Report for the Hearing delivered in Case 114/86

I — Facts

In the framework of the Second ACPEEC Convention of Lomé (hereinafter referred to as Lomé II) signed at Lomé on 31 October 1979 and approved by Council Regulation No 3225/80 of 25 November 1980 (Official Journal 1980, L 347 p. 1), the European Community and its Member States provide financial and technical assistance to certain developing states (collectively referred to as the African, Caribbean and Pacific (or ACP) States). This assistance is financed from the resources of the Fifth European Development Fund (hereinafter referred to as the EDF), established by the Internal Agreement of 1979 on the financing and administration of Community aid (Official Journal 1980, L 347 p. 210).

This case relates to the award of service contracts under Chapter 10 of Title VII of Lomé II. Although Lomé II expired on 28 February 1985 several provisions, including Title VII on financial and technical cooperation, have been maintained in force after 28 February 1985 pursuant to a number of Council regulations of which the most recent is Regulation No 690/86 of 3 March 1986 (Official Journal 1986, L 63, p. 1). To the extent that these provisions of Lomé II remain in force, the Fifth EDF set up for its implementation also remains in force. The Internal Agreement of 1979 provides that the EDF shall remain in force for as long as is necessary for all the operations financed under the Convention to be fully executed (Article 31) and also that the remaining balance of previous development funds shall continue to be administered as provided for in the appropriate internal agreement and in accordance with the rules and regulations in force on 1 March 1980 (Article 30). Similarly, Lomé II, at Article 110 (1) (c), provides that any balance remaining from the Fund that has not been committed by the end of the last year of the application of the Convention will be utilized until it has been exhausted, in accordance with the same conditions as those laid down in Lomé II.

The placing and award of service contracts is dealt with in Chapter 10 of Title VII. According to Article 140 (1), service contracts are to be concluded with consultancy firms or consulting engineers or experts recruited with reference in particular to their professional qualifications and practical experience of problems of the type to be dealt with.

Paragraphs (1) and (2) of Article 142 of Lomé II provide that the rules governing the placing and award of service contracts will be laid down by decision of the Council of Ministers; pending such decision, Articles 24 to 27 of Protocol No 2 and the Joint Declaration on Article 26 of the said protocol, as reproduced in Annex XIV to the Final Act of Lomé II, will apply. Since the Council of Ministers did not make any decision on the rules governing the placement and award of service contracts, Articles 24 and 25 of Protocol No 2 describe how the Commission shall act.

Article 24:

Article 25:

In addition to the criteria laid out in Article 25, the Commission applied, until 1983, a full quota system which linked the extent of a Member State's contribution to the EDF to the number of contracts awarded to their nationals. As from 1 June 1983, the Commission introduced, on a trial basis, a limited quota system under which approximately 18.25% of the available resources were kept out of the quota system and awarded to the most competitive bidder.

The Commission announced at the ACP/FIN Working Party meeting of 6 March 1986, that it had reverted to the full quota system with effect from 1 March 1986.

II — Written procedure and conclusions

1. By application lodged on 16 May 1986 the United Kingdom brought the present action.

2. On 24 July 1986 the Commission requested a decision under Article 91 of the Rules of Procedure on a preliminary objection. It requested the Court to give a ruling on the application as a preliminary issue.

3. The remainder of the written procedure followed the normal course.

4. The United Kingdom claims that the Court should:

HI — Submissions and arguments of the parties

A — Admissibility

The Commission puts forward three arguments on admissibility. The first submission relates to the form of the measure subject to review by the Court, the second to the source of the measure, and the third to its content and effects.

1. The form of the measure

2. The source of the measure

3. The content and effects of the measure

B — Substance

1. Breach of the Lomé II Convention

2. Breach of Article 7 of the EEC Treaty

3. Breach of Article 3 (f) of the Treaty

1 Language of the Case: English.