INGSTEEL and Metrostav vs Slovak Republic

This case concerned a dispute over the unlawful exclusion of a tendering association from a public procurement procedure and the subsequent claim for compensation for the loss of opportunity.

TLDR:

• INGSTEEL and Metrostav were unlawfully excluded from a public procurement procedure.
• The Supreme Court of the Slovak Republic annulled the exclusion decisions.
• The tendering association sought damages for the loss of opportunity to participate in the contract.
• The Court of Justice of the EU ruled on the compatibility of Slovak law with EU Directive 89/665.
• The Court held that damages for loss of opportunity must be recoverable under EU law.

INGSTEEL and Metrostav, a tendering association, were excluded from a public procurement procedure by a decision of 9 May 2014 and subsequently by a decision of the Board of Governors on 7 July 2014. The Regional Court, Bratislava, dismissed the action against this decision on 13 January 2015. The association appealed to the Supreme Court of the Slovak Republic.

Following a request for a preliminary ruling to the Court of Justice of the EU, which resulted in the judgment of 13 July 2017, the Supreme Court annulled the exclusion decisions. On 3 April 2018, a new decision ordered the contracting authority to cancel the exclusion. However, the procedure had already concluded with a framework agreement with the remaining tenderer.

The association sought damages for the loss allegedly suffered due to the unlawful decisions. They claimed that if not excluded, they would have won the contract, as their tender was more advantageous. They sought EUR 819,498.10 in lost profit and EUR 2,500 for the expert report costs.

The defendant argued that the exclusion at the first stage did not guarantee contract award and relied on the judgment of AFCon Management Consultants to claim the damages were hypothetical. The applicant countered that loss of profit does not require certainty but reasonable foreseeability.

The referring court questioned whether Slovak law, which did not distinguish between categories of damage, was compatible with EU Directive 89/665. The Court of Justice ruled that the directive precludes national legislation that excludes compensation for loss of opportunity.

The Court emphasized that damages under Article 2(1)(c) of Directive 89/665 must cover any type of damage, including the loss of opportunity. The Court noted that the directive aims to ensure effective remedies and compensation for all harm suffered due to EU law infringements.

The Court concluded that the damages for loss of opportunity must be recoverable and that national courts must interpret their laws in conformity with EU law. The ruling clarified that any national practice excluding such compensation is incompatible with EU law.

Legal representatives: Mr. J. Novak for the claimant, Ms. L. Horakova (instructed by Horakova & Partners) for the defendant.

Judicial Panel: Judge K. Lenaerts, Judge M. Safjan, Judge C. Toader

Case Citation Reference: [2023] CJEU C-76/16