C-395/95

G E O T R O N I C S v COMMISSION

OPINION OF ADVOCATE GENERAL TESAURO delivered on 30 January 1997

1. In this appeal, Geotronics SA ('Geotron- and the Romanian Ministry for Agriculture ics' or 'the appellant') asks the Court to set and Food Industry jointly issued a restricted aside the judgment of the Court of First invitation to tender under the PHARE pro- Instance of 26 October 1995. ' In that judg- gramme 2 for the supply of electronic tache- ment, the Court of First Instance dismissed ometers to that Ministry for use in the an application by Geotronics for, first, Romanian land reform programme. At annulment of the Commission's decision of national level the operation of the tendering 10 March 1994 rejecting the appellant's ten- procedure was entrusted to the ' E C / P H A R E der under an invitation to tender for a con- Programme Management UNIT-Bucharest' tract financed by the PHARE programme ('PMU-Bucharest'). and, second, for compensation for the dam- age 'which the appellant claimed to have suf- fered as a result of that decision.

More specifically, the Court of First Instance held Geotronics' claim for annulment of the contested decision to be inadmissible and the claim for compensation to be unfounded. In its appeal, the appellant challenges the find- ing that its action for annulment was inad- missible and, in the alternative, it reiterates its damages claim against the Commission. Under the terms of the invitation to tender, the equipment to be supplied had to origi- nate in a Member State of the European Community or in one of the beneficiary The facts countries under the PHARE programme. 3

O n 19 November 1993, the Commission 5. PMU-Bucharest concluded the contract informed the appellant that it had doubts as with that firm and so informed the Commis- to the origin of the equipment tendered and sion and Geotronics on 17 May 1994. It told asked for further clarification in that respect; the appellant that it could not be awarded by letter of 14 December 1993 Geotronics the contract because its tender did not satisfy replied that the tacheometers in question the criteria of origin laid down in the invita- were manufactured in the United Kingdom. tion to tender.

According to the Court of First Instance, it follows from those facts that contracts financed by PHARE must be regarded as national contracts which are binding only on the beneficiary country and the economic 7. In reaching that conclusion, the Court of operator, whereas no binding legal relation- First Instance first of all noted that the ship arises between the tenderers and the PHARE programme is funded by the gen- Commission; the latter restricts itself to tak- eral budget of the European Union and that ing funding decisions on behalf of the Com- contracts under it are awarded pursuant to munity, which in principle could also not the Financial Regulation of 21 December influence the selection of the tenderer. 8 In 1977. 5 Next, the Court described the powers support of that conclusion, the Court cites and responsibilities conferred on the Com- by way of analogy the judgments of the mission and the beneficiary countries respec- Court of Justice on public contracts financed tively by the enabling provisions of that by the European Development Fund regulation, as amended by Regulation (EEC) ('EDF'). 9 N o 610/90: 6 in accordance with those provi- sions, whilst the Commission, being respon- sible for administering the aid, grants credits and ensures that participants in tendering procedures can compete on an equal footing and that the tender selected is economically the most advantageous, the power to award a 8. The Court of First Instance went on to contract lies with the beneficiary country give a decision as to the claim for compensa- under the PHARE scheme. It is for that country to issue invitations to tender, receive tenders, preside over the examination of ten- ders, establish the results and, in particular, 7 — Judgment in Geotronics, paragraphs 27 to 30. sign contracts, additions to contracts and 8 — Geotronics, paragraphs 31 and 32. 9 — Case 126/83 STS v Commission [1984] ECR 2769, para- estimates. In that respect, the Court of First graphs 18 and 19; Case 118/83 CMC v Commission [1985] Instance notes that, as the appellant's repre- ECR 2325, paragraphs 28 and 29; Case C-257/90 lukoUr v Commission [1993] ECR 1-9, paragraphs 22 and 26, and Case sentative conceded at the hearing, the Roma- C-182/91 Forafrique Burkinabé v Commission [1993] ECR 1-2161, paragraphs 23 and 24. In those judgments the Court nian Government was free to award the held that contracts financed by the E D F pursuant to the Convention between African, Caribbean and Pacific Sutes and the European Communities (ACP-EEC), in the versions (Second, Third and First) respectively applicable, remain national contracts which only the representatives of the ben- eficiary countries have the power to conclude, whereas the 5 — Financial Regulation of 21 December 1977 applicable to the actions of the Commission are intended solely to establish general budget (OJ 1977 L 365, p. 1). whether or not the conditions for Community financing 6 — Notably, the provisions of Title IX, relating to external aid, have been met; in practice it has ruled that actions for annul- of Regulation N o 610/90 (OJ 1990 L 70, p. 1), in particular ment of acts adopted by the Commission during the Articles 107, 108(2) and 109(2). contract-awarding procedure arc inadmissible.

In that connection, the Court of First Instance pointed out that the EEA Agree- ment takes effect only as from its entry into 10. As I have already said, in these proceed- force, namely 1 January 1994, whereas the ings Geotronics contests the judgment of the legal framework for the contract-awarding Court of First Instance, asking the Court of procedure, especially as regards the con- Justice to set it aside and also to annul the dition concerning the origin of the products decision contained in the letter of 10 March in question, had already been established in 1994. the restricted invitation to tender issued by the Commission on behalf of the Romanian Government on 9 July 1993. 10 The Commis- sion was therefore correct in relying upon the general conditions which it had laid down in the invitation to tender of 9 July The appeal is based on the Court of First 1993 when it adopted the contested decision. Instance's purported error in law in ruling In short, the entry into force of the EEA that the claim for annulment of the letter of Agreement could not be such as to confer 10 March 1994 was inadmissible. In particu- upon the appellant rights which it was not lar, the appellant argues that the letter consti- entitled to assert at the time when the gen- tutes a genuine decision within the meaning eral conditions of the invitation to tender of Article 173 of the Treaty which produces were published. n binding legal effects for the addressee and may therefore be the subject of an action at law. The appellant maintains that the Com- mission in actual fact plays a significant and decisive part in the conduct and outcome of the contract-awarding procedure under the 9. Finally, according to the Court of First PHARE programme, regardless of the fact Instance, the EEA Agreement could not in that the contracts are subsequently formally any event apply in this case: indeed it found signed by the representative of the country that the contract (for the conclusion of receiving the aid; it points out that it is which the invitation to tender was issued) merely hypothetically possible that the ben- bound, as we have seen, only the tenderer eficiary country might still enter, as the Court of First Instance suggests, into a

11. As to the substance, the appellant repeats in essence the arguments put before the Court of First Instance. First of all, it claims that the EEA Agreement applied without exceptions as from 1 January 1994 and there- The plea concerning admissibility fore before the letter of 10 March 1994. According to the appellant, therefore, the invitation to tender published on 9 July 1993 entailed, as from 1 January 1994, discrimi- nation of a kind no longer permitted against signatory States of the EEA Agreement and therefore to be abolished in accordance with 13. As I pointed out above, the Court of Article 4 of the Agreement. First Instance based the inadmissibility of •the action for annulment on the fact that, in this case, there was no act of the Commis- sion which produced binding legal effects for the appellant. It stated that '(...) contracts financed by the PHARE programme must In any case, in the appellant's view, the EEA be regarded as national contracts which are Agreement should apply with retrospective binding only on the beneficiary country and effect in this case, in so far as the legal frame- the economic operator', and that '[t]he work of the invitation to tender, even though preparation, negotiation and conclusion of it was established before the Agreement the contracts takes place between those two entered into force, was intended to take partners only', and also that 'no legal rela- effect at a date subsequent to 1 January 1994. tionship arises between the tenderers and the Commission, since the latter restricts itself to taking funding decisions on behalf of the Community, and its measures cannot have the effect, in relation to tenderers, of substi- tuting a Community decision for the decision of the beneficiary country under the 12. In the alternative, if the inadmissibility PHARE programme'. It follows that 'In this of its action for annulment should be upheld, area, therefore, there can be no Commission the appellant repeats its claim for damages, decision, as far as tenderers are concerned, alleging that the Commission has incurred which is capable of forming the subject- non-contractual liability within the meaning matter of an action under the fourth para- of the second paragraph of Article 215 of the graph of Article 173 of the EC Treaty'. 1 3 Treaty through its fault in failing to apply the EEA Agreement to the procedure under consideration. It therefore requests that the Court should award it damages of 13 — Geotronics, paragraphs 31 and 32.

O n proper examination, there does not seem to me to be any reason why the act contested in these proceedings should escape the 16. As may clearly be seen from the case- review of legality provided for by the Treaty, file, the act which Geotronics asked the taking into account its actual wording, its Court of First Instance to annul was the let- content, its legal effects on the appellant and ter in which the Commission informed it also the legal and factual context in which it that its offer had been rejected on the ground was adopted. As we shall shortly see, it is in

15 — Case 60/81 IBM v Commission [1981] ECR 2639, para- graphs 8 and 9. However, for a more recent judgment, sec 14 — For the decisions cited by the Court of First Instance, sec Case C-476/93 P Nutral v Commission [1995] ECR 1-4125, point 7 of this Opinion and footnote 9, above. paragraph 28.

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GEOTRONICS v COMMISSION

19. O n the other hand, it could be argued (and this appears to be the most important part of the grounds for the judgment In that letter, moreover, the Commission appealed against) that the Commission has indicated that it had no intention of no responsibility for the award of the con- re-issuing the invitation to tender since tract between the beneficiary country and another undertaking had submitted a tender the chosen contractor, not being a party to it, which it found technically and financially and that its independent decision-making acceptable and which satisfied the conditions power is confined to taking decisions on the laid down in the invitation to tender. permissibility of Community funding.

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O P I N I O N O F MR TESAURO — CASE C-395/95 P

21. In this case the appellant has appealed 20. When Advocate General VerLoren van against a decision concerning it adopted by Themaat proposed that the Court should the Commission in the exercise of its specific find STS's application inadmissible, he had powers, that is to say, the decision by which stated that that solution was necessary in the the Commission informed the applicant that circumstances not only because the contested it had ascertained (independently, and on the act did not produce legal effects for the basis of checks and assessments performed applicant, but because it was not of direct on its own initiative) that its tender did not and individual concern to the applicant since satisfy the conditions set out in the invitation it was addressed to the national authorizing to tender in order to obtain Community officer; 17 he did not however rule out the funding (and also informed it of the conse- possibility that other solutions might be quences of that finding); as we have seen, the desirable in other circumstances and he appellant challenges the decision on the stressed the need to judge each case having ground that it was adopted in breach of the regard to its own special features. 1S principle of equal treatment laid down in the EEA Agreement.

In the circumstances, I fail to see before what contract is awarded, is on the contrary an other court the appellant could have submit- autonomous decision of the Commission ted the contested measure for a review of its falling within the scope of its specific powers legality, if not the Community judicature. 20 and in adopting which the national authori- ties of the beneficiary country play no part.

22. In that connection the Commission maintained during the oral procedure that in a case such as this the only remedy open to the tenderer is to assert its rights before the It must therefore be allowed that it is pos- competent courts of the beneficiary country. sible to bring an action for annulment for breach of Community law against such a decision which, as we have seen, is capable of having binding, definitive legal effects on the addressee. To maintain the contrary is, in my view, tantamount to sheltering behind the only too feeble protection of the national It is clear, however, not only that such a rem- authorities and courts in order to strip an edy is precluded in principle, but also that it applicant of his right to judicial protection, could in any event be of no use, since the which would plainly constitute an unaccept- issue is the review of the legality of an act able breach of the most fundamental rules on which is to all intents and purposes a Com- which the 'Community governed by the rule munity measure. A national remedy could of law' which the Treaty intended to estab- relate only to acts falling within the compe- lish is based and whose values are the tence of the national authorities, such as the Court's constant guide. 21 definitive award of the contract to another undertaking, or to the relevant contract.

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OPINION OF MR TESAURO — CASE C-395/95 P

24. To recapitulate, I consider that in con- definitively fixed in the invitation to tender nection with an invitation to tender financed published on 9 July 1993 and there is no rea- by the PHARE programme a tenderer who son to suppose that they were implicitly is refused Community funding must in any altered by the entry into force of the EEA case be able to bring an action before the Agreement. Retrospective application of that Court, if the other conditions laid down in Agreement to this case, as well as being Article 173 of the Treaty are satisfied, in unfounded in law, would obviously be con- order to challenge the validity of the decision trary to the requirements of legal certainty. taken to that effect by the Commission act- ing in the exercise of its power in that sphere; whereas in any event recourse may be had to the remedy of challenging the award of the contract (or any other act adopted by the national authority) before the Second, as the Court of First Instance has competent court of the beneficiary country correctly pointed out, the EEA Agreement under the PHARE programme. may be applied only in relation to those States which are parties to it, therefore not to Romania.

In the circumstances of the case, in short, I consider that the judgment of the Court of First Instance should be set aside in so far as Finally, the EEA Agreement, in its current it holds that Geotronics' claim for annul- version, does not include the sphere of exter- ment of the Commission's letter of 10 March nal aid, which covers funds used to imple- 1994 is inadmissible, but that the Court of ment the PHARE programme; it is moreover Justice should be able to give a ruling itself obvious that that aid is funded out of the on the substance of the claims, since there is Community's general budget, to which only no further inquiry to be made as to the facts. the Member States of the Union contribute.

(2) dismiss the application as unfounded on the merits;

(3) dismiss the claim for compensation for the damage which the appellant claimed to have suffered as a result of the contested decision as unfounded.

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