Opinion of Mr Advocate General

Mr President,

Members of the Court,

1. Introduction

The applicants, hereinafter referred to as the Italian Consortium, seek the following relief:

1.1. The annulment under Article 173 of the EEC Treaty of a decision of the Commission preventing them from continuing negotiations with the Ethiopian Electric Light and Power Authority (Eelpa) in connection with the award of a public works contract under the Second Lomé Convention, in particular Articles 120 to 132 thereof; in the alternative,

1.2. Should it appear that the Commission made no decision in that regard, a declaration under Article 175 of the EEC Treaty that the Commission failed to act; in the further alternative,

1.3. Compensation under Articles 178 and 215 of the EEC Treaty for the damages and expenses caused by the aforesaid decision or unlawful conduct.

2. Facts and relevant legal provisions

2.1. The Provisional Military Government of Socialist Ethiopia, acting through the intermediary of the Ethiopian Electric Light and Power Authority (Eelpa) in its capacity as employer, issued an invitation to tender (No 1824) in respect of a project to divert the River Amarti (Supplements to the Official Journal of the European Communities S 132 of 14 July 1982, p. 3, and S 193 of 6 October 1982, p. 3).

2.2. The employer requested that the project be financed by the Fifth European Development Fund [hereinafter referred to as the Fund], set up by the Internal Agreement of 1979 on the financing and administration of Community aid (Official Journal 1980, L 347, p. 210), within the framework of the Second ACPEEC Convention, which was signed at Lomé on 31 October 1979 and approved by Council Regulation (EEC) No 3225/80 of 25 November 1980 (Official Journal 1980, L 347, p. 1). The Notice of Invitation to Tender stated that in the event of the project not being approved no contract would be awarded.

2.3. The Lomé Convention defines the respective responsibilities of the ACP States and of the Community regarding the administration of the programme of financial and technical cooperation.

2.4. Under Articles 108 (2) and 120 the ACP States are responsible for implementing the projects and programmes adopted jointly with the Community and financed by the latter. In that regard they are responsible for preparing, negotiating and concluding any contracts which are necessary for the implementation of the projects. Under Article 122 the Government of each ACP State is to appoint a national authorizing officer, who is to ensure, in close cooperation with the chief authorizing officer, that there is equality of conditions for participations in invitations to tender, that there is no discrimination and that the tender which is economically the most advantageous is chosen. He is to prepare and, after obtaining the agreement of the Commission's delegate, issue invitations to tender, receive tenders, preside over their examination, decide the outcome of the examination, which he is to transmit to the delegate with a proposal for the placing of the contract, and sign contracts.

2.5. Article 108 (5) places on the Community the responsibility for preparing and taking financing decisions. Under Article 121 the Commission is to appoint the chief authorizing officer, who is to ensure that financing decisions are carried out and is to be responsible for managing the Fund's resources; he is to commit, clear and authorize expenditure and ensure, in close cooperation with the national authorizing officer, that there is equality of conditions for participations in invitations to tender, that there is no discrimination and that the tender selected is economically the most advantageous. In that connection he is to approve the dossiers before invitations to tender are issued, receive the result of the examination of the tenders and approve the proposal for the placing of the contract. Under Article 123 the Commission is to appoint a delegate to represent it in each ACP State. The delegate may, in certain cases, approve invitation to tender dossiers and be present at the opening of tenders. Under Article 123 (2) (c) he is to approve the proposal for the placing of the contract wherever the following three conditions are fulfilled: the tender selected is the lowest, it is economically the most advantageous and it does not exceed the sum earmarked for the contract.

2.6. Article 130 provides that the criteria for selecting the tender which is economically the most advantageous must take into account inter alia the qualifications of, and the guarantees offered by, the tenderers, the nature and conditions of implementation of the works or supplies and the price, operating costs and technical value of those works or supplies.

2.7. Pending the adoption of general conditions applicable to the award and performance of works -contracts, as provided for by Article 131, a joint declaration, which forms Annex XII to the Convention, refers, in the case of ACP States which, like Ethiopia, were not party to the Yaoundé Convention, to their national legislation or established practices regarding international contracts.

2.8. Annex XIII to the Convention, entitled Joint Declaration on Article 132 of the Convention, provides that, pending the adoption by the Council of Ministers of the arbitration rules provided for by that article, the final decision on disputes relating to the placing or performance of a contract is to be taken in accordance with the rules on conciliation and arbitration of the International Chamber of Commerce.

2.9. Under the Conditions of Tender, tenderers were required to demonstrate their technical experience, their competence to undertake the works (Clause IT-1, 4 (c)) and their current financial capability (Clause IT-1, 4 (d)); those factors were to be examined by a tender committee appointed by the employer, which could include the Commission's delegate and the consulting engineer (Clause IT-1, 4, third paragraph).

2.10. It was stated that the employer did not bind itself to award the contract to the lowest tenderer, but would take into careful consideration the whole of the information given in the tender and its appendices. The successful tenderer would be informed of the acceptance of his tender and would be invited to send to Addis Ababa a representative with a proper power of attorney for the purpose of executing the contract (Clause IT-11).

2.11. By 5 November 1982, the final date for the submission of tenders, Eelpa had received three tenders submitted by the three Italian undertakings, which had joined together to form a consortium (the Italian Consortium), by Rush & Tompkins BV, a company incorporated under Netherlands law and a subsidiary of Rush & Tompkins Group PLC, and by Boskalis Westminster-Baresel, a company incorporated under English law. Eelpa accepted that the tender of Rush & Tompkins BV, which was transmitted by telex, had been duly submitted since the circumstances causing the delay in the despatch of the tender documents amounted to a case of force majeure. That decision was contested neither by the Commission's delegate nor by the chief authorizing officer, despite formal objections on the part of the Italian Consortium, which claimed that, under the terms of Clause IT-5 of the Conditions of Tender, tenders submitted by telex or cable would not be considered.

2.12. On 8 November 1982, the date on which the tenders were opened, the following tenders (expressed in millions of ECU) were recorded:

2.13. Called upon to evaluate the tenders, the consulting engineers, the Danish firm Kampsax, produced a report in which they recommended that negotiations be entered into with the Italian Consortium.

2.14. It is clear from the minutes of the meeting of the Tender Committee held on 24 February 1983 — which were signed by the delegate and another representative of the Commission — that the Committee discussed the technical competence, the financial capability, the proposed schedule of work and the financial proposal of each tenderer on the basis of the engineers' report and an earlier draft thereof. The Committee mentioned in its minutes the slight modification made by the engineers to the conclusions in their report in favour of Rush & Tompkins BV; this was attributable to additional documents which were supplied by Rush & Tompkins BV after the submission of the initial tender documents. The Committee decided unanimously that Rush & Tompkins BV failed to qualify on the basis of three of the four stated criteria and recommended that the Italian Consortium be invited to attend for negotiations.

2.15. The Directorate-General for Development proceeded to make an assessment on the basis of the tender documents, the final report of Kampsax and the recommendation made by the Tender Committee on 24 February 1983, documents which the delegate had transmitted to the chief authorizing officer, and reached the conclusion that the lowest tender, namely that of Rush & Tompkins BV, was technically and financially acceptable and was economically the most advantageous tender.

2.16. On 3 March 1983, Eelpa sent to the Italian Consortium a telex communication inviting it to send a representative to commence negotiations on 14 March 1983 and, if these were successful, to sign a contract.

2.17. On arriving at Addis Ababa, the representatives of the Italian Consortium were informed, on 15 March 1983, that the negotiations could not take place, since the Commission had Ordered' that negotiations be opened with Rush & Tompkins BV.

2.18. On 25 April 1983, Eelpa sent to the Italian Consortium a telex communication explaining that for reasons beyond its knowledge and control it was unable to proceed with the scheduled negotiations; it was forced to start negotiations with Rush & Tompkins BV in strict compliance with a decision made by the Commission alone, despite its strong objections and disagreement on grounds of the tenderer's lack of financial and technical qualifications. Reference was made to a telex communication sent by Kampsax to Eelpa, in which the consulting engineers repeated their view that the lowest tenderer, Rush & Tompkins BV, was unqualified and that Rush & Tompkins Group PLC, which was considered qualified, was not the tenderer.

2.19. As early as 14 January 1983 Rush and Tompkins Group PLC had sent to Kampsax a telex communication explaining that the holding company, whenever necessary, gave an unconditional guarantee of the performance of works by its subsidiary. Subsequently Rush & Tompkins Group PLC sent to Eelpa a formal guarantee, dated 22 April 1983, which was subsequently replaced by a similar guarantee, dated 21 June 1983.

2.20. By telex communication of 19 April 1983, Eelpa invited Rush & Tompkins BV to attend at Addis Ababa for contract negotiations and to produce further documentary evidence of its technical competence and financial capability.

2.21. In a supplementary evaluation report, produced at the request of Eelpa on the basis of documents supplied on 5 May by Rush & Tompkins BV, the consulting engineers adhered to their conclusion that the tenderer, although supported by the Rush & Tompkins Group PLC, was neither technically nor financially qualified to carry out the project. Eelpa accepted that conclusion and decided that the scheduled negotiations could not take place.

2.22. After further consideration of the documents and consultation with the Ethiopian authorities and the consulting engineers, the Commission adhered to its conclusion that the contract should be awarded to Rush & Tompkins BV.

2.23. In a memorandum of 6 June 1983, the consulting engineers, Kampsax, concluded that Rush & Tompkins BV, supported by Rush & Tompkins Group PLC, should be awarded the contract. This was accepted by Eelpa, and the chief authorizing officer gave his agreement on 10 June 1983. On 6 July 1983, the contract was concluded between Eelpa and Rush & Tompkins BV and was endorsed by the national authorizing officer and the Commission's delegate on the authority of the chief authorizing officer.

2.24. The proposal for financing the project was approved by the Fund Committee on 22 February 1983 and the Commission took the final financing decision on 7 March 1983.

2.25. When the representations which it made to the Commission with a view to securing a reexamination of the case and a change in the Commission's attitude met with no success, other than interviews on 12 April and 13 June 1983 with officials from the competent directorate-general, the Italian Consortium announced, on 16 June 1983, its intention to institute proceedings.

3. The first two claims

The applicants' first two claims (conclusions 1 and 2) must in my view be declared inadmissible on the basis of the Court's judgment of 10 July 1984 in Case 126/83 (STS Consorzio v Commission [1984] ECR 2769).

That conclusion is not affected by the differences referred to by the applicants at the hearing between the circumstances of this case and those on which that judgment was based.

In the first place, at the hearing the applicants put forward as a pertinent difference the fact that Eelpa in its capacity as employer stipulated in its Conditions of Tender that the validity of any prospective contract was conditional upon the European Development Fund agreeing to finance it. Since that condition was laid down by the employer, it is the employer alone that is responsible for it. The fact that the employer stipulates such a condition cannot alter the division of competence between the Community and the ACP States as described in the aforesaid judgment or in itself provide any basis for liability on the part of the Community.

Secondly, the applicants correctly point out that the STS case was concerned solely with Article 123 (3) (b) of the Second Lomé Convention, while in this case they rely on Article 123 (2) (c) of the Convention. That observation, correct as far as it goes, is of no avail to the applicants, since the reasoning contained in that judgment clearly applies to Article 123 as a whole. In that regard reference may be made in particular to paragraphs 15 and 16 of the judgment. That such a general application was intended is also clear if the judgment is compared with my Opinion in that case.

Since I think it clear, in the light of the Court's judgment in the STS case, that the applicants' first two claims are inadmissible, I do not think it is necessary to deal with the substance of their submissions on those points.

4. The third claim

4.1. Admissibility

The Commission also disputes the admissibility of the claim for damages, which is stated more specifically in conclusions (3) and (4) of the application. Since the claim for damages in conclusion (3) stands and falls with the admissibility of the first two claims, in my view that claim must indeed be declared inadmissible. It seeks compensation for the damage caused by the acts or failures to act which the applicants seek in their first two claims to have declared unlawful.

The fourth conclusion, however, is independent of the first two claims and reads as follows:

In paragraph 20 of the judgment in the STS case the Court expressly left open the question whether such an action for damages based on the second paragraph of Article 215 of the EEC Treaty was admissible.

The Commission's argument that the claim for damages in this case is a disguised application for annulment is in my view justified in so far as it refers to the applicants' third conclusion.

On the other hand, I think that the applicants' argument that to declare inadmissible the claim for damages on the sole ground that its result could be equivalent to that of an application for annulment would be to ignore the independent nature of that remedy is correct with regard to their fourth conclusion. The potentially independent nature of an action for damages is also confirmed by paragraph 20 of the STS judgment and in fact follows from other judgments of the Court regarding the second paragraph of Article 215 of the EEC Treaty. This part of the Commission's argument must therefore be rejected.

The Commission's argument for inadmissibility based on Article 38 (1) of the Rules of Procedure (insufficient details concerning the extent of the damage suffered) must also in my view be rejected. In the application the subject-matter of the dispute is sufficiently well defined with regard to this claim for damages to meet the requirements laid down in that provision. The nature of the damage for which compensation is claimed is also adequately described in the application. As the Court has consistently held, it is only at a later stage of the proceedings that the precise extent of the damage suffered must be fixed.

In my view conclusion (4) of the application must therefore be regarded as admissible. In that respect I consider to be of particular relevance the obligation which Article 121 (2) of the Convention lays on the chief authorizing officer, namely to ensure equality of conditions for participations in invitations to tender, and see to it that there is no discrimination and that the tender selected is economically the most advantageous. The fact that that is an independent obligation of the chief authorizing officer is underlined in paragraph 15 of the STS judgment, in which it is indicated that that obligation applies both to the chief authorizing officer and to the delegate. Having regard to the nature of the obligations I think it clear, moreover, that they exist in part for the protection of tenderers.

4.2. The substance of the case

5. Conclusion

In conclusion I therefore propose that the Court:

5.1. Declare inadmissible conclusions 1, 2 and 3 of the applicants;

5.2. Dismiss conclusion 4 of the applicants as unfounded;

5.3. Dismiss the application which the applicants brought on 23 December 1983 (reserved until final judgment by an order of 29 February 1984) for an order requiring the Commission to produce certain documents;

5.4. Order the applicants to pay the costs.

1 Translated from the Dutch.