Judgment — ECLI:EU:T:1997:117
Date: 1997-07-14
Language of the case: Portuguese
Court formation: First Chamber
Based on: Treaty establishing the European Economic Community (1957)
Subject matter: European Social Fund (ESF)
Concepts: European Social Fund;Costs;Principle of the protection of legitimate expectations;Effects of a declaration that a measure is void
Procedure: Action for annulment - unfounded;Action for annulment - successful
Origin: Portugal

Summary of the parties' arguments 20. The applicant considers that the contested decision must be annulled for breach ofgeneral principles of law, namely the principles of the protection of acquired rights,of legal certainty and of legitimate expectations, and contravention by theCommission of the principle of sound administration and the duty of care. Itemphasizes the importance of the general principles on which it relies in thecontext of ESF action, particularly where measures are involved which mightpreclude the payment of financial support claimed by a Member State or anindividual (Case 44/81 Germany v Commission [1982] ECR 1855). 21. It refers, first of all, to its lack of experience in the relevant area in 1987, and thatof the Department, in view of the recent accession of Portugal to the EuropeanCommunities. It also refers to the problems of adjustment inherent in the legal,economic and social situation in Portugal at the material time, of which theCommission should have taken account. In that connection, it refers toCommission Decision 86/221/EEC of 30 April 1986 on the Guidelines for theManagement of the European Social Fund in the financial years 1987 to 1989 (OJ1986 L 153, p. 59, hereinafter 'Decision 86/221). Even in such circumstances, itobserved the rules in force and the applicable instructions and its action was inconformity with the objectives of the ESF. It refers in that connection to CouncilDecision 83/516/EEC of 17 October 1983 on the tasks of the European Social Fund(OJ 1983 L 289, p. 38) and Regulation No 2950/83. 22. The applicant maintains that the Commission decision of approval, as brought toits notice, was subject only to determination of the amount of the ESF assistanceas ESC 121 647 958 and the number of trainees as 277. In its view, there was noreason to consider that it would be necessary to carry out any additional checkswhatsoever. It explains that, in those circumstances, it allocated the differencebetween the amount applied for in the application for assistance and the amountallowed in the decision of approval, as notified to it, on a linear or proportionalbasis amongst all the headings. 23. The applicant claims that it set out the method under which it made thosereductions in its application for the payment of an advance, to which it attached adocument entitled 'summary of the situation indicating the hours of training to beundertaken. It adds that the method used is also clear from the quantitative and qualitative evaluation report which accompanied the final payment claim. It statesthat neither the Commission nor the Department made any objections or commentson that point. In fact, the Department certified the factual and statisticalcorrectness of the information contained in the evaluation report. 24. The applicant thus acted in the legitimate belief that all the expenses contained inthe initial application for assistance, subject to the linear reduction made by itfollowing the decision of approval, on the one hand, and the Department circularon the other, were properly incurred and accepted and were therefore eligible. Inits view, any other interpretation would involve breach of the principles of legalcertainty and protection of legitimate expectations, and infringement of Decision86/221. 25. According to the applicant, the decision by which the Department notified to it theconditions for the approval of its project is an administrative measure which conferscertain rights on it and is valid even if it is regarded as part of a wider andincomplete decision-making process carried out by the Commission. Thewithdrawal of such a measure would frustrate the applicant's legitimateexpectations and acquired rights. 26. As regards the alleged failure to justify certain expenses, it states, first, that theamounts correspond to the normal market values at the material time, second, thatthe services invoiced were actually provided and, third, that the amounts set out inthe final payment claim correspond to the costs which it actually incurred. Itadded, at the hearing, that in 1987 it was sufficient, under the national provisionsin force, to produce the contract by way of justification, and that receipted invoiceshave only been required since 1988. 27. As regards, more specifically, justification of the costs under the heading'Functioning and management of the courses  teaching staff, the amount initiallyapproved was not exceeded. Similarly, in the case of the costs for preparation ofthe courses, the Commission merely challenged the invoice submitted by Partex tothe applicant. The applicant emphasizes that the tests for selection of trainees, asinvoiced, were in fact carried out. As regards the heading 'Equipment and non-durable goods, the amount indicated corresponds to the real cost and should havebeen accepted as such. Finally, with respect to normal depreciation, the applicantcriticizes the Commission for not allowing, at the stage of the final payment claim,rectification of the error contained in the application for assistance. 28. In any event, it is incumbent upon the Commission, in the applicant's view, toprove any irregularity in the amounts put forward and in the supporting documents,and it failed to do so. 29. At the hearing the applicant also explained that, if it incurred expenses notprovided for regarding board and accommodation for trainees, that was because, having been obliged to reduce the hours, it had had to organize the training at theheight of the hotel season and could not therefore accommodate the trainees in thehotels as had been planned. 30. The applicant also claims that the time which elapsed between the opening of thefile and the adoption of the contested decision was about eight years. That lapseof time caused it significant damage since it has been obliged to bear until thepresent time high financial costs which it was entitled to assume would be borneby the Commission. It asks the Court to assess the extent to which the periodconcerned involves any failure to observe the limits and principles to which theexercise of the Commission's discretion is subject. It also maintains that it is clearlyimpossible to reconstruct all the events after such a long period, since the peopleresponsible for providing the training are no longer available to supply information. As regards its obligation to retain supporting documents, the applicant maintainsthat the period prescribed for that purpose was, until 1 January 1989, five years andwas extended to ten years only after the training had been completed, even thoughthat change in fact occurred before the inspection visit was carried out. 31. In its reply the applicant also submits that the contested decision was not adoptedwithin the time-limit laid down by the Treaty, namely two months after the requestwhich it submitted for that purpose. 32. For its part, the defendant contends that it did not fail to verify the propriety andgenuineness of the expenditure set out in the final payment claim. As regards theexpenditure which it rejected in the contested decision on the ground that it hadalready been considered ineligible in the decision of approval, the defendantcontends that it again arrived at the conclusion that it was ineligible. As regardsthe other reductions which it made, it explains that certain expenses allowed in thedecision of approval were not sufficiently documented in the final payment claimand therefore were not justified at the stage of the final examination. 33. The defendant, which observes that the proposed measures would not even havebeen approved if they had not conformed with ESF objectives, emphasizes that inthis case the issue is whether the organizer of the measures complied with all therules applicable thereto, in particular those concerning justification of expensesincluded in the final payment claim. The Commission considers that that was notthe case. 34. As regards the method of applying the reductions and the areas to which theyrelate, the defendant explains that it would have been sufficient for the applicantto have divided the cost of the proposed measures by the number of traineesindicated in the proposal and to have compared that result with the result obtainedby dividing the cost of the approved measures by the number of trainees approvedto see that the total reduction decided on by the Commission in the decision ofapproval did not represent a simple linear reduction. If the costs per traineedecreased, that means that certain expenses were not regarded by the Commission as eligible. The Commission contends, referring to the Opinion of AdvocateGeneral Darmon in Case C-291/89, paragraph 28, that it is incumbent upon theorganizer, before incurring any expense, to satisfy himself that the correspondinghead of expenditure had been approved by the Commission, failing which he mustbear the consequences. According to the Commission, neither it nor theDepartment was informed of the linear reduction made by the applicant of theexpenses envisaged in the initial application. The evaluation report was not sentto the Commission in its entirety. 35. The defendant points out that the decision of approval notified to the Departmentclearly indicated the amount applied for, the amount granted, the amount of theexpenses declared ineligible, the reduction and the total amount refused. Thoseamounts represented the ESF portion of the financing, namely 49.5% of the totalcost envisaged in the application for assistance. The Commission is unawarewhether the Department notified that decision to the applicant in detail or whetherit simply forwarded the memorandum appended as annex 4 to the application (seeparagraph 3 above). 36. According to the defendant, if the applicant did not check that the correspondinghead of expenditure had been approved in the decision of approval, it cannot claimany legitimate expectation, still less acquired rights, as to the eligibility ofexpenditure referred to in the initial application for assistance. 37. The defendant also contends, relying on the Opinion of Advocate General Darmonin Case C-291/89, paragraph 38, that even if the Department confirmed the costsand financing as set out in the file, 'such an examination by the national authoritiescannot confirm rights which the applicants acquire definitively only at the end ofa thorough examination carried out by the Commission ... and that 'the analysisby the national authorities prior to the forwarding of the application for paymentto the Commission in no way prejudges the Commission's decision. 38. Nor does the Commission accept that a commercial undertaking which, undernational law, is under a legal obligation to retain its documentation for ten yearscan rely, in order to accuse the Commission of failing in its duty of care, on its ownlack of care or that of third parties in keeping documents for that period. 39. The defendant states that the decision-making procedure followed the normalcourse, was not excessively long and scrupulously respected the interests of theorganizer of the training measures. Findings of the Court 40. The Court observes first that the procedure relating to ESF contributions, governedby Regulation No 2950/83, comprises several stages. Initially, the Commission givesa decision under Article 4(1) on applications for assistance submitted by the Member States on behalf of undertakings (decision of approval). Under Article5(1) and (2) the approval of an application is followed by the payment of anadvance. Subsequently, when the operation is completed, the recipient submits afinal payment claim containing a detailed report on the content, results andfinancial aspects of the relevant operation. Article 5(4) provides that the MemberState is to certify the accuracy of the facts and accounts in payment claims. 41. Moreover, the advance received by the beneficiary covers a maximum of 50% ofthe expenditure approved so that he himself is obliged to advance considerablesums against the expectation of payment of the balance which he may legitimatelyhope to receive, provided that he proves that he used the assistance in accordancewith the conditions laid down in that regard (Case C-189/90 Cipeke v Commission[1992] ECR I-3573, paragraph 17). 42. When examining the final payment claim, the Commission is required to verifywhether the conditions to which the training measures were subject have beenfulfilled. Article 6(1) provides that, when fund assistance is not used in conformitywith the conditions set out in the decision of approval, the Commission maysuspend, reduce or withdraw the aid after giving the relevant Member State anopportunity to comment. It is clear from that provision that the grant of ESF aidis subject to compliance by the beneficiary with the conditions for the training laiddown by the Commission in the decision of approval or by the beneficiary in theapplication for assistance in respect of which that decision was given. 43. Finally, the Court of Justice has described as indisputable the view that 'it is onlyafter receiving a detailed report on the relevant operations after they have beencarried out that it is possible to calculate the precise amount of eligibleexpenditure (Case 84/85 United Kingdom v Commission [1987] ECR 3765,paragraph 23). It follows that the Commission must be empowered to reject evenexpenditure approved in advance on the ground that it has not been properlyjustified, without undermining the acquired rights of the beneficiary of theassistance. Consequently, it is essential to allow the Commission such a discretionin examining the final payment claim since it is only at that stage that it can verifyin concreto the supporting evidence submitted by the undertaking (see also theOpinion of Advocate General Darmon in Case C-291/89, paragraphs 35 and 36). 44. In the present case, after the applicant submitted its final payment claim, theCommission rejected certain expenditure for three different reasons (see paragraph12 above). First, expenditure not mentioned by the applicant in its application forassistance was rejected. Second, the Commission regarded certain expenditure asnot properly documented and therefore not justified. Third, it drew attention tothe existence of certain expenses not allowed in the decision of approval. Consequently, after hearing the Department, which, for its part, had heard theapplicant, the Commission, by the contested decision, reduced the ESF assistanceto an amount lower than that initially granted. Moreover, the Departmentapproved those reductions. 45. The Court considers that it is appropriate to examine first the alleged breach of theprinciple of the protection of legitimate expectations. Any economic operator towhom an institution has given justified hopes may rely on the protection of theprinciple of legitimate expectations (Joined Cases T-466/93, T-469/93, T-473/93, T-474/93 and T-477/93 O'Dwyer and Others v Council [1995] ECR II-2071, paragraph48). The question whether the contested decision meets the requirements of theprinciple of protection of legitimate expectations must be assessed by examiningseparately the three categories of reductions mentioned above. 46. It follows from the rules mentioned above (paragraphs 42 and 43) that, first, theCommission was entitled to reject the applicant's final payment claim, to the extentto which approval was requested for costs which had not been mentioned in theapplication for assistance, without any consequent breach of the principle ofprotection of legitimate expectations. Second, it was also legitimate, from the pointof view of compliance with that principle, to reject its final payment claim to theextent to which approval was sought for expenses not covered by supportingdocuments proving that they had actually been incurred and were linked with thetraining measures as approved. 47. It was incumbent on the beneficiary to prove that the expenses were actuallyincurred and were linked with the training measures approved. It is in the bestposition to do so and must establish that the receipt of resources from public fundsis justified. However, the applicant has merely asserted that the calculationmethods used by the Commission to determine the overall amount of the approvedexpenses were arbitrary and that the costs mentioned by it were in fact incurred,without providing either supporting documents or any other evidence to establishthat the information and findings relied on by the Commission were incorrect. Itfollows that the applicant's arguments concerning justification of the expensesmentioned in its final payment claim cannot be upheld. 48. The principle of the protection of legitimate expectations was thus not infringed asregards the first two categories of reduction. 49. As regards the third category of reduction, it must be borne in mind in limine thatthe Department's notification of the decision of approval indicates only the totalamount granted and the number of persons approved (see paragraph 3, above). Thus, the Commission's assessments concerning the eligibility of the proposedexpenses for the purposes of the decision of approval were not brought to theapplicant's notice before completion of the training measures in such a way that theapplicant could see how they were allocated to each heading. The applicant, incarrying out the measures, was thus unable to identify the items approved, thoserefused and those subjected to a reduction. 50. It is also common ground that the applicant, having received the succinctnotification mentioned above, decided, rather than finding out whether certain expenses had been treated as ineligible, to spread the difference between theamount applied for and the amount approved, that is to say the total reduction,proportionally among all the headings of its application for assistance. Moreover,it made other reductions, in accordance with the Department's abovementionedcircular (see paragraph 4), under all the headings of its application for assistance. The amount claimed in the final payment claim, namely ESC 73 496 941, wasconsiderably lower than the amount allowed by the Commission in the decision ofapproval, namely ESC 121 647 958. 51. It is important to analyse the justification of the third category of reductions havingregard to the fact that the decision of approval was not communicated to theapplicant in full detail, with the result that it was not informed in due time of thereductions made in respect of each heading. The issue is whether non-fulfilmentof the conditions of a decision of approval which were not communicated to thebeneficiary before completion of the training measures, so as to enable the latterto take account of them, is of such a nature as to justify the Commission'sconclusion that the expenses envisaged in the application for assistance but rejectedin the decision for approval are ineligible, even if the beneficiary producessupporting documents proving that they were actually incurred. 52. In this case, whilst it is true that the rules did not require details of the decision ofapproval to be communicated to the person concerned, that information wasnevertheless, in fact, necessary for the beneficiary to be able to fulfil the conditionsfor grant of the assistance in relation to the expenses which, according to theCommission, were not approved in the decision of approval. 53. The Court considers that the beneficiary of assistance cannot be deemed tounderstand, on reading a decision in the form in which the decision in this case wascommunicated to the applicant, that the reductions made by the Commissionrelated to specific headings. On the contrary, a beneficiary might reasonably thinkand accept that an overall reduction had been made and that, consequently, it wasmerely an overall limit that had been imposed on expenditure. In suchcircumstances, for the Commission to be entitled, when examining the finalpayment claim, to regard as ineligible those expenses which were envisaged in theapplication for assistance but were allegedly rejected in the decision of approval,it is necessary for the decision of approval to be brought to the notice of abeneficiary in sufficient detail. That condition is fulfilled only if the notificationindicates the reductions by headings or, at least, contains the information which theCommission communicated in this case to the Department, namely the number ofpersons concerned, the amount allowed, the amount of ineligible expenses, theamount of other reductions and the total amount refused. By virtue of, inter alia,the principle of legal certainty, if he is to observe the conditions of the decision ofapproval regarding the reductions by headings, the beneficiary must be in aposition, when carrying out the training measures, to identify the approved items,the refused items and the items subject to a reduction. 54. In those circumstances, given that the applicant was informed of the adoption ofa decision which was partially favourable to it, but whose content was not disclosedto it in its entirety, it cannot be criticized for failing to react, at that time, to thedecision of approval by asking the Department for clarifications as to theapportionment of the amount granted. 55. The Court finds that the decision of approval, as notified to the applicant,contained no indication of the apportionment of the reductions made. Accordingly,the decision must be regarded as capable of causing the applicant to entertainjustified hopes, so that it might have thought that there were no other reductionsand that it was authorized to allocate pro rata, as it did in this case, the amount ofthe total amount of the reductions among all the headings. 56. Moreover, the Commission cannot rely on the terms of a decision which were notnotified to the beneficiary. It is irrelevant that it was the Department whichinformed the applicant that its project has been approved. When the Commissiondoes not take the necessary precautions to satisfy itself that the beneficiary of ESFaid is informed of the conditions imposed by the decision of approval, it cannotreasonably expect it to observe those conditions. 57. The Court concludes that, in so far as the fact that the expenses were actuallyincurred and were connected with the training measures is demonstrated bysupporting documents, it was contrary to the principle of legitimate expectationsfor the Commission, when examining the final payment claim, to have rejected theclaim to the extent to which it included expenditure provided for in the applicationfor assistance but allegedly not approved in the decision of approval, without thebeneficiary having been notified to that effect. 58. The present plea in law, in so far as it alleges a breach of the principle of theprotection of legitimate expectations, must therefore be upheld to the extent towhich it relates to the reductions made by the Commission merely because thecosts had not been allowed in the decision of approval. 59. For all the foregoing reasons the contested decision should be annulled to theextent to which the Commission reduced the amounts claimed in the applicant'sfinal payment claim merely because the costs in question had not been allowed inthe decision of approval. 60. As regards, on the other hand, the other reductions made on the ground that thecorresponding costs were not provided for or not documented, it must beconcluded, contrary to the applicant's assertions, that they do not contravene theprinciples of legal certainty and protection of acquired rights or the principle ofsound administration and the duty of care. 61. As far as the principle of the protection of legal certainty is concerned, it requiresin particular that Community rules enable the person affected by them to ascertainunequivocally what his rights and obligations are and to take steps accordingly (see,to that effect, Case C-143/93 Van Es Douane Agenten and Others v Inspecteur derInvoerrechten en Accijnzen [1996] ECR I-431, paragraph 27). Although thatprinciple plays a role, inter alia, in the examination of the legality of the decisionsconcerning the recovery of benefits unduly paid, there can be no question of anyinfringement of that principle where, as in this case, the rules in force clearlyprovide for the possibility of financial assistance being recovered in cases where theconditions to which its payment was subject have not been fulfilled. Thoseconditions include, as already observed, the requirement that the cost should havebeen provided for and duly documented. 62. Similarly, the beneficiary of assistance for which the application was approved bythe Commission does not thereby acquire any definitive right to full payment of theassistance if he does not satisfy the abovementioned conditions. 63. As regards the principle of sound administration and the duty of care, the Courtconsiders that the Commission fulfilled the requirements of sound administrationand care by carefully examining all the aspects of the case, and, in so doing,contacting the sub-contractors in order to obtain information and supportingdocuments which the applicant was not in a position to provide. In any event, sincethe applicant has not developed its complaint further and has thus not explainedthe nature of the alleged infringements, the complaint cannot be upheld. 64. As regards the argument concerning the considerable period of time which elapsedafter the file was opened, the Court considers that the relevant period in this case,for the purpose of examining that argument, runs from the delivery of the judgmentof annulment in Case C-291/89 on 7 May 1991 to the adoption of the contesteddecision on 12 July 1994, that is to say a period of 38 months or more than threeyears. Since the Commission was required, following annulment of the firstdecision by the Court of Justice, to re-examine all the information available whenthe measure was adopted and to adopt a new decision on the final payment claim,the period prior to the annulment of the first Commission decision on the finalpayment claim is not in any way relevant to assessment of the propriety of thecontested decision. 65. The question whether the delay was reasonable must be assessed in each individualcase. However, the Commission is required, following annulment of the firstdecision by the Court of Justice, to re-examine all the information available at thetime of adoption of the measure and to adopt a new decision on the final paymentclaim. Account must therefore be taken of the various stages involved in theprocedure leading to the decision in this case. It was necessary to reconstitute thefile. That task, in which the approach taken was heavily influenced by suspicionsof irregularities, involved the organization of an inspection visit to Portugal, visitsto sub-contractors, analysis of the information gathered and several consultations with the Portuguese authorities. The national authorities heard the views of theapplicant on the Commission's draft decisions. The Court considers, in view of thespecial circumstances mentioned above, that the procedure was long but was notunreasonably protracted. 66. In any event, in proceedings for annulment, even an unreasonable delay cannot initself render the contested decision unlawful and thereby justify its annulment forbreach of the principle of legal certainty. A delay in the conduct of the procedurefor implementation of a judgment is not, in itself, of a nature such as to affect thevalidity of the measure which is the outcome of that procedure: if that measurewere annulled merely because of its belatedness, it would be impossible to adopta valid measure since the measure intended to replace the annulled measure couldbe no less belated than the latter, (see, by analogy, Case T-150/94 Vela Palacios vESC [1996] ECR-SC II-877, paragraph 44). 67. Finally, the Court rejects, for the same reasons, the applicant's argument that thecontested decision is vitiated because it was not adopted within a period of twomonths after a request in that regard was submitted by the applicant. It need onlybe observed that the sole effect of the applicant's calling on the Commission to actunder the third paragraph of Article 175 of the Treaty was to enable it to bring anaction for failure to act if the institution in question failed to define its positionwithin two months of being so called upon, as prescribed by the second paragraphof Article 175 of the Treaty. In this case the applicant did not bring an action forfailure to act within the period of two months following the expiry of the periodwithin which the institution should have defined its position. In any event, asubsequent decision cannot be vitiated merely because it was adopted after theexpiry of that period because such a result, if upheld, would make it entirelyimpossible, at that stage, to adopt any valid decision. The plea alleging breach of the obligation to state reasons 68. In view of the foregoing, the plea alleging breach of the obligation to state reasonsneed be examined only to the extent to which the application to the Court has notyet been upheld, namely in so far as it relates to the reductions made on theground that the expenditure had not been provided for in the application forassistance or was not evidenced by supporting documents. Summary of the parties' arguments 69. According to the applicant, the contested decision does not contain an adequatestatement of the reasons for the reductions imposed on the ground that theexpenses under the heading 'Functioning and management of the courses teaching staff, preparation of the courses, equipment and non-durable goods andnormal depreciation were not supported by evidence and were therefore ineligible. As regards, first, the heading 'Functioning and management of the courses  teaching staff, the Commission did not, it is alleged, explain the arbitrary criterionin accordance with which it determined the acceptable overall amount. Similarly,with regard to preparation of the courses, the Commission merely objected to theinvoice submitted by Partex to the applicant, without giving sufficient reasons. Asregards the heading 'equipment and non-durable goods, the amount indicatedcorresponds to the actual cost and should have been taken into account as such. However, the Commission failed to explain its position on that point. 70. The defendant refutes the criticisms levelled against it by the applicant regardingthe statement of the reasons on which its decision was based. It explains that itnotified to the Department the overall amount approved and the amount of thereduction made for each application for assistance. In this case, it communicatedto it the memorandum referred to in paragraph 2 above. That procedure isaccounted for by the fact that the Commission was required to deal with severalthousand applications for assistance within a short period and, as the Court ofJustice has already recognized, it could not therefore specify and justify in such ashort period the reasons for which it considered certain expenses ineligible (Case185/83 University of Groningen v Inspecteur der Invoerrechten en Accijnzen [1984]ECR 3623 and Case C-213/87 Gemeente Amsterdam and VIA v Commission [1990]ECR I-221). The Commission adds that, when, in 1988, the Department asked theCommission to provide it with a breakdown of reductions by headings, it dulyresponded. 71. In its pleadings the defendant explains at length the reductions made by it in thecontested decision. That explanation repeats, essentially, the reasoning containedin memorandum No 22917. Findings of the Court 72. It is settled case-law that the purpose of the obligation to state the reasons onwhich an individual decision is based is to enable the Community judicature toreview the legality of the decision and to provide the person concerned withsufficient information to make it possible to ascertain whether the decision is wellfounded or whether it is vitiated by a defect which may enable its legality to becontested. The extent of that obligation depends on the nature of the measure inquestion and on the context in which it was adopted (Cipeke v Commission, citedabove, paragraph 14). 73. The question whether the statement of the reasons on which the contested decisionwas based was sufficient, and thus in conformity with the Treaty and the case-law,must be assessed by examining separately the reductions made on the ground thatthe expenditure had not been provided for in the application for assistance andthose made on the ground that it was not evidenced by supporting documents. 74. As regards reduction of the expenses not provided for in the initial application forassistance, the first category mentioned above, the Court considers that since the applicant originated that application, after receiving memorandum No 22197 andthe contested decision, it was sufficiently apprised of the grounds for the partial ortotal reductions made by the Commission. The information contained in those twodocuments was sufficient to enable the applicant to realize that, in the contesteddecision, the Commission had imposed reductions in respect of the headings 'hireand rent, 'equipment and non-durable goods and 'board and lodging [oftrainees] and that it had reduced to zero the heading 'normal depreciationbecause the corresponding expenditure had not been provided for in its applicationfor assistance. In those circumstances, the Court is in a position to carry out itsreview of that part of the contested decision. 75. The applicant's complaint, in so far as it relates to the statement of the reasons forthat first category of reductions, is therefore without foundation. 76. As regards the second category mentioned above, the reductions made on theground that certain expenses were not duly evidenced by supporting documents, theCourt considers that the contested decision likewise gives an adequate statementof reasons. It is clear from memorandum No 22197 that the reductions under theheadings 'salaries of trainees, 'preparation of courses, recruitment and selectionof trainees, 'copying of documents, 'management and budgetary control,'specialized work and 'other supplies and also part of the heading 'functioningand management of the courses  teaching staff were made because of theinadequacy of the documentation submitted. The methods used and thecalculations made were set out in sufficient detail to enable the applicant to assesstheir correctness and, if necessary, contest them by producing appropriatedocumentation. 77. The applicant's complaint, in so far as it relates to the statement of reasons for thatsecond category of reductions, is also without foundation. 78. It follows that the plea alleging inadequacy of the statement of reasons, to theextent to which it has been necessary to examine it, must be rejected in its entirety. 79. Save to the extent to which the application for annulment has already been upheld,it must therefore be dismissed. Costs 80. Under Article 87(2) of the Rules of Procedure, the unsuccessful party is to pay thecosts if they have been applied for in the successful party's pleadings. 81. In the present case the annulment sought by the applicant, which applied for anorder that the Commission pay the costs of these proceedings, has been partially granted. The Court considers that, although the applicant has been partiallyunsuccessful, it is nevertheless also necessary to take account, in awarding costs, ofthe course taken by the decision-making procedure, as described above, which wassuch that the applicant was left for a long period in a state of uncertainty asregards its right to obtain in its entirety the financial assistance which had beengranted to it. In those circumstances the applicant cannot be criticized for bringingthe matter before the Court for the Commission's conduct to be reviewed and, inthe light of that review, for appropriate determinations to be made. It musttherefore be held that the defendant's conduct contributed towards creating theconditions for the dispute to arise. 82. It is therefore necessary to apply, in addition to Article 87(2) of the Rules ofProcedure, the second indent of Article 87(3), according to which the Court mayorder even a successful party to pay the costs in proceedings which have arisen asa result of the conduct of that party (see, mutatis mutandis, Case 263/81 List vCommission [1983] ECR 103, paragraphs 30 and 31, and Case T-336/94 Efisol vCommission [1996] ECR II-0000, paragraphs 38 and 39), and to order theCommission to pay the costs in their entirety. 83. The Commission should therefore be ordered to pay in addition to its own costs allthe costs incurred by the applicant. On those grounds, THE COURT OF FIRST INSTANCE (First Chamber) hereby: 1. Annuls Commission Decision C(94)1410/11 of 12 July 1994, notified to theapplicant on 27 December 1994, in Case No 870840/P1, concerning financialassistance from the European Social Fund in respect of training measures,to the extent to which it reduces the amounts claimed by the applicant inits final payment claim solely because the costs in question had not beenallowed in the decision of approval; 2. For the rest, dismisses the application; 3. Orders the Commission to bear its own costs and pay all the costs incurred by the applicant. Saggio Tiili Moura Ramos Delivered in open court in Luxembourg on 14 July 1997. H. Jung A. Saggio Registrar President 1: Language of the case: Portuguese.