ORDER OF THE COURT (Seventh Chamber)

6 March 2014([\*](#Footnote*))

(Appeals – EAGGF, EAGF and EAFRD – Expenditure excluded from European Union financing – Admissibility of an action for annulment – Situation of the appellant who is not directly affected by the decision at issue)

In Case C‐248/12 P,

APPEAL under Article 56 of the Statute of the Court of Justice of the European Union, brought on 21 May 2012,

**Northern Ireland Department of Agriculture and Rural Development,** represented by K. Brown, Solicitor,

appellant,

the other party to the proceedings being:

**European Commission,** represented by N. Donnelly and P. Rossi, acting as Agents, with an address for service in Luxembourg,

defendant at first instance,

THE COURT (Seventh Chamber),

composed of J.L. da Cruz Vilaça (Rapporteur), President of the Chamber, G. Arestis and J.-C. Bonichot, Judges,

Advocate General: N. Jääskinen,

Registrar: A. Calot Escobar,

having decided, after hearing the Advocate General, to give its decision by reasoned order, in accordance with Article 181
of the Rules of Procedure of the Court,

makes the following

**Order**

1        By its appeal, the Northern Ireland Department of Agriculture and Rural Development seeks to have set aside the Order of the
General Court of the European Union of 6 March 2012 in Case T‐453/10 *Northern Ireland Department of Agriculture and Rural Development* v *Commission* (‘the order under appeal’) in which the General Court dismissed as inadmissible its action for partial annulment of Commission
Decision 2010/399/EU of 15 July 2010 excluding from European Union financing certain expenditure incurred by the Member States
under the Guarantee Section of the European Agricultural Guidance and Guarantee Fund (EAGGF), under the European Agricultural
Guarantee Fund (EAGF) and under the European Agricultural Fund for Rural Development (EAFRD) (OJ 2010 L 184, p. 6, ‘the decision
at issue’).

**Background to the dispute**

2        It is apparent from the order under appeal that the European Commission adopted the decision at issue after deficiencies in
the appellant’s management and control of the single area payment scheme in Northern Ireland were identified. Those deficiencies
concerned, in particular, the system for identifying agricultural parcels and the geographical information system, the on-the-spot
checks carried out by the appellant’s inspectors and the application of sanctions and retroactive recoveries.

3        Article 1 of the decision at issue states:

‘The expenditure itemised in the Annex hereto that has been incurred by the Member States’ accredited paying agencies and
declared under the EAGGF Guarantee Section, under the EAGF or under the EAFRD shall be excluded from European Union financing
because it does not comply with European Union rules.’

4        Article 2 of that decision provides as follows:

‘This Decision is addressed to the Kingdom of Denmark, the Federal Republic of Germany, the Kingdom of Spain, the Grand Duchy
of Luxembourg, the Republic of Hungary, the Republic of Austria, the Republic of Slovenia, the Slovak Republic, the Republic
of Finland, and the United Kingdom of Great Britain and Northern Ireland.’

**Procedure before the General Court and the order under appeal**

5        By application lodged on 24 September 2010, the applicant brought an action before the General Court seeking partial annulment
of the decision at issue.

6        More specifically, the application sought annulment of that decision in so far as it concerns a 5% flat-rate correction applied
to certain expenditure incurred in Northern Ireland during the financial period 2007 amounting to EUR 18 600 258.71.

7        By separate document lodged at the Court Registry on 17 January 2011, the Commission challenged the admissibility of the action
under Article 114(1) of the Rules of Procedure of the General Court.

8        In particular, the Commission claimed that the action should be declared inadmissible as the appellant was not the addressee
of the decision at issue and could not be regarded as being directly and individually concerned by that decision. The Commission
submitted in particular that the effects which that decision had on the appellant’s legal situation cannot be regarded as
being the direct consequence of the decision at issue, but stem only from national procedures introduced by the Member State
concerned.

9        In its observations in reply to that plea of inadmissibility, the appellant stated that, while it is true that it is not the
addressee of the decision at issue, the decision nevertheless does concern the appellant directly and individually, since,
in particular, that decision caused a net liability in its accounts.

10      By the order under appeal, the General Court held that the action had to be regarded as inadmissible, particularly since the
appellant does not satisfy one of the conditions laid down in the fourth paragraph of Article 263 TFEU, according to which
the applicant in an action brought against a measure of which it is not the addressee must be directly concerned by that measure.

11      After setting out, in paragraphs 42 and 43 of the order under appeal, the two cumulative criteria which must be met in order
for a natural or legal person to be regarded as directly concerned by the measure being challenged, the General Court found
that those criteria were not met in this case. Relying on paragraph 41 of the Order of the Court of 25 April 2001 in Case
T‐244/00 *Coillte Teoranta* v *Commission* [2001] ECR II‐1275, the General Court found, first, in paragraphs 44 to 53 of the order under appeal, that the decision at
issue, in so far as it concerns the Commission’s refusal to provide financing, affects only the national budget of the Member
State concerned, so that the consequences of that decision on the budget of the appellant are the result, not of European
Union legislation or the decision at issue, but of a decision taken by the authorities of the United Kingdom of Great Britain
and Northern Ireland.

12      Next, the General Court found at paragraphs 54 to 57 of the order under appeal that it does not follow either from the decision
at issue or from European Union law in general that the United Kingdom was obliged to place the financial burden on the appellant’s
budget for the expenditure referred to in that decision which the Commission refused to finance.

13      Finally, in paragraphs 60 to 64 of the order under appeal, the General Court examined the relevance to the proceedings before
it of Case 11/82 *Piraiki-Patraiki and Others* v *Commission* [1985] ECR 207, and Case C‐386/96 P *Dreyfus* v *Commission* [1998] ECR I‐2309, and it found that those judgments, delivered in relation to very specific cases, were not applicable by
analogy to those proceedings.

**Forms of order sought by the parties before the Court of Justice**

14      The appellant claims that the Court should:

–        set aside the order under appeal, declare its action for annulment admissible and refer the case back to the General Court
for examination of the substance of the action brought before it;

–        order the Commission to pay the costs of the appeal proceedings, and those of the proceedings at first instance connected
with the plea of inadmissibility; and

–        reserve costs in the event that the case is referred back to the General Court.

15      The Commission claims that the Court should dismiss the appeal and order the appellant to pay the costs.

**The appeal**

16      Pursuant to Article 181 of its Rules of Procedure, where the appeal is, in whole or in part, manifestly inadmissible or manifestly
unfounded, the Court may at any time, acting on a proposal from the Judge-Rapporteur and after hearing the Advocate General,
decide by reasoned order to dismiss that appeal in whole or in part.

17      It is appropriate to apply that provision in the present case.

*The first and second grounds of appeal*

 Arguments of the parties

18      By its first and second grounds of appeal, the appellant alleges that the General Court erred in law in finding that it could
not be regarded as being directly concerned by reason of the criterion laid down in *Piraiki-Patraiki and Others* v *Commission* and *Dreyfus* v *Commission*, whereas, in its opinion, that criterion gives expression to a broader legal principle. It adds that the General Court infringed
the principle of legal certainty by attempting to limit the scope of those judgments.

19      Relying in particular on the judgment in Case 62/70 *Werner A. Bock* v *Commission* [1971] ECR 897 and on the Order of the Court of 10 September 2002 in Case T‐223/01 *Japan Tobacco and JT International* v *Parliament and Council* [2002] ECR II‐3259, the appellant claims that the General Court should have applied the general principle arising from those
decisions to this case and concluded that the effects of the decision at issue are not in doubt, and that the possibility
that the decision at issue may have a different effect is merely theoretical. The appellant also claims that the criterion
relating to ‘a very specific factual context’ is contrary to the principle of legal certainty by reason of its lack of clarity
and precision.

20      The Commission contends that the first and second grounds of appeal must be dismissed. It states that the ‘criterion’ to which
the appellant refers is not a general rule, but an exception to one of the two cumulative criteria, making it possible to
consider that a measure directly affects the position of an applicant, and that the General Court did not in any way limit
the scope of the judgments in *Piraiki­Patraiki and Others* v *Commission* and *Dreyfus* v *Commission*.

 Findings of the Court

21      It must be noted that the condition that a natural or legal person must be directly concerned by the decision being challenged,
as provided for in the fourth paragraph of Article 263 TFEU, requires two cumulative criteria to be met, namely, (i) the contested
measure must directly affect the legal situation of the individual, and (ii) it must leave no discretion to its addressees,
who are entrusted with the task of implementing it, such implementation being purely automatic and resulting from European
Union rules without the application of other intermediate rules (see, to that effect, Case C‐15/06 P *Regione Siciliana* v *Commission* [2007] ECR I‐2591, paragraph 31, and Joined Cases C‐463/10 P and C‐475/10 P *Deutsche Post and Germany* v *Commission* [2011] ECR I‐9639, paragraph 66).

22      Reference should also be made to the analysis of the Court of Justice in *Piraiki-Patraiki and Others* v *Commission* and *Dreyfus* v *Commission* which in certain specific cases makes it possible to consider that a third party can be directly concerned by a decision
of the Commission not addressed to it, where the possibility of the addressee’s not complying with that decision is purely
theoretical.

23      In so far as the appellant argues that the General Court erred in law in finding that that analysis applies in exceptional
cases and is not a rule of law of general application, it must be stated at the outset that the exceptional nature of the
solution laid down in *Piraiki-Patraiki and Others* v *Commission* and *Dreyfus* v *Commission* is apparent from the very wording of those judgments.

24      Referring expressly to the judgments in *Piraiki-Patraiki and Others* v *Commission* and *Dreyfus* v *Commission*, the Court of Justice has made it clear that it was by way of an exception that it had found that an applicant could be ‘directly
affected’ for the purposes of the fourth paragraph of Article 263 TFEU, where other factors, including the purely theoretical
power not to give effect to the decision in question, implied the existence of direct concern in its regard (see, to that
effect, Joined Cases C‐445/07 P and C‐455/07 P *Commission* v *Ente per le Ville Vesuviane* and *Ente per le Ville Vesuviane* v *Commission* [2009] ECR I‐7993, paragraph 58).

25      Furthermore, and in any event, the appellant has not shown in what way the General Court erred in law in finding that that
case-law was not applicable to the situation at issue in the main proceedings.

26      Accordingly, the General Court was right to find that the case-law from the judgments in *Piraiki-Patraiki and Others* v *Commission* and *Dreyfus* v *Commission* is exceptional in nature due to the specific situations in relation to which those decisions were made, and that that case-law
was therefore not applicable to this case.

27      It follows that the first two grounds relied on by the appellant in support of its appeal must be dismissed as manifestly
unfounded.

*The third ground of appeal*

 Arguments of the parties

28      By its third ground of appeal, the appellant alleges, in essence, that the General Court infringed the fourth paragraph of
Article 263 TFEU by applying the *locus standi* test restrictively.

29      It claims, first, that the Treaty of Lisbon abolished the criteria, laid down in Article 230 EC, that, in the case of acts
which do not entail implementing measures, those acts must individually concern the natural or legal person in question, and
second, that this provision of the TFEU retains only the criterion that a natural or legal person must be directly concerned
by the act at issue. It also states that the latter criterion has exactly the same meaning as when it is used in the context
of the assessment of the condition relating to *locus standi*.

30      The appellant adds that that amendment is of particular relevance in relation to the right to effective judicial protection,
a general principle of European Union law guaranteed by Articles 6 and 13 of the European Convention for the Protection of
Human Rights and Fundamental Freedoms, signed in Rome on 4 November 1950, and by Article 47 of the Charter of Fundamental
Rights of the European Union. It considers that, in those circumstances, the intention of Member States was to allow access
to the courts by relaxing the criterion of ‘individual concern’, and that it is therefore contrary to that objective and to
the principle of effective judicial protection to restrict the scope of that criterion.

31      The Commission contends that the third ground of appeal should be rejected. It states that the General Court correctly applied
the two cumulative criteria set out in paragraph 21 above, and it questions whether the appellant, not being a Member State
or the recipient of the aid which is the subject of the correction, can be considered to derive from the legal order of the
European Union a right which requires effective judicial protection.

 Findings of the Court

32      It should be noted that the conditions for admissibility laid down in the fourth paragraph of Article 263 TFEU must be interpreted
in the light of the fundamental right to effective judicial protection, but such an interpretation cannot have the effect
of setting aside the conditions expressly laid down in that Treaty (see Case C‐583/11 P *Inuit Tapiriit Kanatami and Others* v *Parliament and Council* [2013], paragraph 98).

33      The Court of Justice has already held that where an action for annulment is brought by a non-privileged applicant against
a measure that has not been addressed to it, the requirement that the binding legal effects of the measure being challenged
must be capable of affecting the interests of that party by bringing about a distinct change in its legal position overlaps
with the conditions laid down in the fourth paragraph of Article 263 TFEU (*Deutsche Post and Germany* v *Commission*, paragraph 38).

34      Therefore, the General Court was right to apply, in particular in paragraphs 42 and 43 of the order under appeal, the settled
case-law of the Court of Justice on the criterion for direct concern, as set out in paragraph 21 above. That case-law, as
the appellant acknowledges, is not called into question by the changes introduced by the Treaty of Lisbon, set out in the
fourth paragraph of Article 263 TFEU.

35      Therefore the appellant’s third ground of appeal must be rejected as manifestly unfounded.

*The fourth ground of appeal*

 Arguments of the parties

36      By its fourth ground of appeal, the appellant claims that, while the General Court had applied the existing law correctly,
it should have concluded that the appellant is directly concerned by the decision at issue.

37      The appellant thus considers that it is directly affected by that decision since the financial correction required by that
decision first led to the total exhaustion of the credit to cover disallowances which may occur in any given year, and secondly
gave rise to a shortfall of EUR 5 million which required the recording of that debt as a liability in the appellant’s accounts.

38      The appellant adds that paragraph 52 of the order under appeal contains a contradiction and that the General Court’s assertion
that its situation is directly affected because of the legislation of the United Kingdom is wrong in law.

39      The Commission contends that that ground of appeal cannot be upheld since the decision at issue does not have a direct effect
on the appellant’s legal situation.

 Findings of the Court

40      It follows from paragraphs 21 to 27 and 32 to 35 above that the General Court did not misconstrue the fourth paragraph of
Article 263 TFEU, as interpreted by the Court of Justice, in finding that the appellant is not directly concerned by the decision
at issue.

41      Therefore, there is no need for the Court of Justice to rule on the fourth ground of appeal which merely repeats the arguments
put forward in the other grounds of appeal, which have already been examined and rejected in this order.

42      Therefore since none of the grounds of appeal raised by the appellant in support of its appeal can be upheld, the appeal must
be dismissed as manifestly unfounded.

**Costs**

43      Under Article 138(1) of the Rules of Procedure of the Court of Justice, which applies to appeal proceedings pursuant to Article 184(1)
thereof, the unsuccessful party is to be ordered to pay the costs if they have been applied for in the successful party’s
pleadings.

44      Since the Commission has applied for costs and the appellant has been unsuccessful, the latter must be ordered to pay the
costs of this appeal.

On those grounds, the Court (Seventh Chamber) hereby:

1.      **Dismisses the appeal;**

2.      **Orders the Northern Ireland Department of Agriculture and Rural Development to pay the costs of this appeal.**

[Signatures]

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[\*](#Footref*) Language of the case: English.