Case C‑246/07, Commission v Sweden

By this application, the Commission of the European Communities requested the Court to declare that, by unilaterally proposing that a substance, perfluoroctane sulfonate (‘PFOS’), be added to Annex A to the Stockholm Convention on Persistent Organic Pollutants (‘the Stockholm Convention’), Sweden had failed to fulfil its obligations under Arts 10 EC and 300(1) EC. All the Member States are parties to the Stockholm Convention.

On 4 August 2004, a proposal for a Decision (COM(2004) 537 final) was presented by the Commission, seeking authorisation to submit, on behalf of the Community and the Member States which were parties, proposals to have a certain number of chemicals included in the relevant Annexes to the Aarhus Protocol and/or the Stockholm Convention.

That proposal, in so far as it concerned the Aarhus Protocol, sought to have hexachlorobutadiene, octabromodiphenyl ether and pentachlorobenzene included in Annex I to that protocol, polychlorinated napthalenes included in Annexes I and III and short-chained chlorinated paraffins included in Annex II. PFOS was not covered by the proposal for a Decision, either as regards inclusion in the Annexes to the Aarhus Protocol or inclusion in the Annexes to the Stockholm Convention.

On 14 July 2005, Sweden submitted in its name and on its own behalf a proposal to list PFOS in Annex A of the Stockholm Convention to the Secretariat of that convention.

The complaint alleging breach of Article 10 EC

The Commission first of all alleged infringement of the duty of cooperation in good faith arising out of Art. 10 EC, on the ground that Sweden did not take all the measures necessary to facilitate the achievement of the Community’s tasked and did not abstain from measures which could jeopardise the attainment of the Community’s objectives. The Commission stated that, at the time when Sweden unilaterally proposed that PFOS be listed in Annex A to the Stockholm Convention, work on the matter was ongoing at Council level.   

The Court of Justice first of all reiterated that in all the areas corresponding to the objectives of the Treaty, Art. 10 EC required Member States to facilitate the achievement of the Community’s tasks and to abstain from any measure which could jeopardise the attainment of the objectives of the Treaty (see Case C‑459/03 Commission v Ireland [2006], on which I wrote this post).

In the present case, the Commission had pointed out that it was not claiming that the Community had exclusive competence to submita proposal for the listing of PFOS in Annex A to the Stockholm Convention. The Court therefore found it must therefore be assumed that competence was shared.

The Court reiterated that where it was apparent that the subject-matter of an agreement or convention fell partly within the competence of the Community and partly within that of its Member States, it was essential to ensured close cooperation between the Member States and the Community institutions, both in the process of negotiation and conclusion and in the fulfilment of the commitments entered into. That obligation to cooperate flowed from the requirement of unity in the international representation of the Community (see Ruling 1/78 [1978] (by analogy with the EAEC Treaty); Opinion 2/91 [1993]; Opinion 1/94 [1994]; and Case C-25/94 Commission v Council [1996]).

The Court also stressed that the duty of genuine cooperation was of general application and did not depend either on whether the Community competence concerned was exclusive or on any right of the Member States to enter into obligations towards non-member countries. In particular, Member States were subject to special duties of action and abstention in a situation in which the Commission had submitted to the Council proposals which, although they had not been adopted by the Council, represented the point of departure for concerted Community action. Likewise, the Court found that the adoption of a decision authorising the Commission to negotiate a multilateral agreement on behalf of the Community marked the start of a concerted Community action at international level and required for that purpose, if not a duty of abstention on the part of the Member States, at the very least a duty of close cooperation between the latter and the Community institutions in order to facilitate the achievement of the Community tasked and to ensure the coherence and consistency of the action and its international representation. (Case C-266/03 Commission v Luxembourg [2005] and Case C-433/03 Commission v Germany [2005]).

As regards PFOS, the Court found that, in 2005, there was a common strategy not to propose, at that time, to list PFOS in Annex A to the Stockholm Convention, since, as was apparent from the Council’s conclusions of March 2005, the experts of the Member States and of the Community were to choose the substances to be proposed from among those already covered by the Aarhus Protocol and that, as was apparent from the minutes of the meeting of the Council’s Working Party on International Environmental Issues of 6 July 2005, PFOS was not one of those substances.

It followed that, in unilaterally proposing the addition of PFOS to Annex A to the Stockholm Convention, Sweden dissociated itself from a concerted common strategy within the Council. Moreover, as was apparent from examination of the decision-making process provided for by that convention, Sweden’s unilateral proposal had consequences for the Union.

The Court held that Member States were subject to special duties of action and abstention in a situation in which the Commission had submitted to the Council proposals which, although they had not been adopted by the Council, represented the point of departure for concerted Community action. That was especially true in a situation such as that in the present case which was characterized by a unilateral proposal which dissociated the Member State in question from a concerted common strategy within the Council and was submitted within an institutional and procedural framework such as that of the Stockholm Convention.

Such a situation was likely to compromise the principle of unity in the international representation of the Union and its Member States and weaken their negotiating power with regard to the other parties to the Convention concerned. Consequently, the Commission’s first complaint, alleging breach of Art. 10 EC, was well founded.

Complaint alleging breach of Article 300(1) EC

In its second complaint, the Commission submitted that Sweden’s unilateral action constituted a breach of Art. 300(1) EC. However, the Court held that Art. 300(1) EC concerned “the conclusion of agreements’, whereas any initiative taken by the Community “for the purpose of establishing the positions to be adopted on behalf of the Community in a body set up by an agreement” was governed not by Art. 300(1) EC, but by the second subparagraph of Art. 300(2) EC.

The Court held that, in the present case, the conduct on the part of Sweden which was complained of was the submission of a proposal for an amendment to a body set up by an international agreement, with the result that that conduct was not per se covered by Art. 300(1) EC.

It followed that the complaint alleging breach of Art. 300(1) EC was not well founded.

The Court therefore found that, by unilaterally proposing that a substance, perfluoroctane sulfonate, be listed in Annex A to the Stockholm Convention on Persistent Organic Pollutants, Sweden failed to fulfil its obligations under Art. 10 EC

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Joined Cases C‑145/08 and C‑149/08

In Case C-145/08, the competent interministerial committee decided to privatise Elliniko Kazino Parnithas AE (‘EKP’), a subsidiary of Ellinika Touristika Akinita AE (‘ETA’), an undertaking wholly owned by the Greek State. The contract notice published in October 2001 provided for an initial preselection stage to determine which tenderers met the conditions set out in that notice.

The national court asked whether Directive 89/665 applied to the present case, given that its application presupposed that one of the directives on public contracts referred to in Art. 1 of Directive 89/665 was applicable. The classification of the transaction at issue in the main proceedings by the national court was that that transaction was a mixed contract.

It followed from the case-law of the Court that, in the case of a mixed contract, the different aspects of which were, in accordance with the contract notice, inseparably linked and formed an indivisible whole, the transaction at issue must be examined as a whole for the purposes of its legal classification and must be assessed on the basis of the rules which governed the aspect which constituted the main object or predominant feature of the contract (see Case C‑3/88 Commission v Italy [1989]; Case C‑331/92 Gestión Hotelera Internacional [1994]; Case C‑220/05 Auroux and Others [2007]; Case C‑412/04 Commission v Italy [2008]; and Case C‑536/07 Commission v Germany [2009]).

The Court held that that conclusion was valid irrespective of whether or not the aspect constituting the main object of a mixed contract fell within the scope of the directives on public contracts.

The Court held that the different aspects of the mixed contract at issue in the main proceedings constituted an indivisible whole, of which the aspect relating to the transfer of shares constituted the main object. It furthermore held that the transfer of shares to a tenderer in the context of a privatisation of a public undertaking did not fall within the scope of the directives on public contracts.

The Court held that a mixed contract of which the main object was the acquisition by an undertaking of 49% of the capital of a public undertaking and the ancillary object, indivisibly linked with that main object, was the supply of services and the performance of works did not, as a whole, fell within the scope of the directives on public contracts.

Case C‑149/08

In Case C‑149/08, the national court wished to know, in essence, whether Directive 89/665 precluded a national rule, as interpreted by that court, under which only all members of a tendering consortium might bring an action against a decision of a contracting authority to award a contract, such that the members of that consortium, individually, were deprived not only of the possibility of having a decision of the contracting authority annulled, but also of the possibility of seeking compensation for individual damage suffered as a result of irregularities in the contract award procedure in question.

The applicant in the main proceedings submitted that, by the application of the contested national rules, it was prevented not only from seeking annulment of ESR’s allegedly unlawful decision, which led to its exclusion from the procedure at issue in the main proceedings, but also from seeking damages for the loss caused by that decision. Thus it was deprived of its right to effective judicial protection.

The Court reiterated that the principle of effective judicial protection was a general principle of European Union law (see, to that effect, Case C‑432/05 Unibet [2007], on which I wrote this post). It also reiterated that, in the absence of Community rules governing the matter, it was for each Member State to designate the courts and tribunals having jurisdiction and to lay down the detailed procedural rules governing actions for safeguarding rights which individuals derived from European Union law. Those detailed procedural rules must, however, be no less favourable than those governing similar domestic actions (principle of equivalence) and must not render practically impossible or excessively difficult the exercise of rights conferred by European Union law (principle of effectiveness) (see, to that effect, Case C‑268/06 Impact [2008], on which I wrote this post).

The Court held that, so far as concerned public contracts, an area covered by European Union law, those two types of jurisdiction, that was to say, on the one hand, the jurisdiction to annul or found the invalidity of an administrative act and, on the other, the jurisdiction to award compensation for the loss suffered, were, in the national law at issue in the main proceedings, held by two different courts.

Thus, in the area of public contracts, the combination of Art. 5(2) of Law 2522/1997, which made the award of damages subject to the prior annulment of the allegedly unlawful act, and Art. 47(1) of Presidential Decree 18/1989, in accordance with which only all members of a consortium had locus standi to seek annulment of an act forming part of a procedure for the award of a public contract, meant that it was impossible for any member of a consortium, acting individually, not only to seek annulment of the act adversely affecting it but also to apply to the competent court to obtain compensation for any damage it had suffered individually, whereas that did not appear to be impossible in other areas, by virtue of the rules of domestic law applicable to applications for compensation for loss caused by an unlawful act of a public authority.

By the application of the contested national rules, a tenderer such as the applicant in the main proceedings was deprived of any opportunity to claim, before the competent court, compensation for any damage it had suffered by reason of a breach of European Union law by an administrative act likely to have influenced the conduct and even the outcome of a public procurement procedure. Such a tenderer was thus deprived of effective judicial protection of the rights in that area of the law which it had under European Union law.

The Court therefore concluded that European Union law, in particular the right to effective judicial protection, precluded a national rule, such as that at issue in the main proceedings, interpreted as meaning that the members of a temporary association, tenderer in a public procurement procedure, were deprived of the possibility of seeking, individually, compensation for the loss which they suffered individually as a result of a decision adopted by an authority, other than the contracting authority, involved in that procedure in accordance with the applicable national rules, which was such as to influence the conduct of that procedure.

Text of Judgment