# C_2023007EN.01003301.xml

| 9.1.2023 | EN | Official Journal of the European Union | C 7/33 |
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9.1.2023

EN

Official Journal of the European Union

C 7/33

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Action brought on 30 September 2022 — MBDA France v Commission

(Case T-614/22)

(2023/C 7/42)

Language of the case: English

Parties

Applicant: MBDA France (Le Plessis-Robinson, France) (represented by: F. de Bure, and A. Delors, lawyers)

Defendant: European Commission

Form of order sought

The applicant claims that the Court should:

| — | annul the decision of the Commission served to the applicant on July 20, 2022 (ARES(2022)5278815) rejecting the proposal EDF-2021-AIRDEF-D- EATMI-HYDIS (hereafter the ‘HYDIS Proposal’), on the basis of articles 256 and 263 of the Treaty on the Functioning of the European Union; |
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annul the decision of the Commission served to the applicant on July 20, 2022 (ARES(2022)5278815) rejecting the proposal EDF-2021-AIRDEF-D- EATMI-HYDIS (hereafter the ‘HYDIS Proposal’), on the basis of articles 256 and 263 of the Treaty on the Functioning of the European Union;

| — | annul on the same basis any related decision in order to allow for the re-evaluation of the proposals submitted in response to Call for Proposals EDF-2021-AIRDEF-D ‘Endo-atmospheric interceptor — concept phase’ and the reallocation of funding, including the decision of the Commission accepting the proposal submitted by the consortium coordinated by Sener Aeroespacial (hereafter the ‘HYDEF Proposal’); |
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annul on the same basis any related decision in order to allow for the re-evaluation of the proposals submitted in response to Call for Proposals EDF-2021-AIRDEF-D ‘Endo-atmospheric interceptor — concept phase’ and the reallocation of funding, including the decision of the Commission accepting the proposal submitted by the consortium coordinated by Sener Aeroespacial (hereafter the ‘HYDEF Proposal’);

| — | order the defendant to produce all the documents requested by the applicant relating to the Commission’s evaluation of the HYDIS and HYDEF Proposals; |
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order the defendant to produce all the documents requested by the applicant relating to the Commission’s evaluation of the HYDIS and HYDEF Proposals;

| — | order the defendant to pay the applicant’s legal and other costs and expenses. |
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order the defendant to pay the applicant’s legal and other costs and expenses.

Pleas in law and main arguments

In support of the action, the applicant relies on four pleas in law.

| 1. | First plea in law, alleging that the Commission exceeded the limits of its discretion by applying an artificial and arbitrary grading methodology clashing with the core objectives of the endo-atmospheric interceptor solution (hereafter the ‘EATMI Project’).
  The EATMI Project aims to allocate a European Defence Fund (hereafter the ‘EDF’) € 100 million grant for the concept phase of an interceptor solution against ‘hypersonic’ missiles and gliders. This new type of aerial weapons which, to date, cannot be countered by existing air defence systems, have been used for the first time by Russia during its invasion of Ukraine. In a context of heightened geopolitical insecurity, they pose an unprecedented, game-changing and potentially existential threat to the integrity and security of the Union’s Member States and citizens. They require a new approach to air defence design. Yet the Commission’s grading methodology strays away from that objective:






  — | First, the Commission applied an identical standard weighting methodology to all 2021 EDF projects, without taking into account the crucial stakes of the EATMI Project; |
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1.

First plea in law, alleging that the Commission exceeded the limits of its discretion by applying an artificial and arbitrary grading methodology clashing with the core objectives of the endo-atmospheric interceptor solution (hereafter the ‘EATMI Project’).

The EATMI Project aims to allocate a European Defence Fund (hereafter the ‘EDF’) € 100 million grant for the concept phase of an interceptor solution against ‘hypersonic’ missiles and gliders. This new type of aerial weapons which, to date, cannot be countered by existing air defence systems, have been used for the first time by Russia during its invasion of Ukraine. In a context of heightened geopolitical insecurity, they pose an unprecedented, game-changing and potentially existential threat to the integrity and security of the Union’s Member States and citizens. They require a new approach to air defence design. Yet the Commission’s grading methodology strays away from that objective:

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First, the Commission applied an identical standard weighting methodology to all 2021 EDF projects, without taking into account the crucial stakes of the EATMI Project;

| — | Second, the Commission assessed the applicants’ proposals almost exclusively on the basis of generic considerations common to all 2021 EDF projects, which lack relevance or even clash with the objectives of the EATMI Project; |
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Second, the Commission assessed the applicants’ proposals almost exclusively on the basis of generic considerations common to all 2021 EDF projects, which lack relevance or even clash with the objectives of the EATMI Project;

| — | Through this artificial and arbitrary methodology, the Commission exceeded its discretion, undermining the Union’s capacity to foster an autonomous response to hypersonic threats as a result. |
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Through this artificial and arbitrary methodology, the Commission exceeded its discretion, undermining the Union’s capacity to foster an autonomous response to hypersonic threats as a result.

| 2. | Second plea in law, alleging several manifest errors of assessment:






  — | The Commission committed several manifest errors in the assessment of the HYDIS Proposal. In particular: (i) the Commission misunderstood the notion of ‘concept phase’ and rejected the HYDIS Proposal based on elements that are manifestly irrelevant during that phase; (ii) the Commission misunderstood the notion of cross-border cooperation. As a result, it assessed negatively the past contribution of the MBDA group to the integration of the European defence industry, and ignored the support of the main military powers of the Union in favour of its proposal; and (iii) the Commission relied on generic considerations that are not relevant in the context of the EATMI Project while setting aside the specific requirements of that project; |
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2.

Second plea in law, alleging several manifest errors of assessment:

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The Commission committed several manifest errors in the assessment of the HYDIS Proposal. In particular: (i) the Commission misunderstood the notion of ‘concept phase’ and rejected the HYDIS Proposal based on elements that are manifestly irrelevant during that phase; (ii) the Commission misunderstood the notion of cross-border cooperation. As a result, it assessed negatively the past contribution of the MBDA group to the integration of the European defence industry, and ignored the support of the main military powers of the Union in favour of its proposal; and (iii) the Commission relied on generic considerations that are not relevant in the context of the EATMI Project while setting aside the specific requirements of that project;

| — | The Commission’s manifest errors of assessment led to a decision that largely contradicts the overarching objectives of the EDF: it (i) ignores the initiatives taken by Member States in the Permanent Structured Cooperation framework; (ii) results in a sub-optimal allocation of resources that does not reflect the expertise of European defence players; and (iii) will likely lead to duplications of competences within the Union. |
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The Commission’s manifest errors of assessment led to a decision that largely contradicts the overarching objectives of the EDF: it (i) ignores the initiatives taken by Member States in the Permanent Structured Cooperation framework; (ii) results in a sub-optimal allocation of resources that does not reflect the expertise of European defence players; and (iii) will likely lead to duplications of competences within the Union.

| 3. | Third plea in law, alleging breaches of the principles of good administration and transparency:






  — | The Commission rejected the HYDIS Proposal largely because it felt that some aspects were insufficiently detailed. However, pursuant to the principle of good administration, the Commission had a duty to gather all the relevant facts including by seeking clarifications from the applicant as appropriate, in particular as the future security of the Union’s Member States and citizens is at stake. The applicant could easily have provided such clarifications. Instead, the Commission’s passive attitude and failure to gather relevant factual information resulted in the violation of the principle of good administration; |
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3.

Third plea in law, alleging breaches of the principles of good administration and transparency:

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The Commission rejected the HYDIS Proposal largely because it felt that some aspects were insufficiently detailed. However, pursuant to the principle of good administration, the Commission had a duty to gather all the relevant facts including by seeking clarifications from the applicant as appropriate, in particular as the future security of the Union’s Member States and citizens is at stake. The applicant could easily have provided such clarifications. Instead, the Commission’s passive attitude and failure to gather relevant factual information resulted in the violation of the principle of good administration;

| — | In addition, these alleged shortcomings relate almost exclusively to generic considerations common to all 2021 EDF projects which are unrelated to the EATMI-specific technical and functional requirements. The Commission violated the transparency principle by overweighting such considerations, with no prior information of the applicants. |
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In addition, these alleged shortcomings relate almost exclusively to generic considerations common to all 2021 EDF projects which are unrelated to the EATMI-specific technical and functional requirements. The Commission violated the transparency principle by overweighting such considerations, with no prior information of the applicants.

| 4. | Fourth plea in law, alleging failure to sufficiently state reasons.
  The contested decision contains a series of statements that are unclear or difficult to understand in the context of the case, thereby preventing the applicant from assessing its merits. In particular, the Commission was under a duty to clarify how it had interpreted and applied the above-mentioned generic considerations in the specific context of the EATMI Project and how it had inferred negative comments from them. Yet it failed to do so. |
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4.

Fourth plea in law, alleging failure to sufficiently state reasons.

The contested decision contains a series of statements that are unclear or difficult to understand in the context of the case, thereby preventing the applicant from assessing its merits. In particular, the Commission was under a duty to clarify how it had interpreted and applied the above-mentioned generic considerations in the specific context of the EATMI Project and how it had inferred negative comments from them. Yet it failed to do so.

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