The Dutch Supreme Court recently passed noteworthy judgments (see here and here) in two lengthy legal actions on the question when a service concession is of a certain cross-border interest. The Supreme Court has provided useful tools in practice. The judgments in question have been somewhat overtaken by the fact that service concessions now come under the regime of the Concessions Directive and Part 2a of the Aanbestedingswet (Public Procurement Act). But the judgments are nevertheless of interest, since a certain cross-border interest also plays a role in, for instance, the awarding of below threshold contracts and the granting of scarce licences. It remains to be seen, however, whether the Supreme Court judgments are entirely in keeping with European case law. New proceedings on that question will have to be awaited.
Background of the legal actions
Both legal actions related to the awarding of concessions for the operation of advertising structures (such as billboards and bus shelters). Contracting authorities Rotterdamse Elektrische Tram N.V. (“RET”) and Stichting Eindhoven Marketing (“SEM”) both entered into agreements with operators of outdoor advertisements without inviting tenders. In their opinion the contracts related to service concessions that did not require a call for tenders and could therefore be put out to contract by private tender.
The Concessions Directive was not yet in effect when these concessions were awarded. The tendering rules did not apply to service concessions at the time, unless a concession is of a certain cross-border interest. In that case the contracting authority was required when awarding the concession to apply the fundamental rules of the Treaty on the Functioning of the European Union. The contracting authority must then in any event comply with the principle of equality and the obligation of transparency.
JCDecaux is a competitor of the companies to which the contracts were awarded. It took legal action against RET and SEM to put an end to the performance of the contracts and to ensure that a call for tenders was issued. The Court and the Courts of Appeal issued different rulings and appeals were filed with the Supreme Court in both cases, centred on the interpretation of the term “certain cross-border interest”.
Supreme Court judgments
The Supreme Court found that a certain cross-border interest can be apparent from the economic value of the proposed contract, in conjunction with the place of performance and its specific characteristics. It is not a requirement that a foreign market party has or may have an actually interest in a contract. It was argued during the proceedings that a foreign party’s interest was apparent from the fact that a subsidiary had been set up in the Netherlands. The Supreme Court disagreed: that fact in itself was not an indication that a foreign company was interested in the contract.
The judgments are particularly relevant to the obligation to furnish facts about a certain cross-border interest. The standard applied by the Supreme Court and that applied by the European Court of Justice (ECJ) do not match up on this point. The ECJ found in its Tecnoedi judgment that a certain cross-border interest cannot be inferred hypothetically. A party arguing that a contract is of a certain cross-border interest must demonstrate that companies from other Member States have or may have an actual interest in the contract. The Supreme Court appears to disagree, since it ruled that the judgment in Tecnoedi must be viewed in the specific context of that case (in which the ECJ assessed whether the referring court had provided sufficient information for a preliminary ruling). In the Supreme Court’s opinion, Tecnoedi does not provide a framework for establishing a certain cross-border interest.
We have our doubts about this finding. It is true that the ECJ primarily addressed the question whether sufficient information had been provided to issue a preliminary ruling. But the ECJ also addressed the question what standard applies in that regard. That is particularly apparent from a later judgment: in Oftalma Hospital the ECJ addressed the standard for establishing a certain cross-border interest. The ECJ referred in that case to the findings in Tecnoedi. It would therefore appear that the ECJ does indeed attach value to Tecnoedi.
The Supreme Court appears to set the bar for reliance on a certain cross-border interest lower than the ECJ. A hypothetical cross-border interest suffices for the Supreme Court, whereas the ECJ requires evidence that companies from other Member States have or may have an actual interest in the contract. It remains to be seen how judges will deal with these possibly divergent criteria in practice. We have probably not yet heard the last about this.