Opinion of the Advocate General — ECLI:EU:C:2021:297
Date: 2021-04-15
Language of the case: Greek
Subject matter: Provisions governing the Institutions
Procedure: Appeal - unfounded;Appeal - inadmissible;Action for damages;Appeal - successful
Origin: Hungary

summary in paragraphs 52 and 53 of the judgment under appeal, which are undisputed by the appellant. While precise, unconditional and consistent assurances were therefore given by OLAF investigators, it must be said that their scope was strictly limited to the place where the processing of data by keywords and the medium used for this indexing and searching process would be carried out. At no time did OLAF investigators imply that they agreed to comply with the appellant’s wish to separate beforehand the data relating to the project at issue from those that were not. On the contrary, it results clearly from the abovementioned reports – signed by one of the managing directors of Vialto – that the first step in the process would be to perform digital forensic copies of the hard disk drives and preselected folders from the server, without any limitations being specified in this respect. 103. In those circumstances, the argument that OLAF breached the legitimate expectations of Vialto by deciding to terminate the digital forensic operation after Vialto refused to cooperate fully with the investigation by refusing, inter alia, to provide financial information relevant for the investigation cannot be sustained. Indeed, the protection of legitimate expectations is simply designed to ensure that public authorities honour lawful commitments that they have made and behave in accordance with the expectations they have raised, (26) no more and no less. In this respect, giving effect (where appropriate) to the principle of legitimate expectations is no more than the practical effectuation of the guarantee of good administration in Article 41 of the Charter of Fundamental Rights of the European Union (‘the Charter’). In the present case, however, those expectations could not legitimately relate to anything other than the taking of the first digital forensic copies on the undertaking’s premises, the indexing and sorting of data on those same premises and in this context, using the equipment provided by Vialto. 104. The General Court therefore did not err in law when it held, in paragraph 118 of the judgment under appeal, that Vialto cannot rely on a sufficiently serious breach of the principle of the protection of legitimate expectations which it had placed in the application of a practice derogating in its favour, despite its refusal to accede to the requests made in accordance with Article 7(1) of Regulation No 2185/96 and with the Guidelines on Digital Forensic Procedures, made by the agents of OLAF. 105. Furthermore, while that paragraph of the judgment under appeal is not perhaps a model of clarity, it is nonetheless soundly based on references to the conditions governing the principle of the protection of legitimate expectations and a clear description of what might be termed the derogation proposal made by OLAF. It can thus be understood that the argument relating to the protection of legitimate expectations invoked by Vialto was rejected by the General Court in the absence of Vialto having received precise assurances on the limitation of the digital forensic operation sensu stricto. 106. Any failure to state reasons in that regard would in any event have no bearing on the merits of its rejection of the argument and, therefore, on the operative part of the judgment under appeal. The alleged failure to state reasons should therefore be regarded as ineffective. (27) 107. Consequently, I am of the view that the second ground of appeal must be rejected. C. Third ground of appeal alleging breach of the right to be heard 1. Arguments of the parties 108. By its third ground of appeal, the appellant puts forward a series of arguments criticising the General Court’s reasoning on the right to be heard. 109. First, the findings in paragraph 121 of the judgment under appeal, concerning the fact that it was allegedly heard by OLAF, are not relevant to the examination of the question whether its right to be heard was infringed by DG Enlargement. Second, the General Court distorted the facts by stating, in paragraphs 94 and 122 of the judgment under appeal, that the position taken by DG Enlargement was not binding on the CFCU. As the General Court admitted in paragraph 93 of the judgment under appeal, it appears from the file that that DG had addressed a request to the CFCU inviting it to adopt the necessary measures with regard to Vialto on account of the latter’s breach of its contractual obligations. Such a request would have been binding on the CFCU. Such a distortion of the facts would have led to an incorrect application of the law by the General Court. The General Court should have concluded that DG Enlargement was under an obligation to hear Vialto before applying to the CFCU for the adoption of the necessary measures provided for in the contract in question in view of Vialto’s breach of its contractual obligations. Third, the right to be heard of Vialto should also have been respected by DG Enlargement in the context of its recommendation to suspend the performance of the contract in question or the part of the contract performed by Vialto. Indeed, relying on the judgment of 4 April 2019, OZ v EIB (C‑558/17 P, EU:C:2019:289), the appellant argues that the right to be heard should also be respected where an EU institution makes non-binding recommendations. 110. The Commission agrees with the approach to the right to be heard adopted by the General Court and submits that the third plea in law should be rejected. 2. Analysis 111. By its third ground of appeal, the appellant invokes a series of arguments which are not clearly intertwined, under the guise of errors of law and distortion of the facts. Three arguments have in substance been advanced. First, Vialto contests the relevance given by the General Court, in considering whether its right to be heard was infringed by DG Enlargement, to the fact that it had been heard by OLAF. Second, it criticises the General Court for distorting the facts by stating that the position of DG Enlargement on the measures to be taken vis-à-vis Vialto and communicated to the CFCU was not binding on it, which would have led to an incorrect application of the law. Third, Vialto argues that its right to be heard has not been respected by DG Enlargement also in the context of its invitation to suspend the execution of the contract in question or the part of the contract executed by Vialto. 112. In relation to the second argument, it appears from the uncontested paragraph 89 of the judgment under appeal that, in its letter of 13 October 2016, DG Enlargement informed the CFCU that it considered that the appellant’s refusal to cooperate with OLAF’s investigation placed Vialto in breach of Article 25(2) and (3) of the general conditions and that, in this context, it invited the CFCU to take appropriate measures under the same general conditions in relation to the breach of the contract. It added, in that connection, that the CFCU could consider, as one of the practical possibilities, the suspension of the execution of the contract in question or of the part executed by the appellant. 113. As the appellant acknowledges in its appeal, it follows expressly from the correspondence of DG Enlargement of 13 October 2016 referred to above and also from the letter of the CFCU of 11 November 2016, that the Commission invited it to adopt appropriate measures in relation to the breach of the contract. More than a simple formula, these terms reflect the rules governing a contract concluded under an IPA and the division of competences between the intervening authorities. 114. While the Commission retains overall final responsibility for the general budget, it is the operating structure which is responsible for managing and implementing the programme concerned in accordance with the principle of sound financial management. (28) This has already been pointed out by the Court in its case-law. Indeed, ‘public contracts awarded by non-member countries and capable of benefiting from assistance under the IPA, subject to the principle of decentralised management, remain national contracts which only the national contracting authority responsible for following them through has the power to prepare, negotiate and conclude, the involvement of the Commission representatives in the procedure for the award of those contracts being confined solely to establishing whether or not the conditions for European Union financing are met. Moreover, the undertakings that submit tenders which are awarded the contract in question have legal relations only with the non-member country which is responsible for the contract and the measures adopted by representatives of the Commission cannot have the effect of substituting, in relation to them, a European Union decision for the decision of that non-member country’. (29) 115. In the light of the foregoing considerations, I find myself unable to conclude that there has been any distortion of facts or error of law in paragraphs 94 and 122 of the judgment under appeal, in which the General Court held that the decision to exclude the appellant from the contract in question was taken by the CFCU, without the CFCU being bound by a position adopted to that effect by DG Enlargement. 116. At the same time, irrespective of this absence of contractual relationship between the Commission and Vialto, the question as to whether the former should have heard the appellant before communicating its suggestions to the CFCU is nonetheless a separate one. 117. Article 41(2) of the Charter provides that the right to good administration includes, first, the right of every person to be heard before any individual measure which would affect him or her adversely is taken, second, the right of every person to have access to his or her file, while respecting the legitimate interests of confidentiality and of professional and business secrecy and, third, the obligation on the administration to give reasons for its decisions. In particular, the right to be heard guarantees every person the opportunity to make known his or her views effectively during an administrative procedure and before the adoption of any decision liable to affect his or her interests adversely. (30) 118. In the present case, irrespective of the fact that the decision to exclude Vialto from the contract in question was taken by the CFCU and not by the Commission, it can hardly be maintained that the invitation made by the Commission to the CFCU to adopt appropriate measures in respect of Vialto’s breach of the contract in question, together with its decision to consider that the amount paid for Vialto’s services within that contract as ineligible for EU funding, is not a decision liable to affect its interests adversely within the meaning of Article 41(2) of the Charter. It is perfectly clear that even if the actual decision was taken by the CFCU, the Commission’s intervention was an important – perhaps even a decisive – step in this process. 119. Furthermore, although it is indisputable that OLAF exercises its powers of investigation in complete independence from the Commission, any government or any other institution or body, (31) it nevertheless follows from Regulation No 883/2013 that, at the end of its investigations, OLAF enjoys only a power of recommendation. Indeed, according to Article 11(1) of Regulation No 883/2013, when it concludes an investigation, a report must be drawn up. That report is then accompanied by recommendations of the Director-General on whether or not action should be taken by the institutions, bodies, offices and agencies and by the competent authorities of the Member States concerned. In the case of an external investigation, Article 11(3) of Regulation No 883/2013 specifies that reports and recommendations must be sent to the competent authorities of the Member States concerned and, if necessary, to the competent Commission services. 120. In that legal framework, it is therefore clear that a person or undertaking under investigation by OLAF must, in principle, be heard both by OLAF and by the Union institution, body, office or agency or competent authority of a Member State to which the report and recommendations are addressed, since it is those institutions and Member State bodies which will eventually take the decision that would adversely affect them. (32) 121. Nevertheless, it should not be overlooked, on the one hand, that the infringement of the right to be heard – as for other rights of the defence – must be examined in relation to the specific circumstances of each particular case, (33) and, on the other hand, that this specific right has a dual purpose. First, it serves to investigate the case and, as such, promote the interests of good administration by ensuring that the administrative body concerned establishes the facts as accurately and correctly as possible. Second, it makes it possible to ensure effective protection of the person concerned. (34) 122. According to the Court, the purpose of the rule that the addressee of an adverse decision must be placed in a position to submit his or her observations before the decision is adopted is to enable the competent authority effectively to take into account all relevant information. In order to ensure that the person or undertaking concerned is in fact protected, the purpose of that rule is, inter alia, to enable them to correct an error or submit such information relating to their personal circumstances as will argue in favour of the adoption or non-adoption of the decision, or in favour of it having a specific content. (35) 123. In the present case, it follows from the judgment under appeal and from the appeal of Vialto that the Commission’s act in respect of which Vialto considers that it should have been heard before its adoption is the letter sent to the CFCU on 13 October 2016. (36) In that letter, DG Enlargement informed the CFCU that, despite the obligations provided for in Article 25 of the general conditions, Vialto did not consent to OLAF’s access to the information it needed to carry out its investigations by invoking certain confidentiality clauses and its own interpretation of the contract in question. 124. It is true that this factual information was already included in the on-the-spot check reports. In this regard, as the General Court correctly held in paragraph 121 of the judgment under appeal, the appellant was indeed given the opportunity to contest and comment on the elements contained in those reports by letter of 6 May 2016. Vialto was also able, by its letter of 23 September 2016, to submit its observations on OLAF’s letter of 14 September 2016 informing it that it was considered to be a person concerned by the investigation into the suspicions of corruption or fraud in respect of the project in question. However, it does not appear either from the judgment under appeal, or from the file submitted to the Court, or from the answers given by the Commission to the questions raised on this subject at the hearing of 10 February 2021, that DG Enlargement was aware of those documents or, a fortiori, of the defence arguments developed by the appellant therein when it sent the contested letter to the CFCU on 13 October 2016. In those specific circumstances, I am therefore obliged to find that it cannot be asserted that the Commission has had the opportunity effectively to take into account all relevant information relating to Vialto’s personal situation at the time it wrote to the CFCU inviting it to take certain contractual measures. 125. Consequently, I find myself obliged to conclude that the General Court erred in law in deciding in paragraph 122 of the judgment under appeal that Vialto could not rely on an obligation on the part of the Commission to hear it in its observations because the adoption of the decision excluding it from the contract in question had been taken by the CFCU and not by it. 126. I am therefore of the view that the third ground of appeal relied on by Vialto in support of its appeal must be upheld in so far as it alleges a breach of its right to be heard by the Commission. The appeal must be allowed and the judgment under appeal should be set aside in so far as it held that the appellant could not rely on an obligation on the part of the Commission to hear it in its observations before the decision of the CFCU excluding it from the contract in question was adopted. VII. The action before the General Court 127. In accordance with Article 61 of the Statute of the Court of Justice of the European Union, if the appeal is well founded, the Court may, if it quashes the decision of the General Court, give final judgment in the action, where the state of the proceedings so permits. 128. That is the position in the present case. 129. Indeed, as correctly recalled by the General Court in paragraph 34 of the judgment under appeal, the European Union’s non-contractual liability under the second paragraph of Article 340 TFEU is subject to the satisfaction of a number of conditions, namely the unlawfulness of the conduct alleged against the EU institution, the establishment of actual damage and the existence of a causal link between the conduct of the institution and the damage complained of. (37) 130. This last condition relating to a causal link concerns a sufficiently direct causal nexus between the conduct of the EU institutions and the damage, the burden of proof of which rests on the applicant, so that the conduct complained of must be the determining cause of the damage. (38) 131. However, in the light of the foregoing considerations, given that I have come to the conclusion that the General Court did not distort the facts or err in law when it held that the decision to exclude the appellant from the contract in question had been taken by the CFCU, without the CFCU being bound by a position adopted to that effect by DG Enlargement, it cannot be held that the conduct of which the Commission is accused was the determining cause of the damage alleged by Vialto. 132. Consequently, since the Court has previously held that if any one of the conditions required for the European Union’s non-contractual liability to incur is not satisfied, the action must be dismissed in its entirety and it is unnecessary to consider the other conditions for non-contractual liability on the part of the European Union (39), it must be admitted that the claim for compensation brought by the appellant should, necessarily and in any event, be rejected. VIII. Costs 133. Under Article 184(2) of the Rules of Procedure of the Court of Justice, where the appeal is well founded and the Court itself gives final judgment in the case, the Court is to make a decision as to costs. 134. Under Article 138(3) of the Rules of Procedure, which is also applicable to appeal proceedings by virtue of Article 184(1) thereof, where each party succeeds on some and fails on other heads, the parties are to bear their own costs. However, if it appears justified in the circumstances of the case, the Court of Justice may order that one party, in addition to bearing its own costs, to pay a proportion of the costs of the other party. 135. In the present instance, given that the judgment under appeal should be set aside in part but that the claim for compensation should be rejected, it seems to be appropriate to decide that the appellant and the Commission should each bear their own costs in relation to both proceedings at first instance and the appeal proceedings. IX. Conclusion 136. In the light of the foregoing considerations, I propose that the Court should: – set aside the judgment of the General Court of the European Union of 26 June 2019, Vialto Consulting v Commission (T‑617/17, not published, EU:T:2019:446) in so far as it held that the appellant could not rely on an obligation on the part of the Commission to hear it in its observations before the decision of the CFCU excluding it from the contract in question was adopted; – dismiss the appeal as to the remainder; – dismiss the action brought by Vialto Consulting seeking compensation for the damage allegedly suffered as a result of allegedly unlawful conduct on the part of the European Commission and the European Anti-Fraud Office (OLAF) in connection with its exclusion from the contract for the provision of services bearing the reference TR2010/0311.01-02/001 – order Vialto Consulting and the European Commission to bear their own costs in relation to both the proceedings at first instance and the appeal proceedings. 1 Original language: English. 2 OJ 1996 L 292, p. 2. 3 OJ 2007 L 170, p. 1. 4 OJ 2013 L 248, p. 1. 5 OJ 2006 L 10, p. 82. 6 OJ 2003 L 1, p. 1. 7 Emphasis added. 8 While Regulation No 2185/96 refers to Commission inspectors, this competence is now exercised by OLAF in accordance with Article 2 of Commission Decision 1999/352 establishing the European Anti-Fraud Office (OLAF) (OJ 1999 L 136, p. 20) and Article 3(1) of Regulation No 883/2013. 9 COM(2018) 338 final. 10 Report from the Commission to the European Parliament and the Council entitled ‘Evaluation of the application of [Regulation No 883/2013]’ (COM(2017) 589 final). 11 See Final report of the evaluation of the application of Regulation No 883/2013, 4.2.2.4. Concluding remarks (p. 97 in the version in English). As a reminder, Article 3(2) of Regulation No 883/2013 expressly states that it is in accordance with the provisions and procedures laid down by Regulation No 2185/96, that OLAF may conduct on-the-spot checks and inspections on economic operators. 12 See Article 1.9 of the Guidelines on Digital Forensic Procedures. 13 According to Article 8.4 of the Guidelines on Digital Forensic Procedures, ‘When the forensic work file is available, the investigator shall launch written request through the CMS Intelligence Request Module to index the forensic work file … In response to the investigator’s written request and in conjunction with the investigator the [Digital Evidence Specialist of OLAF staff] shall extract data matching the search criteria from the digital forensic work file for read-only access by the investigator’. 14 See, to that effect, judgment of 16 July 2020, Nexans France and Nexans v Commission (C‑606/18 P, EU:C:2020:571, paragraph 66). Having said that, it must be noted that the possibility for OLAF to continue its examination of data related to the business of an undertaking outside of the premises of the latter is subject to the condition that such continuation does not give rise to any infringement of the rights of the defence and does not constitute an additional encroachment on the rights of the undertakings concerned which goes further than that inherent in an inspection at their premises. OLAF may act in this way when it can legitimately take the view that it is justified to do so in the interests of the effectiveness of the inspection or to avoid excessive interference in the operations of the undertaking concerned (see, to that effect, judgment of 16 July 2020, Nexans France and Nexans v Commission, C‑606/18 P, EU:C:2020:571, paragraphs 87 and 90). 15 See, by analogy (as regards the Commission’s power of investigation in competition matters under Regulation No 1/2003), Opinion of Advocate General Kokott in Nexans France and Nexans v Commission (C‑606/18 P, EU:C:2020:207, point 66). 16 Judgment of 16 July 2020, Nexans France and Nexans v Commission (C‑606/18 P, EU:C:2020:571, paragraph 62). 17 See Article 8.4 of the Guidelines on Digital Forensic Procedures quoted in footnote 13. The ‘Digital Forensic Operations Information Leaflet’ of OLAF also recalls that ‘any data relevant to the investigation will be identified by keyword searches and other search methods [and o]nly these data will be placed in the case file’. 18 See, to that effect, judgment of 16 July 2020, Nexans France and Nexans v Commission (C‑606/18 P, EU:C:2020:571, paragraph 64). 19 See, to that effect, judgment of 9 December 2020, Groupe Canal + v Commission (C‑132/19 P, EU:C:2020:1007, paragraph 28). 20 See Article 6.3 of the Guidelines on Digital Forensic Procedures. 21 Judgment of 16 July 2020, ADR Center v Commission (C‑584/17 P, EU:C:2020:576, paragraph 75 and the case-law cited). 22 See, to that effect, judgment of 25 March 2010, Sviluppo Italia Basilicata v Commission (C‑414/08 P, EU:C:2010:165, paragraph 107). 23 See, to that effect, judgments of 26 February 1987, Consorzio Cooperative d'Abruzzo v Commission (15/85, EU:C:1987:111, paragraph 12); and of 20 June 1991, Cargill v Commission (C‑248/89, EU:C:1991:264, paragraph 20 and the case-law cited). 24 Schønberg, S. J., ‘Legal Certainty and Revocation of Administrative Decisions: A Comparative Study of English, French and EC Law’, Yearbook of European Law, vol. 19, Issue 1, 1999, p. 257 to 298, esp. p. 291. See also Ragnemalm, H., ‘Confiance légitime et délai raisonnable’, in Mélanges en hommage à Fernand Schockweiler, Nomos Verlagsgesellschaft, Baden-Baden, 1999, p. 511 to 522, esp. p. 517 and 518. 25 Judgment of 3 December 2019, Czech Republic v Parliament and Council (C‑482/17, EU:C:2019:1035, paragraph 153). 26 See, to that effect, Gautron, J.-C., ‘Le principe de protection de la confiance légitime’, in Le droit de l’Union européenne en principes. Liber amicorum en l’honneur de Jean Raux, Apogée, Rennes, 2006, p. 199 to 218, esp. p. 210. 27 See, to that effect, judgment of 22 September 2020, Austria v Commission (C‑594/18 P, EU:C:2020:742, paragraphs 47 and 50). 28 See Articles 10(1) and 28(2) of Regulation No 718/2007. 29 Order of 4 July 2013, Diadikasia Symvouloi Epicheiriseon v Commission and Others (C‑520/12 P, not published, EU:C:2013:457, paragraph 34 and the case-law cited). 30 See, to that effect, judgments of 4 April 2019, OZ v EIB (C‑558/17 P, EU:C:2019:289, paragraphs 52 and 53); and of 25 June 2020, SatCen v KF (C‑14/19 P, EU:C:2020:492, paragraphs 116 and 117). 31 See Article 3 of Commission Decision 1999/352. 32 See, by analogy, within the context of a procedure which includes recommendations from an internal committee of an EU institution, judgment of 4 April 2019, OZ v EIB (C‑558/17 P, EU:C:2019:289, paragraph 56). 33 See, to that effect, judgment of 25 October 2011, Solvay v Commission (C‑110/10 P, EU:C:2011:687, paragraph 63). 34 See, to that effect, judgment of 4 June 2020, EEAS v De Loecker (C‑187/19 P, EU:C:2020:444, paragraph 69). 35 See, to that effect, judgment of 3 July 2014, Kamino International Logistics and Datema Hellmann Worldwide Logistics (C‑129/13 and C‑130/13, EU:C:2014:2041, paragraph 38). 36 See paragraph 89 of the judgment under appeal and paragraph 73 of Vialto’s appeal. The two other letters referred to in that paragraph are not Commission documents but a letter dated of 11 November 2016 sent by the CFCU to the consortium and a letter of 10 January 2017 sent by the CFCU to Vialto. 37 See, to that effect, judgments of 14 October 2014, Giordano v Commission (C‑611/12 P, EU:C:2014:2282, paragraph 35), and of 5 September 2019, European Union v Guardian Europe and Guardian Europe v European Union (C‑447/17 P and C‑479/17 P, EU:C:2019:672, paragraph 147). 38 See, to that effect, judgments of 13 December 2018, European Union v Gascogne Sack Deutschland and Gascogne (C‑138/17 P and C‑146/17 P, EU:C:2018:1013, paragraph 22), and of 5 September 2019, European Union v Guardian Europe and Guardian Europe v European Union (C‑447/17 P and C‑479/17 P, EU:C:2019:672, paragraph 32). 39 See, to that effect, judgment of 5 September 2019, European Union v Guardian Europe and Guardian Europe v European Union (C‑447/17 P and C‑479/17 P, EU:C:2019:672, paragraph 148).