HAVET & VANHUFFEL – Association d’avocats
The Regional Court of Warsaw (Poland) had, in the context of a dispute, by decision of 21 December 2023, referred a preliminary question concerning the interpretation of Article 2 of Directive 2004/18/EC of the European Parliament and of the Council of 31 March 2004 on the coordination of procedures for the award of public works contracts, public supply contracts and public service contracts (OJ 2004 L 134, p. 114).
The dispute was between Miejskie Przedsiębiorstwo Wodociągów i Kanalizacji w m.st. Warszawie S.A., the contracting authority, to Veolia Water Technologies, Krüger A/S, OTV France, Haarslev Industries GmbH and Warbud S.A., a consortium of companies, regarding the payment of contractual penalties and compensation for the improper performance of a public works contract for the modernisation and extension of the Czajka wastewater treatment plant (Poland).
The warranty period having expired, the relations between the parties were governed, according to the Warsaw Regional Court, by analogy, by Article 581, paragraph 1, of the Civil Code, relating to the warranty in sales contracts, which provides that the warranty period starts running again from the delivery of a defect-free item or the return of the repaired item, so that, on 27 November 2018, the recoverers were still covered by the warranty, the period of which had started running again on 22 February and 28 April 2016 respectively.
The consortium of companies contests the application of Article 581, paragraph 1, of the Civil Code on the grounds that this provision only concerns sales contracts and that it was not agreed at any time that it would govern, by analogy, the guarantee in the context of the works contract in question. According to this consortium of companies, the application of the said provision would be contrary to the principles of transparency, equal treatment and competition set out in Directive 2004/18 and now reiterated in Directive 2014/24/EU of the European Parliament and of the Council of 26 February 2014 on public procurement and repealing Directive 2004/18/EC (OJ 2014 L 94, p. 65), in that it would amount to imposing requirements that are not clearly apparent from the tender documents or from the Polish regulations in force, but only from a controversial interpretation of the Civil Code.
The Regional Court questioned the scope, in this context, of the principles of equal treatment and non-discrimination in the Court’s case law, and more specifically whether the assessments made in the judgment of 2 June 2016, Pizzo (C 27/15, EU:C:2016:404) should be transposed to the guarantees applicable in the context of the works contract at issue in the main proceedings. It noted in particular that knowledge of national law determines the ability of the operators concerned to set their prices at the right level, and emphasized that the application by analogy of the provisions of the Civil Code governing guarantees in sales contracts could place economic operators from other Member States at a disadvantage compared to national economic operators.
The Warsaw Regional Court decided to stay the proceedings and refer the following question to the Court for a preliminary ruling:
“Must the principles of transparency, equal treatment and fair competition, referred to in Article 2 of Directive [2004/18] (currently Article 18(1) of Directive [2014/24]), be interpreted as precluding an interpretation of national law which allows the provisions of a public procurement contract concluded with a consortium composed of entities from different Member States of the European Union to be determined by taking into account, in that contract, an obligation which may indirectly affect the determination of the price in the tender submitted by that contractor, [an obligation] which is not expressly provided for in [that] contract or in the tender documents, but which arises from a provision of national law which is not directly applicable [to the same] contract, but which has nevertheless been applied by analogy?”
In its judgment, the Court of Justice of the European Union reiterates that the principle of equal treatment, which is one of the fundamental principles of EU law, requires that comparable situations not be treated differently and that different situations not be treated equally, unless such treatment is objectively justified (judgment of 6 October 2021, Conacee, C 598/19, EU:C:2021:810, paragraph 36 and the case-law cited). Therefore, tenderers must be on an equal footing when they prepare their tenders and aims to promote the development of healthy and effective competition between undertakings participating in a public contract (judgment of 6 October 2021, Conacee, C 598/19, EU:C:2021:810, paragraph 37 and case law cited) and have the same opportunities in formulating the terms of their tenders and therefore implies that these tenders are subject to the same conditions for all tenderers.
This principle of equality has as a corollary the obligation of transparency, which aims to ensure the absence of any risk of favoritism or arbitrariness on the part of the contracting authority. This obligation implies that all the conditions and terms of the award procedure must be formulated clearly, precisely, and unequivocally in the contract notice or specifications.
Following the Court of Justice of the European Union, Article 10 of Directive 2004/17 sets out these requirements by explicitly providing that contracting entities must treat economic operators equally, in a non-discriminatory manner, and act transparently.
For the Court, the contracting authority is required to strictly observe the criteria it has itself set until the end of the contract execution phase. It is therefore not authorized to alter the general structure of a contract award by unilaterally modifying, after the award, one of the essential conditions of that award, in particular a stipulation which, if it had appeared in the contract notice, would have led the tenderers concerned to submit a substantially different offer.
The duration of the guarantee and the essential conditions of its implementation are important for determining the financial terms of the bids submitted by bidders. They must therefore be clearly defined and made public, to enable these bidders to understand exactly the legal and economic conditions to which the award of the contract in question and the terms of its execution are subject.
As such, the bidder must be able to identify, as early as the tendering phase, any events that may extend the guarantee period, as well as the extent of the obligations that may be incumbent upon it in the execution of the contract in question.
The Court notes that the guarantee charter contained in the works contract at issue and binding the contracting parties in the main proceedings expressly provided for a guarantee of a duration of 36 months, starting from the date of issue of the certificate of proper execution of the works, and referred to the application, mutatis mutandis, of the relevant provisions of Polish law, in particular the Civil Code, for matters not governed by that charter, which made Article 581, paragraph 1, of the Civil Code, relating to the guarantee in sales contracts starting a new guarantee period, applicable to the works contract at issue in the main proceedings.
The Court reiterates that the national court has exclusive jurisdiction to establish and assess the facts of the main proceedings and to interpret and apply national law. However, it is for the Court to provide the national court with the elements of interpretation of EU law that may prove necessary for the resolution of the main proceedings, while taking into account the guidance contained in the order for reference regarding the national law applicable to the dispute and the facts characterizing the dispute.
For the Court of Justice of the European Union, Directive 2004/18 does not, in principle, preclude a reference, in the contract notice or the specifications, to legislative or regulatory provisions concerning certain technical specifications when such a reference is, in practice, unavoidable, provided that it is accompanied by all the additional information necessary to ensure knowledge of national law and predictability regarding the degree of legal certainty that that law must guarantee to economic operators in the context of public procurement, which is decisive.
For the Court, a simple reference to national law, such as that provided for in the Guarantee Charter, does not appear to enable a reasonably informed
sufficiently clearly, at the tendering stage, that the implementation of the guarantee within the initial period stipulated in the contract in question is likely to trigger the start of a new guarantee period, nor does it allow it, a fortiori, to identify the obligations that may be incumbent upon it in the performance of that contract.
For these various reasons, the Court of Justice of the European Union ruled that the principle of equal treatment and the obligation of transparency, as referred to in Article 10 of Directive 2004/17/EC of the European Parliament and of the Council of 31 March 2004 coordinating the procurement procedures of entities operating in the water, energy, transport, and postal services sectors, must be interpreted as precluding the application by analogy to a works contract, pursuant to a case-law interpretation, of provisions of national law governing guarantees in sales contracts, the content of which has not been expressly specified either in the tender documents or in the works contract, when the applicability of such provisions is not sufficiently clear and foreseeable for a reasonably informed and normally diligent tenderer.
The judgment is available via the link: https://curia.europa.eu/juris/document/document.jsf;jsessionid=0CA5A0BB24FF4E620BC5CC55C6A64688?text=&docid=300964&pageIndex=0&doclang=EN&mode=req&dir=&occ=first&part=1&cid=1795867.