Judgment of the Court of 13 March 1992. - Industrie- en Handelsonderneming Vreugdenhil BV v Commission of the European Communities. - Arrangements for returned goods - Invalidity on the ground that the Commission had no power to adopt a measure - Action to establish liability. - Case C-282/90.



European Court reports 1992 Page I-01937



Summary

Parties

Grounds

Decision on costs

Operative part



Keywords

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1. Action for damages - Subject-matter - Claim for compensation brought against the Community under the second paragraph of Article 215 of the Treaty - Exclusive jurisdiction of the Court - Claim for recovery of sums wrongfully charged by national authorities on the basis of Community rules which are declared invalid - Competence of national courts

(EEC Treaty, Art. 178 and Art. 215, second paragraph)

2. Non-contractual liability - Conditions - Legislative measure - Sufficiently serious breach of a superior rule of law for the protection of the individual - Disregard of the system for the allocation of powers between the Community institutions - No liability

(EEC Treaty, Art. 215, second paragraph)

Summary

1. The combined provisions of Article 178 and Article 215 of the Treaty give the Court exclusive jurisdiction to hear actions seeking compensation for damage attributable to the Community, which is bound, under the second paragraph of Article 215, to make good, in accordance with the general principles common to the laws of the Member States, any damage caused by its institutions or by its servants in the performance of their duties. On the other hand, only the national courts have jurisdiction to entertain an action for the recovery of amounts wrongfully charged by a national administration on the basis of Community rules which are subsequently declared invalid.

2. The mere fact that a legislative measure of the Community is invalid is insufficient by itself for the Community to incur non-contractual liability under the second paragraph of Article 215 of the Treaty for damage caused to individuals. Such liability can only be incurred where a sufficiently serious breach of a superior rule of law for the protection of the individual has occurred. That is not the case where the measure declared invalid has failed to observe the system of the division of powers between the various Community institutions, since the aim of that system is to ensure that the balance between institutions provided for in the Treaty is maintained, and not to protect individuals.

Parties

In Case C-282/90,

Industrie- en Handelsonderneming Vreugdenhil BV, a limited liability company incorporated under Netherlands law, whose registered office is at Voorthuizen (Netherlands), represented by E.H. Pijnacker Hordijk and H.J. Bronkhorst, both of the Hague Bar, with an address for service in Luxembourg at the chambers of J. Loesch, 8 rue Zithe,

applicant,

v

Commission of the European Communities, represented by Robert Fischer, Legal Adviser, and Ben Smulders, a member of its Legal Service, acting as Agents, with an address for service in Luxembourg at the office of Roberto Hayder, a representative of its Legal Service, Wagner Centre, Kirchberg,

defendant,

APPLICATION for an award of damages under the second paragraph of Article 215 of the EEC Treaty,

THE COURT,

composed of: O. Due, President, R. Joliet and P.J.G. Kapteyn (Presidents of Chambers), G.F. Mancini, C.N. Kakouris, G.C. Rodríguez and M. Díez de Velasco, Judges,

Advocate General: M. Darmon,

Registrar: J.A. Pompe, Deputy Registrar,

having regard to the Report for the Hearing,

after hearing oral argument from the parties at the hearing on 19 November 1991, during which Vreugdenhil was represented by H.J. Bronkhorst and H.J.M. Van Vliet, both of the Hague Bar,

after hearing the Opinion of the Advocate General at the sitting on 16 January 1992,

gives the following

Judgment

Grounds

1 By application lodged at the Court Registry on 17 September 1990, Industrie- en Handelsonderneming Vreugdenhil BV (hereinafter referred to as "Vreugdenhil"), a limited liability company having its registered office at Voorthuizen (Netherlands), brought an action under Article 178 and the second paragraph of Article 215 of the EEC Treaty for compensation for damage allegedly suffered as a result of the adoption by the Commission of Article 13a of Commission Regulation No 1687/76 of 30 June 1976 laying down common detailed rules for verifying the use and/or destination of products from intervention (Official Journal 1976 L 190, p. 1), as amended by Commission Regulation (EEC) No 45/84 of 6 January 1984 (Official Journal 1984 L 7, p. 5).

2 Article 13a was inserted in the context of the rules applicable to goods which are "returned" to the customs territory of the Community. That regime, established by Council Regulation (EEC) No 754/76 of 25 March 1976 on the customs treatment applicable to goods returned to the customs territory of the Community (Official Journal 1976 L 89, p. 1), permits goods which have been previously exported to be reimported into the Community, free of import duties. Under Article 2(1) of that latter regulation, goods could not be considered as returned goods if, in particular, at the time of their exportation from the customs territory of the Community, they had been the subject of customs export formalities with a view to obtaining refunds and other amounts granted on exportation within the framework of the common agricultural policy.

3 In addition, Regulation No 1687/76 lays down measures for verifying the use and destination of products from intervention. Under Article 13a of that regulation, as amended, goods from intervention for which a security had been lodged were treated as goods for which the customs formalities for obtaining export refunds had been completed. Consequently, those goods were excluded from the arrangements for returned goods provided for in Article 2(1) of Regulation No 754/76.

4 Applying those provisions, the Netherlands authorities imposed on Vreugdenhil a levy on a consignment of milk powder, which, coming from stocks held by the intervention agency in the Federal Republic of Germany, had first been exported to Jordan, then sent back to the Federal Republic of Germany and finally to the Netherlands. The authorities considered that under Article 13a of the regulation, cited above the goods in that consignment could not be considered to be returned goods unless the amount equal to the security released on the occasion of the previous exportation had been paid, which was not the case.

5 By judgment of 29 June 1989 in Case 22/88 Vreugdenhil and Another v Minister van Landbouw en Visserij [1989] ECR 2049, the Court of Justice held, in answer to a request for a preliminary ruling from the College van Beroep voor het Bedrijfsleven (Administrative Court of Last Instance in matters of Trade and Industry, hereinafter referred to as "the College"), that Article 13a of Regulation No 1687/76 was invalid.

6 On 29 May 1990, the President of the College ordered the authorities to repay Vreugdenhil the amount of the import levy. On 21 December 1990, the College annulled the disputed decisions of the Minister for Agriculture and Fisheries and ordered him to pay the costs of the proceedings. Given that the applicants in the main proceedings had informed the College, by two letters dated 12 June 1990, that the Minister had offered to pay an amount by way of damages, and that they had asked it only to rule on the question of costs, the College made no order concerning their application for damages.

7 Vreugdenhil states that the decision of the President of the College has only partially made good the loss it has suffered. In this respect, it claims that it has suffered additional loss from having been required, wrongfully, to pay the above levy. That loss is said to include, first, the cost of obtaining, and paying interest on, a bank guarantee demanded by the Netherlands authorities pending the outcome of the legal proceedings and the payment of the levy; secondly, the interest which it would have received if the sum corresponding to the levy had remained at its disposal for the period from 7 July 1988, the date on which, having regard to the cost of the bank guarantee, it had wished to pay the levy, until 25 June 1990 the date on which the levy had been reimbursed to it. To those two heads of loss must be added the costs incurred in putting its case to the German and Netherlands customs authorities and the travel expenses incurred in defending its interests before the College and the Court of Justice.

8 Reference is made to the Report for the Hearing for a fuller account of the facts of the case, the procedures and the pleas and arguments of the parties, which are mentioned or discussed hereinafter only in so far as is necessary for the reasoning of the Court.

Admissibility

9 The Commission considers that the action is inadmissible. It considers first of all that an application for damages under Article 178 and the second paragraph of Article 215 of the Treaty cannot be made until the applicant has exhausted the remedies available to it before national courts for the damage allegedly suffered. In its rejoinder, the Commission raises a second plea of inadmissibility to the effect that Vreugdenhil has not shown that it was unable to pass the alleged loss on to its customer, its insurer or the intervention agency.

10 With regard to that second plea, it must be observed that under Article 42(2) of the Rules of Procedure no new plea in law may be introduced in the course of proceedings unless it is based on matters of law or of fact which come to light in the course of the procedure. As that is not the case here, that plea of inadmissibility must be rejected.

11 With regard to the first plea of inadmissibility, Vreugdenhil claims that the domestic procedures for redress do not provide effective protection. It states that, according to the case-law of the College, the State of the Netherlands cannot be held liable where the competent national authority has merely applied the Community rules in force. Accordingly, any application for the redress of its alleged loss would have been doomed to failure before the national courts.

12 In this respect, it must be stated that only the national courts have jurisdiction to entertain an action for the recovery of amounts wrongfully charged by a national administration on the basis of Community rules which are subsequently declared invalid (see to this effect the judgment in Case 20/88 Roquette Frères v Commission [1989] ECR 1553, at paragraph 14). Following its action before the College, Vreugdenhil was able to obtain actual reimbursement of the sums wrongfully charged by the Netherlands intervention agency, plus interest at the statutory rate and the costs of the proceedings.

13 In the present action, Vreugdenhil is applying for compensation for the loss (described in paragraph 7 above) which, it claims, arose from the Commission' s adoption of Article 13a of Regulation No 1687/76, which has been declared invalid.

14 In regard to that claim, it should be observed that the combined provisions of Article 178 and Article 215 of the Treaty give the Court exclusive jurisdiction to hear actions seeking compensation for damage attributable to the Community, which is bound, under the second paragraph of Article 215, to make good, in accordance with the general principles common to the laws of the Member States, any damage caused by its institutions or by its servants in the performance of their duties (judgment in Joined Cases 106/87 to 120/87 Asteris v Greece [1988] ECR 5515, at paragraph 14).

15 It is common ground that the Commission adopted the provision which has been declared invalid and which, according to the applicant, is the cause of the alleged damage. Consequently, the first plea of inadmissibility is unfounded and the action must therefore be declared admissible.

Substance

16 Vreugdenhil claims that the conditions under which the Community incurs liability under the second paragraph of Article 215 of the Treaty, namely where the conduct complained of is unlawful, damage has been incurred and a causal link exists between that conduct and the damage alleged, are satisfied in this case.

17 With regard to the unlawful conduct of which the Commission is accused, Vreugdenhil states that in the case of Vreugdenhil v Minister van Landbouw en Visserij, cited above, the Court declared that Article 13a of Regulation No 1687/76 was invalid on the ground that in adopting that provision the Commission had exceeded its powers. It argues that, in those circumstances, the Court' s settled case-law (judgments in Case 5/71 Aktien-Zuckerfabrik Schoeppenstedt v Council [1971] ECR 975, and Joined Cases 94/76, 4/77, 15/77 and 40/77 Bayerische HNL v Council and Commission [1978] ECR 1209) according to which the Community does not incur liability on account of a legislative measure which involves choices of economic policy unless a sufficiently serious breach of a superior rule of law for the protection of the individual has occurred, does not apply in this case.

18 According to the Commission, the Community cannot be liable unless there has been a manifest and grave disregard of the limits on the exercise of its powers. In its view, that is not the case here since in the Vreugdenhil case, cited above, the Court merely held that the Commission had exceeded its powers without classifying that breach as serious. The Commission also maintains that Vreugdenhil has not explained how a rule on the allocation of powers between the Community institutions, which the Commission disregarded in adopting Article 13a of Regulation No 1687/76, constitutes a superior rule of law for the protection of the individual. Consequently, in its view, Vreugdenhil' s claim for damages is unfounded.

19 With regard to that argument, it should be stated that the mere fact that a legislative measure such as Article 13a of Regulation No 1687/76 is found to be invalid is insufficient by itself for the Community to incur non-contractual liability under the second paragraph of Article 215 of the EEC Treaty for damage caused to individuals. Such liability can only be incurred where a sufficiently serious breach of a superior rule of law for the protection of the individual has occurred (judgment in Bayerische HNL v Council and Commission, cited above, paragraph 4).

20 In that context, it is sufficient to state that the aim of the system of the division of powers between the various Community institutions is to ensure that the balance between the institutions provided for in the Treaty is maintained, and not to protect individuals.

21 Consequently, a failure to observe the balance between the institutions cannot be sufficient on its own to engage the Community' s liability towards the traders concerned.

22 The position would be different if a Community measure were to be adopted which not only disregarded the division of powers between the institutions but also, in its substantive provisions, disregarded a superior rule of law protecting individuals.

23 At paragraph 18 of the judgment in Vreugdenhil and Another, cited above, the Court stated that the aim of Article 13a of Regulation No 1687/76 was to prevent the arrangements for returned goods from being used to commit fraud to the detriment of Community funds.

24 In this respect, it has not been argued that the substance of such a provision, adopted in the general interest of the Community, infringes a superior rule of law protecting individuals.

25 The action must accordingly be dismissed as unfounded without its being necessary to establish whether the other conditions for Community liability have been satisfied.

Decision on costs

Costs

26 Under Article 69(2) of the Rules of Procedure, the unsuccessful party must be ordered to bear the costs. Since Vreugdenhil has failed in its submissions, it must be ordered to pay the costs.

Operative part

On those grounds,

THE COURT

hereby:

1. Dismisses the action;

2. Orders the applicant to pay the costs.