CELEX: 62003CJ0532
Language: en
Date: 2007-12-18 00:00:00
Title: Judgment of the Court (Grand Chamber) of 18 December 2007. # Commission of the European Communities v Ireland. # Failure of a Member State to fulfil obligations - Public procurement - Articles 43 EC and 49 EC - Emergency ambulance services. # Case C-532/03.

Case C-532/03
      Commission of the European Communities
      v
      Ireland
      (Failure of a Member State to fulfil obligations – Public procurement – Articles 43 EC and 49 EC – Emergency ambulance services)
      Opinion of Advocate General Stix-Hackl delivered on 14 September 2006 
      Judgment of the Court (Grand Chamber), 18 December 2007 
      Summary of the Judgment
      Actions for failure to fulfil obligations – Proof of failure – Burden of proof on the Commission 
      (Art. 226 EC)
      Without prejudice to the obligation of the Member States, under Article 10 EC, to facilitate the achievement of the Commission’s
         tasks, which consist in particular, pursuant to Article 211 EC, in ensuring that the provisions of the Treaty and the measures
         taken by the institutions pursuant thereto are applied, in an action for failure to fulfil obligations it is incumbent upon
         the Commission to prove the allegation that the obligation has not been fulfilled. It is the Commission’s responsibility to
         place before the Court the information needed to enable the Court to establish that the obligation has not been fulfilled,
         and in so doing the Commission may not rely on any presumption. 
      
      Thus, in an action for a declaration that for one public body, without prior advertising, to provide another with emergency
         ambulance services is contrary to freedom of establishment and the freedom to provide services, it is for the Commission to
         place before the Court the information needed to enable the Court to establish that a public contract has been awarded, given
         that the possibility that the public body concerned provides the services in question in the exercise of its own powers cannot
         be excluded. In that regard, the mere fact that, as between two public bodies, funding arrangements exist in respect of emergency
         ambulance services does not imply that the provision of the services concerned constitutes an award of a public contract which
         would need to be assessed in the light of the fundamental rules of the Treaty.
      
      (see paras 28-29, 36-37)
JUDGMENT OF THE COURT (Grand Chamber)
      18 December 2007 (*)
      
      (Failure of a Member State to fulfil obligations – Public procurement – Articles 43 EC and 49 EC – Emergency ambulance services)
      In Case C‑532/03,
      ACTION under Article 226 EC for failure to fulfil obligations, brought on 19 December 2003,
      Commission of the European Communities, represented by K. Wiedner and X. Lewis, acting as Agents, assisted by J. Flynn QC, with an address for service in Luxembourg,
      
      applicant,
      v
      Ireland, represented by D. O’Hagan, acting as Agent, assisted by A. Collins SC, E. Regan, Barrister at law, and C. O’Toole, Barrister,
         with an address for service in Luxembourg,
      
      defendant,
      supported by:
      Kingdom of the Netherlands, represented by H.G. Sevenster, C. Wissels and P. van Ginneken, acting as Agents,
      
      intervener,
      THE COURT (Grand Chamber),
      composed of V. Skouris, President, P. Jann, C.W.A. Timmermans, A. Rosas, K. Lenaerts, G. Arestis (Rapporteur) and U. Lõhmus,
         Presidents of Chambers, J.N. Cunha Rodrigues, R. Silva de Lapuerta, J. Makarczyk, M. Ilešič, J. Malenovský and J. Klučka,
         Judges,
      
      Advocate General: C. Stix-Hackl,
      Registrar: K. Sztranc-Sławiczek, Administrator,
      having regard to the written procedure and further to the hearing on 4 April 2006,
      after hearing the Opinion of the Advocate General at the sitting on 14 September 2006,
      gives the following
      Judgment
      1       By its application, the Commission of the European Communities asks the Court of Justice to declare that, in permitting Dublin
         City Council (‘DCC’), successor to the Dublin Corporation Fire Brigade, to provide emergency ambulance services without the
         Eastern Regional Health Authority (‘the Authority’), previously known as the Eastern Health Board, having undertaken any prior
         advertising, Ireland has failed to fulfil its obligations under Articles 43 EC and 49 EC and the general principles of Community
         law.
      
       Legal context
       Community legislation
      2       The provisions governing the award of public service contracts are contained in Council Directive 92/50/EEC of 18 June 1992
         relating to the coordination of procedures for the award of public service contracts (OJ 1992 L 209, p. 1), as amended by
         European Parliament and Council Directive 97/52/EC of 13 October 1997 (OJ 1997 L 328; p. 1; ‘Directive 92/50’). Article 1(a)
         of Directive 92/50 provides in particular that public service contracts are contracts for pecuniary interest concluded in
         writing between a service provider and a contracting authority.
      
       National legislation
      3       Section 65(1) of the Health Act 1953, as applicable in 1999, which applies to the present dispute (‘the Health Act’), provides:
      ‘(1) A health board may, subject to any general directions given by the Minister and on such terms and conditions as it sees
         fit to impose, give assistance in any one or more of the following ways to any body which provides or proposes to provide
         a service similar or ancillary to a service that the health board may provide:
      
      (a)      by contributing to the expenses incurred by the body’.
      4       Section 57 of the Health Act 1970 provides:
      ‘A health board may make arrangements for providing ambulances or other means of transport for the conveyance of patients
         …’
      
      5       Under section 25 of the Fire Services Act 1981: 
      ‘A fire authority may carry out or assist in any operations of an emergency nature, whether or not a risk of fire is involved,
         and a fire authority may accordingly make such provision for the rescue or safeguarding of persons and protection of property
         as it considers necessary for the purposes of that function.’
      
      6       Section 9(1)(a) of the 1981 Act provides that ‘the council of a county’ is the fire authority for the purposes of the Act.
       Facts and pre-litigation procedure
      7       DCC, which is responsible for the fire service in Dublin, provides emergency ambulance services in part of the area served
         by the Authority, inter alia in the city of Dublin. It provided that service as a health authority until 1960, then as a local
         authority through its permanent fire brigade service.
      
      8       Pursuant to section 65 of the Health Act and in order to contribute financially to the provision of emergency ambulance services,
         the East Coast Area Health Board – a board responsible for health matters that is separate from the Authority and which performs
         its functions as delegated by the Authority – makes annual payments to DCC, the final amount of which is determined following
         negotiations between DCC and the East Coast Area Health Board and which represents part of DCC’s expenditure on the provision
         of the services in question.
      
      9       In June 1998, the Eastern Health Board and the Dublin Corporation Fire Brigade drew up a draft agreement on the provision
         of emergency ambulance services. At the beginning of 2003, that is, as at the end of the period laid down in the reasoned
         opinion, that draft agreement included the financing arrangements between those two bodies and constituted an overview of
         the management of the public expenditure relating to that draft agreement.
      
      10     The draft agreement gave rise to a complaint to the Commission in which it was claimed that the draft agreement should have
         been the subject of prior advertising in accordance with the requirements of Directive 92/50. Correspondence was initiated
         between the Commission and the Irish authorities with a view to establishing whether there was a contract to which such an
         advertising requirement would have applied.
      
      11     Having concluded that the provision of emergency ambulance services to the Authority on the basis of an agreement made without
         any prior advertising was inconsistent with Articles 43 EC and 49 EC, the Commission initiated the infringement procedure
         laid down in Article 226 EC.
      
      12     After giving Ireland formal notice to submit its observations, the Commission issued a reasoned opinion on 17 December 2002,
         requesting Ireland to take the necessary steps to comply with that opinion within a period of two months from its receipt.
      
      13     Taking the view that Ireland’s response to the reasoned opinion was unsatisfactory, the Commission decided to bring the present
         action.
      
       The action
       Arguments of the parties
      14     The Commission claims that the arrangements under which emergency ambulance services are provided by DCC by agreement with
         the Authority without there having been any prior advertising constitutes a breach of Articles 43 EC and 49 EC and of the
         general principles of Community law. 
      
      15     According to the Commission, in the absence of a written contract, the provision of such services falls outside the scope
         of Directive 92/50. However, those arrangements should be considered in the light of the fundamental freedoms and the general
         principles of Community law, which include the principle of transparency.
      
      16     Referring to the judgment in Joined Cases 27/86 to 29/86 CEI and Bellini [1987] ECR 3347, the Commission claims that Community law applies in full to situations which are not covered by the public
         procurement directives. It submits further that, according to paragraphs 60 to 62 of the judgment in Case C‑324/98 Telaustria and Telefonadress [2000] ECR I‑10745, compliance with the rules of the EC Treaty relating to the fundamental freedoms in general, and with
         the principle of non-discrimination on the ground of nationality in particular, implies, notably, an obligation of transparency
         which allows the services market to be opened up to competition and the impartiality of procurement procedures to be reviewed.
      
      17     The Commission takes the view in this regard that the foregoing considerations apply to the provision of emergency ambulance
         services. It claims that DCC provides such services for remuneration at the behest of the Authority. The Authority takes an
         active role in ensuring that the services provided meet its requirements and in controlling the amount to be paid in respect
         of those services. The Commission notes also that the Authority’s financial contribution appears to cover almost all of DCC’s
         expenditure on the provision of those services.
      
      18     Ireland contests the alleged failure to fulfil its obligations.
      19     At the hearing, Ireland explained that the present dispute relates to the mobile emergency medical service, which must be
         provided as a public service. It contends that the Commission has not established that DCC provides emergency ambulance services
         at the behest of the Authority, or demonstrated that the arrangement between the Authority and DCC constitutes an award of
         a ‘public contract’.
      
      20     As regards the funding of those services, Ireland contends that the Authority’s participation is undertaken in the exercise
         of its functions, in accordance with the provisions of the Health Act, and that its financial contribution covers only part
         of DCC’s expenditure. In the present case, there is no fixed price and the Authority endeavours to control or limit the amount
         which it is empowered by law to pay to DCC towards the cost of those services.
      
      21     Ireland maintains that section 25 of the Fire Services Act 1981 specifically confers on DCC statutory powers to provide emergency
         ambulance services. DCC, it argues, has provided such services in its capacity as a local authority which, under national
         law, is also the fire authority.
      
      22     Ireland submits that the fact that the emergency ambulance and fire brigade services are concentrated in one public body is
         an advantage in terms of health and public safety, since all members of the combined ambulance and fire brigade services receive
         emergency medical training.
      
      23     Furthermore, Ireland notes that, according to the Court’s judgment in Case 263/86 Humbel and Edel [1988] ECR 5365, those services, which fall within Annex 1 B to Directive 92/50, are not services normally provided for remuneration
         and, as such, are not covered by Articles 43 EC and 49 EC.
      
      24     As regards possible discrimination on the ground of nationality, Ireland submits that its national law does not prohibit providers
         of emergency ambulance services from other Member States from establishing themselves or providing services in Ireland.
      
      25     Ireland takes the view that the Commission has failed to identify any directly or indirectly discriminatory provision in the
         Fire Services Act 1981 or in the Health Acts. In the present case, Ireland relies on the judgment in Case C‑70/95 Sodemare and Others [1997] ECR I‑3395, in which the Court held that it was not contrary to the principle of equal treatment to reserve participation
         in the social welfare system of providing old people’s homes to non-profit-making private operators. 
      
      26     Ireland submits further that Articles 43 EC and 49 EC are inapplicable as the services in question are ‘services of general
         economic interest’ and that the level of their public funding is strictly limited to that which is necessary to cover the
         actual cost of those services.
      
      27     The Kingdom of the Netherlands, which was granted leave to intervene in support of the form of order sought by Ireland by
         order of the President of the Court of 15 June 2004, submits that the principle of transparency does not apply in a situation
         in which there is no connecting factor with the internal market, in the present case, the freedom to provide services. As
         a subsidiary point, the Netherlands claims that, even if the Court were to rule that the principle of transparency must be
         applied if Directive 92/50 is not applicable, it is for the Member States to define what constitutes a ‘sufficient degree
         of advertising’.
      
       Findings of the Court
      28     As a preliminary point, it must be noted that, as is apparent from the form of order sought in the application initiating
         proceedings, the present action for failure to fulfil obligations does not concern the application of Directive 92/50, but
         relates to the issue as to whether the provision by DCC, without prior advertising, of emergency ambulance services is contrary
         to the fundamental rules of the Treaty and, in particular, to the freedom of establishment and the freedom to provide services
         enshrined in Articles 43 EC and 49 EC respectively.
      
      29     It follows from the case-law of the Court that, without prejudice to the obligation of the Member States, under Article 10 EC,
         to facilitate the achievement of the Commission’s tasks, which consist in particular, pursuant to Article 211 EC, in ensuring
         that the provisions of the Treaty and the measures taken by the institutions pursuant thereto are applied (Case C‑494/01 Commission v Ireland [2005] ECR I‑3331, paragraph 42), in an action for failure to fulfil obligations it is incumbent upon the Commission to prove
         the allegation that the obligation has not been fulfilled. It is the Commission’s responsibility to place before the Court
         the information needed to enable the Court to establish that the obligation has not been fulfilled, and in so doing the Commission
         may not rely on any presumption (see, in particular, Case 96/81 Commission v Netherlands [1982] ECR 1791, paragraph 6; Case C‑404/00 Commission v Spain [2003] ECR I‑6695, paragraph 26; and Case C‑135/05 Commission v Italy [2007] ECR I‑0000, paragraph 26).
      
      30     The Commission claims that the maintenance of an agreement between DCC and the Authority, without any prior advertising, constitutes
         a breach of the rules of the Treaty and thereby of the general principles of Community law, in particular the principle of
         transparency.
      
      31     In support of its case, the Commission takes the view that, even in the absence of a written contract detailing the terms
         of the services to be provided by DCC, the correspondence attached to a letter of 19 September 2002 shows that the scope of
         those services and the basis on which they are to be remunerated were considered by the parties and formalised in a draft
         agreement drawn up in June 1998. In particular, in a letter of 15 January 1999 attached to the letter of 19 September 2002,
         DCC’s Finance Officer stated that the negotiations on the funding of the emergency ambulance service had resulted, in June
         1998, in an agreement determining future charges by DCC to the Authority.
      
      32     The Commission submits that it seems that DCC and the Authority agreed to enter into a service-level agreement and that a
         contract was drafted to that end. Therefore, according to the Commission, DCC provides emergency ambulance services at the
         behest of the Authority and for remuneration.
      
      33     In that respect, it is apparent from the documents before the Court that national legislation empowers both the Authority
         and DCC to carry out emergency ambulance services. Under section 25 of the Fire Services Act 1981, a fire authority may carry
         out or assist in any operations of an emergency nature, whether or not a risk of fire is involved, and may accordingly make
         such provision for the rescue or safeguarding of persons and protection of property as it considers necessary for the purposes
         of that function. Thus, under section 9 of that Act, a local authority such as DCC is the responsible fire authority.
      
      34     Between 1899 and 1960, DCC provided emergency ambulance services in its capacity as a health authority. It subsequently acted
         in its capacity as a local authority and, under section 25 of the Fire Services Act 1981, provided those services through
         its permanent fire brigade service. 
      
      35     Consequently, it is conceivable that DCC provides such services to the public in the exercise of its own powers derived directly
         from statute, and applying its own funds, although it is paid a contribution by the Authority for that purpose, covering part
         of the costs of those services.
      
      36     In that regard, as follows from the case-law cited in paragraph 29 of this judgment, it is, in the present case, incumbent
         upon the Commission to place before the Court the information needed to enable the Court to establish that a public contract
         has been awarded, and in so doing the Commission may not rely on any presumption in that regard.
      
      37     However, neither the Commission’s arguments nor the documents produced demonstrate that there has been an award of a public
         contract, since it is conceivable that DCC provides emergency ambulance services in the exercise of its own powers derived
         directly from statute. Moreover, the mere fact that, as between two public bodies, funding arrangements exist in respect of
         such services does not imply that the provision of the services concerned constitutes an award of a public contract which
         would need to be assessed in the light of the fundamental rules of the Treaty.
      
      38     Since the Commission has not proved that Ireland has failed to fulfil its obligations under the Treaty, the action must be
         dismissed.
      
       Costs
      39     Under Article 69(2) of the Rules of Procedure, the unsuccessful party is to be ordered to pay the costs if they have been
         applied for in the successful party’s pleadings. Since Ireland has applied for the Commission to be ordered to pay the costs
         and the latter has been unsuccessful, the Commission must be ordered to pay the costs.
      
      On those grounds, the Court (Grand Chamber) hereby:
      1.      Dismisses the action;
      2.      Orders the Commission of the European Communities to pay the costs.
      [Signatures]
      * Language of the case: English.