C-182/80

JUDGMENT OF 4. 3. 1982 — CASE 182/80

In Case 182/80

H P. GAUFF INGENIEURE GMBH & Co. KG, 9 Passauer Straße, 8300 Nuremberg, represented by Gerd Coeler, Rechtsanwalt, 3 Paulstraße, 2000 Hamburg, applicant, v

COMMISSION OF THE EUROPEAN COMMUNITIES, represented by Dr Jörn Pipkorn, a member of its Legal Department, with an address for service in Lux- embourg at the office of Mario Cervino, Jean Monnet Building, Kirchberg, defendant,

APPLICATION for (i) a declaration that the defendant's decision that the applicant is not eligible to participate in invitations to tender or mutual agreement contracts concerning public service contracts financed by the European Development Fund is void; (ii) in the alternative a declaration that the defendant is under a duty to inform the applicant whether or not it is eligible for the purposes mentioned under (i), and (m) an order that the defendant should pay the costs of the action and pay to the appl.cant the sum of D M 1 by way of damages,

T H E C O U R T (Second Chamber)

The facts and arguments put forward by through direct negotiations, the parties in the course of the written against the wishes of the local procedure may be summarized as administration, to an association follows: of Italian engineers. (a) (2) On the basis of an oral I — F a c t s and w r i t t e n p r o c e d u r e recommendation by the local representative of the European The applicant, a German engineering Communities the applicant was firm, which specializes in the field of not included in the list of selected transport and hydraulic installations, has candidates for the construction of since 1965 operated exclusively in the the Aku la and Penetungu-Libutu ACP countries within the framework of dyke, despite the wishes. of the international aid to those countries. In authorities of that area. particular, the company has operated (b) Gabon since 1965, within the framework of projects financed by the European Once again, on the basis of an objection Development Fund [hereinafter referred on the pan of the European to as "the Fund"], in Cameroon, Gabon, Communities the undertaking "Gabon and the People's Republic of the Congo Engineering" of Libreville, which is the and Zaire, it has permanent and active applicant's Gabonese subsidiary, was establishments in other African countries excluded in 1977/78 from participation and maintains firms participating in the in the project for the road-system for business of engineering consultancy in Port Gentil — Lambaréné. Nigeria, Cameroon and Gabon. (c) Tanzania Since the middle of the nineteen The applicant had been awarded the seventies, the applicant has been contract for the project for the road- excluded from participation in projects in system for Mufindi, pursuant to an the ACP countries financed by the invitation to tender previously issued by Community. the local administration. After the amendment of the arrangements for It cites, by way of example, the financing the scheme and intervention following cases: from Brussels, the applicant was not (a) Zaire allowed to participate in the new invitation to tender because the local (a)(1) At the beginning of 1975 the representative of the European negotiations concerning the Communities indicated that the Gauff second phase of the construction undertaking was considered undesirable of the Mosango-Kiwit road, in Brussels. which were about to be concluded, were broken off by (d) Zambia the European Community with- Despite the proposals of the Zambián out any explanation of the Government authorities that the reasons for this. The supervision applicant should be placed on the list of of the work was then entrusted selected candidates, the applicant was

not taken into consideration as a result Zambián administration. As a of an objection on the pan of the result of an objection emanating European Community. The projects in from Brussels the applicant was question were tnter alia the following: deprived of the order and it was only because the applicant's (d) (1) November 1977 aircraft was already available in Zambia and because the scheme Study of Zambián transport, could no longer be postponed Ministn- for Energy, Transpon that the Zambián Government and Communications, in Lusaka. rejected financing from Brussels and awarded the contract directly (d)(2) 1978 to the applicant. Water supply structures for rural communities in the northern The applicant considers that the provinces of Zambia. defendant's conduct constitutes a conscious and deliberate boycott which (d)(3) 1978 jeopardizes its existence and the Water supply structures for rural employment of its 300 collaborators. It communities in the southern maintains that the Commission of the provinces of Zambia. European Communities is wrongly holding it to be ineligible to panicipate (d)(4) 1978 in contracts financed by the Fund in the ACP countries because of a matter Three agricultural supply roads. concerning the corruption of an official of the Commission in which the (d)(5) 1978 applicant, according to the Commission, Road link with Angola. was involved. The preparatory work carried In March 1975 the Commission was out by the applicant for this informed that, as a result of a tax project was considerable (topo- investigation by the German authorities graphical repon in October 1977, carried out on the applicant's premises, it two inspections of the locality, was etablished that in 1967 and 1968 submission of two tenders in payments amounting in all to DM 88 000 June and August 1978, and had been made to an official of Direc- reconnaissance flights over the torate General VIII of the Commission difficult sector of Sitaka-Watopa- whose responsibilities covered the Lukulu in August 1978). preparation, implementation and techni- cal supervision of projects financed by (d) (6) 1978 the Fund. The applicant declared to the Feasibility study concerning the tax authorities t^it it had sought auth- supplying of water for districts in orization from that official to transmit a the nonhern province and for the sum of DM 50 000 to an African by way central and southern provinces of commission which he was to receive (two separate projects) for the in respect of contracts financed in the Ministry for Water in Lusaka. country in question.

The applicant approached the defendant on a number of occasions in order to obtain clarification of its attitude towards it and by a letter dated 13 The applicant's legal representative again January 1976, addressed to the Director wrote to the Commission on 21 April General of Directorate General VIII of 1980 stating that he intended to institute the Commission, it offered to undertake proceedings before the Court of Justice various projects financed by the Fund in under Article 173 or 175 of the EEC Zaire and Cameroon. In his reply of 9 Treaty should the Commission persist in February 1976 the Director General, Mr its refusal to state whether his client was Krohn, rejected that offer. In another eligible to be entrusted with, the letter, dated 3 December 1976, the execution of projects on the basis of the applicant again raised the matter of what procedure of invitation to tender or it considered to be its exclusion from the of mutual agreement contracts. The projects financed by the Fund, which had Director General of the Legal already lasted for three years, and it Department of the Commission replied proposed to make a new start, on the by a letter dated 20 June 1980, in which basis of a resumption of its panicipation he maintained that the Commission had in the projects financed by the Fund. no power to give a reply in the abstract to the applicant's request since the selection of candidates for participation in invitations to tender was only made case by case. In his reply of 22 December 1976, Mr Krohn informed the applicant that he had passed the letter to the competent department of his General Directorate but did not provide further information As the applicant considered that letter as as to the action taken in regard to that an indication that the defendant intended letter. On 21 December 1977 two to "continue its arbitrary boycott and to members of the applicant's staff, Mr E. exclude it from participation, thereby Wassong and Mr P. Bauer, called on Mr jeopardizing the applicant's existence", it Meyer, Mr Krohn's successor in Direc- reacted against it by an application to the

(d) Those who have been convicted, by According to the requirements laid down a final judgment, of any offence in Article 25 of the Protocol for concerning their professional compiling the list of selected candidates, conduct". the latter must be nationals of Member States or AC P States and selected according to criteria guaranteeing their According to the Joint Declaration on qualifications, experience and indepen­ Article 22 of Protocol N o 2, contained dence and taking into account their avail­ in Annex IX to the Convention, the ability for the proposed undertaking. In placing and performance of public mutual agreement procedures the contracts financed by the Fund are to be Commission compiles a list of selected governed until the implementation of the candidates from which the ACP State decision of the Council of Ministers concerned chooses freely the listed referred to in Article 22 of Protocol candidate it wishes to deal with. With N o 2:

GAUFF v COMMISSION

JUDGMENT OF 4. 3. 1982 — CASE 182/80

IV — S u b m i s s i o n s a n d a r g u m e n t s request addressed by the applicant to the of t h e p a r t i e s Commission on 21 April 1980.

GAUFF v COMMISSION

EEC Treaty, is admissible. It maintains not failed to define its position on the that it is justified in claiming that the request to act contained in the Commission should give a clear applicant's letter of 21 April 1980. definition of its position on the question whether it is considered eligible or not Finally, the Commission maintains that, and the absence of such a decision in so far as the applicant supposes that constitutes at least a misuse of powers. there exists a decision selecting in Likewise, the applicant emphasizes that it advance undertakings which are eligible, is entitled to demand that the Treaty and a proposition which, according to the the rules of law relating to its application Commission, is not justified either by the be complied with and that, because the relevant provisions or by the admin- Commission not only has power but is istrative practice which it follows, the also under a duty to take action for this applicant should, in view of the system purpose, the lack of a decision on the of legal protection provided by the EEC applicant's eligibility constitutes an Treaty, have instituted proceedings for a infringement of the Treaty. declaration that that decision was void.

It observes that the request submitted by The claim for damages the applicant in its letter of 21 April 1980 is in fact aimed at procuring a restriction The applicant maintains that under of the Commission's discretion which Article 215 of the EEC Treaty it may is intended to be exercised in an claim to have made good the damage indeterminate number of future decisions which has been caused to it by the on the selection of candidates in certain conduct of the defendant and which may procedures concerning the award of be assessed at DM 1.

JUDGMENT OF 4. 3. 1982 — CASE 182/80

exclusion. The applicant considers that statements" which are said to have by reason of its being treated as ineligible caused damage to the applicant, those and of unjustified opinions expressed in statements are not adequately identified regard to it national administrations have in the application and consequently the become uncertain, with the result that it requirements of Article 38 (1) of the is excluded from projects financed by Rules of Procedure of the Court other agencies. concerning the designation of the subject-matter of the dispute and

The investments financed by the Fund it is Commission observes that, since the necessary to apply the rules for applicant failed to exercise the right open determining the persons who are entitled to it under the second paragraph of to tender for the contracts in question Article 173 of the EEC Treaty, namely and the conditions for refusing to contest the decisions awarding permission to participate in an invitation contracts to other candidates, it may not to lender or a mutual agreement now, by means of an action for damages, procedure.

GAUFF v COMMISSION

contracts financed by the European grounds for barring participation in Development Fund (Council Decision invitations to tender, will not bear an No 73/313/EEC of 24 July 1973). It interpretation which could result in the remarks that this body of rules application of other criteria. concerning the principle of admission to procedures concerning contracts are subject to precise and exhaustive exceptions introduced by provisions The applicant maintains that in its case laying down obstacles to participation none of the obstacles enumerated in the which must be interpreted restrictively. relevant provisions exist. It claims that This is the case with Article 22 (2) of the with regard to the facts alleged against it General Conditions for Public Works by the Commission concerning the case of corruption, that case has never been and Supply Contracts which defines the the subject of an investigation by the barriers to participation in the pro- Public Prosecutor or of department cedures. judicial proceedings under German law which requires that for the acts in question to constitute an offence the The applicant emphasizes that such person concerned in the corruption must barriers consist in the fact that a be a German civil servant or a public candidate has suspended payments or has servant treated as such, and the official been convicted under a final judgment of of the Commission concerned in the case any offence affecting his professional does not fall into that category. conduct or is guilty of serious misrep- Moreover, since the applicant was not resentation with regard to information concerned or implicated in the disci- required for participation in the plinary proceedings instituted against the invitation to tender. It also refers to official by the Commission, it has never Article 27 of the draft of the new been heard, so that it was never able to conditions applicable to public works clarify and correct the facts from its and supply contracts which contains a point of view, which constitutes a breach similar provision. of the principle, inherent in the rule of law, to a right to a hearing.

Article 18 of the General Conditions for inclusion in the list of selected candidates Public Contracts for the Provision of drawn up under Article 25 of Protocol Services because it was fully aware that N o 2 of the Lomé Convention. The none of the barriers laid down in those Commission considers that that list is not provisions applies to the applicant whose based on a single decision of principle standing and standards are in all respects but it is drawn up on the basis of the beyond reproach. specific characteristics of each project financed by the Fund. The Commission maintains that it is accordingly unable to give an undertaking to the applicant It follows, according to the applicant, concerning the exercise of its power that despite the fact that there is always a when drawing up that list and likewise certain discretion in drawing up the list that it cannot in law provide the general of selected candidates within the specific assurances desired by the applicant which framework of each project, the would entail refraining from exercising Commission's conduct which consists in the discretion conferred upon it by systematically excluding the applicant Article 25 of Protocol No 2 for the although the latter fulfils all the purpose of compiling the list of selected conditions for being placed on the lists candidates. The Commission considers of selected candidates and moreover is that on the contrary it is obliged to not affected by the provisions concerning exercise its discretion by taking into the barriers to participation in the account the circumstances of each case invitations to tender, amounts to an in the interests of the Community, of the arbitrary and illegal boycott. ACP States and of the applicants for the award of contracts themselves.

GAUFF v COMMISSION

application. According to the Com- applicant's affairs it is unable to appraise mission admission is only possible if in the trust to be placed in the applicant in addition certain positive criteria con- any particular case otherwise than in cerning the necessary standing and terms of the trust which may be placed ability of applicants are satisfied as is in Mr Helmut P. Gauff. made clear, in particular, by Article 18 of the draft General Conditions for Public With regard to the applicant's argument Service Contracts and by Article 23 of to the effect that the question whether a the General Conditions for Public Works candidate meets the conditions for parti- and Supply Contracts which in fact cipation in procedures for the award of require candidates to produce "docu- contracts financed by the Fund arises is mentary evidence" of their ability and independent of the fact that the official standing. corrupted by an undertaking is employed by a German authority or by the Consequently, any judgment which the Commission, the Commission retorts Commission may form of the standing that under German criminal law penalties and ability of a candidate falls within the are prescribed for the first case but noi discretion conferred upon it in this for the second, since the provisions in regard by Article 25 of Protocol No 2 of question are designed exclusively to the Lomé Convention. protect the integrity of the German civil

the ACP States. The Commission Communities under the criminal law, maintains that the modification in 1970 owing to the absence of an appropriate of the legal structure of the undertaking svstem governing the responsibility and in question does not affect the facts of protection of officials and other servants the case since the determinant factor is of the European Community in criminal

matters — which prompted it to submit Commission, consisting in holding it to the Council on 10 August 1976 a draft ineligible for and excluding it from treaty covering this matter — constitutes contracts for the provision of services a gap in the law which justifies the financed by the Fund, it has suffered conclusion that the criteria for the damage amounting to at least DM 1. eligibility of candidates relied upon by the applicant do not constitute an exhaustive set of rules governing the It also maintains that the same relation grounds which may justify the exclusion of cause and effect exists between that of a candidate from participating in damage and the damage caused to its procedures for the award of contracts reputation with the authorities of the financed by the Fund and do not, in States, which are assisted by the Fund, particular, cover cases where the by its continued exclusion from contracts Community itself has suffered damage financed by the Fund and by the fact through unlawful practices. that certain officials have made unjustified statements as to its conduct. According to the applicant its claim is According to the Commission, the fact fully justified as regards this point that the Community has suffered damage although it wishes to obtain only token as a result of the unlawful conduct of a

contracts. It is accordingly important statements calculated to discredit it is that no authorization for participation in likewise unfounded. The Commission the various procedures for the award of observes that the applicant refers onl\ to contracts within the framework of the a note of Mr Meyer, the Director Fund should be granted to all under- General of Directorate General \ III takings whose managing director, from which it is clear that the aürjrrd according to his judicial record, has not statements have been neither cleans been convicted of a criminal offence identified nor proved by the applicant without taking into consideration their business practices in the past in relation to the Community. Finally the Commission remark* «hi· if the matter of the project for Į»ro»ir>j: wheat in Zambia, in which trtr The claim for damages applicant's success invalidates us claims concerning an unlawful boycott, v.

GAUFF v COMMISSION

finance the projects with which it was V — Oral procedure envisaged that the applicant would be entrusted. Furthermore any unfavourable statements made by its officials can be At the sitting on 18 June 1981 oral justified, according to the Commission, argument was presented by the applicant, by a concern to safeguard interesu represented by Gerd Coeler, Rechts- worthy of protection, such as the anwalt, and by the Commission of the integrity of the administrations of the European Communities, represented by AC P States. Jörn Pipkom, a member of its Legal Since there has been no wrongful act or Department, acting as Agent. admission whatever on the part of its officials there is no reason to consider the other conditions necessary for the The Advocate General delivered her applicant to succeed in its claim for opinion at the sitting on 29 October damages. 1981.

Decision

JUDGMENT OF 4. 3. 1982 — CASE 182/80

3 By letter of 20 June 1980 the Director General of the Legal Department of the Commission referred to the absence of any provisions compelling or permitting the departments of the Commission to give a statement of views on the general question of the applicant's eligibility and refused to accede to its request.

* The applicant maintains that the letter of 20 June 1980 which was addressed to it by the departments of the Commission is unlawful on the grounds of infringement of the Treaty and of the rules of law relating to its application, as well as of misuse of powers, in so far as the letter constitutes a refusal to confirm the applicant's eligibility for participating in the procedures by way of invitation to tender in respect of or for the conclusion by mutual agreement of public service contracts financed by the Fund.

s The applicant emphasizes that it fulfils all the conditions prescribed by the relevant provisions for admission to participate in procedures for the award of the contracts in question and that furthermore none of the obstacles, of which an exhaustive list is laid down by those provisions, prevents its par- ticipation. It follows that, despite the discretion which the Commission enjoys within the framework of each individual procedure in drawing up the list of candidates, the systematic exclusion of the applicant amounts to an arbitrary and unlawful boycott.

6 In this connection it observes that the complaints made against it concerning a case of corrupting an official of the Commission in which its managing director was involved have never formed the subject-matter of an investigation by the Public Prosecutor's Department or of judicial proceedings in accordance with German law.

n The Commission contends that the letter of the Director of its Legal Department of 20 June 1980 does not constitute a decision within the meaning of the second paragraph of Article 173 of the EEC Treaty, either with regard to the powers of its author or as regards its content or the factual circumstances in which it came to be written. It maintains that since that letter did not produce legal effects with regard to the applicant, the latter has no interest worthy of protection in raising an abstract question of law unrelated to a specific procedure concerning the award of a contract; only the implementation of such a procedure enables a decision of that kind to be adopted.

1: Furthermore, the Commission observes that, even supposing that that letter contained a decision refusing to accept the applicant as eligible, that decision would be well founded in law as being taken in the exercise of a discretion in the drawing up of the list of selected candidates on the basis of the criteria concerning the standing and ability of the candidates in accordance with Article 25 of Protocol No 2 to the Convention with the ACP States.

JUDGMENT OF 4. 3. 19S2 — CASE IB2/8E

i3 With regard to the complaint that it failed to act the Commission contends essentially that it is not obliged, by virtue of any powers conferred upon it by a provision of Community law or under a binding agreement concluded under the conditions laid down in Article 228 of the Treaty, to adopt a decision of principle on the applicant's eligibility. Such a decision, which would have no effects so far as Article 175 of the EEC Treaty is concerned, would merely pre-determine many decisions which themselves produce direct legal effects.

i6 It must be emphasized that neither that provision nor any other relevant provision empowers any department of the defendant institution to define the latter's position, by way of a decision of general scope, on the eligibility of an interested party for the award of the contracts in question.

i7 In the absence of such a power the Director General of the Legal Department of the Commission could not adopt a decision having the purport for which the applicant contends. Furthermore the Director General, in his letter of 20 June 1980, merely referred to the relevant provisions in order to conclude that "the choice of candidates was effected . .. case by case" by taking the circumstances into account and that it was accordingly impossible to provide the applicant with the assurances in principle which it requested regarding its admission to participate in the projects financed by the Fund.

is In the absence of the exercise, upon the conclusion of an internal procedure laid down by law, of a power provided for by law which is intended to produce legal effects of such a nature as to affect adversely the interests of the applicant by modifying its legal position, the letter of 20 June 1980 may not be validly considered as a decision within the meaning of the second paragraph of Article 173 of the EEC Treaty and accordingly cannot give rise to a review by means of the proceedings under that provision.

i9 The foregoing considerations concerning the reasons which prevent the letter of the Commission of 20 June 1980 from being considered as a decision within the meaning of the second paragraph of Article 173 also entail the finding that there is no failure to act, capable of forming the subject of the proceedings provided for in the third paragraph of Anicie 175 of the EEC Treaty, which may be imputed to the Commission.

22 Under Article 69 (2) of the Rules of Procedure the unsuccessful party is to be ordered to pay the costs.

On those grounds,

T H E C O U R T (Second Chamber)

hereby:

1. Dismisses the application;

2. Orders the applicant to bear the costs.