Information;Judgment — ECLI:EU:T:2021:932
Date: 2021-12-21
Language of the case: English
Court formation: Eighth Chamber
Subject matter: Research and technological development
Procedure: Arbitration clause - unfounded
Origin: Poland

summary of that report reads as follows: ‘The investigation established that indeed the Fellow Researcher during the time of his fellowship had parallel activites as employee of the Wrocław Research Centre EIT+ as well as Member of Advisory Board and later employee of a private company called [Datax]. These parallel activities were in part related to work for EU-funded projects. The investigation established that not only were these activities incompatible with full-time work on [Cossar], but the multiple activities that [the researcher] was supposed to undertake according to his employment contracts, would, if they were all carried out, have occupied an unreasonable time thus calling into question all the hours he declared as having worked in EU-funded projects.’ 9 On 1 June 2015, the OLAF report was sent to the REA. 10 On 2 April 2019, the REA sent the applicant a first pre-information letter, dated 1 April 2019, informing it of its intention to recover, first, the sum of EUR 11 626.62 corresponding to the contributions paid by the EU under the HELP agreement, plus the sum of EUR 1 162.66 as damages, and, second, the sum of EUR 25 105.62 corresponding to the contributions paid by the EU under the GreenNets agreement, plus the sum of EUR 1 940.21 as damages. A non-confidential version of the OLAF report and the details of the calculation of the sums to be recovered were annexed to that letter (‘the letter of 1 April 2019’). 11 Furthermore, the applicant was invited to submit any observations it might have within 30 days of receipt of that letter and, in particular, to provide the REA with a reconstructed time record of all the work undertaken, including, in particular, the working hours claimed for other activities and the list of all the researcher’s trips. Failing that, the applicant was requested to submit any other evidence, such as email exchanges, examples of documents prepared or written by the researcher. 12 By letter of 7 May 2019, the applicant sent its observations to the REA. 13 On 13 November 2019, in response to the observations in the letter of 7 May 2019, the REA sent the applicant a second pre-information letter (‘the letter of 13 November 2019’). 14 On that occasion, the REA stated that while it was fully entitled to pursue the recovery of the sums mentioned above in their entirety, it acknowledged that a significant period of time had elapsed since the closure of the OLAF investigation, so that the persons concerned by that investigation, who may have been in a position to provide evidence that the personnel costs declared were actually incurred, no longer worked for the applicant. In those circumstances, the REA informed the applicant that it intended to limit the amount of the recovery at issue to personnel costs and corresponding indirect costs relating to the period from August 2010 and to October 2012 (‘the recovery period at issue’), that is to say, a period in respect of which the OLAF report had demonstrated that the statements concerning the time spent by the researcher on EU-funded projects significantly exceeded 100% of a full-time equivalent post. 15 Thus, as regards the HELP agreement, the amount of the recovery remained unchanged since the entire period of execution of that project fell within the period from August 2010 to October 2012. By contrast, as regards the GreenNets agreement, the REA sent the applicant a revised calculation resulting in a request for recovery of the sum of EUR 22 234.80, plus EUR 1 434.14 for damages. 16 Although it was invited to do so, the applicant did not submit any observations on the letter of 13 November 2019. 17 On 29 January 2020, the REA sent the applicant four debit notes ordering the applicant to pay it, by 16 March 2020 at the latest, the abovementioned sums (‘the debit notes’). 18 On 1 April 2020, the European Commission sent the applicant four payment reminders regarding the debts referred to in the debit notes. 19 On 24 April 2020, the Commission sent the applicant four letters of formal notice concerning the debts referred to in the debit notes. Procedure and forms of order sought 20 By application lodged at the Court Registry on 20 June 2020, the applicant brought the present action. 21 By separate document lodged at the Registry on the same day, the applicant made an application for interim measures seeking suspension of the execution of, first, the letter of 13 November 2019 and, second, the procedure for recovery of the sums at issue. That application was dismissed by order of 11 September 2020, Datax v REA (T‑381/20 R, not published, EU:T:2020:414), for lack of urgency and costs were reserved. 22 Following a second exchange of pleadings, the written part of the procedure was closed on 31 March 2021. 23 Since the parties did not request a hearing pursuant to Article 106(1) of its Rules of Procedure, the General Court (Eighth Chamber), considering that it had sufficient information available to it from the material in the file, decided to rule on the action without an oral part of the procedure, pursuant to Article 106(3) of those rules. 24 The applicant claims, in essence, that the Court should: – annul the letter of 13 November 2019; – rule that the personnel costs relating to the researcher are eligible costs legitimately reimbursed to it, in accordance with the terms of the grant agreements and the provisions of the relevant regulations; – declare that the obligation to pay liquidated damages is unfounded; – order the REA not to take any further action against it in connection with the researcher’s personnel costs relating to the GreenNets and HELP grant agreements; – order the REA to pay the costs. 25 The REA contends that the Court should: – dismiss the action; – order the applicant to pay the costs, including those relating to the interlocutory proceedings. Law The application for annulment of the letter of 13 November 2019 26 In the application, the applicant sought the annulment, under Article 263 TFEU, of the letter of 13 November 2019, on the ground that the REA was allegedly not competent to adopt decisions comprising pecuniary obligations. 27 It is apparent, in particular, from paragraphs 4, 8 and 61 of the reply that the applicant waived its right to seek annulment of the letter of 13 November 2019. There is therefore no need to address that head of claim and the plea relating thereto. The other heads of claim based on Article 272 TFEU The jurisdiction of the General Court 28 The General Court has jurisdiction to hear the present action, on the basis of Article 272 TFEU, by virtue of the arbitration clauses in the third paragraph of Article 9 of the two grant agreements at issue, which confer jurisdiction on the General Court to rule on any dispute concerning the interpretation, application or validity of those agreements. The applicable law 29 The Court must resolve the dispute on the basis of the substantive law applicable to the contract. In the present case, in accordance with the first paragraph of Article 9 of the two grant agreements at issue, those agreements are governed by their own terms, by the acts of EU law relating to the Seventh Framework Programme for research, technological development and demonstration activities (2007-2013), by the financial regulation applicable to the general budget of the European Union and its implementing rules, by other provisions of EU law and, on a subsidiary basis, by Belgian law. 30 It should be noted that, ratione temporis, Council Regulation (EC, Euratom) No 1605/2002 of 25 June 2002 on the Financial Regulation applicable to the general budget of the European Communities (OJ 2002 L 248, p. 1) is the applicable financial regulation. It is apparent from paragraphs 2 and 4 above that the agreements at issue were entered into on 25 January and 29 August 2011. In accordance with the second paragraph of Article 187 of Regulation No 1605/2002, that regulation was applicable from 1 January 2003 and remained in force until its repeal by Regulation (EU, Euratom) No 966/2012 of the European Parliament and of the Council of 25 October 2012 on the financial rules applicable to the general budget of the Union and repealing Regulation No 1605/2002 (OJ 2012 L 298, p. 1), no provision of which specifies that it applies retroactively to grant agreements concluded prior to its entry into force. 31 As regards Belgian law, it should be noted that the third paragraph of Article 1134 of the Civil Code provides that agreements must be performed in good faith. Admissibility 32 Furthermore, in its defence, the REA submits that certain pleas do not satisfy the requirements of clarity and precision laid down in Article 76(d) of the Rules of Procedure and contends that they are inadmissible. 33 Under Article 76(d) of the Rules of Procedure, the application must state the subject matter of the proceedings, the pleas in law and arguments relied on and a summary of those pleas in law. Those particulars must be sufficiently clear and precise to enable the defendant to prepare its defence and the Court to rule on the action, if necessary without any further information (order of 11 March 2021, Techniplan v Commission, T‑426/20, not published, EU:T:2021:129, paragraph 19). 34 In the present case, in support of its action based on Article 272 TFEU, the applicant relied on seven pleas in law. 35 By the pleas in law entitled, first, ‘error as to the established factual findings and violation of the Polish Labour Law’, second, ‘violation of the underlying principles of European Union law – in particular the rule of law’, third, ‘lack of irregularities’ and, fourth, ‘erroneous claim of breach of grant agreements’, the applicant complains, in essence, that the REA failed to establish, by means of probative evidence, that the personnel costs declared were ineligible and, consequently, that it wrongly concluded that several contractual terms had been breached. 36 The other pleas can be clearly identified as alleging that the REA’s claim was time-barred, Article 1134 of the Belgian Civil Code was infringed as well as the principle of proportionality. 37 Thus, the wording of the pleas relied on is sufficiently clear and precise, as is demonstrated, moreover, by the content of the defence and the rejoinder, which shows that the REA was able to understand the pleas in law put forward by the applicant. 38 In those circumstances, the conditions laid down in Article 76(d) of the Rules of Procedure must be regarded as satisfied and the pleas of inadmissibility raised by the REA must be rejected. The first plea in law, alleging errors in the findings of fact and infringement of Polish law, lack of evidence of the ineligibility of the personnel costs declared, absence of breach of the contractual terms and infringement of the ‘underlying principles of European Union law – in particular the rule of law’ 39 The applicant submits, in essence, that it is for the REA to prove that the personnel costs declared in respect of the researcher’s activities are not eligible. The REA did not provide any reliable evidence to show that those costs were ineligible. Consequently, the REA was wrong to criticise it for failing to fulfil its obligations stemming from the contractual terms of the grant agreements at issue. 40 In particular, the applicant claims that the findings of the OLAF report, the investigation of which also concerned other projects and other beneficiaries of grants, are too general and imprecise. According to the applicant, OLAF and the REA did not identify in a precise manner the personnel costs which are eligible, any more than the entity which actually breached the grant agreements in which the researcher was involved. 41 In order to demonstrate that the work carried out by the researcher was genuine and that there was no irregularity, the applicant relies on the following evidence. 42 In the first place, the applicant annexes to the application various documents showing, in its view, that the personnel costs incurred for the researcher’s activities were actual costs. 43 In the second place, it refers to the judgment of 17 September 2019 of the Sąd Okręgowy we Wrocławiu (Regional Court, Wrocław, Poland) delivered in criminal proceedings brought against the researcher, which were abandoned on a conditional basis at the end of a two-year probationary period. The REA failed to take account of that judgment, even though it is apparent therefrom that the applicant observed all due care when recruiting the researcher and all the tasks it entrusted to him were actually carried out. 44 In the third place, the applicant refers to Polish employment law and to the researcher’s employment contract. 45 First, the ineligibility of the personnel costs at issue is contrary to Polish employment law, under which it is perfectly possible to register, in the recording system of an employee’s working time, a working time of eight hours per day, even if the person concerned completed the task more quickly. That remuneration practice is consistent with the grant agreements at issue, which state that personnel costs must be determined ‘in accordance with the usual practices … of the beneficiary’. 46 Moreover, the working time declared by the researcher on the projects at issue never exceeded 152 hours per month, which is less than the authorised maximum working time, namely 40 hours a week. 47 Second, the applicant submits that it took reasonable steps to ensure that the researcher’s actions did not go against its interests. It refers in that regard to the non-competition clause in the researcher’s employment contract, which requires the researcher to obtain written consent from his employer before carrying out other remunerated activities, and to the constant supervision to which he was subject during the execution of the projects at issue. If the researcher had declared working hours which did not correspond to reality, the applicant claims that it would obviously have dismissed him. 48 The REA disputes that line of argument. 49 It maintains that the applicant has not adduced evidence, as it is required to do, to show that the personnel costs declared are eligible. 50 In that regard, referring to the OLAF report, the REA submits that, in view of the overlap between the researcher’s activities and his statements on his working time in various EU-funded projects, the timesheets produced by the applicant for the researcher’s work do not represent actual costs. 51 It follows that a breach of several contractual terms, in particular Article II.14 of the general conditions annexed to the grant agreements at issue (‘the general conditions’), under which the costs, in order to be considered eligible, must be actual, and Article II.15 of those general conditions, according to which, as regards personnel costs, only the costs of the actual hours worked by the persons directly carrying out work under the project may be charged. Moreover, it cannot be ruled out that the applicant made a profit by claiming personnel costs which were not incurred, which constitutes a breach of Article II.18 of those general conditions. 52 As a preliminary point, it should be recalled that, according to a fundamental principle governing EU financial aid, the European Union can subsidise only expenses which have actually been incurred. It follows from that principle that it is not sufficient for the beneficiary of the aid to show that a project has been carried out for the allocation of a specific grant to be justified. That beneficiary of the aid must, in addition, produce evidence that he or she has incurred the expenses declared in accordance with the conditions laid down for the award of the grant or financial aid concerned, with only those expenses which are properly justified being capable of being regarded as eligible (see, to that effect, judgment of 20 July 2017, ADR Center v Commission, T‑644/14, EU:T:2017:533, paragraph 93). His or her obligation to satisfy the prescribed financial conditions is one of his or her essential commitments and accordingly determines the allocation of EU grants (judgment of 3 May 2018, Sigma Orionis v Commission, T‑48/16, EU:T:2018:245, paragraph 139). 53 In that regard, Article II.14(1) of the general conditions stipulates that costs, in order to be considered eligible, must, in principle, be actual and incurred by the beneficiary during the duration of the project. They must be determined in accordance with the usual accounting and management practices and principles of the beneficiary, respecting the accounting rules used in the State in which the beneficiary is established. The beneficiary’s internal accounting and auditing procedures must permit direct reconciliation of the costs and receipts declared in respect of the project with the corresponding financial statements and supporting documents. The costs incurred must be used for the sole purpose of achieving the objectives of the project and its expected results, they must be recorded in the accounts of the beneficiary and indicated in the estimated overall budget. 54 According to Article II.15(1) of the general conditions, direct costs are all those eligible costs which can be attributed directly to the project and are identified by the beneficiary as such, in accordance with its accounting principles and its usual internal rules. As regards personnel costs, only the costs of the actual hours worked by the persons directly carrying out work under the project may be charged. Those persons must be directly hired by the beneficiary in accordance with its national legislation, work under the sole technical supervision and responsibility of the beneficiary and be remunerated in accordance with the usual practices of the beneficiary. 55 In support of its request that the Court declare ‘that the costs of personnel [relating to the researcher] are eligible costs legitimately reimbursed [to it]’, the applicant claims that it submitted timesheets for the researcher’s work and other evidence supporting them. It considers, therefore, that it is for the REA to prove that it is not required to reimburse it the expenditure at issue. 56 However, it is apparent from the case-law cited in paragraph 52 above that the personnel costs referred to by the applicant can be reimbursed to it only if it has demonstrated that they were actually incurred, their link to the grant agreements at issue and observance of the other eligibility criteria laid down by them. To that end, the applicant must provide reliable information enabling it to verify whether the conditions for the award of the grants were met and establish that those costs were incurred in accordance with the conditions laid down for the grant of the aid concerned, with only those expenses which are properly justified being capable of being regarded as eligible (see judgment of 22 January 2019, EKETA v Commission, T‑198/17, not published, EU:T:2019:27, paragraph 48 and the case-law cited). 57 It is only in the situation where the applicant adduces such evidence by relying on timesheets and other relevant information that it is for the defendant to show that the expenditure at issue must be disregarded, justifying their rejection, inter alia, on the basis that those timesheets are not correct or credible (see judgment of 22 January 2019, EKETA v Commission, T‑198/17, not published, EU:T:2019:27, paragraph 49 and the case-law cited). 58 It is therefore necessary to examine in turn the various documents and arguments relied on by the applicant in support of its claim that the conditions of eligibility of personnel costs were met and, in particular, that each working hour of the researcher, the costs of which were declared for the purpose of reimbursement, were actual, that is to say, actually devoted to the execution of the projects at issue. – The documents provided by the applicant (Annexes A.7, A.8, A.12 and A.19 to A.23) 59 As a preliminary point, it should be noted that, although it was invited to do so by the REA in the letter of 1 April 2019, the applicant did not provide any description of the work carried out by the researcher under the grant agreements at issue. 60 In order to prove the eligibility of the personnel costs declared, the applicant provided the Court with the following information: – the assessment reports drawn up during the execution of the projects, from which it is apparent that the grants paid by the European Union were used in a manner consistent with the principle of economy, efficiency and effectiveness; – the researcher’s timesheets submitted in the course of execution of the HELP and GreenNets projects; – the researcher’s business trips register for the GreenNets project; – a history of banking transactions establishing the remuneration paid to the researcher and the reimbursement of the expenses for business trips in which the researcher took part; – an employment certificate relating to the researcher; – five photographs taken during the plenary meetings organised in the context of the implementation of the GreenNets project. 61 However, none of those documents is such as to prove the reliability of the researcher’s timesheets. Nor do those documents allow a direct comparison to be made with the hours declared by him. 62 In the first place, it should be noted that the assessment reports in question had an objective different from that pursued by OLAF in its investigation. Their aim was to assess, on an intellectual level, the research conducted by the applicant with the resources provided by the European Union. For its part, OLAF’s investigation sought to establish whether, in financial terms, the resources received from the European Union had been used in accordance with the contractual rules. 63 As is apparent from the case-law cited in paragraph 52 above, it is not sufficient for the beneficiary of the grant to show that the project has been carried out for the allocation of a specific grant to be justified, but he or she must also prove that he or she incurred the costs declared in accordance with the conditions laid down for the award of the grant. 64 In that regard, the content of those assessment reports does not confirm the eligibility of the personnel costs in question. 65 It is true that the assessor replied in the affirmative to the question whether ‘to the best of your estimate, have resources used, i.e. personnel resources and other major cost items, been (i) utilised for achieving the progress [and] (ii) in a manner consistent with the principle of economy, efficiency and effectiveness’. 66 However, it should be noted that this is merely an ‘estimate’, which is necessarily approximate and general, and that the assessor did not take a specific position on the eligibility of the personnel costs relating to the researcher under investigation by OLAF. Accordingly, the applicant cannot rely on those reports in order to obtain a declaration of eligibility of the personnel costs declared in respect of the projects at issue. 67 In the second place, the submission of the timesheets drawn up at the time the projects at issue were being executed is not sufficient, in the present case, to demonstrate that the personnel costs allegedly incurred by the applicant were actual costs. 68 Since the REA has not directly witnessed the performance of the applicant’s tasks, it does not have, in checking the accuracy of the personnel costs declared by the applicant, any resources other than those deriving inter alia from the production of reliable timesheets (see judgment of 22 January 2019, EKETA v Commission, T‑198/17, not published, EU:T:2019:27, paragraph 67 and the case-law cited). 69 Thus, where there is concrete evidence of the existence of a risk that the conditions for eligibility of expenditure have not been met, the burden of proof as to its eligibility lies with the beneficiary of the grant (see, to that effect, judgment of 22 October 2020, EKETA v Commission, C‑274/19 P, not published, EU:C:2020:853, paragraph 64). 70 In the present case, it is apparent from the OLAF report, on which the REA relied, that the working hours declared by the researcher, as reflected in the timesheets, are unreliable. 71 Following its investigation, OLAF concluded that the researcher had carried out simultaneously a number of professional activities of such a scale that his participation in the HELP and GreenNets projects to the extent declared was implausible. 72 In particular, it is apparent from the OLAF report that the researcher was a member of the applicant’s advisory board from 25 January 2010 to 4 July 2013. During that period, the researcher was also employed by the applicant under an employment contract. Thus, on 1 November 2011, the researcher was recruited by the applicant, initially on a part-time basis until 31 December 2011, then on the basis of 75% until 31 May 2012, before working full-time until 30 April 2013. Between 1 November 2011 and 31 March 2013, the researcher’s timesheets show that he declared to have worked between 66 and 152 hours per month on the projects at issue. 73 However, first, from 1 August 2010 to 31 July 2012, the researcher was also employed by the University of Wrocław (Poland). OLAF states that it is apparent from the timesheets submitted in the context of the Cossar project that 160 working hours were declared each month in respect of the researcher’s university activities. 74 Second, between 1 August 2010 and 31 December 2013, the researcher also worked for the Wrocław Research Centre EIT+ on EU-funded projects other than those at issue in the present case. During that period, he declared that he had worked on those various projects between 38 and 176 hours per month. 75 Third, while, from 13 February to 15 February 2012, the researcher acted as an expert for the Commission in connection with the evaluation of a call for proposals (FP7‑SEC‑2012‑1), the applicant declared that the researcher had worked eight hours per day on the HELP project on the same days. Similarly, from 20 February to 22 February 2012, the researcher acted as an expert for the Commission in the evaluation of a call for proposals (FP7‑SME‑2012) and yet the applicant declared that the researcher had worked eight hours per day on the HELP project on the same days. 76 Fourth, for the period from 2010 to 2013, OLAF states that the researcher also worked as part of a project financed by the Polish National Centre for Research and Development by means of European funds. Similarly, from January to May 2012, working hours were declared for the researcher in a project financed by the European Regional Development Fund. 77 It follows from the foregoing that, during the period of recovery at issue, the number of working hours accumulated on the various projects in which the researcher acted for different entities represented, according to OLAF, between 135 and 270% of a full-time equivalent. 78 Such a finding deprives the timesheets relied on by the applicant of credibility or, at the very least, does not allow them to be recognised as sufficiently credible to rebut the presumption of ineligibility of expenditure stemming from the OLAF report (see, by analogy, judgment of 22 January 2019, EKETA v Commission, T‑198/17, not published, EU:T:2019:27, paragraph 50 and the case-law cited). 79 In the light of the overlap between the hours declared by each of the entities employing the researcher and the number of those hours, it must be held that the OLAF report contains concrete indicia of the existence of a risk that the timesheets submitted by the applicant reflected costs which were not actual costs, in breach, inter alia, of Articles II.14 and II.15 of the general conditions. 80 Although the general conditions are admittedly silent as to the pursuit of parallel activities, the European Union may, however, subsidise only expenditure actually incurred. In addition, it follows from Articles II.14 and II.15 of the general conditions that only the costs of hours actually worked are eligible (see judgment of 22 January 2019, EKETA v Commission, T‑198/17, not published, EU:T:2019:27, paragraph 71 and the case-law cited). 81 In the third place, the register of business trips undertaken by the researcher in the context of the GreenNets project consists of a table in Excel format in which the name of the researcher is associated with several meetings in which he allegedly took part, between 21 November 2011 and 11 January 2013. 82 In that regard, it should be noted that that document does not contain any information concerning the working hours declared in connection with the HELP project and that, as regards the GreenNets project, that document does not contain any description of the work which the researcher carried out during those meetings. 83 In those circumstances, in view of the limited information contained therein, that register of the researcher’s business trips does not constitute reliable evidence of the work actually carried out by him in the context of the GreenNets project. 84 In the fourth place, as regards the history of banking transactions between the applicant and the researcher, it is sufficient to note that that document establishes only that the applicant paid remuneration to the researcher. The question is not whether the applicant did indeed pay remuneration to the researcher but whether the documents which it produced are sufficient to establish that the remuneration paid to him corresponds to work actually carried out in the context of the execution of the HELP and GreenNets projects. 85 In the fifth place, as regards the researcher’s certificate of employment, it is admittedly apparent that he was absent for only 25 days during the period covered by the employment contract. However, that document is not, by the mere mention of the number of days during which the researcher worked for the applicant, such as to establish either that the expenditure declared by the applicant was actually incurred or that the working time devoted to the projects at issue was correct. 86 In the sixth place, the production of photographs in which the researcher appears does not constitute a reasonable and reliable method of assessing the number of hours of work performed by the researcher. In any event, those five photographs do not provide any indication of the working time which they allegedly illustrate. 87 In the light of the foregoing, it must be concluded that the documents produced by the applicant do not make it possible to establish reliably the eligibility of the expenditure incurred by the applicant and, in particular, the fact that the personnel costs claimed were actual costs. – The judgment of 17 September 2019 of the Sąd Okręgowy we Wrocławiu (Regional Court, Wrocław) 88 As regards the judgment of 17 September 2019 of the Sąd Okręgowy we Wrocławiu (Regional Court, Wrocław), it should be noted that the decision of that court cannot have any bearing on the present action since that action falls within the exclusive jurisdiction of the General Court, pursuant to Article 272 TFEU, read in conjunction with the arbitration clause in the grant agreements at issue (see, to that effect, judgment of 3 May 2018, Sigma Orionis v Commission, T‑48/16, EU:T:2018:245, paragraph 70). 89 Accordingly, the REA cannot be criticised for not having taken into account the judgment delivered by a national court in criminal proceedings for the purpose of assessing the eligibility of the personnel costs declared and whether it was appropriate to recover the grants paid on that basis in the context of the execution of the agreements at issue. 90 The purpose of the criminal proceedings brought at national level was distinct from that of the present proceedings since those proceedings sought to determine whether the researcher was guilty under national criminal law. The mere fact that the charges against the researcher have not given rise to a conviction does not prevent the Court from reviewing, in the context of an action based on the contractual liability of the European Union, the compatibility of the recovery measures at issue with the agreements at issue and the rules made applicable by those agreements. 91 It follows that the judgment of the Sąd Okręgowy we Wrocławiu (Regional Court, Wrocław) is not a document capable of establishing the eligibility of the personnel costs allegedly incurred by the applicant. – The arguments based on Polish employment law 92 It should be noted at the outset that a time recording system, such as that described by the applicant, under which Polish labour law allows a number of hours equal to eight hours per day to be recorded, irrespective of the number of hours actually spent on the execution of the project at issue, does not meet the requirements set out in Articles II.14 and II.15 of the general conditions, in particular the requirement that the costs incurred by the beneficiary of a grant can be reimbursed only on condition, inter alia, that they are actual costs. 93 Such a system has no connection with the work actually carried out, with the result that it cannot be relied on by the applicant in support of its line of argument seeking to establish the eligibility of the expenditure at issue. 94 The fact that the eligible costs of the project ‘must be determined in accordance with the usual accounting and management principles and practices of the beneficiary’ has no bearing on that finding. That method of determining costs cannot alter the conditions of eligibility of those costs and, in particular, that referred to in Article II.14(1)(a) of the general conditions, according to which the costs must be actual costs. 95 In addition, as regards the claim that the researcher was under the ‘constant supervision’ of the applicant, it is not supported by any evidence in the file. That claim is, moreover, strongly contradicted by another assertion of the applicant, according to which the researcher enjoyed ‘considerable independence resulting from [the] task-based system’. 96 Furthermore, the existence of a non-competition clause in the researcher’s employment contract does not invalidate OLAF’s finding that the researcher worked simultaneously for several employers during the recovery period at issue and, on that basis, declared a number of working hours which were implausible in the context of several EU-funded projects. It is, moreover, apparent from the OLAF report that, before recruiting the researcher, the applicant already knew that he was working for other employers and it never objected to it, despite the existence of that non-competition clause. 97 It follows that the arguments based on Polish employment law do not establish that the personnel costs which the applicant invokes were actually incurred and, therefore, that there has been no breach of the contractual terms of the grant agreements at issue. 98 In the light of all those considerations, it must be concluded that the applicant has not adduced the proof required of it that the personnel costs declared were actually incurred. The first plea in law must thus be dismissed as unfounded. 99 Therefore, as regards the single plea relating to the eligibility of the researcher’s personnel costs, the claim seeking that those costs be declared eligible must be rejected. 100 Consequently, since the European Union’s financial contribution was unjustified, the applicant has not shown that the REA was not justified in seeking, pursuant to Article II.24(1) of the general conditions, payment of damages in addition to the recovery of that financial contribution, with the result that the applicant’s request seeking a declaration that ‘the obligation to pay liquidated damages … is unfounded’ must also be rejected. The second plea in law, alleging the time-barring of the requests for recovery 101 The applicant claims that the requests for recovery of the sums at issue are ‘time-barred’ since a period of more than five years has elapsed since the end of the projects at issue. That five-year period is referred to not only in Article II.22(3) of the general conditions, which requires grant beneficiaries to keep all originals of documents relating to the grant agreement for five years after the end of the project at issue, but also in Article 46 of the Statute of the Court of Justice of the European Union, under which matters arising from non-contractual liability of the European Union are to be barred after a period of five years from the occurrence of the event giving rise thereto. 102 It adds that, in view of the passage of time, the possibilities of bringing an action for indemnity against the researcher are limited. 103 The REA disputes that line of argument. 104 It considers that that line of argument is unfounded because the debit notes were sent within the five-year period referred to in Article 98(2) of Regulation (EU, Euratom) 2018/1046 of the European Parliament and of the Council of 18 July 2018 on the financial rules applicable to the general budget of the Union, amending Regulations (EU) No 1296/2013, (EU) No 1301/2013, (EU) No 1303/2013, (EU) No 1304/2013, (EU) No 1309/2013, (EU) No 1316/2013, (EU) No 223/2014, (EU) No 283/2014, and Decision No 541/2014/EU and repealing Regulation No 966/2012 (OJ 2018 L 193, p. 1). 105 As a preliminary point, it should be noted that none of the provisions relied on by the applicant fixes the period within which an institution must act to recover sums unduly paid under a grant agreement. 106 In the first place, Article II.22 of the general conditions states only that the Commission may, up to five years after the end of the projects concerned, arrange for a financial audit to be carried out either by external auditors, or by its own departments or by OLAF. In that regard, it is common ground that OLAF’s investigation, opened in March 2013, was initiated within the period prescribed by that provision. 107 In the second place, the limitation period referred to in Article 46 of the Statute of the Court of Justice concerns actions against the European Union in matters of non-contractual liability, while the present case concerns the contractual liability of the European Union. 108 Furthermore, Regulation No 1605/2002, which is, as is apparent from paragraph 30 above, the financial regulation applicable ratione temporis, does not fix any period within which a debit note must be communicated to the debtor. 109 In that regard, the Court of Justice has previously made clear that Article 73a of Regulation No 1605/2002, which fixed a limitation period for claims by the European Union of five years, could not be relied on alone, without its implementing rules, to establish that recovery of a debt owed to the European Union was time-barred (see judgment of 14 June 2016, Marchiani v Parliament, C‑566/14 P, EU:C:2016:437, paragraphs 86 and the case-law cited). 110 Article 73a must therefore be read in conjunction with its detailed implementing rules laid down in Article 85b of Commission Regulation (EC, Euratom) No 2342/2002 of 23 December 2002 laying down detailed rules for the implementation of Regulation No 1605/2002 (OJ 2002 L 357, p. 1), as amended by Commission Regulation (EC, Euratom) No 478/2007 of 23 April 2007 (OJ 2007 L 111, p. 13). That article provides for a limitation period of five years to allow the EU institutions to recover European Union entitlements in respect of third parties, the date from which that period begins to run being the expiry of the deadline communicated to the debtor in the debit note (see judgment of 14 June 2016, Marchiani v Parliament, C‑566/14 P, EU:C:2016:437, paragraphs 87 and the case-law cited). 111 It follows that those provisions do not fix any period within which a debit note has to be communicated to the debtor (judgment of 14 June 2016, Marchiani v Parliament, C‑566/14 P, EU:C:2016:437, paragraph 95; see also, to that effect, judgment of 13 May 2020, Talanton v Commission, T‑195/18, not published, EU:T:2020:194, paragraph 66). 112 Therefore, contrary to what the applicant appears to claim, the debts contained in the debit notes are not time-barred. 113 Admittedly, where the applicable texts are silent, the requirement of legal certainty means that the EU institutions must exercise their powers within a reasonable time (see judgment of 14 June 2016, Marchiani v Parliament, C‑566/14 P, EU:C:2016:437, paragraph 96 and the case-law cited). 114 However, to the extent that the principle that the parties to a contract are under an obligation to perform it in good faith includes the obligation for the institution concerned to communicate to the beneficiary of a grant, within a reasonable time, the conclusions it draws from the findings made by OLAF and set out in its investigation report (see, to that effect, judgment of 19 September 2019, BTC v Commission, T‑786/17, not published, EU:T:2019:630, paragraph 58), and since the applicant has explicitly raised such an argument in support of the third plea, that line of argument will be considered below. 115 It follows from the foregoing that the second plea in law must be rejected as unfounded. The third plea in law, alleging infringement of Article 1134 of the Belgian Civil Code 116 The applicant maintains that it satisfied all the conditions necessary to meet its duty of good faith, laid down in Article 1134 of the Belgian Civil Code. In particular, it displayed all the necessary diligence by supervising and justifying the work carried out by the researcher. It considers that any bad faith on the part of the researcher cannot have adverse consequences for it since it acted in good faith. 117 In the reply, the applicant adds that the REA did not act in good faith by waiting several years to react after receiving the OLAF report. Even if the REA’s application were not time-barred, such conduct constitutes an abuse of rights. In that regard, the applicant considers that it could reasonably assume that the REA had closed the file without further action. 118 The applicant also claims that the passage of time affected its ability to defend itself, which constitutes a breach of its rights of defence. 119 The REA disputes that line of argument. 120 It maintains that the fact that the applicant acted in good faith has no bearing on the assessment of its own good faith, which was not called into question in the application. In any event, it adds that the applicant’s line of argument has no bearing on its obligations under the grant agreements at issue, in particular that of ensuring that the costs declared were eligible. As regards the fact that the researcher acted in bad faith, the REA considers that, not being a party to the grant agreements at issue, it cannot be bound by the related obligation of good faith. In any event, the bad faith of an employee of the applicant amounts to an act of bad faith on the part of the applicant itself, given that the applicant was responsible to the REA for complying with its contractual obligations. 121 As regards the alleged infringement of the rights of the defence, the REA submits that the correspondence between the parties before the action was brought shows, on the one hand, that the applicant was fully informed of the justification of the claims and, second, was provided, at each stage of the procedure, with an opportunity to respond and defend itself. The REA also confirms that certain parts of the OLAF report have been redacted in order to protect the personal data of persons involved in the investigation, while all elements relating to the applicant have been disclosed. 122 As a preliminary point, it should be noted that, according to the Cour de cassation (Court of Cassation, Belgium), the principle enshrined in Article 1134 of the Belgian Civil Code, under which grant agreements must be performed in good faith, prohibits a party from abusing a right conferred on it by the contract. An abuse of rights consists in exercising a right in a manner that manifestly exceeds the limits of the normal exercise of that right by a person exercising all due care. It is possible that the fact that the holder of a right invokes that right after having caused the other party to entertain the legitimate expectation that it will not exercise it by conduct which is objectively incompatible with the normal exercise of that right constitutes an abuse of rights (see judgment of 4 May 2017, Meta Group v Commission, T‑744/14, not published, EU:T:2017:304, paragraph 194 and the case-law cited). 123 In the present case, it should be noted that the REA was aware since 1 June 2015 of the conclusions of the OLAF report and that it was in a position, after examining the content of that report, to identify the claims which it invokes in the debit notes. However, it informed the applicant of its intention to recover the grants at issue only on 2 April 2019 and it did not issue the debit notes until 29 January 2020, that is to say, more than four years after becoming aware of the OLAF report. 124 Admittedly, according to the case-law, the deadline for an EU institution to communicate a debit note to a debtor in the context of an administrative procedure, must, in principle, be presumed to be unreasonable where that communication takes place outside a period of five years from the point at which the institution was, in normal circumstances, in a position to claim its debt (see judgment of 13 May 2020, Talanton v Commission, T‑195/18, not published, EU:T:2020:194, paragraph 69 and the case-law cited). 125 However, the communication of a debit note within a period that is shorter than that five-year period may, depending on the particular circumstances of the case, not meet the requirements of the reasonable time principle. In such a case, the debtor bears the burden of proving that a period shorter than the five-year period was unreasonable (judgment of 14 June 2016, Marchiani v Parliament, C‑566/14 P, EU:C:2016:437, paragraph 106). 126 Thus, the reasonableness of a period of time is to be appraised in the light of all of the circumstances specific to each case and, in particular, the importance of the case for the person concerned, its complexity, the various procedural stages which the EU institution followed and the conduct of the parties in the course of the procedure (see judgment of 13 May 2020, Talanton v Commission, T‑195/18, not published, EU:T:2020:194, paragraph 76 and the case-law cited). 127 It is therefore necessary to ascertain whether the applicant has proved that the period at issue was unreasonable. 128 In the present case, the applicant stated that that period was unreasonable because, first, the possibilities of bringing an action for indemnity before the national courts against the researcher were limited, second, that could have given it a legitimate expectation that the REA would not seek repayment of the grants at issue and, third, that period affected its ability to defend itself effectively. 129 However, none of those factors demonstrates, in the present case, that a reasonable time was exceeded. 130 In the first place, the fact that the possibilities of bringing an action for indemnity against the researcher are limited, because of the limitation period, is not relevant for the purposes of assessing the reasonableness of the period at issue. 131 The applicant cannot rely on the alleged limitation period for an action which could be brought, before a national court, against its former employee. That fact, even if it were established, did not affect in any way the duration of the period up to the communication of the debit notes. In other words, the question whether an action brought by the applicant against its former employee is time-barred is not directly linked to the existence of a debt owed to the European Union by the applicant. Any possible dispute arising from that employment relationship must be settled in accordance with the national legislation applicable to it, which cannot, however, be relied on in order to limit the contractual liability of the applicant in the present case. 132 Second, the REA’s actions did not in any way give the applicant a legitimate expectation and the line of argument based on the applicant’s good faith cannot succeed either. 133 As the REA rightly submits, the fact that a contracting party acted in good faith in the performance of the grant agreement is not sufficient to establish bad faith on the part of the other party. 134 Moreover, it is apparent in particular from the OLAF report that the applicant was informed that the researcher carried out several professional activities simultaneously and that it raised no objection in that regard, as noted in paragraph 96 above. In addition, in order for the REA to be able to exercise its control, grant beneficiaries must demonstrate that the costs attributed to subsidised projects are eligible. As stated in paragraph 98 above, the applicant did not properly justify the personnel costs declared, which constitutes a breach of Articles II.14 and II.15 of the general conditions. 135 Thus, in the context of a grant agreement, where costs are not declared eligible under that agreement because they have been found to be unverifiable or unreliable, the REA, acting on behalf of and under the responsibility of the Commission, which is required to comply with the principle of sound financial management, in accordance with Article 317 TFEU, has no choice but to recover an amount of the grant equal to the unsubstantiated amounts, since that institution can pay out of the EU budget only duly substantiated sums, regardless of whether or not the beneficiary has completed the project covered by the grant agreement (see, to that effect, judgment of 22 October 2020, EKETA v Commission, C‑274/19 P, not published, EU:C:2020:853, paragraph 114 and the case-law cited). Thus, since the applicant was aware of the challenges relating to the justification of the personnel costs at issue and the fundamental principles governing EU financial assistance, in particular those applicable to the grant agreements at issue, recalled in paragraphs 52 to 54 above, the time elapsed could not, in itself, fuel its legitimate expectation that a recovery procedure would not be implemented. 136 Third, it is not apparent from the documents before the Court that the time taken by the REA affected the applicant’s ability to challenge effectively OLAF’s findings on which the requests for recovery are based. 137 In the first place, it was only at the stage of the reply in the present judicial proceedings that the applicant maintained that it was not in a position to defend itself effectively in the light of the passage of time. In the application, the applicant disputed the merits of the requests for recovery, arguing in particular that the expenditure which it declared to have incurred was eligible, without expressly claiming infringement of its rights of defence. 138 In the second place, it is true that the applicant indicated in its observations of 7 May 2019 that it was experiencing difficulties in commenting on the REA’s intentions, in the light of the alleged distortion of the evidence brought about by the passage of time, and that it was therefore necessary to have regard to the documents which it had sent to OLAF during its investigation. 139 However, on that date, the applicant already had in its possession a non-confidential version of the OLAF report, the detailed content of which enabled it to have knowledge of the findings of fact made by OLAF, to submit its observations on the ineligibility of the researcher’s personnel costs and to bring the present action. 140 Furthermore, it is apparent from the letter of 13 November 2019 that, after receipt of the applicant’s observations, the REA asked OLAF to send it the documents which the applicant had provided in the course of the investigation. After examining those documents in the light of the applicant’s observations of 7 May 2019, the REA reached the conclusion that no new argument capable of calling into question OLAF’s factual findings had been put forward. Furthermore, no documentation other than that already provided to OLAF at the time of the investigation was submitted with a view to demonstrating the eligibility of the researcher’s personnel costs. 141 Since the REA essentially limited itself to repeating the factual findings made by OLAF and since, during the investigation carried out by that office, the applicant was able to put forward its point of view on numerous occasions and had the opportunity to provide, at that time, all the supporting documents available to it, the REA cannot be regarded as having infringed its rights of defence. 142 Moreover, the line of argument based on the fact that the testimony of persons capable of confirming the work allegedly actually carried out by the researcher may no longer be sufficiently precise because of the passage of time cannot succeed. 143 First of all, the applicant has not produced any witness statements, so that the Court is not in a position to assess their possible reliability. 144 Next, that claim is not substantiated by any document in the file that would enable the Court to assess the extent to which the applicant encountered difficulties in obtaining such statements. 145 Lastly, it should be noted that it is apparent from the letter of 1 April 2019 that the REA was prepared to take into consideration, in its analysis of the eligibility of the personnel costs at issue, for example, extracts from email exchanges, documents drafted or prepared by the researcher, such as reports, working documents and scientific publications, or even the minutes of the meetings which he allegedly attended. 146 Accordingly, the fact, even if it were established, that the applicant could no longer obtain reliable testimonies showing the work actually carried out by the researcher because of the passage of time cannot, in the present case, constitute an obstacle to the exercise of its rights of defence. 147 In the third place, while it is true that, in accordance with Article II.22(3) of the general conditions, the applicant was required to keep the documents relating to the projects at issue only for a period of up to five years from the end of those projects, the fact remains that, given that the applicant was informed that OLAF was investigating the lawfulness of certain grants which had been paid to it, it was in its interest to retain all relevant documents capable of demonstrating the eligibility of the researcher’s personnel costs (see, to that effect, judgment of 19 September 2019, BTC v Commission, T‑786/17, not published, EU:T:2019:630, paragraph 64). 148 In the fourth place, it is apparent from the file that the President of the Management Board, under whose constant supervision the applicant claims the researcher worked, was interviewed on numerous occasions by OLAF and submitted numerous documents during the investigation in order to attempt to justify the eligibility of the personnel costs declared. It is also apparent from the documents before the Court that that person continued to hold a post within the applicant on the date on which the present action was brought, with the result that he could, once he had received the letter of 1 April 2019, obtain all the information necessary to challenge both the findings made by OLAF and the conclusions drawn from it by the REA (see, to that effect, judgment of 19 September 2019, BTC v Commission, T‑786/17, not published, EU:T:2019:630, paragraph 65). 149 In the fifth place, the applicant cannot criticise the REA for having failed to fulfil its obligation to perform the agreements in good faith since, precisely in order to take account of the passage of time, the REA reduced the amount of the recovery at issue by limiting it to the period during which the timesheets provided in respect of the researcher’s various roles exceeded ‘significantly’ 100% of a full-time equivalent, that is to say, a period during which the researcher’s timesheets were manifestly implausible. 150 In the light of those principles and having regard to all OLAF’s findings, the REA cannot be criticised for having disregarded the principle that agreements be performed in good faith by requesting the applicant to reimburse nearly all the costs declared attributed to the grant agreements because of the ineligible nature of the personnel costs at issue (see, to that effect, judgment of 10 March 2021, Ayuntamiento de Quart de Poblet v Commission, T‑539/18, not published, EU:T:2021:123, paragraph 244 and the case-law cited). 151 The third plea in law must therefore be rejected as unfounded. The fourth plea in law, alleging infringement of the principle of proportionality 152 The applicant submits that, even if the alleged breach of the grant agreements were established, the amount of the recovery at issue should, in any event, be adequate and proportionate to that infringement. The applicant submits in that regard that the REA cannot recover all the sums paid in respect of work carried out by the researcher, but only the sums which were used for purposes other than those envisaged. 153 In that context, given that it is not disputed that the projects at issue were fully executed, the applicant submits that the amount of the recovery should be reduced by at least 90%. Similarly, the applicant proposed, in the reply, to settle that dispute amicably by paying to the REA only the sums claimed by way of damages. 154 The REA disputes that line of argument. 155 It refers in that regard to the case-law according to which it is not sufficient to show that the project was carried out to justify the award of a particular grant, but that the applicant has to prove that the costs declared have been incurred in accordance with the conditions laid down for the award of the grants concerned. Similarly, in order to acquire a definitive right to payment of the grant at issue, the interested party must have fulfilled its financial obligations. In those circumstances, the principle of proportionality cannot be interpreted as allowing the applicant to be relieved of part of the obligations arising from the grant agreements at issue. 156 In any event, the REA considers that the amount of the recovery is proportionate since it has already agreed to reduce the amount to be recovered in the GreenNets project following receipt of the applicant’s observations. 157 On that point, it is sufficient to note that, in the context of a grant agreement, the award of that grant is conditional on compliance by the beneficiary with certain criteria and certain obligations relating to, inter alia, the financial justification of the costs declared as having been incurred for the execution of the projects concerned. Therefore, the beneficiary of the grant acquires a definitive right to payment of the EU financial contribution only if all the conditions to which the award of the grant is subject are satisfied (see judgment of 8 September 2015, Amitié v Commission, T‑234/12, not published, EU:T:2015:601, paragraph 146 and the case-law cited). 158 It follows that it is not sufficient for the beneficiary of the grant to show that a project has been carried out in order to justify the award of a particular grant since it is for the beneficiary to prove that the costs declared have been incurred in accordance with the conditions laid down for the award of the grants concerned (see, to that effect, judgment of 16 July 2020, ADR Center v Commission, C‑584/17 P, EU:C:2020:576, paragraph 109). 159 Given that failure to comply with the obligation to produce reliable timesheets to justify personnel costs is a sufficient ground for rejecting all those costs (see, to that effect, judgment of 22 January 2019, EKETA v Commission, T‑198/17, not published, EU:T:2019:27, paragraph 64 and the case-law cited) and that it follows from the above that the applicant has not adduced evidence of the eligibility of those personnel costs of the researcher to the extent declared, the REA has not infringed the principle of proportionality by requesting reimbursement of virtually all of the costs declared. 160 Accordingly, the fourth plea in law must be rejected as unfounded. 161 In the light of the foregoing, it is therefore necessary to reject the applicant’s request seeking that the REA be ordered ‘not to take any further actions with regard to personnel costs of [the researcher] in relation to GreenNet and HELP grant project agreements’ and, therefore, to dismiss the action in its entirety, without it being necessary to examine the requests for measures of organisation of procedure and measures of inquiry made by the applicant in the reply. Costs 162 Under Article 134(1) 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, it must be ordered to pay the costs, including those relating to the interlocutory proceedings, in accordance with the form of order sought by the REA. On those grounds, THE GENERAL COURT (Eighth Chamber) hereby: 1. Dismisses the action; 2. Orders Datax sp. z o.o. to pay the costs, including those relating to the interlocutory proceedings. Svenningsen Pynnä Laitenberger Delivered in open court in Luxembourg on 21 December 2021. E. Coulon M. van der Woude Registrar President * Language of the case: English.