The year 2022 was an eventful one in the field of public contract and procurement law!
Among the important case law decisions, one notable example is a very interesting judgment handed down on 1 July by the Council of State (no. 254.209), concerning the application of public procurement rules to public real estate transactions.
In this case, the City of Ciney organised a public procurement procedure to sell a real estate site (a former football stadium) to a private operator, with the latter being responsible for designing, financing and constructing housing and public spaces there, meeting a predefined urban planning programme.
Following an action brought by an unsuccessful candidate, the Council of State held that, although this transaction included various urban planning obligations to be borne by the future purchaser, this was not sufficient to consider it a public works contract "meeting the needs" of the Municipality. The decisive factor relied on by the Council of State was that, as a result of this transaction, the Municipality did not become the holder of a right (in rem or personal) over the buildings to be constructed (apart from certain ancillary elements), which, in the Council of State's view, demonstrated the absence of a direct economic interest and of consideration, as required by European case law:
"In the present case, it does not appear that the contested transaction was designed to meet a need connected with the functioning or the tasks of the respondent. Furthermore, it does not appear either that the respondent is to become the owner of the works or of the structure planned in the context of the contested transaction — particularly as regards the housing to be built on the land that is the subject of the sale — or that it will hold a legal title securing the availability of the structures concerned. In any event, even assuming that account must be taken of the retrocession provided for in favour of the respondent and that this retrocession confers on the respondent a legal title in respect of the property to which it relates, it has not been established, in the context of these proceedings under the extreme urgency procedure, that this aspect of the transaction would represent its principal object, to the point of justifying the classification as a public contract."
The Council of State therefore concluded that the obligations imposed on the purchaser of the real estate site were merely urban planning requirements and charges, imposed in the general interest.
This judgment is all the more important given that the Municipality had expressly classified its procedure as a public contract and that none of the litigants had questioned the application of public procurement rules to the transaction, before the Council of State raised the issue of its own motion.
This case law is certainly to be kept in mind when contracting authorities undertake complex real estate transactions.
