Procedural fairness and the EU Remedies Directive – an overview

1. Dr. Michael Fruhmann EBRD Project Ukraine29/30th March 2012 Procedural fairness and the EU Remedies Directive – an overview 1 11/8/2014

2. International background World Bank (Procurement Guidelines + Contract Guidelines; see http://web.worldbank.org/WBSITE/EXTERNAL/PROJECTS/PROCUREMENT/0,,pagePK:84271~theSitePK:84266,00.html) OECD (see: http://www.oecd.org/gov/ethics/procurement) 11/8/2014

3. International background UNCITRAL Model Law on Procurement (see: http://www.uncitral.org/uncitral/en/commission/working_groups/1Procurement.html) GPA (see: http://www.wto.org/english/tratop_e/gproc_e/gp_gpa_e.htm) 11/8/2014

4. Remedies Directive and national law Remedies Directives do not set procedural rules for review proceedings (exception: legal standing and scope of the review) however: detailed national procedural rules governing the remedies intended to protect rights conferred by Community law on candidates and tenderers harmed by decisions of contracting authorities must not compromise the effectiveness of Directive 89/665 (see C-406/08, Uniplex) procedures for interim measures may follow simplified rules (see C-568/08, Combinatie Spijker) 11/8/2014

5. Remedies Directive + national law II in the absence of Community rules in the field, it is for the domestic legal system of each Member State to lay down the detailed procedural rules governing actions for safeguarding rights which individuals derive from Community law, provided, first, that such rules are not less favourable than those governing similar domestic actions (principle of equivalence) and, secondly, that they do not render virtually impossible or excessively difficult the exercise of rights conferred by Community law (principle of effectiveness) – see C-231/96, Edis, C-454/06, pressetext, C-432/05, Unibet 5 11/8/2014

6. Procedural fairness - definition No uniform EU definition, but elements can be found in remedies Directive (for ex. Art. 1 (1) 89/665 ‘effective review’ requirement) and procedural Directives (for ex. Art. 41 2004/18 ‘debriefing requirement’) in ECJ jurisprudence (see for ex. C-450/06, Varec, C-69/10, Samba Diouf) in the European Convention on Human Rights (Art. 6) in connection with Jurisprudence of European Court of Human Rights in Art. 47 (2) Charter of fundamental rights of the EU 6 11/8/2014

7. Procedural fairness – definition II Procedural elements “right to a fair hearing”: means that both parties must be heard in any judicial procedure (see for ex. C-450/06, Varec) “adversarial principle”: means that the parties are entitled to a process of inspecting and commenting on all documents or observations submitted to the court with a view to influencing its decision (see for ex. C-450/06, Varec) 7 11/8/2014

8. Procedural fairness – definition III Procedural elements “Equality of arms” - requires each party to be given a reasonable opportunity to present his case under conditions that do not place him at a substantial disadvantage vis-à-vis his opponent (see T-36/04) – for ex. use of experts right to inspect the files (see for ex. C-450/06, Varec) – but the review body must ensure that confidentiality and business secrecy are safeguarded in respect of information contained in files communicated to that body by the parties to an action 8 11/8/2014

9. Procedural fairness – definition IV Procedural elements “right that the grounds of a decisions must be communicated” - requires that the reasons for a decisions must be made available to the parties; for example: it is not sufficient to reiterate a legal provision and just state its applicability (follows as well from principle of transparency; see C-455/08, C-251/09) 9 11/8/2014

10. Procedural fairness – definition V Procedural elements The complete legal protection which must be ensured before the conclusion of the contract presupposes, in particular, the duty to inform the tenderers of the award decision before such conclusion so that they may have a real possibility of initiating review proceedings (C-455/08) 10 11/8/2014

11. Procedural fairness – periods “effective review”: the fact that a candidate or tenderer learns that its application or tender has been rejected does not place it in a position effectively to bring proceedings; such information is insufficient to enable the candidate or tenderer to establish whether there has been any illegality which might form the subject-matter of proceedings 11 11/8/2014

12. Procedural fairness – periods II “effective review”: only once a concerned candidate or tenderer has been informed of the reasons for its elimination from the public procurement procedure that it may come to an informed view as to whether there has been an infringement of the applicable provisions and as to the appropriateness of bringing proceedings 12 11/8/2014

13. Procedural fairness – periods III “effective review”: objective laid down in Article 1(1) 89/665 can be realised only if the periods laid down for bringing such proceedings start to run only from the date on which the claimant knew, or ought to have known, of the alleged infringement of those provisions (see C-470/99, Universale, C-406/08, Uniplex) 13 11/8/2014

14. Procedural fairness – periods IV “effective review”: requirement under national law that proceedings be brought “promptly” is illegal - system of limitation periods must be “sufficiently precise, clear and foreseeable” (C-406/08, Uniplex) 14 11/8/2014

15. Procedural fairness – periods V “effective review”: requires provision to be made for the unsuccessful tenderer to examine in sufficient time the question of whether the award decision is valid, which means that a reasonable period must pass between the moment when the contract award decision is notified to the unsuccessful tenderers and the conclusion of the contract, in order to allow them, in particular, to bring an application for interim measures until the conclusion of the contract (C-455/08) 15 11/8/2014

16. Thank you for your attention! Contact: Dr. Michael Fruhmann, Federal Chancellery, Constitutional Service, Republic of Austria michael.fruhmann@bka.gv.at 16 11/8/2014