Court annulled the recovery of €68,686 in grant support claimed from a hospital

The Court of Appeal annulled the recovery of €68,686 in grant support claimed back from Rakvere Hospital. In case no. 3-24-2020, Tallinn Court of Appeal found that the grant provider was not allowed to impose a 100% financial correction without substantively assessing the impact of the breach.

NAMM attorney-at-law Nele Tammemäe represented AS Rakvere Haigla, from which the State Shared Service Centre sought repayment of European Union support. As part of the project, the hospital had purchased a generator and carried out a public procurement procedure during which a breach of procurement rules occurred.

The court agreed that the breach gave grounds for a financial correction, but found that the grant provider erred by treating itself as obliged to apply the 100% rate automatically. According to the case law of the Court of Justice of the European Union, the seriousness of the breach and its actual impact on the European Union budget must be taken into account. The court ordered the State Shared Service Centre to review the hospital’s payment applications again and awarded the client €12,525 in procedural costs.

The judgment is important for every grant recipient that has made an error in a public procurement procedure: it confirms that full repayment is not inevitable and that the impact of the breach must be assessed case by case. The judgment is available here.