C-225/97

2 — See the fifth recital in the preamble thereto. Article 1 pro- vides: '1. The Member States shall take the measures neces- sary to ensure that decisions taken by contracting entities The Directive may be reviewed effectively and, in particulari as rapidly as possible in accordance with the conditions set out in the fol- owing 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 as regards: (a) contract award procedures falling within the scope of Council Directive 90/531/EEC; and (b) compliance with Article 3(2)(a) of that Directive in the case of the con- tracting entities to which that provision applies. ...' 3 — The so-called 'suspension-annulment' option is provided for in Article 2 as follows: T h e Member States shall ensure that the measures taken con- cerning the review procedures specified in Article 1 include provision for the powers: cither (a) to take, at the earliest opportunity and by way of inter- locutory procedure, interim measures with the aim of cor- recting the alleged infringement or preventing further injury to the interests concerned, including measures to 2. The Directive is designed to ensure that suspend or to ensure the suspension of the procedure for the award of a contract or the implementation of any swift and effective review procedures are avail- decision taken by the contracting entity; and able at national law so that infringements of (b) to set aside or ensure the setting aside of decisions taken the Community public procurement rules can unlawfully, including the removal of discriminatory tech- nical, 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; * Original language: Italian. 1 — OJ 1992 L 76, p. 14. 4 — My emphasis.

4. Chapter IV of the Directive introduces a 6. The Directive was transposed into French conciliation system, available upon request. law by Law N o 93-1416 of 29 December 1993 Pursuant to Article 9, application of this pro- on review procedures relating to the award of cedure may be requested by 'any person certain supply and works contracts in the having or having had an interest in obtaining water, energy, transport and telecommunica- a particular contract falling within the scope tions sectors. 10 A copy of that Law was noti- of Directive 90/531/EEC and who, in rela- fied to the Commission under cover of a letter tion to the procedure for the award of that of 14 January 1994. contract, considers that he has been or risks being harmed by an alleged infringement of Community law in the field of procurement or national rules implementing that law'. 7 The task of the conciliators — provided, of course, that the contracting entity consents to initiation of the procedure in question — is to endeavour 'as quickly as possible to reach In order to implement Article 2 of the Direc- an agreement between the parties which is in tive, the French legislature chose the option

5 — See Article 3. 8 — See Article 10(4). 6 — See Article 4. 9 — See Article 10(5). 7 — See Article 10(1). 10 — JORF of 1 January 1994, p. 10.

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provided for in Article 2(1 )(c), under which The penalty payment, whether periodic or the courts may be empowered '[to make] an fixed, is wholly distinct from damages and order for the payment of a particular sum, in orders to make such payments may be can- cases where the infringement has not been celled, wholly or in part, if it is established corrected or prevented'. 11 that the default or delay in implementing the court's order has been caused, wholly or in part, by external factors. 13

11 — My emphasis. 12 — See Article 1, third paragraph. (Translated freely.) 13 — See Article 1, seventh paragraph.

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system or the conciliation procedure envis- The penalty payment system aged by the Directive.

10. With a view to transposing the Directive Not satisfied with the French authorities' into national law, France chose option (c), reply, the Commission delivered a reasoned that is to say, the 'financial deterrent' approach, opinion to the French Government on 8 rather than the suspension-annulment November 1996. option. 1 4Law N o 93-1416 confers on the President of the competent judicial body power to order the defaulting party to comply. At the same time, he may impose penalty payments — initially in the form of a pay- ment per diem, but which can later be con- verted to a fixed amount. 15

However, not even the reply to the reasoned opinion was found to be satisfactory and the Commission therefore brought the present proceedings under Article 169 of the Treaty.

What, according to the Commission, would 13. The Commission's argument leaves me have been the proper course of action? The somewhat confused. Above all, I am not con- Commission maintains that the special deter- vinced by the theory that the French legisla- rent character of the penalty payment system ture should have specified that the penalty should have been guaranteed directly by the payment should act as a deterrent. To my legislature. That is to say, the amounts should mind, that would have been wholly gratu- have been fixed by statute rather than left to itous. By its very nature, the penalty payment the discretion of the courts. In any event, the is designed precisely to undermine resistance implementing legislation should have on the part of the defaulting party, quite expressly stated that penalty payments must simply because he is thereby compelled to be fixed at a level high enough to have the pay a certain sum of money for every single necessary deterrent effect, or it should have day of delay in complying. The penalty pay- laid down rules limiting the discretion of the ment is therefore a typical means of enforcing courts in that regard, by prescribing a min- court orders; its deterrent effect stems from imum amount or other suitable parameters. its particular mode of operation. That is why an express legislative provision baldly stating that the penalty payment must act as a deter- rent does absolutely nothing to enhance the dissuasive character which already distin- guishes that mechanism, being as it is a means

— and a particularly effective one at that the Commission, finds no support in the — of enforcing compliance with court wording of the Directive: Article 2(5) does rulings. not specify that the legislature, rather than the courts, must fix the amount of the penal- ties payable. Moreover, the Commission acknowledges that this is not a requirement imposed directly by the Directive. O n the contrary, the initial proposal made specific provision to that effect, but that formed no part of the text adopted. Admittedly, that is not in itself conclusive. It seems to me, how- ever, that upon a proper construction of the 14. An altogether separate matter, and a more Directive the only absolute obligation incum- delicate one, is the question whether the bent on Member States is to make the system French legislature should have made certain effective; that is to say, to introduce a mecha- of the deterrent effect by specifying the rel- nism which enables infringements to be rem- evant amounts in the implementing legisla- edied and which also has a deterrent effect tion, or by laying down specific criteria or vis-à-vis future infringements. In other words, other rules on the basis of which the amounts in order to give proper effect to the option should be calculated so as to limit the discre- provided for by the Directive at (c), the tion of the courts on that point. That, in my Member States must introduce a measure view, is the main thrust of the Commission's whereby, as a manner of speaking, a 'financial complaint. Article 2(5) provides, in fact, that deterrent' is brought to bear, powerful enough ‘ [t]he sum to be paid in accordance with to be effective in terms of attaining the objec- paragraph 1(c) must be set at a level high tives referred to above. enough to dissuade the contracting entity from committing or persisting in an infringe- ment'. 18 The difficulty, however, lies in deter- mining by whom the amount is to 'be set': by the courts in the exercise of their discretion, as the French Government maintains; or indi- rectly by statute, through the setting of param- eters within which the courts may do this.

rightly, insists on — necessarily depends on conduct of contracting entities, too, may vary the amount being fixed by statute in the leg- — according to whether or not they act in islation implementing the Directive. 20 O n the good faith, whether they are concerned to contrary, I think that assumption is belied by remedy infringements or to prevent them, and the experience of those legal systems in which so on. It seems clear that such factors must be recourse to the penalty payment system is borne in mind when it comes to setting a common: there is no doubt as to its deterrent figure to be paid under Article 2(1)(c) and effect, even though in many cases determina- there can be no body better placed to make tion of the amount is a matter for the courts, such appraisals than the courts in the exercise at their discretion, rather than for the legisla- of their discretion. Statutory determination of ture. 21 the amounts is a very blunt instrument to wield in this context. Admittedly, legislation under which the courts were able to set the figure between a minimum and a maximum amount would satisfy the requirement that penalty payments be set at an amount appro- priate to the individual case. However, that approach would in no way displace the dis- cretion of the courts when it came to quan- 15. Certainly, the correct operation of 'option tifying the amounts in practice, albeit within (c)' — and, particularly, the true deterrent the parameters set by statute. O n the other effect of the penalty payments — depends on hand, such parameters would have to be suf- the prudent exercise of discretion by the courts ficiently wide to enable the courts to take called upon to set the amount payable. How- into account the various situations which may ever, in my view, if the material provisions of arise. Moreover, it would not be appropriate this Directive are to be correctly implemented, for this Court to monitor the national legis- the courts must be allowed to apply them lature's exercise of discretion in fixing such with an appropriate measure of discretion. thresholds when implementing the Directive. Infringements may take various forms. The

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for all interests likely to be harmed, as well as provisions into measures transposing the the public interest, and may decide not to directive in question'. grant such measures where their negative con- sequences could exceed their benefits. ...' 22 That provision would be wholly frustrated if Member States were required to adopt a system under which the competent national bodies could do no more than mechanically apply the remedies prescribed by statute.

22 — My emphasis. 24 — See Case 14/83 Von Colson and Kamann [1984] ECR 1891 23 — Case C-236/95, cited above: point 26 of the Opinion. and Case 31/87 Beentjes [1988] ECR 4635.

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The Directive was transposed into national law by 17. A further ground of complaint raised by means of a specific legislative instrument the Commission against Law N o 93-1416 is and the French authorities can scarcely be that the penalty payment system provided for criticised for not incorporating therein a derogates from the rules which ordinarily provision that is neither required by the govern penalty payments in French law, par- Directive nor essential for the attainment of ticularly with respect to the Law of 1991 on its aims. As regards the requirements of legal the reform of civil enforcement procedures. 28 certainty, to my mind these are fully satisfied Thus the French authorities have infringed — as the Court has consistently held 27 — as Article 1(2) of the Directive, which provides soon as individuals are in a position to that 'Member States shall ensure that there is ascertain the existence and scope of their no discrimination between undertakings likely rights under the Directive. In the present case, to make a claim for injury in the context of a this means that that fundamental requirement procedure for the award of a contract as a is satisfied if the undertakings concerned are result of the distinction made by this Direc- in a position to realise that remedies are tive between national rules implementing available in respect of failure to comply with Community law and other national rules'. the Community rules on public procurement, and if the courts are able to make penalty payment orders in cases where the contracting entity fails to comply with court rulings.

important, in order to satisfy the requirement for legal cer- tainty, that individuals should have the benefit of a clear and ingly, Law N o 91-650 could not be appropri- precise legal situation enabling them to ascertain the full extent of their rights and, where appropriate, to rely on ated sic et simpliciter as the basis for them before the national courts' (see Case 29/84 Commis- sion v Germany [1985] ECR 1661, paragraph 23; Case 363/85 Commission v Italy [1987] ECR 1733, paragraph 7; and Case C-59/89 Commission v Germany [1991] ECR 2607, para- graph 18). 28 — Law N o 91-650 of 9 July 1991 (JORF of 14 July 1991, 27 — See the judgments cited in footnote 26. p. 9228).

transposing the Directive into French law. It or, in determining the amount, to take into does not enable either the ordinary courts or account the conduct of the party against the administrative courts to intervene in public whom the order is made. According to the procurement procedures. Accordingly, the Commission, this weakens the deterrent effect adoption of Law N o 93-1416 cannot be said of the French system. to indicate an intention on the part of the French legislature to set up a special and less coercive procedure distinct from the rules of civil law in force. The only feature shared by the two bodies of rules is that they both pro- vide for recourse to the penalty payment

Rather, to 18. Lastly, the Commission's final complaint my mind, the reverse is true. 30 Indeed, the against Law N o 93-1416 remains to be exam- fact that, when the amount has been set, the ined. This concerns the distinction between court makes a fixed penalty payment order, periodic penalty payment orders and fixed taking into account the conduct of the penalty payment orders. Specifically, the Com- defaulting contracting entity, means that the mission maintains that it is incompatible with latter remains sub j udice, so to speak.

in Riv. Dir. Civ., 1981, I, p. 511: '[t]he option of increasing the level of the astreinte is specifically designed to enable any resistance on the part of the defaulting party to be over- come more easily. That also makes it necessary to determine 29 — See Article 2(5). definitively the amount payable'.

To my mind, the Commission's complaint in this respect must be upheld. As the Commis- sion points out, the provisions of Chapter II of the Directive require adoption of specific provisions in the implementing legislation designed to set out in detail the attestation 19. The Commission alleges that France failed system decided upon, the rules governing the to adopt any measure implementing Chapter designation of attestators, the professional II of the Directive concerning the attestation qualifications required, and so on. There is no system. The French Government, for its part, such provision in Law N o 93-1416. Further- acknowledges that Law N o 93-1416 does not more, according to established case-law, the contain any specific provisions on that sub- provisions of a directive must be implemented ject, but maintains that these were not neces- 'with unquestionable binding force, [and] with sary in the circumstances. Proper effect is the specificity, precision and clarity required given to Chapter II of the Directive simply if ... to satisfy the requirement of legal cer- contracting entities are made aware that they tainty'. 33 Consequently, 'in order to secure may submit their procurement procedures for the full implementation of directives in law attestation in accordance with its provisions. and not only in fact, Member States must This the French authorities achieved by pub- establish a specific legal framework in the area lishing Directive 92/13/EEC in a review which in question'. 34 The mere act of publishing the specialises in the public procurement sector Directive in a review, albeit a review with a particularly wide circulation in the public procurement sector, is not enough to satisfy the stringent requirements laid down by that 31 — In my view, it is no accident that Article 15(3) of the Regula- tion on the control of concentrations, cited in footnote 20, case-law. provides that 'Where the persons referred to in Article 3(1 )(b), undertakings or associations of undertakings have satisfied the obligation which it was the purpose of the peri- odic penalty payment to enforce, the Commission may set the total amount of the periodic penalty payments at a lower figure than that which would arise under the original deci- 32 — The French Government refers to the April-May 1992 edi- sion' (my emphasis). Nor docs it seem to me that that provi- tion of the review entitled Marchés Publics. sion, which is entirely consonant with the principle of pro- 33 — See Case C-59/89 Commission v Germany, cited above, portionality, diminishes the deterrent effect of the penalty paragraph 24. payment. 34 — See Case C-59/89, cited above, paragraph 28.

Conclusion

2 1 . In the light of the above considerations, I p r o p o s e that the C o u r t :

(1) declare that, b y failing t o a d o p t w i t h i n t h e p e r i o d prescribed t h e laws, regula- tions and administrative provisions necessary t o c o m p l y w i t h C h a p t e r s II a n d IV of C o u n c i l Directive 9 2 / 1 3 / E E C of 25 F e b r u a r y 1992 c o o r d i n a t i n g the laws, regulations and administrative provisions relating t o t h e application of C o m - m u n i t y rules o n t h e p r o c u r e m e n t p r o c e d u r e s of entities o p e r a t i n g in t h e water, energy, t r a n s p o r t and t e l e c o m m u n i c a t i o n s sectors, t h e F r e n c h R e p u b l i c has failed t o fulfil its obligations u n d e r that Directive;

(2) o r d e r the F r e n c h R e p u b l i c t o p a y t h e costs.

35 — See Article 9(2).

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