CJEC, 4th chamber, April 9, 2003, No C-424/01

THE COURT (Fourth Chamber)

1. By order of 25 October 2001, received at the Court on the following day, the Bundesvergabeamt (Federal Procurement Office) referred to the Court of Justice for a preliminary ruling under Article 234 EC two questions on the interpretation of Article 2 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), as amended by 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) ('Directive 89-665').

2. Those questions were raised in the course of proceedings between CS Communications & Systems Austria GmbH ('CS Austria') and Allgemeine Unfallversicherungsanstalt ('AUV'), regarding the decision taken by the latter to reject, without considering its merits, the tender that CS Austria had made in relation to a contract to deliver, install and initialise various network electronic components, on the ground that it did not correspond to the specifications of the invitation to tender.

Community legal framework

3. As stated in the third recital in the preamble thereto, Directive 89-665 aims to increase the guarantees of transparency and non-discrimination in relation to the opening-up of public procurement to Community competition and to ensure, in particular, that effective and rapid remedies are available in Member States in the case of infringements of Community law in the field of public procurement or national rules implementing that law.

4. Article 2(1) of Directive 89-665 states, to that end, that the Member States are to ensure 'that the measures taken for the purpose of [guaranteeing that such effective and rapid remedies are available] include provision for the powers to:

(a) take, at the earliest opportunity and by way of interlocutory procedures, interim measures with the aim of correcting the alleged infringement or preventing further damage to the interests concerned, including measures to suspend or to ensure the suspension of the procedure for the award of a public contract or the implementation of any decision taken by the contracting authority;

(b) either set aside or ensure the setting aside of decisions taken unlawfully, including the removal of discriminatory technical, economic or financial specifications in the invitation to tender, the contract documents or in any other document relating to the contract award procedure;

(c) award damages to persons harmed by an infringement.'

5. As regards the adoption of interim measures, Article 2(4) provides:

'The Member States may provide that when considering whether to order interim measures the body responsible may take into account the probable consequences of the measures for all interests likely to be harmed, as well as the public interest, and may decide not to grant such measures where their negative consequences could exceed their benefits. A decision not to grant interim measures shall not prejudice any other claim of the person seeking these measures.'

6. Finally, under the first subparagraph of Article 2(8):

'Where bodies responsible for review procedures are not judicial in character, written reasons for their decisions shall always be given. Furthermore, in such a case, provision must be made to guarantee procedures whereby any allegedly illegal measure taken by the review body or any alleged defect in the exercise of the powers conferred on it can be the subject of judicial review or review by another body which is a court or tribunal within the meaning of Article [234] of the Treaty and independent of both the contracting authority and the review body.'

National legal framework

7. Directive 89-665 was transposed into Austrian law by the Bundesgesetz über die Vergabe von Aufträgen (Bundesvergabegesetz) (Federal Law on the award of public contracts, BGBl. 1993-462). That law was replaced in 1997 by a law of the same title (BGBl. I, 1997-56, 'the BVergG').

8. Paragraph 113 of the BVergG provides:

'1. The Bundesvergabeamt is responsible on application for carrying out a review procedure in accordance with the following provisions.

2. Until the award of the contract, the Bundesvergabeamt may:

(a) grant interim orders, and

(b) set aside unlawful decisions of the contracting authority

in order to prevent infringements of this federal law and its implementing rules.

3. Once the contract has been awarded or the contract award procedure has been ended, the Bundesvergabeamt may determine that as a result of an infringement of this federal law, or of any regulations made hereunder, the award was not made to the tenderer who made the best offer. ...'

9. Paragraph 116, concerning the adoption of interim orders, provides:

'1. As soon as the review procedure is initiated the Bundesvergabeamt is bound in the case of an application to that effect to make without delay, by way of interlocutory order, the interim measures which appear necessary and appropriate to remove or prevent harm, existing or imminent, which adversely affects the applicant's interests on account of the alleged unlawful act.

...

3. Before making an interim order the Bundesvergabeamt must weigh the probable consequences of the measure to be taken for all the interests of the defendant, the other candidates or tenderers and the contracting authority likely to be harmed, as well as any specific public interest in continuing the contract award procedure. If it appears from that examination that the negative consequences of an interim order outweigh its advantages, it must not be granted.

4. An interim order may provisionally suspend the entire contract award procedure, or certain decisions of the contracting authority until any order to set aside the decision is made by the Bundesvergabeamt, or may prescribe any other appropriate measure. Further, it is appropriate to make an order for the interim measure which is the least onerous in the light of the aim pursued.

...

6. Interim measures have immediate effect. Their implementation is governed by the Verwaltungsvollstreckungsgesetz 1991 [Law on the enforcement of administrative decisions, BGBl. 1991-53].'

The main proceedings and the questions referred for a preliminary ruling

10. On 9 July 2001 the AUV published an invitation to tender for a contract to deliver, install and initialise various network electronic components and network management software. The value of that contract, which also included training on the use of that software, was estimated at EUR 1 000 000.

11. By letter of 10 September 2001, CS Austria submitted a tender for the contract stating, however, that the products that it sought to supply were not new products, but that they had been subject to a general overhaul.

12. By letter of 19 September 2001, the AUV informed CS Austria that its tender had been rejected, without consideration of the content, on the ground that it did not correspond to the specifications of the invitation to tender. The AUV relied, in that regard, on the case-law of the Austrian civil courts, according to which in the case of doubt and in the absence of any express provision to the contrary, only new products may be tendered for a public supply contract.

13. CS Austria brought an action before the Bundesvergabeamt under Paragraph 113 of the BVergG, seeking to have the rejection of its tender set aside, and for an interim measure restraining the contracting authority from awarding the contract until the Bundesvergabeamt had ruled on the substance of its application to have the decision set aside. In support of its application, CS Austria argued, firstly, that the invitation to tender did not contain any indication that the products supplied had to be new, but only required the products to satisfy all the safety rules in force, which was the case in these proceedings because the products that it proposed for tender had been subject to a general overhaul and, as regards the electronic switches, were not liable to any form of wear and tear. Secondly, CS Austria argued that it had submitted the tender which was the lowest in price, although fully equivalent technically to the tenders of the other tenderers, and that the contract should therefore have been awarded to it, so that the AUV's decision to dismiss its tender without examining its content was unlawful, and was likely to cause it serious financial loss.

14. The AUV contended that the interim measure should be set aside on the ground, firstly, that a delay of two months in the award of the contract would expose it to considerable financial loss and would jeopardise the treatment capacity of the hospitals to which the supplies at issue were destined and secondly, that the application for an interim measure amounted to an abuse of process because the application to have the contracting authority's decision set aside, that the application for an interim measure was intended to preserve, was in any event bound to fail. The AUV pointed out, in that connection, that CS Austria admitted that it had only offered second-hand reconditioned products, while Austrian civil courts have consistently held that in the absence of an express stipulation to the contrary, the goods supplied under a contract must always be new. As used goods had not been expressly authorised in the invitation to tender, CS Austria's tender had purely and simply to be dismissed.

15. By decision of 25 October 2001, the Bundesvergabeamt allowed CS Austria's application in part, in so far as it restrained the contracting authority from awarding the contract before 25 November 2001. However, it reserved its decision on the other aspects of the interlocutory application, on the ground that that depended on an interpretation of Article 2 of Directive 89-665. It observed, in that regard, that although the Austrian legislature had taken, in Paragraph 116(3) of the BVergG, the measures necessary for the transposition of Article 2(4) of Directive 89-665, the latter provision did not explicitly provide for consideration, by the body responsible for the review procedures for the award of public contracts, of the prospects of success of the application to set aside the contracting authority's decision.

16. According to the Bundesvergabeamt, firstly, that provision could be interpreted as meaning that only the factual difficulties that the grant of an interim measure involves, such as the delay in awarding the contract and the difficulties which arise from that, would be taken into consideration by that body. Such an interpretation could be justified by considerations relating to the essential effectiveness of the interlocutory procedure for the purposes of Directive 89-665, as consideration of the substantive application's prospects of success as early as at the stage of the decision relating to the interim measure in fact anticipates the outcome of the substantive proceedings.

17. Secondly, the Bundesvergabeamt points out that Article 2(4) of Directive 89-665 explicitly authorises the body responsible for review procedures for the award of public contracts to take account of the probable consequences of interim measures for all interests likely to be affected, including the public interest. It is thus possible that in weighing those competing interests, that body may also consider the prospects of success of the application to set aside the contracting authority's decision.

18. Taking the view, in those circumstances, that the resolution of the dispute pending before it depended on an interpretation of Community law, the Bundesvergabeamt decided to stay its proceedings and to refer the following questions to the Court for a preliminary ruling:

'1. When balancing interests prior to deciding an application for interim measures, as required by Article 2(4) 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, as amended by Directive 92-50-EEC of 18 June 1992, is the "body responsible for review procedures" within the meaning of Article 2(8) of Directive 89-665-EEC required to take into account the prospects of success of an application for an unlawful decision of a contracting authority to be set aside pursuant to Article 2(1)(b) of that directive?

2. If the answer to the first question is in the negative:

When balancing interests prior to deciding an application for interim measures, as required by Article 2(4) 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, as amended by Directive 92-50-EEC of 18 June 1992, is the "body responsible for review procedures" within the meaning of Article 2(8) of Directive 89-665-EEC entitled to take into account the prospects of success of an application for an unlawful decision of a contracting authority to be set aside pursuant to Article 2(1)(b) of that directive?'

19. The national court also asked the Court to deal with the reference for preliminary ruling by way of an accelerated procedure, in accordance with Article 104a of the Rules of Procedure, on the ground that the questions arise in the course of interlocutory proceedings and concern the award of a public contract which is still under way, that the contracting authority wished to award as soon as possible, having regard to the fact that any delay in the award of the contract was likely to lead to a reduction in the radiological treatment capacity of two large Austrian hospitals.

20. By decision of 20 November 2001 that request was rejected by the President of the Court, on the proposal of the Judge-Rapporteur, on the ground that the circumstances put forward by the national court did not establish that the questions referred for a preliminary ruling were matters of exceptional urgency.

The admissibility of the questions referred for a preliminary ruling

21. Relying on the Bundesvergabeamt's decision of 11 July 2001 to make a reference in other proceedings on the award of public contracts, registered at the Court Registry under number C-314-01 and currently pending before the Court, the Commission has expressed doubt as to the judicial character of the referring body, on the ground that it had acknowledged in that decision that its decisions 'do not comprise directions to the contracting authority that are enforceable'. In those circumstances, the Commission wishes to know whether the questions referred by the Bundesvergabeamt in the present proceedings are admissible, having regard to the case-law of the Court and in particular Case C-134-97 Victoria Film [1998] ECR I-7023, paragraph 14, and Case C-178-99 Salzmann [2001] ECR I-4421, paragraph 14, according to which a national court may refer a question to the Court only if there is a case pending before it and if it is called upon to give judgment in proceedings intended to lead to a decision of a judicial nature.

22. In that regard, it must be observed, firstly, that Paragraph 116(4) of the BVergG indicates expressly that the Bundesvergabeamt, hearing an application for interim relief, may stay the award procedure as a whole, or only certain decisions of the contracting authority, or order other appropriate measures.

23. Secondly, it is clear from Paragraph 116(6) that the orders made by the Bundesvergabeamt in the course of interlocutory proceedings are immediately enforceable, and that they are governed in that respect by the Law of 1991 on the enforcement of administrative decisions.

24. As the Commission has not put forward any argument to cast doubt on the binding nature of those orders there is no reason, having regard to the provisions of Paragraph 116(4) and (6) of the BVergG, to question the judicial character of the Bundesvergabeamt.

25. It follows that the questions referred by that body are admissible.

The questions referred for a preliminary ruling

26. By its two questions, which must be considered together, the national tribunal asks, essentially, whether it follows from Directive 89-665, and more particularly from Article 2(4), that when a body responsible for review procedures for the award of public contracts determines an application for interim relief, it is bound or, as the case may be, authorised to take account of the prospects of success of an application for annulment of the decision of the contracting authority based on the unlawfulness of that decision.

27. Taking the view that the answer to those questions did not admit of any reasonable doubt the Court, in accordance with Article 104(3) of the Rules of Procedure, informed the national tribunal that it intended to give judgment by reasoned order and invited the interested parties referred to in Article 23 of the EC Statute of the Court of Justice to submit observations on the matter.

28. Only the Commission submitted its observations within the time-limit. While it reiterated its doubts as to the admissibility of the questions referred, it expressed its agreement with the decision of the Court to give judgment by reasoned order.

29. It must be observed that the prospects of success of the substantive action are not mentioned among the factors which the body responsible for review procedures for the award of public contracts must or may take account of when it determines an application for interim measures under Article 2(1)(a) of Directive 89-665, but that provision does not preclude them from being considered. Article 2(4) of the directive merely states that the Member States may provide that when considering whether to order interim measures, the body responsible may take into account the probable consequences of the measures for all interests likely to be harmed, as well as the public interest, and may decide not to grant such measures where their negative consequences could exceed their benefits.

30. In the absence of specific Community rules governing the matter, it is therefore for the domestic legal system of each Member State to determine the rules governing the adoption of interim measures by the bodies responsible for review procedures for the award of public contracts, taking into account the purpose of Directive 89-665, which is to ensure that decisions taken by the contracting authority may be reviewed effectively and as rapidly as possible if there has been an infringement of Community law in the field of public procurement or of the national rules implementing that law.

31. However, according to settled case-law the Member States must ensure that the relevant national rules are not less favourable than those governing similar domestic actions (the principle of equivalence) and that they do not make it practically impossible or excessively difficult to exercise rights conferred by Community law (the principle of effectiveness) (see in particular to that effect Case C-92-00 HI [2002] ECR I-5553, paragraph 67, Case C-62-00 Marks & Spencer [2002] ECR I-6325, paragraph 34, and Case C-255-00 Grundig Italiana [2002] ECR I-8003, paragraph 33).

32. As regards the latter principle, it is plain that the fact that a national provision states that the body responsible for review procedures for public procurement is bound or, as the case may be, authorised to take account of the prospects of success of an application for a decision of a contracting authority to be set aside on the ground that it is unlawful is not such as to undermine the effectiveness of the rights conferred by the Community directives on the coordination of the procedures for the award of public contracts and, in particular, of the right to effective and rapid remedies laid down by Directive 89-665, because such a national provision merely provides for the consideration, in each particular case, of the degree of likelihood of an alleged infringement of Community law in the field of public procurement or the national rules implementing that law.

33. Therefore, the answer to the questions referred is that Article 2 of Directive 89-665 must be interpreted as meaning that it does not preclude the Member States from providing that when a body responsible for review procedures for the award of public contracts decides an application for interim measures, it is bound or authorised to take account of the prospects of success of an application for a decision of a contracting authority to be set aside on the ground that it is unlawful, so long as the national rules thus governing the adoption of those interim measures are not less favourable that those governing similar domestic actions and do not make it practically impossible or excessively difficult to exercise the rights conferred by Community law.

Costs

34. The costs incurred by the Austrian and French Governments and by the Commission of the European Communities, which have submitted observations to the Court, are not recoverable. Since these proceedings are, for the parties to the main action, a step in the proceedings pending before the national tribunal, the decision on costs is a matter for that tribunal.

On those grounds,

THE COURT (Fourth Chamber),

in answer to the questions referred to it by the Bundesvergabeamt by decision of 25 October 2001, hereby rules:

Article 2 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, as amended by Council Directive 92-50-EEC of 18 June 1992 relating to the coordination of procedures for the award of public service contracts, must be interpreted as meaning that it does not preclude the Member States from providing that when a body responsible for review procedures for the award of public contracts decides an application for interim measures, it is bound or authorised to take account of the prospects of success of an application for a decision of a contracting authority to be set aside on the ground that it is unlawful, so long as the national rules thus governing the adoption of those interim measures are not less favourable than those governing similar domestic actions and do not make it practically impossible or excessively difficult to exercise the rights conferred by Community law.