CJEC, 5th chamber, May 4, 1995, No C-79/94

THE COURT (Fifth Chamber)

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.

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.

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.