CJEU rules that third country bidders cannot invoke EU procurement rules
Published on 28th Nov 2024
Ruling states that third country bidders without a reciprocity agreement cannot invoke EU rules to ensure their participation on equal terms with European firms
The Court of Justice of the European Union (CJEU) has ruled in Case C-652/22 on a preliminary ruling to interpret Articles 36 and 76 of Directive 2014/25/EU on procurement by entities operating in the water, energy, transport, and postal services sectors (special sectors).
In this case, a Turkish company participated in the tendering of a public contract for the construction of railway infrastructure in Croatia. The Turkish company appealed the decision to award the contract on the grounds of infringement of the principles of equal treatment and transparency laid down in Directive 2014/25/EU. The Croatian court hearing the case referred the matter to the CJEU for a preliminary ruling.
International reciprocity agreement required
The CJEU dismissed the question for preliminary ruling, stating in its judgment that Directive 2014/25/EU applies to EU procurement procedures and guarantees equal treatment between economic operators. However, this right only extends to Member States or third countries which have signed international agreements with the EU ensuring reciprocal and non-discriminatory access to public procurement. As Turkey is not a party to any such agreement with the EU, Turkish operators cannot invoke this directive to demand equal treatment with EU tenderers.
EU's exclusive competence
Furthermore, the CJEU highlights the exclusive competence of the EU in the area of common commercial policy (as provided for in Article 207 of the Treaty on the Functioning of the European Union), which includes regulating the access by third-country operators to public contracts in the EU. Therefore, Member States cannot unilaterally grant equivalent participation rights to third-country operators without an international reciprocity agreement. In other words, although these third-country operators can participate in tenders if the contracting authority allows them to, they cannot claim the rights guaranteed by the directive or demand that they be applied to them on equal terms.
Article 43 violation
Finally, the judgment concludes that allowing an interpretation of Directive 2014/25/EU that would permit economic operators from third countries without an international reciprocity agreement to invoke the provisions of the directive would violate its Article 43. This limits the right to no less favourable treatment to countries with specific agreements with the EU that ensure reciprocal and non-discriminatory access.
Osborne Clarke comment
The CJEU's judgment marks a milestone in EU public procurement policy. By establishing that economic operators from third countries cannot invoke EU public procurement rules without an international agreement, the court reinforces the Union's exclusive competence in this area. This decision underlines the importance of international agreements in guaranteeing fair and reciprocal access to public procurement markets, ensuring that the rules of the game are clear and equitable for all bidders.
If you would like to know more about the content of the CJEU ruling or any other public procurement issues, please do not hesitate to contact one of our experts listed below or your usual contact at Osborne Clarke.
