On 28 January 2010, the European Court of Justice (ECJ) issued two
important judgments relating to actions before national courts for
alleged breaches of the public procurement rules.
The judgments are helpful for unsuccessful tenderers in that it is
now clear that any limitation periods for bringing actions should
run from the time when tenderers became (or ought to have become)
aware of the grounds giving rise to a breach of the procurement
rules. In the UK and Ireland, they should have at least three
months from that point to bring an action.
The UK case related to an action by Uniplex which had been
unsuccessful in a tender for supplies to the National Health
Service. Under the relevant UK legislation, infringement
proceedings were to be brought "promptly and in any event
within three months" from the date when grounds for
proceedings first arose, subject to the possibility of an
extension. This provision sought to implement a 1989 EU Directive
under which decisions of contracting authorities were to be
reviewed "as rapidly as possible". The ECJ found that:
- while limitation periods were legitimate, the effect of the UK
rules was that actions might be dismissed on the basis that they
had not been brought "promptly" even if they were brought within
three months. This was contrary to the requirements of legal
certainty and the principle of effectiveness under which national
measures must not render impossible or excessively difficult the
exercise of EU law rights; and
- the time period for bringing an infringement action should run from
the date on which the claimant knew, or ought to have known, of the
infringement, rather than the date of the actual breach. Again,
this followed from the principle of effectiveness.
The other ECJ judgment related to proceedings in connection with a
contract for the design and construction of a road in Ireland. One
of the tenderers, EuroLink, got down to the final two bidders, but
was never directly told that it had not ultimately been awarded the
contract.
In addition to the lack of notice of the contract award, the
European Commission took issue with two aspects of the Irish
legislation. First, in language very similar to the UK legislation,
it stated that infringement actions should be brought "at the
earliest opportunity and in any event within three months"
from the date when grounds for the application first arose, again
subject to the possibility of an extension. Secondly, the
legislation only specifically referred to the need for award
decisions to be challenged within that time period, but the Irish
courts had interpreted this to also cover interim decisions in the
process.
Unsurprisingly given the UK judgment, the ECJ confirmed that the
"at the earliest opportunity" wording was contrary to EU
law. The ECJ also found that:
- the interpretation of the legislation to apply it to interim
decisions as well as final award decisions was again contrary to
the requirements of legal certainty and the principle of
effectiveness. This needed to be stated expressly in the
legislation for claimants to be fully informed of their rights; and
- it is essential that unsuccessful tenderers are informed of the
award decision.
As a result of these judgments, changes can be expected to the
wording of the limitation periods under the UK and Irish
legislation.
Please click on the links below for the other articles in
the March 2010 competition newsletter
Contacts
Nigel Parr
T: +44 (0)20 7859 1763
E: nigel.parr@ashurst.com
Neil Cuninghame
T: +44 (0)20 7859 1147
E: neil.cuninghame@ashurst.com
Mats Johnsson
T: +46 (0)8 407 24 68
E: mats.johnsson@ashurst.com
This newsletter is not intended to be a comprehensive review of
all developments in the law and practice, or to cover all aspects
of those referred to. Readers should take legal advice before
applying the information contained in this publication to specific
issues or transactions.