Non ci facciano perdere tempo... CJEU axes barriers to effective judicial review or procurement challenges and stresses 'obligation' to follow preliminary rulings (C-689/13)

Blogging from Turin, this case seems a bit too rightly timed

Blogging from Turin, this case seems a bit too rightly timed

In its Judgment of 5 April 2016 in PFE, C-689/13, EU:C:2015:693, the Court of Justice of the European Union (CJEU) has confirmed the jurisprudential line started with Fastweb , C-100/12, EU:C:2013:448 (see comment here), and adopted a very clear position against procedural barriers that could prevent the effective review of public procurement challenges. It has also stressed the 'obligation' incumbent upon last instance courts to  ensure respect for (ie application of) the interpretation of EU law derived from the CJEU's answer to a reference for a preliminary ruling, or the previous case-law of the CJEU that already provides a clear answer to that question.

The case at hand concerned several procedural rules and practices applicable to the review of public procurement challenges in Italy and their compatibility with the Remedies Directive [Art 1(3)], as well as Art 267 TFEU and of the principles of effectiveness and the primacy of EU law.

The factual situation was different, but the technical setting was identical to Fastweb in that the challenger of the procurement decision (PFE) was confronted with a counterclaim by the would-be awardee of the contract (GSA) on the basis that PFE 'had no legal interest in bringing the proceedings as it did not fulfil the eligibility requirements for the tendering procedure and should therefore have been excluded from the procedure' (C-689/13, para 14). The first review court assessed GSA's counterclaim first and, finding in GSA's favour, dismissed PFE's main claim without a full review. 

Thus, the case once more concerns the Italian rule that 'if a counterclaim has been brought challenging the main action on the ground that it is inadmissible, the counterclaim must be given precedence and examined before the main action. Under the national legal system, such a counterclaim is classified as ‘exclusive’ or ‘paralysing’ on the basis that, where the counterclaim is deemed well founded, the court seised is required to dismiss the main action as inadmissible without assessing its merits' (C-689/13, para 15).

Despite the existence of the Fastweb Judgment, which explicitly opposes such procedural path, the Consiglio di Stato felt compelled to send the request for a preliminary reference because while 'in the case which gave rise to that judgment, only two undertakings submitted tenders and both of them had conflicting interests in the main action for annulment brought by the undertaking whose bid had been unsuccessful and in the counterclaim brought by the successful tenderer, ... in the [PFE] case, more than two undertakings submitted bids, even though only two of them have brought proceedings' (C-689/13, para 17).

It is not clear whether the Consiglio di Stato was attempting to prompt the CJEU to reconsider its Fastweb case law. Or maybe the case was just an 'excuse' to seize the CJEU en passant for a clarification of a different (arguably internal) matter about the Independence with which different chambers and divisions within the Consiglio di Stato operate for the purposes of sending references for preliminary rulings t the CJEU. In particular, and in the simplified terms adopted by the CJEU, the core of the second question was whether 'where a question concerning the interpretation or validity of EU law arises, a chamber of a court of final instance must, if it does not concur with the position adopted by decision of that court sitting in plenary session, refer the question to the plenary session and is thus precluded from itself making a request to the Court of Justice for a preliminary ruling' (C-689/13, para 31).

On the 'generality' of Fastweb

Unsurprisingly, the CJEU very clearly reaffirmed the position and clarified that Fastweb is a general ruling or, in more detailed terms:

28 The interpretation given by the Court in Fastweb ... is applicable in a context such as that of the main proceedings. First, each of the parties to the proceedings has a legitimate interest in the exclusion of the bids submitted by the other competitors. Second ... it cannot be ruled out that one of the irregularities justifying the exclusion of both the successful tenderer’s bid and that of the tenderer challenging the contracting authority’s decision may also vitiate the other bids submitted in the tendering procedure, which may result in that authority having to launch a new procedure.
29      The number of participants in the public procurement procedure concerned as well as the number of participants who have instigated review procedures and the differing legal grounds relied on by those participants are irrelevant to the question of the applicability of the principle established by the Fastweb (C‑100/12, EU:C:2013:448) case-law.
30      In the light of the foregoing considerations, the answer to the first question is that the third subparagraph of Article 1(1) and Article 1(3) of Directive 89/665 are to be interpreted as meaning that a main action for review brought by a tenderer with an interest in obtaining a particular contract who has been or may be adversely affected by an alleged breach of EU public procurement law or rules transposing that law, with a view to excluding another tenderer, cannot be dismissed as inadmissible under national procedural rules which provide that the counterclaim lodged by the other tenderer must be examined first (C-689/13, paras 28-30, emphasis added).

On the bounless access to the CJEU

Further to that, and in relation with the second question, the CJEU also unsuprisingly was unwilling to recognise any limitation of the possibility or duty for domestic courts to send cases for a preliminary ruling (see here). In clear terms, the CJEU confirmed that

32 ... national courts have the widest discretion in referring questions to the Court involving interpretation of relevant provisions of EU law ..., that discretion being replaced by an obligation for courts of final instance, subject to certain exceptions recognised by the Court’s case-law ... A rule of national law cannot prevent a national court, where appropriate, from using that discretion, ... or complying with that obligation.
33      Both that discretion and that obligation are an inherent part of the system of cooperation between the national courts and the Court of Justice established by Article 267 TFEU and of the functions of the court responsible for the application of EU law entrusted by that provision to the national courts.
34      As a consequence, where a national court before which a case is pending considers that a question concerning the interpretation or validity of EU law has arisen in that case, it has the discretion, or is under an obligation, to request a preliminary ruling from the Court of Justice, and national rules imposed by legislation or case-law cannot interfere with that discretion or that obligation.
35      In the present case, a provision of national law cannot prevent a chamber of a court of final instance faced with a question concerning the interpretation of Directive 89/665 from referring the matter to the Court of Justice for a preliminary ruling (C-689/13, paras 32-35, references omitted and emphasis added).

On the need to follow-up and 'ask responsibly'

Maybe to compensate for the boundless access to the preliminary ruling procedure, the CJEU also sent a 'friendly' warning to (all, but mainly the Italian) national courts of last instance in what could be considered a reenactment of the boundaries of the acte claire doctrine (see here).

 38 ... a judgment in which the Court gives a preliminary ruling is binding on the national court, as regards the interpretation or the validity of the acts of the EU institutions in question, for the purposes of the decision to be given in the main proceedings ... Accordingly, the national court which, adjudicating as court of final instance, has complied with its obligation to make a reference to the Court for a preliminary ruling under the third paragraph of Article 267 TFEU, is bound, for the purposes of the decision to be given in the main proceedings, by the interpretation of the provisions at issue given by the Court and must, if necessary, disregard any national case-law which it considers inconsistent with EU law ...
39      It should also be noted that the effectiveness of Article 267 TFEU would be impaired if the national court were prevented from forthwith applying EU law in accordance with the decision or the case-law of the Court.
40      A national court which is called upon, within the exercise of its jurisdiction, to apply provisions of EU law is under a duty to give full effect to those provisions, if necessary refusing of its own motion to apply any conflicting provision of national legislation, even if adopted subsequently, and it is not necessary for the court to request or await the prior setting aside of such provision by legislative or other constitutional means.
41      Any provision of a national legal system and any legislative, administrative or judicial practice that might impair the effectiveness of EU law by withholding from the national court with jurisdiction to apply such law the power to do everything necessary at the moment of its application to set aside national legislative provisions that might prevent EU rules from having full force and effect are incompatible with those requirements, which are the very essence of EU law (C-689/13, paras 38-41, references omitted and emphasis added).