Search Articles
(CN) — The European Union’s high court on Thursday ordered a review into charges that Airbus hired a chief rival’s top executive and obtained trade secrets that helped the company win a massive contract to build a new fleet of EU satellites.
The European Court of Justice overturned an April 2023 decision by the General Court, a lower court, that dismissed the case brought by the German space company OHB System against the European Commission’s decision to not investigate its accusations against Airbus, a European aerospace and defense giant.
The case centers on about 1.5 billion euros ($1.7 billion) in contracts the European Space Agency awarded in 2021 to build 12 new satellites for the EU’s Galileo global navigation system. The agency opened the bidding process in May 2018.
In January 2021, the EU gave about 699.5 million euros (about $810 million) in work to Airbus Defense and Space and about 772 million euros ($894 million) in contracts to the Italian firm Thales Alenia Space Italia.
Meanwhile, Bremen-based OHB, formerly a go-to supplier of Galileo satellites, lost the bid because its offer was more expensive.
But OHB said Airbus got an unfair edge by hiring OHB’s chief operating officer in December 2019 and obtaining sensitive information about its bid from him. OHB declined to identify its former COO, whose name does not appear in court documents.
OHB complained its former executive was “placed at the head of the department responsible” for the Airbus tender, the high court noted.
“Consequently, according to OHB, the sensitive information obtained by its former employee conferred an unfair advantage on ADS [Airbus Defense and Space] in the procedure in question,” the court said.
The German company asked the European Commission to investigate the matter and suspend the contract. But the commission, the EU’s executive branch, rejected OHB’s complaints.
On Thursday, the Court of Justice ruled the contract process needed to be reevaluated because there were possible “conflicts of interest.”
“It cannot be ruled out that the information obtained as a result of the recruitment of a former executive of the competitor gave an unjustified advantage to the tenderer that recruited him,” the high court stated in a news release. The ruling was not immediately available in English.
The court said EU contracts must comply “with the principle of equal treatment” and that all bidders must “be afforded equality of opportunity when formulating their tenders, and that those tenders be subject to the same conditions.”
The court said the commission should have examined OHB’s complaints against Airbus. It ordered the General Court to examine whether the commission had “complied with the principle of equal treatment.”
Ralph Heinrich, an Airbus spokesman, declined to comment on Thursday’s ruling.
Marianne Radel, a spokeswoman for OHB, said the company was pleased.
“We now must see how the court will reassess the matter,” she said in an email. She declined to offer further details.
The European Commission did not immediately reply to a query from Courthouse News.
Courthouse News reporter Cain Burdeau is based in the European Union.
Follow @cainburdeauSubscribe to our free newsletters
Our weekly newsletter Closing Arguments offers the latest about ongoing trials, major litigation and rulings in courthouses around the U.S. and the world, while the monthly Under the Lights dishes the legal dirt from Hollywood, sports, Big Tech and the arts.