THE Court of Justice in The Hague has declined to rule on the case brought by the Netherlands Federation of Transport Companies (FMN) and others seeking to prevent the Dutch government from directly awarding the next Main Line Network (HRN) concession to Netherlands Railways (NS) without market testing.
As it handles matters of civil law, the Court of Justice has said that it is not competent to judge the case. This can only be heard by the relevant specialist Supreme Administrative Court, the Trade and Industry Appeals Tribunal (CBb), and only after the concession has been granted.
FMN says that it is considering an appeal, and in the meantime has asked the European Commission (EC) to start legal proceedings against the Netherlands at the European Court of Justice.
The Dutch government must award the HRN concession to NS before December 25, the end of the transition period allowing direct awards without open competition as specified by European Union’s (EU) Fourth Railway Package.
The current HRN concession held by NS expires on December 31 2024. Its replacement would run for 10 years to 2035, covering 95% of total rail passenger-km in the Netherlands including inter-city and international services.
FMN is seeking to stop the direct award process on the grounds that the concession is being awarded without carrying out market testing to determine which services can be operated commercially, as required by EU law regarding PSO contracts.
The Court of Justice is of the opinion that it cannot determine if the direct award is contrary to EU law before the CBd can issue a judgment.
This would create a real risk that after the HRN concession had been granted, a case would be pending before both the civil court and the CBd, raising the possibility of conflicting verdicts and uncertainty over which ruling would be decisive.
However, the Court of Justice acknowledges that FMN is determined to have a court pass judgment as soon as possible on what it clearly sees as a violation of EU law.
The Court of Justice also says that it is very aware that the issue of who will hold the next HRN concession over the next 10 years “is of considerable interest to society”, and that the lack of clarity over the lawfulness of the direct award process implies “undesired uncertainty.”
If the direct award process was found to be in breach of EU law and FMN were able to bring the case before the CBd, the Court of Justice says it would be questionable whether operators other than NS would be able to start operating parts of HRN network on January 1 2025 after the current concession expires.
If the tribunal indeed requires market testing to be carried out, the Court of Justice says that it is uncertain that this could be completed and that an HRN concession revised in line with its findings would be ready in time for the start of operations on January 1 2025 or for operators to make the necessary preparations.
Pending a verdict in the Dutch courts, further action to loosen the close relationship between national operator NS and the Ministry of Infrastructure may be taken at European level.
In her letter of July 18 2022, EC commissioner for transport, Ms Adina Vălean, warned the Dutch minister of the environment, Ms Vivianne Heijnan, that making the HRN direct award without market testing would entail “a serious risk of breaching European Union law.”
The EC has repeatedly expressed its serious concerns over the legality of the proposed direct award “and the excessively broad scope of the concession.” It could choose to instigate infraction proceedings against a member state for breaching EU law despite repeated warnings.
Responding to the ruling, FMN said: “We regret that no material judgment has been made by the Court of Justice against European regulations.
“It is striking that the court - while pointing out in line with three previous court cases that the European rules are unclear - is failing to request clarity from the European Court on the interpretation of these rules.
“In the end, only the European Court of Justice in Luxemburg can intervene here. We are therefore awaiting the final decision to award the HRN concession to NS and will appeal against it.
“Last year's letter from commissioner Välean to the Dutch government is still relevant and the Netherlands has not yet allayed the concerns of the EC. We therefore ask the EC to start legal proceedings against the Netherlands at the European court.”
