The judgment provides useful practical guidance on the scope of the national security exception in EU law and the limits of judicial review in highly strategic defense projects. Given the potentially severe consequences of non-compliance with the public procurement rules, private investors and financiers investing in such long-term strategic partnerships must carefully assess whether the exception is correctly invoked.

Background: strategic partnership for light weapons

In 2024, the Belgian Ministry of Defense decided to establish a 20-year strategic partnership with FN Herstal covering a broad range of activities relating to light weapons systems. The partnership included several integrated components, such as:

  • maintenance and management of existing weapons systems
  • engineering and R&D
  • rental of weapons systems
  • the supply of ammunition

The contract was awarded through a negotiated procedure without prior publication, relying on Article 346(1)(b) TFEU. This provision allows Member States to take measures necessary for the protection of essential security interests relating to the production of or trade in arms, munitions and war material.

The German manufacturer Heckler & Koch challenged the decision before the State Council. A request for suspension in extreme urgency of the award decision had already been rejected by the State Council on 27 June 2024. The present judgment deals with the related request for annulment of the award decision.

The legal challenge

The claimant argued that Belgium had wrongly relied on Article 346 TFEU and that the contract should have been subject to the normal public procurement rules and competitive procedures.

Among other arguments, the claimant submitted that:

  • the partnership covered activities that did not strictly concern military goods
  • the measure pursued industrial or economic interests rather than genuine security interests
  • the decision was disproportionate, since a 20-year partnership covering several activities had been removed entirely from competition

The claimant further argued that the contract could have been divided into several lots, allowing competition for certain components of the project.

Key issue: scope of Article 346 TFEU

The case turned on whether the Belgian government could legitimately rely on Article 346(1)(b) TFEU to avoid applying one of the competitive procedures under Directive 2009/81 on defense and security procurement.

Article 346 allows Member States to adopt measures necessary to protect essential security interests relating to the production of or trade in arms, munitions and war material. However, such measures may not distort competition in the internal market for products that are not specifically intended for military use.

The Court of Justice of the European Union has clarified that this exception must be interpreted strictly under EU law. The Member State invoking the exception bears the burden of proof in this respect.

The State Council therefore examined whether the conditions for invoking the exception were satisfied.

Conditions for the application of Article 346 TFEU

Article 346 TFEU refers to Council Decision 255/58, which contains the so-called “common military list”. The claimant argued that the equipment covered by the partnership did not fall within the categories of that list.

On the basis of its analysis of both confidential and non-confidential evidence, the State Council confirmed that the equipment did fall within the categories of the common military list and that it had a specific military purpose.

The court also held that the Belgian State had sufficiently demonstrated that the envisaged partnership, which seeks on the one hand to ensure operational readiness by securing and maintaining security of supply and strategic autonomy and on the other hand to meet future quantitative and qualitative needs for light weapons and ammunition, is necessary for the protection of Belgium’s essential security interests. The State Council further considered that those interests would be jeopardized if the exception provided for in Article 346 TFEU were not applied.

Integrated system approach accepted

A central element of the government’s defense was that the project had to be viewed as a single integrated system.

According to the Belgian State, the different components of the partnership were closely interconnected and aimed at ensuring:

  • strategic autonomy
  • security of supply
  • the development of a national defense technological and industrial base

The authorities argued that splitting the contract would undermine these objectives and create dependencies on foreign suppliers.

The court accepted this reasoning and acknowledged the strong interdependence between weapons, maintenance, R&D and ammunition supply within the project. It also confirmed that the partnership’s 20-year duration was justified by accounting evidence concerning the amortization of the relevant investments.

Claimant lacks standing

Another important aspect of the judgment concerns standing, namely the claimant’s interest in bringing proceedings.

The State Council examined whether the claimant could realistically have obtained the contract if a competitive procedure had been organized. The Belgian State argued that the claimant could not meet the integrated requirements of the partnership, in particular because it did not produce ammunition and could not provide the full system approach required by the project.

The State Council indicated that the claimant’s interest in challenging the decision was closely linked to the legality of the reliance on Article 346 TFEU. As the State Council accepted the integration of the different components within the partnership, the logical conclusion was that the claimant lacked standing to challenge the award.

Implications for defense procurement

The judgment illustrates several important points for defense procurement.

First, the decision confirms that Member States retain significant discretion when defining their essential security interests in the defense sector.

Second, authorities may justify integrated long-term partnerships where interoperability, security of supply and technological autonomy are key objectives.

Third, courts remain cautious when reviewing decisions linked to national defense and security policy, particularly where sensitive information and strategic considerations are involved.

For defense companies, the case illustrates that challenging procurement decisions based on Article 346 TFEU can be particularly difficult where authorities rely on arguments relating to strategic autonomy and security of supply and frame the project as part of a broader strategic defense ecosystem.

Nevertheless, contracting authorities must still provide a sufficiently robust justification for invoking the essential security interests exception. Non-compliance with the public procurement rules may create significant risks for the enforceability of the contract under Belgian law. Private investors and financiers involved in such projects will therefore require sufficient comfort that reliance on the exception is legally sound.