The case involved a claim for lost profits by a Cypriot Company which had submitted a bid for the supply of legal publications but was not awarded the contract. Although the company successfully challenged the decision of the Tender Board and had it annulled, the contract had already been executed, making a re-evaluation of its bid impossible.
Key Legal Findings
- The annulment of an administrative decision does not automatically lead to compensation: The Court reiterated that an annulment ruling has a negative effect (annulling the decision) rather than a positive effect (imposing a specific course of action on the administration). Even if the original tender award decision is annulled, the administration is not obliged to grant the contract to the claimant, as it retains the right to either cancel the tender or issue a new call for bids. The case confirms the well-established principle that the administration maintains discretionary power in managing public procurement processes.
- Lost profit is not considered compensable damage: To be eligible for compensation, the claimant must prove a direct and causal link between the annulled administrative act and the financial loss suffered. The Court ruled that the mere theoretical possibility of securing a public contract is not sufficient to justify a claim for lost profits. Lost profit, as a loss of a potential contract, does not constitute direct and certain damage but rather relies on assumptions and probabilities, which exclude compensation.
- The burden of proof lies with the claimant: The appellants were required to demonstrate that, had the unlawful act not occurred, their bid would have necessarily been awarded the contract. The Court found that no sufficient evidence was presented to prove that the administration could not have canceled the tender or sought alternative solutions. As a result, the claim for compensation was deemed insufficiently substantiated and was dismissed.
Significance of the Decision
This ruling sets an important precedent for cases involving public tenders and administrative annulments. It strengthens the legal stance that the administration is not obliged to award a contract or provide compensation unless direct financial harm is proven. Furthermore, it clarifies that lost profit is not a compensable claim unless there is clear and substantiated financial loss directly resulting from the annulled administrative decision.
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