C-103/97

'Where bodies responsible for review proce­ dures 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 2. Article 1(1) of the Review Directive, as whereby any allegedly illegal measure taken amended by Article 41 of Council Directive by the review body or any alleged defect in 92/50/EEC of 18 June 1992 relating to the the exercise of the powers conferred on it can coordination of procedures for the award of be the subject of judicial review or review by 2 another body which is a court or tribunal public service contracts, requires the Member States to take the measures necessary to ensure within the meaning of Article 177 of the EEC that decisions taken by the contracting autho­ Treaty and independent of both the con­ rities may be reviewed effectively and in par­ tracting authority and the review body. ticular as rapidly as possible on the grounds that such decisions have infringed Commu­ nity law in the field of public procurement or national rules implementing that law.

The members of such an independent body * Original language: Italian. 1 — OJ 1989 L 395, p 33. shall be appointed and leave office under the 2 — OJ 1992 L 209, p. 1. same conditions as members of the judiciary

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8. Paragraph 6(3) provides that the members of the Office are appointed by the Tyrolean Government and remain in office for five years. They leave office early by resignation or if they are removed. In that regard, Para­ graph 6(4) provides that an appointment must 6. The Review Directive was transposed into be revoked if the conditions for appointment Austrian law at Federal level by the Bundes­ are no longer fulfilled or if factors arise which gesetz über die Vergabe von Aufträgen (Fed­ prevent proper performance of the duties and eral Law on the Award of Public Contracts). 4 'are likely to do so for a long time'. Each of the nine Länder then adopted its own law relating to the award of public contracts; in the case of the Land of Tyrol, the law in question is the Tyrolean Vergabegesetz (here­ 5 inafter 'the TVerG') of 6 July 1994.

9. Under Paragraph 6(6), the Office may take 3 — OJ C 241, p. 21. decisions when it has been properly convened 4 — The Federal law, which was originally published in BGBl. No 639/1993, was subsequently republished following the codi­ and when the president, the rapporteur, the fication of public contracts legislation by the Law of 27 May 1997 (BGBl No 56/1997). member drawn from the judiciary and at least 5 — In LBGl. No 87/1994. one other member are present. Decisions are

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taken by a simple majority of the votes cast. moreover, after the contract has been awarded, In the event of a tie, the president's vote is it may examine whether the fact that it was decisive. Abstention is not allowed. not awarded to the best bidder was due to a breach of the law (Paragraph 12(2)). In the course of that procedure, the Office must assess whether the contract would not in any case have been awarded to the successful bidder even if there had been no breach of the law as alleged in the application. If the 10. In accordance with Paragraph 6(7), the contracting authorities' decision is set aside, members of the Office are not to be bound the competitor whose bid was rejected in by instructions in the performance of their breach of the provisions in force may claim duties. Their decisions are not liable to be set damages in the civil courts. aside through administrative channels.

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challenged that decision before the Constitu­ (2) Does the abovementioned law on the tional Court which, by judgment of 12 June award of contracts adequately provide 1996, set it aside on the ground that it had for the transposition into national law of infringed the right, guaranteed by the Aus­ Council Directive 89/665/EEC of 21 trian constitution, to proceedings before the December 1989 on the coordination of court specified by law. The Constitutional the laws, regulations and administrative Court observed that the composition of the provisions relating to the application of Office was not in accordance with the require­ review procedures to the award of public ments of the review directive since its presi­ supply and public works contracts, in dent did not have the necessary legal and pro­ relation to the review procedures men­ fessional qualifications for judicial office. tioned in Article 1 thereof?'

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17. It is well known that, for reasons con­ that the Office is established by law and that nected with the uniform application of Com­ its jurisdiction is compulsory. A similar posi­ munity law, the concept of a 'court or tri­ tive assessment is also called for with regard bunal' which is competent to submit questions to its permanence, since the Office sits per­ for a preliminary ruling has a meaning inde­ manently. The fact that its members remain in pendent of the definitions to be found in the office for a limited number of years (five) is 8 national legal systems. As the Court has irrelevant in that regard since it is well known consistently held, 9 in order to determine that the term of office of the members of a whether a body making a reference is a court court can be limited to a specified period, or tribunal for the purposes of Article 177 of provided only that the period in question is the Treaty, the Court takes account of a predetermined by law and not left to the dis­ number of factors, such as whether the body cretionary choice of the person who has the is established by law, whether it is permanent, power of appointment. Finally, there is no whether its jurisdiction is compulsory, doubt that the Office applies rules of law whether its procedure is inter partes, whether when it reviews the legality of decisions it applies rules of law and whether it acts as a relating to the award of contracts (Paragraph third party and is independent. It is therefore 8 of the TVerG). appropriate at this stage to determine whether the conditions to which I have just referred are fulfilled by the body which has requested the Court's intervention in this case.

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I am of the opinion that the same conclusion putes which it is called upon to determine. can be reached in this case, given that the That requirement is even more evident in Tyrolean law provides, in Paragraph 7(1), that cases such as this, where, on the one hand, hearings with the participation of the parties the administrative authority has the power to must be conducted before the Office and that appoint and remove the members of the Office more specific rules on the organisation and and, on the other, it is also a party in the 1 conduct of those hearings must be inserted, cases brought before the latter. 2 as has in fact been the case, in the internal 1 rules of procedure. 1

12 — This is, of course, the situation which normally arises in the It is well known that any body which pur­ field of public contracts. It is precisely in order to avoid any adverse consequences stemming from the 'structural' prox- ports to exercise judicial functions must, in imity between the 'reviewer' and the reviewed that the Review Directive lays down additional conditions to be sat- principle, guarantee a high degree of imper- isfied by the body, a court or tribunal within the meaning viousness to any outside influence which of Article 177 of the Treaty, called upon to resolve disputes concerning public contracts in the two-tier system. In par- could, if only potentially, compromise its inde­ ticular, at least the president of the body is required to have the same legal and professional qualifications as a member pendence of judgment in relation to the dis­ of the judiciary. This system will be discussed below, at point 32 et seq. 13 — The judgments which stress the importance of the condi- tions of independence and third-party status include those in the Pretore di Salò case, cited above, paragraph 7, Case 11 — See Paragraph 4 of the Tyrol Land Government Regulation C-24/92 Corbiau [1993] ECR I-1277, paragraph 15, and the of 24 April 1995, Tiroler LGBL 1995, No 47. Almelo case [1994], cited above, paragraph 21.

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I do not consider that criticism well founded. The fact that a member of the Office is drawn 26. Finally, the Commission disputes the com­ from the administrative authority is not, by patibility of the rules governing removal from itself, sufficient to compromise his freedom of office of members of the body with the prin­ judgment, which must be guaranteed by the ciple of the independence of the judicial body. set of rules governing the operation of the It points out that the provisions on removal body. It should be added that the Austrian contained in Paragraph 6(4) of the law estab­ legislature itself has taken account of that lishing the Office are worded too vaguely. In requirement by providing in the law estab­ addition to a reference to circumstances in lishing the Office that, irrespective of their which the conditions required for appoint­ background, its members are not to be sub­ ment are no longer fulfilled, which obviously ject to instructions in the exercise of their does not give rise to any problems of inter­ functions (Paragraph 6(7)). pretation, Paragraph 6(4) also provides that

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the administrative authority may annul the a guarantee against undue interference or pres­ appointment if factors arise which prevent sure on the part of the executive. proper performance of the duties and 'are likely to do so for a long time'. It is this latter provision which, according to the Commis­ sion, appears difficult to reconcile with the principle of the independence of the judicial body.

14 — It is significant that the Austrian legal system itself contains different approaches to the operation even of bodies called upon to review, at sole instance, the legality of awards of public contracts. As is apparent from the circumstances of Case C-258/97 Hospital Ingenieure, in which I shall deliver my Opinion on 1 October 1998, the law on public contracts in force in Carinthia confers the abovementioned powers on the Unabhängiger Verwaltungssenat für Kärnten, a judicial body which derives the guarantees of its independence from the law establishing it, the power of removal being conferred on the senate itself and exercisable only in the circumstances In conclusion, the provision of the law estab­ expressly provided for by the law (Article 129b of the Aus­ trian Federal Constitution). lishing the Office which governs the sensitive 15 — See points 33 to 37 of the Opinion of Advocate General matter of the removal of its members uses a Tesauro [1997] ECR I-4976 et seq. formula which appears too vague to serve as 16 — Judgment cited above, paragraph 36.

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cerning annulment or withdrawal of their 29. Nor is there any contradiction between appointments and concerning their indepen­ the conclusions which I have reached and the dence and removal from office apply by fact that the Court has recently answered analogy to official members of the chambers. some questions submitted to it by the Federal In general, the provisions of the Richtergesetz Austrian authority responsible for review pro­ concerning annulment and withdrawal of cedures in relation to the award of public judges' appointments apply also to lay mem­ contracts. In its judgment in the Mannesmann bers. Furthermore, the impartiality of lay Anlagenbau Austria AG and Others case, 17

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same law). 9 Thesame can be said with regard 32. As will be recalled, the Office seeks essen­ to the grounds on which parties may chal­ tially to ascertain whether the rules governing lenge members of the Office, which are its composition and operation comply with expressly laid down in the Federal law but the requirements contained in the first sub­ not, as shown above, in the Tyrolean law. paragraph of Article 2(8) of the Review Direc­ tive.

30. In the light of all those considerations, I propose that the Court declare that the ques­ tions raised by the Tiroler Vergabeamt are inadmissible since they have been submitted In their written observations and during the by a body lacking the status of a court or tri­ oral procedure before the Court, the atten­ bunal within the meaning of Article 177 of tion of the parties focused, in particular, on the Treaty. the profile of the president of the body in question, with a view to clarifying whether or not it satisfies the conditions set out in Article 2(8) of the Review Directive.

The first and second questions submitted

33. I would say at the outset that an analysis of that provision shows that the discussion 31. Should the Court see fit, contrary to what referred to above is neither relevant nor nec­ I have suggested above, to regard the Office essary in this case. In order to substantiate as a 'court or tribunal' within the meaning of that conclusion, it is essential to undertake a Article 177, thus overcoming all the uncer­ precise reading of Article 2(8) of the Review tainties with regard to the position as third Directive. parties and independence of the members of the body, the problem would then arise of assessing the substance of the questions raised by the Office. The following observations will therefore be devoted to that assessment.

35. Article 2(8), and in particular the first review body. The subsequent text of Article sentence thereof, contemplates two different 2(8) of the directive refers to that indepen­ scenarios. Member States have the right to dent body as a court or tribunal as referred choose between two options when organising to in Article 177, which must satisfy certain the system for reviewing decisions taken by 'special' requirements relating to the condi­ the contracting authorities. The first option, tions under which its members are appointed which I shall describe as the 'single-tier sys­ and leave office, the qualifications of its presi­ tem', is to confer competence to hear review dent, the procedure to be followed by it, and proceedings on 'judicial bodies'. The second, the binding nature of its decisions. which I shall call the 'two-tier system' and which reflects the legislative position in sev­ eral Member States at the time of the adop­ tion of the directive, is to confer competence, in the first place, on first-instance review bodies which are not judicial bodies. The subsequent text of Article 2(8) applies exclu- sively to this second scenario. In such a case, 37. The task of assessing accurately the leg­ the provision states that 'provision must be islative purport of the provision in question made to guarantee procedures whereby any is by no means a simple one. What is crucial allegedly illegal measure taken by the review for our purposes is to clarify what the direc­ body or any alleged defect in the exercise of tive meant by the phrase 'bodies ... judicial in the powers conferred on it can be the subject character' in the first sentence of Article 2(8). of judicial review or review by another body It must be ascertained whether that phrase is which is a court or tribunal within the meaning to be construed as a reference to the Com­ of Article 177 of the EEC Treaty and inde­ munity concept of 'court or tribunal' or as a pendent of both the contracting authority and reference to national law. the review body'.

39. The rationale of the system as a whole, as first tier is represented by a 'purely' admin the Austrian Government and the Commis istrative body which, as such, falls outside the sion acknowledged at the hearing, is to ensure definition of a court or tribunal as referred to that, whenever decisions taken by the con in Article 177. tracting authorities are reviewed, there can be intervention by a body which, by virtue of its 'judicial' nature, is entitled to submit ques tions for a preliminary ruling to the Court of Justice, even if that body is not formally part of the judicial system of the Member State in

provision concerns the specific conditions to be satisfied by the independent body which deals with cases at second instance in the two-tier system. It is therefore clear that the clarifications sought by the national authority are not relevant in this case since that part of the provision is not applicable to the Public Procurement Office established by the 40. However, if the Office is considered to be Tyrolean law. The issue raised by the refer a body entitled to submit questions to the ring authority therefore boils down to that of Court of Justice — and is therefore a court or the admissibility of the questions submitted, tribunal as referred to in Article 177 —, it fol which has already been examined.

It would therefore make no sense, power and to the parties, the conditions gov from that point of view, to require decisions erning their appointment and removal, and so taken by a 'court or tribunal' within the on. It is therefore not crucial, for example, to meaning of Article 177 to be subject to review assess whether the president of the Office has by another body in turn entitled to make ref the same personal and professional qualifica erences to the Court. I reiterate: the require tions as a member of the judiciary and whether ment to provide in any event for the inter those qualifications must be determined by vention of a body which is a 'court or tribunal' reference to a 'national' or 'Community' con within the meaning of Article 177 is clearly cept of a court. That condition is peculiar to redundant in cases such as this, where the the 'two-tier' system which the directive con body responsible for review procedures is, by ceives of as a possible alternative available to definition, regarded as a 'court or tribunal'; it Member States when establishing a national is relevant only if, in a two-tier system, the system of review procedures.

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not in itself a decisive criterion for regarding vergabeamt were to be regarded as a 'court or a body as a 'court or tribunal' for the pur­ tribunal within the meaning of Article 177' as poses of Article 177. referred to in the last sentence of the first part of Article 2(8), and therefore as a 'second tier' in the determination of review proceedings against the award of public contracts, the interpreter would be faced with the problem of identifying the first-tier review body which 42. It should be added that, always assuming is not a 'body ... judicial in character' and that the body in question is to be regarded as whose decisions would have to be the subject a court or tribunal within the meaning of of review by the Office. It will be noted that Article 177, the conclusion which I have no such first-instance review body exists reached is the only one which allows the within the Austrian system since review pro­ Tyrolean system of reviewing awards of public ceedings against decisions taken by con­ contracts to be included within the scope of tracting authorities are brought at first and the Review Directive. Indeed, if the Landes- sole instance before the Landesvergabeamt.

43 . In the light of the foregoing , I propose that the Court declare the questions referred by the Tiroler Landesvergabeamt inadmissible since that body is not a court or tribunal within the meaning of Article 177 of the Treaty.

In the alternative, I propose that the Court reply as follows:

The second part of Article 2(8) of the review directive must be interpreted as meaning that the conditions set out therein apply exclusively to the composition of independent bodies responsible for the review of decisions taken by another body which is competent at first instance to hear and determine review proceedings against the award of public contracts and is not a court or tribunal as referred to in Article 177 of the EC Treaty. The provision in question is therefore not relevant for the purpose of assessing the composition and operation of the Tiroler Landesvergabeamt .