62021TJ0330_RES
Case T‑330/21
EWC Academy GmbH
v
European Commission
Judgment of the General Court (Ninth Chamber), 21 December 2022
(Social policy – Grants for actions to promote corporate governance initiatives – Call for proposals VP/2020/008 – Exclusion of European works councils not having legal personality – Article 197(2)(c) of Regulation (EU) 2018/1046)
EU budget – EU financial assistance – Grants for actions to promote corporate governance initiatives – Grant award procedure and grant agreement – Call for proposals – Eligibility criteria – Entities without legal personality – Elements capable of demonstrating the financial capacity of such entities – Restriction to evidence demonstrating the possession of annual accounts or own bank accounts – Not permissible
(European Parliament and Council Regulation 2018/1046, Article 197(2)(c))
(see paragraphs 37, 38, 39, 41, 44 and operative part)
Résumé
On 2 June 2020, a call for proposals was published concerning the award of grants for actions to promote corporate governance initiatives. (
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) As part of a decision of the European Commission, (
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) the call for proposals specified that single applicants, lead applicants and co-applicants eligible to participate in the call had to be, inter alia, legal entities or workers’ representatives, such as works councils. Similarly, the call stated that organisations of social partners without legal personality pursuant to the applicable national law were also eligible to submit applications. (
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) Finally, it specified that single applicants, lead applicants and joint applicants had to have strong financial capacity to maintain their activities for the period of the action and to help finance it as necessary.
The applicant, a training and consultancy company specialising in issues relating to employee representation in a cross-border context, and the European works councils of Mayr-Melnhof Packaging and DS Smith plc, joined together in a consortium to respond to the call for proposals. On 30 July 2020, the applicant submitted an application for a grant and designated the abovementioned European works councils as co-applicants (‘the co-applicant works councils’). The application was accompanied by a declaration on their honour by the chairs of said works councils stating that they possessed the required financial and operational capacity.
The Commission initially asked the applicant to provide evidence that the co-applicant works councils were registered with the national public authorities. The applicant replied that they did not require registration and that they were represented by their chairs. Subsequently, the Commission invited the applicant to submit additional documents, including the ‘Legal Entity’ form. In response to that request, the applicant declared that the co-applicant works councils were not legal entities and that, consequently, no document could be produced to that effect.
On the basis of the Financial Regulation, the Commission then called on the applicant to provide evidence of the financial capacity of one of the two European works councils concerned by requesting its balance sheet and profit and loss account. The applicant stated that it was not in a position to comply with that request.
By decision of 14 April 2021, the Commission rejected the applicant’s application for a grant submitted in the context of the call for proposals, as the consortium’s coordinator (‘the contested decision’). The Commission considered, in particular, that the co-applicant works councils did not fulfil the conditions set out in Article 197(2)(c) of the Financial Regulation or those relating to point 8.1 of the call for proposals. Following the finding that those works councils were ineligible, the Commission considered that the applicant did not meet the minimum eligibility criterion set out in point 6.1(b) of the call for proposals, and that therefore the application must be rejected in its entirety.
By an action under Article 263 TFEU, the applicant sought annulment of the contested decision. In support of its action, the applicant puts forward, in essence, three pleas in law, the first alleging infringement of Article 197(2)(c) of the Financial Regulation, read in conjunction with point 8.1 of the call for proposals, the second alleging infringement of Article 197(3) of that regulation and the third alleging infringement of the principle of the protection of legitimate expectations.
In its judgment, the General Court upheld the applicant’s action, holding that the contested decision was adopted in breach of the Financial Regulation.
This is the first case in which the General Court has interpreted Article 197(2)(c) of the Financial Regulation, (
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) dealing with the participation of entities without legal personality in the European Union’s calls for proposals.
Findings of the Court
The Court notes that the aim of Article 197(2)(c) of the Financial Regulation is to enable entities which do not have legal personality to participate, in the same way as legal persons, in Union calls for proposals. It also points out that the information and supporting documents referred to in Article 196(1)(c) of that regulation as necessary to demonstrate financial capacity in the context of a grant application and which consist, in particular, of the profit and loss account and the balance sheet for up to the last three financial years for which the accounts were closed, cannot be the only elements sufficient to demonstrate the existence of that capacity. An interpretation of Article 197(2)(c) of the Financial Regulation that would have the effect of requiring entities without legal personality to submit evidence generally associated with the possession of such personality would undermine the useful effect of that provision by creating obstacles to their participation in grant applications.
Although the elements provided must make it possible to verify that the entity without legal personality is able to offer guarantees for the protection of the financial interests of the Union equivalent to those offered by a legal person, the Financial Regulation does not, in the view of the Court, stipulate that these elements are restricted to evidence that they have annual accounts (balance sheets and/or profit and loss accounts) or own bank accounts.
(
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)	Call for proposals VP/2020/008 (information, consultation and participation of representatives of undertakings) (‘the call for proposals’).
(
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)	Commission Decision C(2019) 6522 final of 16 September 2019 on the adoption of the 2020 annual work programme for grants and procurements concerning the prerogatives and specific competencies of the Directorate-General for Employment, Social Affairs and Inclusion, serving as financing decision.
(
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)	Pursuant to Article 197(2)(c) 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 (EU, Euratom) No 966/2012 (OJ 2018 L 193, p. 1, ‘the Financial Regulation’).
(
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)	Article 197(2)(c) of the Financial Regulation provides that entities which do not have legal personality are eligible to participate in a call for proposals provided that they offer guarantees for the protection of the financial interests of the Union equivalent to those offered by legal persons.