The consequence of a contract being declared ineffective is that any consideration under the contract shall be returned.
A contracting authority and an economic operator modified the contents and terms of a service concession contract through a supplemental contract. A different economic operator applied to an administrative court for a review of the effectiveness of the supplemental contract. While the case was pending at the administrative court, the contracting parties reached an agreement according to which the supplemental contract would no longer apply and that the supplemental contract had not yet been executed in any respect. The parties to the contract were of the opinion that the case should be dismissed. However, the administrative court did not find cause to dismiss the case but declared the supplemental contract ineffective. The administrative court of appeal rejected the appeals of the contracting parties.
The question in the case was whether the purpose of an application for review of the effectiveness of a contract had become moot when the contract had been terminated by the contracting parties without any exchange of consideration.
The Supreme Administrative Court stated that damages are a remedy in the area of public procurement and that the right to damages is forfeited if the action is not brought before a general court within one year of the date on which the contract was entered into or was determined ineffective through a ruling which has become legally binding. In the event an administrative court dismisses the case without a trial on the merits, there is a risk that the period of time in which to bring the action for damages will expire. This could entail that the economic operator, in such cases, is deprived of the right to an effective legal remedy.
Since the period of time in which to bring an action for damages had expired when the administrative court had issued its judgement, the other economic operator’s only possibility to bring a claim in damages was thereby that the application for review of the effectiveness of the contract was granted and that the period of time for the action for damages was thus calculated from the date on which the decision regarding the determination of ineffectiveness became legally binding. Accordingly, the economic operator was deemed to have a legitimate interest in obtaining an adjudication of the application and the case was therefore not dismissed.
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