Judgment of the Court of First Instance (Second Chamber) of 21 March 1996. - Frederick Farrugia v Commission of the European Communities. - Action for annulment - Commission decision refusing to award a fellowship to the applicant - Criteria for eligibility - British Overseas citizen - Erroneous reasons - Non-contractual liability - Non-material damage. - Case T-230/94.



European Court reports 1996 Page II-00195



Summary

Parties

Grounds

Decision on costs

Operative part



Keywords

++++

1. Acts of the institutions ° Statement of reasons ° Decision coupled with an erroneous statement of reasons ° Consequence ° Annulment ° Raising before the Court of other reasons which may be capable of justifying the decision ° Not permissible

(EC Treaty, Art. 190; Council Decision 92/217)

2. Non-contractual liability ° Conditions ° Actual and certain damage caused by a wrongful act ° Candidate for a fellowship having his application rejected for an erroneous reason ° Compensation for non-material damage subject to proof that the conditions prescribed for the grant of a fellowship are satisfied

(EC Treaty, Art. 215, second para.)

Summary

1. Where the only reason referred to by the Commission in its decision rejecting an application, sent to a candidate for a fellowship in the context of the specific research and technological development programme in the field of human capital and mobility, laid down by Council Decision 92/217, namely the fact that the applicant did not satisfy the nationality and mobility requirements fixed for the award of such a fellowship, is erroneous, that decision must be annulled.

The Commission cannot, in order to save its decision from such an annulment, rely on the fact that there were other reasons for rejecting the application. In any event, the Commission cannot, in support of the contested decision, properly rely on reasons which were not contained in that decision and were raised by it only after the bringing of the action, since it was only on the basis of the reasons set out in the contested decision communicated to him that the applicant could determine whether the rejection of the application was well founded and whether it was appropriate to bring proceedings before the Court. Since the Commission has not sufficiently proved that any regularization of the application is precluded, it is also unable to claim that the applicant has no legitimate interest in obtaining the annulment of the decision which, according to the Commission, could be replaced only by another decision to reject his application, since the conditions for the grant of a fellowship are not satisfied.

2. The Community can be held liable only if a number of conditions are satisfied as regards the illegality of the allegedly wrongful act committed by the institutions, the actual harm suffered and the existence of a causal link between the act and the damage alleged to have been suffered.

Consequently, a candidate for a fellowship who has had his application rejected for an erroneous reason but who, since he has not proved that he satisfied all the conditions required to obtain that fellowship, cannot show actual and certain damage, cannot claim compensation for non-material damage resulting from the loss of the chance to pursue his studies and research.

Parties

In Case T-230/94,

Frederick Farrugia, resident in Athens, represented by Linos Sissilianos, of the Athens Bar,

applicant,

v

Commission of the European Communities, represented by Ana Maria Alves Vieira and, during the oral procedure, by Peter Oliver, of its Legal Service, with an address for service in Luxembourg at the office of Carlos Gómez de la Cruz, of its Legal Service, Wagner Centre, Kirchberg,

defendant,

APPLICATION for the annulment of the Commission decision of 26 April 1994 rejecting the applicant' s application for a research training fellowship and for compensation for material and non-material damage allegedly caused to the applicant by that decision,

THE COURT OF FIRST INSTANCE

OF THE EUROPEAN COMMUNITIES (Second Chamber),

composed of: H. Kirschner, President, C.W. Bellamy and A. Kalogeropoulos, Judges,

Registrar: H. Jung,

having regard to the written procedure and further to the hearing on 23 November 1995,

gives the following

Judgment

Grounds

Facts and procedure

1 By letter of 3 February 1994, sent to the Commission' s Directorate-General for Science, Research and Development (DG XII), the applicant, who holds a degree in medicine from the University of Athens and specializes in surgery, applied for a fellowship in the field of research and technological development (research training fellowship) in connection with a stay in the United Kingdom.

2 Article 3 of the General Conditions governing research training fellowships drawn up by the Commission (DG XII) pursuant to Council Decision 92/217/EEC of 16 March 1992 on a specific research and technological development programme in the field of human capital and mobility (1990 to 1994) (OJ 1992 L 107, p. 1) provides that: "Research fellows, to be eligible, must satisfy the following requirements:

(a) nationality:

the applicant must be a national of a Community Member State or an associated State or a natural person resident in the Community;

(b) mobility:

the applicant must be a national of a country other than that in which the laboratory is established and must not have carried out his/her normal activity in that country for more than two years prior to the date of submission of the application;

...".

3 In the letter with his application, the applicant stated that, although he had been born and was living in Greece, he was a British Overseas citizen and not a British citizen. However, by letter of 18 March 1994 the Commission rejected his application and returned his application form on the grounds that he was a citizen of the host country, that Appendices 6 (D2), 9 and 10-2 (D1.2), which should have been included with that application form (assessment of the research project to be drawn up by the host institution and declaration that the candidate had been accepted as a researcher), were missing, and that his project was not a research project, but a course. In its letter the Commission informed the applicant that his application could be resubmitted.

4 By letter of 7 April 1994 the applicant resubmitted his application to the Commission. In that letter he drew to the Commission' s attention the fact that, as he had stated in the letter with his application of 3 February 1994, he was not a British citizen, but a British Overseas citizen, that according to the declaration made by the United Kingdom in that respect when it acceded to the European Communities, he was not regarded as a British national, and that, consequently, contrary to the Commission' s contention in its letter of 18 March 1994, he was not a citizen of the host country (the United Kingdom). In that letter the applicant enclosed a copy of his alien' s residence permit issued by the Greek Ministry of Public Order. He also enclosed a document from the host institution in the United Kingdom (the Royal Postgraduate Medical School), which he described as "a letter from the host institution". According to the applicant, that document was to replace Annex 9 of the application form and should be regarded as sufficient by the Commission.

5 By letter of 26 April 1994 the Commission' s officer replied to the applicant as follows:

"I regret to send you back once more your application for a grant. May I emphasize that you are not a citizen of a third country but a citizen from two EC countries.

Therefore please understand that with regards to our nationality criteria of eligibility, you have a double British and Greek nationality and that you are not eligible either for UK or Greece."

6 On 6 June 1994 the applicant applied for legal aid, which was granted to him by order of the Court of First Instance (First Chamber) of 14 December 1994.

7 The applicant thereupon brought the present action by application lodged at the Registry of the Court of First Instance on 10 January 1995.

8 Since the defendant did not lodge a rejoinder, the written procedure closed on 24 July 1995 when the reply was lodged.

9 By decision of 19 September 1995 the Judge-Rapporteur was assigned to the Second Chamber and the case was therefore assigned to that Chamber.

10 Upon hearing the report of the Judge-Rapporteur, the Court of First Instance (Second Chamber) decided to open the oral procedure, after inviting the Commission to reply to a written question. The parties presented oral argument and answered oral questions put to them by the Court at the hearing on 23 November 1995.

Forms of order sought

11 The applicant claims that the Court should:

° annul the Commission' s decision rejecting his application for a research training fellowship on the ground that it did not satisfy the eligibility requirements;

° award him damages of ECU 13 900 for all damage sustained.

12 At the hearing on 23 November 1995 the applicant stated that he was withdrawing his claim for damages in so far as it concerned his material loss, and maintaining it only in so far as concerned the non-material damage caused to him by the rejection of his application.

13 The defendant contends that the Court should:

° dismiss the action brought by the applicant;

° order the applicant to pay the costs.

The plea for annulment

Admissibility

14 During the oral procedure the defendant contended that, since its position regarding the applicant' s application had been set out in its letter of 18 March 1994, the decision in its subsequent letter of 26 April 1994 merely confirmed that decision and the applicant' s action, having been brought after the two-month period prescribed by the fifth paragraph of Article 173 of the EC Treaty, was inadmissible.

15 The Court considers that the Commission' s plea contesting the admissibility of the action, which the Community judicature must in any event examine of its own motion (see Case T-465/93 Murgia Messapica v Commission [1994] ECR II-361, paragraph 24), cannot be accepted. As is clear from the Commission' s letter of 18 March 1994 rejecting for the first time the application on the grounds indicated in the letter, that application could be resubmitted. Although by its letters of 18 March and 26 April 1994 the Commission refused the applicant the fellowship requested, the refusal in the second letter after a fresh examination of the application and on the basis of a form completed at the Commission' s invitation, cannot, therefore, be regarded as a decision confirming the refusal contained in the letter of 18 March 1994. Consequently, the action against the decision in the Commission' s letter of 26 April 1994 must be declared admissible.

Substance

Arguments of the parties

16 The applicant states that, although he was born in Greece and is living there permanently, he is not of Greek nationality, as is shown by the fact that he holds an "aliens residence permit" issued by the Greek Ministry of Public Order, a document which is issued only to citizens of non-member countries. Nor does he have British nationality, since he is merely a British Overseas citizen. He states that British Overseas citizens are not regarded as Community nationals in any of the Member States. He refers to the declaration by the United Kingdom of Great Britain and Northern Ireland on the definition of the term "nationals" at the time of signature of the Treaty of Accession to the European Communities (OJ 1972 L 73, p. 196), subsequently replaced by a new declaration on the matter (OJ 1983 C 23, p. 1), from which it is clear that persons who do not have the right of abode in the United Kingdom are not British nationals. He also refers to the relevant United Kingdom legislation (Immigration Act 1971, section 3(1)), which provides that persons who are not British citizens do not have the right of abode in the United Kingdom. Finally, he has produced a copy of his passport, in which it is indicated that, unlike British citizens, British Overseas citizens do not have the right of abode in the United Kingdom.

17 The applicant therefore claims that the Commission' s contention in its letter of 26 April 1994 that he has dual Greek and British nationality is incorrect. Consequently, he satisfies all the nationality and mobility requirements laid down in Article 3 of the Conditions governing research training fellowships, since, although not a national of a Member State, he was resident in Greece and wished to go to the United Kingdom in order to pursue medical research in that country, without ever having carried out his normal activity there.

18 In its defence, the Commission concedes that the applicant did not in fact have Greek nationality, as it had erroneously asserted in its letter of 26 April 1994. At the hearing on 23 November 1995 the Commission also conceded that, contrary to its contention in the letter of 26 April 1994, he was not a national of the United Kingdom (the host country) either, and that, consequently, he satisfied the nationality and mobility requirements in Article 3(a) of the General conditions governing research training fellowships.

19 However, the Commission contends that his application was not rejected solely because he did not satisfy those two requirements. Those requirements relate only to the admissibility of an application for a fellowship and, once the application has been found to be admissible, the candidate, the host institution, that is the institution in which the candidate proposes to carry out his research project, and the research project itself must be subjected to prior evaluation, so that each application undergoes a triple evaluation before an actual fellowship can be obtained.

20 The Commission states that in the present case, as it informed the applicant in its letter of 18 March 1994, several assessments concerning his application, which should have been provided by the host institution and included in Appendices 6 and 9 to his application form, were missing. In particular, the applicant did not submit any evidence to show that the host institution would accept him as a researcher and he inserted the statement "not applicable" in those appendices, which, according to the Commission, indicates that in reality his project was a course and not a research project approved by the host institution justifying the award of the fellowship requested.

21 In his reply, the applicant claims that, contrary to the Commission' s submissions, it is clear from its letter of 26 April 1994 that his application was rejected solely because he did not satisfy the nationality and mobility requirements.

Findings of the Court

22 The Court observes that, as is evident from the decision in the letter of 26 April 1994, the sole reason for the contested refusal by the Commission to grant the applicant the fellowship requested is that the applicant was not a national of a non-member country, but a national of two Member States, and did not satisfy the nationality requirements for a research fellowship either for the United Kingdom or for Greece.

23 As regards the question whether the applicant held Greek nationality, as is alleged by the Commission in its letter of 26 April 1994, the Court finds that it is clear from the documents before it that the applicant sent to the Commission, as an annex to his letter of 7 April 1994, a copy of his Greek residence permit, valid for one year, and clearly and conspicuously containing the statement "Alien' s Resident Permit" in two Community languages, Greek and English ("Adia Paramonis Allodapou ° Alien' s Residence Permit"). Consequently, the Commission had no basis for stating that the applicant had Greek nationality, since his Greek residence permit was an alien' s residence permit. That finding is confirmed by the Commission itself, which in its defence conceded that the letter of 26 April 1994 contained an error regarding the applicant' s nationality and that he was not in fact a Greek national.

24 As regards the question whether the applicant was a British national and therefore a national of the "host" country, the Court observes, firstly, that Article 4 of Council Directive 68/360/EEC of 15 October 1968 on the abolition of restrictions on movement and residence within the Community for workers of Member States and their families (OJ, English Special Edition 1968 (II), p. 485) provides that:

"1. Member States shall grant the right of residence in their territory to the persons referred to in Article 1 who are able to produce the documents listed in paragraph 3.

2. As proof of the right of residence, a document entitled 'Residence Permit for a National of a Member State of the EEC' shall be issued. This document must include a statement that it has been issued pursuant to Regulation (EEC) No 1612/68 and to the measures taken by the Member States for the implementation of the present Directive. The text of such statement is given in the Annex to this Directive."

25 Moreover, as the Court has already found (see paragraph 23), the applicant held in Greece not a "Residence Permit for a National of a Member State of the EEC", but an "Alien' s Residence Permit" issued by the Ministry of Public Order, valid for one year, and clearly and conspicuously bearing the words "Alien' s Residence Permit" in Greek and in English ("ADIA PARAMONIS ALLODAPOU ° ALIEN' S RESIDENCE PERMIT"). If the applicant were to be regarded as a British national for the purposes of the application of Community law, under the abovementioned provisions of Directive 68/360 he would have been entitled, not to a residence permit valid for one year, but to a "Residence Permit for a Community National", valid for five years, and automatically renewable.

26 In addition, although it is true that the applicant' s residence permit states "Citizenship: British", it also states "Nationality: Melitea", that is Maltese, which explains why the Greek authorities did not issue to the applicant a "Residence Permit for a Community National", but an Alien' s Residence Permit.

27 Furthermore, even accepting that, as the Commission explained in its defence, its officials took the view that the reference to "Melitea" in his Greek residence permit indicated his place of birth in Greece, leading them to believe that he also held Greek nationality, those officials could nevertheless not validly conclude that the applicant could at the same time hold Greek nationality and be the holder of a Greek residence permit for aliens.

28 Nor can the Commission claim that the Greek authorities, by issuing the applicant with a residence permit for a national of a non-Member country, had themselves committed an error by failing to take into account the fact that the applicant might have British nationality as he was a British Overseas citizen. The applicant had stated in his letter of 7 April 1994 that he was not a British citizen but a British Overseas citizen. The Declaration on the definition of the term "nationals" made by the United Kingdom upon its accession to the European Communities, as replaced by the New Declaration made after the entry into force of the British Nationality Act 1981 (see paragraph 16 above), to which the applicant referred in his letter to the Commission, states:

"As to the United Kingdom of Great Britain and Northern Ireland, the terms 'nationals' , 'nationals of Member States' or 'nationals of Member States and overseas countries and territories' wherever used in the Treaty establishing the European Economic Community ... or in any of the Community acts deriving from those Treaties, are to be understood to refer to:

(a) British citizens;

(b) persons who are British subjects by virtue of Part IV of the British Nationality Act 1981 and who have the right of abode in the United Kingdom and are therefore exempt from United Kingdom immigration control;

(c) British Dependent Territories citizens who acquire their citizenship from a connection with Gibraltar."

29 In those circumstances, the Court considers that the applicant could not be regarded by the Commission as a British national for the purposes of applying Community law. As the applicant has established before the Court by producing his passport, he does not fall within the scope of subparagraph (b) or subparagraphs (a) and (c) of the United Kingdom' s declaration.

30 Finally, the Court takes note of the fact that during the oral procedure the Commission conceded that the applicant did not in fact have British nationality for the purposes of the application of Community law and that, consequently, he satisfied the nationality and mobility requirements applicable to the research training fellowships requested.

31 It follows that the reasoning on which the contested decision is based is erroneous and the decision must therefore be annulled.

32 That conclusion is not affected by the fact that in its defence and during the oral procedure the Commission contended that the applicant' s application was rejected not only on account of his nationality, but also on other grounds set out in its letter of 18 March 1994 informing him that certain documents which should have contained assessments drawn up by the host institution and been annexed to his application were missing and that the fact that the applicant had written the words "not applicable" on those documents showed that the project proposed for the fellowship at issue was in fact a course and not a research project.

33 The Court finds that, despite the Commission' s submission that the applicant did not enclose with his application for a fellowship certain documents necessary to show that he satisfied the substantive conditions for the award of that fellowship, the file shows that the applicant annexed to his letter of 7 April 1994 a document from the host institution (the Royal Postgraduate Medical School), which, as he indicated in that letter, was in his view sufficient.

34 By letter of 26 April 1994 the Commission, without referring to the statements in its previous letter of 18 March 1994 informing the applicant that he had failed to enclose certain necessary documents with his application, returned the application to him, again stating that he was not a national of a non-member country, but a national of two Member States and that he therefore did not satisfy the eligibility requirements for a fellowship either for Greece or for the United Kingdom.

35 Accordingly, the Commission must be regarded as having rejected the application on the sole ground that the applicant did not satisfy the nationality and mobility requirements, and not on the grounds raised by the Commission for the first time in its defence (see paragraphs 18 and 19 above).

36 The Court considers that, in any event, the Commission cannot properly rely, in support of the contested decision, on reasons which were not contained in that decision and were raised by it only after the bringing of the action, since it was only on the basis of the reasons set out in the contested decision that the applicant could determine whether the rejection of his application was well founded and whether it was appropriate to bring proceedings before the Court (Case C-343/87 Culin v Commission [1990] ECR I-225, and Case T-52/90 Volger v Parliament [1992] ECR II-121).

37 Finally the Court considers that the Commission has no basis for claiming that the applicant has no legitimate interest in the annulment of the contested decision because he did not satisfy the substantive conditions for obtaining the fellowship at issue, so that, even without the error regarding his nationality, it would necessarily have been led to adopt a decision rejecting his application (see Case 90/74 Deboeck v Commission [1975] ECR 1123, Case 30/78 Distillers Company v Commission [1980] ECR 2229, and Case T-50/91 De Persio v Commission [1992] ECR II-2365, paragraph 24).

38 In that respect the Commission has not sufficiently proved that, if it considered that the documents enclosed by the applicant with his letter of 7 April 1994 did not regularize his application papers, it was precluded, in particular because of a possible time-bar, from examining the papers in detail and inviting the applicant to submit the appropriate documents, which is what it did in its letter of 18 March 1994.

39 It follows that, in taking the view that because of his nationality the applicant did not satisfy the requirements for the award of a research training fellowship, the Commission gave an erroneous statement of reasons for the contested decision of 26 April 1994, which, consequently, must be annulled.

The claim for compensation

Substance

Arguments of the parties

40 The applicant claims that he has suffered significant damage because, as a result of the Commission' s error regarding his nationality, he lost a unique opportunity to continue his studies and research in the United Kingdom. He adds that, as is clear from the Commission' s letter of 26 April 1994 ("I regret to send you back once more your application"), he had made numerous efforts to submit his application on repeated occasions in the past, thereby losing valuable time in his studies and his career. He assesses that damage at ECU 10 400. Moreover, he claims to have suffered significant non-material damage, which should be assessed at ECU 3 500. However, during the oral procedure the applicant withdrew his claim for compensation of material damage, restricting his claim merely to non-material damage.

41 The Commission contends that the applicant is invoking damage which is uncertain and hypothetical. It states that, even assuming that the applicant' s application satisfied the substantive conditions, which was not in fact the case, as the Commission pointed out in the context of the claim for annulment (see paragraphs 18 and 19 above), to be actually accepted, the application still had to undergo a triple evaluation (see paragraph 19 above). In that regard, the Commission states that for the period 1992-1994 it received more than 6 000 applications for research training fellowships, of which only 1 800 were granted.

Findings of the Court

42 It is settled law that the Community can be held liable only if a number of conditions are satisfied as regards the illegality of the allegedly wrongful act committed by the institutions, the actual harm suffered and the existence of a causal link between the act and the damage alleged to have been suffered (see, most recently, Case C-136/92 P Commission v Brazzelli Lualdi and Others [1994] ECR I-1981, and Case T-185/94 Geotronics v Commission [1995] ECR II-2795).

43 In the present case, concerning non-material damage flowing from the applicant' s loss of his chance to pursue his studies and research in the United Kingdom, the requirement that such damage be actual presupposes that the applicant must establish at least that his application satisfied the substantive conditions for being accepted, so that it was only the Commission' s unlawful refusal, in so far as it was based on erroneous grounds regarding his nationality, which deprived him of the chance of having his application taken into consideration for award of the fellowship requested.

44 The Court considers that the applicant has not established, during either the written or oral procedure, that his application for the fellowship actually satisfied the prescribed substantive conditions, so that he would have had a strong chance of ultimately being awarded that fellowship, if the Commission had not committed an error as regards his nationality. The Court points out that it cannot find, on the basis of the document annexed to his letter of 7 April 1994 in reply to the Commission' s letter of 18 March 1994 (see paragraphs 3 and 4 above) headed "Royal Postgraduate Medical School" but not referring to the applicant by name, that he was actually accepted by that institution as a researcher for a specific programme.

45 In those circumstances, and without it being necessary to consider whether other documents necessary to support the applicant' s application were missing and whether his application papers were therefore not duly completed, as the Commission claims, or to assess the applicant' s chances of ultimately being awarded the fellowship requested, it suffices to find that the applicant has not sufficiently proved that, as well as satisfying the nationality and mobility requirements, he also satisfied the prescribed substantive conditions for his application to be taken into consideration by the Commission, and possibly granted.

46 The claim for compensation for alleged non-material damage must, therefore, be rejected, since the applicant has failed to prove actual and certain damage by showing that, had the Commission not rejected his application for a fellowship on erroneous grounds concerning his nationality, that application fulfilled the prescribed conditions for it to be taken into consideration and accepted (see Case 9/64 Acciaieria Ferriera di Roma v High Authority [1965] ECR 311, 320, Case 79/71 Heinemann v Commission [1972] ECR 579, paragraph 9, and Case T-478/93 Wafer Zoo v Commission [1995] ECR II-1479, paragraph 49).

Decision on costs

Costs

47 Under Article 87(2) of the Rules of Procedure, the unsuccessful party is to be ordered to pay the costs if they have been applied for in the successful party' s pleadings. Since the Commission has been essentially unsuccessful, it must be ordered to pay the costs.

Operative part

On those grounds,

THE COURT OF FIRST INSTANCE (Second Chamber)

hereby:

1. Annuls the Commission decision in its letter of 26 April 1994;

2. Dismisses the claim for compensation;

3. Orders the Commission to pay the costs.