“Property and the Tower erected thereon as described in Schedule 1 together with any alterations or additions thereto”. (b) The “Tower” was defined as: “the structure on which advertisements are displayed including all supports and the electrical cables and apparatus used for the lighting of the structure as further described in Schedule 1 hereto”. (c) The ‘Permitted Use’ was defined as: “... the operation of the Tower on the Property for the display of static electronic advertisements”.
"The absence of clear rules at Union level governing the award of concession contracts gives rise to legal uncertainty and to obstacles to the free provision of services and causes distortions in the functioning of the internal market. As a result, economic operators, in particular small and medium-sized enterprises (SMEs), are being deprived of their rights within the internal market and miss out on important business opportunities, while public authorities may not find the best use of public money so that Union citizens benefit from quality services at best prices. An adequate, balanced and flexible legal framework for the award of concessions would ensure effective and non-discriminatory access to the market to all Union economic operators and legal certainty, favouring public investments in infrastructure and strategic services to the citizen. Such a legal framework would also afford greater legal certainty to economic operators and could be a basis for and means of further opening up international public procurement markets and boosting world trade.
"Concessions are contracts for pecuniary interest by means of which one or more contracting authorities or contracting entities entrusts the execution of works, or the provision and the management of services, to one or more economic operators. The object of such contracts is the procurement of works or services by means of a concession, the consideration of which consists in the right to exploit the works or services or in that right together with payment. Such contracts may, but do not necessarily involve a transfer of ownership to contracting authorities or contracting entities, but contracting authorities or contracting entities always obtain the benefits of the works or services in question." (d) Recital 14 explains that service concessions impose legally enforceable obligations in respect of the services to be provided: "
“The New Leases are contracts for the rental of land within the meaning of regulation 10(11) of the CCR 2016. The New Leases are genuine leases. Although the objective of Outdoor Plus in entering into the lease arrangement is to exploit the advertising rights, the primary objective of the Council in granting the New Leases is to obtain a guaranteed income stream from the rental payments. The advertising concession authorises Outdoor Plus to exercise an economic activity on state-owned land but does not require Outdoor Plus to provide a service for the benefit of the Council. The essential features of the New Leases are that Outdoor Plus gains exclusive possession of the land and the structures on it. It has permission to use those structures for the display of static advertising and to sell the advertising space to third parties but that does not change the nature of the transaction as one for the rental of land.”
“158. On the basis of the admitted breaches by the Council, if the CCR 2016 applied, such breaches would be serious and material. Ocean would be entitled to a declaration of ineffectiveness and the Council would be required to pay a civil financial penalty. The purpose of these remedies is to penalise the wrongdoer and act as a deterrent. I reject Mr Goudie's submission that the adverse financial impact of a declaration of ineffectiveness would constitute overriding reasons relating to a general interest, requiring that the effects of the concession contract should be maintained, to engage regulation 61. As the New Leases do not affect the provision of services for the Council's residents, there would be no direct impact on public services. Any losses suffered by Outdoor Plus or third party advertisers would be a matter as between those parties and the Council. 159. An award of damages can only be made, in accordance with the Francovich principles, if any breach of the CCR 2016 is sufficiently serious to merit an award and there is a direct causal link between the breach and the damage sustained: Nuclear Decommissioning Authority v EnergySolutions EU Limited[2017] 1 WLR 1373 . 160. Any breaches of the CCR 2016 and/or general EU principles would not be sufficiently serious to give rise to an award of damages. Any distortion of the internal market through a failure to alert potential bidders from other EU states would not have affected the outcome of the tender exercise for Ocean. The successful bid from Outdoor Plus was more than£1 million per annum higher than the bid from Ocean. Therefore, even if the opportunity to tender had been offered to other bidders, Ocean would not have been successful. For that reason, Ocean would not be able to establish a causal link between any breach and damages.”
“Under Community law, the service that is the subject of a service concession must also be in the general interest, so that a public authority is institutionally responsible for providing it. The fact that a third party provides the service means that the concessionaire replaces the authority granting the concession in respect of its obligations to ensure that the service is provided for the community.”
“AG52 In my view, it is possible from a full examination of the measure, bearing in mind the meaning that the Court has so far attributed to it, to deduce the fundamental principle that for a given activity to fall within the ambit of the law on public works contracts there must be a strong and direct link between the public authority and the work or works to be executed. That link normally follows from the fact that the work or works are executed on the public authority’s initiative. AG53 Contrary to the view taken by the referring court, non-material and indirect benefit alone is not sufficient. Nor is the mere fact that the activity to be assessed is, generally, in the public interest sufficient. It should be noted that, in cases where a permit for the activity has to be issued by a public authority (which is normally the case with all building activities), the activity must obviously be in the public interest in order to obtain a permit, since the public interest is the reference parameter on which the public authorities grant permission. Unless the scope of the Directive is extended indefinitely, the general existence of a public interest which justifies permission to pursue the activity cannot therefore constitute the decisive criterion for determining which cases are to fall within it. In particular, it must be borne in mind that a building permit, that is to say, the typical expression of the authorities’ powers in the objective area of town planning, is usually confined to removing restrictions on a private initiative, not a public initiative.”
“AG62 A services concession is characterised in particular by the fact that the public authority entrusts the exercise of a service activity, a service the provision of which would as a rule fall to that public authority, to the concessionaire, thus requiring that concessionaire to provide a specific service. AG63 For an instrument to be regarded as a services concession, it must therefore be established that the provision of services is subject to specific requirements laid down by the public authority concerned and that the economic operator is not at liberty to withdraw from the provision of such services. AG64 Those considerations are borne out by recital 14 of Directive 2014/23, according to which certain Member State acts such as authorisations or licences, in particular where the economic operator remains free to withdraw from the provision of works or services, should not qualify as concessions. Unlike those acts, concession contracts provide for mutually binding obligations whereby the execution of the works or services is subject to specific requirements defined by the contracting authority. AG65 In this case it is not apparent from the facts described in the respective orders for reference whether the applicants in the main proceedings were required, under acts classified under national law as “concessions of State-owned assets”, to provide services that had been specifically entrusted to them by a public authority and were subject to specific requirements defined by that authority.” 39. These passages make plain that the services are those which “as a rule” would otherwise fall to be provided by the public authority. Mr Moser relied on the qualification, which certainly indicates that this principle may be subject to exceptions. But the effect of Promoimpresa, and the other authorities to which I have referred, makes it clear that, at least as a matter of general principle, the services which are the subject of the Concessions Directive (and therefore the Regulations) are services which would otherwise be provided by the contracting authority as part of its statutory obligations or in furtherance of its strategic objectives. 40. Finally, standing back from the detail, I would add this general point. All of Mr Moser’s arguments on principal issue 1 edged towards the proposition that, because the Council is a public authority, any contract into which it enters must, in some way or another, be caught by either the general public procurement rules, or these Regulations. 41. In my view, that is not looking at the question the right way round. A local authority like the Council will enter into a myriad of different contracts every year. Some may be caught by the Regulations; most will not. It is for Ocean to prove that the New Leases fall within the ambit of the Regulations, not for the Council to displace some sort of presumption that, because it is a public authority, all of its contracts are caught in one way or another by the public procurement rules. 42. The judge’s general conclusion, that the services had to be services which the Council was otherwise obliged to perform (or were for the benefit of the Council or its residents) then fed into her subsequent findings at [98] – [103] (set out at paragraph 17 above) about the terms of the New Leases in this case. Having concluded generally that the services had to be services which the Council would otherwise be obliged to provide, the judge had no doubt that the New Leases were not service concessions contracts. This was because, as she held: i) the Council had no statutory obligation to provide advertising services for its residents and the advertising services were not provided on the Council’s behalf [98]; ii) the advertising from the Two Towers was not required by, or provided for, the Council [99]; iii) the New Leases did not provide a service for the benefit of the Council or its residents [100]; and iv) advertising did not fall within the categories of services envisaged by the Concessions Directive [101]. 43. In my view, the judge’s conclusions summarised at i) - iii) above were plainly right. The Council had no statutory or other obligation to provide advertising services for its residents (or anyone else) and Ocean do not suggest otherwise. Accordingly, any advertising services being provided pursuant to the New Leases were not and could not be provided on the Council’s behalf. There was no express request for advertising by the Council within the New Leases, and its income was derived from Ocean Plus’ possession and use of the land, not the nature or quantity of advertising they might sell. That advertising was in any event unrelated to the objectives of the Council or any of its public obligations. 44. In addition, I consider that there was no direct benefit to the Council or its residents as a result of the nature and quantity of the advertising featured on the Two Towers. Although the Council imposed negative covenants as to particular types of advertising (unlawful and moving advertisements were prohibited), it was irrelevant to the Council whether or not those who saw the advertisements (whether they were local residents or otherwise) benefited in some way from the advertisements that they saw. 45. Mr Moser suggested that the Council could be said to have derived at least an indirect benefit from the rent payable under the New Leases (which gave rise to ground 2 of the appeal). But that misses the point. That submission assumed that the rent was paid in consideration for services to which the Regulations applied. But it was not, for the reasons already given. 46. For completeness, I should say that I do not agree with the judge’s fourth and final reason at [101], summarised at point iv) at paragraph 42 above. Whilst I accept that advertising does not fall within the categories of services envisaged by Recital 1 of the Concessions Directive, that of itself does not seem to me to be determinative: see the fuller exposition of my reasoning on this issue at paragraphs 73-76 below. However, since I expressly agree with each of the first three reasons for the judge’s finding that the New Leases were not service concessions contracts, this difference of opinion is irrelevant to the disposal of this appeal. 47. In those circumstances, I consider that the twin strands of the judge’s conclusions on principal issue 1 were essentially correct. In consequence, the Regulations did not apply to the tender process for the New Leases. 7. Principal Issue 2: Were the New Leases Caught by the Definition in Regulation 3(3)? 48. Principal issue 2 is concerned with whether the New Leases were contracts “for pecuniary interest… by means of which [the] contracting authority entrust the provision and the management of services… to the economic operator” (regulation 3(3)). The judge concluded that they were not. Her reasoning is at [105] – [112] and her conclusion is at [113] – [114] (paragraph 18 - 19 above). 49. The starting point for any consideration of this issue is to attempt to define what is meant by a concession. Mr Moser described it as a transfer, by the contracting authority to the economic operator, of the right to exploit a business opportunity by providing a service to third parties, in return for a payment to the owner of that opportunity. In this way, he said that the New Leases involved a grant by the Council to Outdoor Plus to exploit the opportunity to advertise; that Outdoor Plus provided advertising services to third party advertisers, in exchange for which the advertisers provided money to Outdoor Plus; and that Outdoor Plus then passed at least some of that money back to the Council. 50. Whilst I do not demur from Mr Moser’s generic definition of a concession, it will be seen straight away that the facts of this case do not easily fit within his proposed synallagmatic The expression used in Faraday (see paragraph 53 below). model. In a paradigm concession contract, the third parties will be those members of the public for whom the contracting authority is obliged to provide the services in question (like residents who need car parking, or who require leisure facilities). Here the third parties are advertisers who have no connection whatsoever with the Council or its residents. Moreover, the money paid by the advertisers to Outdoor Plus has nothing to do with the Council, which has a separate entitlement to a fixed sum by way of rent, regardless of the nature, quality or quantity of the advertising sold or the monies received by Outdoor Plus from those advertisers. 51. The decision in Promoimpresa is also of assistance on the general definition of a concession: “47. However, in the cases in the main proceedings, as the Commission notes, the concessions do not concern the provision of a particular service by the contracting entity, but an authorisation to exercise an economic activity on State-owned land. It follows that the concessions at issue in the main proceedings do not fall within the category of service concessions (see, by analogy, Belgacom NV v Interkommunale voor Teledistributie van het Gewest Antwerpen (Integan) (C-221/12) EU:C:2013:736; [2014] 2 C.M.L.R. 23at [26]–[28]). 48. Such an interpretation is, furthermore, supported by recital 15 of Directive 2014/23. That recital states that certain agreements having as their object the right of an economic operator to exploit certain public domains or resources under private or public law, such as land, whereby the State establishes only general conditions for their use without procuring specific works or services, should not qualify as “service concessions” within the meaning of that directive.”
“... to fulfil the purpose of the Directive, a required element is a commitment by the contractor, legally enforceable by the contracting authority, to perform the relevant work. It is insufficient if, legally, the contractor has a choice if he's entitled not to perform the work.”
“(a) the acquisition or rental, by whatever financial means, of land, existing buildings or other immovable property or concerning rights thereon…”
“(a) the acquisition or rental, by whatever financial means, of land, existing buildings or other immovable property or which concern interests in or rights over any of them …” 63. Although the wording of the Concessions Directive, on the one hand, and the Regulations, on the other, is slightly different, the difference is minimal. Nothing turns on it. I shall therefore refer to these provisions generically as “the land exemption”. 64. Neither counsel was able to identify any European or domestic authorities which explained the land exemption more fully. The point arose in argument in Faraday but was not addressed by this court in its judgment. In addressing principal issue 3, it is therefore necessary to start with the words of the land exemption itself. 65. In my view, the description in the latter part of Recital 15 of “land lease contracts” which are the subject of the land exemption is an almost perfect description of the New Leases in the present case. Thus, in the words of that Recital, the New Leases “generally contained terms concerning entry into possession by the tenant, the use to which the property is to be put, the obligations of the landlord and tenant regarding the maintenances of the property, the durations of the lease and the giving up of possession to the landlord, the rent and the incidental charges to be paid by the tenant”. 66. That analysis is consistent with the width of the land exemption set out in regulation 10(11). That makes clear that the Regulations do not apply to contracts for the rental of existing buildings, or contracts “which concern interests in or rights over” existing buildings. As Mr Moser accepted, that is a very wide definition. It seems to me that it must cover the New Leases, which are almost exclusively concerned with the Two Towers (namely the existing buildings) on these two pieces of land. 67. Mr Moser submitted that, when looked at as a whole, the New Leases were not land transactions, but contracts in relation to advertising services. He went so far as to say that “they make no sense as a lease”