Classified information about your shareholder? Defence doesn't have to explain what exactly is going on
The Council of State rules that Defence may exclude a company from a European defence project based on classified intelligence about its sole shareholder, even though the precise content of that information cannot be disclosed.
What happened?
A Belgian company participated in two defence projects as part of a consortium: a national DEFRA call and a European EDA Cross-CapTech project. In October 2025, the Director-General of the Royal Higher Institute for Defence refused the company's participation in the DEFRA call. The reason: the General Intelligence and Security Service (ADIV) held classified information about the company's sole shareholder — an 'integrity problem' that could cause reputational damage to Defence. The company had obtained a 'NATO SECRET' security clearance in May 2024, but ADIV subsequently received additional information. This information is classified under the Act of 11 December 1998 and cannot be disclosed — not even to the company itself. After an unsuccessful review and meeting with ADIV on 14 November 2025, Defence decided definitively on 4 December 2025: the company cannot represent Belgian industry in the European EDA project either. The company sought suspension, arguing insufficient formal motivation, material motivation errors, and disproportionality. The Council of State rejected all arguments. The formal motivation obligation must be reconciled with the secrecy requirements for classified information: a concise motivation suffices as long as the person can understand why the decision was made. The decisive motive was the integrity problem of the shareholder, not the 'reputational damage' — which was merely a superfluous motive.
Why does this matter?
This ruling touches on a rare but critical intersection: what if a government bases its decision on information it legally cannot share? In defence and security procurement, this is increasingly relevant. The ruling confirms that formal motivation requirements are balanced against secrecy obligations — and secrecy prevails, provided the authority indicates in general terms why it reached its conclusion.
The lesson
If you are active in defence or security procurement: holding a security clearance is no guarantee for future participation. New intelligence information can change the situation — and you will not get to see it. Always verify whether your company's shareholder structure could pose a risk.
Ask yourself
If you participate in a defence or security-related contract: have you recently verified whether any intelligence service has concerns about your shareholders or directors? A past security clearance does not automatically protect you.
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 →