Joined Cases C‑182/11 and C‑183/11

Econord SpA

v

Comune di Cagno and Others

(Reference for a preliminary ruling from the Consiglio di Stato)

‛Public service contracts — Directive 2004/18/EC — Contracting authority exercising over a legally distinct successful tenderer control similar to that exercised over its own departments — No obligation to carry out a tendering procedure in accordance with the rules of EU law (‘in-house’ award) — Successful tenderer controlled jointly by several local authorities — Conditions for the applicability of an in-house award’

Summary — Judgment of the Court (Third Chamber), 29 November 2012

1. Questions referred for a preliminary ruling — Jurisdiction of the Court — Limits — Jurisdiction of the national court — Establishing and assessing the facts of the dispute — Necessity of a question referred and relevance of the questions raised — Assessment by the national court

   (Art. 267 TFEU)

2. Questions referred for a preliminary ruling — Jurisdiction of the Court — Limits — Clearly irrelevant questions and hypothetical questions put in a context not permitting a useful answer — Questions not related to the purpose of the main proceedings

   (Art. 267 TFEU)

3. Approximation of laws — Procedures for the award of public works contracts, public supply contracts and public service contracts — Directive 2004/18 — Scope — Public authorities jointly establishing, in their capacity as contracting authority, an entity with responsibility for carrying out their public service mission, or a public authority subscribing to such an entity — System of rules exempting those authorities from their obligation to initiate a public tendering procedure — Admissibility — Conditions

   (European Parliament and Council Directive 2004/18)

1.  See the text of the decision.

   (see para. 21)

2.  See the text of the decision.

   (see para. 22)

3.  Where, in their capacity as contracting authority, a number of public authorities jointly establish an entity with responsibility for carrying out their public service mission, or where a public authority subscribes to such an entity, the condition established by the case-law of the Court of Justice of the European Union to the effect that, in order to be exempted from their obligation to initiate a public tendering procedure in accordance with the rules of EU law, those authorities must jointly exercise over that entity control similar to the control they exercise over their own departments, is fulfilled where each of those authorities not only holds capital in that entity, but also plays a role in its managing bodies.

   There is similar control where the entity in question is subject to a control which enables the contracting authority to influence that entity’s decisions. It must be a case of a power of decisive influence over both strategic objectives and significant decisions of that entity. In other words, the contracting authority must be able to exercise a structural and functional control over that entity. That control must also be effective. Where use is made of an entity jointly owned by a number of public authorities, the similar control may be exercised jointly by those authorities, without it being essential for such control to be exercised individually by each of them. It follows that, if a public authority becomes a minority shareholder in a company limited by shares with wholly public capital for the purpose of awarding the management of a public service to that company, the control that the public authorities which are members of that company exercise over it may be categorised as similar to the control they exercise over their own departments when it is exercised by those authorities jointly. In those circumstances, although, where a number of public authorities make use of a common entity for the purposes of carrying out a common public service task, it is certainly not essential that each of those authorities should in itself have an individual power of control over that entity. However, if the very concept of joint control is not to be rendered meaningless, the control exercised over that entity cannot be based solely on the controlling power of the public authority with a majority holding in the capital of the entity concerned. Where the position of a contracting authority within a jointly owned successful tenderer does not provide it with the slightest possibility of participating in the control of that tenderer, that would, in effect, open the way to circumvention of the application of the rules of EU law regarding public contracts or service concessions, since a purely formal affiliation to such an entity or to a joint body managing it would exempt the contracting authority from the obligation to initiate a tendering procedure in accordance with the EU rules, even though it would take no part in exercising the similar control over that entity.

   (see paras 27-31, 33, operative part)

Joined Cases C‑182/11 and C‑183/11

Econord SpA

v

Comune di Cagno and Others

(Reference for a preliminary ruling from the Consiglio di Stato)

‛Public service contracts — Directive 2004/18/EC — Contracting authority exercising over a legally distinct successful tenderer control similar to that exercised over its own departments — No obligation to carry out a tendering procedure in accordance with the rules of EU law (‘in-house’ award) — Successful tenderer controlled jointly by several local authorities — Conditions for the applicability of an in-house award’

Summary — Judgment of the Court (Third Chamber), 29 November 2012

1. Questions referred for a preliminary ruling — Jurisdiction of the Court — Limits — Jurisdiction of the national court — Establishing and assessing the facts of the dispute — Necessity of a question referred and relevance of the questions raised — Assessment by the national court

   (Art. 267 TFEU)

2. Questions referred for a preliminary ruling — Jurisdiction of the Court — Limits — Clearly irrelevant questions and hypothetical questions put in a context not permitting a useful answer — Questions not related to the purpose of the main proceedings

   (Art. 267 TFEU)

3. Approximation of laws — Procedures for the award of public works contracts, public supply contracts and public service contracts — Directive 2004/18 — Scope — Public authorities jointly establishing, in their capacity as contracting authority, an entity with responsibility for carrying out their public service mission, or a public authority subscribing to such an entity — System of rules exempting those authorities from their obligation to initiate a public tendering procedure — Admissibility — Conditions

   (European Parliament and Council Directive 2004/18)

1.  See the text of the decision.

   (see para. 21)

2.  See the text of the decision.

   (see para. 22)

3.  Where, in their capacity as contracting authority, a number of public authorities jointly establish an entity with responsibility for carrying out their public service mission, or where a public authority subscribes to such an entity, the condition established by the case-law of the Court of Justice of the European Union to the effect that, in order to be exempted from their obligation to initiate a public tendering procedure in accordance with the rules of EU law, those authorities must jointly exercise over that entity control similar to the control they exercise over their own departments, is fulfilled where each of those authorities not only holds capital in that entity, but also plays a role in its managing bodies.

   There is similar control where the entity in question is subject to a control which enables the contracting authority to influence that entity’s decisions. It must be a case of a power of decisive influence over both strategic objectives and significant decisions of that entity. In other words, the contracting authority must be able to exercise a structural and functional control over that entity. That control must also be effective. Where use is made of an entity jointly owned by a number of public authorities, the similar control may be exercised jointly by those authorities, without it being essential for such control to be exercised individually by each of them. It follows that, if a public authority becomes a minority shareholder in a company limited by shares with wholly public capital for the purpose of awarding the management of a public service to that company, the control that the public authorities which are members of that company exercise over it may be categorised as similar to the control they exercise over their own departments when it is exercised by those authorities jointly. In those circumstances, although, where a number of public authorities make use of a common entity for the purposes of carrying out a common public service task, it is certainly not essential that each of those authorities should in itself have an individual power of control over that entity. However, if the very concept of joint control is not to be rendered meaningless, the control exercised over that entity cannot be based solely on the controlling power of the public authority with a majority holding in the capital of the entity concerned. Where the position of a contracting authority within a jointly owned successful tenderer does not provide it with the slightest possibility of participating in the control of that tenderer, that would, in effect, open the way to circumvention of the application of the rules of EU law regarding public contracts or service concessions, since a purely formal affiliation to such an entity or to a joint body managing it would exempt the contracting authority from the obligation to initiate a tendering procedure in accordance with the EU rules, even though it would take no part in exercising the similar control over that entity.

   (see paras 27-31, 33, operative part)