Judgment — ECLI:EU:T:2002:84
Date: 2002-03-21
Based on: Treaty establishing the European Economic Community (1957)
Subject matter: Competition;Agreements, decisions and concerted practices
Concepts: Statement of reasons;Applications by natural or legal persons;Admissibility and examination of applications, forms of order sought and pleas in law;Conditions for exemption
Procedure: Action for annulment - unfounded
Origin: United Kingdom

summary of the pleas in law relied on. Since that requirement is mandatory, the issue of compliance with it may be raised by the Court of its own motion. The summary of the pleas relied on, it should be pointed out, must be sufficiently clear and precise to enable the defendant to prepare its defence and the Court to rule on the action, if necessary without any other supporting information. Similar requirements are called for where a submission is made in support of a plea in law (see, for example, Case T-352/94 Mo och Domsjö v Commission [1998] ECR II-1989, paragraph 333). In order to guarantee legal certainty and sound administration of justice it is necessary, in order for an action to be admissible, that the basic legal and factual particulars relied on are indicated, at least in summary form, coherently and intelligibly in the text of the application itself (see, for example, the order in Case T-145/98 ADT Projekt v Commission [2000] ECR II-387, paragraph 66). While the body of the application may be supported and supplemented on specific points by references to extracts from documents annexed to it, a general reference to other documents, even those annexed to the application, cannot make up for the absence of the essential arguments in law which, in accordance with the above provisions, must appear in the application (order in Case T-154/98 Asia Motor France and Others v Commission [1999] ECR II-1703, paragraph 49). Moreover, it is not for the Court to seek and identify in the annexes the pleas and arguments on which it may consider the action to be based, since the annexes have a purely evidential and instrumental function (judgment in Case T-84/96 Cipeke v Commission [1997] ECR II-2081, paragraph 34). 155. In the present case, the submissions mentioned above were not set out, even briefly, in the body of the application, but were the subject of a general reference to an annexed document. They are therefore inadmissible. 156. As regards the admissibility of the substance concerning direct operational support, which was put forward for the first time at the reply stage, it must be noted that it follows from Article 44(1)(c) in conjunction with Article 48(2) of the Rules of Procedure that the application must state the subject-matter of the proceedings and a summary of the pleas in law relied on, and that the introduction of a new plea in law in the course of proceedings is not allowed unless it is based on matters of law or of fact which come to light in the course of the procedure. However, a plea which constitutes an amplification of a submission previously made, either expressly or by implication, in the original application and is closely linked to it must be declared admissible (see, for example, Case T-37/89 Hanning v Parliament [1990] ECR II-463, paragraph 38). The same applies to a submission made in support of a plea in law. 157. In the present case, the new submission disputing the countervailing benefit constituted by direct operational support, which is moreover presented very briefly, is not based on new matters which have come to light in the course of the procedure. Nor is it an amplification of a submission previously made, expressly or by implication, in the application and closely linked to the application. 158. It must therefore be declared inadmissible. 159. It follows from all the foregoing that the plea must be rejected. B - The plea of inadequate statement of reasons Arguments of the parties 160. The applicant submits that the Commission did not provide the contested decision with an adequate statement of reasons. 161. The inadequacy concerns the Commission's rejection of the observations made by the applicant in the administrative procedure, on the need to carry out a comparison between the cost structures of tied houses and free houses, and of the matters put forward by an accountant on behalf of the applicant. 162. It also concerns the Commission's reasoning with respect to the assessment of the rent subsidy and more particularly the assessment of the rent of Bass tied houses at 11.36% of turnover. First, the Commission omitted to mention in the contested decision, for each of the trading years in the period 1990 to 1998, the total turnover of all the houses tied to Bass, the total number of tied lessees, and the total letting income from all the tied houses. Second, it gave no reasons for choosing the rent/turnover method rather than the rent/net profit method. Findings of the Court 163. In contrast to a plea of manifest error of assessment, which goes to the substantive legality of the contested decision and can be examined by the Community judicature only if it is raised by the applicant, a plea of absence of reasons or inadequacy of the reasons stated goes to an issue of breach of essential procedural requirements within the meaning of Article 230 EC and involves a matter of public policy which must be raised by the Community judicature of its own motion (Case C-265/97 P VBA v Florimex and Others [2000] ECR I-2061, paragraph 114). 164. The reasoning required by Article 253 EC must show clearly and unequivocally the reasoning of the Community authority which adopted the contested measure so as to enable the persons concerned to ascertain the reasons for the measure and to enable the Community judicature to exercise its power of review (Case C-156/98 Germany v Commission [2000] ECR I-6857, paragraph 96). 165. The requirement to state reasons must be assessed in relation to the circumstances of each case, in particular the content of the measure in question, the nature of the reasons given and the interest which the addressees of the measure, or other parties to whom it is of direct and individual concern, may have in obtaining explanations (Case T-198/98 Micro Leader v Commission [1999] ECR II-3989, paragraph 40). It is not necessary for the reasoning to go into every relevant point of fact and law, since the question whether the statement of reasons meets the requirements of Article 253 EC must be assessed with regard not only to its wording but also to its context and to all the legal rules governing the matter in question (Germany v Commission, paragraph 97). 166. In particular, the Commission cannot be required to discuss all the matters of fact and law which may have been dealt with during the administrative procedure (Joined Cases C-241/91 P and C-242/91 P RTE and ITP v Commission [1995] ECR I-743, paragraph 99). The Commission is not obliged to adopt a position on all the arguments relied on by the parties concerned in support of their request, and need only set out the facts and legal considerations having decisive importance for the structure of the decision (Case T-5/97 Industrie des poudres sphériques v Commission [2000] ECR II-3755, paragraph 199). 167. As regards the alleged inadequate statement of reasons for the rejection, in connection with the assessment of the rent subsidy, of the observations submitted in the administrative procedure by the applicant and the accountant he had instructed, it must be observed that the object of those observations was essentially to criticise the used of the rent/turnover method adopted by the Commission and to advocate the use of the rent/net profit method. In that regard, it is sufficient to observe that the Commission examined, at points 68 to 72 of the contested decision, the merits of observations by an accountant and some lessees who consider that, in practice, rents are determined by an expert valuer on the basis of 50% of the divisible balance, namely the net profit and claim that the assumption that rent is properly based on a percentage of turnover is false, and that the assumption that free-of-tie rent is based on 15% of turnover is therefore also false. 168. In reply to those observations, the Commission disputed that the model put forward by the accountant corresponded to normal practice in the open market. It noted that while, in negotiations on rent or rent review, account is taken of future profits, other factors such as positioning in the market and product range are also considered. It observed that the contractual rent negotiated by the parties is not automatically determined on the basis of 50% of net profit, but may in fact vary from 40% to 60% of net profit. It found that the rent/turnover ratio method had practical advantages over the method proposed by the applicant. Finally, it noted that if the results of the various methods are compared, it is not unusual to find that their results may coincide. 169. Having regard to that detailed reasoning, even leaving aside the case-law which states that the Commission is not obliged to discuss every point of fact or law dealt with in the administrative procedure and need only set out the facts and legal considerations having decisive importance for the structure of the decision, it cannot validly be maintained that the Commission failed to take account of the observations of the applicant and the accountant. 170. As regards the calculation of the rent subsidy, the applicant submits first that the reasons stated are inadequate with respect to the method chosen for that calculation. In that regard, it must be noted that the Commission, at point 63 of the contested decision, referred to three possible methods of assessing the rent subsidy, that it chose the rent/turnover ratio method because that method had been adopted by the OFT, and that it considered that it could build on the work of the OFT. It then set out, at points 64 to 66 and 73 of the contested decision, the way in which it applied that method, and, at points 67 to 72 of the contested decision, justified the choice of that method from the point of view of the criticism made by lessees as to the pertinence of the method based on a rent/net profit ratio. 171. In those circumstances, bearing in mind also what has been stated above on the complaint of failure to take into consideration the similar observations made by the applicant in the administrative procedure, it cannot validly be maintained that the Commission did not give sufficient reasons for its choice for calculating the rent subsidy of the method based on the rent/turnover ratio rather than that based on the rent/net profit ratio. 172. The applicant further considers that the Commission did not give adequate reasons, at point 65 of the contested decision, for its assessment of the reference rent of Bass tied houses at 11.36% of turnover. According to the applicant, adequate reasoning on that point would have involved mentioning the total turnover of the houses tied to Bass, the total number of tied houses and the total letting income from all the tied houses. 173. On this point, it must be observed that the Commission stated, at point 65 of the contested decision, that the figure of 11.36% came from internal documents of Bass, mostly compiled in preparation for rent or rent review negotiations, for a random sample of 30 pubs chosen by the Commission. It said that those documents included individual estimates of the turnover of each pub, from which the average rent/turnover ratio was calculated. The Commission thereby indicated, summarily but in a clear and consistent manner, the criteria on the basis of which the figure of 11.36% was reached. The reasoning in question is thus adequate. 174. In so far as the submission, in support of the plea of inadequate statement of reasons, seeks to dispute the correctness of the grounds of the contested decision, it is irrelevant. The absence or inadequacy of a statement of reasons constitutes a plea of breach of essential procedural requirements, and as such is distinct from a plea of incorrectness of the grounds of the decision, which is reviewed in the context of the question whether a decision is well founded (Case T-266/97 Vlaamse Televisie Maatschappij v Commission [1999] ECR II-2329, paragraph 144). 175. Since none of the submissions in support of the plea of inadequate statement of reasons is well founded, that plea must be rejected. 176. It follows that the application must be dismissed in its entirety. Costs 177. Under Article 87(2) of the Rules of Procedure, the unsuccessful party is to be ordered to pay the costs if they have been applied for in the successful party's pleadings. Since the applicant has been unsuccessful, he must be ordered to pay the costs as applied for by the defendant. 178. Under the third subparagraph of Article 87(4) of the Rules of Procedure, the intervener shall bear its own costs. On those grounds, THE COURT OF FIRST INSTANCE (Third Chamber), hereby: 1. Dismisses the application; 2. Orders the applicant to bear his own costs and pay those of the Commission; 3. Orders the intervener to bear its own costs. Azizi Lenaerts Jaeger Delivered in open court in Luxembourg on 21 March 2002. H. Jung M. Jaeger Registrar President Table of contents Facts of the dispute II - 2 The administrative procedure II - 3 Procedure and forms of order sought by the parties II - 4 Admissibility II - 5 1. Interest in bringing proceedings II - 5 Arguments of the parties II - 5 Findings of the Court II - 5 2. The applicant's capacity to bring proceedings II - 5 Arguments of the parties II - 5 Findings of the Court II - 6 Substance II - 7 A - The plea of manifest errors of assessment II - 7 1. Failure to take sufficient account of the effect of the standard leases on the profitability of Bass tied houses II - 7 Arguments of the parties II - 8 Findings of the Court II - 9 2. Assessment of the price differential II - 13 (a) Definition of the price differential II - 13 - Arguments of the parties II - 13 - Findings of the Court II - 14 (b) Determination of the reference group II - 14 - Arguments of the parties II - 15 - Findings of the Court II - 15 3. Calculation of the rent subsidy II - 16 (a) The complaint as to the choice of the rent/turnover method II - 17 - Arguments of the parties II - 17 - Findings of the Court II - 17 (b) The complaint as to the assessment of the rent of free houses as 15% of turnover II - 18 - Arguments of the parties II - 18 - Findings of the Court II - 20 4. The assessment of other countervailing benefits II - 25 (a) The argument that only benefits provided under a contractual obligation should have been taken into account II - 26 - Arguments of the parties II - 26 - Findings of the Court II - 26 (b) The assessment of certain countervailing benefits II - 26 - Arguments of the parties II - 26 - Findings of the Court II - 26 B - The plea of inadequate statement of reasons II - 28 Arguments of the parties II - 28 Findings of the Court II - 28 Costs II - 31 1: Language of the case: English.