T-185/94

GEOTRONICS v COMMISSION

JUDGMENT OF THE COURT OF FIRST INSTANCE (Fourth Chamber) 26 October 1995 *

In Case T-l85/94,

Geotronics SA, a company incorporated under French law, with its registered office at Logneš (France), represented by Tommy Pettersson, of the Swedish Bar, with an address for service in Luxembourg at the Chambers of Arendt and Medernach, 8-10 Rue Mathias Hardt,

applicant,

v

under the PHARE Programme, and, second, compensation under Articles 178 and 215 of the EC Treaty for the damage which the applicant claims to have suffered as a result of the contested decision,

THE COURT O F FIRST INSTANCE OF THE EUROPEAN COMMUNITIES (Fourth Chamber),

composed of: K. Lenaerts, President, R. Schintgen and R. Garcia-Valdecasas, Judges,

Registrar: B. Pastor, Administrator,

having regard to the written procedure and further to the hearing on 21 June 1995,

gives the following

2 O n 9 July 1993 the Commission, acting 'on behalf of the Government of Roma- nia', and the Romanian Ministry for Agriculture and Food Industry jointly issued a restricted invitation to tender through the intermediary of the ' E C / P H A R E Pro- gramme Management UNIT-Bucharest' (hereinafter 'PMU-Bucharest'), the Roma- nian State authority to which the project was entrusted, for the supply of electronic tacheometers ('total stations') to the Romanian Ministry of Agriculture and Food Industry for use in the Romanian land reform programme. Under Article 2 of the general conditions of the restricted invitation to tender, the equipment to be sup- plied had to originate in a Member State of the European Community or in one of the beneficiary countries under the P H A R E Programme.

3 O n 16 July 1993 the French company Geotronics SA (hereinafter 'Geotronics' or 'the applicant'), a wholly-owned subsidiary of the Swedish company Geotronics AB, submitted a tender for the supply of 80 total stations of the Geodimeter 510 N type ('electronic total stations with inbuilt memory for data storage').

4 By fax letter of 18 October 1993, PMU-Bucharest informed the applicant that its tender had been successful and that a contract would be submitted to the contract- ing authority for approval.

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5 By fax letter of 19 November 1993, the Commission informed the applicant that the evaluation committee had recommended that it be awarded the contract, but expressed doubts as to the origin of the products tendered by Geotronics and asked for further clarification in that respect.

firm satisfied the tender conditions and was acceptable. The Commission therefore requested PMU-Bucharest to contact the German firm to finalize the contract.

10 It was in those circumstances that the applicant brought this action, by application lodged at the Registry of the Court of First Instance on 29 April 1994.

n By a separate document lodged at the Registry of the Court of First Instance on the same day, the applicant submitted under Article 185 of the Treaty an applica- tion for interim measures suspending the operation of the contested decision.

i2 O n 17 May 1994 PMU-Bucharest informed the Commission that the Romanian Ministry of Agriculture and Food Industry, the contracting authority, had awarded the contract to the German firm by decision of 15 April 1994.

1 3 O n the same day, PMU-Bucharest informed the applicant that, because its tender did not satisfy the criteria of origin laid down by the restricted invitation to tender, the Romanian authorities were unable to award the contract to it.

M By decision of 7 July 1994, after hearing the observations of the parties, the Court of First Instance assigned the case to the Fourth Chamber, composed of three judges.

is The applicant claims that the Court should:

— annul the Commission decision addressed to Geotronics rejecting its tender, as notified in a fax letter received b y Geotronics on 10 March 1994;

in the alternative,

— order the Commission to pay Geotronics compensation of E C U 500 400 plus interest for each calendar month at 1% above 30 days' LIBOR, as from the date on which Geotronics was notified of the Commission's decision until full pay- ment is made;

— order the Commission to pay the costs.

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20 The Commission contends that the action for annulment is inadmissible because the disputed letter of 10 March 1994 does not constitute a decision capable of pro- ducing binding legal effects of such a kind as to affect the interests of the applicant (see the judgment of the Court of Justice in Case C-257/90 Italsolar v Commission [1993] ECR 1-9, paragraph 21). Under the rules allocating responsibility for the tendering procedure between the Commission and the authorities of the benefi- ciary countries under the P H A R E Programme, there can be no Commission decision, so far as tenderers are concerned, which is capable of forming the subject- matter of an action for annulment.

2i The Commission explains in that respect that the P H A R E Programme is funded from the general budget of the European Union ('the general budget'), and that contracts are awarded pursuant to the Financial Regulation of 21 December 1977 applicable to the general budget (OJ 1977 L 356, p. 1), and more specifically pur- suant to the provisions of Title IX thereof, relating to external aid, as amended by Council Regulation N o 610/90 of 13 March 1990 (OJ 1990 L 70, p. 1). Under the Financial Regulation, it is for the Commission to give its agreement to proposals

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for the award of contracts, whilst it is for the beneficiary country to sign estimates and to conclude contracts and supplementary agreements and then notify them to the Commission.

22 The framework agreements between the Commission and the beneficiary countries under the P H A R E Programme reflect that division of roles. Moreover, the Pro- gramme Management Units responsible for starting up and managing each project do not form part of the Commission's administrative structure but are responsible, on behalf of their governments, for all the steps which are the responsibility of the recipient country under the Financial Regulation.

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distinctly changing its legal position. Although the Commission is not the con- tracting authority as defined by the P H A R E Programme, it played a decisive role in the procedure for funding the programme by determining the conditions on which a tender was to be acceptable and by assuming responsibility for the restricted tendering procedure. That conclusion is supported, first, by the terms used by the Commission in its letter to the applicant of 10 March 1994, in which it concluded that it could not 'endorse the awarding of the contract to Geotronics' and would 'not reissue the tender', and secondly, by the terms of the Commission's letter of 11 March 1994 asking the Romanian authorities to negotiate the contract with the other tenderer.

25 In reply to the Commission's argument that it was the Romanian authorities' letter to the applicant of 17 May 1994 which constituted the decision adversely affecting it, the applicant points out that the Romanian authorities had initially favoured the Geotronics tender, only to change their mind afterwards on the basis of the Com- mission's decision to reject that tender on account of the non-Community origin of the equipment. It was thus the Commission's decision to disqualify Geotronics which produced binding legal effects with respect to it and adversely affected its interests.

26 As regards the case-law cited by the Commission in support of its plea of inad- missibility, the applicant argues that any comparison with Community aid granted through the EDF under the Third Lomé Convention is irrelevant in this case. Unlike Articles 8, 9 and 10 of Regulation N o 3906/89, which designate the Com- mission as the authority responsible for the entire aid scheme, the Third Lomé Convention confines the Commission's role to the financing of the aid projects. Thus, in the case of aid granted through the EDF, it is the national authorities alone that deal directly with the tenderers while the Commission merely cooperates with the A C P States as regards the financing of the aid projects, whereas, in the case of the P H A R E Programme, the Commission deals directly with both the national authorities and the individual tenderers. Moreover, the P H A R E Programme is

29 By Articles 107 and 108(2) of Regulation N o 610/90, measures and projects funded under the Community's cooperation policy are implemented by the beneficiary country in close collaboration with the Commission, which, as the body adminis- tering the aid, grants credits and ensures that participants in tendering procedures can compete on an equal footing, that there is no discrimination and that the ten- der selected is economically the most advantageous.

30 Nevertheless, under Article 109(2) of that regulation, it is for the beneficiary coun- try to issue invitations to tender, receive tenders, preside over the examination of tenders and establish the results of the tendering procedure. It is also for that country to sign contracts, additions to contracts and estimates and notify the

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Commission thereof. It follows that the power to award a contract lies with the beneficiary country under the P H A R E Programme. In that respect, the applicant's representative conceded at the hearing that, in this case, the Romanian Government was free to award the contract to Geotronics, notwithstanding the Commission's refusal to grant it Community aid.

3i It follows from that division of roles that contracts financed by the P H A R E Pro­ gramme must be regarded as national contracts, which are binding only on the beneficiary country and the economic operator. The preparation, negotiation and conclusion of the contracts take place between those two partners only.

35 The claim for the annulment of the Commission's letter of 10 March 1994 must therefore be rejected as inadmissible.

Substance

The claim for compensation

Basis of liability

— Arguments of the parties

36 The applicant argues that, by rejecting Geotronics' tender on grounds of the prod- ucts' origin, the Commission infringed the EEA Agreement, committed a fault giv- ing rise to non-contractual liability, and must therefore pay compensation for the damage suffered.

40 It is therefore necessary to establish whether the Commission has committed a fault capable of giving rise to liability under the second paragraph of Article 215 of the Treaty and to examine, in that regard, whether it acted in breach of the EEA Agree- ment.

The alleged infringement of the EEA Agreement

— Arguments of the parties

4i The applicant points out, first, that the EEA Agreement, which entered into force on 1 January 1994, extends the geographical area of application of EC legislation

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its entry into force did not imply any obligation to reopen the tendering procedure in question. Moreover, a decision on a given tender must always be in conformity with the terms of the invitation to tender, which in this case had closed before the entry into force of the Agreement, so that the decision could not make any waiver in favour of a particular tenderer.

46 The Commission further points out that there can have been no infringement of Articles 4, 8, 11 and 65(1) of the EEA Agreement in this case, since the goods were intended for Romania, which is not a party to the Agreement, and there has there- fore been no movement of goods or any public procurement transaction within the European Economic Area.

47 The Commission adds that those parties to the EEA Agreement which are not Member States of the European Community do not contribute to the Community budget and, consequently, do not contribute to the funding of the P H A R E Pro- gramme. It would therefore be anomalous for those countries to be able to insist, in connection with Community aid programmes, on their own goods being accepted.

— Findings of the Court

52 Moreover, the applicant's representative conceded at the hearing that the applicant caused the delay in the proceedings as, although not in bad faith, it misled the Commission as to the origin of the products. H e also acknowledged that, had the Commission given its ruling before 1 January 1994, the applicant would have had no standing to raise the question of the applicability of the EEA Agreement to the contract-awarding procedure at issue in these proceedings.

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53 The Court of First Instance therefore considers that the Commission was right, in reliance on the general conditions laid down by it in the restricted invitation to tender and accepted by the applicant before the entry into force of the EEA Agree- ment, to inform the applicant on 10 March 1994 that its tender had to be rejected on the ground that, contrary to the conditions applicable to the invitation to ten- der, the equipment tendered by it did not originate in Member States of the Com- munity or in a beneficiary country under the P H A R E Programme.

54 The letter of 10 March 1994 merely implemented the conditions laid down by the restricted invitation to tender and cannot be regarded as having created a new legal situation different from that which arose as a result of the restricted invitation to tender. Therefore, the fact that such implementation occurred at a time when the legal context had changed, on account of the entry into force of the EEA Agree- ment, cannot be such as to affect the legal framework established by the invitation to tender and confer upon the applicant rights which it could not have asserted at the time when the invitation to tender was issued.

Costs

59 Under Article 87(2) of the Rules of Procedure of the Court of First Instance, the unsuccessful party is to be ordered to pay the costs if they have been applied for in the successful party's pleadings. Since the applicant has been unsuccessful, and the Commission has applied for costs, the applicant must be ordered to pay the costs, including those incurred in the proceedings for interim measures.

O n those grounds,

T H E C O U R T O F FIRST INSTANCE (Fourth Chamber)

hereby:

1. Dismisses the application in its entirety;

Registrar President

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