Decision

Referring to Art . 149, para 1, subpara 2 of the Constitution in relation to Art . 150, para 2 of the Constitution a five - member jury of the Supreme Administrative Court ( SAC ), Panel 1 , challenged the constitutionality of §§ 128, 130, 131, 132 and 133 of the Act Amending and Supplementing the Public Procurement Act (AASPPA). Paragraph 128 of the AASPPA amends Art. 120 of the Public Procurement Act (PPA), § 130 of the AASPPA amends Art. 121 of the PPA, § 131 of the AASPPA creates a new Art. 121а of the PPA, § 132 of the AASPPA amends Art. 122 of the PPA and § 133 of the AASPPA creates new articles – Arts. 122а – 122 l in the PPA.

The challenge sees noncompliance between §§ 128, 130, 131, 132 and 133 of the AASPPA by which the Legislature grants the Commission for Protection of Competition (CPC) the power to have a say on the legality of the decisions, actions or omissions of the contracting authorities under PPA and the text of Art. 119 of the Constitution reading that j ustice in the Republic of Bulgaria shall be administered by the Supreme Court of Cassation, the Supreme Administrative Court, courts of appeal, regional courts, courts-martial and district courts. Thus the CPC , which is not a court inasmuch as there exist substantial differences between the organization and modus operandi of the courts and this institution of the State , as a matter of fact settles legal disputes between the persons involved in public procurement procedures and by doing so , is engaged in jurisdiction . Such a power , however , disagrees with Art . 119 of the Constitution which gives a detailed list of the institutions that can have jurisdiction .

What is particular about that case is that the challenge is targeted against several AASPPA paragraphs, which change PPA texts or insert new texts into the PPA. The Constitutional Court maintains the view that any amending or supplementing act, be it passed on its own or incorporated into the final provisions of a new act to amend or supplement an existing piece of legislation, is a piece of secondary legislation. An act amending or supplementing an existing act cannot be identified as a separate piece of legislation that permanently exists in the legal world due to, inter alia, the fact that unlike other acts as a first step it unmakes the rules of conduct and as a next step, it makes them. Art. 8 4, item 1 of the Constitution considers amendments and supplements as autonomous and equally important legislating processes on a par with the passage and abrogation. Further, an amendment or a supplement to an existing piece of legislation has, inter alia, an abrogating effect on it. However, the nature of that effect is not an autonomous legal consequence but part of the rationale of the desired amendment and supplement. Therefore, an amending or a supplementing act ceases to be autonomous upon entry into force and becomes part of the act, which it amends or supplements. Henceforth, it is only the amended or supplemented texts of the acting piece of legislation in accordance with the numeration that can be subject to a challenge of constitutionality. An act that amends or supplements an existing piece of legislation can be autonomously checked for compliance with the Constitution solely between the promulgation and the entry into force as in this interval it is not yet incorporated into the piece of legislation that it amends or supplements. The transitional and concluding provisions of an act that amends or supplements an existing piece of legislation can be subject to a separate check for compliance with the Constitution inasmuch and insofar they are standalone in the amendments or supplements to the existing piece of legislation.

To rule on the case on merit the Constitutional Court took into account:

1. Jurisdiction is the independent settlement of a concrete legal dispute, i.e. the process establishes what an existing legal rule prescribes, what conduct is the proper conduct and whether and to what an extent the real conduct which is action or omission conforms to the prescriptions of the law in the concrete case dealt with. Jurisdiction is the law enforcement and in that sense it is based on the law and enforces the law. Therefore, the settlement of legal disputes, which is unrelated to the law enforcement, will not be equivalent to jurisdiction. For an activity to be termed jurisdiction it must seek to settle legal disputes on which legal action has been taken and in observation of certain adversary proceedings in conditions of independence and autonomy of settlement. As jurisdiction settles a concrete legal dispute, the judgment under such circumstances must enjoy a special stability that will forestall review.

The challenge of the law abidance of the decisions, actions or omissions of the contracting authorities of contracts under the PPA and in general the challenge of the legality of an administrative act is a legal dispute, which is tantamount to jurisdiction, providing it must be settled by an independent authority, which is approached in conditions of adversary proceedings. The opposite would be an unacceptable mix of administrative activity and jurisdiction, hence the conflict with the principle of the separation of powers. In general, the judgment whether an activity constitutes jurisdiction or state governance must proceed from the nature of the activity and not from the legal status of the institution that carries it out. Art. 119 of the Constitution reading that justice shall be administered by courts does not invite a different conclusion nor does it specifically imply that the criterion to put jurisdiction in a separate compartment should be the institution that is engaged in it. The purpose of this text is not to define the criterion that makes an activity jurisdiction for it is beyond doubt that apart from jurisdiction the courts are engaged in an administrative activity in a judicial form.

2. Chapter Eleven of the PPA provides for a special appeal procedure for decisions, actions or omissions of the contracting authorities under the PPA in deviation from the general appeal procedure for administrative acts that the Administrative Procedure Code treats. The procedure referred to has a number of peculiarities: the contracting authorities' final decision is appealable as are all the contracting authorities' actions in the course of the procedure; the appeal has no suspension effect; the rules of legal action initiation, schedule of hearings and conclusion of litigation, including summary trial, are different; the proceedings are a recipient of the rules of the Protection of Competition Act (PCA), etc. The circumstance that the cases of which the legal text says nothing with regard to the appeal procedure for decisions, actions and omissions on the part of the contracting authorities pursuant to the PPA, are subject to the appeal procedure for individual administrative acts, cannot be a reason to minimize the importance of the special provision and of the conclusions about the nature of the activity performed solely on the basis of the reception of the general administrative process rules.

3. There is logic to assign to the CPC the control on the legality of the contracting authorities' decisions, actions or omissions as part of the administrative control exercised by an independent administrative authority. The presumption is that there is connection between public procurement and competition, especially there is a need to protect competition and promote competition in the award of contracts in order to achieve higher efficiency of public expenditure.

4. The core of the challenge is that it is unacceptable to let an independent administrative authority, i.e. the CPC, acquire functions that are tantamount to jurisdiction in the appeal of the legality of the contracting authorities' decisions, actions or omissions pursuant to the PPA. No doubt, organizationally the CPC is not a court, least of all a specialized court. The CPC composition and modus operandi differ substantially from those of the court in general and of the specialized courts in particular. The most essential aspect is that the CPC is not part of the Judiciary; the CPC members are not subject to the rules that govern the election and legal status of justices as established by the Constitution and the Judiciary Act; the CPC members are elected for a term in office; the decisions are subject to a quorum, etc.

The CPC is an independent specialized State institution that is accountable to the National Assembly. The CPC is not administratively superior to the contracting authorities pursuant to the PPA as it is not the top level of a centralized hierarchical structure. Hence the impossibility to exercise internal ,,in-house” control. The CPC is not an institution of specialized external ,,outhouse” administrative control either, therefore, its legal status cannot be seen as equivalent to that of the National Audit Office, the Financial Supervision Commission, the Antidiscrimination Commission, etc. While this decision will not delve into the details that make the difference between ,,control” and ,,supervision”, it is worth noting that as a rule the so-called external ,,outhouse” administrative control cannot evolve in the form of abrogation of particular administrative acts. Such a possibility exists with internal ,,in-house” administrative control inasmuch as it is exercised by a higher-ranking body on a body of a lower rank within the hierarchy of the same institution. According to the PPA the bodies with powers to exercise control on public procurement are the Minister of Economy and Energy and the Public Procurement Agency . As far as the CPC is concerned, it has the power to rule specially on the legality of the contracting authorities' decisions, actions or omissions pursuant to the PPA, i.e. the CPC has strictly fixed up powers. Such a regulatory approach is an indication of whether the Legislature wants to grant the CPC an extra power in addition to what the Protection of Competition Act has already granted it – the power to ensure the normal functioning of competition in all sectors of this country's economy.

The CPC's activities as described in the PPA's Chapter 11 are not homogeneous. To begin with, the CPC can rule on challenges of the legality of the contracting authorities' decisions, actions or omissions pursuant to the PPA. Should a complainer demand so, the CPC is free to enjoin suspension on the public procurement procedure. The former is a case where there is jurisdiction: the CPC examines the legal dispute with which it has been approached as an independent authority and within the framework of adversary proceedings. It appears untenable to claim that it is a case of jurisdiction in the sense that the CPC just proves or disproves the legal consequences of an administrative act and supplies it with duly collected evidence on the basis of which the complainer can substantiate claims before the Supreme Administrative Court. When the legality of a contracting authority's decision, action or omission is challenged, the challenge seeks to contest the legal situation that has occurred, i.e. to find what this situation looks like and how it correlates to what the law reads on the case dealt with. The more so that jurisdiction is law enforcement inasmuch as it proceeds to implement the law. However, the CPC is not engaged in jurisdiction when it suspends the public procurement procedure, as it does not settle a legal dispute.

5. The hypothesis that the CPC resolution on the contestation of the contracting authorities ' decisions , actions or omissions in public procurement is not an instance of jurisdiction as despite some characteristics that allow describing an action as jurisdiction , this resolution does not have the force of res judicata . However , any resolution that challenges the legality of an administrative act and asks for its abrogation will go into effect legitimately unless appealed against with the SAC as it will provide legal defense against the contracting authority ' s unlegislated decision , action or omission and there will follow a settlement of the dispute whether there exists justification in the claim to retract the contracting authority ' s unlegislated decision , action or omission in public procurement , i . e . whether it will have the force of res judicata. The resolution ascertains the real legal situation and makes it binding on the parties to conform their doings to what has been thus ascertained . The CPC resolution on the legality of the contracting authority ' s decisions , actions or omissions is not a stable administrative act and its effect is not limited to its irrevocability alone. The resolution achieves more than that: it settles a legal dispute and if it is not appealed against with the SAC, it will go into effect.

The CPC resolution on the contestation of the contacting authorities' decisions, actions or omissions in public procurement is not an individual administrative act or merely an administrative act in the meaning of Art. 120 of the Constitution. In principle, legal disputes shall not be settled by administrative acts. It is only when a superior administrative body rules on a complaint against an administrative act of a lower-ranking administrative body that the higher-ranking body issues a new administrative act. As a higher-ranking body is had in mind, this is indication that the idea of ruling is limited not to a judgment on what the law prescribes on the concrete dispute, but seeks to ensure that the law is enforced in the practices of government of the State. The CPC is not the superior of the contracting authorities, hence the implausibility of the assumption that the act with which the CPC rules constitutes an administrative act.

Further , it should be noted that the Legislature grants the CPC, in its capacity of a body that exercises control on the public procurement procedure, powers that are not characteristic of a court. The CPC passes a resolution, including resolutions on contestations of the legality of a contracting authority's decision, action or omission, subject to a quorum; should the complainer demand so, the CPC has the prerogative to suspend the procedure; the settlement of the dispute is not final and is appealable with the SAC; when the CPC abrogates a contracting authority's decision, action or omission, it is free to make binding prescriptions about the public procurement procedure , i.e. to do something that is more typical of the administration; and finally, it is not to be ignored that when the CPC exercises control on the contracting authorities' decisions, actions or omissions in public procurement, it acts as an independent body that is elected by the National Assembly.

The text of Art. 119, para 1 of the Constitution reads that j ustice shall be administered by the Supreme Court of Cassation, the Supreme Administrative Court, courts of appeal, regional courts, courts-martial and district courts. To comply with the prescription that justice shall be administered by courts, it will be sufficient to leave the final settlement of a legal dispute to any of the above-mentioned courts. This will make sure that the requirement of settlement of a legal dispute, i.e. adjudication, by a court is met. The administration of justice that Art. 119, para 1 of the Constitution provides for refers it to the courts and this requirement can be met providing the law ensures that any legal dispute is taken to court. The opposite, the reference of a legal dispute to an institution other than a court, will be inconsistent with Art. 119, para 1 of the Constitution. The prescription of Art. 119, para 1 of the Constitution invites the same conclusion. It is true that the text lists different courts, general and specialized alike, and does not compartmentalize them in a definite system. That the purpose of this text is not to constitute a system of one type or another is evident in para 2 of Art. 119 of the Constitution that provides for the establishment of courts other than the specialized courts mentioned in paragraph 1. Therefore the idea is that the adjudication as an activity which settles legal disputes by an independent authority in adversary proceedings should not be perceived as a problem of a system of general courts and of a system of specialized courts ; the idea is not to confine the adjudication to a definite system of court instances but to ensure that the final say on a legal dispute is by a court both in organizational and functional terms. This is absolutely in compliance with the imperative of Art. 119, para 1 of the Constitution reading that justice shall be administered by the courts that are enumerated in that text. The formula that justice shall be administered by the courts and by no other institution is in fact an outcome of shifting the focus of the provision of Art. 119 of the Constitution. The exact meaning of the text is not to be explained with nothing else but the focus on the enumeration of the general and specialized courts in the text referred to; this meaning is to be explained within the whole context of the provision at issue.

On the other hand, the provision at issue should be treated in the context of the principle of separation of powers. The purpose of Art. 119 of the Constitution is to present the administration of justice as a basic function of the State in addition to the legislating and executive function and to define it as the basic activity of the one of the three powers. Each of the three powers is independent of the others and deters the others with its inherent activity. Inasmuch as the mutual deterrence may impede the functioning of the State, it should not be made absolute. While the Constitution grants to each of the three powers prerogatives that fall within the basic portfolio of the other two powers, it conforms strictly to the key role of that power vis-à-vis the respective activity. Therefore, any interpretation of the Constitution provisions that attribute to the three powers their basic activities in the sense that a definite activity is exclusively within the domain of any of the powers will not be in tune with the real content of the principle of separation of powers. For instance, the courts adjudicate and this is their basic function; yet the courts also are engaged in administration in a judicial form. Administrative bodies, on their part, issue penal provisions that are appealable with a court. There is no reason to insist , under such circumstances , that the principle of separation of powers a priori rejects the interpretation that this decision accepts .

Regarding the case in question, as the court is the institution that controls adjudication and as the ruling of a court is final in the settlement of a legal dispute on the legality of a contracting authority's decision, action or omission, there is no need to look for noncompliance with the principle of separation of powers in the sense that an institution, whatever it may be, ousts the courts from adjudication. Merely, there is no longer a need for the courts to rule as the parties to a legal dispute are offered a settlement by an independent body and neither the one nor the other objects the settlement despite the law-provided avenue of expression of disagreement.

On one occasion the Constitutional Court interpreted Art. 119 of the Constitution and came to the conclusion that it precludes the assignment of judicial functions to the CPC (Decision № 22 / 1998 on Constitutional Case № 18 / 1998). However , the Constitutional Court was approached with a case , which is not identical with this case for the PCA text that was challenged assigned the final settlement of a legal dispute to a body other than the courts enumerated in Art. 119, para 1 of the Constitution, i.e. in the hypothesis of Decision № 22 / 1998 on Constitutional Case № 18 / 1998 the gateway to the court had been completely cut off. That decision continues to stick to the Constitutional Court's established practice vis-à-vis the interpretation of Art. 119 of the Constitution in the sense that the court is the body that is competent to settle a specific legal dispute with the important explanation that inasmuch as the administration of justice is to be understood as the final settlement of a legal dispute, the provision in question will be met as the law permits a non-judicial body to rule, on the condition that should the parties concerned so desire, the final decision may be taken by a court following an appeal as a regular procedure of defense. The hearing of a legal dispute by a court is a sign of a state committed to the rule of law. The way to the court must be open at all times : this is a fundamental principle and the ,,finishing brick ” of the building of the state committed to the rule of law. One of its underlying principles is that normally any execution or administration should be subject to judicial control. In this way in unison with the Constitution principle a state committed to the rule of law demonstrates its determining structural characteristics : it is the court that has the final and ultimate say on the respect for the rights and legitimate interests of individuals and corporate entities and on the outcome of legal disputes . This ensures fully the right to legal counseling that Art. 56 and Art. 120, para 2 of the Constitution provide for. The parties in a public procurement procedure get access to proceedings, which are guaranteed by the appeal with a court of the act of the CPC as a non-judicial body with a jurisdictional competence. As a result of the PPA procedure the final jurisdictional act is decreed by a judicial body pursuant to Art. 119, para 1 of the Constitution and specialized to settle legal disputes. Thus the law - established specialization and differentiation of the judicial institutions from the public administration institutions guarantee the defense of the rights and legitimate interests of individuals and corporate entities that are involved in the public procurement process .

Following the above-stated deliberations, the Constitutional Court dismissed the challenge of the five-member jury of the Supreme Administrative Court, Panel 1, of the constitutionality of Art. 120, Art. 121, Art. 121а, Art. 122 and Arts. 122а – 122 l of the Public Procurement Act that are amended or supplemented respectively by §§ 128, 130, 131, 132 and 133 of the Act Amending and Supplementing the Public Procurement Act.

Председател: Румен Янков