Judgment — ECLI:EU:T:1997:174
Date: 1997-11-07
Language of the case: Portuguese
Court formation: Third Chamber
Based on: Treaty establishing the European Economic Community (1957)
Subject matter: European Social Fund (ESF)
Concepts: Statement of reasons;Admissibility and examination of applications, forms of order sought and pleas in law
Procedure: Action for annulment - unfounded
Origin: Portugal

summary of the pleas in law on which the application is based. In that connection, it should be noted that the applicant makes no express plea going to the issue of whether the decision is well founded. In accordance with settled case-law, a statement of claim must be sufficiently clear and precise to enable the defendant to prepare its defence and the Court to exercise its power of judicial review. In order to guarantee legal certainty and sound administration of justice it is thus necessary for the basic legal and factual particulars relied on be indicated, at least in summary form, coherently and intelligibly in the application itself (order of 28 April 1993 in Case T-85/92 De Hoe v Commission [1993] ECR II-523, paragraph 20). The lack of precision in the applicant's statement of claim led the Commission to believe that the only plea raised in the application was that based on the alleged inadequacy of the reasoning underlying the contested decision, with the result that it replied only to this plea in its statement in defence. Thus, at point 13 of that document, it argued that the fact that the applicant does not agree with the contested decision must not be confused with the lack or inadequacy of the statement of reasons. The Court cannot take cognizance of the observations made by the applicant in its letter of 26 April 1994 on the draft decision to reduce assistance and to which it refers at point 42 of its application. A catch-all reference to other documents, even ones appended to the application, cannot remedy the omission of essential elements of the legal arguments which must be contained in the application itself (Case C-347/88 Commission v Greece [1990] ECR I-4747, paragraph 28, and Case C-52/90 Commission v Denmark [1992] ECR I-2187, paragraph 17 et seq.). Certainly, the body of the application may be supported and supplemented, in regard to specific points, by references to extracts of documents appended thereto, but it is not for the Court to seek and identify in the annexes the grounds on which it may consider the action to be based, since the annexes have a purely evidential and instrumental function (orders of 24 March 1993 in Case T-72/92 Benzler v Commission [1993] ECR II-347, paragraph 19, and in De Hoe v Commission, cited above, paragraph 22). Under those conditions, the Court considers that the application, as submitted for its appraisal, does not enable it to exercise its judicial review on the question of whether the contested decision is well founded, and that it prevented the defendant from effectively presenting its defence in that connection. It is true that the applicant also claimed, in the reply and at the hearing, that the grounds of the contested decision were not well founded. However, that is to be regarded as a new plea since it cannot be deemed to amplify the plea going to inadequacy of reasoning, precisely on account of the distinction which must be made between them (see paragraph 32, above). Under Article 48(2) of the Rules of Procedure of the Court of First Instance, no new plea in law may be introduced in the course of proceedings unless it is based, which is not the case here, on matters of law or of fact which have come to light in the course of the procedure (Case T-521/93 Atlanta and Others v Commission [1996] ECR II-1707, paragraph 39). It follows from the foregoing that the plea going to the inadequacy of the reasoning on which the contested decision is based is the only plea which is validly before the Court. Statement of reasons for the decision Arguments of the parties In its application the applicant maintains that the conclusions set out in letter No 6045, which constitute the grounds of the contested decision, are contradictory, ambiguous, incoherent and without foundation. They give, it claims, no objective and precise indication of the manner in which the amount of ineligible expenditure was calculated. To that extent, the contested decision does not comply with the requirements laid down by the Court of Justice in Cipeke v Commission, cited above. The Commission, it maintains, based its conclusions on hypothetical calculations which, in view of the expenditure in connection with the preparation of the courses, result in much smaller figures than the average expenditure incurred by all the other recipients of the assistance at issue. The Commission's calculations as to the ineligibility of certain expenditure were not carried out in a reasonable manner, as the applicant already had occasion to emphasize in its letter of 26 April 1994 annexed to the application, of which it forms an integral part. In its reply, the applicant adds that the contested decision states neither the method of calculation nor the rules followed by the Commission in reducing the financial assistance (Case C-181/90 Consorgan v Commission [1992] ECR I-3557, paragraphs 15 to 25; and Case T-450/93 Lisrestal and Others v Commission [1994] ECR II-1177,paragraph 52). The justifications given for reducing the amount of the assistance originally granted, as they appear in the conclusions of the verification mission and the observations of the Portuguese Government, are based purely on hypothetical reasoning and presumptions, whereas justifications for reducing the amount of assistance must be given with certainty and in a sufficiently clear manner. The Commission essentially objects that the applicant has not proven the hypothetical, imprecise and subjective nature of the calculations which, on the contrary, the Commission worked out minutely and seriously after the verification mission. Letter No 6045, whose conclusions form the basis of the contested decision, as the applicant itself points out at paragraph 37 of its application, states with sufficient clarity and transparency the methods of calculation and rules followed, such as the criterion of reasonableness of the expenditure, which led the Commission to reduce the Fund assistance. That letter brought to the applicant's notice not only the total amount of the reduction but also an exact list of the items where reductions had been made, the various amounts per item and subcontractor, and the method of calculating that reduction. Finally, the reductions made were substantiated with certainty and sufficient clarity, at least to the extent to which it was possible to do so, regard being had to the material made available to the verification mission. Findings of the Court It should be recalled at the outset that the Court has consistently held that the statement of reasons required by Article 190 of the Treaty must clearly and unequivocally show the reasoning of the institution which adopted the measure, so as to enable the Community judicature to exercise its power of review and the persons concerned to know the grounds on which the measure was adopted (Case C-22/94 The Irish Farmers Association and Others [1997] ECR I-1809, paragraph 39, and Lisrestal, cited above, paragraph 52). It follows that the absence or inadequacy of a statement of reasons constitutes a plea going to infringement of essential procedural requirements and, as such, is distinct from a plea going to the incorrectness of the grounds of the contested decision, which, by contrast, is reviewed in the context of the question whether a decision is well founded (Case T-356/94 Vecchi v Commission [1996] ECR-SC II-1251, paragraph 82). In the present case, suffice it to state that the contested decision, as explained in letter No 6045, devotes several pages to a detailed account of the grounds relied on, rightly or wrongly, by the Commission in support of the reduction of the various headings of expenditure deemed ineligible and of the methods for calculating those reductions. The applicant was therefore able to apprise itself of both the total amount of the reduction and the headings in question, the itemization of the reductions in the case of each heading and the method of calculation applied to those reductions, in accordance with the principles laid down in Cipeke v Commission, cited above. It is apparent, therefore, that the statement of the reasons on which the contested decision is based sets out clearly and coherently the factual and legal considerations forming the basis of the justification in law for the reductions carried out, irrespective of whether those considerations are well founded, which, as stated above, is not an issue arising in connection with the adequacy of the statement of reasons but rather with the substance of the case. In those circumstances the plea of inadequacy of the statement of reasons on which the contested decision is based must be rejected. It follows that the action must be dismissed. Costs 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 and the Commission asked for an order as to costs against the applicant, it must be ordered to pay the costs, including the costs of the proceedings on the application for interim measures. On those grounds, THE COURT OF FIRST INSTANCE (Third Chamber), hereby: Dismisses the action; Orders the applicant to pay the costs, including the costs of the proceedings on the application for interim measures. Vesterdorf Briët Potocki Delivered in open court in Luxembourg on 7 November 1997. H. Jung B. Vesterdorf Registrar President 1: Language of the case: Portuguese. ECR