Summary
Parties
Grounds
Decision on costs
Operative part
Keywords
1. Appeals - Pleas in law - Review by the Court of the assessment of the evidence - Not possible except where the clear sense of the evidence has been distorted
2. Appeals - Pleas in law - Erroneous assessment of the facts - Inadmissible - Appeal dismissed
(EC Treaty, Art. 168a (now Art. 225 EC); EC Statute of the Court of Justice, Art. 51, first subpara.)
Summary
1. In an appeal, the Court of Justice has no jurisdiction to find the facts or, as a rule, to examine the evidence which the Court of First Instance accepted in support of those facts. Provided that the evidence has been properly obtained and the general principles of law and the Rules of Procedure relating to the burden of proof and the taking of evidence have been observed, it is for the Court of First Instance alone to assess the value to be attached to the evidence produced. Save where the clear sense of that evidence has been distorted, that appraisal does not constitute a point of law which is subject, as such, to review by the Court of Justice.
( see para. 48 )
2. It is clear from Article 168a of the Treaty (now Article 225 EC) and Article 51 of the EC Statute of the Court of Justice that an appeal may be based only on grounds relating to the infringement of rules of law, to the exclusion of any appraisal of the facts. The Court of First Instance has exclusive jurisdiction, first, to establish the facts except where the substantive inaccuracy of its findings is apparent from the documents submitted to it and, second, to assess those facts.
( see para. 63 )
Parties
In Case C-13/99 P,
TEAM Srl, established in Rome, represented initially by A. Tizzano and G.M. Roberti, of the Naples Bar, and, subsequently, by F. Caruso, also of the Naples Bar, 39 Via Santa Teresa a Chiaia, Naples,
appellant,
APPEAL against the judgment of the Court of First Instance of the European Communities (Fourth Chamber) of 29 October 1998 in Case T-13/96 TEAM v Commission [1998] ECR II-4073, seeking to have that judgment set aside,
the other party to the proceedings being:
Commission of the European Communities, represented by M.-J. Jonczy, Principal Legal Adviser, and L. Gussetti, of its Legal Service, acting as Agents, with an address for service in Luxembourg at the office of C. Gómez de la Cruz, of its Legal Service, Wagner Centre, Kirchberg,
defendant in the proceedings at first instance,
THE COURT (Fifth Chamber),
composed of: L. Sevón, President of the First Chamber, acting as President of the Fifth Chamber, P.J.G. Kapteyn, P. Jann (Rapporteur), H. Ragnemalm and M. Wathelet, Judges,
Advocate General: F.G. Jacobs,
Registrar: L. Hewlett, Administrator,
having regard to the Report for the Hearing,
after hearing oral argument from the parties at the hearing on 24 November 1999,
after hearing the Opinion of the Advocate General at the sitting on 17 February 2000,
gives the following
Judgment
Grounds
1 By application lodged at the Court Registry on 18 January 1999, TEAM Srl (the appellant) brought an appeal under Article 49 of the EC Statute of the Court of Justice against the judgment of the Court of First Instance of 29 October 1998 in Case T-13/96 TEAM v Commission [1998] ECR II-4073 (the contested judgment), by which that Court dismissed the action for damages brought by the appellant following, first, the Commission's decision, contained in a letter of 16 November 1995, annulling the tendering procedure for a feasibility study for the modernisation of a railway junction in Warsaw, and, second, the restricted invitation to tender of 4 December 1995 for a feasibility study for the modernisation of a railway node in Warsaw.
Legal framework, facts and procedure before the Court of First Instance
2 The Community's PHARE programme is based on Council Regulation (EEC) No 3906/89 of 18 December 1989 on economic aid to certain countries of central and eastern Europe (OJ 1989 L 375, p. 11), in the version thereof resulting, in particular, from Council Regulation (EEC) No 2698/90 of 17 September 1990 amending Regulation (EEC) No 3906/89 in order to extend economic aid to other countries of central and eastern Europe (OJ 1990 L 257, p. 1, hereinafter Regulation No 3906/89).
3 Article 3(2) of Regulation No 3906/89 provides as follows:
Account shall be taken, inter alia, of the preferences and wishes expressed by the recipient countries concerned in the choice of measures to be financed pursuant to this regulation.
4 Article 23 of the General Regulations for Tenders and the Award of Service Contracts financed from PHARE/TACIS Funds (the General Regulations) governs the conditions in which a tendering procedure may be annulled or closed. Under paragraph 2(d) of that article, such annulment or closure may take place, in particular, if exceptional circumstances render normal performance of the tender procedure or contract impossible.
5 Article 23(3) of the General Regulations provides that, in the event of annulment of any tendering procedure, tenderers who are still bound by their tenders are to be notified thereof by the contracting authority. They are not entitled to any compensation.
6 As is apparent from the contested judgment, the appellant is an engineering consultancy company incorporated under Italian law specialising in the construction, management and maintenance of civil engineering, industrial and infrastructure projects.
7 On 13 June 1995, the Commission issued a restricted invitation to tender for a feasibility study for the modernisation of a railway junction in Warsaw (the invitation to tender of 13 June 1995).
8 That invitation to tender was sent to, amongst others, the appellant and Centralne Biuro Projektowo-Badawcze Budownictwa Kolejowego (Kolprojekt) (hereinafter Kolprojekt), a Polish public-owned company providing railway engineering consultancy services. Those two undertakings formed a consortium and submitted a tender.
9 By fax of 16 November 1995, the Commission informed the tenderers that the invitation to tender had been cancelled due to the introduction of new objectives and modified terms of reference (the contested decision).
10 On 4 December 1995, the Commission issued, on behalf of the Government of Poland, a new restricted invitation to tender (the contested invitation to tender). The terms of reference stated that the successful tenderer would be required to work with Kolprojekt and that the budget allocated for the participation of the latter company was to be 25% of the financial offer.
11 By fax of 21 December 1995, the Commission announced that it proposed to issue more precise terms of reference and to set a new deadline for the submission of bids. It stated that the submission of bids was, in the meantime, deferred.
12 On 26 January 1996, the appellant and Kolprojekt brought an action before the Court of First Instance, in which they sought, first, annulment of the contested decision and of the contested invitation to tender and, second, compensation for the damage allegedly suffered by them as a result.
13 By fax of 28 May 1996, the Polish Government asked the Commission to withdraw the Warsaw railway junction study from the PHARE programme and to replace it with other urgent railway projects. It pointed out that the tendering procedure had been suspended for several months, that there were plans to modernise the junction, and that priority must be given to new activities on another line.
14 By letter of 3 June 1996, the Commission informed the Polish Government that it had decided to annul the whole procedure on the basis of Article 23(2)(d) of the General Regulations.
15 By written pleading dated 10 June 1996, the Commission raised a procedural issue and asked the Court of First Instance to rule that the application for annulment should not proceed to judgment, to declare the claim for damages inadmissible or, in the alternative, dismiss it as unfounded, and to order the appellant and Kolprojekt to pay the costs of the claim for damages.
16 By order of 13 June 1997 in Case T-13/96 TEAM and Kolprojekt v Commission [1997] ECR II-983, the Court of First Instance ruled that there was no longer any need to give a decision on the application for annulment and reserved for the final judgment its decision on the application for a declaration that the claim for damages was inadmissible.
17 By order of 8 May 1998, the President of the Fourth Chamber of the Court of First Instance ordered that Kolprojekt's name be removed from the register of the Court of First Instance, on the ground that it wished to withdraw its application.
18 By letter of 11 May 1998, the Court of First Instance requested the Commission, pursuant to Article 64 of its Rules of Procedure, to produce the minutes, notes and memoranda relating to the contested decision and the contested invitation to tender, together with the correspondence exchanged between the Commission and the Polish authorities concerning the conduct of the two successive invitations to tender.
19 The Commission transmitted the documents by letter of 20 May 1998, but requested that they should not be placed on the case-file and communicated to the appellant until the Court of First Instance had given a ruling on their confidentiality, applying the criteria laid down in the order of the Court of First Instance of 10 December 1997 in Joined Cases T-134/94, T-136/94 to T-138/94, T-141/94, T-145/94, T-147/94, T-148/94, T-151/94, T-156/94 and T-157/94 NMH Stahlwerke and Others v Commission [1997] ECR II-2293. In order to justify its request, the Commission pleaded the fact that those documents related to tenders submitted by competitors of the appellant and that the latter would gain an unfair advantage if it became aware of the contents of those documents.
20 By letter of 4 June 1998, the Court of First Instance returned to the Commission the documents annexed to the letter of 20 May, requesting it to produce a non-confidential version of those documents and to send a copy of that version to the appellant. By letter of the same date, it informed the appellant of the Commission's letter and of its response to it.
21 By letter of 5 June 1998, the Commission sent the Court of First Instance a non-confidential version of the documents in question, stating that it was not free to dispose of the documents emanating from the Polish Government or its administrative bodies. The Court of First Instance sent a copy of that letter, together with the documents in question, to the appellant, which received them on 12 June 1998.
22 The oral procedure before the Court of First Instance took place on 25 June 1998.
23 In the course of the oral procedure the appellant lodged two documents, namely a letter dated 21 August 1995 from the Polish Ministry of Transport and Maritime Economy to the Commission and a confidential version of the minutes of a meeting between representatives of the Commission and of that ministry concerning the evaluation of the tenders submitted in the context of the invitation to tender of 13 June 1995. The Commission, which received copies of those documents, argued pursuant to Article 48(1) of the Rules of Procedure of the Court of First Instance that their production was inadmissible.
The contested judgment
24 In paragraphs 27 to 30 of the contested judgment, the Court of Justice considered that, although the appellant had not quantified the damage which it claimed to have suffered, its claim for damages was admissible since it had clearly indicated the evidence on the basis of which the nature and extent of the alleged damage could be assessed.
25 As regards the question of the Community's non-contractual liability, the Court of First Instance held, in paragraphs 70 to 72, that, in the event of annulment of any tender procedure, the tenderers are not in principle entitled to any compensation, save in cases where an infringement of Community law in the conduct of the tendering procedure has affected a tenderer's chances of being awarded the contract.
26 In paragraphs 73 and 74, the Court of First Instance ruled that, even if the appellant had shown that the Commission had infringed Community law in its conduct of the tendering procedure, such an infringement would not have compromised the consortium's chances of being awarded the contract. According to the Court of First Instance, it was the withdrawal of the study for which the two invitations to tender were issued that sealed the fate of the bid submitted by the consortium. The appellant had not shown that the withdrawal in question was contrary to Community law, or that it was caused by the conduct alleged against the Commission. On the contrary, the appellant had itself stated that the withdrawal was prompted only in part by that conduct.
27 The Court of First Instance referred in that regard to the fax of 28 May 1996, which showed that the Polish Ministry of Transport and Maritime Economy advanced two sets of reasons in support of its request for the withdrawal in question, one of which cited external factors. The Court of First Instance noted that the appellant itself had stated that the withdrawal was prompted only in part by the conduct of the Commission. It concluded that the causal link between the conduct alleged against the Commission and the damage pleaded by the appellant was not sufficiently direct.
28 As to the damage resulting from the loss of profit, the Court of First Instance found, in paragraph 76, that the claim in that connection presupposed that the appellant was entitled to be awarded the contract. Since the Commission was not bound by the evaluation committee's proposal but had a broad discretion in assessing the factors to be taken into account for the purpose of deciding to make such an award, the damage at issue could only have been future and hypothetical.
29 As regards the two documents lodged by the appellant in the course of the hearing, the Court of First Instance considered, in paragraph 79, that there was no need to rule on the objection of inadmissibility raised in that connection by the Commission, since those documents were irrelevant for the purposes of determining the dispute. Consequently, the documents in question were not included in the case-file and were thus not taken into consideration for the purposes of the judgment.
30 The Court of First Instance therefore dismissed the action and ordered the appellant to pay all the costs relating to the application for damages.
The appeal
31 The appellant puts forward three pleas in support of its appeal. The first plea alleges infringement of the rights of the defence and of the principle of equality of arms as regards the conduct of the proceedings, in particular the measure of inquiry ordered by the Court of First Instance on 11 May 1998; the second plea alleges infringement of the Rules of Procedure as regards the gathering of evidence and distortion of that evidence; and, by its third plea, the appellant alleges infringement of the principles of non-contractual liability in public procurement matters.
The first plea
32 By its first plea, which is in two parts, the appellant asserts that the Court of First Instance infringed, first, the rights of the defence and, second, the principle of equality of arms.
33 It was not until 11 May 1998 that the Court of First Instance requested the Commission to produce documents relating to the contested invitation to tender, despite the fact that the production of those documents had been sought in the application lodged over two years earlier. Thus, since the hearing took place on 25 June 1998, the appellant was prevented from submitting its written observations on the documents in question, even though they were relevant for the purposes of determining the dispute. Consequently, the measure of organisation of procedure was taken at an excessively late stage - without any reason for the delay.
34 Furthermore, in determining the relevance and confidentiality of those documents, the Court of First Instance consulted only the Commission, thereby infringing the principle of equality of arms.
35 It should be recalled, first, that, according to Article 168a of the EC Treaty (now Article 225 EC) and the first paragraph of Article 51 of the EC Statute of the Court of Justice, an appeal is to be limited to points of law. The latter provision states that such an appeal must be based on grounds of lack of competence of the Court of First Instance, breach of procedure before it which adversely affects the interests of the appellant and infringement of Community law by that Court (Case C-7/95 P Deere v Commission [1998] ECR I-3111, paragraph 18, and Case C-8/95 P New Holland Ford v Commission [1998] ECR I-3175, paragraph 22).
36 Thus, the Court of Justice has jurisdiction to verify whether a breach of procedure adversely affecting the appellant's interests was committed before the Court of First Instance and must satisfy itself that the general principles of Community law and the Rules of Procedure applicable to the burden of proof and the taking of evidence have been complied with (see, in particular, Case C-185/95 P Baustahlgewebe v Commission [1998] ECR I-8417, paragraph 19).
37 As regards the first part of the first plea, by which the appellant alleges excessive delay in the conduct of the proceedings, especially in relation to the measure of inquiry ordered by the Court of First Instance, it should be noted, first, that the Court of First Instance was called upon to determine a preliminary issue, on which it ruled by order of 13 June 1997. It was only after that date that the written procedure concerning the claim for damages could proceed. Thereafter, the Court of First Instance had to resolve the procedural situation of Kolprojekt, of which it did not become fully aware until the appellant lodged its reply on 8 October 1997. Having, on 8 May 1998, ordered that Kolprojekt's name be removed from its register, the Court of First Instance requested the Commission on 11 May 1998 to send it the documents production of which was sought by the appellant.
38 Second, the case-file shows that on 12 June 1998 - nearly two weeks before the date of the hearing - the appellant received the non-confidential version of the documents lodged by the Commission. The appellant therefore had sufficient time in which to consider those documents and, if need be, to respond to them.
39 In those circumstances, the appellant's assertion that the Court of First Instance infringed the rights of the defence by deciding to order a measure of organisation of procedure belatedly and on a date too close to that of the hearing is unfounded.
40 As to the second part of the first plea, concerning the treatment of the documents produced by the Commission in pursuance of the measure of inquiry ordered on 11 May 1998, it should be noted that, in accordance with Article 64 of its Rules of Procedure, the Court of First Instance may decide to adopt measures of organisation of procedure which involve asking for documents or any papers relating to the case to be produced.
41 In that regard, Article 64(4) of those Rules of Procedure provides as follows:
Each party may, at any stage of the procedure, propose the adoption or modification of measures of organisation of procedure. In that case, the other parties shall be heard before those measures are prescribed.
Where the procedural circumstances so require, the Registrar shall inform the parties of the measures envisaged by the Court of First Instance and shall give them an opportunity to submit comments orally or in writing.
42 In the present case, the parties are agreed that the appellant applied for the production of various documents and that the Court of First Instance granted that application after having heard the Commission, considered the documents produced by the latter and adopted a view on the objection raised by the Commission in its letter of 20 May 1998 regarding the confidential nature of the documents in question.
43 It is also common ground that the appellant was notified of the Commission's letters of 20 May and 5 June 1998 containing objections with regard to the confidentiality of the documents in question and the initial position adopted by the Court of First Instance on 4 June 1998.
44 However, it does not appear from the case-file relating to the procedure before the Court of First Instance that the appellant contested in writing the objections raised by the Commission; nor does the record of the hearing on 25 June 1998 indicate that it put forward any plea in that regard.
45 In those circumstances, it clearly had no grounds for maintaining that the contested judgment disregarded the principle of equality of arms.
46 It follows that the first plea must be rejected.
The second plea
47 By its second plea, the appellant maintains that the Court of First Instance was wrong, and had no reason, to find in paragraph 79 of the contested judgment that the documents produced by the appellant at the hearing were irrelevant and to refuse to include them in the case-file. Since those documents confirmed the illegality of the Commission's conduct and the decisive role played by the latter in changing the tendering procedure, the Court of First Instance thus distorted the evidence; it follows that the contested judgment is vitiated by an absence of reasoning on that point and should be annulled.
48 It should be recalled in that regard that the Court of Justice has no jurisdiction to find the facts or, in principle, to examine the evidence which the Court of First Instance accepted in support of those facts. Provided that the evidence has been properly obtained and the general principles of law and the rules of procedure in relation to the burden of proof and the taking of evidence have been observed, it is for the Court of First Instance alone to assess the value to be attached to the evidence produced before it. That appraisal does not therefore constitute, save where the clear sense of that evidence has been distorted, a point of law which is subject, as such, to review by the Court of Justice (Baustahlgewebe v Commission, cited above, paragraph 24).
49 However, the question whether the grounds of a judgment of the Court of First Instance are contradictory or inadequate is a question of law which is amenable, as such, to judicial review on appeal (see, in particular, Baustahlgewebe v Commission, paragraph 25).
50 In the present case, it must be held, first, that, by referring to its earlier reasoning showing that the documents produced by the appellant at the hearing were irrelevant for the purposes of determining the dispute, the Court of First Instance gave sufficient reasons for its decision not to include them in the case-file.
51 Second, there is nothing to indicate that, in so doing, the Court of First Instance clearly distorted the evidence adduced by the appellant.
52 It follows that the second plea must be rejected.
The third plea
53 By the first part of its third plea, the appellant complains that the Court of First Instance wrongly categorised the damage for which it sought compensation. That damage resulted, it claims, not from its failure to win the contract but from its loss of opportunity.
54 According to the appellant, it is an established principle in matters of public procurement that, in the event of irregularity in a tendering procedure, a tenderer who has complied with the detailed rules governing participation in that procedure may claim compensation for the damage suffered as a result both of the loss of chance of award of the contract and of his incurring the costs and expenses in participating in that procedure.
55 The appellant maintains that, in the present case, its chances of winning the contract under the invitation to tender of 13 June 1995 were particularly high and that, by disregarding the principles of compensation referred to in the previous paragraph, the Court of First Instance committed an error of law. Moreover, the contested judgment fails to give any reasons on this point.
56 In that regard, it is clear from paragraphs 71 to 75 of the contested judgment that the Court of First Instance did in fact consider the appellant's claim on the basis that it was founded on the loss of chance of award of the contract under the invitation to tender of 13 June 1995.
57 The first part of the third plea must therefore be rejected.
58 By the second part of its third plea, the appellant claims that the analysis of the causal link undertaken by the Court of First Instance was incorrect, in that it took the view that the damage was attributable not to any illegal acts or conduct on the part of the Commission but to the withdrawal of the feasibility study project, which resulted from an autonomous decision by the Polish authorities.
59 According to the appellant, the subsequent decisions of the Polish Government were brought about, at least concomitantly, by the unlawful conduct of the Commission.
60 The appellant argues that in the present case it is established that the evaluation committee recommended that the appellant be awarded the contract, that the Commission stated that it did not agree with that committee's assessment and did not wish to issue a new invitation to tender but to undertake a review of the tenders previously submitted in the initial procedure, that the adviser to the Polish Ministry of Transport and Maritime Economy regarded the Commission's choice as unjustified and expressed doubts about the legality of the line of action proposed by the latter, and that, as is apparent from the minutes of the meeting of the evaluation committee held on 13 September 1995, Mr Kozuchowski, the Republic of Poland's representative on that committee, refused to endorse that new procedure and to sign the minutes prepared by the Commission.
61 In those circumstances, the appellant maintains that the Polish Government's decision to withdraw the study relating to the Warsaw rail junction from the PHARE programme was not therefore the result of an autonomous decision by that government but the inevitable consequence of the Commission's negligent acts and arbitrary interventions. The Polish authorities, on the other hand, were in favour of awarding the contract to the undertaking which had submitted the best bid in accordance with the assessments carried out by the evaluation committee. The delay in awarding the contract, which was solely attributable to the Commission's unlawful conduct, was a fundamental factor contributing to the decision to withdraw the project.
62 According to the appellant, the Court of First Instance therefore committed an error of law in its assessment of the causal link, inasmuch as it failed to take account of the fact that the damage pleaded in the present case resulted from irregularities on the part of the Commission in its handling of the tendering procedure and of the fact that that damage occurred before the abovementioned withdrawal decision was taken. Moreover, the Court of First Instance disregarded the importance of protecting undertakings whose legitimate interests are adversely affected by improper conduct of a tendering procedure. Here again, the contested judgment was vitiated by the absence of a statement of reasons.
63 It is clear from Article 168a of the Treaty and Article 51 of the EC Statute of the Court of Justice that an appeal may be based only on grounds relating to the infringement of rules of law, to the exclusion of any appraisal of the facts. The Court of First Instance has exclusive jurisdiction, first, to establish the facts except where the substantive inaccuracy of its findings is apparent from the documents submitted to it and, second, to assess those facts (see, in particular, Deere v Commission, cited above, paragraph 21, and New Holland Ford v Commission, cited above, paragraph 25).
64 Moreover, an appeal must indicate precisely the contested elements of the judgment which the appellant seeks to have set aside, and also the legal arguments specifically advanced in support of the appeal (see the order in Case C-19/95 P San Marco v Commission [1996] ECR I-4435, paragraph 37).
65 It must be held, first, that, inasmuch as the appellant claims that the damage suffered by it resulted from unlawful acts and conduct on the part of the Commission, it is contesting the assessment of the facts carried out by the Court of First Instance and that, seen in that light, the plea is inadmissible.
66 Second, in so far as the appellant's arguments are to be construed as an assertion that the Court of First Instance committed an error of law in finding that there was no sufficiently direct causal link between the damage alleged by it and the Commission's conduct of which it complains since this was merely one of the reasons which prompted the decision by the Polish Government to request withdrawal of the Warsaw rail junction study from the PHARE programme, it must be held that the appellant has not put forward any specific plea in law in support of those arguments and that it is not for the Court of Justice, in determining an appeal, to consider such a plea of its own motion.
67 It follows that the second part of the third plea must likewise be rejected.
68 It results from all the foregoing that none of the pleas put forward by the appellant can be accepted and that the appeal must therefore be dismissed.
Decision on costs
Costs
69 Under the first paragraph of Article 122 of the Rules of Procedure, where an appeal is unfounded or where it is well founded and the Court of Justice itself gives final judgment in the case, the Court is to make a decision as to costs. Under Article 69(2) of the Rules of Procedure, which apply to appeal proceedings by virtue of Article 118, the unsuccessful party is to be ordered to pay the costs if they are applied for in the successful party's pleadings. Since the Commission has requested that the appellant be ordered to pay the costs and the latter has been unsuccessful, it must be ordered to pay the costs.
Operative part
On those grounds,
THE COURT (Fifth Chamber)
hereby:
1. Dismisses the appeal;
2. Orders TEAM Srl to pay the costs.
Full & Egal Universal Law Academy