61981CJ0044_EN
Parties
Subject of the case
Grounds
Decision on costs
Operative part
Parties
IN CASE 44/81
FEDERAL REPUBLIC OF GERMANY AND BUNDESANSTALT FUR ARBEIT, NURNBERG ( FEDERAL LABOUR OFFICE, NUREMBERG ), REPRESENTED BY M . SEIDEL, MINISTERIALRAT AT THE FEDERAL MINISTRY FOR ECONOMIC AFFAIRS, BONN, AND BY J . SEDEMUND, ACTING AS AGENT, DULY AUTHORIZED TO ACT IN THE PROCEEDINGS, WITH AN ADDRESS FOR SERVICE IN LUXEMBOURG AT THE CHANCELLERY OF THE EMBASSY OF THE FEDERAL REPUBLIC OF GERMANY, 3 BOULEVARD ROYAL,
APPLICANTS,
AND
IRELAND, REPRESENTED BY L . J . DOCKERY, CHIEF STATE SOLICITOR, ACTING AS AGENT, ASSISTED BY E . P . FITZSIMONS, SENIOR COUNSEL, AND J . O ' REILLY, BARRISTER AT LAW, WITH AN ADDRESS FOR SERVICE IN LUXEMBOURG AT THE IRISH EMBASSY, 28 ROUTE D ' ARLON,
INTERVENER,
V
COMMISSION OF THE EUROPEAN COMMUNITIES, REPRESENTED BY J . AMPHOUX, LEGAL ADVISER TO THE COMMISSION, ASSISTED BY M . HILF, A MEMBER OF THE COMMISSION ' S LEGAL DEPARTMENT, WITH AN ADDRESS FOR SERVICE IN LUXEMBOURG AT THE OFFICE OF O . MONTALTO, A MEMBER OF ITS LEGAL DEPARTMENT, JEAN MONNET BUILDING, KIRCHBERG,
DEFENDANT,
Subject of the case
APPLICATION
1 . PRIMARILY, FOR AN ORDER THAT THE COMMISSION SHOULD PAY TO THE BUNDESANSTALT FUR ARBEIT DM 16 928 855.52 AND, IN THE ALTERNATIVE, FOR A DECLARATION THAT THE COMMISSION DECISION OF 10 DECEMBER 1980 REFUSING TO PAY THE BALANCES DUE UNDER THE COMMISSION ' S DECISION OF 23 DECEMBER 1977 IS VOID ;
2.IN THE ALTERNATIVE FOR A DECLARATION THAT THE COMMISSION ' S LETTER OF 16 DECEMBER 1980 CONCERNING THE APPLICATION OF ARTICLE 4 OF COMMISSION DECISION 78/706/EEC OF 27 JULY 1978 ON CERTAIN ADMINISTRATIVE PROCEDURES FOR THE OPERATION OF THE EUROPEAN SOCIAL FUND ( OFFICIAL JOURNAL 1978, L 238, P . 20 ) IS VOID,
Grounds
1 BY AN APPLICATION LODGED AT THE COURT REGISTRY ON 20 FEBRUARY 1981, THE GOVERNMENT OF THE FEDERAL REPUBLIC OF GERMANY AND THE BUNDESANSTALT FUR ARBEIT ( FEDERAL LABOUR OFFICE ) BROUGHT AN ACTION WHOSE FIRST HEAD OF CLAIM IS PRIMARILY FOR AN ORDER THAT THE COMMISSION SHOULD PAY THE SUM OF DM 16 928 855.52 DUE UNDER THE COMMISSION ' S DECISION OF 23 DECEMBER 1977 APPROVING THE GRANT OF ASSISTANCE FROM THE SOCIAL FUND FOR FOUR PROJECTS TO BE CARRIED OUT BY THE BUNDESANSTALT FUR ARBEIT AND, IN THE ALTERNATIVE, FOR A DECLARATION PURSUANT TO THE FIRST PARAGRAPH OF ARTICLE 173 OF THE EEC TREATY THAT THE COMMISSION ' S DECISION OF 10 DECEMBER 1980 REFUSING PAYMENT OF THAT SUM IS VOID .
2 THE SECOND HEAD OF CLAIM INTRODUCED BY THE GOVERNMENT OF THE FEDERAL REPUBLIC OF GERMANY PURSUANT TO THE FIRST PARAGRAPH OF ARTICLE 173 OF THE EEC TREATY IS FOR A DECLARATION THAT THE COMMISSION ' S LETTER OF 16 DECEMBER 1980 CONCERNING THE APPLICATION OF ARTICLE 4 OF COMMISSION DECISION 78/706/EEC OF 27 JULY 1978 ON CERTAIN ADMINISTRATIVE PROCEDURES FOR THE OPERATION OF THE EUROPEAN SOCIAL FUND ( OFFICIAL JOURNAL 1978, L 238, P . 20 ) IS VOID .
3 BY THIS ACTION THE APPLICANTS ARE IN SUBSTANCE CHALLENGING THE COMMISSION ' S REFUSAL TO GRANT THE REQUESTS TO PAY THE BALANCES OF APPROVED ASSISTANCE FROM THE SOCIAL FUND ON THE GROUND THAT THE REQUESTS WERE NOT SUBMITTED WITHIN THE PERIOD OF 18 MONTHS LAID DOWN BY ARTICLE 4 ( 1 ) OF COMMISSION DECISION 78/706 .
I - FIRST HEAD OF CLAIM
1 . THE CLAIM FOR PAYMENT
4 THE APPLICANTS MAINTAIN THAT IN A SITUATION SUCH AS THEIRS WHERE AID HAS BEEN GRANTED TO THEM BY A COMMISSION DECISION, THE COMMISSION ' S FAILURE TO PAY THAT AID ENTITLES THEM TO MAKE A CLAIM FOR PAYMENT . SUCH A CLAIM IS THE ONLY REMEDY OFFERING THEM THE EFFECTIVE LEGAL PROTECTION GUARANTEED TO THEM BY ARTICLE 164 OF THE TREATY . MOREOVER, THE APPLICANTS CONSIDER THAT IF THIS CLAIM WERE REJECTED, THE EFFECT WOULD BE TO ENSURE THAT CLAIMS FOR PAYMENT BASED ON A UNILATERAL ACT ADOPTED BY THE COMMISSION IN FAVOUR OF THE APPLICANT WOULD BE TREATED DIFFERENTLY FROM CLAIMS OF THE SAME KIND WHICH HAVE THEIR BASIS IN CONTRACTUAL OR NON-CONTRACTUAL LIABILITY AND MAY BE MADE UNDER ARTICLE 215 OF THE TREATY . SUCH A DIFFERENCE IN TREATMENT IS NOT JUSTIFIED WHERE IT IS A QUESTION OF ENSURING PAYMENT OF SUMS DUE FROM THE COMMUNITY .
5 IN THE COMMISSION ' S VIEW, A CLAIM FOR PAYMENT SUCH AS THAT MADE BY THE APPLICANTS IS EXTRANEOUS TO THE SYSTEM OF REMEDIES ESTABLISHED BY THE TREATY AND THEREFORE INADMISSIBLE . THAT IS PARTICULARLY SO SINCE THE APPLICANTS ARE NOT WHOLLY WITHOUT EFFECTIVE LEGAL PROTECTION, AS THIS IS SUFFICIENTLY GUARANTEED BY THE POSSIBILITY OPEN TO THEM OF BRINGING AN ACTION FOR FAILURE TO ACT AGAINST THE COMMISSION UNDER ARTICLE 175 OF THE TREATY .
6 IT IS TRUE THAT IN THIS AREA THERE IS NO PROVISION IN THE TREATY ENTITLING A PERSON IN FAVOUR OF WHOM AN INSTITUTION HAS ENTERED UNILATERALLY INTO A FINANCIAL COMMITMENT TO BRING BEFORE THE COURT AN ACTION FOR PAYMENT AGAINST THAT INSTITUTION . THAT OF ITSELF DOES NOT MEAN THAT THE PERSON CONCERNED HAS NO REMEDY WHERE THAT INSTITUTION REFUSES TO HONOUR ITS COMMITMENTS . INDEED, IN SO FAR AS THE INSTITUTION, BY REFUSING PAYMENT, DISPUTES A PRIOR COMMITMENT OR DENIES ITS EXISTENCE, IT COMMITS AN ACT WHICH IN VIEW OF ITS LEGAL EFFECTS MAY GIVE RISE TO AN ACTION FOR A DECLARATION OF NULLITY UNDER ARTICLE 173 OF THE TREATY . IF AS A RESULT OF THE ACTION THE REFUSAL TO MAKE THE PAYMENT IS DECLARED VOID, THE APPLICANT ' S RIGHT WILL BE ESTABLISHED AND IT WILL BE FOR THE INSTITUTION CONCERNED, PURSUANT TO ARTICLE 176 OF THE TREATY, TO ENSURE THAT THE PAYMENT WHICH HAS BEEN UNLAWFULLY REFUSED IS MADE . MOREOVER, IF AN INSTITUTION FAILS TO REPLY TO A REQUEST FOR PAYMENT, THE SAME RESULT MAY BE OBTAINED BY MEANS OF ARTICLE 175 .
7 IT FOLLOWS THAT WHILST THE EEC TREATY MAKES NO PROVISION FOR AN ACTION OF THE TYPE BROUGHT BY THE APPLICANTS, THIS CANNOT BE REGARDED AS A LACUNA WHICH MUST BE FILLED IN ORDER TO ENSURE THAT PERSONS CONCERNED HAVE EFFECTIVE PROTECTION FOR THEIR RIGHTS . THE CLAIM FOR PAYMENT MADE BY THE APPLICANTS MUST THEREFORE BE DECLARED INADMISSIBLE .
2 . THE ALTERNATIVE CLAIM FOR A DECLARATION THAT THE COMMISSION ' S LETTER OF 10 DECEMBER 1980 REFUSING THE PAYMENTS REQUESTED IS VOID
( A ) ADMISSIBILITY
8 FOR THE REASONS ALREADY STATED BY THE COURT IN CONSIDERING THE PRINCIPAL HEAD OF CLAIM, THE REFUSAL TO MAKE A PAYMENT IS AN ACT WHICH MAY BE THE SUBJECT OF AN ACTION FOR A DECLARATION OF NULLITY UNDER ARTICLE 173 OF THE TREATY . HOWEVER, THE COMMISSION MAINTAINS THAT THIS HEAD OF CLAIM IS ALSO INADMISSIBLE SINCE IT IS DIRECTED AGAINST A LETTER, NAMELY THAT OF 10 DECEMBER 1980, WHICH MERELY CONFIRMED A DECISION WHICH HAD BEEN DEFINITIVELY ADOPTED AND NOTIFIED TO THE APPLICANTS IN JULY 1980 .
9 THE COMMISSION THUS REFERS TO THE LETTERS WHICH THE DIRECTOR GENERAL OF THE DIRECTORATE GENERAL FOR EMPLOYMENT AND SOCIAL AFFAIRS SENT TO THE FEDERAL MINISTRY OF LABOUR ON 11 AND 15 JULY 1980, IN WHICH IT WAS STATED THAT IT WOULD NOT BE POSSIBLE TO GRANT THE REQUEST FOR PAYMENT, SINCE THEY HAD NOT BEEN SUBMITTED WITHIN THE PERIOD LAID DOWN BY ARTICLE 4 ( 1 ) OF COMMISSION DECISION 78/706 .
10 BEFORE THE PRECISE NATURE OF THE COMMISSION ' S LETTERS OF JULY AND DECEMBER 1980 CAN BE DETERMINED, IT IS NECESSARY TO PUT THEM IN CONTEXT BY RECALLING THE SEQUENCE OF EVENTS WHICH OCCURRED BETWEEN JULY AND DECEMBER OF THAT YEAR .
11 BY A LETTER OF 4 AUGUST 1980, THE FEDERAL MINISTRY OF LABOUR REPLIED TO THE ABOVE-MENTIONED LETTERS OF 11 AND 15 JULY 1980, CHALLENGING THE COMMISSION ' S POSITION ON GROUNDS BOTH OF LAW AND OF FACT AND ASKING IT TO EXPLAIN ITS VIEW . THAT REQUEST WAS FORMALLY ACCEPTED BY THE COMMISSION IN ITS LETTER OF 5 SEPTEMBER 1980 AND A MEETING TOOK PLACE ON 29 SEPTEMBER 1980 BETWEEN THE DIRECTOR RESPONSIBLE FOR THE ADMINISTRATION OF THE SOCIAL FUND AND A GERMAN OFFICIAL, THE COMMISSION DIRECTOR AGREEING TO RECONSIDER THE
VIEW OF THE FEDERAL AUTHORITIES AND TO REFER THE MATTER TO THE VICE-PRESIDENT OF THE COMMISSION . THE FEDERAL AUTHORITIES '
VIEW WAS AGAIN PUT FORWARD IN TWO LETTERS, ONE OF 6 OCTOBER 1980 FROM THE STATE SECRETARY OF THE FEDERAL MINISTRY OF LABOUR AND SOCIAL AFFAIRS AND THE OTHER OF 4 DECEMBER 1980 WRITTEN BY THE PRESIDENT OF THE BUNDESANSTALT FUR ARBEIT . BOTH LETTERS WERE ADDRESSED DIRECT TO THE VICE-PRESIDENT OF THE COMMISSION . IN THE COURSE OF THAT EXCHANGE OF VIEWS, THE VICE-PRESIDENT OF THE COMMISSION ADVISED THE FEDERAL MINISTRY OF LABOUR AND SOCIAL AFFAIRS BY A LETTER OF 10 DECEMBER 1980 - THE LETTER WHICH IS THE SUBJECT OF THIS ACTION - THAT HE SAW NO POSSIBILITY OF INSTRUCTING THE DIRECTORATE RESPONSIBLE FOR THE SOCIAL FUND TO REVOKE ITS DECISION OF JULY 1980, SINCE THE PERIOD LAID DOWN BY ARTICLE 4 OF DECISION 78/706 HAD BEEN EXCEEDED .
12 IT IS CLEAR FROM THE CIRCUMSTANCES DESCRIBED ABOVE THAT IT WAS ONLY BY ITS LETTER OF 10 DECEMBER 1980 THAT THE COMMISSION REACHED AN UNEQUIVOCAL AND DEFINITIVE DECISION ON THE REQUEST FOR PAYMENT WHICH HAD BEEN SUBMITTED TO IT . CONSEQUENTLY, THAT LETTER MUST BE REGARDED NOT AS CONFIRMATION OF A PRIOR ACT BUT AS THE ACT WHEREBY THE COMMISSION NOTIFIED ITS DEFINITIVE DECISION CONCERNING THE PAYMENTS REQUESTED IN A FORM ENABLING ITS NATURE TO BE IDENTIFIED . THE ACTION FOR A DECLARATION THAT THE LETTER IS VOID, WHICH WAS LODGED WITHIN THE PERIOD PRESCRIBED BY LAW, IS THEREFORE ADMISSIBLE .
( B ) SUBSTANCE
13 THE APPLICANTS CONTEST THE VIEW THAT ARTICLE 4 OF COMMISSION DECISION 78/706 MAY BE INTERPRETED AS LAYING DOWN A PRECLUSIVE PERIOD . THEY MAINTAIN, MOREOVER, THAT IF THAT WERE THE CASE, BY ATTACHING SUCH A LEGAL EFFECT TO THE PERIOD WHICH IT LAID DOWN THE COMMISSION WOULD HAVE EXCEEDED THE POWERS OF IMPLEMENTATION CONFERRED UPON IT BY ARTICLE 124 OF THE TREATY AND ARTICLE 13 OF REGULATION ( EEC ) NO 2396/71 OF THE COUNCIL OF 8 NOVEMBER 1971 ( OFFICIAL JOURNAL, ENGLISH SPECIAL EDITION 1979 ( III ), P . 924 ), SINCE THE COUNCIL ALONE HAS SUCH POWER BY VIRTUE OF ARTICLE 127 OF THE TREATY .
14 THE COMMISSION ' S POWERS TO LAY DOWN TIME-LIMITS AND PENALTIES FOR FAILURE TO COMPLY THEREWITH MUST BE DETERMINED IN THE LIGHT OF THE POWERS CONFERRED UPON THE COUNCIL AND THE COMMISSION BY THE TREATY AND BY THE PROVISIONS ADOPTED FOR THE APPLICATION THEREOF AND IN THE LIGHT OF THE REQUIREMENTS OF SOUND ADMINISTRATION .
15 WITH REGARD TO THE EUROPEAN SOCIAL FUND, ARTICLE 124 OF THE TREATY EXPRESSLY PROVIDES THAT THE FUND IS TO BE ADMINISTERED BY THE COMMISSION . PURSUANT TO THAT ARTICLE, THE COUNCIL HAS EXPRESSLY PROVIDED IN ARTICLE 11 OF REGULATION NO 2396/71 OF 8 NOVEMBER 1971 IMPLEMENTING THE COUNCIL DECISION OF 1 FEBRUARY 1971 ON THE REFORM OF THE EUROPEAN SOCIAL FUND THAT THE COMMISSION IS TO ENSURE THE CONTROL OF THE USE OF THE FUNDS GRANTED TO THE SOCIAL FUND . THE COUNCIL HAS ALSO PROVIDED IN ARTICLE 13 OF THE REGULATION THAT THE COMMISSION IS TO BE RESPONSIBLE FOR TAKING THE NECESSARY MEASURES FOR IMPLEMENTING THE RULES LAID DOWN BY THE REGULATION . THE DUTY OF ADMINISTRATION AND CONTROL WITH WHICH THE COMMISSION IS THUS ENTRUSTED AND THE REQUIREMENTS RELATING TO THE SOUND ADMINISTRATION OF COMMUNITY FINANCES NECESSARILY IMPLY THAT THE ACCOUNTS OF THE SOCIAL FUND MUST BE CLEARED WITHIN A REASONABLE PERIOD AND THAT THE COMMISSION IS EMPOWERED TO DETERMINE THAT PERIOD AND TO ATTACH TO IT PENALTIES WHICH WILL ENSURE ITS OBSERVANCE . IN VIEW OF THE IMPORTANCE OF THAT PERIOD FOR THE SOUND ADMINISTRATION OF THE SOCIAL FUND, IT IS IMPOSSIBLE TO RULE OUT THE POSSIBILITY THAT THE PENALTIES PROVIDED FOR MAY EXTEND TO THE LOSS OF THE RIGHT TO PAYMENT AS A RESULT OF THE FIXING OF A PRECLUSIVE PERIOD .
16 THE PRINCIPLE OF LEGAL CERTAINTY, HOWEVER, REQUIRES THAT A PROVISION LAYING DOWN A PRECLUSIVE PERIOD, PARTICULARLY ONE WHICH MAY HAVE THE EFFECT OF DEPRIVING A MEMBER STATE OF THE PAYMENT OF FINANCIAL AID ITS APPLICATION FOR WHICH HAS BEEN APPROVED AND ON THE BASIS OF WHICH IT HAS ALREADY INCURRED CONSIDERABLE EXPENDITURE, SHOULD BE CLEARLY AND PRECISELY DRAFTED SO THAT THE MEMBER STATES MAY BE MADE FULLY AWARE OF THE IMPORTANCE OF THEIR COMPLYING WITH THE TIME-LIMIT . NEITHER THE WORDING OF ARTICLE 4 ( 1 ) OF COMMISSION DECISION 78/706 NOR THE CONTEXT IN WHICH IT APPEARS JUSTIFIES THE INTERPRETATION THAT THE PERIOD IS A PRECLUSIVE PERIOD .
17 IT SHOULD BE OBSERVED IN THAT REGARD THAT NEITHER IN THE PROVISION ITSELF NOR IN THE RECITAL RELATING TO THE PROVISION IN THE PREAMBLE TO THE DECISION IS ANY INDICATION GIVEN OF THE EXISTENCE OR THE NATURE OF PENALTIES FOR EXCEEDING THE PERIOD PRESCRIBED . THE LACK OF ANY INDICATION OF THE CONSEQUENCES OF EXCEEDING THE PERIOD LAID DOWN BY ARTICLE 4 STANDS IN CONTRAST WITH THE EXPRESS AND PRECISE STATEMENT IN ARTICLE 2 OF THE SAME DECISION CONCERNING THE EFFECTS ATTACHING TO ANOTHER PERIOD, NAMELY THE PERIOD FOR THE SUBMISSION OF APPLICATIONS FOR ASSISTANCE, THE CONSEQUENCE OF EXCEEDING WHICH IS THAT
' THE APPLICATION FOR ASSISTANCE SHALL BE DEEMED TO HAVE BEEN WITHDRAWN ' . THIS CONTRAST BETWEEN THE PRECISION OF ARTICLE 2 AND THE IMPRECISION OF ARTICLE 4 IS ALL THE MORE SIGNIFICANT SINCE THE PRECLUSIVE PERIOD PROVIDED FOR BY ARTICLE 2 HAS FAR LESS SERIOUS CONSEQUENCES FOR THE MEMBER STATES, SINCE ITS EFFECT IS MERELY THAT THE APPLICATION FOR APPROVAL IS DEEMED TO HAVE BEEN WITHDRAWN AT A STAGE AT WHICH EX HYPOTHESI THE MEMBER STATE CONCERNED HAS NOT YET INCURRED ANY EXPENDITURE .
18 IT FOLLOWS THAT ARTICLE 4 OF COMMISION DECISION 78/706 CANNOT BE REGARDED AS LAYING DOWN A TIME-LIMIT FAILURE TO COMPLY WITH WHICH INVOLVES THE LOSS BY THE STATE CONCERNED OF THE RIGHT TO THE PAYMENT OF THE BALANCE OF THE ASSISTANCE APPROVED . CONSEQUENTLY, THE COMMISSION ' S DECISION OF 10 DECEMBER 1980 REFUSING PAYMENTS OF ASSISTANCE FROM THE SOCIAL FUND AMOUNTING TO DM 16 928 855.52 MUST BE DECLARED VOID, IN SO FAR AS IT IS BASED ON THE FACT THAT THE REQUESTS WERE SUBMITTED AFTER THE EXPIRY OF THE PERIOD LAID DOWN BY ARTICLE 4 OF COMMISSION DECISION 78/706 .
II - THE CLAIM FOR A DECLARATION THAT THE LETTER OF 16 DECEMBER 1980 IS VOID
19 BY THIS HEAD OF CLAIM THE GOVERNMENT OF THE FEDERAL REPUBLIC OF GERMANY IN FACT SEEKS TO OBTAIN INDIRECTLY A DECLARATION BY THE COURT THAT ARTICLE 4 OF COMMISSION DECISION 78/706 LAYING DOWN A PRECLUSIVE PERIOD IS VOID . SINCE IT BECAME CLEAR IN THE COURSE OF THE EXAMINATION OF THE CLAIM FOR A DECLARATION THAT THE LETTER OF 10 DECEMBER 1980 IS VOID THAT THE PROVISION DOES NOT EMBODY A PRECLUSIVE PERIOD, THIS HEAD OF CLAIM NO LONGER SERVES ANY PURPOSE AND IT IS THEREFORE UNNECESSARY TO GIVE A DECISION ON IT .
Decision on costs
COSTS
20 UNDER THE TERMS OF ARTICLE 69 ( 2 ) OF THE RULES OF PROCEDURE, THE UNSUCCESSFUL PARTY IS TO BE ORDERED TO PAY THE COSTS IF THEY HAVE BEEN ASKED FOR IN THE SUCCESSFUL PARTY ' S PLEADING . SINCE COSTS HAVE NOT BEEN ASKED FOR BY EITHER THE APPLICANT OR THE INTERVENER, THE PARTIES SHOULD BE ORDERED TO BEAR THEIR OWN COSTS .
Operative part
ON THOSE GROUNDS,
THE COURT
HEREBY :
1 . DECLARES VOID THE COMMISSION ' S DECISION OF 10 DECEMBER 1980 REFUSING TO PAY TO THE FEDERAL REPUBLIC OF GERMANY BALANCES OF ASSISTANCE FROM THE SOCIAL FUND AMOUNTING TO DM 16 928 855.52 ;
2 . DISMISSES THE REMAINDER OF THE APPLICATION ;
3 . ORDERS THE PARTIES TO BEAR THEIR OWN COSTS .