# C_2023216EN.01004702.xml

| 19.6.2023 | EN | Official Journal of the European Union | C 216/47 |
| --- | --- | --- | --- |

19.6.2023

EN

Official Journal of the European Union

C 216/47

---

Action brought on 13 March 2023 — Semmelweis Egyetem v Council

(Case T-138/23)

(2023/C 216/63)

Language of the case: English

Parties

Applicant: Semmelweis Egyetem (Budapest, Hungary) (represented by: P. Nagy and B. Karsai, lawyers)

Defendant: Council of the European Union

Form of order sought

The applicant claims that the Court should:

| — | annul Article 2(2) of Council Implementing Decision (EU) 2022/2506 of 15 December 2022, (1) insofar as it concerns the applicant; or alternatively, |
| --- | --- |

—

annul Article 2(2) of Council Implementing Decision (EU) 2022/2506 of 15 December 2022, (1) insofar as it concerns the applicant; or alternatively,

| — | annul Article 2(2) of Council Implementing Decision (EU) 2022/2506 in its entirety; and, in either case, |
| --- | --- |

—

annul Article 2(2) of Council Implementing Decision (EU) 2022/2506 in its entirety; and, in either case,

| — | order that the defendant pay the applicant’s costs of these proceedings. |
| --- | --- |

—

order that the defendant pay the applicant’s costs of these proceedings.

Pleas in law and main arguments

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

| 1. | First plea in law, alleging that the contested decision lacks a sufficiently solid factual basis. The defendant should have based its decision to adopt the contested decision on duly established facts. Instead, it is argued that the defendant relied on the unsubstantiated assessment and proposal from the European Commission.






  — | First sub-plea: The defendant failed to ensure that the inclusion of the applicant in the group of entities made subject to the restrictive measures by Article 2(2) of the contested decision rested on a sufficiently solid factual basis. In connection with the issue of alleged breaches of the principles of the rule of law, the Commission’s fact-finding was not extended to the composition, decision-making, finances and operation of any of the ‘public interest trusts’, such as the foundation in charge of the maintenance of the applicant. Neither the defendant nor the Commission, it is argued, analysed the potential impact, nature, duration or the seriousness and scope of the alleged breaches and/or the restrictive measures, which has resulted in damage to applicant’s businesses and good reputation. |
| --- | --- | --- |

1.

First plea in law, alleging that the contested decision lacks a sufficiently solid factual basis. The defendant should have based its decision to adopt the contested decision on duly established facts. Instead, it is argued that the defendant relied on the unsubstantiated assessment and proposal from the European Commission.

—

First sub-plea: The defendant failed to ensure that the inclusion of the applicant in the group of entities made subject to the restrictive measures by Article 2(2) of the contested decision rested on a sufficiently solid factual basis. In connection with the issue of alleged breaches of the principles of the rule of law, the Commission’s fact-finding was not extended to the composition, decision-making, finances and operation of any of the ‘public interest trusts’, such as the foundation in charge of the maintenance of the applicant. Neither the defendant nor the Commission, it is argued, analysed the potential impact, nature, duration or the seriousness and scope of the alleged breaches and/or the restrictive measures, which has resulted in damage to applicant’s businesses and good reputation.

| — | Second sub-plea: The defendant made manifest errors of assessment of facts. The concerns raised by the Commission in connection with the ‘public interest trusts’ relate to public procurement and conflict of interests. It skipped the defendant’s attention that the public procurement issue had already been resolved prior to the adoption of the decision and that — in terms of the applicant — no conflict of interest has ever existed. |
| --- | --- |

—

Second sub-plea: The defendant made manifest errors of assessment of facts. The concerns raised by the Commission in connection with the ‘public interest trusts’ relate to public procurement and conflict of interests. It skipped the defendant’s attention that the public procurement issue had already been resolved prior to the adoption of the decision and that — in terms of the applicant — no conflict of interest has ever existed.

| — | Third sub-plea: Pursuant to Article 6(9) of Regulation (EU, Euratom) 2020/2092 of the European Parliament and of the Council of 16 December 2020 (the ‘Conditionality Regulation’), (2) the defendant failed to state adequate reasons. The Commission’s proposal and, consequently, the contested decision, was supposed to set out specific grounds and evidence on which that decision should have been based. However, no such valid grounds have been named in the contested decision or the proposal, which has penalised the applicant. |
| --- | --- |

—

Third sub-plea: Pursuant to Article 6(9) of Regulation (EU, Euratom) 2020/2092 of the European Parliament and of the Council of 16 December 2020 (the ‘Conditionality Regulation’), (2) the defendant failed to state adequate reasons. The Commission’s proposal and, consequently, the contested decision, was supposed to set out specific grounds and evidence on which that decision should have been based. However, no such valid grounds have been named in the contested decision or the proposal, which has penalised the applicant.

| 2. | Second plea in law, alleging that the applicant, a person affected by the contested decision, has been denied the opportunity to defend its rights; and so its right to be heard has been infringed. Should the applicant’s right to be heard not have been denied, it would have resulted in considerations leading to proper, proportionate, relevant and honest limitations of the measures adopted. |
| --- | --- |

2.

Second plea in law, alleging that the applicant, a person affected by the contested decision, has been denied the opportunity to defend its rights; and so its right to be heard has been infringed. Should the applicant’s right to be heard not have been denied, it would have resulted in considerations leading to proper, proportionate, relevant and honest limitations of the measures adopted.

| 3. | Third plea in law, alleging that the contested decision lacks proper authorisation and that the defendant misused its rights.






  — | First sub-plea: The Conditionality Regulation contains no authorisation appropriate for the measures set out in Article 2(2) of the Decision. The authorisation embedded in the Conditionality Regulation is not a carte blanche, it must be limited (a) by purpose (‘the protection of the Union budget’) and (b) to the means that are appropriate for attaining such a purpose. There is an absence of appropriate means and proportionality in the contested decision, which would have limited its scope concerning the applicant, and which consequently lacks requisite authorisation, which infringes the rights of the applicant. |
| --- | --- | --- |

3.

Third plea in law, alleging that the contested decision lacks proper authorisation and that the defendant misused its rights.

—

First sub-plea: The Conditionality Regulation contains no authorisation appropriate for the measures set out in Article 2(2) of the Decision. The authorisation embedded in the Conditionality Regulation is not a carte blanche, it must be limited (a) by purpose (‘the protection of the Union budget’) and (b) to the means that are appropriate for attaining such a purpose. There is an absence of appropriate means and proportionality in the contested decision, which would have limited its scope concerning the applicant, and which consequently lacks requisite authorisation, which infringes the rights of the applicant.

| — | Second sub-plea: The defendant misused its power. In this regard the applicant submits the following reference: ‘In accordance with settled case-law, a measure is vitiated by misuse of powers only if it appears, on the basis of objective, relevant and consistent evidence, to have been taken solely, or at the very least chiefly, for ends other than those for which the power in question was conferred or with the aim of evading a procedure specifically prescribed by the FEU Treaty for dealing with the circumstances of the case ...’. (3) |
| --- | --- |

—

Second sub-plea: The defendant misused its power. In this regard the applicant submits the following reference: ‘In accordance with settled case-law, a measure is vitiated by misuse of powers only if it appears, on the basis of objective, relevant and consistent evidence, to have been taken solely, or at the very least chiefly, for ends other than those for which the power in question was conferred or with the aim of evading a procedure specifically prescribed by the FEU Treaty for dealing with the circumstances of the case ...’. (3)

| 4. | Fourth plea in law, alleging that the defendant has infringed the principle of proportionality, a fundamental principle of EU law. In order to ensure strict adherence to the principle of proportionality, the institution adopting an act has an obligation to weigh up appropriately the various interests at play, analyse their function and role, and make decisions accordingly. In this case, the applicant asserts that there is no identifiable evidence that would suggest that the interests of the applicant were taken into account at any level or in any form or that the situation of the applicant was analysed, let alone objectively, diligently, and proportionally, prior to the adoption of the measures included in Article 2(2) of the contested decision, hence its detrimental effect on the applicant. |
| --- | --- |

4.

Fourth plea in law, alleging that the defendant has infringed the principle of proportionality, a fundamental principle of EU law. In order to ensure strict adherence to the principle of proportionality, the institution adopting an act has an obligation to weigh up appropriately the various interests at play, analyse their function and role, and make decisions accordingly. In this case, the applicant asserts that there is no identifiable evidence that would suggest that the interests of the applicant were taken into account at any level or in any form or that the situation of the applicant was analysed, let alone objectively, diligently, and proportionally, prior to the adoption of the measures included in Article 2(2) of the contested decision, hence its detrimental effect on the applicant.

| 5. | Fifth plea in law, alleging that the contested decision distorts the market in which the applicant is competing. Prohibition of distortion of the market with no justification is embedded in the fundamental freedoms of the Union. Limiting the applicant’s business for the benefit of its competitors violates the fundamental freedoms of the Union. |
| --- | --- |

5.

Fifth plea in law, alleging that the contested decision distorts the market in which the applicant is competing. Prohibition of distortion of the market with no justification is embedded in the fundamental freedoms of the Union. Limiting the applicant’s business for the benefit of its competitors violates the fundamental freedoms of the Union.

---

(1)  Council Implementing Decision (EU) 2022/2506 of 15 December 2022 on measures for the protection of the Union budget against breaches of the principles of the rule of law in Hungary (OJ 2022 L 325, p. 94).

(2)  Regulation (EU, Euratom) 2020/2092 of the European Parliament and of the Council of 16 December 2020 on a general regime of conditionality for the protection of the Union budget (OJ 2020 L 433I, p. 1).

(3)  See paragraph 56 of the judgment of 5 May 2015 in Kingdom of Spain v European Parliament and Council of the European Union (Case C-146/13, EU:C:2015:298).

---