Council of State Ruling on Unilateral Modification of Administrative Contracts

Extract

[...] When contractual irregularity can be isolated without altering the general economy of the contract, the Administration is entitled to ensure its suppression or unilateral modification. On the other hand, when the tainted clause constitutes a structural element of the contract, its unilateral suppression would compromise its balance, implying a prior judicial intervention or termination (CE March 2023, SIPPEREC). This clarification is essential, as it puts an end to a persistent judicial uncertainty: previously, any contractual irregularity had to be submitted to the judge before being regularized. [...]

[...] The principle of contractual balance, which pervades the entire law of administrative contracts, is hereby strongly consolidated. II- A demanding reconfiguration of the judge's control over unilateral modification acts The refined clarification of the criterion of the 'serious doubt » within the framework of the referral-suspension The criterion of the 'serious doubt» constitutes the fundamental pivot of the referral-suspension, in the sense that it authorizes the administrative judge to suspend the execution of an act when the invoked means appear to be, prima facie, of a nature to compromise its legality. [...]

[...] By this methodological reconfiguration, the Council of State gives full coherence to the referral-suspension, by inscribing it in a dynamic of balance between preservation of administrative power and effective protection of the co-contractor's interests. The SIPPEREC judgment marks a renewed reflection on the place of judicial control in the execution of the administrative contract. By clarifying the criterion of serious doubt and adjusting the powers of the judge of the referred case, it ensures an optimal balance between judicial control and the need for regularization of illicit clauses. [...]

[...] In truth, this ruling operates a double judicial clarification. On the one hand, it reaffirms the primacy of the power of unilateral modification, while specifying its contours in order to ensure a balance between contractual mutability and legal security). On the other hand, it redefines the control of the referring judge by strictly framing the notion of serious doubt, in order to avoid the referral-suspension from becoming an excessive brake on administrative action). The renewed consecration of the unilateral power of modification of administrative contracts The pragmatic extension of the unilateral power in the face of contractual legality requirements The decision rendered in the SIPPEREC case marks a notable mutation in the general economy of the unilateral power of modification of administrative contracts. [...]

[...] In doing so, the Council of State sets a new guideline: the regularization of a contract by unilateral modification should not be systematically hindered by an urgent dispute, except in cases of substantial irregularity. [...]