Important legal notice

61987C0045

European Court reports 1988 Page 04929 Swedish special edition Page 00631 Finnish special edition Page 00651

Opinion of the Advocate-General

Mr President, Members of the Court, 1 . In this action the Commission is asking the Court for a declaration that by allowing the inclusion in the invitation to tender for a public works contract concerning the supply of water for Dundalk of a clause providing that the pipes to be used are to be certified as complying with an Irish standard and by refusing to consider a tender providing for the use of pipes not certified as complying with that standard, Ireland has failed to fulfil its obligations under Article 30 of the EEC Treaty and Article 10 of Council Directive 71/305/EEC of 26 July 1971 concerning the coordination of procedures for the award of public works contracts ( hereinafter referred to as "the directive "). ( 1 )

2 . The promoter of the project, called the "Dundalk Water Supply Augmentation Scheme", is the Dundalk Urban District Council . Within that project, the contract in question is contract No 4 . It concerns the construction of a water-main to transport water from the River Fane source to a treatment plant and thence into the existing supply system . In the contract specifications, Clause 4.29 provides that : "Asbestos cement pressure pipes shall be certified as complying with Irish Standard Specification 188:1975 in accordance with the Irish Standard Mark Licensing Scheme of the Institute for Industrial Research and Standards . All asbestos cement water-mains are to have a bituminous coating internally and externally . Such coatings shall be applied at the factory by dipping ". Following a complaint by an Irish public works undertaking, Walls, one of whose very competitively priced tenders was rejected because it envisaged the use of Spanish Uralita pipes that did not have the certification required, the Commission commenced the procedure provided for in Article 169 of the EEC Treaty .

3 . It is necessary first of all to describe the legal background to the arguments which will enable the Court to determine whether Ireland has failed to fulfil certain of its obligations under Community law .

4 . The Commission considers that the infringement must be considered in the light, in particular, of the obligations arising under Article 10 of the directive . Noting that, according to Article 3 ( 5 ) of the directive, its provisions do not apply in particular to public works contracts awarded by the production, distribution, transmission or transportation services for water, the Commission points out that, since Ireland referred to the compulsory notice provided for in the directive in order to publish a notice of the contract in question in the Official Journal of the European Communities, it is obliged to comply with all of the provisions of the directive, in particular Article 10 ( 2 ). That provision prohibits in principle, in clauses of contracts governed by the directive, "the indication of trade marks, patents, types, or of a specific origin or production"; however, it authorizes such an indication subject to certain conditions if it is accompanied by the words "or equivalent ".

5 . There is no doubt that the contract in question, which was one of a number of contracts for works designed to augment the Dundalk water supply, thus belonged to a category of contracts outside the scope of the directive and that, from that point of view, Ireland was not a priori obliged to comply with its provisions . It is contended, however, that Ireland voluntarily submitted itself to its application .

6 . Apparently, the publication of the notice of the contract in question in accordance with the conditions laid down in the directive was initially linked to Ireland' s plan to seek Community finance for the project . Its plan came to nothing but the Commission wishes the Court to declare that once a Member State publishes, on its own initiative, a notice of an invitation to tender in the form provided for in the directive, it must subsequently apply all the provisions of the directive, so that the apparent situation is complied with, as it were .

7 . With regard to that argument, which has been supported by Spain, I share the view of Ireland that the perfectly clear wording of the provisions excluding contracts relating to the production, distribution, transmission or transportation of water from the scope of the directive must prevail . To those provisions the Community legislature has added no qualification to the effect that authorities awarding contracts may voluntarily make their invitations to tender subject to a set of rules which is a priori inapplicable to them . I do not believe that in its judgment the Court may infer, from the form of the publication of a notice of invitation to tender, consequences which the Community legislature, which laid down those formal requirements, did not envisage .

8 . Neither the Commission nor Spain has truly explained how, as a matter of law, the Member States could unilaterally, in the absence of any supporting legal provision, override the effect of Article 3 ( 5 ) of the directive and no previous judgments of the Court have been cited in support of this view .

9 . Certainly, one cannot ignore the need to protect the interests of contractors who might draw certain conclusions from publication of the notice in the Official Journal of the European Communities . However, it seems to me that, given the Community legislature' s very clear position as regards the exclusion of certain contracts from the scope of the directive, a qualification added by a decision of the Court to the effect that a Member State may voluntarily submit itself to the application of the provisions of the directive would have the disadvantage of introducing ambiguity into the interpretation of the provisions of a directive where there is none at present . In several of its judgments the Court has emphasized in this regard the necessity for Member States not to place economic operators in a position of uncertainty through contradictions in legislation or regulations . ( 2 ) In my view, that principle applies a fortiori to strictly Community provisions and in the present circumstances prohibits the perfectly clear meaning of Article 3 ( 5 ) of the directive from being obscured .

10 . For that reason I consider that in the present case the directive could not apply to the contract in question and consequently that it is unnecessary to consider how Ireland failed in this case to fulfil the obligations laid down therein .

11 . It would therefore appear that Ireland' s conduct may be assessed only in the light of the obligations arising under Article 30 of the Treaty .

12 . Here again, Ireland considers that the provisions of Article 30 cannot apply to the facts referred to by the Commission and that its reliance on Article 30 has no sound basis .

13 . That view is based on an apparently simple line of argument . Ireland is being challenged on an issue concerning the non-conformity with Community law of one aspect of the invitation to tender for a public works contract . Invitations to tender are governed by provisions which implement the articles of the Treaty relating to the freedom to provide services . Therefore, Ireland' s conduct cannot, according to the case-law of the Court, be assessed with reference to the provisions of the Treaty relating to the free movement of goods . Ireland relies in this connection on the judgment of the Court of 22 March 1977 in Ianelli v Meroni in which the Court stated that :

14 . Before assessing the merits of Ireland' s point of view, it must be set out in somewhat greater detail . Invitations to tender for public works contract are governed by Directive 71/305 . That directive is based in particular on Article 59 ( 2 ) and Article 66 of the Treaty . A public works contract should therefore be regarded as a provision of services and any challenge to a clause in such a contract should be examined with reference to the requirements of the freedom to provide services . Each clause, whatever its subject-matter, is merely ancillary to the provision of the services . Therefore, in the case of obstacles covered by specific provisions of the Treaty, as referred to in the judgment in Ianelli, Article 30 cannot be relied upon .

15 . For the sake of completeness it must be noted that ultimately that line of argument would necessarily lead to the conclusion that any attempt to find an infringement of obligations arising under the Treaty would be futile in the present case . Besides the fundamental impossibility of relying on the obligations laid down in Article 30, there is the effect of the special provision of the directive, ( 4 ) which excludes from the scope of the directive in particular public works contracts relating to the supply of water . Such contracts, being governed ratione materiae by the rules of the Treaty relating to the freedom to provide services, fall outside the provisions of the directive implementing those Treaty rules by virtue of an exception provided for in the directive .

16 . Like the Commission and Spain, I am not convinced by that line of argument .

17 . First of all, it is necesary to recall how, according to the case-law of the Court, the scope of Article 30 is delimited in relation to that of other provisions of the Treaty . In its judgment of 3 March 1988 in Bergandi the Court stated that Article 30

18 . In actual fact, an examination of the case-law of the Court leads to the conclusion that in general the clear desire is for the maximum number of obstacles to the importation of goods to be caught through Article 30 .

19 . One illustration is to be found in the judgments in cases concerning processes for the manufacture of physical articles where the Court relies on Article 60 of the Treaty so as to let classification as the provision of a service operate only in subordination to classification as supply of goods . ( 7 )

20 . An even more convincing illustration of the "attractive effect" of Article 30 is afforded by the case-law of the Court concerning the applicability of Article 30 to operations covered by the provisions on State aids . In its judgment in Ianelli, cited above, the Court ruled :

22 . In fact, the only cases in which the Court has in the past considered that the application of certain provisions of the Treaty precludes reliance on Article 30 are those concerning "obstacles which are of a fiscal nature or have equivalent effect", ( 11 ) which corresponds closely to the abovementioned passage from the Bergandi judgment . ( 12 )

23 . It may therefore be deduced from the case-law of the Court that the fact that a given situation is, as a whole, governed by certain provisions of the Treaty does not in all cases prevent a particular aspect of that situation from giving rise to the application of Article 30 . More precisely, the fact that a service is provided would not appear to exclude an assessment of the compatibility of certain aspects of the provision of that service with Article 30 .

24 . That impression can only be reinforced by a reading of the judgment of 30 April 1974 in Sacchi in which the Court ruled that, although the transmission of television signals, including those in the nature of advertisements, comes, as such, within the rules of the Treaty relating to services, trade in material, sound recordings, films, apparatus and other products used for the diffusion of television signals is subject to the rules relating to freedom of movement for goods . ( 13 )

25 . The case-law of the Court, in the light of that judgment, therefore gives grounds for considering that, although a public works contract constitutes a provision of services, the materials used to perform it are covered by the provisions of Article 30 .

26 . In support of that view, which, I believe, simply takes account of the principles laid down in the judgments of the Court, I would like to put forward a consideration prompted by the particular legal factors of this case . In my opinion, Ireland' s argument leads to a considerable weakening of the effectiveness of certain fundamental rules of the Treaty, those relating to the free movement of goods . To say that all the aspects of a public works contract are covered exclusively by the provisions of the Treaty concerning the freedom to provide services when the directive implementing those provisions in the field of public works contracts excludes from its scope contracts relating to energy and water would ultimately render the principle of free movement ineffective as regards materials of considerable importance . I do not believe that such a situation could have been envisaged by the authors of the Treaty . Nor can I imagine that the Community legislature, which drafted the directive, had the intention or even the power to frustrate to some extent the application of the fundamental provisions of the Treaty on freedom of movement in that way .

27 . I therefore consider that the interpretation of the rules of the Treaty relating to the free movement of goods and the freedom to provide services, as regards the relation between their respective fields of application, must not entail the ineffectiveness, with regard to major areas of trade, of a fundamental provision which has been recognized by the Court as having direct effect ( 14 ) or the invalidity of a set of Community rules .

28 . Incidentally, it may also be noted that certain provisions of the directive, for example Article 10, essentially implement the principle of the free movement of goods . This well illustrates that not all the aspects of a public works contract are covered exclusively by the rules relating to the freedom to provide services .

29 . I am therefore satisfied that there are no grounds for accepting Ireland' s argument and that it is now necessary to consider the conduct which the Commission regards as a breach of Ireland' s obligations under Article 30 of the EEC Treaty . In other words, the question is whether Ireland' s conduct in this case meets the classic definition of a measure having equivalent effect given in the judgment in Dassonville . ( 15 )

64.In this case, however, the Court is confronted with a very different situation. The requirement of compliance with IS 188 does indeed show the characteristics of consistency and generality in Ireland, as the Irish Government admitted when it stated that this was "in accordance with the usual practice followed in relation to public works contracts in Ireland". (28) Hence the inclusion of the contested clause was not an isolated act, but constituted a specific manifestation of a general practice and, in addition, brought that practice to the attention of the Community institutions.

65.It is for that reason that I consider that it is possible to hold that there has been a failure to fulfil obligations in this case, moreover, without really straining the terms of the Court's case-law.

66.Indeed, after setting out the requirement for "a certain degree of consistency and generality", the Court's abovementioned judgment of 9 May 1985 goes on to say that that generality must be

"assessed differently according to whether the market concerned is one on which there are numerous traders or whether it is a market ... on which only a few undertakings are active",

in which case

"a national administration's treatment of a single undertaking may constitute a measure incompatible with Article 30". (29)

67.It appears to me to be possible to take a lead in this case from that relaxation of the requirements of consistency and generality. As I have already stated, it can be considered that public works contracts of the type at issue afford the main commercial outlet for asbestos cement pipes. It is not an everyday occurrence for sizeable contracts to be put out to tender, and each such contract has major commercial consequences in two respects. Each contract represents in itself a commercial project for manufacturers and, depending on the size of the contract, a barrier to imports erected with respect to a given contract may have significant consequences immediately. But it must be borne in mind that a barrier set up with respect to a particular contract also has implications for later contracts, and hence future commercial projects, in so far as in the light of their first experience public works contractors will tend not to provide for the use of imported material in their tenders.

68.Accordingly, in view of the magnitude of the potential short - and medium-term effects on imports of a single public works contract, I consider that a barrier to imports in connection with such a contract is capable of constituting a failure to fulfil obligations under Article 30. The particulars of the case before the Court seem to me to fit perfectly within this analytical framework and justify the Court's granting the Commission's application.

69.This would establish an infringement in respect of a situation which seems, in very tangible terms, to be completely alien to the principles underlying the EEC. For as there are only two firms which have been granted the Irish Standard Mark Licence in respect of IS 188, namely an Irish firm, for all sizes of pipe, and a German firm, for a particular size of pipe, in most cases the Irish firm is predestined to be the supplier of the pipes before the tenders are even considered.

70.In its application the Commission asks the Court to declare that Ireland has failed to fulfil its obligations by allowing the inclusion of the contested clause in the Dundalk contract "and consequently refusing to consider (or rejecting without adequate justification)" a tender providing for the use of asbestos cement pipes manufactured to an alternative standard affording equivalent guarantees. It has not been possible to determine as clearly as could be wished from the Commission's answers to the questions put by the Court both during the written procedure and at the hearing the nature of the claim relating to the refusal to consider the offer or its rejection without adequate justification.

71.If that limb of the claim is separate from and subsidiary to the claim concerning the inclusion of the contested clause, the Court should rule on it only if it holds that there has been no failure to fulfil obligations with respect to the first limb. In that regard, the failure to fulfil obligations appears to me to be sufficiently clear-cut as to make it unnecessary to consider that alternative limb of the claim, and I further take the view that if the Court were to hold that there has been no failure to fulfil obligations in respect of the first limb, it would have to reach the same conclusion for the same reasons as regards the second, since the same Community rules are alleged to have been infringed in each case.

72.If the second part of the Commission's claim is in fact directed at the mere implementation of the measure complained of in the first part, the Court may refer to the solution adopted in its aforementioned judgment of 18 March 1986 in Commission v Belgium, (30) and hold that separate complaints are not involved and that therefore a separate decision is not called for.

73.I therefore propose that the Court should

(1) Declare that, by including in the contract specification for the Dundalk Water Supply Augmentation Scheme: Contract No 4, Clause 4.29 requiring asbestos cement pressure pipes to be certified as complying with Irish Standard Specification IS 188:1975, Ireland has failed to fulfil its obligations under Article 30 of the EEC Treaty;

(2) Order Ireland to pay the costs.

(+) Translated from the French.

(1) OJ, English Special Edition 1971 (II), p. 682.

(2) See in particular the judgment of 4 April 1974 in Case 167/73 Commission v France ((1974)) ECR 359, and the judgment of 25 October 1979 in Case 159/78 Commission v Italy ((1979)) ECR 3247.

(3) Case 74/76 Ianelli v Meroni ((1977)) ECR 557, paragraph 9.

(4) Article 3 (5), cited above.

(5) Case 252/86 Bergandi ((1988)) ECR, paragraph 33.

(6) Judgment of 11 July 1985 in Joined Cases 60 and 61/84 Cinéthèque SA and Others v Fédération nationale des cinémas français ((1985)) ECR 2605, at p. 2615.

(7) Judgement of 7 May 1985 in Case 18/84 Commission v France ((1985)) ECR 1339, paragraph 12, and Joined Cases 60 and 61/84, cited above, paragraph 10.

(8) Case 74/76 Ianelli v Meroni, cited above, paragraph 2 of the operative part.

(9) Case 18/84 Commission v France, cited above, paragraph 13.

(10) Case 103/84 Commission v Italy ((1986)) ECR 1759, paragraph 19.

(11) Case 74/76 Ianelli v Meroni, cited above, paragraph 9.

(12) Case 252/86 Bergandi, cited above, paragraph 33.

(13) Case 155/73 Sacchi ((1974)) ECR 409, paragraph 1 of the operative part.

(14) Case 74/76 Ianelli v Meroni, cited above, paragraph 1 of the operative part.

(15) Judgment of 11 July 1974 in Case 8/74 Procureur du Roi v Dassonville ((1974)) ECR 837, at p. 852, paragraph 5.

(16) Case 104/75 ((1976)) ECR 613.

(17) Case 21/84 ((1985)) ECR 1355.

(18) Defence, pp. 22 and 23.

(19) Case 104/75 de Peijper, cited above, paragraph 17.

(20) Judgment of 27 March 1984 in Case 169/82 Commission v Italy ((1984)) ECR 1603.

(21) Judgment of 10 March 1987 in Case 199/85 Italy v Commission ((1987)) ECR 1039.

(22) Judgment of 26 May 1982 in Case 149/79 Commission v Belgium ((1982)) ECR 1845.

(23) Judgment of 18 March 1986 in Case 85/85 Commission v Belgium ((1986)) ECR 1149.

(24) Judgment of 24 November 1982 in Case 249/81 Commission v Ireland ((1982)) ECR 4005.

(25) Judgment of 18 June 1975 in Case 94/74 IGAV v ENCC ((1975)) ECR 699.

(26) Judgment of 5 May 1970 in Case 77/69 ((1970)) ECR 237.

(27) Case 21/84 ((1985)) ECR 1355.

(28) Defence, p. 16.

(29) Case 21/84, cited above, paragraph 13.

(30) Case 85/85, cited above, paragraph 28.