II —

I shall put forward my observations on the substance of the case only as a subsidiary. They will overlap with the problems of jurisdiction raised with regard to admissibility. As the applicants once more emphasized at the hearing, they request compensation from the Community, on the basis of the provisions of Articles 178 and of the second paragraph of Article 215 of the EEC Treaty, for the damage which they alleged was caused by the fact that the Commission omitted to ensure that the transactions to which they had committed themselves could be carried out under the conditions applicable at the date on which they entered into their contracts, or in any case, at the date of the result of the Community invitations to tender for refunds on exports of sugar to third countries in which they had taken part. I shall therefore do no more than inquire whether this omission is such as to make the Community liable, as this Court has moreover requested the parties to do. However I would remind you that the regulations of which the applicants directly complain are those which were adopted by the Commission pursuant to Article 3 of Regulation No 974/71 of the Council amending the monetary compensatory amounts after 23 July and until 27 December 1976, in other words after the contracts into which the applicants had entered had been concluded or in any case after the Community invitations to tender for refunds on exports of sugar to third countries. The loss specified covers very exactly the additional monetary compensatory amounts which the applicants had to pay to the national authorities as a result of the fact that Regulation No 1608/74 of the Commission of 26 June 1974 on special provisions in respect of monetary compensatory amounts, called a “discretionary relief regulation” which was applicable with retroactive effen as from 4 June 1973, the date of the entry into force of the first regulation of the Commission (Regulation No 1463/73) laying down detailed rules for the application of those amounts, was not applied to them. Properly speaking, they request payment of a specific sum, as to the amount of which there is no doubt or controversy, which was charged pursuant to Community rules which they consider “unlawful”. They allege that by that omission the Commission was guilty of an unlawful an because it involved discrimination against them and was contrary to the principle of the protection of the “legitimate expectation” of traders: the Commission, which alone has the power to extend the scope of the exemption from the monetary compensatory amounts laid down by the “discretionary relief regulation”should have filled a lacuna or a manifest defect in the rules. The question of any liability on the part of the Community is therefore linked to that of the legality of the charging of the increased compensatory amounts in question and it is necessary first to settle this question because the applicants do not allege liability without fault but a wrongful unlawful omission. 1. Let me say at once that on this point I cannot agree with them because although it is true that the Commission had the power which they attribute to it and although from the point of view of expediency it seems in fact, as I shall say, very desirable for Reguladon No 1608/74 to be amended, it has no obligation in this respect. As Mr Advocate General Warner observed quite rightly in this Opinion of 6 December 1977 in the Dietz Case (p. 12 of the provisional text): “Suppose that the applicant here made good its contention that the Commission ought to have included transitional provisions protecting exporters in the legislation in question, the fan would remain that the Commission had a measure of discretion as to the nature and content of such transitional provisions”. It would only be possible to call in question the failure to use this discretion within the context of an action on the ground of misuse of powers directed against Regulation No 974/71 of the Council or Regulation No 1608/74 of the Commission or of an application for a declaration as to the validity of those regulations lodged on the occasion of an implementing decision addressed to an individual. An illegal abstention may only be brought before the Court under the conditions laid down in Article 35 of the ECSC Treaty or Article 175 of the EEC Treaty and only as the result of the possible annulment or “declaration of invalidity” of those regulations (the hypothesis put forward in the judgment of this Court of 19 October 1977 in Joined Cases 124/76 and 20/77, S.A. Moulins et Huileries de Pont-à-Mousson v Office National Interprofessionel des Céréales and Société Coopérative Providence Agricole de la Champagne v Office National Interprofessionel des Céréales and the judgment of the same date in Joined Cases 117/76 and 16/77, Albert Ruckdeschel & Co. and Hansa-Lagerbaus Ströh & Co. v Hauptzollamt Hamburg-St. Annen and Diamalt AC v Hauptzollamt Itzehoe, Recueil 1977, p. 1753, and in the judgments of this Court of 5 July 1977 in the Bela-Mühle Josef Bergmann, Granaría, Ölmühle Hamburg and Firma A Becher Cases) that the principle of the force of res judicata requires the Community authorities or the competent national authority to draw the logical conclusions from such an annulment or declaration of invalidity or, in accordance with the expression used in the judgment of this Court of 19 October 1977, “it is for the institutions competent in matters of common agricultural policy to adopt the measures necessary to correa this incompatibility”. There is no need to recall that this is not so in the present case. The Court, within the context of an action for damages, has not, any more than the national court, the power to extend the scope of the exemption from monetary compensation amounts, as that scope results clearly from Regulation No 1608/74, by filling a lacuna in the rules by a praeter legem interpretation. Even if the Court were to consider that according to the rules of natural justice the Community rules applicable have caused the applicants damage, it would not follow in law that the Court could itself adopt such measures whose detailed rules and whose date of entry into effect might moreover vary. In addition there is a complete procedure whereby the exemption from the monetary compensatory amounts may be granted to contracts the length of which is more than three months, which is the case of those relating to sugar certificates A and B which are valid for five months over and above the month in which they were issued: a Member State which intends to grant such exemption must notify its intention with supporting evidence; it may only implement it if the Commission raises no objection thereto. The Commission must obtain the opinion of the appropriate Management Committee before making a decision on such exemption. However, until now, according to the accepted expression, the Management Committee for Sugar has not given opinions on the proposals put before it by the Commission. Article 1 of Regulation No 1608/74 is not therefore a directly applicable provision binding upon the Commission and, to my knowledge, the Commission has not yet decided to disregard the absence of an opinion from the Management Committee. I do not know why the Management Committee has not given opinions or why the Commission has not disregarded this absence of opinions but I can neither deny that a prion the reasons are of a serious nature nor state that they are not justified by any overriding public interest. 2. The applicants allege that the discrimination between traders in the Member States and the distortions in competition which result therefrom are “unlawful” (third subparagraph of Article 40 (3)). But these distortions, real though they are, result from the absence of a common monetary policy and, as we shall see, from the fact that the starting position is not the same in the Member States. Moreover, the fan that the applicants' competitors operating from other Member States are not open to the same risks as they are does not infringe the principle of equality because the system of floating rates of exchange does not have the same effect as the amendment of the central or representative rate of a currency; it may sometimes work to the advantage and sometimes to the disadvantage of exporters. 3. To find that there has been an ‘infringement of the principle of the protection of legitimate expectation’, which has been laid down as a superior rule of law for the protection of individuals, it is necessary in particular according to the case-law of this Court for those concerned to be able to claim an established right or legitimate expectations, for the infringement thereof to be unforeseeable and immediate and for there to be no overriding public interest which prevents those rights or expectations from being taken into consideration. As the Commission observes, the applicants do not, in contrast to the cases which have been brought before this Court until now, allege an untimely amendment to the Community rules which has disturbed established rights or legitimate expectations. On the contrary, they complain of an absence of amendment to Regulation No 1608/74, adding that such absence is contrary to the principle of equality contained in a regulation in which they had complete confidence. There is some discrepancy in those expressions themselves, because although, in certain situations, it is possible to claim established rights or legitimate expectations under specific rules it is much more difficult to claim blind confidence in a principle of natural justice: a flagrant breach of a superior principle of natural law and not of law owing to an omission or an abstention is, by definition, much more difficult to establish. Is the confidence which the applicants claim to have had in the due adoption of rules or of an interpretation of the existing rules which would satisfy them so ‘complete’ and so ‘blind’ as they allege? It is necessary to acknowledge that the contracts upon which the applicants rely were concluded after 15 March 1976, the date on which the French Government decided to permit the franc to float freely, and even after 25 March 1976, the date on which a new representative rate was fixed for the French franc and on which the monetary compensatory amounts which had been newly re-introduced were applied. However, according to the conditions laid down in Article 2 (1) of Regulation No 1608/74, the waiver of the monetary compensatory amounts may apply only to transactions carried out pursuant to binding contracts concluded before the monetary measure referred to in Article 1. The monetary measures referred to in that provision are of three types. They may be: — either the introduction or the increase in monetary compensatory amounts as a result of the fixing or the amendment of the representative rate of the currency of a Member State; — or the introduction or the increase in monetary compensatory amounts as a result of the fixing or the amendment of the representative rate of the currency of a Member State used in the context of the common agricultural policy; — or, finally, the decision of a Member State to permit its currency to float in relation to the currencies of the Member States where the fluctuation is kept within a maximum spread of 2.25 %. On the other hand, no provision is made for the case in which the monetary compensatory amounts are increased from day to day or from week to week as a result of the finding that the spot market rates during the previous week lead to a variation of more than one point from the percentage laid down for the previous fixing. Such a difference results from the independent daily decision of each government to support or not to support its currency. Such a decision cannot constitute ‘the monetary event’ constituting an excessive additional burden referred to in the discretionary relief regulation. There is a very simple reason for this: whenever the currency of a Member State fluctuated downwards and that ‘fluctuation’ was accompanied by a sudden increase, however small, in the monetary compensatory amounts, it would be necessary to apply the ‘discretionary relief regulation’. Such an interpretation would have to give rise to weekly, not to say daily, application of the ‘discretionary relief regulation’ and the Commission is quite right in saying that if it were necessary to exempt traders wholly or partially from the effect of the monetary compensatory amounts in consideration of the special features of each case and on the basis of an interval of time not otherwise laid down and a threshold which is not further specified, the system of which the applicants complain would not be compatible with the administration of common agricultural prices and that the general all-embracing system of monetary compensatory amounts, which was designed to function weekly on a standard basis, would become totally inapplicable. The transitional measures which were invoked as precedents by the applicants in order to elucidate their claims for fair treatment all relate either to the case in which the unit of account used for the common agricultural policy is altered or to the devaluation of a national currency or of the dollar or, finally, to the departure of a currency from the European ‘monetary snake’. The sole aim of Regulation No 1608/74 was to codify these measures adapted to a specific situation and make them general, so to speak, and to establish certain criteria relating in particular to the evidence which those concerned must provide, to the need for an individual examination of each case in the light of the loss suffered and, finally, to adopt provisions to assure a coordinated application thereof whilst providing, where necessary, for the adoption of more refined further measures in accordance with the Management Committees procedure. In fact the argument of the applicants amounts to claiming that they anticipated that they would automatically be protected if an ‘unforeseeable’ alteration in the monetary compensatory amounts were to cause them ‘excessive’ losses in the performance of their contracts. It was however inherent in the systemestablished by Regulation No 974/71 and the subsequent regulations that if a country permitted the rate of exchange of its currency to fluctuate to the extent provided for in Article 1 of that Regulation compensatory amounts would be charged on exports. By very definition, the decision of the French Government to permit its currency to float introduced a permanent element of insecurity since that currency was no longer kept within a maximum spread of 2.25 % and it was foreseeable that those fluctuations, upwards or downwards moreover, might at any moment become more or less elastic Because of the way in which Article 1 of the discretionary relief regulation has been drafted and applied nobody could reasonably consider that the system would automatically be accompanied by provisions based on the rules of natural law of the type demanded by the applicants. It was obviously permissible for the applicants to enter into contracts on the basis that the extent of the fluctuations of the French franc would not involve the application of ‘excessive’ compensatory amounts. However, neither taking part in the Community invitations to tender nor the provisions of the French rules on foreign exchange could give them that guarantee. The applicants therefore took a calculated commercial risk and an increase in the monetary compensatory amounts, however excessive and unwelcome, cannot in these circumstances be described as unforeseeable. What was in fan foreseeable was the charging of monetary compensatory amounts; what was not foreseeable was the tolerable or intolerable nature of the increases involved.