ECJ: Application of EU procurement rules to land development agreements

Judgment of the Court of Justice of the European Union of 25th March 2010 in Case C-451/08

The European Court of Justice clarified in its judgment of the 25th March its well-known 2007 ruling in Auroux vs. Rosanne. In that earlier case, the ECJ ruled that a French local authority scheme to develop a new leisure centre amounted to a public works contract that had to be awarded via a competitive tender under the EU procurement directives. The ECJ's new ruling makes clear that the procurement rules will apply only where works are to be carried out for the authority's direct economic benefit and where the authority has defined the works in a way that goes beyond the mere exercise of its planning powers.
The case concerned the sale by a German federal agency of the site of a former army barracks. The national court, which dealt with this case, referred various questions to the ECJ for a preliminary ruling. The questions all related to the definition of “public works contracts” falling within EU procurement Directive 2004/18.
The ECJ's ruling makes clear that not all land development agreements with public authorities will fall within the EU procurement rules. It should therefore quell some of the more expansive interpretations that were being given to the earlier Auroux judgment. As such, the new ruling should be welcomed by public authorities and developers alike.

Harald Nickel
attorney . tax lawyer
assistant professor for public procurement law (h_da)

Nickel Rechtsanwälte
Partnerschaftsgesellschaft

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