La non application d’une clause de tacite reconduction d’un contrat de la commande publique ne peut donner lieu à indemnisation

The non application of a clause of tacit renewal of a contract of the public order can give rise to compensation

by gmorales on 17 October 2016 | Category: Public markets
La non application d’une clause de tacite reconduction d’un contrat de la commande publique ne peut donner lieu à indemnisation La non application d’une clause de tacite reconduction d’un contrat de la commande publique ne peut donner lieu à indemnisation

Council of State, October 17, 2016, Municipality of Villeneuve-le-Roi, n ° 398131

Deciding on a concession allowing to exploit an activity on the market of a commune, the Council of State recalls the principle of illegality of clauses of tacit renewal in the contracts of the public order and sanctions a clause indemnifying the cocontractant when l administration does not apply the tacit renewal clause. It also applies the principle of prohibition to contract on the exercise of the power of unilateral decision to a clause providing for the modalities of review of various rights of a fiscal nature.

Rule # 1: The tacit renewal of a public order contract is illegal

The Council of State recalls here the principle according to which clauses of tacit renewal of a contract of the public order are illegal. This rule has been affirmed by the High Administrative Court on several occasions, notably in the judgment of 29 November 2000, Municipality of Païta, No. 205143. In the latter judgment relating to a public contract, it was held that a clause of tacit renewal is null and that the contract resulting from the application of this clause is also null, on the basis that contracting of public contracts must be preceded by a call for competition; however, the tacit renewal giving rise to a new contract, it was thus passed in violation of the obligations to call for competition (likewise for a delegation of public service, see EC, May 23, 2011, Department of Guyana, No. 314715). In this case, it was a thirty-year contract award, which provided that at the end of this period the concession agreement would be tacitly extended for a period of ten years, unless terminated by one of the parties one year before its expiry date. The Administrative Court of Melun ruled that this clause was illegal and the Council of State was right on this point.

Rule n ° 2: The non application of a clause of tacit renewal can give rise to compensation

In the case in point, the concession agreement also provided that if its termination at the end of the thirty-year period occurred as a result of the municipality, the concessionaires would be entitled to compensation. The Administrative Court held that this indemnity clause was severable from the tacit extension clause and was lawful, since the compensation provided was not manifestly disproportionate in the light of the damage suffered as a result of the non-renewal of the contract. The Conseil d'Etat censures this reasoning by holding that, since this indemnity clause was intended to compensate for the tacit renewal of the contract, it could not be detached from the tacit renewal clause. Moreover, ruling on the merits, the Council of State considers that the clauses of tacit renewal in a contract of the public order being illegal, no prejudice and therefore no right to compensation can arise, for the contracting party of the administration, a lack of tacit renewal. Consequently, he considers that such a compensation clause is unlawful and that this illegality must be relieved by the judge of his own motion.

Rule n ° 3: The administration can not define by contract the modalities of revision of rights which constitute tax receipts

The concession treaty also provided for a clause determining the terms and conditions for the review of market rights in halls, fairs and markets, material rights, unloading rights and tightness fees. However, the judge notes that these rights have the character of a fiscal receipt of the municipality, pursuant to the provisions of the decree of May 17, 1809 and those of Article L.2331-3 of the CGCT, on the one hand, and that only the Municipal Council is competent to decide the modalities of revision of rights of fiscal nature, in application of the second paragraph of the article L.2224-18 and the first paragraph of the article L.2121-9 of the CGCT, on the other hand. Consequently, the administrative court holds that the clause setting out imperatively the modalities of revision of rights of fiscal nature, falling within the sole competence of the City Council, is illegal. This position is validated by the Council of State. The administrative judge thus applies the principle according to which the administration can not contract on the exercise of the power of unilateral decision.

Board of state
N ° 398131
ECLI: FR: CECHR: 2016: 398131.20161017
Mentioned in the tables of Lebon collection
7th - 2nd rooms together
Frédéric Dieu, rapporteur
Gilles Pellissier, public rapporteur
SCP MONOD, COLIN, STOCLET; PRADO, lawyers

Reading of Monday, October 17th, 2016

FRENCH REPUBLIC
IN THE NAME OF THE FRENCH PEOPLE


Full Text

Considering the following procedure:

Seized of a preliminary question by an order of September 8, 2014 of the judge of the state of the high court of Créteil, the administrative court of Melun, by a judgment n ° 1504226 of March 2, 2016, declared illegal, d On the one hand, paragraph 2 of Article 9 of the addendum of 2 April 1976 to the convention concluded between the commune of Villeneuve-le-Roi and Mrs B ... and whose object is the exploitation of the markets of the municipality, on the other hand, article 5 of the addendum of June 4, 1992 to the same convention as it applies to the rights of place provided for in article 3 of the addendum of June 4, 1992 and the rights of unloading vehicles, also provided for in this article, and rejected the conclusions of the municipality of Villeneuve-le-Roi that it is illegal to declare paragraph 3 of article 9 of the addendum of 2 April 1976.

By a summary appeal and a supplementary memorandum, registered on 21 March and 20 April 2016 at the litigation secretariat of the Conseil d'Etat, the municipality of Villeneuve-le-Roi asks the State Council:

  1. to annul that judgment in so far as he refused to declare paragraph 3 of Article 9 of the addendum of 2 April 1976 unlawful;
  2. settling the case on the merits, to grant his claim on this point;
  3. to put to the charge of MM. C ... the sum of 6 000 euros under Article L. 761-1 code administrative justice.

Considering the other parts of the file;

Viewed:

  • the general code of local authorities;
  • the general tax code;
  • Article 136 of the Decree of 17 May 1809;
  • the code of administrative justice;

After hearing in open session:

  • the report of Mr. Frédéric Dieu, master of petitions,
  • the conclusions of Mr Gilles Pellissier, public rapporteur;

The word having been given, before and after the conclusions, to the SCP Monod, Colin, Stoclet, lawyer of the commune of Villeneuve-le-Roi and to Me Le Prado, lawyer of ME .. C ..., of MA. .C ... and MD..C ...;

  1. Considering that it appears from the documents of the file submitted to the judge of the bottom that ME..C ..., MA..C ... and MD..C ..., carrying on their commercial activity under the sign "Les Fils of Mrs B ... ", have seized the tribunal de grande instance of Créteil of a request tending, on the one hand, to the compensation of the prejudice which they estimate to have undergone due to the lack of knowledge by the municipality of Villeneuve -le-Roi of the clause of revision of the rights of place envisaged by article 5 of the amendment of June 4, 1992 to the convention relating to the functioning of the markets and markets of the commune of Villeneuve-le-Roi concluded on December 9 1957 with MrsB ..., and, on the other hand, to the payment of the indemnity provided for in article 9 of the addendum of 2 April 1976 to the same agreement in the event of termination of the agreement by the city at the end of the thirtieth year of operation; that by an order of September 8, 2014, the judge of the status of the tribunal de grande instance of Créteil sent the parties before the administrative court to decide on the legality of Article 5 of the amendment of the 4 June 1992 and Article 9 of the addendum of 2 April 1976; that, by the judgment attacked, the administrative court of Melun has, on the one hand, declared illegal the stipulations of the second paragraph of Article 9 of the rider of April 2, 1976 providing for the tacit renewal of the contract as well as those of the Article 5 of the addendum of 4 June 1992 on the review of rights of place and, on the other hand, rejected the conclusions of the commune of Villeneuve-le-Roi that the stipulations of the third paragraph be declared illegal of article 9 of the rider of 2 April 1976 which provides for the payment of compensation in the event of termination of the agreement by the city; that the town of Villeneuve-le-Roi seeks the annulment of the judgment of the administrative court of Melun as he rejected the latter conclusions; that, by way of cross-appeal, MM. C ... seek the annulment of this judgment in so far as it declared unlawful article 5 of the addendum of 4 June 1992 providing for the revision of the rights of place;

On the contested judgment, in so far as it declared unlawful Article 5 of the addendum of 4 June 1992:

  1. Considering that it results as much from the provisions of the decree of May 17th, 1809 relating to the municipal and beneficence grants, applicable to the rights of places perceived in the halls and markets, that those of the article L. 2331-3 of the general code of the local authorities, that the product of the rights of place perceived in the halls, fairs and markets presents the character of a fiscal receipt of the commune; that it also results from the second paragraph of Article L. 2224-18 and the first paragraph of Article L. 2121-9 of the General Code of Local Authorities that only the municipal council is competent to adopt terms of revision duties of a fiscal nature such as space charges levied in halls, fairs and markets, or the tax on garbage disposal and the sweep fee, also listed in Article L. 2331-3 of the General Code of local authorities and governed by Articles 1379, 1520 to 1523 and 1528 of the General Tax Code; that these modalities of revision can not result from the imperative stipulations of a contract passed by the commune;
  1. Considering that according to article 5 of the addendum of June 4, 1992: "In order to update the old variation formula, to reference the new bases and to harmonize the parameters according to the actual conditions of exploitation, the provisions of article 8 of the addendum of April 2, 1976 are canceled and replaced by the following: / The daily rate of collection provided for in Article 3 of this addendum and the fees determined in Article 3 ci above, in the same proportion and on the same date, will be revised at least once each year, and will undergo the same evolution as the variation formula below without, however, in the event of a decrease, return to a rate and royalty lower than prefixed, unless otherwise agreed by the parties on this particular point.In case of refusal by the city to apply the clause below, the parties agree to meet to jointly develop the amendment of the discount of the tari f and the fee provided for in the initial agreement and its successive amendments. / (....) "that the perceptions referred to in Article 3 of the addendum of 4 June 1992 are niche rights, material rights, unloading rights and sealing rights;
  1. Considering that by a sovereign appreciation devoid of denaturing, the administrative court of Melun considered that the stipulations of article 5 of the addendum of June 4, 1992 fixed imperatively the modalities of revision of the rights of place, of material, of unloading of the vehicles and tightening provided for in article 3 of the same endorsement; it follows from what has been said in point 2 that the court was legally able to infer that these stipulations were unlawful in so far as they apply to rights the definition of which falls within the sole competence of the municipal council, without that the municipality can engage by contract in this matter; that, consequently, the incidental appeal of MM. C ... must be rejected;

On the contested judgment as he declared legal paragraph 3 of Article 9 of the rider of 2 April 1976:

  1. Whereas under Article 9 of the addendum of 2 April 1976: "The concession agreement shall have a term of thirty years beginning on the date of bringing the new market into operation." / It will then be renewed by tacit renewal for a period of ten years, unless terminated by one or other of the parties sent one year before its normal expiry / If the cancellation was made by the city upon the expiry of the 30th year of the exploitation, it would be due to the concessionaires an indemnity equal to a quarter of the annuities paid, increased from the 16th year of exploitation of an interest calculated at the rate of 6 % according to the method with compound interest ";
  1. Considering that after having judged illegal the clause of tacit renewal provided for in the second paragraph of Article 9 of the rider of April 2, 1976, the administrative court held that the indemnity clause provided for in the third paragraph of the same article, which he has without prejudice, that it was intended to repair the damage suffered by the concessionaire by reason of the absence of renewal of the contract at the end of the initial term of thirty years provided for in paragraph 1 of the same article, was divisible from the clause of tacit renewal and was legal since the indemnity which it provided for payment to the contracting party was not manifestly disproportionate with regard to the prejudice caused to the C ... consorts by the non-renewal of the contract; that in so holding that the indemnity clause provided for in paragraph 3 of the same article was divisible from the clause of tacit renewal provided for in paragraph 2 of the same article, the court distorted these contractual stipulations as soon as it had - even noted, as has just been said, that the object of this indemnity clause was to repair the damage suffered by the concessionaire because of the opposition of the municipality to the tacit renewal of the contract;
  1. Considering that it follows from the foregoing that the municipality of Villeneuve-le-Roi is founded, without it being necessary to examine the other grounds of its appeal, to request the annulment of Article 3 of the judgment under appeal who rejected his claims that the third paragraph of Article 9 of the addendum of 2 April 1976 should be unlawful;
  1. Considering that it is necessary, in the circumstances of the case, to settle the case on the merits in application of the provisions of Article L. 821-2 code administrative justice;
  1. Considering that the clauses of tacit renewal contained in contracts of the public order being illegal, no prejudice, and therefore no right to compensation, can be born, for the contracting party of the administration, the absence of tacit renewal of a contract at the end of the initial period agreed upon by the parties; that thus, the illegality of the clause of tacit renewal contained in a contract of the public order results in the illegality of the clause providing for compensation to the co-contractor of the public person due to the non-tacit renewal of the contract; that the illegality of such indemnity clause without legal basis must be relieved by the judge of its own motion;
  1. Considering that it follows from the above that the indemnity clause provided for in paragraph 3 of Article 9 of the rider of 2 April 1976, providing for compensation to the concessionaire in case of refusal by the municipality of Villeneuve-le-Roi to let the contract be tacitly renewed and continue beyond its legal duration, and therefore because of its refusal to apply a clause of tacit renewal, is tainted of illegality;

The conclusions submitted under the provisions of Article L. 761-1 of the Administrative Justice Code:

  1. Considering that the provisions of Article L. 761-1 of the Code of Administrative Justice preclude the charging of the municipality of Villeneuve-le-Roi, which is not, in the present case, the losing party, the sums that MM. C ... in respect of the costs incurred by them and not included in the costs; whereas, on the other hand, they should be charged to the sum of 3000 euros to be paid to the commune of Villeneuve-le-Roi;

DECIDE:
Article 1: The cross-appeal of MM. C ... is rejected.
Article 2: Article 3 of the judgment of the Administrative Court of Melun of 2 March 2016 is set aside.
Article 3: It is stated that paragraph 3 of Article 9 of the addendum of 2 April 1976 to the agreement concluded between the commune of Villeneuve-le-Roi and Mrs.B ..., relating to the functioning of the markets of the commune, is tainted with illegality.
Article 4: Messrs. C ... will pay a sum of 3 000 euros to the municipality of Villeneuve-le-Roi under Article L. 761-1 code administrative justice.
Article 5: The conclusions presented by MM. C ... under the provisions of Article L. 761-1 code administrative justice are rejected.
Article 6: This decision will be notified to the municipality of Villeneuve-le-Roi, ME .. C ..., MA..C ... and MD..C ....