Judgment of the Court of 12 July 1988. - Commission of the European Communities v Council of the European Communities. - Budgetary procedure: compliance with the time-table laid down by the Treaty. - Case 383/87.



European Court reports 1988 Page 04051



Summary

Parties

Grounds

Decision on costs

Operative part



Keywords

++++

Action for failure to act - Repair of failure to act after institution of proceedings - Subject-matter of action ceasing to exist - No need to give a decision

( EEC Treaty, Arts 175 and 176 )

Summary

The remedy provided for in Article 175 of the Treaty is founded on the premiss that the unlawful inaction of the Council or of the Commission enables the other institutions and the Member States and, in certain circumstances, private persons to bring the matter before the Court in order to obtain a declaration that the failure to act is contrary to the Treaty, in so far as it has not been repaired by the institution concerned . The effect of that declaration under Article 176 is that the defendant institution is required to take the necessary measures to comply with the judgment of the Court, without prejudice to any actions to establish non-contractual liability to which the aforesaid declaration may give rise .

Where the act whose absence constitutes the subject-matter of the proceedings was adopted after the action was brought but before judgment a declaration by the Court to the effect that the initial failure to act is unlawful can no longer bring about the consequences prescribed by Article 176 . It follows that in such a case, as in cases where the defendant institution has responded within a period of two months after being called upon to act, the subject-matter of the action has ceased to exist, so that there is no longer any need to give a decision .

Parties

In Case 383/87

Commission of the European Communities, represented by Bernard Paulin, Senior Legal Adviser, and John Forman, Legal Adviser, both members of its Legal Department, acting as Agents, with an address for service in Luxembourg at the office of G . Kremlis, a member of the Legal Department of the Commission, Jean Monnet Building, Kirchberg,

applicant,

v

Council of the European Communities, represented by Arthur Alan Dashwood, Director of its Legal Department, and Félix van Craeyenest, Principal Administrator in its Legal Department, acting as Agents with an address for service in Luxembourg at the office of Jorn Kaeser, Manager of the Legal Directorate of the European Investment Bank, 100 boulevard Konrad Adenauer,

defendant,

APPLICATION for a declaration that, by failing to establish a draft budget covering the estimated financial requirements of the Community for the 1988 financial year, as required by the first paragraph of Article 199 of the EEC Treaty and the first subparagraph of Article 171 ( 1 ) of the EEC Treaty and to place it before the European Parliament not later than 5 October 1987, as required by the third subparagraph of paragraph 3 and the first subparagraph of paragraph 4 of Article 203 of the EEC Treaty and the third subparagraph of paragraph 3 and the first subparagraph of paragraph 4 of Article 177 of the EAEC Treaty, thereby preventing the two arms of the budgetary authority - together with the Commission - from being able to exercise the powers given them by the Treaties in the budgetary procedure, the Council has failed to fulfil its Treaty obligations,

THE COURT

composed of : Lord Mackenzie Stuart, President, G . Bosco, O . Due, J . C . Moitinho de Almeida and G . C . Rodríguez Iglesias ( Presidents of Chambers ), T . Koopmans, U . Everling, K . Bahlmann, Y . Galmot, C . Kakouris, R . Joliet, T . F . O' Higgins and F . Schockweiler, Judges,

Advocate General : J . Mischo

Registrar : H . A . Ruehl, Principal Administrator,

having regard to the Report for the Hearing and further to the hearing on 28 April 1988,

after hearing the Opinion of the Advocate General delivered at the sitting on 26 May 1988,

gives the following

Judgment

Grounds

1 By an application lodged at the Court Registry on 23 December 1987, the Commission of the European Communities brought an action under the first paragraph of Article 175 of the EEC Treaty for a declaration that, by failing to establish a draft budget covering the estimated financial requirements of the Community for the 1988 financial year and to place it before the European Parliament no later than 5 October 1987, the Council has infringed the first paragraph of Article 199, the third subparagraph of paragraph 3 and the first subparagraph of paragraph 4 of Article 203 of the EEC Treaty and the first subparagraph of Article 171 ( 1 ), the third subparagraph of paragraph 3 and the first subparagraph of paragraph 4 of Article 177 of the EAEC Treaty .

2 In the course of the proceedings before the Court, the Commission stated that the failure to act which it imputes to the Council relates not to non-compliance with Article 199 of the EEC Treaty but to an infringement of Article 203 thereof, consisting in the failure to establish the draft budget for 1988 and to place it before the European Parliament no later than 5 October 1987 .

3 Reference is made to the Report for the Hearing for an account of the legal and factual background to the dispute and of the submissions and arguments of the parties, which are mentioned or discussed hereinafter only in so far as is necessary for the reasoning of the Court .

4 The Council contends that the action is inadmissible on the ground that the draft budget is not a definitive measure upon the absence of which an action for failure to act can be founded . All the measures forming part of the budgetary procedure prior to final adoption of the budget are preparatory measures .

5 It is appropriate for the Court, before considering that objection, to determine of its own motion whether, in the particular circumstances of the case, it is still necessary for it to give a decision .

6 In that connection, it should be noted that the following facts are undisputed :

The draft budget for 1988 had not been placed before the European Parliament by 6 October 1987;

On that date, the President of the Council informed the President of the European Parliament that the Council had not been able to comply with the time-limit of 5 October 1987 for placing the draft budget for 1988 before the Parliament;

By a letter dated 7 October 1987, the President of the European Parliament called upon the Council, pursuant to Article 175 of the EEC Treaty "to establish a draft budget for the 1988 financial year without delay";

By a letter of the same date, the President of the Commission called upon the Council, pursuant to Article 175 of the EEC Treaty, "to establish, without further delay, a draft ( budget ) which meets the financial requirements of the Community in 1988";

The Council did not define its position, within the meaning of Article 175, regarding those two requests that it should act;

The draft budget for 1988 established by the Council was not placed before the European Parliament until 7 March 1988 .

7 When the President of the European Parliament and the President of the Commission called upon the Council to act, the Council was no longer in a position to do so by the date laid down in Article 203 ( 4 ) of the Treaty, since that date had passed in the mean time . Both Presidents were aware of that fact since they called upon the Council, not to comply with the time-limit, which was no longer possible, but to establish the draft budget "without delay" or "without further delay ". The draft was indeed established and submitted to the Parliament, but on a date which fell after the expiry of the two-month period provided for in the second paragraph of Article 175 of the Treaty, computed from the time at which the Council was called upon to act . In fact, that date fell after the two actions were brought .

8 It must be observed in the first place that, under Article 175 of the Treaty, an action for failure to act is admissible only if the institution in question has first been called upon to act and has not defined its position within the abovementioned period of two months . It follows that an action for failure to act cannot be brought where the act which the institution concerned has been called upon to adopt was in fact adopted within the period of two months, with the result that the failure to act with which it is charged has been repaired .

9 The remedy provided for in Article 175 is thus founded on the premiss that the unlawful inaction on the part of the Council or of the Commission enables the other institutions and the Member States and, in certain circumstances, private persons to bring the matter before the Court in order to obtain a declaration that the failure to act is contrary to the Treaty, in so far as it has not been repaired by the institution concerned . The effect of that declaration, under Article 176, is that the defendant institution is required to take the necessary measures to comply with the judgment of the Court, without prejudice to any actions to establish non-contractual liability to which the aforesaid declaration may give rise .

10 In circumstances such as those in this case, where the act whose absence constitutes the subject-matter of the proceedings was adopted after the action was brought but before judgment, a declaration by the Court to the effect that the initial failure to act is unlawful can no longer bring about the consequences prescribed by Article 176 . It follows that in such a case, as in cases where the defendant institution has responded within a period of two months after being called upon to act, the subject-matter of the action has ceased to exist .

11 It must therefore be held that there is no longer any need for the Court to give a decision .

Decision on costs

Costs

12 By virtue of Article 69 ( 5 ) of the Rules of Procedure, where it is unnecessary for the Court to give a decision the costs are to be in the discretion of the Court . In this case, the Council should be ordered to pay the costs since it failed to submit the draft budget for 1988 to the European Parliament before the final date laid down in the Treaty and did not communicate with the Parliament as that date approached in order to give assurances regarding the time-table which it envisaged or to discuss the procedure to be followed in such circumstances .

Operative part

On those grounds,

THE COURT

hereby :

( 1 ) Declares that there is no need for it to give a decision;

( 2 ) Orders the Council to bear the costs .