Karanovic & Partners in cooperation with local lawyers | View firm profile
On the 8th
of June, 2017, the Court of Justice of the European Union (CJEU) reached an
important decision in the case Medisanus
d.o.o. v General Hospital Murska Sobota (C-296/15) concerning public
procurement procedures. The judgement is relevant from both the procedural
aspect – since the National Review Commission (DKOM) was acknowledged for the
first time as a “national court” for the purposes of Article 267 of the Treaty
on the Functioning of the European Union (TFEU), as well as from the
substantive point of view – due to the emphasis on the principle of equal
treatment and the prohibition of discrimination within public procurement
procedures.
Disputed Public Procurement
General Hospital
Murska Sobota reached a decision, on public procurement in 2015, concerning the
purchase of two types of drugs derived from plasma. The tender documentation
specified as a technical prerequisite that these drugs have to be obtained from
Slovenian plasma. This prerequisite was included in the tender documentation
based on the provision of the Law on Medicinal Products,[1]
which stipulates that supplies must come as a matter of priority from medicinal
products manufactured from plasma collected in Slovenia.[2]
According to the opinion of the contracting authority, this should not be
contravening EU primary law, since deviation from Article 34 of TFEU may be
justified on the grounds of public health protection. Consequently, such a
provision of the Law on Medicinal Products contributes to the national
self-sufficiency by encouraging Slovenian citizens to make voluntary blood
donations.
The only contractor
that could fulfil such a prerequisite was the Institute for Transfusion
Medicine of the Republic of Slovenia. The company Medisanus d.o.o., which was
offering drugs of the same type but from foreign plasma, after the rejection of
its tender application, challenged the decision before DKOM. The procedure was
subsequently stalled by the DKOM, since it made a request for a preliminary
ruling before the CJEU. Namely, whether the request for a plasma of Slovenian
origin is in accordance with the Public Procurement Directive.[3]
DKOM is Entitled to Request a Preliminary
Ruling before the CJEU
For the first time in
DKOM’s existence, the CJEU had the opportunity to assess whether the DKOM could
be considered as the “national court” for the purposes of Article 267 TFEU.
Considering the established case law on similar national revision bodies in member
states,[4] the
CJEU ruled that the DKOM fulfils all relevant criteria for the obtainment of
such status which entitles the DKOM to request preliminary rulings. The DKOM
has, namely, no connection with contracting authorities whose decisions it
reviews, its members enjoy the same safeguards as judges in relation to their
appointment, term of office and the grounds for removal. Its members are,
furthermore, independent and the jurisdiction of the DKOM is mandatory and
permanent. Also, the DKOM is established pursuant to a special law and the
procedure is inter partes.
Prerequisite on National Origin
of Plasma is Contrary to EU Law
The CJEU established
that the drugs derived from human blood or plasma are “goods” in terms of
Article 34 TFEU, and are as well “products” under the Public Procurement
Directive. CJEU furthermore states that the prerequisite for a national origin
falls under the scope of Article 34 TFEU, which prohibits obstacles to the free
movement of goods. This prohibition covers both the quantitative restrictions,
as well as measures that are capable of hindering, directly or indirectly and
actually or potentially, imports between member states.[5]
This prohibits all discriminatory practices that limit the free movement of
goods within the EU.
The paramount
conclusion of the CJEU is that the prerequisite on national origin of plasma is
discriminatory per se, since it does
not allow companies that collect plasma from other countries to successfully
participate in the tender procedures. It is true that the Public Procurement
Directive itself enabled references to certain origin, however only if this is
justified by the subject matter of the procurement and such reference is only
exceptional. It also derives from the CJEU case law that in such cases a specific
source stated in the tender documentation has to be accompanied by the words
“or equivalent” in order for the tender to be in compliance with EU law.[6]
There was no such wording in the case at hand.
Pursuant to the fact
that it is possible to deviate from the principle of the free movement of goods
in certain exceptional cases, the CJEU deliberated whether such deviation is
justified. The sole reason for justification could only be based on the grounds
of public health protection.[7]
The CJEU did note that the prerequisite for a national origin of plasma pursues
a legitimate objective. However, the priority principle for medicinal products
manufactured industrially from Slovenian plasma does not contribute decisively
to encouraging the Slovenian population to make voluntary blood donations.
Thus, the CJEU held that the priority principle is disproportionate.
Conclusion
The most important
conclusion for the practice on public procurements will be the fact that
neither the Public Procurement Directive nor the primary EU law forbid tender
documentation provisions which would require that drugs are derived from
Slovenian plasma, even if national legislation requires such a provision. A decision
like that, which further limits the scope of potential deviations from the free
movement of goods, will be beneficial for public procurement procedures, since
such practices are not uncommon. In light of enhancing the professionalism of
the DKOM, the decision on admissibility of its request should be welcomed.
Thus, we can anticipate further activity from parties which will surely more
often propose to DKOM to request preliminary ruling in cases where ambiguous
legal provisions are at play.
[1] Official Gazette of the Republic of Slovenia,
no. 17/14.
[2] The legal basis for this is Article 6 (71) of
the Law on Medicinal Products.
[3] Although the Directive 2004/18/EC was repealed
by Directive 2014/24/EU on the 18th of April, 2016, the same legal
reasoning applies also under the new Directive.
[4] For example, the judgement in case Consorci Sanitari del Maresme dated 6th
of October, 2015 (C-203/14) and there stated case law.
[5] For example the judgement in case Deutsche Parkinson Vereinigung dated 19th
of October, 2016 (C-148/15), and there stated case law.
[6] Judgement in case Commission v Ireland dated 17 June 1981 (45/87).
[7] Article 36 TFEU.