ORDER OF THE COURT 23 October 2013

ORDER OF THE COURT 23 October 2013 (Refusal to commence proceedings for alleged failure of an EEA State to fulfil its obligations in the field of procurement Actionable measures Admissibility) In Case E-2/13, Bentzen Transport AS, represented by Line Voldstad, advokat, Advokatfirma DLA Piper Norway DA, Oslo, Norway, v applicant, EFTA Surveillance Authority, represented by Xavier Lewis, Director, and Catherine Howdle, Temporary Officer, Department of Legal & Executive Affairs, acting as Agents, Brussels, Belgium, defendant, APPLICATION under the second paragraph of Article 36 of the Agreement between the EFTA States on the Establishment of a Surveillance Authority and a Court of Justice for annulment of the EFTA Surveillance Authority s Decision No 507/12/COL of 19 December 2012 in Case No 71620 concerning the closure of a case against Norway commenced following receipt of a complaint against the State in the field of public procurement, THE COURT, composed of: Carl Baudenbacher (Judge-Rapporteur), President, Per Christiansen and Páll Hreinsson, Judges, Registrar: Gunnar Selvik, having regard to the written pleadings of the parties, makes the following

2 Order I Facts and procedure 1 Bentzen Transport AS ( Bentzen or the applicant ) is an Oslo-based private company which operates in the waste management business. 2 In April 2008, the Waste Management Department of the Municipality of Oslo ( REN ) announced a tender for the award of a contract for waste collection services in that area. The applicant was among the companies that applied. As a result of the procurement procedure, the contract was eventually awarded to Veolia Environmental Recycling AS and Reno Norway AS ( Reno ). 3 The applicant appealed against REN s decision as regards the partial award of the contract to Reno. After the waste management authorities upheld their decision, the applicant filed a formal complaint with the Appeals Board for Public Procurement. 4 On 2 April 2009, the applicant also instituted legal proceedings before Oslo City Court claiming compensation from the Municipality of Oslo. In a judgment of 12 March 2010, the claim was dismissed. The applicant s appeal against that decision was rejected in a judgment of 1 July 2011 by Borgarting Court of Appeal. The applicant appealed against that judgment to the Supreme Court of Norway, which in a decision of 13 December 2011 refused leave to appeal. 5 On 23 March 2012, the applicant lodged a complaint against Norway with the EFTA Surveillance Authority ( ESA ). The complaint concerned the procurement procedure conducted by the Norwegian authorities for the collection of waste in Oslo. The applicant claimed that Norway had failed to fulfil its obligations under the EEA rules on public procurement, and in particular under the act referred to in point 2 of Annex XVI to the EEA Agreement (Directive 2004/18/EC of the European Parliament and of the Council of 31 March 2004 on the coordination of procedures for the award of public works contracts, public supply contracts and public service contracts (OJ 2004 L 134, p. 114), Directive 2004/18 ), in awarding a contract for the collection of such waste. 6 On 4 April 2012, ESA sent a request to the Norwegian Government for information about the award of the contract, with which the Norwegian Government complied. On 9 November 2012, after having reached a preliminary view, ESA contacted the applicant in order to give it the possibility to comment further and to furnish new evidence.

3 7 By Decision No 507/12/COL of 19 December 2012 ( the contested decision ), ESA closed the case. By this act of closure, ESA decided not to initiate the formal infringement procedure laid down in Article 31 of the Agreement between the EFTA States on the Establishment of a Surveillance Authority and a Court of Justice ( SCA ). 8 By an application registered at the Court on 13 March 2013, the applicant brought an action under the second paragraph of Article 36 SCA. The applicant requests the Court to: (1) annul the EFTA Surveillance Authority Decision of 19 December 2012, Case No. 71620, concerning closing a case against Norway commenced following receipt of a complaint against the State in the field of public procurement; (2) order the EFTA Surveillance Authority to pay the costs of the proceedings. 9 The action is based on four pleas in law, namely that ESA infringed: - its duty to uphold Article 2 of Directive 2004/18, and - the fundamental rules of the EEA Agreement applicable to public procurement, as well as - its special duty under Article 23 SCA to ensure that the rules of the EEA Agreement on public procurement are upheld, and finally - its duty to state reasons under Article 16 SCA. 10 By a letter registered at the Court on 18 April 2013, the defendant lodged an application for a decision on the admissibility of the action as a preliminary matter pursuant to Article 87(1) of the Court s Rules of Procedure ( RoP ). 11 The defendant claims that the Court should: (1) dismiss the application as inadmissible; and (2) order the applicant to pay the costs. 12 If its plea of inadmissibility is not accepted, the defendant seeks relief as follows: In the alternative, if the EFTA Court should decide not to dismiss the application as inadmissible, the Authority asks for a new deadline to be set for the submission of a full defence.

4 13 On 15 May 2013, the applicant submitted, pursuant to Article 87(2) RoP, its observations on the preliminary objection and lodged a statement in which it contested ESA s plea of inadmissibility and claimed that it must be considered to have a legal interest in applying to the EFTA Court to annul the decision from ESA. II Legal background 14 According to Article 65(1) of the EEA Agreement ( EEA ), Annex XVI contains specific provisions and arrangements concerning procurement which, unless otherwise specified, shall apply to all products and to services as specified. The provisions on procurement are also subject to monitoring by ESA pursuant to Article 109 EEA. 15 The second paragraph of Article 36 SCA reads: Any natural or legal person may, under the same conditions, institute proceedings before the EFTA Court against a decision of the EFTA Surveillance Authority addressed to that person or against a decision addressed to another person, if it is of direct and individual concern to the former. 16 ESA s functions are defined, inter alia, in Article 31 SCA which reads: If the EFTA Surveillance Authority considers that an EFTA State has failed to fulfil an obligation under the EEA Agreement or of this Agreement, it shall, unless otherwise provided for in this Agreement, deliver a reasoned opinion on the matter after giving the State concerned the opportunity to submit its observations. If the State concerned does not comply with the opinion within the period laid down by the EFTA Surveillance Authority, the latter may bring the matter before the EFTA Court. 17 Article 23 SCA contains a special provision on procurement which reads: The EFTA Surveillance Authority shall, in accordance with Articles 22 and 37 of this Agreement and Articles 65(1) and 109 of, and Annex XVI to, the EEA Agreement as well as subject to the provisions contained in Protocol 2 to the present Agreement, ensure that the provisions of the EEA Agreement concerning procurement are applied by the EFTA States.

5 18 Article 1(1), (2) and (3) of Protocol 2 to the SCA on the Functions and Powers of the EFTA Surveillance Authority in the Field of Procurement reads: 1. Without prejudice to Article 31 and 32 of this Agreement, the EFTA Surveillance Authority may invoke the procedure for which the present Article provides when, prior to a contract being concluded, it considers that a clear and manifest infringement of the provisions of the EEA Agreement in the field of procurement has been committed during a contract award procedure falling within the scope of the acts referred to in points 2 and 3 of Annex XVI to the EEA Agreement. 2. The EFTA Surveillance Authority shall notify the EFTA State and the contracting authority concerned of the reasons which have led it to conclude that a clear and manifest infringement has been committed and request its correction. 3. Within 21 days of receipt of the notification referred to in paragraph 2, the EFTA State concerned shall communicate to the EFTA Surveillance Authority: (a) its confirmation that the infringement has been corrected; or (b) a reasoned submission as to why no correction has been made; or (c) a notice to the effect that the contract award procedure has been suspended either by the contracting authority on its own initiative or on the basis of the powers specified in Article 2(1)(a) of the act referred to in point 5 of Annex XVI to the EEA Agreement. 19 Article 87(1) and (2) RoP reads: 1. A party applying to the Court for a decision on a preliminary objection or other preliminary plea not going to the substance of the case shall make the application by a separate document. The application must state the pleas of fact and law relied on and the form of order sought by the applicant; any supporting documents must be annexed to it. 2. As soon as the application has been lodged, the President shall prescribe a period within which the opposite party may lodge a document containing a statement of the form of order sought by that party and its pleas in law.

6 20 Article 88(1) RoP reads: Where it is clear that the Court has no jurisdiction to take cognizance of an action or where the action is manifestly inadmissible, the Court may, by reasoned order, and without taking further steps in the proceedings, give a decision on the action. III Arguments of the parties with respect to admissibility 21 ESA submits that the application is inadmissible on the ground that a decision not to initiate the procedure laid down in Article 31 SCA is not amenable to judicial review. 22 ESA agrees with the applicant s submission that it has a duty to ensure that the provisions of the EEA Agreement concerning procurement are applied by the EFTA States. This duty arises under Article 23 SCA, read in conjunction with Articles 22 and 37 SCA, Articles 65(1) and 109 EEA, Annex XVI to the EEA Agreement and is subject to the provisions contained in Protocol 2 to the SCA. 23 ESA submits further that, to the extent that its obligations of surveillance are not regulated by Protocol 2 to the SCA, they are governed by the general provisions of the SCA, and Article 31 in particular. 24 The special rules in Protocol 2 to the SCA, cited by the applicant, are in ESA s view first and foremost concerned with the special powers conferred on it when considering, prior to the conclusion of a contract, that a clear and manifest infringement of the procurement rules has taken place. As the applicant s original complaint was a request that ESA evaluate a procurement decision already taken by the Norwegian authorities, ESA considers that those special rules did not govern the contested decision. Hence, ESA takes the view that the contested decision is based on Article 31 SCA. 25 Having regard to the Court s order in Case E-13/10 Aleris Ungplan v ESA [2011] EFTA Ct. Rep. 5, ESA submits that Article 31 SCA and Article 258 of the Treaty on the Functioning of the European Union ( TFEU ) correspond and, according to the principle of procedural homogeneity, it has, in a comparable manner to the European Commission ( the Commission ), a right but no duty to initiate formal proceedings under Article 31 SCA. Accordingly, ESA suggests that the Court should declare the present application inadmissible. 26 Having regard further to Aleris Ungplan, ESA submits also that its decision has no legal effect on the position of the applicant. It contends that this circumstance serves as another justification for the well-established case law of the Court of Justice of the European Union ( ECJ ), according to which a decision of the Commission whether or not to commence proceedings cannot be reviewed in an action for annulment brought by a private party.

7 27 On a general note, the applicant agrees with ESA that, pursuant to Article 31 SCA, it is at ESA s discretion whether to bring a matter before the Court. The applicant further agrees that the SCA provisions which correspond with provisions of the TFEU should be interpreted in a similar manner as a consequence of the principle of homogeneity. By reference to ECJ case law, the applicant submits that as a main rule natural and legal persons cannot invoke Article 256 TFEU in order to obtain a declaration that the Commission has failed to initiate infringement proceedings. 28 However, the applicant contends that ESA has infringed its duty to state the reasons on which its decision is based under Article 16 SCA. It submits that compliance with the duty to give reasons is a key procedural requirement. 29 Moreover, the applicant argues that the reasoning must not be too vague or inconsistent. Instead, it must be coherent and mention figures and essential facts upon which the decision relies. In the applicant s view, however, ESA s reasoning in the contested decision does not provide enough information to ascertain the circumstances under which ESA has applied Directive 2004/18. 30 Furthermore, the applicant contends that ESA has infringed its special duty under Article 23 SCA to ensure that the rules of the EEA Agreement are upheld by the EEA/EFTA States. 31 In response to ESA s submission that it did not assess the applicant s complaint further because the national authority had already taken its decision in the procurement proceedings, the applicant contends that this cannot be considered a legitimate argument. Consequently, the applicant asserts that ESA has failed to meet the requisite standard of assessment in procurement cases. In particular, ESA should have assessed whether there had been a breach of the fundamental principles of EEA law. 32 As essential procedural requirements have not been met, the applicant asserts that it must be found to have legal interest. IV Findings of the Court 33 Article 88(1) RoP provides that the Court may, where an action is manifestly inadmissible, by reasoned order, and without taking further steps in the proceedings, give a decision on the action. After considering the submissions of the parties pursuant to Article 87(1) and (2) RoP, the Court has decided to base its assessment of the case on Article 88(1) RoP. 34 By the present action, brought under the second paragraph of Article 36 SCA, the applicant seeks the annulment of Decision No 507/12/COL of 19 December 2012 by which ESA discontinued its examination of the complaint submitted by the applicant without taking further action on the breaches alleged therein.

8 35 The applicant submits that the application does not concern Article 31 SCA, but rather the special procedures relating to public procurement contracts under Article 23 SCA, according to which ESA is obliged to act. In this regard, the Court notes that, according to Article 23 SCA, the process entailed in the special procedures for public procurement is subject to the provisions of Protocol 2 to the SCA. 36 Under Article 1(1) of that Protocol, ESA may, without prejudice to Articles 31 and 32 SCA, invoke the procedure for which the Article provides when, prior to a contract being concluded, it considers that a clear and manifest infringement of EEA procurement provisions has been committed during a contract award procedure falling within the scope of the acts referred to in Annex XVI to the EEA Agreement. 37 The Court has repeatedly recognised the principle of procedural homogeneity and referred in particular to considerations of equal access to justice and compliance with judgments rendered in infringement proceedings for parties appearing before the EEA courts (see Case E-14/11 DB Schenker v ESA [2012] EFTA Ct. Rep. 1178, paragraph 77 and case law cited). Moreover, the Court has held that homogeneity cannot be restricted to the interpretation of provisions whose wording is identical in substance to parallel provisions of EU law (see DB Schenker v ESA, cited above, paragraph 78, and the order of the Court of 7 October 2013 in Joined Cases E-4/12 and E-5/12 Risdal Touring and Konkurrenten.no v ESA, not yet reported, paragraph 104). 38 The second paragraph of Article 36 SCA corresponds in substance to the fourth paragraph of Article 263 TFEU (see, inter alia, Case E-5/07 Private Barnehagers Landsforbund [2008] EFTA Ct. Rep. 62, paragraph 48). Although it is not required to do so pursuant to Article 3(2) SCA, in assessing the application for annulment pursuant to the second paragraph of Article 36 SCA, the Court finds it appropriate to take account of the reasoning in the case law of the EU courts concerning the fourth paragraph of Article 263 TFEU. 39 The procedure for direct intervention, defined in Article 23 SCA and Protocol 2 to the SCA, corresponds in substance to the special procedures relating to public procurement contracts laid down in Article 3 of Council Directive 89/665 and Article 8 of Council Directive 92/13/EEC. That procedure can neither derogate from nor replace the powers of ESA under Article 31 SCA or the Commission under Article 258 TFEU (see Aleris Ungplan v ESA, cited above, paragraphs 25 to 27, and case law cited). 40 According to this case law, it is irrelevant, when deciding on the admissibility of infringement proceedings in the EFTA pillar of the EEA, whether or not ESA invoked the special procedure in relation to public procurement contracts. ESA alone is competent to decide whether it is appropriate to bring proceedings under the first paragraph of Article 31 SCA for failure to fulfil

9 obligations. Furthermore, the choice between that procedure and the special procedure in matters of public procurement is within ESA s discretion (see Aleris Ungplan v ESA, cited above, paragraph 26). 41 Private applicants do not have the right to challenge a refusal by ESA to initiate proceedings against an EEA/EFTA State for failure to fulfil its obligations under the EEA Agreement (see Aleris Ungplan v ESA, cited above, paragraph 27, and case law cited). 42 That conclusion is not undermined by the applicant s argument that ESA allegedly infringed the applicant s procedural rights, such as the duty to state reasons (see, by comparison, the order of the General Court in Case T-202/02 Makedoniko Metro and Michaniki v Commission [2004] ECR II-181, paragraph 45). 43 Consequently, as the contested decision does not constitute a challengeable act, the application must be dismissed as manifestly inadmissible. 44 For the sake of completeness, it is recalled that the findings contained in ESA s decision to close the case do not have the effect of resolving the dispute between the applicant and the Norwegian authorities as to the legality of the procurement procedures undertaken by those authorities (see Aleris Ungplan v ESA, cited above, paragraph 28 and case law cited). V Costs 45 Under Article 66(2) RoP, the unsuccessful party is to be ordered to pay the costs if they have been applied for in the successful party s pleadings. Since ESA has requested that the applicant be ordered to pay the costs and the latter has been unsuccessful, the applicant must be ordered to pay the costs.

10 On the grounds stated above, THE COURT hereby orders: 1. The application is dismissed as inadmissible. 2. The applicant bears the costs of the proceedings. Carl Baudenbacher Per Christiansen Páll Hreinsson Luxembourg, 23 October 2013 Gunnar Selvik Registrar Carl Baudenbacher President