The Senate’s Department of Administrative Cases has suspended proceedings in a case concerning the repeal of a decision by the Procurement Monitoring Bureau and submitted three preliminary questions to the Court of Justice of the European Union (CJEU) concerning the exclusion of a market operator from a public tender. The proceedings have been suspended until the CJEU decision enters into force.

The applicant in the present case is a company that had submitted a tender to a local government competition for renting motor vehicles. As the Competition Council had previously fined the applicant for a horizontal cartel agreement and the applicant had not convinced the contracting authority of its reliability, the applicant was excluded from the competition. The Procurement Monitoring Bureau affirmed this decision and allowed the contracting authority to conclude agreements with the winners of the competition.

The District Administrative Court dismissed the application to repeal the decision by the Procurement Monitoring Bureau. It held that, within the meaning of the Public Procurement Law, a finding by a competent authority establishing a violation is to be deemed as a “strong indication” the tenderer has entered into an agreement with other economic operators, which is mandatory grounds for excluding the tenderer from the competition unless it has restored its reliability in the manner prescribed by law. The court further considered it irrelevant that the decision in question had been appealed and had not yet entered into legal effect.

After examining the cassation complaint submitted by the applicant, the Senate concluded that in order to adjudicate the case correctly, it is necessary to determine whether the Latvian legal norms applied in the case are compatible with European Union law. The CJEU has held that the contracting authority is free to independently evaluate the trustworthiness and reliability of tenderers, and that its decision needs to be reasoned, however, it remains doubtful that the contracting authority, if the decision of the competition authority has been appealed against, must refrain from its own evaluation as to whether competition law might have potentially been violated. Accordingly, clarification from the CJEU needs to be sought as to whether a contracting authority can itself decide to exclude a tenderer from a competition on the grounds that the competition authority has adopted a decision whose legality is being currently contested before a court. Similarly, it is doubtful whether European Union law on the maximum term of exclusion is being respected by a rule under which a tenderer could be excluded from public tenders for three years following a decision by the competition authority establishing the tenderer has violated competition law, and then for three more years from the date on which said decision has become final. In addition, the tenderer’s fundamental rights may have been infringed. First, the right to fair trial is relevant. If neither the contracting authority nor, subsequently, the court itself assesses whether a violation of competition law has occurred, it raises doubt whether the court can be deemed a court of full jurisdiction. The fact that the contracting authority has linked the restoration of reliability with not appealing the decision of the Competition Council and willingly adhering to it, namely, by admitting the violation and paying the fine, raises further doubt whether the tenderer’s right to a fair trial has been respected. Secondly, since the fines imposed by the Competition Council are considered to be criminal in nature, the presumption of innocence becomes a relevant factor, since the contracting authority could base its decision on an assumption that a violation of competition law has taken place, even though court proceedings are still ongoing.

Case SKA-109/2026 (A420207323)

Information prepared by Viesturs Lācis, Adviser in the Matters of Senate Communication

Telephone: +371 67020302; e-mail: viesturs.lacis@at.gov.lv