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You are here: BAILII >> Databases >> Court of Justice of the European Communities (including Court of First Instance Decisions) >> EvoBus Austria (Law relating to undertakings) [1998] EUECJ C-111/97 (24 September 1998)
URL: http://www.bailii.org/eu/cases/EUECJ/1998/C11197.html
Cite as: [1998] EUECJ C-111/97
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JUDGMENT OF THE COURT (Sixth Chamber)

24 September 1998 (1)

(Public procurement in the water, energy, transport and telecommunications sectors - Effect of a directive which has not been transposed)

In Case C-111/97,

REFERENCE to the Court under Article 177 of the EC Treaty by the Bundesvergabeamt (Austria) for a preliminary ruling in the proceedings pending before that body between

EvoBus Austria GmbH

and

Niederösterreichische Verkehrsorganisations GmbH (Növog)

on the interpretation of Council Directive 92/13/EEC of 25 February 1992 coordinating the laws, regulations and administrative provisions relating to the application of Community rules on the procurement procedures of entities operating in the water, energy, transport and telecommunications sectors (OJ 1992 L 76, p. 14),

THE COURT (Sixth Chamber),

composed of: H. Ragnemalm, President of the Chamber, G.F. Mancini, P.J.G. Kapteyn (Rapporteur), J.L. Murray and K.M. Ioannou, Judges,

Advocate General: N. Fennelly,


Registrar: H.A. Rühl, Principal Administrator,

after considering the written observations submitted on behalf of:

- the Austrian Government, by Wolf Okresek, Ministerialrat in the Constitutional Affairs Service of the Federal Chancellor's Office, acting as Agent,

- the Commission of the European Communities, by Hendrik van Lier, Legal Adviser, and Claudia Schmidt, of its Legal Service, acting as Agents,

having regard to the Report for the Hearing,

after hearing the oral observations of the Niederösterreichische Verkehrsorganisations GmbH (Növog), represented by Claus Casati, trainee lawyer, Vienna, the Austrian Government, represented by Michael Fruhmann, of the Federal Ministry of Foreign Affairs, acting as Agent, and the Commission, represented by Hendrik van Lier and Claudia Schmidt, at the hearing on 12 February 1998,

after hearing the Opinion of the Advocate General at the sitting on 2 April 1998,

gives the following

Judgment

  1. By order of 25 November 1996, received at the Court on 17 March 1997, the Bundesvergabeamt (Federal Procurement Office) referred to the Court for a preliminary ruling under Article 177 of the EC Treaty three questions on the interpretation of Council Directive 92/13/EEC of 25 February 1992 coordinating the laws, regulations and administrative provisions relating to the application of Community rules on the procurement procedures of entities operating in the water, energy, transport and telecommunications sectors (OJ 1992 L 76, p. 14).

  2. Those questions were raised in proceedings between EvoBus Austria GmbH (hereinafter 'EvoBus') and the Niederösterreichische Verkehrsorganisations GmbH (hereinafter 'Növog') relating to the award of a public supply contract in respect of buses.

    Legal background

  3. Directive 92/13 requires the Member States to lay down appropriate procedures for reviewing the legality of the procurement process in the sectors specified in the directive not later than 1 January 1993.

  4. Article 1 of the Directive is worded as follows:

    '1. The Member States shall take the measures necessary to ensure that decisions taken by contracting entities may be reviewed effectively and, in particular, as rapidly as possible in accordance with the conditions set out in the following Articles and, in particular, Article 2 (8), on the grounds that such decisions have infringed Community law in the field [of] procurement or national rules implementing that law ...

    2. Member States shall ensure that there is no discrimination between undertakings likely to make a claim for injury in the context of a procedure for the award of a contract as a result of the distinction made by this Directive between national rules implementing Community law and other national rules.

    3. The Member States shall ensure that the review procedures are available, under detailed rules which the Member States may establish, at least to any person having or having had an interest in obtaining a particular contract and who has been or risks being harmed by an alleged infringement. In particular, the Member States may require that the person seeking the review must have previously notified the contracting entity of the alleged infringement and of his intention to seek review.'

  5. Article 2 provides:

    '1. The Member States shall ensure that the measures taken concerning the review procedures specified in Article 1 include provision for the powers:

    either

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

    (b) to set aside or ensure the setting aside of decisions taken unlawfully, including the removal of discriminatory technical, economic or financial specifications in the notice of contract, the periodic indicative notice, the

    notice on the existence of a system of qualification, the invitation to tender, the contract documents or in any other document relating to the contract award procedure in question;

    or

    (c) to take, at the earliest opportunity, if possible by way of interlocutory procedures and if necessary by a final procedure on the substance, measures other than those provided for in points (a) and (b) with the aim of correcting any identified infringement and preventing injury to the interests concerned; in particular, making an order for the payment of a particular sum, in cases where the infringement has not been corrected or prevented.

    Member States may take this choice either for all contracting entities or for categories of entities defined on the basis of objective criteria, in any event preserving the effectiveness of the measures laid down in order to prevent injury being caused to the interests concerned;

    (d) and, in both the above cases, to award damages to persons injured by the infringement.

    Where damages are claimed on the grounds that a decision has been taken unlawfully, Member States may, where their system of internal law so requires and provides bodies having the necessary powers for that purpose, provide that the contested decision must first be set aside or declared illegal.

    ...

    7. Where a claim is made for damages representing the costs of preparing a bid or of participating in an award procedure, the person making the claim shall be required only to prove an infringement of Community law in the field of procurement or national rules implementing that law and that he would have had a real chance of winning the contract and that, as a consequence of that infringement, that chance was adversely affected.

    8. The Member States shall ensure that decisions taken by bodies responsible for review procedures can be effectively enforced.

    9. 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 measures 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 177 of the Treaty and independent of both the contracting entity and the review body.

    The members of the independent body referred to in the first paragraph shall be appointed and leave office under the same conditions as members of the judiciary as regards the authority responsible for their appointment, their period of office, and their removal. At least the President of this independent body shall have the same legal and professional qualifications as members of the judiciary. The independent body shall take its decisions following a procedure in which both sides are heard, and these decisions shall, by means determined by each Member State, be legally binding.'

  6. In Austria, the Bundesgesetz über die Vergabe von Aufträgen (Federal Law on Public Procurement, BGBl. (Bundesgesetzblatt = Federal Law Gazette) No 463/1993, hereinafter 'the BVergG'), which entered into force on 1 January 1994, transposed into national law:

    - 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), and

    - Council Directive 93/38/EEC of 14 June 1993 coordinating the procurement procedures of entities operating in the water, energy, transport and telecommunications sectors (OJ 1993 L 199, p. 84).

  7. Paragraph 7(2) of the BVergG provides:

    'This Law only applies in the water, energy, transport and telecommunications sectors to the extent provided for in the fourth chapter of the third part. The provisions of the fourth part do not apply to procurement in those sectors.'

  8. The fourth part of the BVergG relating to legal protection (Rechtsschutz) provides for a procedure for review by the Bundesvergabeamt. Thus, Paragraph 91(3) provides that an unsuccessful tenderer may appeal against the award of a public sector contract to the Bundesvergabeamt within two weeks of being informed of the award.

  9. In the fourth chapter, entitled 'Specific provisions relating to awarding authorities in the water, energy, transport and telecommunications sectors', Paragraph 67(1) of the BVergG provides: 'Only the provisions of this chapter apply to public awarding authorities, to the extent that they carry out an activity within the meaning of subparagraph 2, and to private awarding bodies.'

  10. Directive 92/13 was transposed into domestic law by the federal law amending the federal law on the award of public contracts and the law on the employment of foreigners (BGBl. No 776/1996). That law entered into force on 1 January 1997.

    The main proceedings

  11. On 18 July 1996, EvoBus requested the Bundesvergabeamt to set in motion a review procedure under Paragraph 91(3) of the BVergG. That request related to the tendering procedure initiated by Növog in respect of the delivery of 36 to 46 buses for the regular inter-urban express bus service.

  12. In support of its application, EvoBus claimed that, in the course of that procedure, the successful tender had been subsequently amended and the repurchase price of the buses thus increased from 34% to 55%.

  13. In the circumstances, the Bundesvergabeamt decided to stay proceedings and to refer the following questions for a preliminary ruling:

    '(1) May an individual derive, from Article 1(1) to (3), Article 2(1), (7) to (9) or any other provisions of Directive 92/13/EEC, a specific right to have review proceedings conducted before authorities or courts or tribunals complying with Article 2(9) of Directive 92/13/EEC, which is so sufficiently precise and specific that, in the event of non-transposition by a Member State of the provisions of the directive in question, an individual may rely on that provision?

    If Question 1 is answered in the affirmative:

    (2) In conducting a review procedure, must a national court having the attributes of the Bundesvergabeamt disregard provisions of national law such as Paragraph 7(2) in conjunction with Paragraph 67(1) of the Bundesvergabegesetz which preclude it from conducting a review procedure even where such review procedure is intended by the national legislature solely to serve the purpose of transposing Directive 89/665/EEC?

    If Question 1 is answered in the affirmative:

    (3) Must the adjudicating court disregard those or any comparable procedural provisions of national law in such circumstances, if they impede or prevent a review procedure from being effectively conducted?'

    The first and second questions

  14. By the first and second questions, which it is appropriate to deal with together, the national court is essentially asking whether Articles 1(1) to (3) and 2(1) and (7) to (9) or any other provisions of Directive 92/13 must be interpreted as meaning that, where the directive has not been transposed by the end of the period prescribed for that purpose, the review bodies of the Member States having competence in relation to procedures for the award of public supply and public works contracts

    may also hear applications for review relating to procedures for the award of public contracts in the water, energy, transport and telecommunications sectors.

  15. It must first be pointed out that in its judgment in Dorsch Consult (Case C-54/96 [1997] ECR I-4961, paragraph 40), the Court observed that it is for the legal system of each Member State to determine which court or tribunal has jurisdiction to hear disputes involving individual rights derived from Community law. However, it is the Member States' responsibility to ensure that those rights are effectively protected in each case. Subject to that reservation, it is not for the Court to involve itself in the resolution of questions of jurisdiction to which the classification of certain legal situations based on Community law may give rise in the national judicial system.

  16. Next, it must be observed that, although Article 1 of Directive 92/13 requires the Member States to adopt the measures necessary to ensure effective review in the field of public service contracts in the water, energy transport and telecommunications sectors, it does not indicate which national bodies are to be the competent bodies for this purpose and, furthermore, does not require that those bodies be the same as those which the Member States have designated in the field of public works contracts and public supply contracts.

  17. It is common ground that, at the time when EvoBus made its application for review before the Bundesvergabeamt, namely 18 July 1996, Directive 92/13 had not been transposed into Austrian law.

  18. In regard to such circumstances, the Court pointed out at paragraph 43 of the Dorsch Consult judgment, cited above, that Member States' obligation arising from a directive to achieve the result envisaged by the directive and their duty under Article 5 of the EC Treaty to take all appropriate measures, whether general or particular, to ensure fulfilment of that obligation, is binding on all the authorities of Member States, including, for matters within their jurisdiction, the courts. It follows that, when applying national law, whether adopted before or after the directive, the national court called upon to interpret that law must do so, as far as possible, in the light of the wording and the purpose of the directive so as to achieve the result which it has in view and thereby comply with the third paragraph of Article 189 of the EC Treaty (see Case C-106/89 Marleasing [1990] ECR I-4135, paragraph 8; Case C-334/92 Wagner Miret [1993] ECR I-6911, paragraph 20; and Case C-91/92 Faccini Dori [1994] ECR I-3325, paragraph 26).

  19. That obligation requires the national court to determine whether the relevant provisions of domestic law allow recognition of a right for individuals to review in relation to awards of public service contracts in the water, energy, transport and telecommunications sectors. In circumstances such as those in point in the main proceedings, the national court is required in particular to determine whether that right to review may be exercised before the same bodies as those established to hear applications for review concerning the award of public supply contracts and

    public works contracts (see the judgment in Dorsch Consult, cited above, end of paragraph 46).

  20. In the main proceedings, it is, however, common ground that, pursuant to Paragraphs 7(2) and 67(1) of the BVergG, the awarding authorities under Paragraph 67(2) are expressly excluded from the system of review established by that Law pursuant to Directive 89/665.

  21. In those circumstances it must be pointed out that, if the relevant provisions of domestic law cannot be interpreted in conformity with Directive 92/13, the persons concerned may, in accordance with the appropriate procedures under domestic law, claim compensation for the damage incurred owing to the failure to transpose the directive within the time prescribed (Dorsch Consult, cited above, paragraph 45; on the question of Member States' liability in the event of non-transposition of a directive see, in particular, Joined Cases C-6/90 and C-9/90 Francovich and Others [1991] ECR I-5357 and Joined Cases C-178/94, C-179/94, C-188/94, C-189/94 and C-190/94 Dillenkofer and Others [1996] ECR I-4845).

  22. Accordingly, the answer to be given to the first and second questions is that Article 1(1) to (3), Article 2(1), (7) to (9) and the other provisions of Directive 92/13 cannot be interpreted as meaning that, where the Directive has not been transposed by the end of the period prescribed for that purpose, the review bodies of the Member States having competence in relation to procedures for the award of public works contracts and public supply contracts may also hear applications for review relating to procedures for the award of public contracts in the water, energy, transport and telecommunications sectors. However, in order to observe the requirement that domestic law be interpreted in conformity with Directive 92/13 and the requirement that the rights of individuals be protected effectively, the national court must determine whether the relevant provisions of its domestic law allow recognition of a right for individuals to bring review proceedings in relation to awards of public contracts in the water, energy, transport and telecommunications sectors. The national court must, in particular, verify whether that right to bring review proceedings can be exercised before the same bodies as those established to hear applications for review concerning the award of public supply contracts and public works contracts. If the provisions of domestic law are incapable of being interpreted in conformity with Directive 92/13, the persons concerned may, in accordance with the appropriate procedures under domestic law, claim compensation for damage suffered as a result of the failure to transpose the directive within the prescribed time-limit.

    The third question

  23. In view of the answer given to the first and second questions, it is not necessary to answer the third question.

    Costs

    24. 24. The costs incurred by the Austrian Government 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 proceedings, a step in the proceedings pending before the national referring body, the decision on costs is a matter for that body.

    On those grounds,

    THE COURT (Sixth Chamber),

    in answer to the questions referred to it by the Bundesvergabeamt by order of 25 November 1996, hereby rules:

    Article 1(1) to (3), Article 2(1), (7) to (9) and the other provisions of Council Directive 92/13/EEC of 25 February 1992 coordinating the laws, regulations and administrative provisions relating to the application of Community rules on the procurement procedures of entities operating in the water, energy, transport and telecommunications sectors cannot be interpreted as meaning that, where the directive has not been transposed by the end of the period prescribed for that purpose, the review bodies of the Member States having competence in relation to procedures for the award of public works contracts and public supply contracts may also hear applications for review relating to procedures for the award of public contracts in the water, energy, transport and telecommunications sectors. However, in order to observe the requirement that domestic law be interpreted in conformity with Directive 92/13 and the requirement that the rights of individuals be protected effectively, the national court must determine whether the relevant provisions of its domestic law allow recognition of a right for individuals to bring review proceedings in relation to awards of public contracts in the water, energy, transport and telecommunications sectors. The national court must, in particular, verify whether that right to bring review proceedings can be exercised before the same bodies as those established to hear applications for review concerning the award of public supply contracts and public works contracts. If the provisions of domestic law are incapable of being interpreted in conformity with Directive 92/13, the persons concerned may, in accordance with the appropriate procedures under domestic law, claim compensation for damage suffered as a result of the failure to transpose the directive within the prescribed time-limit.

    Ragnemalm
    Mancini
    Kapteyn

    Murray Ioannou

    Delivered in open court in Luxembourg on 24 September 1998.

    R. Grass H. Ragnemalm

    Registrar President of the Sixth Chamber

    1: Language of the case: German.

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