Case C‑150/17 P

European Union

v

Kendrion NV

(Appeal — Actions for damages — Second paragraph of Article 340 TFEU — Excessive duration of the proceedings in a case before the General Court of the European Union — Compensation for damage allegedly suffered by the applicant — Material damage — Bank guarantee charges — Causal link — Default interest — Non-material damage)

Summary — Judgment of the Court (First Chamber), 13 December 2018

Appeal — Grounds — Mistaken assessment of the facts — Inadmissibility — Review by the Court of the assessment of the facts and evidence — Possible only where the clear sense of the evidence has been distorted

Non-contractual liability — Conditions — Causal link — Concept — Bank guarantee charges arising from the choice of an undertaking not to pay the fine imposed by the Commission — Infringement by the EU judicature of the duty to adjudicate within a reasonable time on the occasion of the action by that undertaking — No direct causal link

European Union — Representation before the EU judicature — Action for compensation against the EU in respect of damage allegedly suffered through unreasonable duration of the procedure before the General Court — Representation of the Union by the Court of Justice of the European Union — Appeal brought by the Union before the Court of Justice delivered against the judgment at first instance by the General Court — Jurisdiction of the President of the Court of Justice to decide whether to lodge an appeal

European Union — Representation before the EU judicature — Action for compensation against the EU in respect of damage allegedly suffered through unreasonable duration of the procedure before the General Court — Representation of the Union by the Court of Justice of the European Union — Appeal brought by the Union before the Court of Justice delivered against the judgment at first instance by the General Court — Breach of the right to an independent and impartial tribunal — No such breach

In actions for damages seeking, under the second paragraph of Article 340 TFEU, compensation for damage as a result of the breach by the General Court of its obligation to adjudicate within a reasonable time, it is necessary to distinguish between, on the one hand, the institution of the ‘Court of Justice of the European Union’ which, as an EU institution is supposedly at the origin of the damage alleged, and therefore has the status of defendant at first instance and, as the case may be, appellant in the appeal, and, on the other hand, the General Court and the Court of Justice, which are the courts of which it is composed, with jurisdiction to hear those actions and appeals, respectively. Thus, the circumstance that an appellant in the appeal is the European Union, represented by the institution of the ‘Court of Justice of the European Union’, and, at the same time the court to which the appeal has been referred is the Court of Justice results not from a choice by that appellant, but from the strict application of the European Union law rules on the matter. In those circumstances, it cannot validly be argued that the Court of Justice decided to refer the matter to itself by an appeal contrary to the right to an independent and impartial tribunal, as set out in the second paragraph of Article 47 of the Charter of Fundamental rights of the European Union. (see paras 27, 34, 35)

The decision of the European Union, represented by the Court of Justice of the European Union, to bring an appeal against a judgment delivered by the General Court in an action for damages is taken exclusively by the President of that institution, which represents it. Moreover, since the President of that institution is also the President of the Court of Justice as a judicial body hearing such an appeal, the President does not intervene in the judicial handling of the case, and is replaced by the Vice-President. (see para. 38)

Where it is unsuccessful in its submissions, in the action at first instance, the European Union, represented by the Court of Justice of the European Union, is, pursuant to Article 56 of the Statute of the Court of Justice, entitled to bring an appeal against the judgment under appeal. No provision of European Union law limits the right of the parties to bring an appeal, provided that the conditions of that provision have been fulfilled, including where the party concerned is the European Union and the latter is represented by the Court of Justice of the European Union, as an EU institution. Such a limitation would, furthermore, be contrary to the principle of equality of arms. In that regard, the fact that, in several judgments, the Court of Justice has found that an action for damages is an effective remedy in no way prevents the Court of Justice of the European Union, as an institution representing the European Union against which an action for damages has been brought, to bring an appeal against the decision of the General Court disposing of that action, where the conditions set out in Article 56 of the Statute of the Court of Justice have been fulfilled, nor renders, consequently, such an appeal inadmissible. Moreover, there is nothing in EU law which permits the conclusion that the review which must be carried out by the Court in an appeal lodged by the European Union against a judgment of the General Court delivered in an action for damages under the second paragraph of Article 340 TFEU should be more or less broad depending on the institution which represents the European Union. (see paras 39, 41, 43)

See the text of the decision. (see para. 52)

The fact that the EU judicature may have committed a breach of the obligation to adjudicate within a reasonable time in cases relating to the lawfulness of a fine imposed by the Commission cannot be the determining cause of the damage suffered by the undertaking which brought the action as a result of paying bank guarantee charges during the period by which that time was exceeded. That would be the case only if it were compulsory to maintain the bank guarantee, so that the undertaking which brought an action against a Commission decision imposing a fine on it, and which chose to provide a bank guarantee in order not to comply immediately with that decision, was not entitled, before the date on which the judgment on that action was delivered, to pay that fine and put an end to the bank guarantee that it had provided. Like the provision of the bank guarantee, the maintenance of that guarantee is a matter for the discretion of the undertaking concerned in the light of its financial interests. Nothing prevents, as a matter of EU law, that undertaking from terminating, at any time, the bank guarantee that it has provided and paying the fine imposed, where, in view of the evolution of the circumstances in relation to those existing on the date when that guarantee was provided, that undertaking deems that option more advantageous for it. That might be the case, in particular, where the conduct of the proceedings before the EU judicature leads the undertaking in question to take the view that the judgment will be delivered at a date later than that which it had initially envisaged and that, consequently, the cost of the bank guarantee will be higher than the cost that it had initially envisaged when providing that guarantee. (see paras 58, 59, 61)

See the text of the decision. (see paras 79, 94)

See the text of the decision. (see para. 80)

Any damage for which compensation is sought in an action for non-contractual liability of the European Union under the second paragraph of Article 340 TFEU must be actual and certain. In that context, since an act or omission of an EU institution may give rise to certain costs for an undertaking but, at the same time, it may result in certain gains for that undertaking, it can be considered that there is damage, within the meaning of Article 340 TFEU, only where the net difference between costs and gains stemming from the conduct alleged against that institution is negative. Thus, in an action for damages by which compensation is claimed for the damage resulting from payment of default interest on the amount of a fine on account of the breach by the General Court of a reasonable time for adjudicating in a case concerning the Commission’s decision imposing that fine, it is only, in fact, if the interest which has accrued during the period by which the reasonable time for adjudicating was exceeded is greater than the advantage conferred on the appellant by possession, during that period, of the sum equal to the amount of the fine plus default interest that it may be considered that there is actual and certain damage. (see paras 86-88)

See the text of the decision. (see para. 89)

See the text of the decision. (see paras100, 117, 118)