, it must be ordered to pay the costs.

Operative part

On those grounds,

THE COURT (Fifth Chamber)

hereby:

1. Declares that, by concluding a framework agreement for the exclusive supply by six Greek textile undertakings of dressing material for use in Greek hospitals and by the Greek army and by failing to publish the relevant notice in the Official Journal of the European Communities, the Hellenic Republic has failed to fulfil its obligations under Council Directive 77/62/EEC of 21 December 1976 coordinating procedures for the award of public supply contracts, as last amended by Directive 88/295/EEC of 22 March 1988;

2. Orders the Hellenic Republic to pay the costs.