Opinion of Advocate General
Mr President,
Members of the Court,
1. In this case, Compagnie d'Entreprise CFE (CFE), a public limited company governed by Belgian law, seeks an order from the Court for the European Parliament (the Parliament) to pay a certain amount for contract work carried out. CFE applies to the Court on the basis of an arbitration clause in the contract between it and the Parliament, which confers jurisdiction on the Court in accordance with Article 42 of the ECSC Treaty, Article 181 of the EEC Treaty and Article 153 of the EAEC Treaty.
Facts and legal background
2. The facts may be summarized as follows. The dispute concerns the fitting-out of three conference rooms in the Van Maerlant building, an office block that the Belgian State has had built in Brussels for the European Parliament. On 23 November 1987, in its capacity as the contracting authority, the European Parliament invited tenders for the fitting-out of the abovementioned rooms, and inter alia for the performance of carpentry works (lot 5.1). CFE and other building contractors tendered. The Parliament opened tenders on 28 January 1988. In a letter of 21 June 1988, the Parliament informed CFE that it had been chosen to carry out the carpentry work (lot 5.1). In that letter, the Parliament confirmed the value of the work and requested CFE to take all steps necessary to meet the mandatory time-limits which had been agreed upon. On 18 July 1988, the Parliament signed the contract and sent it to CFE to sign. By letter of 8 August 1988, CFE sent the Parliament one set of the signed contractual documents. However, in its letter, it added the following consideration:
3. Three problems arose out of the performance of that work. First, by letters of 18 August, 28 November and 14 December 1989, CFE drew the Parliament's attention to the fact that, due to what it considered to be a delay in the award of the contract, it had to place orders with its suppliers and subcontractors between August and October 1988, instead of the period from March to May of that same year, at prices which had gone up considerably since June 1988. In that letter, CFE repeated its observation that in order to solve that problem equitably, a technical formula for price variation used in Belgium should be applied to the invoicing of the work. That would lead to a price increase of BFR 1689055.
4. The legal relationship between CFE and the Parliament is governed first and foremost by their contract of 18 July 1988. That contract provides that Belgian law applies to all matters not specifically provided for therein. In the contract, both parties undertake to comply with the clauses in the contractual documents concerning the price and the undertakings made by CFE in its tender of 28 January 1988. The contractual documents, which are an integral part of the contract, arc the contract at issue, the undertaking (which contains the tender) signed on 28 January 1988 by the two directors of CFE, the administrative clauses provided for in Annex I, the technical clauses for lot 5.1 and the plans. Both parties expressly accept the exclusion of any other clause or term.
The claim for an updating of the tender price
5. The parties' views. CFE asserts that its claim does not concern price variation during the course of performance, but an updating of its tender price of 28 January 1988. In its application, it claims an updating to the time of the order, namely 18 July 1988. However, in its reply, CFE maintains that its claim concerns the updating of the price of its tender to the day on which it was able to place orders with its subcontractors. It therefore claims an updating equivalent to the amount obtained by applying the technical price variation formula for the period from March 1988 to 31 October 1988, the date on which it negotiated new prices with its subcontractors.
6. Before considering the substantive arguments, I have to discuss the plea of inadmissibility raised by the Parliament in its rejoinder, based on Article 42(1) of the Rules of Procedure of the Court, against what the Parliament describes as a significant amendment to CFE's claim, namely the extension of the updating sought, from the date of the award of the contract to the date on which it placed orders with its subcontractors, in other words from 18 July 1988 to 31 October 1988. Article 42(1) of the Rules of Procedure allows the parties to offer further evidence in the reply and rejoinder in support of their arguments, provided they give reasons for the delay in offering it; in the Parliament's view, it follows a fortiori that an amendment of the claim made in a reply must be declared inadmissible by the Court.
7. As to the substance of the case, I shall first discuss the parties' arguments and the provisions upon which they rely. In support of its view, CFE maintains first that the award of the contract should have taken place around 1 March 1988, that is to say two and a half months prior to 15 May 1988, the date set for the start of the work in Article B 28.1 of the special conditions. The clauses under which the contract must be awarded within a period of 180 calendar days, starting the day following that on which tenders are opened (Article A 15) and remain valid for 600 calendar days (Article B 13.1) are not, it considers, to be applied, since a reasonable interpretation of the terms under which the work is to be carried out means that only the starting and finishing dates fixed for the work (15 May 1988 and 27 February 1989 respectively) may be regarded as decisive.
8. To CFE's argument the Parliament replies, principally, that Article B 13.1 of the special conditions prohibits any price variation (see point 4 above). CFE cannot circumvent that prohibition by demanding that its tender price be updated. The Parliament then analyses CFE's demand that the price be updated and distinguishes two stages, a precontractual stage up to 19 July 1988 and a contractual stage after that date.
9. My assessment. First, I must make it clear that I cannot share CFE's view that, in the light of Article B 28.1, a reasonable interpretation of the general conditions rules out the application of Articles A 15 and B 13.1 of the special conditions (for the wording of all those articles see point 4 above). To that end, CFE relies upon — in my opinion wrongly — inter alia Article 1161 of the Belgian Civil Code concerning the interpretation of contracts. That article provides that all the clauses in a contract shall be interpreted by reference to one another, so that each is interpreted in the manner called for by the document as a whole. Only if Articles A 15, B 13.1 and B 28.1 of the special conditions were inconsistent with each other could they be derogated from. However, as I intend to demonstrate, that is not the case.
10. Quite apart from the foregoing, the objection raised by CFE concerning the delay in placing the order also falls foul of Article 38 of the Royal Decree. Paragraph 1 of that article provides:
11. Nor, in my opinion, does CFE succeed in establishing that the Parliament committed any wrongful act or omission covered by Article 16(1) of the general conditions (see the wording in point 7 above). It follows from the foregoing analysis of the relevant contractual provisions that there is no question of omissions, delays or conduct of whatever nature, since under the contract the Parliament had 180 calendar days to choose a contractor.
12. Nor does it seem to me that the requirements of Article 16(2) of the general conditions (see the wording in point 7 above) are met. For that purpose, the successful tenderer must first have suffered very significant damage. It cannot be inferred from Belgian case-law that a price increase of 4% constitutes such very significant damage. Furthermore, it is very doubtful whether, as is required under Article 16(2), the price increases in question were unforeseeable for CFE and whether CFE took all the steps necessary to guard against the consequences of those price increases. First, I have difficulty imagining that by the time of the conclusion of the contract CFE was not reasonably able to foresee the price increases in question. It is apparent from its letter of 8 August 1988 (see point 2 above) that at that time it knew of the price increase of around 2% which had occurred between February-March 1988 and July 1988 — an increase which it in no way categorized as exceptional in that letter, but rather as calculable under a standard formula. Nor can I imagine that CFE did not know or could not have known that prices were going to increase again between July and October 1988, an increase which — after the deduction of the 2% noted up to July — amounted to no more than 2% and, accordingly, is in no way as spectacular as CFE would have it.
13. Having regard to the foregoing considerations, I therefore conclude that CFE's first claim seeking an updating of its tender price to BFR 1689055 must be dismissed.
The claim for payment for installation of plaster boards
14. CFE asserts that by installing the plaster boards to beneath the floor and above the false ceiling it carried out the work in accordance with the detailed plans. In a letter of 22 December 1988, the architect required the boards to be installed on the whole elevation of the partitions, which, according to CFE, constituted additional work over and above the work described in the original order. Consequently, in accordance with Article 42 of the general conditions, an extra charge of BFR 393600 is due.
15. In that regard, I also consider that the Court cannot allow CFE's claim. The technical clauses seem to me to be sufficiently clear with regard to how the plaster boards are to be installed. Article 5.1.5 (partitions) lays down:
The claim for payment for installation and reinstallation of the wall panelling
16. Referring to the contract, CFE asserts that, in addition to lot 5.1. carpentry, the order that it received initially also included the job painting booth facing panelling. Those initial provisions implied that the removal of the panelling for painting was CFE's responsibility. Since, however, its panelling did not meet the fire resistance standards laid down by the fire brigade, that work was withdrawn from CFE and the painting work given to another undertaking, ACP. However, CFE had to remove and replace the panelling, which in its view, constituted an additional service, not included in the remainder of the work for which it was responsible. Accordingly, it claims an additional payment under Article 42 of the general conditions.
17. The dispute here is basically one of fact, concerning which the documents before the Court do not show the precise allocation of tasks between CFE and ACP when, following the difficulties summarized by CFE, the painting work was given to the latter. I none the less consider that the Court cannot allow CFE's claim in this regard either. In my opinion, the installation and replacement of panelling has to be considered as carpentry work within the broad meaning of the word and not as painting work, that is to say the work with which ACP had henceforth been entrusted. The obligation concerning the removal and replacement of the panelling therefore seems to me to be logically included in the work in lot 5.1 for which CFE was responsible, that is to say the carpentry work. Furthermore, Article A.2.2 of the special conditions stipulates, concerning the contents of the invitation to tender, that:
18. Since CFE fails in its three claims and the Parliament has applied under Article 69(2) of the Rules of Procedure of the Court for costs in its pleadings, CFE should be ordered to pay the costs.
Conclusion
19. In the light of the foregoing I propose that the Court:
1 Original language: Dutch.
2 Article 2.4 of the contract provides for both the abovemen lioned procedure and the arbitration clause.
3 For the reference to that Ministerial Decree, see below, point 4 and note 6.
4 Article 2.4 ot the contract
5 Article 2.1 of the contract.
6 Article 2.2 of the contract.
7 Article 2.6 of the contract.
8 The Royal Decree was published in the Moniteur Belge of 27 July 1977, p. 9552; the general conditions were published in the Moniteur Belge of 8 September 1977, p. 10931.
9 Article 35(1) of the Royal Decree provides: Tenderers shall continue to be bound by their tender, as possibly amended by the administrative authority, for a period of 60 calendar days as from the day after the opening of tenders, unless the special conditions provide for a different period. (Emphasis added).
10 See Case 306/81 Verras y Parliament [1983] ECR 1755. The citation comes from paragraph 9 of that judgment, in which, in turn, the Court refers to the Amylum case: see Case 101/81 Amylum v Council [1982] ECR 3107, in particular at para. 25.
11 The time limit of 18C days from the day of the opening of tenders gave the Parliament until 27 July 1988 to notify the tenderers oi its choice
12 The situation in which the tenderer agrees to maintain his tender only if he is given a higher price is regulated by the second paragraph of Article 38 of the Royal Decree: in that case, the competent authority may, instead of recommencing the procedure, agree to the price increase, refer to the other tenderers in the order in which their tenders arc ranked, or ash all the other tenderers to review their prices.
13 See inter alia Civ. Brussels, 8 June 1984, L'entreprise et le Droit, 1985, p. 108, in particular, p. 110 (damage can only be categorized as very significant where it represents at least 10 to 15% of the amount of the tender); Civ. Brussels, 18 September 1986, L'entreprise et le Droit, 1991, p. 388, more particularly at page 392 (damage following an increase in prices of around 3.5%, is not very significant damage).