Keywords

Summary



Keywords

1. Actions for annulment – Actionable measures – Meaning – Decision on out‑of‑court set-off between debts and claims adopted by the Commission on the basis of Regulation No 1605/2002 – Included

(Art. 230 EC; Council Regulation No 1605/2002, Art. 73; Commission Regulation No 2342/2002)

2. Commission – Powers – Implementation of the Community budget – Decision to recover by set-off – Procedure

(Council Regulation No 1605/2002, Arts 71 and 73; Commission Regulation No 2342/2002, Arts 78(2), 79 and 83)

3. Community law – Principles – Protection of legitimate expectations – Conditions – Precise assurances provided by the administration

4. Commission – Powers – Implementation of the Community budget – Decision to recover by set-off

(Council Regulation No 1605/2002, Art. 73; Commission Regulation No 2342/2002, Art. 83)

Summary

1. An act whereby the Commission effects an out‑of‑court set-off between debts and claims arising from different legal relationships with the same person is a challengeable act for the purposes of Article 230 EC. In the context of such an action for annulment it is for the General Court to examine the legality of a decision to offset in the light of the effects of the failure actually to pay the contested sums to the applicant.

(see para. 25)

2. The Commission does not commit any ‘abuse of process and does not evade any judicial scrutiny of the legality of offsetting the amounts receivable where it does not refer to that set-off as a form of defence within proceedings relating to a case which gave rise to a judgment of the General Court which recognised the Commission’s debt to the applicant and where the Commission confines itself to effecting that set-off subsequent to that judgment. Neither the procedure laid down by Regulation No 1605/2002 on the Financial Regulation applicable to the general budget of the European Communities leading to the adoption of a decision for recovery of a receivable amount by offsetting nor the rules for the implementation of the Financial Regulation established by Regulation No 2342/2002 provide, in Articles 71 and 73(1) and Articles 78(2) and 79 respectively, that the Commission must first assert before a court its intention to offset amounts receivable.

(see paras 31-38)

3. The right to rely on the principle of the protection of legitimate expectations extends to any individual in a situation where a Community authority has caused him to entertain expectations which are justified. As a general rule, a person may not plead infringement of the principle unless he has been given precise assurances by the administration.

(see para. 40)

4. Where the Commission decides to effect recovery by set-off, the applicant’s claim, consisting of the damages which the Commission was ordered to pay to the party concerned by a judgment of a Court of the European Union, becomes of a fixed amount only when its exact amount is known, which may be the date of delivery of that judgment. If such a judgment is delivered, while it is true that the operative part of the judgment does not fix the amount payable by the Community at that date, to the extent that it allows interest to run until the actual payment of damages, the fact remains that the amount receivable by the applicant from the Community becomes certain, of a fixed amount and due on the date of delivery.

Further, notwithstanding the absence of any express provision to that effect, the offsetting provided for by Regulation No 1605/2002 on the Financial Regulation applicable to the general budget of the European Communities is retroactive in effect with the result that it extinguishes the amounts receivable concerned as from the time when the conditions governing its operation are met. Under the system established by Article 73 of that regulation and Article 83 of Regulation No 2342/2002 laying down detailed rules for the implementation of the Financial Regulation, the accounting officer must effect the offsetting after informing the debtor of it, where the debtor has not voluntarily complied. The retroactive effect of offsetting to the date when the obligation of the accounting officer materialises thereby ensures, in accordance with the systems of offsetting recognised by the legal systems of the majority of Member States, that the debtor does not suffer any adverse consequences, in particular as regards interest for late payment payable when a period of time elapses between the time when the conditions for offsetting are met and the time when the offsetting is actually carried out. Thus, the Commission infringes Article 73 of the Financial Regulation where it carries out the offsetting with effect from a date subsequent to the date when the amount receivable by the applicant became certain, of a fixed amount and due.

(see paras 61-62, 64-68)