This article is an excerpt from the 2021 edition of The Art of Tendering: A Global Due Diligence Guide, which is available for purchase.
In its March 2013 decision in Communicaid Group Ltd v. European Commission, the European Court of Justice dismissed an injunction application brought by a non-compliant losing bidder. The applicant was a company registered in England and Wales which had provided language course services to several institutions, bodies and agencies of the European Union under a framework contract that was set to expire. The European Commission initiated a new tendering process to establish new framework agreements for the provision of those services. The applicant was unsuccessful in that re-tendering process and brought an injunction application to try to stop the awards to a competitor. The applicant asserted that it would suffer irreparable harm if the contract awards proceeded and that the awards should therefore be delayed until the merits of its complaint could be adjudicated. However, the Court noted that injunctions were only available under European law in extreme circumstances, such as where a bidder could show that losing the award would cause it to suffer permanent business losses that impacted its future viability as a business:
In that regard, it should be borne in mind that, according to settled case-law, the urgency of an application for interim measures must be assessed in relation to the need for interim measures in order to avoid serious and irreparable damage being caused to the party seeking interim relief (order of the President in Case C-213/91 R Abertal and Others v Commission [1991] ECR I-5109, paragraph 18; orders of the President in Joined Cases T-195/01 R and T-207/01 R Government of Gibraltar v Commission [2001] ECR II-3915, paragraph 95, and in Case T-181/02 R Neue Erba Lautex v Commission [2002] ECR II-5081, paragraph 82). However, it is not sufficient to claim that operation of the act of which suspension is sought is imminent; rather, it is for the party seeking such relief to adduce sound evidence that it cannot wait for the outcome of the main proceedings without suffering damage of that kind (order of the President in Case T-34/02 R B v Commission [2002] ECR II-2803, paragraph 85). While it does not have to be established with absolute certainty that the damage is imminent, its occurrence must nevertheless be foreseeable with a sufficient degree of probability (order of the President in Case C-335/99 P(R) HFB and Others v Commission [1999] ECR I-8705, paragraph 67, and order in Neue Erba Lautex v Commission, cited above, paragraph 83).
It is also settled case-law that damage of a pecuniary nature cannot, save in exceptional circumstances, be regarded as irreparable or even as being reparable only with difficulty, since financial compensation for that damage can normally be obtained subsequently. In such a case, the interim measure sought will be justified only if it appears that, without such a measure, the applicant would be in a position that could imperil its financial viability before final judgment is given in the main action, or that its market share would be affected irremediably and substantially, regard being had in particular to the size of its business (see order of the President of 28 April 2009 in Case T-95/09 R United Phosphorus v Commission, not published in the ECR, paragraphs 33 to 35 and case-law cited).
As regards the damage of a pecuniary nature claimed in this case, while the applicant does complain that it was placed at a competitive disadvantage in relation to CLL-Allingua, because the latter won the contract at issue, it does not however claim that it has lost its market share in the sector of language training services. In any event, the applicant has not produced any detailed figures on that point nor has it demonstrated that obstacles of a structural or legal nature prevent it from regaining a significant proportion of the lost market share (see, to that effect, order of the President of 24 March 2009 in Case C-60/08 P(R) Cheminova and Others v Commission, not published in the ECR, paragraph 64). Any damage suffered in this respect cannot therefore be considered to be irreparable.
The Court concluded that the applicant had failed to prove that it would suffer such irreparable harm. Furthermore, the Court ruled that lost profit damages are generally not available to losing bidders under European law because the award of a contract is never a presumed outcome since the purchasing institution is within its rights to cancel a bidding process without making any award:
In any event, it must be recalled that the damage pleaded by the applicant is said to have been suffered on the occasion of a tendering procedure in respect of the award of a public contract. The object of such a procedure is to enable the authority concerned to select, from a number of competing tenders, that which appears best to conform to predetermined selection criteria, and that authority has, to that end, a wide discretion. Accordingly, an undertaking taking part in a tendering procedure never has an absolute guarantee that it will be awarded the contract, but must always keep in mind the possibility that the contract could be awarded to another tenderer. In those circumstances, the adverse financial consequences which the undertaking in question would suffer as a result of the rejection of its tender have, generally, to be considered to be part of the normal commercial risk which each undertaking active in the market must face (see order of the President of 25 January 2012 in Case T-637/11 R Euris Consult v Parliament, not published in the ECR, paragraph 19 and case-law cited).
It follows that the loss of an opportunity to be awarded and to perform a public contract forms an integral part of exclusion from the tendering procedure in question and cannot be regarded as constituting in itself serious damage, all the more so since even a tenderer whose offer has been accepted must anticipate that, before signing the contract, the contracting authority may, pursuant to the first paragraph of Article 101 of Council Regulation (EC, Euratom) No 1605/2002 of 25 June 2002 on the Financial Regulation applicable to the general budget of the European Communities (OJ 2002 L 248, p. 1), either abandon the procurement or cancel the tendering procedure, without that tenderer being entitled, as a general rule, to claim any compensation (order in Euris Consult v Parliament, paragraph 20). Before the signature of the contract with the successful tenderer the contracting authority is not bound and may therefore, in the context of its responsibilities relating to the general interest, freely abandon the procurement or annul the tendering procedure, without any obligation to compensate that tenderer (see, to that effect, order of 14 May 2008 in Joined Cases T-383/06 and T-71/07 Icuna.Com v Parliament [2008] ECR II-727, paragraph 59), unless it has induced the latter to believe that he is certain to obtain the contract and has encouraged him to make irreversible investments on that expectation (see, to that effect, Case T-203/96 Embassy Limousines & Services v Parliament [1998] ECR II-4239, paragraphs 76 and 80).
Finally, the Court ruled that any damages suffered could be quantified for a financial compensation if it could prove its case at trial and it was therefore not entitled to injunctive relief:
Nor has the applicant shown that it would be unable to obtain financial compensation subsequently by means of an action for damages (see, to that effect, order of the President in Case T-303/04 R European Dynamics v Commission [2004] ECR II-3889, paragraph 72 and case-law cited). In so far as that harm is not made good merely by the implementation of the judgment in the main proceedings, it can be made good through the means of redress provided for in Articles 268 TFEU and 340 TFEU (see, to that effect, order of the President in Case T-369/03 R Arizona Chemical and Others v Commission [2004] ECR II-205, paragraph 75 and case-law cited), given that the mere possibility of bringing an action for damages is sufficient to show that such harm is in principle reparable, irrespective of the uncertainty attached to the outcome of the proceedings in question (see, to that effect, order of the President in Case C-404/01 P(R) Commission v Euroalliages and Others [2001] ECR I-10367, paragraphs 70 to 75, and order of the President in Case T-132/01 R Euroalliages and Others v Commission [2002] ECR II-777, paragraph 52).
Consequently, the arguments presented by the applicant do not justify a finding that the claimed pecuniary damage is irreparable.
As this case illustrates, obtaining injunctions is difficult in jurisdictions where that relief is not granted on request but is only granted where a bidder can meet the strict case law test for injunctive relief, which typically requires the applicant to convince the court that a contract award to a competing bidder could cause it irreparable harm.
