61981C0044
OPINION OF MR ADVOCATE GENERAL
VERLOREN VAN THEMAAT
DELIVERED ON 16 MARCH 1982 (
1
)
Mr President,
Members of the Court,
I. Introduction
Bv an application lodged at the Registry of the Court of Justice on 20 February 1981 the Federal Republic of Germany and the Bundesanstalt für Arbeit [Federal Labour Office] brought an action against the Commission of the European Communities. The application is primarily for an order that the Commission should pay DM 16928855.52 to the Bundesanstalt für Arbeit and in the alternative for a declaration of the nullity of the Commission's decision of 10 December 1980 refusing to pay the balance due under its decision of 23 December 1977 granting assistance from the European Social Fund for four projects carried out by the Bundesanstalt für Arbeit in the clock-making industry (adaptation to quartz electronics) and in the field of youth unemployment. By a second head of claim put forward solely by the Government of the Federal Republic of Germany, a declaration is sought that the Commission's letter of 16 December 1980 (Reference No 8007034-V/C) 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.
Having regard to the relevant provisions of the Rules of Procedure and to
Annexes I and II thereto, the application was lodged just within the required period. The legal questions involved in these proceedings concern not so much the amount as the legal basis (as well as the admissibility) of the claim for pavment and also whether both claims, including the alternative limb of the principal head of claim, are well founded.
The various periods for carrying out the four projects, in respect of which assistance from the Social Fund was approved and instalments were paid, were 1 Mav 1977 to 30 April 1978, 16 November 1977 to 31 August 1978, 1 January 1978 to 31 August 1978 and 16 November 1977 to 31 August 1978. With the exception of one part of the last-mentioned project, the projects were carried out within the required periods. However, the requests for payment of the outstanding balances of assistance from the Fund were not submitted until 8 May 1980. Under Article 4 of Commission Decision 78/706, the requests should have been submitted no later than 30 October 1979 in the case of the first project and no later than the end of February 198C in the case of the last three projects. As already stated, the requests amounted in total to nearly DM 17 million. On 11 and 15 July 1980 the Commission informed the Government of the Federal Republic of Germany that it was unable to grant the requests tor pavmeni because they had noi been submitted within the period laid down b\Article 4 ( l ) of Commission Decision 78/706 of 27 July 1978.
Despite a meeting on 30 September 1980 between representatives of the Commission and the Federal Ministry of Labour and notwithstanding letters of 6 October and 4 December 1980 from the competent Federal State Secretary and the President of the Bundesanstalt für Arbeit, Mr Vredeling, a Member of the Commission. confirmed the Commission's refusal to make the pavmeni bv a letter of 10 December 198C.
Moreover, in a circular of 16 December 1980 the Commission gave general confirmation that it regarded the period which it had laid down by Decision 78/706 for the submission of requests for final payment as a period after which the submission of requests was precluded. For a full account of the contents of that circular 1 refer to the Report for the Hearing.
Bv a decision of 1 July 1981 the Court of Justice, in response to an application lodged on 17 June 1981, allowed Ireland to intervene in support of the conclusions of the applicants.
I shall now turn first to a consideration of the legal basis for the various claims. In particular the legal basis for the principal and alternative claims for pavment proves to have been caused considerable problems in this case. In this connection 1 shall also consider the questions of admissibility raised by the Commission. However, the questions of admissibility do not concern the principal claim for payment. They relate solely to the alternative claim for a declaration that the refusal to make the payment is void and to the second claim for a declaration that the letter of 16 December I9S: is void.
In the third pan of my opinion I shall, in so tar as is necessarv. consider whether the various claims are well founded and
then in conclusion shall summarize my views.
2. The legal basis and the admissibility of the various claims
2.1. The first head of claim
The problems concerning the legal basis for the submission of claims for payment of assistance promised from the European Social Fund arose from the fact that initially the applicants took the view that an application by analogs' of Article 215 of the EEC Treaty was possible. In particular, they considered at first that an analog}.could be drawn with the contractual liability referred to in the first paragraph of Article 215. In their reply they expressed the view that their claim for payment constituted an independent action for payment which was generally recognized in the Member States and which was comparable with actions for damages provided for by the second paragraph of Article 215.
With regard to the legal basis originally chosen for the payment claim, it may first be observed that the alleged obligation to make the payment arose, if at all, from regulations and other unilateral Community acts falling within the province of public law, but on no account from a contract. Moreover, the Commission in my view correctly concluded from paragraph 6 of the judgment of the Court of 4 October 1979 in Joined Cases 261 and 262/78 Interqiiell Starke-Chemie GmbH 6 Co. KG and Diamalt AG v Council and Commission of the European Communities [1979] ECR 3045 that the second paragraph of Anide 215 cannot be used as the iegal basis tor a claim for the pavment ot amounts which are alleged to be due under Community law or at most can be so used only where no other valid legal basis is available. That provision refers in tact to the making good of damage. This view is also borne out by research into the principles of the legal systems of the Member States. In most Member Sutes it has not been possible to trace any actions comparable with the “Leistungsklage” which, according to the applicants, is possible in such cases under German administrative law. Research into the laws of the other Member States supports far more the view that the legal basis for actions such as the present must be sought primarily in Article 173 or Article 175 or in a combination of those legal bases. Even in cases where the forms of action have in other respects developed differently, parallels have frequently been found in the national laws of the Member States in particular with the second paragraph of Article 175.
At the hearing the parties finally agreed that the legal basis for the principal claim could be found in Article 175 of the EEC Treaty. Indeed, the applicants in this case charged the Commission primarily with having, in contravention of the Treaty (more precisely the implementing rules adopted on the basis thereof), failed to adopt a decision to pay the balance claimed. Thus, it is clear merely from the wording of Article 175 that that article provides the primary legal basis for this claim.
An obstacle which was initially raised by the Commission was the condition in the second paragraph of the abovementioned article that such an action for failure to act is to be admissible onh if the institution concerned has first been called upon to act. However, in response to a question put by the Court the
Commission finally conceded at the hearing that the applicants, by their oral and written requests referred to earlier, in particular their letters of 6 October and 4 December 198C, might ven- well be regarded as requests to the institution to act for the purposes of the second paragraph of Article 175.
The ensuing letter of 10 December 1980 from Mr Vredeling, a Member of the Commission, may be regarded as a definitive definition of the Commission's position within the meaning of the second sentence of the second paragraph of Article 175 and indeed as a definitive refusal to make the payment. In this connection importance is therefore assumed by the alternative limb of the first head of claim, that is to sav the claim for a declaration that that definitive refusal to make the payment is void. It is clear from the decisions of the Court, inrer alia in Case 42/71 Nordgetreide v Commission [1972] ECR 105, that where the institution concerned has defined its position the legal basis for further action shifts from Article 175 to Article 173 of the EEC Treaty. In other words, once an act has occurred, even if it takes the form of a letter in which the request to act is refused, an action for failure to act is no longer possible and the act in question must be challenged under Article 173 (cf. H. G. Schermers, Judicial Protection in the European Communities, Second Edition (1979), p. 197). Understood in that sense, the alternative claim put forward by the applicants for a declaration that Mr Vredeling's letter of 1C December 19S; is void should therefore be declared admissible as an action bv a Member Slate within the meaning of Article 173 of the EEC Treaty. For the reasons why that letter and not the earlier refusals to make the payment should be regarded as the Commission's definitive reply to the request for payment, reference may be made to the scheme of Article 175 as explained above and to the Court's previous decisions on the subject as well as to the passages of the Report for the Hearing concerning the earlier refusals to make the payment. This finding is relevant for the purpose of determining the limitation period applicable in this case, which by reference to the letter of 10 December 1980 was, as I have alreadystated, observed. The objection of inadmissibility raised by the Commission in relation to the alternative limb of the first head of claim must therefore be dismissed for the reasons already stated.
2.2. The second head of claim
The second claim, which is made solely by the government of the Federal Republic of Germany, is, as already stated, for a declaration that the Commission's circular of 16 December 1983 is void.
The admissibility of this second claim does not appear to me to depend on whether or not there can be any question of a legislative measure. Article 173 permits an action to be brought against any acts of the Council or the Commission. However, in my opinion it follows from the scheme of Articles 173 and 174 that under Article 173 onlv those legal measures may be challenged which are intended to have legal consequences tor those concerned, in this case the Member States. However, the letter in question, which was issued by the Director of the Social Fund, is clearly intended merely to give a more detailed explanation of Commission Decision 78/706 of 27 July I97S. On the basis also of the Court's decision in Case 20/58 Phoenix-Rheinrohr v High Authority of the European Coal and Steel Community [1979] ECR 75. I subscribe to the Commission's view that the applicant's second claim is inadmissible. Moreover, since it is possible to challenge individual decisions based on
the letter of 16 December 1980, such a declaration of inadmissibility does not prejudice the interests of effective legal protection.
3. The question whether the alternative limb of the claim for payment is well founded
3.1. The contested letter and the questions of law arising from it
It is clear from the analyses which I have already made that essentially there remains to be considered only the alternative limb of the applicant's first head of claim, namely the claim for a declaration that Mr Vredeling's letter of 10 December 1980 is void. In so far as is relevant here, that letter states first that under Article 4 of Decision 78/706 the requests for payment were received too late and that Mr Vredeling saw no possibility of instructing the administration of the Fund to revoke its decision of 11 July 1980.
Moreover, in the letter Mr Vredeling once again explains whY Article 13 of Regulation (EEC) No 2396/71 constitutes a sufficient legal basis for Article 4 of Decision 78/706. According to the letter, Article 13 empowers the Commission to adopt such measures as will ensure the proper administration of the Fund (“eine ordnungsgemäße Verwaltung”). “Proper administration of the funds granted requires that they be called upon within a reasonable period.” (
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It is also clear from the letter that the Commission also reiected a number of requests lor pavmen; from other Memoer States men had been received out oi time and that Mr Vreading considered that the principle that all the Member States should be treated equally prevented the grant of an exemption from Article 4 in the case of the government of the Federal Republic of Germany.
With regard to that letter let me now consider successively the following legal questions:
(a)
the power of the Commission to lay down preclusive periods such as those in question in this case;
(b)
the substance of Article 4 of Commission Decision 78/706;
(c)
the lawfulness of the refusal to make the payment.
3.2. The power of the Commiision to Uy down preclusive periods for the submission of requests for the payment of assistance from the Social Fund
According to the applicants, it follows from Articles 7 and 8 of Regulation No 2893/77 (Official Journal 1977, L 337, p. 1) and from Article 4 of Regulation No 858/72 (Official Journal. English Special Edition 1972 (II), p. 353), both of the Council, that the Commission is obliged to make the payment as soon as the conditions laid down by the Council are fulfilled. They mention that, as is clear inter alia from the abovementioned implementing regulations and also from Article 127 of the EEC Treaty, the Council alone, and not the Commission as well, has the power to lay down other binding conditions relating to pavment. Article 13 of Regulation No 23967/1 of the Council, upon which Decision 78/706 is based, expressly restricts the powers of the Commission to the adoption of the measures which are necessary for the implementation of the rules laid down in that regulation. The applicants maintain that a provision permitting the Commission to withdraw aid which has already been awarded is not merely a measure implementing the abovementioned regulation but a substantive rule implementing Article 127 of the EEC Treaty. However, the Council alone has the power to lay down such implementing rules. Any exception to that rule concerning the division of powers must, they claim, be expressly provided for in a Council regulation, as is shown by Article 4 of Regulation No 858/72 as amended by Regulation No 2894/77 (Official Journal 1977, L 337, p. 5), in which the powers of the Commission to reduce or refuse to pay assistance are precisely defined. Finally, they claim that the possibility of the withdrawal of existing rights to payments in respect of projects which have already been duly carried out on the sole ground that documentan. evidence was not submitted within the required period raises a matter of principle of such importance that it may be settled only by the Council. In their reply the applicants — with a certain change in emphasis, it seems to me — proceed on the basis that their claim is not based on an unlawful act on the pan of the Commission but on an undertaking given on 23 December 1977 to grant assistance, which, they claim, should be honoured. Once the appropriations have thus been fixed, the Commission's sole duty is to applv the detailed implementing rules which the Council has laid down. In view of the fact that the Council has reserved to itself the right to make any decision concerning substantive provisions, Article 13 of Regulation No 2396/71 of the Council cannoi be interpreted in the manner in which it has been interpreted by the Commission In particular, the Commission may noi laxdown time-limits having the character of preclusive periods because their effect is matenally to restrict the rights of beneficiaries. In that regard the applicants again refer to Article 1 (3) of Regulation No 2894/77, which provides for the reduction of assistance in cases where projects have been carried out irregularly. It follows a fortiori that it is also the Council alone which has the power to lay down rules concerning the withdrawal of assistance in cases where projects are properly carried out.
In their arguments which I have just summarized the applicants in my view fail to appreciate the fundamental difference between substantive rules of policy and administrative rules. All the provisions of Council regulations which the applicants have cited clearly concern the substantive policy to be pursued. Article 124 of the EEC Treaty expressly provides — without prejudice to the power which the Council derives from Article 127 of the EEC Treat) also to lay down implementing provisions in this area itself — that the Fund is to be administered by the Commission. In the light of that article and in the absence of anv provisions on the matter adopted by the Council itself, Article 13 of Regulation No 2396/71 of the Council must in fact be interpreted as an assignment of the responsibility for taking any administrative measures which are necessary for implementing the rules laid down in that regulation. Support for that view is also to be found in the wording of Article 11 of that regulation, which, referring to Article 124 of the EEC Treaty, assigns to the Commission the task of ensuring the control of the use of ihr funds granted pursuant to the regulation. In m\view, the administrative task referred to in Article 124 of the EEC Treaty unquestionably covers the fixing by regulations, directive or decision of periods for final settlement, whether they be of a purely administrative nature or have the character of a true limitation or preclusive period. Moreover, from the viewpoint of a proper and lawful budgetary policy and having regard to the duty under Anieles 205 a and 206 a (2) of the EEC Treaty to repon annually to the Council and the Parliament subject to audit by the Court of Auditors, it is in my view quite legitimate to lay down reasonable preclusive periods on the basis of Article 13 of Regulation No 2396/71. Article 11 of that regulation assigns to the Commission the task of controlling the use of funds granted “without prejudice to any provisions adopted on the basis of Anide 209 of the Treaty”. That wording implies that the task is not confined to the application of provisions implementing that aniele of the Treaty. At the hearing the Commission made a number of other valid remarks concerning this relationship with Anieles 205 et seq. of the EEC Treaty. It appears inter alia from those remarks that it was in fact the Federal Republic which repeatedly pressed for more rapid settlement of the payments made by the Social Fund. Finally, 1 would point out a parallel which may be drawn with the administrative duties of the Member States in relation to the implementation of the Common Agricultural Policy. In a long line of decisions the Coun of Justice has invariably given a wide interpretation to those administrative duties.
Lastlv, I subscribe to the Commission's view that the prescribing of the time-limit in question was, moreover, not in conflict with the principle of nonretroactivuy relied upon by Ireland in its intervention but merely set limits on periods which, at the time of the adoption of Decision 78/706, had in the case of the first proiect begun to run by only three months and in the case of the remaining three projects had not yet begun to run at all. Even if in the case of the first project the period were regarded as not having commenced until the date on which the decision entered into force, the request for final payment in respect of that project would nevertheless have been submitted out of time.
My opinion on this point is therefore that in the light of Article 124 of the EEC Treat) and Article 11 of Regulation No 2396/71 of the Council, the Commission had the power by virtue of Article 13 of that regulation to lay down preclusive periods for the submission of requests for the final settlement of assistance awarded from the Social Fund.
3.3. The substance of Article 4 of Commission Decision 78/706
The Commission, after consulting the European Social Fund Committee, laid down, by Decision 78/706 of 27 July 1978, which was addressed to the Member States, measures implementing Article 13 of Regulation No 2396/71. Article 4 of that decision provides that Member States are to submit their requests for payment within eighteen months following the date of completion of operations.
According to the applicants and to the intervener, the Irish Government, that period is a purely administrative period and noi a preclusive or limitation period. This, they claim, follows both from the aording of Article 4 and from its position in the decision as a whole. For further details of the applicant's argument I refer to the Repon for the Hearing.
In my view this argument must also fail. First, the preamble to the decision expressly states with regard to applications for assistance that “for the efficient administration of the Fund, any failure to keep to these time-limits should involve the withdrawal of the relevant applications”. That passage from the preamble clearly points to a preclusive period and not merely to a purely administrative period. When the preamble states further with regard to the payment of assistance that on completion of the projects the Member States must have a specified period for the submission of their requests for payment, this must according to its own wording also be construed in the same sense. The wording of Article 4 likewise points so clearly to a preclusive period that in case of doubt the Member States should at least have consulted the Commission in good time with regard to the nature of the period. Moreover, the statement made by the Commission during the proceedings that five Member States (which had also submitted their requests for payment out of time) accepted the Commission's interpretation was not contested. Finally, in this regard the Commission in my view correctly drew an analogy with the question which the Court was called upon to decide in its judgment of 30 November 1972 in Case 32/72 Wasaknäcke Knäckebrotfabrik GmbH v Einfuhr- und Vorratsstelle für Getreide und Futtermittel [197'2] ECR 1181, which concerned the nature of a time-limit. Moreover, the paragraphs of that judgment concerning the need, on account of the principle of equal treatment, for uniform time-limits without any possibility of extension in individual cases seem to me to apply by analog)' to the present dispute.
Consequently, my view on this issue is that there can be no doubt that the period referred to in Article 4 of Decision 78/706 must be regarded as having the character of a preclusive or peremptory time-limit.
3.4. The lawfulness of the refusal to make the payment
Finally, there remains therefore for consideration the question whether, any reasons may be adduced for the view that the refusal to make the payment was unlawful in this particular case.
In that regard the applicants observe first that there were grounds for them to interpret Article 4 as laying down a purely administrative period and that its interpretation as a preclusive period would frustrate the expectation which they were legitimately entitled to place in the scope of the provision. In the past, the Commission has also repeatedly extended the period. Finally, it would be contrary to the principle of proportionality to attribute to it in all cases the character of a preclusive period.
With regard to the alleged exceptions to the prescribed period, the Commission stated — without evidence to the contran being offered — that these always involved exceptional circumstances, of which the Commission had been informed by the Member Siate concerned before the expiry of the period. The mere fact that the Commission thus did not rule out in principle an approach made in good time on the basis of exceptional circumstances cannot be regarded as a breach ot the principle of proportionally. Moreover, the Commission claims that in accordance with the case-law or the Court it confined the exemptions from the time-limit to which it agreed to cases of force majeure or similar compelling
circumstances notified to it before the expiry of the period.
Both in their pleadings and at the hearing the applicants argued at some length that in the present cases there were similar exceptional circumstances which objectively justified their exceeding the prescribed period. In that regard I refer to the Repon for the Hearing.
Moreover, they maintained that the Commission's requirement that a plea of force majeure or other compelling exceptional circumstances must be raised before the expiry of the prescribed period finds no support in the decision. However, in my view such a requirement arises from the nature of a preclusive period, with the result that this argument must be rejected. Nor in my opinion can the applicants successfully rely upon the Court's judgment in Case 240/78 Atalanta Amsterdam B. V. v Produktschap voor Vee en Vlees [1979] EC R 2137, because that case did not concern a fixed preclusive period but an obligation to send the relevant documentary proof “without delay”. Moreover, the Court did not regard that obligation as a principal obligation the fulfilment of which was a condition of the acquisition of the right to the aid but as an additional obligation the fulfilment of which, but not specifically the fulfilment within the prescribed period, constituted in itself a condition of the right to aid It is clear from my analysis, however, that the period concerned in this case is actually a preclusive period, except in cases where notification is given in good time of compelling difficulties.
However, u seems clear to mr that the arguments considered so iar militatine; for and against the applicant's vie on this point concerning the refusal to make the payment in this particular case tip the balance less conciusivelv against the applicants than did their argumentconcerning the lawfulness of Decision 78/706/EEC as such. With regard to the refusal to make the payment, I consider in particular two arguments of the applicants intrinsically quite strong: first, the argument, which was supported by documentary evidence, concerning the administrative aspects of the projects in question, which were indeed exceptionally complex and made it very difficult, if not impossible, to submit the required documentary evidence in time; secondly, the bona fide belief which the applicants were entitled to have on the basis of the Court's judgment in Case 240/78 Atalanta, cited above, that where it was proven that the projects had been carried out in good time some delay in the assembly and submission of the documentary evidence would not entail forfeiture in such exceptional circumstances. The circumstances of this case are in other words tantamount to cases of force majeure as recognized in the Court's case-law. I refer in that regard in particular to the Court's judgment of 14 February 1978 in Case 68/77 — IFGIntercontinentaie Fleischhandelsgesellschaft mbH & Co. KG v Commission of the European Communities [1978] ECR 353 (in particular to paragraph 11 at p. 370) and to a number of other decisions of the Court referred to by H. G. Schermers at pages 60 to 62 of his abovementioned work. However, it is also clear from those cases that hitherto
the Court has allowed reliance to be placed on force majeure or similar circumstances only where the person concerned was unable to exercise any decisive control over those circumstances. In my view, that requirement is not fulfilled in this case. Because of that, because of the failure to give notice of the expected delay in good time and above all because of the principle of equalitv, which was also referred to in the contested letter of 10 December 1980 from Mr Vredeling, I conclude finally that the applicants' alternative claim for a declaration of the nullity of the Commission's definitive decision contained in the abovementioned letter refusing payment of the outstanding amounts under the Commission's decision of 23 December 1977 should be rejected. I would add that if it were possible under Article 174 of the EEC Treaty, I might have recommended that a partial payment determined according to principles of equity should be made to the Federal Republic of Germany. Even if that had been possible in principle, it would moreover have been necessary first to compare the alleged exceptional complexity of the final accounts in question and the extent to which the prescribed period was exceeded with other requests for the payment of outstanding balances rejected by the Commission on the ground that the prescribed period had been exceeded.
4. Summary
Mv opinion may be summarized as follows:
1.
The basis for the applicants' first claim was originally to be found in Article 173. However, following the Commission's definitive refusal to pay the balances claimed, Article 173 of the EEC Treaty became applicable to the refusal and there was no longer any separate legal basis for the first limb of the principal head of claim. However, the alternative limb of the first head of claim, which is for a declaration that the Commission's decision of 10 December 1980 is void, must be considered admissible.
2.
The second head of claim put forward by the Federal Republic of Germany, seeking a declaration that the Commission's letter of 16 December 1980 — Ref. No 800703 4-V/C — concerning the application of Article 4 of Commission Decision 78/706 of 17 Julv 1978 is void, is inadmissible, since it is clear that the letter is merely intepretative and as such can have no legal consequences.
3.
The claim for a declaration of the nullity of the Commission's definitive refusal to pay the balances claimed, which was contained in Mr Vredeling's letter of 10 December 1980, must be rejected. Having regard to Article 13 of Regulation No 2396/71 of the Council and to Article 124 of the EEC Treaty, as well as to Article 11 of the regulation, the Commission unquestionably had the power to lay down preclusive periods for the submission of requests for final settlement of assistance awarded from the Fund. In the light of the preamble to Commission Decision 78/706, it is clear that the period referred to in Article 4 of that decision must be regarded as having the character of such a preclusive period. Having regard to previous decisions of the Coun and to the requirement that all the Member States must be treated equally in this matter, the special circumstances pleaded by the Federal Republic of Germany cannot be regarded as a case of force majeure or of comparable exceptional circumstances such as in the present case would justify an exception to the mandatory nature of the preclusive period.
4.
Pursuant to Article 69 (2) of the Rules of Procedure, the applicants should be ordered to pav the costs.
(
1
)	Translated from the Dutch.
(
2
)	Original text of the issue: “Eine solche Verwaltung der bewilligten Mittel bedingt, daß diese innerhalb einer angemessenen Frist abgerufen werden.”