The main distinguishing feature between Faraday and Midlands Co-op appears to be the existence of enforceable obligations for the developer to exploit the land. In the Midlands Co-op, the developer Tesco was free to decide by the Commission, even after the acquisition of the land concerned, whether or not the Land is ready to develop. As such, the Court considered that it was an exempt real estate transaction, although it is likely that all parties to the agreement had reached the agreement in the hope that Tesco would develop the country in accordance with the plans agreed by the Council. In Faraday, there was no such freedom on the part of the developer after the exercise of the opportunity to acquire the corresponding leases. As soon as St. Modwen acquired his lease on the land, he was obliged to develop it. Accordingly, the Court of Appeal did not consider this to be an exempt land transaction. Instead, the Court concluded that it was an agreement to provide work and services that depended on the developer`s acquisition of the corresponding land shares. However, there is no doubt that the judgment creates increased uncertainty for local authorities exercising their development powers and that a more cautious approach is likely in the future, given that more transactions are subject to public procurement rules, particularly where an option is highly likely to be exercised.
However, the Court of Appeal found that entry into the development agreement was still illegal, since the agreements, when considered as a whole, are ultimately required to place an order and that this obligation would crystallize at some point (i.e., the development contract would become a public contract for work), at a time when it was too late to proceed with the necessary contracting procedure (i.e. at the time the developer withdrew the land). This is both a violation of regulations and public law (on the basis that the Council has indeed agreed to act illegally in the future). “In concluding the development contract, the city council has effectively agreed to act illegally in the future. It has pledged to act in violation of contracting legislation. As Mr. Giffin says, it is illegal in itself, whether as a real or predictive violation of legitimate contracting requirements under the 2004 Directive and the 2006 regulations, or simply as an illegal public right or both. The only other possibility would be that a contracting power would be free to enter into a series of agreements in such an undertaking, the combined effect of which is to establish a “public contract for work” without ever going through a public procurement procedure. This would ne our regulatoryization.” Similarly, in Commission/France10, the ECJ clarified that the exercise of an option (for the provision of certain works) as part of a public contract made following a tendering procedure would only be valid if the initial award procedure had been designed to take into account the possibility of exercising that option. , z.B.
by formulating appropriate attribution criteria to evaluate bidders` bids for the (possible) exercise of this option. In other words, without evidence that the option has been fully “tested” in a compliant procurement procedure, the subsequent exercise of this option would be contrary to public procurement law.