In 2009, the European Commission launched a procurement procedure for the award of a public works contract in respect of the modernisation of a facility. The European Commission awarded that contract to two companies, including TP, which had concluded a consortium contract with each other beforehand. At the end of the works, upon detecting some defects at the facility, the Commission issued the consortium with an anticipated notice of termination of the contract. The Commission also initiated arbitration proceedings under the auspices of the International Chamber of Commerce (ICC). The arbitral tribunal ordered both companies to pay jointly and severally to the European Union an amount corresponding to the costs necessary to repair the facility. The arbitral tribunal also referred to the conduct of the consortium as grossly negligent.

In October 2022, the Commission adopted a decision under which the company TP was excluded for a period of two years from participating in public procurement and grant award procedures. In that regard, the Financial Regulation 2018[1] provides that the authorising officer responsible may exclude a person or entity, inter alia, where that person or entity has shown significant deficiencies in complying with main obligations in the implementation of a legal commitment financed by the EU budget. In order to find that there was such a failure to comply, the Commission relied on the joint and several liability of company TP as a member of the consortium.

TP brought an action before the General Court of the European Union seeking the annulment of that decision.

First of all, the General Court considers that there is no automatic link between the finding of a failure to comply with contractual obligations and the adoption of an exclusion measure by the authorising officer responsible.

Next, it states that the authorising officer responsible must, before adopting an exclusion measure in respect of a person or entity concerned, conduct a specific and individual assessment of the conduct of that person or entity, in the light of all the relevant factors.

Since, in the present case, the Commission merely relied on the joint and several liability of the company TP, as a member of the consortium, without taking into account the individual conduct of company TP, the General Court annuls the decision of the Commission.

[1] Regulation (EU, Euratom) 2018/1046 of the European Parliament and of the Council of 18 July 2018 on the financial rules applicable to the general budget of the Union, amending Regulations (EU) No 1296/2013, (EU) No 1301/2013, (EU) No 1303/2013, (EU) No 1304/2013, (EU) No 1309/2013, (EU) No 1316/2013, (EU) No 223/2014, (EU) No 283/2014, and Decision No 541/2014/EU and repealing Regulation (EU, Euratom) No 966/2012.

:: Judgment of the General Court in Case T-776/22 | TP v Commission