Report for the Hearing delivered in Joined Cases 89 and 91/86

I — Summary of the facts

1. Article 27 (1) of Regulation No 136/66/EEC of the Council of 22 September 1966 on the establishment of a common organization of the market in oils and fats (Official Journal, English Special Edition 1965-66, p. 221) provides for a subsidy to be granted for oil seeds harvested and processed within the Community. The principles governing the grant of that subsidy, which involves control of the processing of seeds at the oil mill, and the detailed rules relating to that control, for which a Community subsidy certificate is provided, were laid down at the material time in Regulation (EEC) No 2114/71 of the Council of 28 September 1971 on the subsidy for oil seeds (Official Journal, English Special Edition 1971 (III), p. 826). In implementation of that regulation, the Commission adopted Regulation (EEC) No 1204/72 of 7 June 1972 laying down detailed rules for the application of the subsidy system for oil seeds (Official Journal, English Special Edition 1972 (II), p. 493), pursuant to which control is to be exercised from the time the seeds enter the oil mill until they are processed. The abovementioned Community subsidy certificate contains, by virtue of Article 5 of that regulation, in particular ‘one part, designated ID, certifying that the quantity of seeds harvested in the Community which is identified is subject to the control ’. In France, the Société interprofessionnelle des oléagineux (SIDO) is responsible for applying the subsidy system in question. In certain cases, where the seeds had already been pressed before application was made for part ID of the abovementioned Community certificate, the SIDO took the view that refusal to grant the aid would be an excessive penalty for an administrative mistake. However, when inspections were carried out by officials of the European Agricultural Guidance and Guarantee Fund (EAGGF) for the purpose of clearing the accounts for the years 1974 and 1975, the payment of subsidies in such cases was criticized by the Commission.

2. In 1980, the company Comptoir national technique agricole (CNTA) pressed several consignments of seeds at its plant in Bordeaux. A first consignment of 2317 tonnes was delivered to the plant and pressed during October, and the application for part ID of the subsidy certificate was sent to the SIDO on 31 October 1980; a second consignment of 3725 tonnes was received and pressed in November, and part ID of the certificate was applied for on 4 December 1980. The delay in sending the applications was due, according to CNTA, to organizational problems resulting from a fire at the plant in January 1980. When the SIDO officials established, during an on-the-spot check, that the ID parts of the Community certificate had been applied for late, the French authorities asked the appropriate department of the Commission whether the subsidies for those pressings could nevertheless be granted, asserting once again that refusal to grant them would be an excessive penalty in view of the fact that the seeds were genuinely of Community origin and oil had been obtained from them. Whilst awaiting the Commission's reply, the SIDO agreed, by a letter to CNTA dated 16 April 1981, to pay the subsidies in question on the condition that CNTA provided it with a guarantee securing repayment on demand of such sum as might be due from CNTA ‘when the EAGGF gave its decision as to the eligibility of the advances paid in respect of subsidies ’, expressly drawing attention to the considerable risk that the EAGGF might declare the subsidies ineligible. The guarantee, for an amount of FF 8586278, was furnished on 24 April 1981 by the company L'Etoile commerciale.

3. Subsequently, there were discussions between the French Minister for Agriculture and the Commission on the financing of the subsidies in question by the EAGGF. The Commission maintained its position that, under the Community rules, ID certificates could not be issued after processing of the seeds and that the payment of the subsidy in question could not be recognized as eligible for financing by the EAGGF. That view was expressed in various versions of the Commission's summary report on the results of controls for the clearance of the EAGGF Guarantee Section accounts for the years 1980 and 1981. On the basis of that summary report, on 28 August 1985 the Commission adopted Decision 84/456/EEC on the clearance of the accounts presented by the French Republic in respect of the European Agricultural Guidance and Guarantee Fund, Guarantee Section, expenditure for 1981, which was notified to the French Republic on 5 September 1981 and published in the Official Journal of the European Communities on 9 October 1985 (Official Journal 1985, L 267, p. 24). It is common ground that the total amount of the expenditure not recognized as chargeable to the EAGGF set out in the annex to that decision, which makes no reference to individual cases or individual traders, includes inter alia the sum of FF 9707410.88 corresponding to the subsidies and advance-fixing guarantees for the consignments of seeds pressed by CNTA.

4. By letters dated 27 and 28 January 1986, the SIDO informed the banks which had issued the advance-fixing guarantees for CNTA and L'Etoile commerciale, which had stood surety for reimbursement of the subsidies, of the Commission's decision and forwarded to them a copy of the part of the EAGGF's summary report concerning the subsidies in question, showing that the subsidies had been declared ineligible. L'Etoile commerciale was formally called upon to pay the amount for which it had stood surety, namely FF 8586278, on behalf of CNTA, the latter company having been in court-supervised receivership since 1983. CNTA was informed of the Commission's refusal to recognize the subsidies as chargeable to the EAGGF by letters dated 4, 21 and 28 February 1986, in which the banks concerned and L'Etoile commerciale reported that the SIDO had asked them to discharge their commitments on behalf of CNTA, following the Commission's decision of 28 August 1985. By a letter dated 21 February 1986, L'Etoile Commerciale transferred to the SIDO the sum of FF 8024558.88 to cover the amount debited to it by virtue of the EAGGF report.

II — Procedure and conclusions of the parties

1. By an application received at the Court Registry on 26 March 1986, L'Etoile commerciale brought an action against the Commission, claiming that the Court should: (a) Declare partially void Commission Decision 85/456/EEC of 28 August 1985 on the clearance of the accounts presented by the French Republic in respect of the expenditure financed by the EAGGF for 1981 in so far as it declares ineligible the subsidies paid to CNTA by the SIDO in respect of 6041.80 tonnes of sunflower seed pressed in October and November 1980; (b) Order the Commission to pay to it the sum of FF 8024558.88 by way of damages as a result of that decision being declared void; (c) In the alternative, declare Commission Regulation No 1204/72 void; (d) Order the Commission to pay the costs. By an application received at the Court Registry on 27 March 1986, CNTA brought an action against the Commission, claiming that the Court should: (a) Declare partially void Commission Decision 85/456/EEC of 28 August 1985 in so far as it declares ineligible the subsidies paid to CNTA in respect of 6041.80 tonnes of sunflower seed pressed in October and November 1980; (b) Order the Commission to pay it FF 1000000 by way of damages; (c) In the alternative, declare Commission Regulation No 1204/72 void; (d) Order the Commission to pay the costs. The two cases were joined by Order of the Court of 4 June 1986.

2. In support of their claims, L'Etoile commerciale and CNTA state, essentially, that since it is common ground that seeds of Community origin were actually processed for the purpose of producing oil, the conditions for payment of the subsidies were fulfilled pursuant to Article 10 of Regulation No 2114/71. The Commission cannot, in their view, make the grant or withholding of the subsidy dependent on the date of the application for the ID parts of the subsidy certificates, since the purpose of the latter is to determine the amount of the subsidies. The Commission's decision should therefore be declared void. The Commission is also under an obligation to pay compensation for the loss deriving from the fact that, as a result of the Commission decision, the SIDO required repayment of the subsidies. In the alternative, Regulation No 1204/72 should be declared unlawful since the withholding from CNTA of all the subsidies as a result of a mere formal error is a disproportionate penalty.

3. By a separate document lodged under Article 91 (1) of the Rules of Procedure, the Commission raised an objection of inadmissibility and requested that the Court: (a) Declare the applications inadmissible; (b) Order the applicants to pay the costs.

4. The applicants submitted written observations on that objection of inadmissibility and claimed that the Court should: (a) Dismiss the objection of inadmissibility and declare the applications admissible; (b) Reserve its decision on the procedural issue of admissibility for the final judgment; (c) Order the Commission to pay the costs.

5. Upon hearing the report of the Judge-Rapporteur and the views of the Advocate General, the Court decided, pursuant to Article 95 (1) of the Rules of Procedure, to assign the case to the Fifth Chamber for a decision on the objection of inadmissibility, and to open the oral procedure concerning that objection without any preparatory inquiries.

HI — The arguments of the parties concerning admissibility

1. The Commission states in the first place that the applicants have not complied with the time-limit for instituting proceedings laid down in the third paragraph of Article 173 of the Treaty and in Article 81 (1) of the Rules of Procedure. That period commenced on the 15th day following the date of publication of the contested decision and therefore expired on 24 December 1985. Moreover, the contested decision is not of direct concern to the applicants within the meaning of the second paragraph of Article 173. In matters of intervention, Regulation (EEC) No 729/70 of the Council of 21 April 1970 on the financing of the common agricultural policy (Official Journal, English Special Edition 1970 (I), p. 218) empowers the Member States, acting through the intervention agencies, to implement the measures provided for by Community regulations. It is the decisions of the intervention agencies which directly affect the interests of undertakings (judgment of 27 March 1980 in Case 133/79 Sucrimexv Commission [1980] ECR 1299, and of 10 June 1982 in Case 217/81 Interagrav Commission [1982] ECR 2233). Operators may contest such measures before the national courts and the latter may submit to the Court of Justice under Article 177 of the EEC Treaty questions on the interpretation or validity of the Community regulations. In this case, the SIDO thus acted on its own responsibility. The clearance of accounts provided for by Article 5 (2) of Regulation No 729/70 is a matter of relations between the Member States and the Commission alone. The need to recover amounts paid unduly by the Member State concerned does not follow automatically from the clearance of the accounts. A national authority cannot, without any basis in Community law, establish direct relations between the Commission and a private person. The claim for damages is inadmissible because the Court has jurisdiction only to adjudicate on compensation for damage caused by Community institutions or their servants. Damage caused by national institutions provides no basis for establishing liability on the part of the Community (judgment of 12 December 1979 in Case 12/79 Wagner v Commission [1979] ECR 3657; and of 26 February 1986 in Case 175/84 Krohn v Commission [1986] ECR 753). Moreover, an action for compensation can be brought only after all means of obtaining annulment of the national authorities' decision have been exhausted before the national courts. As regards the claim that Regulation No 1204/72 should be declared voia\ it is quite clear, in the Commission's view, that the periods for instituting proceedings under the third paragraph of Article 173 of the Treaty and Article 81 (1) of the Rules of Procedure have expired.

2. The applicants state in the first place that the contested decision is of direct and individual concern to them. Referring to the judgment of 15 July 1963 (Case 25/62 Plaumann v Commission [1963] ECR 95), they contend that the Commission's contested decision and the summary report constituting the statistical basis for it, which individually and without any possibility of confusion relates to the subsidies paid to CNTA, are the legal basis for SIDO's recovery of the subsidies from CNTA and L'Etoile commerciale, as joint and several surety. Without that decision, neither CNTA nor L'Étoile commerciale would have been obliged to pay the sum in question. The judgments relied upon by the Commission are irrelevant, since the decision in this case is a mandatory decision dealing with entitlement to aid, which leaves the Member State to which it is addressed no margin of discretion and compels the SIDO to recover the amount in question from CNTA and L'Étoile commerciale (see judgment of 14 January 1981 in Case 819/79 Germany v Commission [1981] ECR 21; and of 21 September 1983 in Joined Cases 205 to 215/82 Deutsche Milchkontor v Germany [1983] ECR 2633). It is not possible for the applicant to bring proceedings before the national courts. The dispute relates to the legality of the Commission decision and not to an implementing measure adopted by a national authority. In any event, a national court could not order the Commission to repay the Community subsidies. Since the applicants are directly and individually concerned by the contested decision, the period for bringing an action could not have started to run against them until the day on which it came to their knowledge. The publication of that decision did not in any event enable them to ascertain that the subsidy granted to CNTA was covered by the decision. They could not therefore know that they were directly concerned by that decision until the date on which the 1SIDO sought to enforce its legal consequences against them. The alleged noncompliance with the time-limit is, moreover, irrelevant, since the applicants are in in any event seeking the repayment of wrongly recovered sums by means of an action for compensation, which is not subject to the terms of the third paragraph of Article 173 of the Treaty. The action for compensation is brought, in the first place, on a supplementary basis to cover the damage caused by the contested decision. The Commission, which adopted a definitive decision regarding entitlement to the Community subsidy when clearing the EAGGF accounts, cannot pass the responsibility for that decision on to the national authorities, since they are obliged to implement it and have no margin of discretion. The action for compensation is an independent remedy (see Opinion of Mr Mancini in Case 281/82 Unifrex v Commission and Council [1984] ECR 1969, at p. 1988). A declaration that Regulation No 1204/72 is void is sought by way of a plea of illegality under Article 184 of the EEC Treaty, a remedy which has been held by the Court to be available (see judgment of 6 March 1979 in Case 92/78 Simmentbal v Commission [1979] ECR 777).

U. Everling

Judge-Rapporteur

1 Language of the Case: French.