On 8 February 2018 the European Court of Justice handed down its Judgment in Case C-144/17, Lloyd’s of London v Agenzia Regionale per la Protezione dell’Ambiente della Calabria, concerning the decision of the latter to exclude two syndicates of Lloyd’s from the procedure for the award of a public service contract for insurance. More precisely, the request for a preliminary ruling concerned the interpretation of the principles of transparency, equal treatment and non-discrimination which derive from Articles 49 and 56 of the Treaty on the Functioning of the European Union (TFEU) and are referred to in Article 2 of Directive 2004/18/EC, of 31 March 2004, on the coordination of procedures for the award of public works contracts, public supply contracts and public service contracts[1].

In the case at issue the Calabria Regional Environmental Protection Agency (‘Arpacal’ – Italy) decided to exclude two Lloyd’s syndicates from the open tendering procedure for the award of a contract for insurance cover services on the ground of infringement of Article 38(1)(m), quater, of Legislative Decree No 163/2006[2]. The said Decree[3] provided that tenderers which ‘… are, in relation to another participant in the same tendering procedure, in a situation of control for the purposes of Article 2359 of the Codice civile (Civil Code), or in any relationship, including a de facto relationship, where the situation of control or relationship means that the tenders are attributable to a single decision-making centre’ would be excluded from participation in a procedure for the award of concessions and of public works, supply and service contracts, and could not conclude contracts pertaining thereto or sub-contracts.

Firstly it is important to clarify that Lloyd’s is a recognised grouping of members that are natural and legal persons, which members, whilst acting through individual groups — the syndicates — operate independently from one another and in competition with one another. However, given that none of the internal structures has autonomous legal personality, syndicates may only act through the General Representative, who is the sole representative for each country[4]. In the main proceedings, the national legislation at issue allows two syndicates of Lloyd’s to participate in the same tendering procedure relating to insurance, even when their tenders have each been signed by Lloyd’s General Representative for Italy. But Arpacal excluded those two syndicates from the procedure on the ground, specifically, that as their tenders had each been signed by the Special Agent of that Representative, the latter must have been aware of the content of those tenders[5].

The Court noted that Article 45 of Directive 2004/18 does not preclude the option for Member States to maintain or establish, in addition to those grounds for exclusion, substantive rules intended, in particular, to ensure, with regard to public procurement, observance of the principles of equal treatment of all tenderers and of transparency, which constitute the basis of the EU directives on public procurement procedures, provided that the principle of proportionality is observed[6]. Observance of the principle of proportionality requires that the contracting authority must examine and assess the facts, in order to determine whether the relationship between two entities has actually influenced the respective content of the tenders submitted in the same tendering procedure, a finding of such influence, in any form, being sufficient for those undertakings to be excluded from the procedure[7]. The automatic exclusion of candidates or tenderers that are in a relationship of control or of association with other competitors goes beyond that which is necessary to prevent collusive behavior and, as a result, to ensure the application of the principle of equal treatment and compliance with the obligation of transparency[8].

The mere fact that tenders such as those in the main proceedings have been signed by the same person, namely the Special Agent of Lloyd’s General Representative for Italy, cannot justify their automatic exclusion from the tendering procedure at issue[9]. In taking as their sole basis for excluding the syndicates the fact that the tenders were signed by the Special Agent of Lloyd’s General Representative for Italy, the decisions at issue thus presumed there to be collusion, without the syndicates having the possibility of proving that their respective tenders had been drawn up wholly independently of one another[10]. Lastly, the Court agrees with the written observations submitted by the European Commission, that the national legislation at issue in the main proceedings does not appear to allow such an automatic exclusion, but nonetheless allows the contracting authority to exclude tenderers where it finds, on the basis of unambiguous evidence, that their tenders were not drawn up independently, which is a matter that falls to be determined by the referring court[11]. On those grounds, the Court ruled that:

“… the principles of transparency, equal treatment and non-discrimination which derive from Articles 49 and 56 TFEU and are referred to in Article 2 of Directive 2004/18/EC of the 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 must be interpreted as meaning that they do not preclude legislation of a Member State, such as that at issue in the main proceedings, which does not allow two syndicates of Lloyd’s of London to be excluded from participation in the same procedure for the award of a public service contract for insurance merely because their respective tenders were each signed by the General Representative of Lloyd’s of London for that Member State, but instead allows their exclusion if it appears, on the basis of unambiguous evidence, that their tenders were not drawn up independently…”.