AG Jääskinen confirms GC and CJEU jurisdiction to review procurement decisions linked to EU's external action: Time to rethink? (C‑439/13 P)

In his second Opinion of 21 May 2015 in case Elitaliana v Eulex Kosovo, C-439/13 P, EU:C:2015:341 (not available in EN), AG Jääskinen has submitted that the EU Courts have competence for the review of decisions awarding public contracts financed by the EU budget in the context of the EU's external action.

In the case at hand, the challenge concerned the award of a services contract for helicopter emergency medical services [transportation] and air ambulance services tendered by the European Union Rule of Law Mission in Kosovo (Eulex Kosovo), which is the largest civilian mission ever launched by the European Union under the Common Security and Defence Policy (CSDP) by means of Joint Action 2008/124 (as amended).

AG Jääskinen's Opinion could not be clearer in stressing that "insofar as it relates to public contracts awarded in the context of the external action of the European Union, [the challenge] certainly comes within the scope of the budgetary provisions of EU law", which makes the General Court and the Court of Justice of the European Union competent. I fully agree with his view.

The point of departure that the AG takes is to stress that, under what is now Article 41 TEU, CSDP missions "are funded by the Member States based on their gross national product (GNP) when it comes to military operations, while civil and military expenses are borne by the European Union" (para 38, own translation). And, more specifically, that Art 16 of Joint Action 2008/124 determines that "all the costs of Eulex Kosovo are managed in accordance with the rules and procedures applicable to the general budget of the European Union" (para 39, own translation). Consequently, the "jurisdiction of the Court of Justice follows from the budgetary commitment made by the Union and the adoption of decisions that aim to ensure its implementation within the framework of the functions exercised by entities established pursuant to the acts of the CFSP" (para 41, own translation). 

This leads AG Jääskinen to reject the arguments against the CJEU's jurisdiction based on the "extraneousness" of public procurement rules to the CFSP/CSDP (as submitted by the Commission), or the "political gravitas" of CFSP/CSDP acts, which would require the CJEU to refrain from exercising jurisdiction (as submitted by Eulex Kosovo).

In his Opinion, the AG stresses that there is no doubt whatsoever about the applicability of the relevant EU financial regulation to the contracts awarded in the execution of CSDP missions, in as far as they are financed by the EU Budget--as clearly indicated in the practical guide on contracting procedures applying to all EU external actions financed from the EU general budget and the European Development Fund published by the European Commission (see  2014 version).

At this point, the AG examines the only exception to the previous rules, stressing that
although the jurisdiction of the General Court and the Court of Justice to hear the dispute over public contracts awarded in the context of the external action of the Union has been established, the conclusion of such contracts could however escape the jurisdiction of the Union courts if the contracts include military action. Indeed ... in the light of Article 41 TEU, operations that have an impact on the fields of the military or defense are borne by the budgets of Member States, unless the Council decides otherwise. However, with regard to public procurement of a civil nature, the competence of the Court is indisputable (para 60, own translation).
In view of all the above, AG Jääskinen concludes that: "the courts of the European Union cannot avoid future disputes concerning the insufficient protection of the rights of individuals in the context of external action. Thus, the debate on the status of missions and their personnel, to the extent that they benefit from privileges and immunities, must be accompanied by the provision to individuals of legal means to challenge the acts of the missions that affect their rights and obligations" (para 66, own translation).

The question that remains open, then, is to what extent there is a need to revise the EU's Financial  Regulation to include provisions on mixed civil-military/defence procurement along the lines of the regime foreseen in Directive 2009/81, so that compliance with the rules is not too burdensome for CSDP missions, at least in their early stages. To be fair, running the CSDP missions is clearly challenging and procurement probably does not rank very high in the priorities of bodies and agents that need to make it happen. And, in those circumstances, it is fair to say that the regime for urgent procurement can still be rather limiting, particularly as challenges and protests are concerned. Hence, this may be an area that needs regulatory reform.

Other than that, and from the strict perspective of the scope of competence of the Union courts in the field of public procurement, it may also be a good occasion to rethink the role of the General Court and the CJEU as public procurement review bodies. In my opinion, developments such as the Elitaliana v Eulex Kosovo case (if the CJEU follows AG Jääskinen, of course) point to the need to either create a specialized review chamber parallel to the EU Civil Service Tribunal, or to subject procurement review processes to alternative dispute resolution mechanisms. Maybe this is a second area in need of regulatory reform/institutional redesign.