Challenge to TECTEO’s SAP contract fails on one missing publication: the directors’ mandates were not yet in the Official Gazette
Tetrade Consulting challenged, under extreme urgency, the award to NRB of a services contract for managing consumption metering data in SAP-ISU at TECTEO, but the Council of State declared the application inadmissible of its own motion because the renewal of the mandates of the two directors who had decided to bring the action had, on the day of the hearing, still not been published in the annexes to the Belgian Official Gazette.
What happened?
TECTEO, an intermunicipal cooperative company, awarded a public services contract for the ‘implementation of TECTEO’s business processes for the management of consumption metering data in SAP-ISU for its electricity and gas activities’ to Network Research Belgium, or NRB. The decision was undated but was communicated to Tetrade Consulting on 12 December 2012. By a single application lodged on 21 December 2012, Tetrade sought both annulment and suspension under extreme urgency. An order of 21 December 2012 summoned the parties to the hearing of 21 January 2013. NRB applied on 18 January 2013 to intervene; as the beneficiary of the disputed contract it had an interest in doing so and its request was granted. Then things went wrong for Tetrade, and not on the grounds the parties had briefed. With its application Tetrade had produced a copy of its articles of association of 30 May 2000, together with a copy of the minutes of a general meeting of 20 April 2012 showing that the directorships of Rhiannon and Trevisan had been renewed for a six-year term ending immediately after the ordinary general meeting of 2018. It also produced a copy of a ‘Report of the Board of Directors of Monday 17 December 2012’ showing that those two directors had decided to bring the action. In the inventory of documents attached to its application, Tetrade itself stated that publication of the renewal of its directors’ mandates was ‘in progress’. The Council of State tested this against articles 73, 74 and 76 of the Companies Code: the extract of the acts concerning the appointment and termination of office of persons authorised to administer and bind the company must be filed and published in the annexes to the Belgian Official Gazette within fifteen days of filing, and such particulars are enforceable against third parties only from the day of their publication, unless the company proves that those third parties had prior knowledge of them. On the day of the hearing no document established that publication had taken place, nor even that the necessary steps had been undertaken. Nor was there any document showing that an extract of the deliberation of the general meeting of 20 April 2012 had been filed with the registry of the commercial court in whose district the company has its registered office. The Council concluded of its own motion that the application for suspension was inadmissible. At the parties’ request the judgment further provided that the bids of Tetrade Consulting and NRB would remain confidential. NRB’s intervention was admitted, the application for suspension under extreme urgency was rejected, the judgment was notified by fax and the costs were reserved.
Why does this matter?
An award dispute is usually lost on the plea; here the bidder lost it on the file — before a single word had been exchanged about the contract itself. That is not formalism for its own sake. The Council of State must be able to establish that the company appearing before it validly decided to do so, and it must be able to infer this from particulars enforceable against third parties. An internal board report will not do where the signatories’ authority rests on mandates not yet published in the Official Gazette. The timing makes it painful: the mandates were renewed on 20 April 2012, the action was brought on 21 December 2012 and the hearing took place on 21 January 2013 — nine months in which publication could have been put in order, while Tetrade had to write in its own inventory that it was ‘in progress’. Moreover, the Council made that finding of its own motion: no party needed to raise the point. For anyone active in public procurement the practical significance is considerable. Extreme-urgency proceedings play out in a matter of weeks. Anyone who at that moment still has to find out whether their company law publications are in order is too late. And if the case founders on admissibility, the award simply stands, however strong the substantive grievances were — of the quality of the bids of Tetrade and NRB this judgment tells us nothing, precisely because the Council never reached them.
The lesson
Check now, and not on the day you want to challenge an award, whether the appointment and renewal of your directors have been filed with the registry of the enterprise court and published in the annexes to the Belgian Official Gazette. Until that publication exists, the mandates are not enforceable against third parties and the Council of State may find of its own motion that your action was not validly brought. Always attach proof of publication to an application, not merely the minutes of the general meeting and an internal board report. If you only notice when drafting the application that publication is missing, arrange the filing immediately and at least produce evidence of those steps before the hearing — here even that was absent. And bear in mind: in extreme-urgency proceedings you do not have weeks to put such a thing right. For authorities the flip side is equally sober: admissibility is a real defence, but you need not rely on it, since the Council may raise the point without you.
Ask yourself
Have the mandates of your current directors been published in the annexes to the Belgian Official Gazette, and do you hold recent proof of that in your file? Has the extract of the general meeting’s decision appointing or reappointing them been filed with the registry? Do you know who within your company is formally competent to decide to bring an action, and is there a written trace of it that is enforceable against third parties? And have you checked those three things before an award decision arrives to which you must react within fifteen days?
About this database
The Council of State (Raad van State / Conseil d'État) is Belgium's supreme administrative court. In disputes over public procurement — from contract awards to tenderer exclusions — the Council of State is the final arbiter. The rulings in this database are summarised by TenderWolf in plain language, with practical lessons for tenderers and contracting authorities. View all rulings →