C-337/98

COMMISSION V FRANCE

OPINION OF ADVOCATE GENERAL JACOBS delivered on 23 March 2000 *

1. In this case, die Commission alleges a undertakings or on the basis of special or failure by the French authorities to comply exclusive rights granted by a competent with the Community rules governing the authority of a Member State (Article 2(1) use of negotiated procedures for the con- and (2)(c)). clusion of procurement contracts by entities operating in the water, energy, transport and telecommunications sectors, in a spe- cific instance where a negotiated procedure was followed without a prior call for competition. The main issue is whether those rules applied to the procedure in 3. It provides for three types of procedure question; the French Government disputes whereby such entities may award contracts the Commission's contention that they in the fields covered: open, restricted and were in force at the material stage of that negotiated procedures. These are defined in procedure. If the rules were applicable, it Article 1(7) as follows: must be determined whether the conditions were met for a derogation from the obliga- tion to issue a call for competition.

'(a) in the case of open procedures, all interested suppliers, contractors or ser- vice providers may submit tenders;

The relevant Community legislation

(b) in the case of ... restricted procedures, only candidates invited by the contract- 2. Council Directive 93/38 1 applies to ing entity may submit tenders; contracting entities operating, biter alia, public transport networks either in their capacity as public authorities or public

8. Article 45 also provided that Directive 6. However, under Article 20(2): 'Con- 90/531 2— which contained3 provisions tracting entities may use a procedure with- identical for present purposes to those of out prior call for competition in the fol- Directive 93/38 cited above — should lowing cases: cease to have effect as from the date on which the latter was applied by the Mem- ber States. Member States had been required to comply with Directive 90/531 by 1 January 1993. 4Prior to that directive, procurement procedures in the 'utilities' sectors had not been subject to Community regulation.

2 — Council Directive 90/531/EEC of 17 September 1990 on the procurement procedures of entities operating in the water, (c) when, for technical or artistic reasons energy, transport and telecommunications sectors, OJ 1990 L 297, p. 1. or for reasons connected with protec- 3 _ In Articles 1(6), 4(2), 15(1) and (2)(c) and 16. tion of exclusive rights, the contract 4 —Article 37(1) and (2).

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The relevant French legislation (2) when requirements can be met only by [work or supplies] which, by reason of technical necessity, substantial preli­ minary investment, special plant or equipment or know-how, can be con­ 9. The rules governing public procurement tracted out only to a specific contractor in France are contained principally in the or supplier; Code des Marchés Publics (Public Procure­ ment Code, hereinafter also 'the Code').

10. Article 104(1) of the Code requires negotiated contracts to be preceded by a ...' call for competition. Article 104(11) con­ cerns exceptions for which no call for competition is needed. The text applicable at the material times in the present case provides, in so far as is relevant:

Factual background say a tram or light railway network. On 26 October 1989, its committee voted, inter alia, to confirm previous decisions to provide a reserved-track network, to opt for the 'VAL' automatic light railway system, to seek government funding and 12. Briefly stated, this case concerns a to authorise consultations with a view to lengthy process to award a contract for awarding a contract for drawing up pre- the construction of an urban light railway liminary specifications. The report on line. The relevance of the different stages in which that vote was taken stated that the that process lies essentially in determining VAL system was produced by the two whether it comprised a single, uninter- companies Matra (Matra Transport, now rupted award procedure or whether a apparently known as Matra Transport second procedure was commenced at a International) and Alsthom (GEC Alsthom relatively late stage of the overall process. Transport). The contract for drawing up That issue is relevant in turn when deter- preliminary specifications was, it was sta- mining the applicability of the Community ted at the hearing, later awarded to and rules to one of the initial steps in the performed by Matra. procedure leading to the final award.

17. In response to a request from the Court, the French Government has pro- 20. However, that stage had not been duced a letter from Matra to Sitcar, dated reached without political opposition. A 9 July 1991 and apparently received on 'Comité pour une alternative au VAL' had 12 July 1991 (though perhaps too late to be been set up in 1991 and most of the mentioned in the report delivered on that relevant resolutions had been opposed by date). That letter appears to accompany a a minority. In addition, the ecological file containing Matra's proposal for the movement 'Rennes Verte' had applied to 'system' portion of the work on the first the Tribunal Administratif (Administrative VAL line in Rennes. It confirms a guaran- Court), Rennes, to have the Prefect's teed price of FRF 987 000 000 or, with declaration of public interest set aside. On certain possible modifications to the pro- 16 February 1994, that court annulled the gramme, of FRF 953 200 000, both declaration on the ground that the preli- excluding tax and at January 1991 prices. minary inquiry was incomplete as regards analysis of certain required criteria.

18. On 15 February 1993, the Prefect of Ille-et-Vilaine, the département in which Rennes is situated, issued a declaration of 21. As a result, by letter of 30 March 1994, public interest in respect of the first line of the Minister for Infrastructure, Transport the VAL light railway network. That and Tourism informed the Chairman of the declaration was a precondition for pro- District Council that government funding, ceeding with the project, in particular for although still in principle available, could making expropriations. not be provided until the administrative procedure had been recommenced and completed as required by that judgment.

24. In a letter dated 29 July 1996 to two Procedure councillors hostile to the project, who had challenged an alleged refusal to communi- cate the 1993 turnkey contract for the 'system' portion of the VAL line, the Chairman of the District Council stated, 26. Following a complaint submitted to it inter alia, that the contract could not be in late 1996 — apparently by councillors communicated because it had never hostile to the VAL project — the Commis- existed, having been neither signed by the sion requested clarification from the French competent authority nor forwarded to the Republic, which replied, essentially, that Prefect, and that the withdrawal of the the contract had been awarded in 1989, resolution approving it called into question before the entry into force of Directives the very existence of the project. The 90/531 or 93/38, and that Matra was the decision embodied in that letter was, how- only company able to meet the require- ever, subsequently set aside by a judgment ments and had already made substantial of the Tribunal Administratif of 16 July investments. The Commission sent the 1997, which held, inter alia, that the French authorities a letter of formal notice existence of the contract was attested by in June 1997. Considering the reply to that the terms of the resolution of 30 March letter unsatisfactory, it then sent a reasoned

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28. The Commission's case is, essentially, that the procedure in issue was initiated on 22 September 1995, that at that date the conditions for the application of the dero- Directive 90/531 and Directive 93/38 gation contained in Article 20(2)(c) of Directive 93/38 were not met and that by failing to issue a call for competition the French authorities thus infringed that direc- tive. The French Government maintains 30. In so far as they are relevant to the that the procedure was commenced (and present case, the rules contained in Direc-

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tive 90/531 and in Directive 93/38 are sion — or indeed any transitional provi- identical; the changes introduced by the sions — nor is there any reason to con- latter merely extend them to cover con- clude that their purpose requires any form tracts for services, as well as for works and of retroactive effect. supplies. The Commission, however, seeks a declaration of failure to fulfil obligations in respect of Directive 93/38 alone.

33. The Court has also recognised the principle that amending legislation applies, unless otherwise provided, to the future consequences of situations which arose 31. Consequently, any finding that the under the previous legislation. 9 provisions of Directive 90/531 were brea- ched during the period when they were applicable but Directive 93/38 was not applicable would be ultra petita. None the less, I consider it useful to bear both directives in mind when analysing the 34. Those principles, however, do not situation in this case. directly resolve the question of the immedi- ate application of new rules to a procedure already under way at the date by which they were to be transposed. The measures necessary to comply with the provisions of Directive 90/531 should have been applied from 1 January 1993 and those of Direc- tive 93/38 from 1 July 1994 at the latest.

assessments, which also contains no transi- applicable to subsequent stages of proce- tional provisions. The Court has held that dures already under way at the date of the obligations imposed by that directive must deadline for their transposition into apply to a consent procedure commenced national law. The Court's approach in the after the deadline for their transposition environmental impact assessment cases into national law but before that transposi- cited above may have been influenced by tion was actually effected. 11 In order to the consideration that it could not be determine whether the directive rules apply, determined with certainty at what stage in for reasons of legal certainty the sole a procedure the assessment required by the criterion must be whether the application directive should take place, whereas the for consent was formally lodged before or commencement of the procedure by the after the deadline for transposition. 12 The lodging of a formal application was a directive was designed to cover projects clearly ascertainable event. likely to require a long time to complete, so that complex procedures already initiated under national law and situations already established should not be affected by it. 13

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on stages completed before the dates on original procedure was completed well which they were to be applied. before 1 July 1994, when the period for transposition of Directive 93/38 expired, and even before 1 January 1993, by which date the provisions implementing Directive 90/531 were to be brought into force.

40. In the specific context of a Community procurement directive not transposed within the period prescribed, that conclu- sion is consistent with the Court's ruling in 42. The issuing of a call for competition Tögel, 14 that 'Community law does not must be prior to the commencement of require an awarding authority in a Member negotiations. Here, it is clear that negotia- State to intervene ... in existing legal situa- tions had already commenced by 19 July tions ... where those situations came into 1990 at the latest — prior to even the being before expiry of the period for adoption of Directive 90/531 — and had transposition'. Although that ruling con- been substantially completed by 9 July cerned a situation in which the contract 1991. Agreement was reached by itself had been concluded before, but for a 30 March 1993. Indeed, at the hearing, period extending beyond, that date, the the Commission appeared to accept that if principle is in my view of general applica- the contract had been carried out as tion: it applies to whatever and however approved on the latter date the Community many stages of a procurement procedure procurement rules would not have been have been completed before expiry of the infringed. period for transposition.

the resolution approving the 1993 contract 47. As for the significance of the resolution and of the decision to resume detailed requesting Semtcar to 'reprendre la mise au negotiations with Matra? point' of the contract, the Commission sees it as clear evidence of the commencement of a new procedure, the French Govern- ment as a resumption and continuation of the original procedure. The contract approved on 22 November 1996 is invoked by both parties in support of their posi- tions: the Commission claims it diverges in substantial respects from the 1993 con- 45. The contract approved on 30 March tract, whereas the French Government 1993 was, it appears, never signed. The asserts that it was substantially the same, Court has been presented with various the only differences being the choice of a arguments as to whether a binding award marginally different model as a result of was none the less made at that date or at an technical developments in the intervening earlier stage when agreement was reached period and an updating of the price. on terms. The Commission considers that the award was made on 30 March 1993, there having been no final, unconditional agreement prior to that date. The French Government argues that Matra had acquired a right to the contract by its firm commitment as to price on 9 July 1991. 48. The Commission's action is brought in respect of the procedure leading to the award of the contract approved for signa- ture on 22 November 1996. What is at issue is whether that award was the out- come of the original procedure or whether the latter had come to a close on or before 22 September 1995. 46. We have also heard conflicting views on whether, assuming there was such an award, the contract was rendered void by the withdrawal of the resolution approving it. The Commission argues that the with- drawal meant, in French administrative 49. Directive 93/38 lays down certain law, that the resolution was deemed never requirements to be observed before, during to have existed. The French Government and following the 'award' stage of a asserts that the position was simply that, procedure but does not specify how it is until a new declaration of public interest to be determined when that award has was issued and the funding conditional taken place. This is understandable. The thereupon released, it was impossible to Community procurement directives do not sign the contract with Matra; a binding effect a complete harmonisation of proce- decision to award the contract to that dures but lay down requirements to be company had none the less been taken observed where specified criteria are met, and remained in existence unless and until in particular as regards the value of the a competent court should decide otherwise. contract. All other applicable rules, includ-

50. When considering those hypotheses, however, it must be borne in mind that in proceedings against a Member State for a declaration of failure to fulfil an obligation, it is incumbent on the Commission to prove 53. If a procedure is concluded by a that the obligation has not been fulfilled separate award and that award is made and to place before the Court the informa- when, say, firm agreement is reached tion necessary to enable it to determine between the contracting entity and the whether that is so. 15 future contractor, so that approval by the elected body, whilst essential for other reasons, does not affect the existence of that award, 16 then it would seem to follow that withdrawal of that approval can like- wise not affect the existence of the award, 51. Three possibilities may be envisaged although presumably there must be some when considering when the original proce- new approval before the contract can take dure was brought to an end: it may have effect. In those circumstances the award, if been concluded by the approval of the made before 30 March 1993, would have contract by the District Council on remained in existence after 22 September 30 March 1993, by an award at some 1995, since the only measure withdrawn on earlier stage, perhaps when firm agreement that date was the resolution approving the had been reached, or by some later event. contract and authorising its signature, and could have been subsequently approved anew by the resolution of 22 November 1996.

52. If approval by an elected body is necessary and a procedure is concluded by the decision approving the contract and authorising its signature, then the resolu- tion of 30 March 1993 would appear to 54. If the original procedure was not con- cluded either on or before 30 March 1993,

57. I thus reach the view that it has not been established that the original procedure was concluded at an earlier stage in any of 56. In that regard, the language used in the the three possible hypotheses, so that the second resolution of 22 September contract approved on 22 November 1996 1995 — "reprendre la mise au point" — may be regarded as the conclusion of that is highly indicative of both a resumption procedure, at the commencement of which and a refinement of negotiations. More- Community procurement rules did not over, the French Government has produced apply to contracts awarded by entities a letter from Matra to Semtcar dated operating public transport networks. Con- 30 November 1995, stating that Matra sequently, the fact that no prior call for had examined the impact of readjusting competition was issued cannot constitute the timetable for the project and, taking an infringement of those rules.

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59. It may be noted here that, although critical of Article 104(II) of the French Public Procurement Code, the Commission does not seek any declaration of failure to fulfil obligations with regard to the inclu- sion in that provision of a derogation on the basis of substantial prior investment. Nor, in its defence, does France seek to rely on that article; it argues, rather, that the Community derogation applied. That aspect may thus be ignored, and it is also irrelevant for present purposes whether there may be any contradiction between 61. The French Government considers that Article 104(II) of the Code and Article 2(4) the conditions for the derogation were met of Decree 93-990, implementing Directive as regards both 'technical reasons' and 90/531. 17 The question to be answered is: 'reasons connected with protection of was there a breach of Article 20(2)(c) of exclusive rights'. The basic elements and Directive 93/38 as a result of conduct after certain essential parts of the VAL system 1 July 1994? were protected by 11 patents and one design registered by Matra in France between 1975 and 1993, each with a validity of 20 years, the majority of them being extended to other Member States. Only two of them expired during the 60. The Commission submits that there relevant period, in 1995. The name 'VAL' should have been a call for competition was registered by Matra as a trade mark in 1987. In 1996, Alsthom stated to Semtcar that it could not meet the terms specified as 17 — See paragraphs 10 and 11 above. regards deadlines and previous construe-

65. This means, I consider, that where a Member State seeks to rely on a deroga- tion, it is for the Member State to justify its 63. As I have pointed out, 18 it is for the claim and not for the Commission to prove Commission to prove its case and to place that the conditions for the derogation were the necessary evidence before the Court. not met. However, the overall burden of proof remains with the Commission; where evidence has been put forward to justify the derogation, it is up to the Commission to refute that evidence. On the totality of the evidence presented to it, the Court must be satisfied that the Commission has estab- 64. However, where a Member State relies lished its case. on a derogation from a general rule, the Court has regularly held the burden of proof to be reversed. 19 It has taken that 20 — Article 9(b) and Article 9(d) (later Article 5(3)(c)) of Council Directive 71/305/EEC concerning the coordina- approach in a number of cases concerning tion of procedures for the award of public works contracts, OJ, English Special Edition 1971(11), p. 682, and Arti- provisions of procurement directives either cle 6(1)(h) of Council Directive 77/62/EEC of 21 Decem- ber 1976 coordinating procedures for the award of public supply contracts, OJ 1977 L 13, p. 1. 2 1 — C a s e C-318/94 Commission v Germany [1996] ECR I-1949, paragraph 13 of the judgment; see also Case 18 — See above, paragraph 50. 199/85 Commission v Italy [1987] ECR 1039, paragrapli 19 — See. for example, as regards exceptions to the principle of 14, Case C-107/92 Commission v Italy [1993] ECR free movement of goods. Case C-128/89 Commission v I-4655, paragraphs 12 to 14, Case C-328/92 Commission Italy [1990] ECR I-3239, paragraph 23 of the judgment, v Spam [1994] ECR I-1569, paragraph 16, and Case and Case C-205/89 Commission v Greece [1991] ECR C-57/94 Commission v Italy [1995] ECR I-1249, para- I-1361, paragraph 9. graph 23.

69. In those circumstances, I take the view that, if the procedure leading to the final award is held to have commenced in 67. The Commission has produced a letter September 1995, it cannot be concluded from Alsthom to one of the councillors from the totality of the evidence before the opposed to the VAL project, dated Court that for technical reasons or reasons 23 November 1995 (two months after the connected with the protection of exclusive decision to resume negotiations with Matra rights the contract could be executed only and one year before the final approval of by a particular contractor; the derogation the contract). It is clear from that letter that in Article 20(2)(c) of Directive 93/38 thus at that date Alsthom, having supplied did not apply and, by not publishing a call similar though not identical systems in the for competition in the Official Journal of past, considered itself perfectly capable of the European Communities, the French providing a fully automatic reserved-track Republic failed to fulfil its obligations system in Rennes in accordance with the under that provision and consequently also specifications and wished to submit a under Article 4(2) of the same directive.

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Conclusion

70. Nevertheless, on the basis of the view I have reached as to the applicability of the Community rules to the initial stages of the procedure in issue, I conclude that the Court should:

(1) dismiss the application; and