EU Remedies Directive implemented - International Law Office

On June 1 2010 the EU Remedies Directive (2007/66/EC) will be transposed into Finnish law through amendments to the Act on Public Contracts and the Act on Public Contracts in Special Sectors. Once the directive has been implemented, with regard to procurements that exceed EU threshold values, the Market Court will be competent to order an awarded contract to be considered ineffective if:

• the contract was awarded directly, without the publication of the proper contract notice;
• the contracting authority did not respect the mandatory standstill period; or
• the contracting authority concluded the contract after an appeal was initiated before the Market Court.

Where a contract is declared ineffective, this will lead to prospective (rather than retrospective) cancellation, coupled with alternative penalties. the Market Court may also order the contracting authority to pay a penalty fine to the government in case of a failure to respect the standstill period or conclusion of a contract while an appeal was pending before the Market Court. If no ineffectiveness is adjudged, the Market Court may, in addition to or instead of the fine, order a shortening of the duration of the contract.

The amendments also affect the rectification procedure. The contracting authority may rectify its procurement decision, either on its own initiative or based on a demand by the party concerned, regardless of whether the decision has been appealed to the Market Court. If the contracting authority's rectification decision removes the relevant party's need for judicial review, the Market Court may decide to withdraw the proceedings before it.

In addition, the amendments double the national threshold values that determine the applicability of the Act on Public Contracts. Thus, the national procedures apply to contracts that are valued at less than the EU thresholds, but more than:

• €30,000 for supply or service contracts, service concessions and design contests;
• €100,000 for Annex B (ie, Group 25) joint procurements for healthcare, social services and education contracts; and
• €150,000 for works contracts and concessions.

For further information on this topic please contact Asko Lindqvist at Borenius & Kemppinen by telephone (+358 40 551 8969), fax (+3589 6153 3499) or email (asko.lindqvist@borenius.com). The Borenius & Kemppinen website can be accessed at www.borenius.com.