Strasbourg, 10 March 2005

Dear Mr M.,

On 28 and 29 July 2003, you made a complaint to the European Ombudsman against the Commission on behalf of PLANISTAT Luxembourg and PLANISTAT Europe SA concerning unpaid bills and the suspension of contracts concluded between PLANISTAT and the Commission.

On 9 September 2003, I forwarded the complaint to the President of the Commission. The Commission sent its opinion on 6 November 2003 and I forwarded it to you with an invitation to make observations, which you sent on 6 May 2004.

By fax of 29 April 2004, Mrs Marguerite RIES, bankruptcy administrator of PLANISTAT Luxembourg, informed my office that the complaint on behalf of PLANISTAT Luxembourg could be dropped.

On 16 June 2004, I wrote to the President of the Commission with a request for further information. The Commission sent its opinion on 29 July 2004 and I forwarded it to you with an invitation to make observations. No observations have been received from you.

I am writing now to let you know the results of the inquiries that have been made.

THE COMPLAINT

The complaint is made by the lawyer of the company PLANISTAT (hereafter "the complainant"), which consists of PLANISTAT Luxembourg and PLANISTAT Europe SA (based in Paris). The complaint is subdivided in two parts. According to the complainant's lawyer, the relevant facts are as follows:

- Complaint by PLANISTAT Luxembourg against DG Trade:

PLANISTAT Luxembourg concluded two contracts, dated 4 March 2002 (contract n° Trade 02-F3-01) and 24 June 2003 (contract n° Trade 03-F3-01), with DG TRADE of the Commission, for carrying out economic studies and organising seminars on behalf of the Commission. After the execution of the contracts, the complainant sent the various bills to the Commission, but these bills (for a total amount of EUR 43 346.19) have still not been paid.

On 11 July 2003, the Director General of DG Trade informed the complainant of the suspension with immediate effect of the above two contracts. According to the complainant, the suspension of the contracts was not contractually foreseen.

On 24 July 2003, the complainant's lawyer sent a letter to DG Trade of the Commission calling on it to pay the bills in question within eight days. He also indicated that he had received instructions to start legal proceedings to recover the sums.

On 29 July 2003, he also wrote to the Director General of DG Trade with regard to both the matter of the unpaid bills and the suspension of the contracts, and called on the Commission to respect the contract. He also indicated that the complainant would continue to send bills in execution of the contract.

- Complaint by PLANISTAT Europe SA against Eurostat:

PLANISTAT Europe concluded various contracts with Eurostat for carrying out statistical studies on behalf of Eurostat. After the execution of the contracts, the complainant sent the various bills to the Commission, but these bills (for a total amount of EUR 1 295 382.51) have still not been paid.

The Commission, however, suspended the contracts. According to the complainant, the suspension of the contracts was not contractually foreseen. Moreover, the complainant got to know about the suspension of the contracts via the press, according to which all contracts with PLANISTAT had been suspended awaiting the results of an inquiry.

On 16 June 2003, the complainant's lawyer sent a letter to Eurostat calling on it to pay the bills in question within 8 days. He also indicated that he had received instructions to start legal proceedings to recover the sums. As Eurostat did not reply, he sent a reminder on 21 July 2003.

On 28 July 2003, he also wrote to the Director General of Eurostat with regard to both the matter of the unpaid bills and the suspension of the contracts and called on the Commission to respect the contract.

On 28 and 29 July 2003, the complainant's lawyer made the present complaint to the Ombudsman and claimed that :

1. The Commission should pay the bills of PLANISTAT Luxembourg (for a total amount of EUR 43 346.19) and PLANISTAT Europe SA (for a total amount of EUR 1 295 382.51).

2. The Commission should respect the contracts concluded between PLANISTAT Luxembourg and the Commission (DG Trade) and between PLANISTAT Europe SA and the Commission (Eurostat), which have been unjustifiably suspended.

On 31 July 2003, the complainant's lawyer informed the Ombudsman's office that urgent summary proceedings had been started before the "Tribunal d'Arrondissement de Luxembourg" with regard to the first claim.

In his letter of 9 September 2003 to the Commission, the Ombudsman therefore requested an opinion from the Commission only with regard to the complainant's second claim. In a letter of the same day, the Ombudsman informed the complainant's lawyer that he could only deal with the second claim of the complaint, as, on the basis of Article 195 of the EC Treaty, the Ombudsman is not entitled to deal with a complaint "where the alleged facts are or have been the subject of legal proceedings".

THE INQUIRY

The Commission's opinion

In its opinion, the Commission made the following comments:

Subsequent to the Commission's decision of 9 July 2003 to suspend all the contracts with PLANISTAT as a precautionary measure according to good financial management principles, the Commission, taking account of the elements brought to its attention, instructed its services on 23 July 2003 to terminate the contracts with that company, in accordance with the arrangements foreseen in the contracts.

As regards the contracts signed before 1 January 2003, they have been terminated on the basis of Article 7 § 1 of the general conditions that give each of the parties the possibility to terminate the contract with prior notice of two months. In doing so, the Commission simply exercised its rights foreseen in the contracts and cannot be held liable.

As for the contracts signed during the course of 2003 (with the exception of contract ESTAT 200353101001), the Commission's decision to terminate the contracts is based on Article II.15.1.h) of the general conditions applicable to the said contracts which foresees the right for the Commission to terminate the contract "where the contractor has, intentionally or by negligence, committed an irregularity in performance of the contract or in relation to other contracts concluded with an institution, organ, or agency of the European Communities and, more generally, in the event of fraud, corruption or any other illegal activity detrimental to the Communities' financial interests on the part of the contractor".

Audit reports conducted by Commission services and information provided by OLAF have revealed that a company belonging to the PLANISTAT group has participated in irregularities in the performance of contracts with the Commission, including invoicing for services falling outside the scope of the contract. In these circumstances, the Commission was fully entitled to terminate these contracts.

On this basis, the contract signed on 24 June 2003 with DG Trade has been terminated by notice of 29 July 2003.

Contract ESTAT 200353101001 of 24 March 2003 was terminated on the basis of Article 18 § 1, which provides for unilateral termination by either party, giving one month's notice. The termination was done by notice of 13 July 2003(1).

The Commission concluded that its attitude was justified on the basis of the available information and the relevant contracts.

Further inquiries

The Ombudsman sent the Commission's opinion to the complainant's lawyer for possible observations, but no observations were received.

On 26 April 2004, the Ombudsman's office contacted the office of the complainant's lawyer by telephone asking for copies of the contracts that are the subject of the complaint. On that occasion, Mrs Isabelle COMHAIRE, a colleague of the complainant's lawyer, informed the Ombudsman's office that PLANISTAT Luxembourg had gone into bankruptcy and was thus no longer represented by the law office "Kremer Associés & Clifford Chance", but by its bankruptcy administrator, namely Mrs Marguerite RIES.

In an e-mail of the same day, Mrs COMHAIRE indicated that PLANISTAT Europe SA wished to maintain its part of the complaint.

On 28 April 2004, the Ombudsman's office contacted the bankruptcy administrator of PLANISTAT Luxembourg. Mrs RIES indicated that the complaint with regard to PLANISTAT Luxembourg could be dropped. She confirmed this information in a fax which she sent to the Ombudsman's office on 29 April 2004.

The complainant's observations

On 6 May 2004, the complainant's lawyer sent observations on the Commission's opinion, as well as a copy of general conditions of the contracts between the Commission and PLANISTAT Europe SA. The observations can be summarised as follows:

The complainant maintained the complaint and observed that the suspension of the contracts by the Commission occurred without any prior notice. In its opinion, the Commission referred to provisions of the general conditions of the Commission's contracts for services, which cannot apply in the present case. More particularly, the provision of Article II.15.1 of the general conditions on which the Commission based itself to terminate the various contracts with the complainant cannot be applied, as no circumstance foreseen in it is encountered in the present case. The damage suffered by the complainant is certain and extensive, as the complainant put material and personnel at the Commission's disposition.

Further inquiries

After careful consideration of the Commission's opinion and the complainant's observations with regard to PLANISTAT Europe SA, it appeared that further inquiries were necessary. On 16 June 2004, therefore, the Ombudsman requested the Commission to provide him with a copy of all the letters by which it terminated the various contracts with PLANISTAT Europe SA, as well as a copy of the contractual provisions on which the termination was based.

The Commission's second opinion

The Commission transmitted some of the requested documents.

The letters terminating the contracts were attached in two annexes according to the type of contractual clause applicable:

In annex I, the contract provision on which the termination was based was Article 7, § 1 of the Conditions générales applicables aux contrats d'entreprise de la Commission.

In annex II, the contract provision on which the termination was based was Article 18, § 1 of the contract.

As regards the contracts terminated on the basis of Article II.15.1.h) of the general conditions applicable to the said contracts (namely irregularity in the performance of the contract), the Commission stated that the facts that gave rise to the terminations are presently the subject of an investigation by the Public Prosecutor (Parquet de Paris) in the framework of a penal action in which the Commission intervened as a civil party. The Commission stated that it could not, therefore, transmit these documents to the Ombudsman.

The complainant's additional observations

The complainant made no observations on the Commission's second opinion.

THE DECISION

1 The scope of the inquiry

1.1 The complaint against the Commission concerns unpaid bills and the suspension of contracts. The original complaint was made on behalf of PLANISTAT Luxembourg and PLANISTAT Europe SA. During the course of the inquiry, the bankruptcy administrator of PLANISTAT Luxembourg informed the Ombudsman that the complaint on behalf of that company could be dropped. The present decision therefore deals only with the complaint made on behalf of PLANISTAT Europe SA.

1.2 In dealing with complaints concerning a contractual relationship with a Community institution or body, the Ombudsman limits his inquiry to examining whether the Community institution or body has provided him with a coherent and reasonable account of the legal basis for its actions and why it believes that its view of the contractual position is justified. If that is the case, the Ombudsman concludes that his inquiry has not revealed an instance of maladministration. The Ombudsman's decision on a contractual case does not affect the right of the parties to have the dispute subsequently examined and authoritatively settled by a court of competent jurisdiction.

2 The alleged unjustified suspension of the contracts with PLANISTAT Europe SA

2.1 The complainant claims that the Commission should respect the contracts concluded between PLANISTAT Europe SA and the Commission (Eurostat), which have been unjustifiably suspended. This suspension happened without any prior notice from the Commission. The provision of Article II.15.1 of the general conditions on which the Commission based itself to terminate the various contracts with the complainant can not be applied, as no circumstance foreseen in it is encountered in the present case.

2.2 The Commission observed that, as regards the contracts signed before 1 January 2003, they have been terminated on the basis of Article 7 § 1 of the general conditions that give each of the parties the possibility to terminate the contract with prior notice of two months. In doing so, the Commission simply exercised its rights foreseen in the contracts and cannot be held liable. As regards the contracts signed during the course of 2003 (with the exception of contract ESTAT 200353101001), the Commission's decision to terminate the contracts is based on Article II.15.1.h) of the general conditions applicable to the said contracts which provides for the Commission the right to terminate the contract "where the contractor has, intentionally or by negligence, committed an irregularity in performance of the contract or in relation to other contracts concluded with an institution, organ, or agency of the European Communities and, more generally, in the event of fraud, corruption or any other illegal activity detrimental to the Communities' financial interests on the part of the contractor". Finally, contract ESTAT 200353101001 of 24 March 2003 was terminated on the basis of Article 18 § 1, which provides for unilateral termination by either party, giving one month's notice. The termination was done by notice of 13 July 2003.

In its second opinion, the Commission enclosed, in two annexes, the letters by which the contracts had been terminated. In the first annex, the contract provision on which the termination was based was Article 7.1 of the Conditions générales applicables aux contrats d'entreprise de la Commission. In the second annex, the contract provision on which the termination was based was Article 18, § 1 of the contract.

For the contracts terminated on the basis of Article II.15.1,h) of the general conditions applicable to the said contracts, the Commission pointed out that the facts that motivated the termination were subject of legal proceedings in Paris, where the Commission brought criminal indemnification proceedings.

2.3 The Ombudsman notes from the file of the case that PLANISTAT Europe SA concluded 26 contracts with the Commission (Eurostat)(2). It appears that one contract (ref. 200153300012) was signed in 2001, 18 contracts were signed in 2002, and 7 contracts were signed in 2003.

2.4 From the file it further appears that the reasons, i.e. the legal basis, given by the Commission for the termination of these contracts can be subdivided into the following three categories according to the contracts concerned:

(a) for all contracts concluded before 1 January 2003, the Commission's letters (sent by registered post) terminating the contracts(3) referred to Article 7 § 1 of the General conditions applicable to the contracts for services of the Commission, which were annexed to the contracts. Article 7 § 1 provides that "Chaque partie contractante peut, par sa seule volonté, résilier le contrat moyennant un préavis de deux mois et sans être tenue à une quelconque indemnité à ce titre. Au cas où la Commission a résilié le contrat, le contractant n'a droit qu'à une rémunération correspondante à l'exécution partielle du contrat"(4). The Commission's letters pointed out that the termination of the contracts would take effect two months after the reception of the letters by the contractor.

(b) for all contracts concluded during the year 2003 (with the exception of contract ref. 200353101001), the Commission terminated the contracts on the basis of Article II.15.1. of the general conditions applicable to the said contracts, which provides that "the Commission may terminate the contract in the following circumstances: (…) h) where the contractor has, intentionally or by negligence, committed an irregularity in performance of the Contract or in relation to other contracts concluded with an institution, organ or agency of the European Communities and, more generally, in the event of fraud, corruption an any other illegal activity detrimental to the Communities' financial interests on the part of the Contractor".

(c) for contract ref. 200353101001, the Commission's letter of 30 July 2003 terminating the contract referred to Article 18, § 1 of the contract which provides that "either contracting party may terminate the Contract at any time by giving one month’s notice". The letter pointed out that the termination would take effect one month after the receipt of the letter by the contractor.

2.5 With regard to the contracts in category (a), concluded before 1 January 2003, and in category (c), ref. 200353101001, the Ombudsman notes that the Commission has simply used the possibility foreseen in the applicable general conditions to terminate the contracts by giving the prescribed period of notice. The provisions concerned do not oblige the Commission to provide a reason for the termination of the contracts. The complainant's allegation that the suspension was unjustified cannot therefore be sustained and no instance of maladministration was found.

2.6 As regards the contracts (b), concluded during the year 2003, the Commission's second opinion informs the Ombudsman that the facts that gave rise to the terminations are presently the subject of an investigation by the Public Prosecutor (Parquet de Paris) in the framework of a penal action in which the Commission intervened as a civil party. In accordance with Article 195 of the EC Treaty and Article 2.7 of the Ombudsman's Statute, the Ombudsman therefore terminates his inquiry into this part of the complaint and files the outcome of his enquiries without further action.

3 Conclusion

3.1 On the basis of the Ombudsman's inquiries as regards the contracts mentioned in point 2.5 above, there appears to have been no maladministration by the Commission.

3.2 On the basis of Article 195 of the EC Treaty and Article 2.7 of the Ombudsman's Statute, the Ombudsman terminates his inquiry with regard to the contracts mentioned in point 2.6 above and files the outcome of his enquiries without further action.

For the above reasons, the Ombudsman closes the case.

The President of the Commission, as well as the bankruptcy administrator of PLANISTAT Luxembourg, Mrs Marguerite RIES, will also be informed of this decision.

Yours sincerely,

 

P. Nikiforos DIAMANDOUROS

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(1) The Ombudsman notes that the Commission's letter (ESTAT/C-4/40330) is dated "30" and not "13" July 2003.

(2) A complete list of the 26 contracts with reference numbers is contained in an annex to the complainant's letter of 28 July 2003, entitled "Liste des contrats PSE".

(3) Those letters, which were similar for all contracts concerned, were sent by the Commission between 28 July and 31 July 2003.

(4) "Each contractual party may, by its sole will, terminate the contract with two months' notice and without being obliged to provide any indemnification. In case the Commission terminates the contract, the contractor is only entitled to a remuneration corresponding to the partial execution of the contract" (translation by the Ombudsman's services).