Judgment;Summary — ECLI:EU:C:2020:27
Date: 2020-01-22
Language of the case: Dutch
Court formation: Seventh Chamber
Subject matter: Agriculture and Fisheries;Economic, social and territorial cohesion
Procedure: Reference for a preliminary ruling
Origin: Netherlands

Summary C-814/18 — 1 
Case C-814/18 
Summary of the request for a preliminary ruling pursuant to Article 98(1) of 
the Rules of Procedure of the Court of Justice 
Date lodged: 
21 December 2018 
Referring court: 
College van Beroep voor het bedrijfsleven (Netherlands) 
Date of the decision to refer: 
18 December 2018 
Applicant: 
Ursa Major Services B.V. 
Defendant: 
Minister van Landbouw, Natuur en Voedselkwaliteit 
  
Subject of the action in the main proceedings 
The main proceedings concern the granting of subsidies in the fisheries sector. 
The issue is whether costs paid by third-party participants in a project are eligible 
for subsidisation.  
Subject and legal basis of the request for a preliminary ruling 
The request under Article 267 TFEU concerns the application of Article 55(1) of 
Regulation No 1198/2006 to the relationship between a provider of a subsidy and 
a beneficiary, as well as the eligibility of third-party expenditure and the 
principles of the protection of legitimate expectations and of legal certainty.  
Questions referred 
1. Is Article 55(1) of Regulation 1198/2006 applicable to the relationship 
between the provider of a subsidy, in the present case the Minister, and the 
beneficiary (the recipient of the subsidy)?  
EN 
SUMMARY OF THE REQUEST FOR A PRELIMINARY RULING — CASE C-814/18 
 
2  
2. If the first question is answered to the effect that Article 55(1) of Regulation 
1198/2006 does apply to the relationship between the provider of the subsidy and 
the beneficiary: can expenditure that has been paid by a third party (whether or not 
by set-off) be regarded as expenditure actually paid by the beneficiary as referred 
to in Article 55(1) of Regulation 1198/2006? 
3. If the second question is answered to the effect that expenditure paid by a 
third party (whether or not by set-off) cannot be regarded as expenditure actually 
paid by the beneficiary as referred to in Article 55(1) of Regulation 1198/2006: 
(a) does an executive practice whereby the provider of the subsidy has 
consistently considered contributions from third parties to be expenditure actually 
paid by the beneficiary as referred to in Article 55(1) of Regulation 1198/2006 
mean that the beneficiary could not have been expected to detect such an incorrect 
interpretation of Article 55(1) of Regulation 1198/2006 by the provider of the 
subsidy, with the result that the beneficiary is entitled to the subsidy as granted to 
him, and 
(b) should the contributions from third parties then be included in the 
expenditure actually paid by the beneficiary as referred to in Article 55(1) of 
Regulation 1198/2006 (in which case the subsidy is set higher) or  
(c) should recovery of the wrongly granted subsidy then be waived on the basis 
of the principle of the protection of legitimate expectations and/or the principle of 
legal certainty? 
(d) does it make any difference in that regard if the provider of the subsidy, as in 
the present case, has granted an advance on the subsidy? 
Provisions of international law cited 
Council Regulation No 1198/2006 of 27 July 2006 on the European Fisheries 
Fund. 
Council Regulation No 1260/1999 of 21 June 1991 laying down general 
provisions on the Structural Funds. 
Provisions of national law cited 
Regeling van de Minister van Landbouw, Natuur en Voedselkwaliteit van 14 
februari 2007, nr. TRCJZ/2007/388, houdende regels inzake de verstrekking van 
subsidies door de Minister van Landbouw, Natuur en Voedselkwaliteit (Regeling 
LNV-subsidies) (Regulation of the Minister for Agriculture, Nature and Food 
Quality of 14 February 2007, No. TRCJZ / 2007/388, laying down rules on the 
granting of subsidies by the Minister for Agriculture, Nature and Food Quality 
(Regulation on LNV subsidies)). 
URSA MAJOR SERVICES 
 
3 
Brief summary of the facts and the procedure in the main proceedings 
1 The applicant in the main proceedings, Ursa Major Services BV, is a company 
which manages subsidy projects within the fisheries sector. The applicant applied 
to the minister van Landbouw, Natuur en Voedselkwaliteit (Minister for 
Agriculture, Nature and Food Quality) (the defendant) for a subsidy for a project 
aimed at promoting sustainable investments by participating shrimp fishing 
enterprises in a newly developed fishing gear. By decision of 17 August 2012, the 
Minister granted a maximum subsidy of EUR 118 056. The granting of the 
subsidy must be distinguished from the determination of the subsidy. At the end of 
a project, there is an assessment of whether the applicant has carried out the 
subsidised activity and has thus fulfilled his obligations. The decision on the 
determination of the subsidy then entails determining (and paying out) the final 
subsidy amount on the basis of invoices. 
2 The applicant drew up a budget which was included in the decision to grant a 
subsidy. It shows that the subsidy granted amounted to 60% of the eligible costs, 
half of which was financed by the European Fisheries Fund (‘the EFF’). The other 
half came from the province of Friesland. The recipients of the subsidy (the 
beneficiaries within the meaning of Regulation No 1198/2006) had to finance the 
ineligible costs and 40% of the eligible costs in some other way.  
3 Some participating fishing enterprises withdrew after the subsidy was granted. For 
the project to continue, the applicant needed substitute financing. It obtained this 
from the fishing enterprise J. Seepma, which was already involved in the project 
as an expert practitioner, and from the supplier of the fishing gear (VCU TCF 
B.V). Those parties were not recipients of the subsidy, but third parties 
participating in the project. Seepma deducted the financial contribution on the 
invoices for the provision of services as an expert practitioner. Separate invoices 
were drawn up for VCU’s contribution. The Minister paid an advance on the 
subsidy on the basis of invoices which also showed the set-off by Seepma.  
4 After the payment of that advance, by decision of 20 January 2016 (‘the primary 
decision’) the Minister rejected a request to amend the decision to grant the 
subsidy in accordance with the modified financing. The Minister argued that 
Seepma and VCU were not co-applicants and co-recipients of the subsidy. A 
contribution to the financing by project partners or third parties could not be 
subsidised, because those costs are not borne by the applicant for the subsidy.  
5 In the decision of 21 July 2016 (‘the contested decision’), the Minister 
supplemented the grounds for the primary decision by referring to Article 55(1) of 
Regulation No 1198/2006. According to the Minister, it follows from that 
provision that costs are only eligible if the recipient of the subsidy has incurred 
and paid for them himself.  
6 At the end of the project, as a result of the contested decision, the final amount of 
the subsidy was set lower than would have been expected on the basis of the 
SUMMARY OF THE REQUEST FOR A PRELIMINARY RULING — CASE C-814/18 
 
4  
original subsidy granted. The contribution of both third parties participating in the 
project was now not covered by the eligible amount, 60% of which was paid out. 
The request for a preliminary ruling concerns the contested decision on the grant 
of the subsidy.  
Main submissions of the parties to the main proceedings 
7 According to the applicant, the Minister should have assessed the application for 
the amendment of the decision to grant the subsidy on the basis of national 
legislation and not on the basis of Article 55 of Regulation No 1198/2006. 
Furthermore, the request for an amendment could not be rejected on the basis of 
the latter article either. The total costs incurred do not increase if the original 
financiers are replaced by others. In the alternative, the applicant argued that the 
Minister should also have assessed the application on the basis of the exceptions 
contained in Article 55(2) of Regulation No 1198/2006 which relate to other 
contributions to the project. It further stated that the question of whether costs can 
be subsidised does not depend on the way in which the project costs are invoiced 
(for example, through set-off).  
8 The applicant also relies on the principle of the protection of legitimate 
expectations and the principle of legal certainty. The Minister granted an advance 
on the subsidy on the basis of invoices which showed the set-off of costs by 
Seepma. Consequently, the applicant did not amend that course of action. Since 
the subsidy was not paid only out of the EFF, but also out of provincial funds, it is 
not self-evident that in the present case the principle of the protection of legitimate 
expectations and the principle of legal certainty should be interpreted in 
accordance with EU case-law.  
9 The Minister argues that costs paid by third parties that have not been declared to 
the recipient of the subsidy are not eligible for subsidy. According to him, 
Article 55(2) of Regulation No 1198/2006 is not at issue because the applicant has 
not indicated which expenditure was made in kind. The Minister also 
acknowledges that the applicant was subsequently faced with a change in the 
application of EU law in the sense that, unlike the grant of the advance, he no 
longer accepts invoices in which a financial contribution from a third party is 
deducted. The Minister decided on that change on the basis of information 
subsequently obtained from the European Commission’s Audit Service. The 
Minister contends that in that case the EU law principles of the protection of 
legitimate expectations and of legal certainty apply. For the application of those 
principles, it is irrelevant whether the advance paid is based on a different view of 
eligible costs than that relating to the determination of the subsidy. Moreover, 
those principles may not be applied contra legem.  
URSA MAJOR SERVICES 
 
5 
Brief summary of the reasons for the referral 
10 The referring court, unlike the applicant, considers that Article 55(1) of 
Regulation No 1198/2006 does apply in the main proceedings. On the basis of 
paragraph 4 of that article alone, the interpretation of that Regulation is relevant to 
the assessment of the legality of the contested decision. It appears from the 
positions adopted by the parties that that interpretation is open to doubt, so that the 
referring court is obliged to refer a question for a preliminary ruling.  
11 First of all, according to the referring court, there is doubt as to the scope of 
Article 55(1) of Regulation No 1198/2006. That provision refers to ‘a contribution 
from the EFF’, but Article 52, for example, refers to ‘public aid’ and Article 53 to 
‘public expenditure’. On the basis of those different terms, it could be argued that, 
in the light of Article 53(2) and Article 75(1) of Regulation No 1198/2006, 
Article 55(1) of that Regulation relates exclusively to the expenditure reimbursed 
by the Commission out of the EFF to the Member State granting the subsidy. That 
would then also apply to the in-kind expenditure referred to in Article 55(2) of 
Regulation No 1198/2006.  
12 However, if it must be held that Article 55(1) of Regulation No 1198/2006 does 
apply to the relationship between the Member State and the recipient of the 
subsidy, the Minister’s interpretation means, on the one hand, that a project 
receives less subsidy if it is co-financed by third parties. That amounts to 
preferential treatment for projects which, apart from the subsidy, are paid entirely 
from the own capital of the recipient of the subsidy. That restricts the use of 
private sources of funding, whereas, according to recital 16 of Regulation 
No 1198/2006, that should in fact be promoted. It also makes it more difficult to 
enter into partnerships with, inter alia, economic and social partners as referred to 
in Article 8 of that Regulation. On the other hand, the Minister’s interpretation 
seems to be in line with Article 52 of that Regulation — read in conjunction with 
Annex II (a) thereof — which suggests that no financing is possible other than that 
provided by the government and the recipients of subsidies.  
13 Article 55(4) of Regulation No 1198/2006 does not appear to be decisive in 
assessing the scope of paragraph 1 of that article. That provision states that the 
eligibility of expenditure is to be determined at national level, but subject to the 
exceptions provided for in that Regulation. The question is whether Article 55(1) 
of that Regulation constitutes such an exception. The legislative history of the 
Regulation does not provide a definitive answer to that question. Presumably, the 
predecessor of that provision (namely, Article 30(2) of Regulation No 1260/1999) 
was intended to determine the starting date for eligibility. That provision does not 
seem to relate to the question whether the recipient of the subsidy has paid the 
project costs himself.  
14 The foregoing leads the referring court to refer to the CJEU, first, the question 
whether Article 55(1) of Regulation No 1198/2006 applies to the relationship 
between the provider of the subsidy, in this case the Minister, and the recipient of 
SUMMARY OF THE REQUEST FOR A PRELIMINARY RULING — CASE C-814/18 
 
6  
the subsidy. If that article does not apply to that relationship because that 
provision only concerns the relationship between the European Union and the 
Member State, whether the costs of that project are eligible must be determined on 
the basis of national legislation (albeit subject to the exceptions laid down in that 
Regulation, as is clear from Article 55(4) of that Regulation). Under the applicable 
national legislation, costs cannot be excluded from subsidy because a third party 
has paid them.  
15 If the Regulation does apply to the relationship between the provider of the 
subsidy (the Minister) and the recipient, the next question is whether expenditure 
paid by a third party may in the present case be regarded as expenditure actually 
paid by the beneficiary as referred to in Article 55(1) of Regulation 
No 1198/2006.  
16 If the CJEU, like the Minister, determines that costs paid by third parties are not 
eligible, the referring court will also have to give a ruling on the applicant’s 
reliance on the principle of the protection of legitimate expectations and the 
principle of national legal certainty. The question in that regard is whether the 
Minister was entitled to change his position because officials of the European 
Commission gave a different interpretation to the provision in question. That is 
why, by its third question, the referring court wishes to ascertain whether the 
original practice of the Minister to consistently consider contributions from third 
parties as belonging to the eligible costs may mean that the applicant could not 
have been expected to detect that incorrect interpretation, so that the decision to 
grant the subsidy can remain unchanged. He refers in that regard to the judgment 
of the CJEU of 2 July 2015, Demmer, C-684/13, ECLI:EU:C:2015:439, 
paragraphs 74 to 94, in particular paragraph 87, and of 20 December 2017, 
Erzeugerorganisation Tiefkühlgemüse, C-516/16, ECLI:EU:C:2017:1011, 
paragraphs 64 to 75, in particular paragraph 69.