Analysis: “To disclose or not to disclose – Klaipėdos regiono atliekų tvarkymo centras (C-927/19)” by Piotr Bogdanowicz
At the request of the Lithuanian Supreme Court (Lietuvos Aukščiausiasis Teismas), in Klaipėdos regiono atliekų tvarkymo centras (C-927/19) the Court of Justice tried to find a proper balance between the protection of the confidential information provided by a tenderer and the effectiveness of the rights of defence of other tenderers. The case also concerned several other aspects, but in this Analysis I will only focus on the confidentiality issues. In any case, it is worth mentioning that the judgment was issued by the Grand Chamber which in public procurement cases does not happen very often.
In the case at hand, one tenderer attempted unsuccessfully to gain access to the tender of another tenderer. The contracting authority itself very actively prioritised the right of this other tenderer in order to protect its confidential information. That practice, which apparently is common in Lithuania, results in the rights of tenderers being only partly protected. In disputes relating to the award of public contracts, the unsuccessful tenderers have less information than the other parties to those disputes. Furthermore, the effective protection of their rights depends on whether the competent national court decides to classify the information they request as confidential. A decision by which the court does not grant a request for access to such information may diminish an unsuccessful tenderer’s chances of having its action against the decision to award the contract upheld.
Consequently, the Lithuanian Supreme Court asked the Court of Justice, firstly, whether the so-called Remedies Directive (Council Directive 89/665 on the coordination of the laws, regulations and administrative provisions relating to the application of review procedures to the award of public supply and public works contracts) must be interpreted as meaning that a decision of a contracting authority refusing to disclose to an economic operator the information deemed confidential in the application file or in the tender of another economic operator can be challenged before a court and, if necessary, in a prior administrative review procedure.
The Court of Justice held that this is indeed the case. The position of the Court of Justice should not be surprising. In particular, it is clear from its case law that the concept of ‘decisions taken by the contracting authorities’, which can then be challenged, must be interpreted broadly. Nothing in the law prevents an unsuccessful tenderer from commencing legal proceedings solely against the refusal to disclose to it information deemed confidential, without challenging the legality of other decisions of the contracting authority. At the same time, under the Remedies Directive, national law may require that such a tenderer first seek review with the contracting authority before seeking judicial review.
Secondly, the Lithuanian Supreme Court enquired whether the Remedies Directive and the Public Procurement Directive (Directive 2014/24 on public procurement) must be interpreted as meaning that both the contracting authority and, as the case may be, the competent national court are required to disclose to an economic operator which has requested of it all the information contained in the documents submitted by a competitor, including the confidential information contained therein. The referring court also wished to know whether, in the event of a refusal to disclose information on the ground of its confidentiality, the contracting authority must state reasons for its position regarding the confidential nature of that information.
Rather unsurprisingly, the Court of Justice held that a contracting authority which is requested by an economic operator to disclose information deemed confidential contained in the tender of a competitor to which the contract has been awarded is not required to communicate that information where its disclosure would infringe the rules of EU law relating to the protection of confidential information. However, the justification of the Court of Justice in this respect lacks clarity. For instance, the Court of Justice pointed out that if the contracting authority has doubts as to the confidential nature of the information submitted by given tenderer, it must, before taking a decision granting the applicant access to that information, give that tenderer the opportunity to provide additional evidence in order to ensure that its rights of defence are respected. It is not clear what the Court of Justice means by providing ‘additional evidence’. In particular, if a tenderer does not demonstrate in its tender the confidential nature of the information, should the position of the Court be interpreted as giving to him a second chance. This would be doubtful. Volenti non fit iniuria.
If the contracting authority refuses to disclose information on the ground of confidentiality, it must state reasons for its position regarding the confidential nature of that information. Interestingly, the Court of Justice invoked here the general principle of EU law relating to good administration, which shows how important the duty to state reasons is in the eyes of the Court of Justice. It is because it enables the national courts to review the legality of those decisions and it is therefore a requirement for ensuring that the judicial review guaranteed by Article 47 of the Charter is effective. In any case, national courts must necessarily have at their disposal the information required, including confidential information and trade secrets, in order to be able to determine, with full knowledge of the facts, whether that information can be disclosed, and determine all the relevant matters of fact and of law.
Dr hab. Piotr Bogdanowicz is an Associate Professor of EU Law and EU Procurement Law at Warsaw University.