Background to the complaint

1. In November 2013, the complainant, an NGO based in the Netherlands, entered into a grant contract with an EU Delegation. The complainant was to implement, over a three year period, a project aimed at increasing food security and environmental awareness, by developing food gardens for young people in Tzaneen (South Africa). The project was to be implemented with the help of a local partner.

2.  In October 2016, the local partner withdrew from the project and the Delegation asked the complainant to explain how the project would continue. The complainant proposed a new partner to the Delegation.

3. The Delegation suspended the project as of 30 November 2016, as it was not satisfied with the information provided by the complainant.

4. On 1 September 2017, the complainant proposed another new local partner.^[1] The Delegation invited the proposed partner for an interview.  When the complainant asked whether it could participate in the interview, the Delegation replied that it wanted to have a bilateral meeting with the proposed partner. However, the Delegation added that it would “be very useful to also meet with [the complainant] to discuss any doubts that may arise from the meeting with [the proposed partner] and the way forward...” The Delegation then met the proposed partner and concluded that it was not suitable. It did not discuss its concerns with the complainant.

5. On 10 October 2017, the Delegation communicated to the complainant its intention to terminate the contract by 23 December 2017. The complainant contested this decision. The Delegation replied on 3 November 2017 confirming its decision to terminate the contract. It did so once again on 15 November 2017.

6. On 1 December 2017, the complainant requested a meeting “with representatives of the EU Delegation in person to discuss the possibility of finding an amicable solution in the hope of moving forwards and completing the remaining project activities”. The complainant requested that the proposed local partner be present at the meeting. The Delegation did not follow up on this request.

The inquiry

7. The Ombudsman opened an inquiry into the following aspect of the complaint:

The EU Delegation to the Republic of South Africa breached Article 13.2^[2] of the General Conditions of the Grant Contract, since it ignored the complainant’s request to hold a meeting with the EU Delegation (with the participation of the proposed local partner) to discuss the possibility of settling the dispute amicably.

The complainant’s desired outcome was that its team be given the opportunity to hold a meeting with the EU Delegation and, if possible, with the proposed local partner, in order to settle the dispute and continue the project.

8. In the course of the inquiry, the Ombudsman received the reply of the Commission on the complaint and, subsequently, the comments of the complainant in response to the Commission's reply.

Arguments presented to the Ombudsman

9. The complainant contended that after suspending the project in November 2016, the Delegation presented the complainant’s team with various questions and requests for information. It therefore unnecessarily drew out the period during which the project was suspended to almost one year. According to the complainant, the Delegation’s unwillingness to consider the effective solutions it had presented was instrumental in prolonging the project’s delay. The complainant argued that the Delegation failed to do ‘everything possible’ to settle the dispute amicably, in accordance with Article 13.2 of the General Conditions.

10. The complainant considered that it had addressed all the points raised in the Delegation’s letter confirming its decision to terminate the contract. It said that the letter invited it to provide comments but clearly stated that there was no margin to reconsider the decision.

11. The complainant also noted that, although the Delegation had offered to discuss with it any doubts that could have arisen during the meeting with the proposed partner, the Delegation did not contact it and simply communicated its intention to terminate the contract. The complainant stated that the purpose of the meeting request it had made in its letter of 1 December 2017 was to address the Delegation’s reservations.

12. The complainant said that the attitude of the Delegation was negative and that none of its statements appeared to show that it had been trying to find a solution.

13. The Commission argued that by requesting an interview to evaluate the proposed partner, the Delegation had acted in compliance with the contractual rules and with the principle of equal treatment of applicants. According to the Commission, the complainant had failed to prove its ability to conclude the remaining activities and achieve the expected results.

14. With regard to the complainant’s request for a meeting, the Commission argued that it was not until after the contract had effectively been terminated that the complainant made that request. It noted that the amicable settlement procedure encourages the parties to resolve disputes arising between them during the implementation of the contract^[3], while in this case the dispute related to the consequences of termination. The Commission also noted that the Delegation based its negative evaluation of the proposed new partner on objective reasons and that holding a meeting would not alter such a conclusion.

The Ombudsman's assessment

Preliminary remark

15. In their replies in this case, the Commission and the complainant commented extensively on the Delegation’s decision to terminate the contract. While that decision is not the focus of the Ombudsman’s inquiry, the complainant’s desired outcome, as set out above, was to have a meeting with the Delegation in order to settle the dispute and continue the project.

16. The Ombudsman understands the situation to be the following: after the complainant’s first local partner withdrew from the project and after the complainant lost its second partner, the Delegation engaged extensively with the complainant and met with its proposed (third) partner which it did not believe to be suitable. Specifically, the Commission found that the complainant and the proposed partner lacked the “combined capacity” (in the Commission’s words) to carry out the remaining activities effectively. The Commission also considered that the fact that the project had been suspended for a long time, that the complainant was not on the ground and that limited time remained for the project to be implemented made it impossible for the project to be executed effectively and for the intended results to be achieved. It therefore terminated the contract^[4].

17. The central issue in this case, namely whether the Commission should have agreed to the meeting requested by the complainant, needs to be assessed in this context.

The alleged failure to hold a meeting to discuss an amicable settlement

18. The relevant provision of the contract provides that “the Parties shall do everything possible to settle amicably any dispute arising between them during implementation of this Contract. To that end, they shall communicate their positions and any solution that they consider possible in writing, and meet each other at either's request” (emphasis added).

19. The complainant requested a meeting to discuss the possibility of settling the dispute amicably on 1 December 2017. By this time, the Delegation had twice confirmed the termination of the contract. Moreover, the project had been suspended for over a year. Having reviewed the file in this case, the Ombudsman notes that the Delegation engaged in extensive contacts with the complainant throughout the implementation of the contract, providing it with several opportunities to submit missing financial statements and supporting documents. As such, she is of the view that the Delegation was not obliged to accept the meeting request made on 1 December 2017.   

20. It is true that the Delegation had, on 21 September 2017, made a commitment to discuss with the complainant “any doubts that may arise from the meeting with [the proposed partner] and the way forward...” (emphasis added). The Delegation did not follow up on this commitment. Instead, it sent the complainant a letter informing it of its intention to terminate the contract.

21. While it is unfortunate that the Delegation made a commitment to discuss with the complainant its proposed partner and then did not proceed with that discussion, the Commission has convincingly explained in the course of this inquiry that such a discussion would have brought no added value. Specifically, the Commission explained that the Delegation based its negative evaluation of the proposed new partner on objective reasons and that holding a meeting would not have altered such a conclusion. Given that the complainant expressly stated that the purpose of the meeting request it had made in its letter of 1 December 2017 was to address the Delegation’s reservations, the Ombudsman accepts that the meeting would not have served any purpose.

22. Having reviewed all the material made available to her and in view of the foregoing, the Ombudsman considers that there was no maladministration.

Conclusion

Based on the inquiry, the Ombudsman closes this case with the following conclusion:

There was no maladministration by the Commission.

 

Emily O'Reilly

European Ombudsman

Strasbourg, 03/05/2019

 

[1] The director of the (second) partner that the complainant had proposed to the Delegation died tragically on 6 April 2017.

[2] In accordance with Article 13.2 of the General Conditions of the Grant Contract, “the Parties shall do everything possible to settle amicably any dispute arising between them during implementation of this Contract. To that end, they shall communicate their positions and any solution that they consider possible in writing, and meet each other at either's request. A party must reply to a request for an amicable settlement within 30 days”.

[3] General Conditions of the Grant Contract, Article 13(2).

[4] General Conditions of the Grant Contract, Article 12(1).