Report for the Hearing in Case C-247/89

I — Legal background and procedure

The Community legislation

Council Directive 77/62/EEC of 21 December 1976 (Official Journal 1977 L 13, p. 1) coordinates procedures for the award of public supply contracts. Article 1(a) defines public supply contracts as contracts for pecuniary consideration concluded in writing between a supplier and a contracting authority for delivery of the products.

Article 1(b) defines contracting authorities as the State, regional or local authorities and the legal persons governed by public law, or, in Member States where the latter are unknown, bodies corresponding thereto as specified in Annex I. In the case of Portugal these include legal persons governed by public law whose public supply contracts are subject to State control (Section XIII of Annex I to Directive 77/62, added by the Act concerning the conditions of accession of the Kingdom of Spain and the Portuguese Republic and the adjustments to the Treaties, Official Journal 1985 L 302, p. 217).

Article 2(2)(a) excludes public supply contracts awarded by bodies which administer transport services from the scope of the directive.

Article 5(l)(a) provides that the advertising rules laid down in Article 9 shall apply to contracts whose estimated value net of VAT is not less than 200000 European units of account (approximately ESC 34200000). Article 9 requires contracting authorities who wish to award a public supply contract to make known their intention by means of a notice (paragraph 1). They are to send the notice to the Office for Official Publications of the European Communities (hereinafter: the Publications Office) for publication in the Official Journal of the European Communities (paragraph 2). The notice is not to be published in the Official Journals or in the press of the country of the contracting authorities before the date of its dispatch (paragraph 5).

Pursuant to Articles 392 and 395 of the Act of Accession, Directive 77/62 should have been transposed into national law by Portugal by 1 January 1986.

Article 3(2)(a) of Council Directive 88/295/EEC of 22 March 1988 (Official Journal L 127, p. 1) amends Article 2 of Directive 77/62. The new text of Article 2. excludes public supply contracts awarded by carriers by land, sea or inland waterway from the scope of the directive.

Council Directive 71/305/EEC of 26 July 1971 (Official Journal L 185, p. 5) concerns the coordination of procedures for the award of public works contracts. Article 3(4) thereof excludes from the scope of the directive public works contracts awarded by bodies which are governed by public law and which administer transport services.

Council Directive 90/531/EEC of 17 September 1990 (Official Journal L 297, p. 1) on the procurement procedures in the water, energy, transport and telecommunications sectors deals, as its sixth and seventh recitals indicate, with public procurement markets in sectors excluded from the scope of Directives 71/305 and 77/62. Article 2(2) of the directive expressly states that it shall apply to the firm Aeroportos e Navegação Aérea (hereinafter ANA-EP).

The Portuguese legislation

Article 13(l)(c) of Decree-Law 260/76 of 8 April 1976, laying down the basic rules governing public undertakings, subsequently amended by Decree-Law 29/84 of 20 January 1984, provides that the acquisition and disposal of property the value of which exceeds ESC 50000000 shall be subject to authorization or approval by the relevant Minister.

Decree-Law 235/86 of 18 August 1986, Diano da República 188, series I, transposes Directive 71/305 into national legislation. It lays down the ground rules for public works contracts.

ANA-EP was set up by Decree-Law 246/79 of 25 July 1979, Diario da República 170, series I. Article 2(1) thereof, and Articles 1(1) and 34(1) of the constitution of ANA-EP (annexed to Decree-Law 246/79) provide that ANA-EP is a legal person governed by public law, empowered to act autonomously in administrative and financial matters and in regard to its own assets, and exercising the powers conferred on it by law or by its own constitution, without prejudice to the supervisory powers entrusted to State bodies.

Article 2(2) of Decree-Law 246/79 provides that the State's supervisory powers shall cover, inter alia, the granting of the right to use public airport facilities; determination of the level of fees charged for using airports; expropriation in the public interest; the occupation of sites; the protection of facilities and staff; and non-contractual civil liability.

Article 2(3) of Decree-Law 246/79 and Articles 2 and 34 of ANA-EP's constitution, itself approved by the Decree-Law, stipulate that ANA-EP shall make its works and supply contracts subject to the rules of private law. Article 1(3) of Decree-Law 235/86 states that an order from the relevant ministry is necessary for the Decree-Law to apply to a public undertaking. No such order has been issued to apply the rules of public law as set out in the Decree-Law to the contract concluded by ANA-EP.

Article 3 of Decree-Law 246/79 states that ANA-EP's activities shall include the following:

Article 4 of Decree-Law 246/79 provides that ANA-EP's initial capital shall consist inter alia of the airport infrastructure made over by the State and all rights and assets belonging to the Office of Lisbon Airport. Article 26(1) of ANA-EP's constitution stipulates that ANA-EP may dispose of its property freely, without being subject to the legal constraints governing State property.

The members of ANA-EP's organs, including the Board and the Management Board, are appointed by the Minister of Transport and Communications (ANA-EP's constitution, Articles 5, 7 and 14).

Article 21 of the constitution states that the Minister of Finance and the Minister of Transport and Communications shall approve inter alia the multiannual finance and activities programmes, the annual activity programme, the annual investment budgets and the annual operating accounts, and that they shall also determine public-service charges and approve the general prices and fees policy for the operation of other services, the contracting of loans and the issue of bonds.

Article 22 of the constitution states that approval of the staff rules, in particular in regard to remunerations policy, shall require authorization by the abovementioned ministers, and by the Minister for Labour and the Minister for Economic Planning.

The State will compensate ANA-EP for any charges or reductions in income resulting from activities which are inherently lossmaking or where there is a policy of social prices (constitution of ANA-EP, Articles 3(3) and 23(2)).

Article 31(3) of ANA-EP's constitution provides that the Government may give ANA-EP shareholdings, grants or subsidies.

The State will only be liable vis-à-vis third parties for actions and situations which may be attributed to ANA-EP to the extent that it has explicitly undertaken such liability (constitution of ANA-EP, Article 35(2)).

Article 36 of ANA-EP's constitution states that ANA-EP shall be subject to the general scheme of taxation of public undertakings; however, it may be granted special benefits and exemptions in view of its public service obligations.

Article 41 of ANA-EP's constitution states that any doubts arising as to the interpretation or application of the constitution shall, where necessary, be resolved by an order issued by the Minister of Transport and Communications and the Minister for Finance and Economic Planning.

Procedure

In 1987, ANA-EP held a tendering procedure for the supply and assembly of a telephone exchange at Lisbon Airport and published a notice to that effect in the Portuguese weekly Expresso dated 29 August 1987. The notice, based on the public tender programme, indicated that the base price of the contract was ESC 120000000. In regard to the legislation applicable, reference was made to the provisions of Decree-Law 235/86, of 18 August 1986, for all matters not dealt with in the call for tenders, provided that the provisions concerned were compatible with the principal's status as an undertaking.

On 28 September 1987, the Commission, considering that ANA-EP had not complied with the obligation to send the notice of the tendering procedure to the Office for Official Publications of the European Communities with a view to its being published in the Official Journal of the European Communities, requested the Republic of Portugal to make known its observations within 15 days. By letter of 20 October 1987 the Portuguese authorities denied that Directive 77/62 applied to the situation in question.

By a telex message of 4 February 1988 the Commission asked the Portuguese authorities to forward to it certain documents. In reply to that telex message, the Portuguese Government, by a communication of 8 April 1988, forwarded to the Commission the file on the tendering procedure, the aforementioned Decree-Law No 246/79 and ANA-EP's constitution.

Having failed to discover any factor such as might justify the failure to publish notice of the contract in the Official Journal of the European Communities, the Commission, by reasoned opinion of 21 November 1988, requested the Portuguese Government to take all necessary steps to comply with the reasoned opinion within one month from the date of service.

By a telex message of 17 January 1989 and by letter of 31 March 1989, the Portuguese authorities reported that they intended to amend Decree-Law No 29/84, of 20 January 1984, in order to repeal Article 13(l)(c) of Decree-Law No 260/76, thereby terminating the infringement. By letter of 10 May 1989, they forwarded a text of the relevant draft legislation. On 4 August 1989 the Commission, having noted that the infringement had still not been terminated, lodged the present application.

The written procedure followed its normal course.

The Court, upon hearing the Report of the Judge-Rapporteur and the views of the Advocate General, decided to open the oral procedure without any preparatory inquiry. However, it decided to put a question to the Commission.

II — Forms of order sought

The Commission claims that the Court should:

The Portuguese Republic contends that the Court should:

III — The parties' pleas in law and arguments

Admissibility

In its defence, the Portuguese Government raised an objection of inadmissibility founded on three pleas in law.

1. The alleged infringement, it contends, could not be attributed to the Portuguese State. ANA-EP was a public undertaking, with its own legal personality, separate from that of the Portuguese State, empowered to act autonomously in administrative and financial matters and in regard to its own assets. Admittedly, Article 9 of Directive 77/62 imposed on the Portuguese State a specific obligation to publish in the Official Journal of the European Communities the tendering procedures for which the State itself was the contracting authority. However, for contracting authorities other than the State, the Community directive did not and could not impose on the State a specific obligation to publish in the Official Journal tendering procedures organized by legal persons other than the State; in the normal course of events, the State would not even be aware of such contracts.

2. The Portuguese Government claims to have been misled by a contradiction between the reasons set out in the reasoned opinion, and those contained in the application. The reasoned opinion stated that ANA-EP must be deemed to be a contracting authority within the meaning of Directive 77/62 as the conclusion of supply contracts was subject to approval or authorization by the Portuguese Government. In the light of the reasoned opinion, the Portuguese Government proposed an amendment to the law, formally eliminating the requirement of State approval or authorization in respect of certain contracts concluded by public undertakings (Article 13 of Decree-Law No 260/76), in order to terminate the infringement. However, in its application the Commission intimated, for the first time, that eliminating the requirement of Government authorization or approval would not prevent ANA-EP from being considered a contracting authority.

3. The Commission's conduct during the pre-litigation procedure was equivocal. The Commission never specified what sort of action would be appropriate to terminate the alleged infringement. However, it did not oppose the Portuguese Government's intention to repeal the requirement of State approval or authorization in respect of certain public contracts. In any case, it would never have been possible to amend the law by the deadline set in the reasoned opinion.

Merits

The Commission maintains that all the conditions for the application of Article 9 of Directive 77/62 were fulfilled, and that none of the derogations relating to its scope was applicable. However, the contracting authority, ANA-EP, did not comply with the obligation to send the notice of the contract to the Publications Office in order for it to be published in the Official Journal, pursuant to Article 9 of Directive 77/62.

The Portuguese Government's first plea is that ANA-EP cannot properly be considered to be a contracting authority within the meaning of Article 1(b) of Directive 77/62 and Point XIII of the Annex thereto. It advances two arguments:

1. ANA-EP did not in fact award a public supply contract since the contract awarded was not subject to the rules of public law.

2. Point XIII in Annex 1 to Directive 77/62 did not require general control by the State of an undertaking — ex hypothesi a State undertaking — but rather specific control over public supply contracts. ANA-EP was exempt from having to submit its supply contracts for such specific control.

IV — Reply to the question from the Court

The Commission was requested to explain the divergent interpretations of Article 2(2)(a) of Directive 77/62 which necessitated the publication of an interpretative clarification by the Commission in the Guide, and the amendment of the article concerned by Directive 88/295 (Reply, p. 29).

The Commission replied that, initially, some Member States had maintained that bodies which administered ports and airports were excluded from the scope of Directives 77/62 and 71/305. However, in the course of proceedings under Article 169 of the EEC Treaty, all such Member States had come to accept the Commission's view that the exclusion concerned carriers alone.

The Commission had none the less wished to clarify the situation in order to settle the difficulties relating to the interpretation of the directives in regard to bodies which administer ports and airports. It had accordingly incorporated its interpretation of Article 2(a) of Directive 77/62 in the Guide, and had taken advantage of the amendments to Directives 77/62 and 71/305 in order to provide a definitive clarification of the provisions concerned.

1 Language of the case: Portuguese.