Judgment — ECLI:EU:C:2008:476
Date: 2008-09-09
Language of the case: Italian
Court formation: Grand Chamber
Based on: Treaty establishing the European Economic Community (1957)
Subject matter: Agriculture and Fisheries;External relations;Fruit and vegetables;Commercial policy;World Trade Organization;Non-contractual liability
Concepts: General;Appeals;Effects. Scope and limits;GATT and WTO;Basis of liability;Right to property;Freedom to pursue trade or professional activities
Procedure: Appeal - unfounded;Action for damages
Origin: Italy

Summary of the Judgment 1. Appeals – Pleas in law – Inadequate or contradictory reasoning – Admissibility (Art. 225 EC; Statute of the Court of Justice, Art. 58, first para.) 2. International agreements – Agreements concluded by the Community 3. International agreements – Agreement establishing the World Trade Organisation 4. Non-contractual liability – Liability for a lawful act (Art. 288, second para., EC) 5. Community law – Principles – Fundamental rights – Right to property – Freedom to pursue a trade or profession – Scope 6. Appeals – Pleas in law – Grounds of a judgment vitiated by an infringement of Community law – Operative part well founded on other legal grounds – Dismissal 7. Procedure – Duration of the proceedings before the Court of First Instance – Reasonable length – Criteria for assessment 1. The question whether the grounds of a judgment of the Court of First Instance are contradictory or inadequate is a question of law which is amenable, as such, to judicial review on appeal. In that connection, the requirement that the Court of First Instance give reasons for its decisions cannot be interpreted as meaning that it is obliged to respond in detail to every single argument advanced by an applicant, particularly if the argument is not sufficiently clear and precise. Nor does the obligation to state reasons require the Court of First Instance to provide an account which follows exhaustively and one by one all the arguments put forward by the parties to the case. The reasoning may therefore be implicit on condition that it enables the persons concerned to know why the Court of First Instance has not upheld their arguments and provides the Court of Justice with sufficient material for it to exercise its power of review. (see paras 90-91, 96) 2. The effects within the Community of provisions of an agreement concluded by the Community with non-member States may not be determined without taking account of the international origin of the provisions in question. In conformity with the principles of public international law, Community institutions which have power to negotiate and conclude such an agreement are free to agree with the non-member States concerned what effect the provisions of the agreement are to have in the internal legal order of the contracting parties. If that question has not been expressly dealt with in the agreement, it is the courts having jurisdiction in the matter and in particular the Court of Justice within the framework of its jurisdiction under the Treaty that have the task of deciding it, in the same manner as any other question of interpretation relating to the application of the agreement in question in the Community, on the basis in particular of the agreement’s spirit, general scheme or terms. Thus, specifically, it falls to the Court to determine whether the provisions of an international agreement confer on persons subject to Community law the right to rely on that agreement in legal proceedings in order to contest the validity of a Community measure. The Court can examine the validity of secondary Community legislation in the light of an international treaty only where the nature and the broad logic of the latter do not preclude this and, in addition, the treaty’s provisions appear, as regards their content, to be unconditional and sufficiently precise. (see paras 108-110) 3. A decision of the Dispute Settlement Body (DSB) of the WTO, which has no object other than to rule on whether the conduct of a WTO member is consistent with the obligations entered into by that State within the context of the WTO, cannot in principle be fundamentally distinguished from the substantive rules which convey such obligations and by reference to which such a review is carried out, at least when it is a question of determining whether or not an infringement of those rules or that decision can be relied upon before the Community courts for the purpose of reviewing the legality of the conduct of the Community institutions. A recommendation or a ruling of the DSB finding that the substantive rules contained in the WTO agreements have not been complied with is, whatever the precise legal effect attaching to such a recommendation or ruling, no more capable than those rules of conferring upon individuals a right to rely thereon before the Community courts for the purpose of having the legality of the conduct of the Community institutions reviewed, whether the review is in annulment proceedings or for the purpose of deciding an action for compensation. First, the nature of the WTO agreements and the reciprocity and flexibility characterising them continue to obtain after such a ruling or recommendation has been adopted and after the reasonable period of time allowed for its implementation has expired. The Community institutions continue in particular to have an element of discretion and scope for negotiation vis-à-vis their trading partners with a view to the adoption of measures intended to respond to the ruling or recommendation, and such leeway must be preserved. Second, as is apparent from Article 3(2) of the Understanding on Rules and Procedures Governing the Settlement of Disputes, which forms Annex 2 to the Agreement establishing the WTO, recommendations and rulings of the DSB cannot add to or diminish the rights and obligations provided in the agreements concerned. It follows in particular that a decision of the DSB finding an infringement of such an obligation cannot have the effect of requiring a party to the WTO agreements to accord individuals a right which they do not hold by virtue of those agreements in the absence of such a decision. (see paras 120, 128-131) 4. In affirming the existence of a regime providing for non-contractual liability of the Community on account of the lawful pursuit by it of its activities falling within the legislative sphere, the Court of First Instance erred in law. As Community law currently stands, no liability regime exists under which the Community can incur liability for conduct falling within the sphere of its legislative competence in a situation where any failure of such conduct to comply with the WTO agreements cannot be relied upon before the Community courts. It is immaterial in this regard whether that conduct is to be regarded as a positive act, that is to say, for example, the adoption of regulations following a decision of the Dispute Settlement Body (DSB) of the WTO, or as an omission, that is to say the failure to adopt measures calculated to ensure the correct implementation of that decision. Failure on the part of the Community institutions to act can also fall within the legislative function of the Community, including in the context of actions for damages. However, the Community legislature enjoys a broad discretion for the purpose of assessing whether the adoption of a given legislative measure justifies, when account is taken of certain harmful effects that are to result from its adoption, the provision of certain forms of compensation. Also, a Community legislative measure whose application leads to restrictions of fundamental rights, such as the right to property and the freedom to pursue a trade or profession, that impair the very substance of those rights in a disproportionate and intolerable manner, perhaps precisely because no provision has been made for compensation calculated to avoid or remedy that impairment, could give rise to non-contractual liability on the part of the Community. (see paras 176, 178-179, 181, 184) 5. An economic operator cannot claim a right to property in a market share which he held at a given time, since such a market share constitutes only a momentary economic position, exposed to the risks of changing circumstances. Nor can the guarantees accorded by the right to property or by the general principle safeguarding the freedom to pursue a trade or profession be extended to protect mere commercial interests or opportunities, the uncertainties of which are part of the very essence of economic activity. An economic operator whose business consists in particular in exporting goods to the markets of non-member States must therefore be aware that the commercial position which he has at a given time may be affected and altered by various circumstances and that those circumstances include the possibility, which is moreover expressly envisaged and governed by Article 22 of the Understanding on Rules and Procedures Governing the Settlement of Disputes (DSU), which forms Annex 2 to the Agreement establishing the WTO, that one of the non-member States will adopt measures suspending concessions in reaction to the stance taken by its trading partners within the framework of the WTO and will for this purpose select in its discretion, as follows from Article 22(3)(a) and (f) of the DSU, the goods to be subject to those measures. (see paras 185-186) 6. If the grounds of a judgment of the Court of First Instance disclose an infringement of Community law but its operative part is shown to be well founded on other legal grounds, the appeal must be dismissed. (see para. 187) 7. Where there is no indication that the length of the proceedings affected their outcome in any way, a plea that the proceedings before the Court of First Instance did not satisfy the requirements concerning completion within a reasonable time cannot as a general rule lead to the setting aside of the judgment delivered by the Court of First Instance. In addition, the reasonableness of the length of proceedings before the Court of First Instance must be appraised in the light of the circumstances specific to each case and, in particular, the importance of the case for the person concerned, its complexity and the conduct of the applicant and of the competent authorities. (see paras 203, 212)