ECJ: “Main object” of a mixed contract relevant for obligation to procure by tender
New limitation for applicability of the EU public procurement law
ECJ, Case C-145/08
Referring to Directive 92/50/EEC but also applicable to Directive 2004/17/EEC, the European Court of Justice decided on 6th May 2010 that the different aspects of a mixed contract constitutes for the main proceedings an indivisible whole, of which the aspect relating to the transfer of shares constituted the main object. It furthermore came to the conclusion 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 case’s facts were the following: The competent interministerial committee decided to privatize Elliniko Kazino Parnithas AE (‘EKP’), a subsidiary of Ellinika Touristika Akinita AE (‘ETA’), an undertaking wholly owned by the Greek State. Therefor, a mixed contract was concluded 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. 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 Court held that the acquisition represents the main object of the contract. Thus, the mixed contract applies in the main proceedings to the Directive 92/50/EEC.
In its judgment, the Court followed its case-law. Thereafter, 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]). Therewith, the Court confirmed his criticism without explicit mentioning regarding to the “Ahlhorn” judgment of the Higher Regional Court of Dusseldorf (VII-Verg 2/07). In this judgment of the 25th March 2010 (Case, C-451/08), the Court clarified 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. Before, several German Higher Regional Courts have argued, real estate sales of the state use to follow the rules of the German Law against Restraints on Competition (GWB). The ECJ turned against this jurisdiction now.
In conclusion, the obligation of the state in conjunction with real estate sales on which the EU abetment and competition law especially the Commission Communication on State aid elements in sales of land and buildings by public authorities (97/C 209/03) apply, remain unaffected by the Court’s case. Any disregard of this rule violates article 107 of the Treaty of the European Union (TEU) and is also a violation of German competition law (§ 3 UWG) which is liable for trail in a civil court of justice in Germany.
Harald Nickel
advocate . tax lawyer
assistant professor for public procurement law (h_da)
