Case C‑547/22

INGSTEEL spol. s. r. o.

v

Úrad pre verejné obstarávanie

(Request for a preliminary ruling from the Okresný súd Bratislava II)

Judgment of the Court (Fifth Chamber) of 6 June 2024

(Reference for a preliminary ruling – Review procedures in respect of the award of public supply and public works contracts – Directive 89/665/EEC – Article 2(1)(c) – Compensation awarded to a tenderer unlawfully excluded from a procedure for the award of a public contract – Scope – Loss of opportunity)

Approximation of laws – Review procedures in respect of the award of public supply and public works contracts – Directive 89/665 – Actions for damages – Obligation to make good damage caused to individuals – Scope – Unlawful decision to exclude from a procedure for the award of a public contract – Loss of opportunity to participate in that procedure – Included

(Council Directive 89/665, as amended by Directive 2007/66, sixth recital and Arts 1(3) and 2(1)(c))

(see paragraphs 33, 36-39, 41-44)

Résumé

Ruling on a reference for a preliminary ruling from the Okresný súd Bratislava II (District Court, Bratislava II, Slovakia), the Court interprets Article 2(1)(c) of Directive 89/665 ( 1 ). In essence, the referring court asks whether that article must be interpreted as precluding national legislation or a national practice which excludes the possibility, for a tenderer who has been excluded from a procedure for the award of a public contract because of an unlawful decision of the contracting authority, of being compensated for the damage suffered as a result of the loss of the opportunity to participate in that procedure with a view to obtaining the contract concerned. More specifically, it asks the Court to clarify whether that provision must be interpreted as meaning that persons harmed by an infringement of EU public procurement law and who are thus entitled to be compensated include not only those who have suffered loss as a result of not having obtained a public contract, namely their loss of profit, but also those who have suffered loss linked to the lost opportunity to participate in the procedure for the award of that contract and to make a profit as a result of such participation. In the present case, Article 17 of Law No 514/2003 ( 2 ) expressly refers, as recoverable damage, only to ‘actual damage’ and ‘loss of profit’ and not to ‘loss of opportunity’.

The request has been made in proceedings between INGSTEEL spol. s r. o. and the Slovak Republic, acting through the Úrad pre verejné obstarávanie (Public Procurement Regulatory Authority, Slovakia; ‘the defendant in the main proceedings’), concerning an action for damages brought by that company following the unlawful exclusion of the association of which it was a member (‘the tendering association’) from a procedure for the award of a public contract initiated by Slovenský futbalový zväz (Slovak Football Association; ‘the contracting authority’).

More specifically, the contracting authority decided to exclude the tendering association from that procedure for the award of a public contract, taking the view that that association had not satisfied the requirements of the contract notice relating, in particular, to its economic and financial standing. Following actions brought by that association, the Najvyšší súd Slovenskej republiky (Supreme Court of the Slovak Republic), making a request for a preliminary ruling to the Court that gave rise to the judgment in INGSTEEL and Metrostav ( 3 ), annulled the decisions confirming that exclusion decision. The defendant in the main proceedings then adopted a new decision ordering the contracting authority to cancel the exclusion of the tendering association from the procedure at issue. Since that procedure had in the meantime been closed, the applicant in the main proceedings brought an action before the referring court seeking damages for the loss allegedly suffered.

Findings of the Court

According to settled case-law, the Court interprets the provision of EU law at issue by taking into account not only its wording but also the context in which it appears and the objectives pursued by the legislation of which it forms part.

First, as regards the wording of Article 2(1)(c) of Directive 89/665, the Court finds that that provision, which is worded in broad terms, provides that the Member States are to ensure that damages are awarded to persons harmed by an infringement of EU law on the award of public contracts, which, in the absence of any indication to distinguish different categories of harm, may cover any type of damage suffered by those persons, including that arising from the loss of the opportunity to participate in the procedure for the award of a contract.

Secondly, it considers that that finding is supported by the context of the provision at issue. Individuals harmed by a breach of EU law attributable to a Member State have a right to compensation where three conditions are met: the rule of EU law infringed must be intended to confer rights on them; the breach of that rule must be sufficiently serious; and there must be a direct causal link between the breach and the damage sustained. Furthermore, compensation for loss or damage caused by infringements of EU law must be commensurate with the loss or harm sustained, in that it must, where appropriate, enable the loss or harm actually sustained to be made good in full. Article 2(1)(c) of Directive 89/665 gives concrete expression to those principles, inherent in the EU legal order.

In that regard and in accordance with Article 1(3) of Directive 89/665, the review procedures provided for by that directive must be available at least 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. No possibility of limiting that access is established by that directive. The action for damages provided for in Article 2(1)(c) of that directive was thus envisaged by the EU legislature as being the legal remedy of last resort, which must remain available to persons harmed by an infringement of EU law where they are de facto deprived of any possibility of benefiting from the effectiveness of one of the other remedies provided for in that provision.

That is, in particular, the case of an unlawfully excluded tenderer who, having requested and obtained the annulment of its exclusion from a procedure for the award of a public contract such as that at issue in the main proceedings, is, however, no longer able, on account of the closure of that procedure in the meantime, to benefit from the effects of that annulment. While damage may result from the failure to obtain, as such, a public contract, it must be held that it is possible for the tenderer who has been unlawfully excluded to suffer separate damage, which corresponds to the lost opportunity to participate in the procedure for the award of a public contract concerned in order to obtain that contract. Such damage must be recoverable under Article 2(1)(c) of Directive 89/665.

Thirdly, the Court considers that the broad interpretation of Article 2(1)(c) of Directive 89/665 is supported by the objective pursued by that directive, of not excluding any type of harm from the scope of that directive.

In that regard, it points out that, although Directive 89/665 cannot be regarded as providing for complete harmonisation and, therefore, as envisaging all possible remedies in public procurement matters, the fact remains that, as stated in the sixth recital of that directive, the directive stems from the intention of the EU legislature to ensure that, in all Member States, adequate procedures permit not only the annulment of decisions taken unlawfully but also the compensation of persons harmed by an infringement of EU law. Consequently, in order not to compromise that objective, as the Court has held with regard to loss of profit, the total exclusion, in respect of the damage for which compensation may be granted, of the loss of the opportunity to participate in a procedure for the award of a public contract in order to obtain that contract, cannot be accepted in the event of an infringement of EU law since, especially in the case of economic or commercial disputes, such total exclusion of that loss of opportunity would be such as to make it practically impossible to make good the damage suffered.

Article 2(1)(c) of Directive 89/665 must therefore be interpreted as meaning that the damages which persons harmed by an infringement of EU public procurement law may claim under that provision may cover the loss or damage suffered as a result of the loss of opportunity. However, although that article requires that damages may be awarded to persons harmed by an infringement of EU public procurement law, it is, in the absence of EU provisions in that field, for the domestic legal system of each Member State to determine the criteria by reference to which damage resulting from the loss of an opportunity to participate in a procedure for the award of a public contract in order to obtain that contract must be established and assessed, provided that the principles of equivalence and effectiveness are observed.

In the present case, the Court notes that it is apparent from the request for a preliminary ruling that Article 17 of Law No 514/2003 expressly refers, as recoverable damage, only to ‘actual damage’ and ‘loss of profit’. It then recalls that, according to the case-law of the Court, in order to ensure the effectiveness of all provisions of EU law, the principle of primacy requires, inter alia, national courts to interpret, to the fullest extent possible, their national law in conformity with EU law and that that obligation to interpret national law in conformity with EU law requires national courts, where appropriate, to change established, and even settled, case-law if it is based on an interpretation of domestic law that is incompatible with the objectives of a directive.

In conclusion, the Court holds that Article 2(1)(c) of Directive 89/665 precludes national legislation or a national practice which, as a matter of principle, excludes the possibility, for a tenderer excluded from a procedure for the award of a public contract because of an unlawful decision of the contracting authority, of being compensated for the damage suffered as a result of the loss of the opportunity to participate in that procedure with a view to obtaining the contract concerned.

( 1 ) Council Directive 89/665/EEC of 21 December 1989 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 (OJ 1989 L 395, p. 33), as amended by Directive 2007/66/EC of the European Parliament and the Council of 11 December 2007 (OJ 2007 L 335, p. 31) (‘Directive 89/665’).

( 2 ) Zákon č. 514/2003 Z. z. o zodpovednosti za škodu spôsobenú, pri výkone verejnej moci (Law No 514/2003 on liability for damage caused in the exercise of public authority) of 28 October 2003 (No 215/2003 Z. z), in the version applicable to the dispute in the main proceedings (‘Law No 514/2003’).

( 3 ) Judgment of 13 July 2017, INGSTEEL and Metrostav (C‑76/16, EU:C:2017:549).