Report for the Hearing delivered in Case 109/86

I — Facts and written procedure

By contract of 22 April 1982, Ioannis Theodorakis Biomichania Elaiou AE, Chania (hereinafter referred to as ‘the plaintiff’), agreed to sell to the Polish State undertaking Agros Bohdanowicz a quantity of 100 tonnes of refined olive-residue oil from the 1981/82 harvest. The stipulated date for delivery was 31 August 1982. Provision was made for any dispute resulting from the contract to be settled by arbitration before an arbitral tribunal at the Polish Chamber of Commerce.

The required security, in the form of a letter of guarantee issued by the National Bank of Greece for an amount of DR 310000, was deposited and the Ministry of Agriculture granted the plaintiff the necessary export licence. Under the contract, it was the responsibility of the purchaser of the goods to take delivery of them and load them. According to the correspondence exchanged by the parties to the contract, a representative of the purchaser was to be in Athens on the agreed date to take delivery of the goods, but he did not arrive on that date or subsequently, despite several telex messages and telegrams sent by the plaintiff. Agros Bohdanowicz gave notice that it was unable to take delivery of all the goods in December and the contract was thereupon cancelled.

The plaintiff claims that it applied for and obtained from the Foreign Trade Section of the Ministry of Agriculture an extension of the ‘loading period’ (meaning, apparently, an extension of the validity of the export licence) until 31 December 1982. However, in the proceedings before the referring court the defendant denied that that was the case. In the documents before the Court there is no sign of any extension in box 21 in the export licence.

On 19 February 1983, the plaintiff asked the Ministry of Agriculture to release the security. In response to that application, the Ministry, by decision of 13 April 1983, declared the security forfeit on the ground that the goods had not been exported and, by order of 5 September 1983, directed that the amount in question should be deposited with the Agricultural Bank of Greece. That deposit was made and the plaintiff then paid the required amount to the guarantor bank. Finally, on 1 December 1983, the plaintiff instituted proceedings against the Greek State for payment of the sum of DR 300969 on the ground that it wrongly decided to declare forfeit the security which the plaintiff had furnished in the circumstances described above and thereby caused the plaintiff loss. In the alternative, the plaintiff claimed that the security was void by virtue of Article 850 of the Greek Civil Code since there was no principal debt and, in the further alternative, that the Greek State was under an obligation to repay the amount of the security to it by virtue of the principle prohibiting unjust enrichment. The action was dismissed by a judgment of 30 March 1984; on 5 March 1985 the plaintiff appealed to the Court of Appeal, claiming that the circumstances set out in its original statement of claim constituted a case of force majeure.

Considering that in order to give judgment it required a ruling from the Court on the interpretation of the relevant provisions of Community law, the First Chamber of the Court of Appeal, Athens, decided on 16 October 1985 to stay the proceedings and to refer the following question to the Court for a preliminary ruling under Article 177 of the EEC Treaty:

‘Do the circumstances set out in the plaintiff's application of 1 December 1983 constitute a case of force majeure within the meaning of Commission Regulation (EEC) No 3183/80 of 3 December 1980, in particular Articles 36 and 37 thereof, so as to justify the cancellation of the export licence issued by the Foreign Trade Section of the Greek Ministry of Agriculture and repayment of the amount lodged by the plaintiff by way of security?’

The order for reference was received at the Court Registry on 7 May 1986.

Pursuant to Article 20 of the Protocol on the Statute of the Court of Justice of the EEC, written observations were submitted by the applicant, represented by Eleftherios Sp. Zouridakis, of the Athens Bar, and the Commission of the European Communities, represented by Xénophon Yataganas, a member of its Legal Department, acting as Agent.

Upon hearing the report of the Judge-Rapporteur and the views of the Advocate General, the Court decided to open the oral procedure without any preparatory inquiry. However, it asked the Commission to reply in writing to a question; the Commission complied within the prescribed period. By decision of 28 January 1987, the Court assigned the case to the Second Chamber.

II — Written observations submitted to the Court

The plaintiff claims that the circumstances of this case meet the conditions of force majeure for the purposes of Articles 36 and 37 of Regulation No 3183/80. It appears to consider that that concept includes the failure of a purchaser to take delivery of goods under a sale contract. More specifically, it maintains that it did everything required of it by the conditions of the contract. In particular, it prepared the goods and placed them at the disposal of the purchaser in due time. However, the purchaser cancelled the arrangement for taking delivery on the agreed date and did not specifically name another date. Subsequently, the plaintiff repeatedly called upon the purchaser to take delivery, but did not receive any reply upon which it could rely. Moreover, it states that it had no means of compelling the purchaser to fulfil its obligations regarding loading of the goods.

Consequently, it claims that the Court should

‘declare that the failure to complete the export transaction in question is not the result of any fault on its part, but constitutes a case of force majeure’.

In the Commission's opinion, the non-performance of a contract resulting from the purchaser's failure to take delivery of the goods cannot be regarded as a case of force majeure. As the Court has consistently held, the concept of force majeure within the meaning of Articles 36 and 37 of Regulation No 3183/80 is precisely defined as a circumstance alien to the subject-matter of the contract which makes it impossible for the intended action to be carried out (see the judgment of 9 February 1984 in Case 284/82 Acciaierie e Ferriere Busseni SpA v Commission [1984] ECR 557). The concept of impossibility has also been defined by the Court as meaning that, even if it is not absolutely impossible to carry out the intended action, it is nevertheless necessary that there should be exceptional and unforeseeable circumstances which are outside the control of the person concerned and are apparently inevitable, even if all due care is taken.

According to the Commission, those conditions are not fulfilled where the circumstances are foreseeable in the context of commercial relations and where an ordinary commercial risk is undertaken. It is the responsibility of the seller to have recourse to the remedies available under civil law, namely to exercise all possible pressure on the purchaser to secure due performance of the contract and to take care that the contract contains the appropriate clauses to safeguard it from the risk of non-performance. It is also incumbent upon the seller to seek other purchasers for goods which have not been accepted and to claim compensation from the other party to the contract for the damage resulting from non-performance. Any other interpretation of the concept of force majeure might lead to abuse. It is inconceivable that the financial consequences of such abuse should be borne by the Community budget or by the national budget.

In the event that the Court should wish to give a more specific reply, the Commission states that in its opinion the facts of the case do not in any way conform to the special conditions laid down in Articles 36 and 37 of Regulation No 3183/80. The plaintiff has not furnished proof that it obtained an extension of the validity of the export licence, which expired in the normal way on 31 August 1982, in so far as the special entry on the licence required for that purpose was not made. Moreover, contrary to Article 36 (3), the relevant circumstances were not notified to the agency issuing the licence, namely the Ministry of Agriculture. Thus, the Ministry never took the decision required by Article 36 (4) as to whether the circumstances relied upon constituted a case oí force majeure. Consequently, the Ministry was unable to exercise the wide discretion conferred upon it by Article 37 (1) of that regulation. Finally, the procedure under Article 37 (5), whereby the Member State concerned is obliged to advise the Commission of any case of force majeure, was not followed in the present case.

The Commission therefore proposes that the question submitted should be answered as follows :

‘Articles 36 and 37 of Commission Regulation (EEC) No 3183/80 of 3 December 1980 must be interpreted as meaning that the non-performance of an export contract caused by the purchaser's failure to attend in order to take delivery of the goods does not constitute a case of force majeure.’

In any event:

‘The matters of fact set out in the application for cancellation of the export certificate and release of the security furnished by the plaintiff do not constitute a case of force majeure within the meaning of Regulation (EEC) No 3183/80, in particular Articles 36 and 37 thereof.’

K. Bahlmann

Judge-Rapporteur

1 Language of the Case: Greek.