On 30 January 2023, the Administrative Court handed down a judgement in the high-profile case concerning the Swedish Competition Authority's supervisory decision in relation to the Swedish Courts Administration, see the Administrative Court in Stockholm case no. 35322-21. The Administrative Court considered that, by entering into an agreement with a property owner and future landlord for the construction of a new court building, the Swedish Courts Administration had carried out an unauthorised direct procurement. Despite the fact that the construction contract and the associated consultancy services were to be procured according to LOU.
According to the Administrative Court, all agreements in the collaboration between the parties were interconnected and interdependent, so that it was not possible to exclude certain parts from the procurement. The rental exemption in Chapter 3, section 19 of the Public Procurement Act was therefore not applicable.
The Administrative Court's judgement was appealed to the Administrative Court of Appeal, which adjudicated on 17 April 2023, see the Administrative Court of Appeal in Stockholm case no. 803-23. Unfortunately, the issues addressed in the Administrative Court's judgement were however never examined, as the Administrative Court of Appeal made the assessment that the Swedish Competition Authority's supervisory decision was not appealable. According to section 41 of the Administrative Procedure Act, a decision may only be appealed if it can be assumed to significantly affect someone's situation. The Administrative Court of Appeal argued in this context that while the relevant supervisory decision constituted criticism of the Swedish Courts Administration, it was not linked with any prohibitions, requirements for measures or injunctions. The Administrative Court of Appeal therefore overturned the Administrative Court's judgement, and left other questions in the case uncommented.
On the current theme, another case initiated by the Swedish Competition Authority's supervision should also be mentioned, see the Administrative Court in Luleå case no. 1638-21. In the case in question, Boden municipality had sold a property to a landlord, which was supposed to carry out maintenance works and tenant adaptations and subsequently rent out the property to the municipality. The arrangement comprised a transfer agreement, bill of sale and a rental contract. It is worth noting that the property was transferred at a value of SEK 31 million and that the rental contract contained an undertaking that the landlord would carry out the relevant maintenance works and tenant adaptations to a value of SEK 69 million. The Swedish Competition Authority applied for a procurement fee and claimed that the arrangement contained a construction contract. The Administrative Court took the Swedish Competition Authority's line and in summing up made the assessment that the agreements collectively constituted a construction contract and that the transaction in its entirety should therefore be covered by LOU (the Public Procurement Act).
The judgement was appealed to the Administrative Court of Appeal in this case too, see the Administrative Court of Appeal in Sundsvall case no. 1044-22. Unfortunately, the issues addressed in the Administrative Court's judgement were not examined in this case either, as the Administrative Court of Appeal made the assessment that the Swedish Competition Authority's application for a procurement fine had not been received on time. According to chapter 21, section 7, second paragraph of LOU, an application for a procurement fine shall, if no supplier has applied to appeal the agreement's validity, have been received by the Administrative Court within one year from when the agreement was concluded. The Administrative Court of Appeal argued in this context that the period assigned commenced with the signing of the transfer agreement, and, in distinction from the Administrative Court's judgement, not when all agreements that were part of the transaction were signed. The Administrative Court of Appeal therefore overturned the Administrative Court's judgement in this case too, and left other questions in the case unanswered.
COMMENTS
Similarly to other new practice in the area, the Administrative Court of Appeal's judgements leave more questions than answers, and it remains unclear when and if procuring authorities can apply the rental exemption in situations where the authority wishes to rent premises that are to be constructed or adapted based on the authority's requirements. In this respect, the Administrative Court of Appeal in Stockholm's judgements in cases no. 9369-21 and 9370-21 respectively should be specifically mentioned, which have been appealed to the Supreme Administrative Court (see cases no. 6858-22 and 6859-22). As of today's date, the Supreme Administrative Court has not issued a decision in the question of leave to appeal. However, as said, there remains a major need for clarification in the area, and we therefore believe and hope that the issues will be taken up for appeal.
