Public procurement cases

1. Commencement of proceedings

A case relating to public procurement shall be initiated by a written petition.

A case can be submitted to the Market Court by whomever the case concerns and in certain cases by certain authorities. The petitioner can mainly be an undertaking operating in the sector who has participated in competitive tendering or whose participation in the competitive tendering has been prevented by the action of the contracting entity.

The petition shall be submitted to the Market Court within fourteen days of the date on which the tenderer was notified in writing of the decision on the competitive tendering and the grounds thereof, and received written instructions for referral of the case to the Market Court. The fact that the contracting entity and the tenderer chosen by the contracting entity have signed the supply contract does not prevent a petition made within the deadline from being considered.

Before submitting the petition to the Market Court, the petitioner shall inform the contracting entity in writing of its intention to bring the matter before the Market Court.

2. Sanctions that can be ordered by the Market Court

Under the Public Procurement Act, § 9, the Market Court can upon petition:
(1) wholly or partly set aside a decision of a contracting entity;
(2) forbid the contracting entity to apply a section in a document relating to the contract or otherwise to pursue an incorrect procedure;
(3) require the contracting entity to correct its incorrect procedure; or
(4) order the contracting entity to pay a compensation payment to a party who would have had an actual chance of winning the contract if the procedure had been correct.

A compensation payment can be ordered to be paid if the measures defined in subsection (1), (2) and (3) above could be harmful to the opposing party’s interest, a third party’s interest or to the public interest, or if the petition has been submitted after the signing of the supply contract.

In practice, the above subsections (1), (2) and (3) are applied together. If the Market Court sets aside a procurement decision, it also usually prohibits the contracting entity from applying the incorrect award procedure and requires the contracting entity to rectify its incorrect procedure.

The Market Court can impose a conditional fine to enforce compliance with its order relating to prohibition of an incorrect award procedure and rectification of an incorrect award procedure.

When a case relating to public procurement becomes pending, the Market Court can prohibit or suspend implementation of a decision or otherwise order the award procedure to be suspended on an interim basis for the duration of the Market Court proceedings. The Market Court can impose a conditional fine to enforce an injunction relating to an interim order.

The Public Procurement Act, § 8, enacts concerning damages. Damages are not a sanction that can be ordered by the Market Court nor is the Market Court competent to consider claims for damages. Claims for damages shall be lodged with a general lower court.

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4. Hearing of a petition at the Market Court

Unless a petition is dismissed directly, the Market Court provides the contracting entity with an opportunity to respond to the petition.

If the hearing of a case and the ruling to be given in the case might affect the position of the tenderer chosen by the contracting entity, the Market Court provides the tenderer in question with an opportunity to give a statement on the petition.

Once the contracting entity has given the Market Court its response, and the tenderer chosen by the contracting entity has given a statement, if any, the Market Court generally provides the petitioner with an opportunity to make a rejoinder on the response and statement, unless this is evidently unnecessary as regards resolving the case.

In cases relating to public procurement, the proceedings at the Market Court are generally conducted in writing. The Market Court can hold an oral hearing if necessary to clarify the case. An oral hearing can be held in particular when clarification of a case calls for personal testimony or for the hearing of experts.

5. Appeal

A party can appeal a Market Court ruling to the Supreme Administrative Court. The appeal shall be made within thirty days of service of the ruling. A Market Court ruling shall be complied with notwithstanding an appeal unless the Supreme Administrative Court orders otherwise.

6. Costs

When the Market Court hears a case relating to public procurement, the provisions of the Administrative Judicial Procedure Act shall apply to indemnification of any legal costs.

According to the Administrative Judicial Procedure Act, a party shall be liable to compensate the other party for its legal costs in full or in part, if especially in view of the resolution of the matter it is unreasonable to make the latter bear its own costs. An administrative authority that has given a decision can also be regarded as a party. When assessing the liability of a public party, special account shall be taken of whether the proceedings have arisen from the error of the authority. A private party shall not be held liable for the costs of a public party unless the private party has made a manifestly unfounded claim.

7. Publicity of the proceedings

The Act on the Publicity of Court Proceedings shall apply in the hearing of public procurement cases at the Market Court.