C-13/99

TEAM V COMMISSION

OPINION OF ADVOCATE GENERAL JACOBS delivered on 17 February 2000 *

1. This is an appeal against a judgment 1of Europe, is the framework within which the the Court of First Instance dismissing an European Community channels economic action for damages by TEAM Sri, an Italian aid in order to implement measures inten- engineering consultancy company. The ded to support the process of economic and damage was allegedly suffered as a result social reform under way in those countries. of, first, a decision by the Commission annulling a tendering procedure for a feasibility study for the modernisation of a railway junction in Warsaw and, sec- ondly, the subsequent restricted invitation to tender for another such feasibility study.

3. Article 3(2) of Regulation No 3906/89 provides as follows:

Background and procedure before the Court of First Instance

'Account shall be taken, inter alia, of the preferences and wishes expressed by the recipient countries concerned in the choice 2. The PHARE programme, based on of measures to be financed pursuant to this Council Regulation (EEC) No 3906/89 of regulation.' 18 December 1989 on economic aid to the Republic of Hungary and the Polish Peo- ple's Republic 2 and subsequently extended to other countries of Central and Eastern

'Annulment of the tendering procedure 3. In the event of annulment of any tender procedure, Tenderers who are still bound by their tenders shall be notified thereof by the Contracting Authority. Such Tenderers shall not be entitled to compensation.' 1. The Contracting Authority may, prior to awarding the contract, without thereby incurring any liability to the Tenderers, and notwithstanding the stage in the procedures leading to the conclusion of the contract, either decide to close or annul the tender 5. On 13 June 1995 the Commission issued procedure in accordance with para- a restricted invitation to tender for a graph 2, or order that the procedure feasibility study for the modernisation of be recommenced, if necessary, on a railway junction in Warsaw on the E-20 amended terms. line ('the June invitation to tender') to be financed in the context of PHARE Project PL 9406 (1994 Transport Infrastructure Programme). That invitation to tender was sent to, amongst others, TEAM and Cen- tralne Biuro Projektowo-Badawcze Budow- 2. A tender procedure may be closed or nictwa Kolejowego (Kolprojekt) (herein- annulled in particular in the following after 'Kolprojekt'), a Polish public-owned cases: company providing railway engineering consultancy services. Having formed a consortium to take part jointly in the procedure, with Kolprojekt acting as the lead tenderer, the two undertakings sub- mitted their tender.

(d) if exceptional circumstances render 6. By fax of 16 November 1995, the Com- normal performance of the tender mission informed the tenderers that the procedure or contract impossible; invitation to tender had been cancelled due to the introduction of new objectives and modified terms of reference ('the contested 3 — Set out in paragraph 4 of the judgment of the Court of First Instance. decision').

7. On 4 December 1995 the Commission Court of First Instance, claiming that that issued, 'on behalf of the Government of Court should annul both the Commission Poland', a new restricted invitation to decision contained in the letter of tender for a feasibility study for the mod- 16 November 1995 and the contested invi- ernisation of the Warsaw railway node on tation to tender, award them compensation the E-20 TEN line ('the contested invitation for the damage suffered and order the to tender'). The shortlist of undertakings Commission to pay the costs. invited to submit tenders included the applicant but not Kolprojekt. The terms of reference issued with the contested invitation to tender, however, stated, under the heading 'Staff and local participation', 10. By fax of 28 May 1996, the Ministry of that the successful tenderer would be Transport and Maritime Economy of the required to work with Kolprojekt and that Republic of Poland asked the Commission the budget allocated for the participation of to withdraw the Warsaw railway junction the latter company was to be 25% of the study from the PHARE PL 9406 pro- financial offer. The terms of reference gramme and to replace it with other urgent appear to be otherwise identical to those railway projects. It pointed out that the issued with the June invitation to tender. tendering procedure had been suspended for several months and that the study could not be undertaken. The ministry also mentioned external factors relating to the planned modernisation of the junction, in particular the improvement of the Warsaw- Terespol section of the E-20 railway line and new priority pre-investment activities 8. By fax of 21 December 1995, the head for another line. of the relevant Commission unit announced that, in response to questions and remarks from several tenderers pointing to a lack of clarity in the terms of reference as regards available data, data collection and the involvement of the Polish institutions, the 11. By letter of 3 June 1996, the Deputy Commission would clarify the matter with Director-General of DG IA informed the the Polish authorities with a view to issuing Polish ministry that the Commission had more precise terms of reference during acceded to its request. He further explained January and setting a new deadline for the that, since there was no longer any reason submission of bids. The fax stated that the to proceed with the invitation to tender for submission of bids was, in the meantime, the study, the Commission had decided to deferred and the deadline postponed. annul the whole procedure on the basis of Article 23(2)(d) of the General Regula- tions.

16. First, 6 the Court held that the charges and expenses incurred by a tenderer in 13. By order of 13 June 1997, the Court of connection with his participation in a First Instance (Fourth Chamber), in tendering procedure could not in principle response to an application by the Commis- constitute loss capable of being remedied sion, ruled that there was no longer any by an award of damages since, first, need to give a decision on the application Article 23 of the General Regulations for annulment and reserved for the final applicable to the tender procedure provided judgment its decision on the admissibility for contracting authorities to close or annul of the claim for damages. 4 the tendering procedure without incurring liability for compensation, and, secondly, the Instructions to Tenderers forming part of the June invitation to tender provided that the contracting authority was not bound to accept the lowest offer or to 14. By order of 8 May 1998, 5the Presi- award any contract. dent of the Fourth Chamber of the Court of First Instance, having been informed by the applicants in the reply that Kolprojekt wished to withdraw from the present proceedings, ordered the latter's name to be removed from the Court register. 17. Next, 7the Court examined the ques- tions of illegality and causation, since Article 23 could not apply if a tenderer's chances of being awarded the contract had been affected by an infringement of Com- munity law in the conduct of the tendering procedure. It noted that TEAM had not shown any such infringement of Commu- The judgment of the Court of First Instance nity law and that in any event the cause of the loss of chance of award was the with- drawal from the PHARE PL 9406 pro- gramme of the feasibility study (and the acceptance of that withdrawal by the 15. The substance of the ruling of the Commission pursuant to Article 3(2) of Court of First Instance is contained in Regulation No 3906/89), which TEAM

20. The Court also ruled on two docu- The history of the two documents in ments on which TEAM sought to rely at question the hearing: a letter dated 21 August 1995 from the Ministry of Transport and Mari- time Economy of the Republic of Poland to the Commission and a confidential version 22. By written question sent on 11 May of the minutes of a meeting held in Brussels 1998 the Court of First Instance requested on 13 September 1995 between represen- the Commission, pursuant to Article 64 of tatives of the Commission and of the its Rules of Procedure, to produce before Ministry concerning the evaluation of the 20 May 1998 the minutes, notes and tenders submitted in the context of the memoranda relating to the contested deci- invitation to tender of 13 June 1995. The sion and the contested invitation to tender, Court ruled that the documents were together with the correspondence irrelevant for the purposes of determining exchanged between the Commission and the dispute; they were therefore not taken the Polish authorities between 13 June and into consideration by the Court for the 4 December 1995 concerning the conduct of the two invitations to tender in question.

8 — Paragraphs 76 and 77. 9 — Paragraph 78. 10 — Paragraph 79.

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26. At the hearing on 25 June 1998, TEAM 24. The letter of 21 August 1995 was in requested that the two documents should response to a letter from the Commission be put on the Court file. The. Court of First dated 11 August 1995 in which the Com- Instance refused that request, finding that mission stated that it could not endorse the the documents were irrelevant.

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Summary of the arguments ments were relevant for a correct assess-' ment of at least two elements of the application, namely the illegality of the Commission's conduct and the decisive role 27. TEAM notes that it first asked the played by the Commission in changing the Court of First Instance to request the tender procedure and preventing its con- Commission to produce all relevant min- tinuance. utes of meetings and correspondence in its application lodged on 26 January 1996, two and a half years before the Court's formal request was made. TEAM submits that the conduct of the Court of First Instance is a manifest infringement of its right to a fair hearing, since the decision to request production was taken after exces- sive delay when it was no longer in a 30. Finally, TEAM states that the Court position to submit written observations and gave no reasons for its decision that the had little time to use the documents for the documents were irrelevant, which is in purposes of the hearing. itself sufficient to invalidate its judgment.

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32. As for the Court's alleged failure to give before the Court of First Instance may be a reasons for not taking the documents into ground of appeal. 1 3In this case, however, consideration, the Commission submits there is nothing to support the allegation of that paragraph 79 of the judgment, intro- unreasonable delay in ordering production duced by the words 'In view of the fore- of the documents. It was not until the order going' and therefore to be read in conjunc- of the Court of First Instance of 13 June tion with paragraphs 12, 11 73, 74 and 75, 1997 that the Court decided to postpone clearly shows the logic behind the Court's ruling on the Commission's objection of decision. inadmissibility until it ruled on the sub- stance of the claim for damages. In the following month the Commission, in its defence lodged on 16 July 1997, referred to the existence of a notarial deed by which Kolprojekt's representatives revoked the powers of attorney granted to their lawyers (who also acted for TEAM), noting that they had asked those lawyers to cease any Analysis actions in the name of Kolprojekt. That deed was subsequently annexed to TEAM's reply lodged on 8 October 1997. In its order of 8 May 1998 the Court of First Instance stated that that must be regarded 33. TEAM complains essentially that the as a discontinuance of proceedings within Court of First Instance (i) ordered the the meaning of Article 99 of its Rules of production of documents with excessive Procedure, and accordingly removed the tardiness; (ii) decided questions — namely name of the applicant Kolprojekt from the the relevance and confidentiality of the register. Three days later the Court of First documents — which were relevant to Instance made its first request for relevant TEAM'sright to a fair hearing without documents to the Commission. In the hearing TEAM; (iii) wrongly refused to circumstances outlined above, the lapse of take the documents into consideration, time between TEAM's application and that distorting the evidence by concluding that first request cannot be regarded as unrea- they were not relevant; and (iv) gave no sonable or excessive. reasons for that conclusion.

38. Finally, TEAM argues that the Court of First Instance gave no reasons for conclud- 36. With regard more specifically to the ing that the documents were not relevant. argument concerning confidentiality, it is Although it is true that the Court of First for the Court of First Instance, and more Instance is subject to the general principle particularly the Chamber to which the case which places on every court the obligation has been assigned, to rule on procedural to state the reasons on which its decisions issues raised by the parties and in particular are based, by indicating in particular the on questions connected with the commu- reasons which led it not to uphold a nication between parties of secret or con- complaint expressly raised before it, 16 that fidential documents. 15 Moreover and in principle does not mean that the Court of any event, the Court of First Instance saw First Instance must give reasons for every the confidential versions and excluded decision on procedural and evidential mat- them as irrelevant: since, as indicated ters: the principle requires the Court to above, that decision is unreviewable on respond to all the pleas in law raised before appeal, it seems to me that no separate it but not necessarily to address all .addi- point of appeal relating to the confidenti- tional arguments. 17 In particular the Court ality aspect subsists. is not obliged to give reasons for every assessment of evidence: such assessments are, as indicated above, findings of fact not decisions of law.

40. TEAM submits that on two points the Court of First Instance incorrectly inter- preted the arguments set out in the appli- cation and thus erroneously assessed their legal implications: the first point concerns the loss allegedly suffered and the second 42. The Commission responds that the concerns causation. Court did indeed examine the claim for loss of chance of award, concluding that that loss was due not to any infringement of Community law by the Commission but to an act of the Polish Government, namely withdrawal of the study. That was further- more accepted by TEAM in its reply before the Court of First Instance, where it stated The concept of the damage to be compen- that the Polish authorities' decision to sated withdraw the study, far from extinguishing the damage pleaded, made it irremediable. The Court moreover found that TEAM had not shown that the Commission had 41. TEAM first criticises the Court for infringed Community law. stating that the loss pleaded by it, in particular the non-award of the contract, could be compensated only if it had a right to the contract. TEAM notes that it stressed in its written and oral pleadings that the damage of which it complains was not the failure to obtain the contract but was caused by a different legal situation. It is 43. TEAM's appeal on this ground is in my well established that, where there is irregu- view inadmissible. In its application before larity in a tender offer, a participant who the Court of First Instance, TEAM breaks has complied with the prescribed procedure down its damages claim into (i) charges and may seek compensation both for the loss of expenses, (ii) loss resulting from the non- chance of award of the contract and for the award of the contract and (iii) damage to

44. In any event, that ground of appeal is unfounded. As TEAM itself notes, damage Erroneous test of causation for loss of chance of award of the contract could arise only where the conduct of the procedure was irregular. As is apparent from paragraph 69 of the judgment of the Court of First Instance, under Article 23(1) of the General Regulations the contracting authority may, before awarding the con- tract and without incurring any liability to the tenderers, either decide to close or 45. TEAM submits that the Court wrongly annul the tendering procedure or order that applied the test for determining causation: the procedure be recommenced, if neces- the judgment proceeds on the basis that the sary, on amended terms. As the Court of damage pleaded was due not to any illegal First Instance indicates, such a provision act or conduct on the part of the Commis- would not validate conduct by the Com- sion but rather to the autonomous with- mission in conflict with the principles of drawal of the project by the Polish autho- legal certainty and the protection of legit- rities. That is wrong, TEAM suggests, for imate expectations. However, there is noth- two reasons: first, the damage pleaded is ing to suggest any infringement of those due to the Commission's acts and conduct principles in this case. There is no evidence, in administering the tender procedure, and for example, that TEAM was 'encouraged is unrelated to the decisions subsequently taken by the Polish authorities, and

18 — Case C-136/92 P Commission v Brazzelli Lualdi and Others [1994] ECR I-1981, paragraph 59 of the judgment. 19 — Case T-203/96 [1998] ECR II-4239.

48. There are two separate but related 47. The Commission states that the inclu- aspects to this ground of appeal. First, sion in the contested invitation to tender of there is the argument that the damage the obligation on the successful tenderer to pleaded is due to the Commission's illegal work with Kolprojekt and the provision acts and omissions and not to the Polish that the budget allocated for the participa- Government's decision to withdraw the tion of that company was to be 25% of the study, as found by the Court of First financial offer meant that it was substan- Instance. Secondly, there is the argument tially different from the June invitation to that that decision was in any event sub- tender. Those amendments, which signifi- stantially prompted by the Commission's cantly altered the economic content and the illegal conduct. working methods of the project subject to

21 — Paragraph 75 of the judgment. 20 — Cited in note 19. 22 — Paragraph 96 of the judgment.

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49. In my view the findings of the Court of as stated above there is nothing to suggest First Instance as to causation are findings of that the Commission acted unlawfully. fact and as such unreviewable on appeal. Even if that were not the case, and even if the damage pleaded or the Polish autho- rities' decision was a consequence of the Commission's conduct of the tender proce- dure, I do not consider that the outcome 50. It follows that none of the grounds of would or should have been different since appeal can be upheld.

Conclusion