Azerbaijan tender law interpreted by the court

 

According to Article 50-4.2 of the Law of the Republic of Azerbaijan "On Public Procurement", if the number of consignors registered to participate in electronic procurement is less than 3 participants to ensure effective competition, the procuring organization may cancel this procedure. According to Article 29.4 of that Law, the participation fee is not reimbursed under any circumstances. However, in practice, in case the continuation of the tender is refused according to Article 50-4.2, uncertainty has arisen regarding whether the participation fee will be reimbursed or not.

 

Thus, on the complaint of the "Palladium Defense and Security Solutions" Limited Liability Company, which was accepted on September 16, 2022, the Constitutional Court decided to verify the compliance of Article 29.4 of the Law of the Republic of Azerbaijan "On State Procurement" with Parts I and II of Article 29 of the Constitution of the Republic of Azerbaijan and gave relevant comments on this issue in the Decision.

 

First, the Constitutional Court notes that the participation fee is paid to cover the expenses related to the holding of the tender. In addition, by paying the participation fee, the applicant also shows how serious his intention to participate in the tender is. As such, the Constitutional Court concludes that there is no ambiguity in the content of Article 29.4, and the non-reimbursement of the participation fee, in any case, applies to the tenders that were refused due to the small number of participants.

 

However, the Constitutional Court, approaching the issue from the point of view of property rights, notes that during the re-announcement of the tender, which was rejected due to the fact that the number of consignors who submitted a tender offer to participate in the tender was less than the number required by law, charging the participation fee again from the previous consignor is disadvantageous compared to other consignors who joined later. As a result, in addition to the violation of one of the important principles reflected in the preamble of the Law "On Public Procurement" (the principle of creating an equal competitive environment for all consignors (contractors), the individual and excessive burden of the failed tender applicant, in addition to the initiative of civil circulation subjects to participate in public procurement the creation of a barrier also occurs. Based on the above, the Plenum of the Constitutional Court comes to the conclusion that the application of the provisions of Article 29.4 of the Law "On State Procurement" to tenders that were not completed due to the number of consignors (contractors) being less than three participants, leads to inconsistency with the requirements of Parts I and II of Article 29 of the Constitution.

 

As a result, the Constitutional Court notes that although the legislation does not consider it possible to reimburse the participation fee, that participation fee should be replaced by the participation fee in the tender to be held again. At the same time, the legislator does not exclude compensating the participation fee of the participants who have paid and are registered as consignors in future tenders, which did not take place on the basis specified in Article 11.1 of the Law "On Public Procurement".