The Court of Justice of the European Union says no to the automatic enforcement of provisional bail – Giuseppe De Carlo

«THE principles of proportionality and of equal treatmentas well as theobligation of transparencymust be interpreted as meaning that they preclude national legislation which provides for theautomatic forfeiture of the provisional security established by a bidder …

The Court of Justice of the European Union says no to the automatic enforcement of provisional bail – Giuseppe De Carlo

«THE principles of proportionality and of equal treatmentas well as theobligation of transparencymust be interpreted as meaning that they preclude national legislation which provides for theautomatic forfeiture of the provisional security established by a bidder following theexclusion of the latter from a procedure for the award of a public service contract, even if the service in question has not been awarded to him».

This is the principle of law enunciated by Court of Justice of the European Union in sentence no. 403 of 26 September 2024, in response to the interpretative question posed by Council of State with ordinance no. 5950 of 16 June 2023 on the compatibility with European law of internal rules that provide for the forfeiture of the provisional guarantee as an automatic consequence of the exclusion.

The issue has been debated in jurisprudence for some time and has been the subject of numerous preliminary references from the Council of State regarding the regulations onenforcement of the provisional bail contained in 2006 Code (see the referral orders to the Court of Justice, all of the Fifth Section of the Council of State, no. 2033 of 28 February 2023, no. 3264 of 29 March 2023 and no. 5618 of 7 June 2023, as well as the most recent order no. 3530 of 18 April 2024).

With ordinance no. 3299 of 26 April 2021, the Council of State had raised the question of constitutional legitimacy of the legislation introduced in 2016, in particular of the non-retroactivity of the more favorable regime provided for by the new Code regarding the enforcement of provisional bail. In fact, while article 48 of Legislative Decree no. 163/2006 established that the enforcement of the provisional bail also operated against unsuccessful competitorsarticle 93 of Legislative Decree no. 50/2016 limited its applicability tosuccessful bidder.

There Constitutional Courtin sentence no. 198 of 26 July 2022, deemed the question of constitutional legitimacy of the non-retroactivity of the most favorable regulation for unsuccessful competitors to be unfounded, based on the nature to be attributed to the enforcement of the provisional deposit. The latter, in fact, is not one punitive sanctionbut a tool to guarantee the seriousness of the offer presented by the competitor and, at the same time, of the correctness and speed of the tender process.

Traditionally, administrative jurisprudence has understood the forfeiture of the provisional guarantee as an automatic consequence of the exclusion provision, insensitive to assessments aimed at highlighting the non-attributability to fault of the violation that caused the exclusion (see, ex plurimis, Council of State, section V, 6 April 2020, n. 2264 and 24 June 2019, n. 4328). The enforcement of the provisional bail constitutes, therefore, one objective guarantee of the fulfillment of the obligations assumed by the competitors in relation to participation in the tender (see Council of State, section V, 16 May 2018, n. 2896).

However, neither the majority interpretative direction nor sentence no. 198/2022 of the Constitutional Court have proven to be decisive for the resolution of disputes – such as those examined by the Council of State and subject to a preliminary ruling – in which the cause that gave rise to the exclusion is missing or difficult to attribute to the competitor. In such cases, the automatic enforcement of the security translates into a unjustified sacrifice or anyway excessive for the competitor.

In fact, according to another jurisprudential direction (expressed by the Council of State in the orders for preliminary rulings to the Court of Justice), the enforcement of the provisional security, precisely because of its automatic nature and the economic burden it produces on the competitor, takes on the characteristics of criminal sanction in the meaning proposed by European Court of Human Rights. In particular, the Court of Strasbourg has indicated the following three criteria for identifying a criminal sanction: i) la legal qualification of the offence in national law, with the clarification that it is not binding when the “intrinsically criminal” value of the measure is ascertained; ii) the nature of the offencededuced from the scope of application of the law which provides for it and from the aim pursued; iii) the degree of severity of the sanction. And since the European Court of Human Rights assigns a broad meaning to criminal matters, even the exercise of administrative sanctioning power is subject to respect for fundamental principles.

From this perspective, the automatic forfeiture of the provisional guarantee constitutes a violation of the principle of proportionality of sanctions because it was arranged in the absence of a fair balance between the public interest in the correctness of the procedure and fundamental rights guaranteed at European level. In fact, when the forfeiture occurs automatically, the competitor bears a burden financial penalty without any adequate assessment of the circumstances of the specific case.