Facts of the case and the main proceedings
On 5 June 2025, the Court of Justice of the European Union issued a preliminary ruling on application of the obligation of transparency during the performance of a public contract (judgment C-82/24 and opinion of the Advocate General).
The case concerned a contract for the construction of a sewage sludge thermal treatment plant. The contract had been awarded by a Polish contracting authority to a consortium of companies established in different Member States, led by Veolia Water Technologies sp. z o.o.
During performance of the contract, a dispute arose as to whether the replacement of part of the works – in this case, recuperators – triggered a new warranty period.
The contracting authority relied on Polish case law that, by analogy, applies to works contracts a provision of the Polish Civil Code relating to sales contracts. This provision provides that, if a valid claim is made under a warranty, a new warranty period starts to run from delivery of the defect-free item or return of the repaired item. The contracting authority argued that the contract documents did not deviate from this rule of general law since they provided that ‘where this warranty card is silent, the relevant provisions of Polish law, including in particular the Civil Code, shall apply mutatis mutandis’.
Conversely, the Consortium argued that the cited case law was not applicable. In its view, the obligation of transparency precluded the application of national case law that was not expressly made applicable in terms of the contract documents.
The national court hearing the dispute referred a question to the Court of Justice for a preliminary ruling on the scope of the obligation of transparency.
The Court's reasoning
In its judgment, the Court of Justice points out that the principle of equal treatment and the obligation of transparency require that the substantive and procedural conditions concerning participation in a contract be clearly defined in the contract documents, in particular the obligations of tenderers, so that they can understand the exact procedural requirements (judgment C-82/24, §34).
The Court of Justice also underlines the fact that the principle of equal treatment and the obligation of transparency must likewise be observed by the contracting authority during the performance phase of the contract, in order to ensure their effectiveness and the attainment of their objectives (judgment C-82/24, §36).
With regard to the case at hand, the Court of Justice considers that the duration of the warranty obligation is an important element for determining the financial terms and conditions of the tenders as submitted by the tenderers in question. It therefore concludes that the duration of the warranty obligation is one of the elements that must be clearly defined in the procurement documents.
However, the Court of Justice considers that a mere reference in the contract documents to the application of national law does not satisfy the obligation of transparency regarding whether implementing the warranty within the initial period provided for in the contract is liable to trigger a new warranty period. This is because, according to the Court, national law is not clear enough: the relevant article of the Civil Code is part of the section relating to sales contracts, and the wording of the provision does not make it clear that it applies to works contracts. The application by analogy of that provision to works contracts is based on case-law interpretation and is subject to differences between national courts and scholarly debate.
Subject to the usual reservation that it is for the referring court to confirm the factual assessments of the case, the Court concludes that application of the case law relied on by the contracting authority would breach the obligation of transparency.
Analysis of the judgment
The Veolia judgment is one of a series of judgments based on the finding that national operators are more familiar with national regulations than operators established in other Member States. Consequently, where the subject matter of a contract or the terms and conditions applicable to it can only be understood in the light of national legislation, there results a distortion of competition between national operators and operators established in other Member States.
Based on this reasoning, the Court of Justice has previously ruled that a pre-condition for participation (in that case, payment of a fee) in a public procurement procedure, arising from the interpretation of national law and the normal practice of an authority, would particularly disadvantage operators from other Member States (judgment C-27/15).
Similarly, the subject matter of the contract must be clearly described in the contract documents. Understanding the subject matter of the contract, which is naturally an essential element in preparing a tender, cannot depend on a knowledge of national law (see judgment C-423/07 and C-225/98). In case C-225/98, the concession contract in question related to highway works. The granting authority argued that the concessionaire was required not only to carry out the works specified, but also additional works set out in a royal decree. However, the Court of Justice ruled that, by failing to mention these works in the subject matter of the public works concession contract or in the specifications, the contracting authority had breached its obligation of transparency
The Veolia judgment extends this existing case law to all terms and conditions that are important "for determining the financial conditions of the tenders submitted by the tenderers". The Court thus leads us into an endless debate. Economic operators will argue that all contractual conditions are important for setting their prices, whether they relate to acceptance, revision of the contract due to unforeseeable circumstances, or performance deadlines, in order to avoid negative interpretations of case law.
The Veolia judgment is therefore likely to have repercussions on disputes relating to the performance of public contracts. For instance, consider the case of builders’ ten-year warranty. Under Belgian law, contractors are liable for defects in "major works and buildings" for a period of ten years, as set out in articles 1792 and 2270 of the old Civil Code. According to established case law, certain major repair works may constitute “major works” under these provisions, thus triggering a new ten-year liability period for the contractor. As this rule is not included in the relevant articles, it could be considered insufficiently predictable for non-Belgian contractors and therefore be set aside in accordance with the Veolia judgment.
Finally, this judgment could lead to unequal treatment between contracting authorities and contractors established in other Member States. In the event of a dispute, contractors established in other Member States will be able to invoke all applicable national legal rules and case law, while contracting authorities will only be able to use the rules contained in the contract documents or those that are easily understandable and accessible to tenderers in other Member States.
The authors thank Abdellatif Khamal for his contribution to this Legal Eubdate.
