Insights

In a request for a preliminary ruling by Randstad Italia SpA to the European Court of Justice, Grand Chamber, the interpretation of Article 19(1) TEU^[1] relating to the obligations of Member States to provide remedies sufficient to ensure effective legal protection was considered, specifically relating to the application of review procedures to the award of public supply and public works contracts.

The request was made in proceedings between Randstad Italia SpA and Umana SpA, Azienda USL Valle d’Aosta concerning the exclusion of Randstad from a procedure for the award of a public contract and the regularity of that procedures.

The application of the right to an effective remedy was requested by Randstad in the context of concession contracts^[2] awarded by contracting authorities, with concession contracts including public contracts, framework agreements, work and services concessions and dynamic purchasing systems. Member States have an obligation to take the necessary measures to ensure that, as regards to contracts falling within the scope of the Directive, decisions taken by contracting authorities may be reviewed effectively and as rapidly as possible in accordance with any applicable conditions which may be imposed – such review procedures shall be available to any person having, or having had an interest in obtaining a particular contract and who has been, or risks being harmed by an alleged infringement.

In providing an effective review procedure, Member States shall ensure that such procedures include provision for powers to:

1. Take at the earliest opportunity interim measures with the aim of correcting the alleged infringement or preventing further damage to the interests concerned – including measures to suspend or ensure the suspension of the procedure for the award of a public contract;
2. Either set aside or ensure the setting aside of decisions taken unlawfully, including the removal of discriminatory technical, economic or financial specifications in the invitation to tender;
3. Award damages to the persons harmed by the infringement.

The dispute in the main proceedings and the questions referred to for a preliminary ruling related to the launch of a tendering procedure by USL for the purpose of awarding a public contract on the basis of the most economically advantageous tender, to an employment agency for the temporary supply of personnel.

Randstad brough an action before the Tribunale amministrativo regionale dell Valle d’Aosta disputing 1) its exclusion from the tendering procedure which excluded Randstad after a second round of evaluation of the participant tenderers and 2) the regularity of the procedure adopted by USL – its action therefore also concerned the award of the contract granted to a third party tenderer.

The judgment was further appealed before the Consiglio di Stato which held that Randstad’s pleas were inadmissible on the basis that Randstand was deemed to be ineligible during the tendering process as it did not meet the ‘stress test’ of the minimum threshold imposed by USL, and that Randstand lacked standing to challenge the results since it had a purely factual interest, analogous to that of any other economic operator in the sector that had not participated in the tendering procedure.

The preliminary question which was referred to the Court of Justice for a preliminary ruling was to determine whether EU law precludes a provision of domestic law which, according to national case law, does not allow individual parties to challenge, by means of an appeal, the conformity with EU law of a judgment of the highest administrative court.

With reference to the principle of procedural autonomy, the Court noted that, provided that there are EU rules on the matter, it is for the national legal order of each Member State to establish procedural rules for remedies to ensure effective legal protection. In doing so, it is necessary to ensure that those rules are not less favourable than in similar domestic law. In keeping with this principle, EU law does not preclude Member States’ from restricting or imposing conditions on please which may be relied on in appeal proceedings, provided that the principle of equivalence and principles of effectiveness are respected.

As regards the principle of equivalence, the Court notes that, in this case, the jurisdiction of the referring court to hear and determine appeals against judgments of the Council of State is limited according to the same rules, regardless of whether the appeals are based on provisions of national law or of EU law.

As to the principle of effectiveness, the Court recalls that EU law does not have the effect of requiring Member States to establish remedies other than those established by national law, unless no legal remedy exists that would make it possible to ensure respect for the rights that individuals derive from EU law. Provided that, in the present case, the referring court finds that such a legal remedy does exist, which seems on the face of it to be the case, it is entirely open, from the point of view of EU law, to the Member State concerned to confer jurisdiction on the highest court in its administrative order to adjudicate on a dispute at last instance, in relation both to the facts and to points of law, and consequently to prevent that dispute from being open to further substantive examination in an appeal in cassation before the highest court in its judicial order.

The Court concluded that where national procedural law in itself permits interested persons to bring an action before an independent and impartial tribunal and to assert before it, that EU law, has been infringed, but where the highest court in the administrative order of the Member State concerned, wrongly makes the admissibility of that action subject to conditions that have the effect of depriving those interested persons of their right to an effective remedy, EU law does not require that that Member State make provision – for the purpose of addressing the infringement of that right to an effective remedy – for the possibility of lodging an appeal before the highest court in the judicial order against such inadmissibility decisions from the highest administrative court.

This article was first published in the Malta Independent. 

^[1] The Treaty of the European Union.

^[2] Within the meaning of Directive 89/665 – on the coordination of the laws, regulations and administrative provisions relating to the application of review procedures to the award of public supply and public works contracts