EU funding risk cannot justify ex parte lifting of award freeze

A Portuguese rule that lets a court lift, within 48 hours and without hearing the challenger, the automatic suspension of a contested contract awardEuropa is incompatible with the remedies directive, even where the aim is to save European fundingEuropa. Article 2(3) to (5) of Council Directive 89/665/EEC, read in the light of Article 47 of the Charter of Fundamental Rights of the European Union, precludes such a schemeEuropa, the Court of Justice (Second Chamber) holds in Joined Cases C-266/25 and C-267/25Europa.

The cases concern two awards by EDIA – Empresa de Desenvolvimento e Infra-estruturas do Alqueva, S.A., each decided on 23 December 2024, for floating photovoltaic power plants at pumping stations in Portugal: the Álamos station in Case C-266/25, and the S. Pedro and S. Matias stations in Case C-267/25. I-Sete – Inovação, Soluções Económicas e Tecnologias Ecológicas, Lda. challenged both awards before the Tribunal Administrativo e Fiscal do Porto. EDIA says Council of Europe Development Bank money totalling EUR 45 million funds the two contracts on condition they are completed by 31 December 2025 at the latest, so maintaining the suspension could cost it that European financing.

The referring court asked about Article 2d of Directive 89/665, on ineffectiveness of concluded contracts. The Court reframes the question: no contract has been concluded — I-Sete challenges the award decisions themselves — so the dispute is pre-contractual and governed by Article 2, not Article 2d.

Under Portuguese law, an urgent challenge to an award for a European-funded project, brought within 10 working days of notification of the award to all tenderers, automatically suspends the contested actEuropa. But afterwards the contracting authority may ask the court, without first hearing the opposing party, to lift the suspension provisionally on summary evidenceEuropa. The court must grant it within 48 hours on two cumulative conditions only: expiry of the 10-day period, and a risk of losing European fundingEuropa — presumed as soon as the authority attaches a document showing the contract belongs to a financed projectEuropa. The challenger then has five days to seek maintenance, but only by showing those two conditions were not metEuropa.

That scheme replaces one automaticity with its opposite. It allows the authority to exploit the temporary lifting to sign the contract even though Article 2(3) forbids concluding it before the review body has ruled. The challenger's only reply is, in the Court's words, a probatio diabolica — proving a negative against two easily satisfied conditions — while the court itself has no discretion at the provisional stageEuropa.

The later inter partes weighing under Article 25-A(6) to (8) of the Public Procurement Code cannot cure this, because the applicant has no guarantee it survives to that stage. The right to an effective remedy requires the interim-measures court itself to balance all the interests at stake before lifting protectionEuropa — Article 2(5) of the directive is its concrete expression in procurement, reconciling the unsuccessful tenderer with the authority and the successful tenderer. A funding-loss risk alone cannot systematically tip that balance in the authority's favourEuropa, since shielding every EU-funded award from suspension could bless unlawful awards while inflicting irreparable damage on challengers. The measure therefore impairs the very essence of the Article 47 rightEuropa, so no proportionality assessment can save it.

Legal basis: Article 2(3) to (5) of Council Directive 89/665/EEC of 21 December 1989, as amended by Directive 2014/23/EU, read in the light of Article 47 of the Charter of Fundamental Rights of the European Union.