Michaël Eeckhout

In NFŠ (C‑28/23), the Court of Justice ruled that a subsidy agreement awarding a multi-million subsidy for the construction of a stadium, followed years later by the State’s promise to purchase the stadium, was a public procurement contract for works. Public procurement rules require competitive tendering. Following national legislation, a contract concluded in breach of public procurement rules is null and void from the outset (ex tunc).

On 30 March 2023, the Enterprise Court of Antwerp issued a significant judgment setting boundaries for the enforceability of back-to-back arrangements in subcontracting for works contracts. Specifically, the court addressed the legality of "pay-if/when-paid" clauses, which may be deemed null and void under certain conditions, violating the Belgian rules aimed at combating late payments and unfair terms in B2B agreements.

Back-to-back arrangements, which involve passing risks and obligations from the main contractor to subcontractors, are prevalent in project finance. These arrangements ensure that the project company, often a special purpose vehicle with limited assets, does not retain uncontrollable risks. A key element of back-to-back arrangements is often the pay-if/when-paid clause. This clause makes the subcontractor's payment conditional upon the main contractor receiving funds from the employer or lenders.