Order of the Court of First Instance (Fourth Chamber) of 9 January 2001. - Innova, Centro euromediterraneo per lo sviluppo sostenibile v Commission of the European Communities. - Action for annulment - Action concerning what is in fact a dispute of a contractual nature - Lack of jurisdiction of the Court of First Instance. - Case T-149/00.



European Court reports 2001 Page II-00001



Summary

Parties

Grounds

Decision on costs

Operative part



Keywords

Actions for annulment - Application concerning, in reality, a contractual dispute - Community Court's lack of jurisdiction - Manifest inadmissibility

(Arts 230(4) EC, 238 EC and 240 EC)

Summary

$$In the absence of an arbitration clause within the meaning of Article 238 EC, the Court of First Instance manifestly lacks jurisdiction to hear and determine an application which, although based on Article 230(4) EC, must be regarded as being in reality an application relating to the performance of a contract concluded by the Community. If it were otherwise, the Court would be extending its jurisdiction beyond the limits placed by Article 240 EC on the disputes of which it may take cognisance, since that article gives national courts or tribunals ordinary jurisdiction over disputes to which the Community is a party.

An action for annulment brought by a tenderer selected for a project co-financed by the Community against the Commission's decision to terminate the contract concluded with that tenderer relating to the implementation of the project in question is therefore manifestly inadmissible, inasmuch as, although based on Article 230(4) EC, such an action in reality constitutes an application relating to the performance of that contract.

( see paras 25, 30 )

Parties

In Case T-149/00,

Innova, Centro euromediterraneo per lo sviluppo sostenible, established in Calatafimi (Italy), represented by D. Fosselard, lawyer, with an address for service in Luxembourg,

applicant,

v

Commission of the European Communities, represented by M.-J. Jonczy and E. Paasivirta, acting as Agents, with an address for service in Luxembourg,

defendant,

APPLICATION for the annulment of the Commission's decision of 23 March 2000 to terminate the contract relating to the Dionysos project concluded with the applicant,

THE COURT OF FIRST INSTANCE

OF THE EUROPEAN COMMUNITIES (Fourth Chamber),

composed of: P. Mengozzi, President of the Chamber, V. Tiili and R.M. Moura Ramos, Judges,

Registrar: H. Jung,

makes the following

Order

Grounds

Facts and Procedure

1 Innova, Centro euromediterraneo per lo sviluppo sostenible, is a non-profit-making association established under Italian law whose object is to contribute to the long-term development of the Mediterranean countries.

2 On 5 August 1998 the Commission concluded with the applicant a contract (hereinafter the contract or the contract in dispute), financed under a programme based on Council Regulation (EC) No 1488/96 of 23 July 1996 on financial and technical measures to accompany (Meda) the reform of economic and social structures in the framework of the Euro-Mediterranean partnership (OJ 1996 L 189, p. 1), by which the applicant undertook to carry out a project described in Annex A to the contract and entitled Dionysos - Network of ancient sites where entertainments were held, in consideration for a financial contribution from the Commission in the amount of ECU 891 188.

3 Under clause 15.3 of the contract:

If the beneficiary fails to comply with an obligation under this contract and does not take rectification measures promptly, the Commission reserves the right to suspend or cease financing for the project or the payments required for the contract and, if appropriate, to terminate the contract. In the event of termination, the Commission reserves the right to reimbursement of all the payments already made.

4 Clause 15.6 of the contract provides:

If the payments are not reimbursed within the required period prescribed, the amount owed by the beneficiary will bear interest at the rate applicable by the European Monetary Institute (EMI) to its operations in [ecus], published in the Official Journal, C Series, and in force at the end of the period prescribed for reimbursement to be made.

The beneficiary agrees that the order for recovery duly drawn up by the Commission for the said reimbursement is enforceable within the meaning of Article 192 of the [EC] Treaty in every country in which the beneficiary has a registered office. (Article 192 of the EC Treaty is now Article 256 EC).

5 Clause 17 of the contract stipulates that [a]ny dispute between the Commission and the beneficiary which arises out of the performance of the ... contract and which it had not been possible to settle amicably between the parties will be brought before the Brussels courts. Clause 18 states that the ... contract is governed by Belgian law.

6 In performance of the contract, the applicant received EUR 404 273 from the Commission.

7 By letter of 23 March 2000 Mr Laurent, Head of Unit at the Commission's Directorate-General for External Relations, informed the applicant that he had decided to terminate the contract in accordance with clause 15.3. In the letter he states that [t]his decision to terminate the contract is accompanied, of course, by the claim for reimbursement of all or part of the payments already made and that the Commission reserves the right to activate the bank guarantee provided by Innova for that purpose.

8 In order to justify the decision, the author of the letter states: I find that, since the contract came into effect, there has been chronic failure to comply with Innova's contractual obligations in the implementation and management of the Dionysos project, and also that [its] organisation has been unable promptly to take the necessary rectification measures.

9 By letter of 6 June 2000 enclosing a debit note dated 29 May 2000, which the applicant received on 22 June, the Commission requested that the applicant repay the sum of EUR 404 273 within 15 days of receipt of the letter, failing which proceedings would be taken to recover the amount in question plus interest.

10 By application lodged at the Court Registry on 2 June 2000, the applicant brought an action under the fourth paragraph of Article 230 EC for the annulment of the Commission's decision to terminate the contract.

11 By separate document lodged at the Court Registry on 6 July 2000, it also made an application, under Article 242 EC, for suspension of the operation of the Commission's decision to terminate the contract, in so far as it requires the applicant to repay all the sums already received from the institution under the contract, and also, in so far as necessary, of the debit note sent pursuant to that decision. The applicant also sought application of Article 105(2) of the Rules of Procedure of the Court of First Instance on the ground that any measure to enforce the contested decision would cause it serious and irreparable damage.

12 By order of 20 July 2000 in Case T-149/00 R Innova v Commission (not yet published in the European Court Reports) the President of the Court dismissed the application for interim relief as inadmissible, on the ground that the Court of First Instance did not have jurisdiction to adjudicate on the application in the main proceedings, and reserved costs.

13 On 25 July 2000 the Commission, by a separate document, raised a plea of inadmissibility under Article 114(1) of the Rules of Procedure. On 27 September 2000 the applicant submitted its observations on that plea.

Forms of order sought

14 In its plea of inadmissibility, the defendant contends that the Court should:

- declare the application inadmissible;

- order the applicant to pay the costs, including those of the interlocutory proceedings.

15 In its observations on the plea of inadmissibility, the applicant contends that the Court should:

- make an appropriate order as to the admissibility of its application;

- if the application is dismissed as inadmissible, order the defendant to pay all or part of the costs, under Article 87(3) of the Rules of Procedure.

Admissibility

16 Under Article 114(3) of the Rules of Procedure, the remainder of the proceedings relating to the plea of inadmissibility is to be oral, unless the Court of First Instance otherwise decides. The Court considers that, in the present case, the documents in the file provide all the information it needs and that there is no need to open the oral procedure.

Arguments of the parties

17 Under its plea of inadmissibility, the defendant points out that, since the subject-matter of the present dispute is the termination of a contract concluded with the applicant, it is of a contractual nature and, according to settled case-law, does not fall within the jurisdiction of the Court of First Instance, unless the contract contains an arbitration clause (order of 23 March 200 in Case T-234/99 Monod-Gayraud, not published in the European Court Reports, paragraph 44). The contract in dispute not only does not contain such a clause, but also expressly provides, in clause 17, that the Brussels courts are to have jurisdiction to hear disputes which may arise during performance of the contract.

18 Basing its argument on the order in Innova v Commission, cited above, the defendant maintains that, since termination is only the penalty for breach of the contract by one of the two contracting parties, this dispute cannot be dissociated from a dispute concerning performance of the contract, which falls within the jurisdiction of the Brussels courts.

19 In its observations on the plea of inadmissibility, the applicant states that it has no alternative but to take due notice of the order in Innova v Commission and to leave the matter of the admissibility of its application for annulment to the Court.

20 The applicant then requests the Court, in the event that the application is declared inadmissible, to apply Article 87(3) of its Rules of Procedure and order the defendant to pay the costs. It takes the view that the present dispute has been largely caused by the defendant's conduct.

21 In that regard, the applicant points out, first, that it was the Commission's staff who drafted the contract in dispute and, in particular, clause 15.6 which characterises as enforceable within the meaning of Article 192 of the Treaty the order, drawn up by the Commission in the event of termination of the contract, for recovery of the payments already made. That reference to Article 192 of the Treaty made it more difficult for the applicant to decide which forum had jurisdiction to hear this case. Article 192 of the Treaty provides that decisions which are enforceable in nature may be suspended only by a decision of the Court of Justice. According to the applicant, since the contested decision is a decision to effect recovery which, according to clause 15 of the contract, is enforceable, it is understandable that the applicant brought its action for annulment before the Community court.

22 Second, the applicant states that, by letter dated 3 May 2000 from its legal adviser, it had asked the Commission, in accordance with the principles of sound administration and access to justice, to inform it as soon as possible before which court the decision could be contested. It did not receive a reply from the Commission until about 15.00 hrs on 31 May 2000, that is, two days before the expiry of the period prescribed for bringing an action before the Community court. Of course, by that date the applicant had already prepared a draft application to be lodged at the Court of First Instance in the event that the Commission had replied that the Community courts had jurisdiction to hear the case.

23 Furthermore, according to the applicant, the Commission's reply was far from clear and categorical on the matter of which forum had jurisdiction. In this respect, it states that the letter of 31 May 2000 contained the following passage:

As regards your request that we should specify the court in which the decision communicated to your client may be contested, we consider that this matter is covered by the clause in the contract conferring jurisdiction over disputes arising under it on the Brussels courts.

24 The applicant submits that the use of the verb consider implies that the question of which forum had jurisdiction to hear the case could be subject to debate and that, in that context, the Commission was merely expressing its opinion.

Findings of the Court

25 It is settled case-law that, by virtue of the combined provisions of Article 238 EC and Council Decision 88/591/ECSC, EEC, Euratom of 24 October 1988 establishing a Court of First Instance of the European Communities (OJ 1988 L 319, p. 1), as amended, the Court of First Instance does not have jurisdiction to give judgment, at first instance, in disputes relating to contractual matters brought before it by natural or legal persons unless there is an arbitration clause in the contract to that effect. If it were otherwise, the Court would be extending its jurisdiction beyond the limits placed by Article 240 EC on the disputes of which it may take cognisance, since that article gives national courts or tribunals ordinary jurisdiction over disputes to which the Community is a party (order in Case T-186/96 Mutual Aid Administration Services v Commission [1997] ECR II-1633, paragraph 47).

26 In the present case, the contract does not contain a clause conferring jurisdiction on the Court of First Instance to hear disputes which may arise during its performance. The provision concerning the settlement of disputes, which is contained in clause 17 of the contract, expressly stipulates that any dispute between the Commission and the beneficiary arising out of the performance of the contract is to be subject to the jurisdiction of the Brussels courts.

27 This dispute undoubtedly falls within the scope of that provision. As is stated in the order in Innova v Commission, cited above (paragraph 21), the dispute is directly related to the obligations set out in the contract, since termination, for which clause 15 provides, is only the penalty imposed on one of the two contracting parties for failing to comply with its obligations.

28 Moreover, it cannot be maintained that clause 17 of the contract precludes the exclusive jurisdiction conferred on the Community court by Article 230(4) EC. That jurisdiction concerns only decisions to which Article 249 EC relates and which the institutions find it necessary to adopt in the circumstances provided for by the Treaty (order in Mutual Aid Administration Services v Commission, cited above, paragraphs 50 and 51). In the present case, the contested decision is wholly contractual in nature and is not, therefore, one of the acts in respect of which actions for annulment fall within the exclusive jurisdiction of the Community court under Article 230(4) EC.

29 Nor can it be inferred from clause 15.6 of the contract that the Court of First Instance has jurisdiction over this dispute. Without there being any need to rule on the precise scope of the clause, it is sufficient to point out that the mere reference in clause 15.6 to Article 192 of the Treaty cannot be construed as conferring jurisdiction on the Community court, unless the very clear wording of clause 17 of the contract is to be disregarded.

30 It follows from all the foregoing considerations that, in the absence of an arbitration clause, the Court of First Instance manifestly lacks jurisdiction to hear and determine this application which, although based on Article 230(4) EC, must be regarded as being in reality an application relating to the performance of a contract concluded by the Community. The application must therefore be dismissed as manifestly inadmissible.

Decision on costs

Costs

31 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. However, under Article 87(3) the Court of First Instance may order a party, even if successful, to pay costs which it considers that party to have unreasonably or vexatiously caused the opposite party to incur.

32 In this case, it is not appropriate to apply the latter provision. Contrary to what the applicant claims, it cannot be stated that the dispute arose, or became likely, because of the Commission's conduct.

33 It cannot be accepted that the reference made in clause 15.6 of the contract to Article 192 of the Treaty could have made it more difficult for the applicant to determine which court had jurisdiction to hear this case. As is apparent from paragraph 29 above, the wording of clause 15.6 of the contract was not such as to give rise to problems of interpretation.

34 In any event, it cannot be accepted that, by failing to inform the applicant, with the necessary speed, which court had jurisdiction to hear the present dispute, the Commission infringed the principles of access to justice and sound administration. In this respect, it is sufficient to point out, first, that, since its relations with Innova were wholly contractual, the Commission was not required, by virtue of the principles of access to justice and sound administration, to inform the applicant of its position as regards determination of the court with jurisdiction to hear the dispute. Second, since the defendant was only one of the contracting parties, it had no special authority concerning the interpretation of the contract. It is therefore not surprising that, in its reply to the applicant's request relating to the competent court, it merely expressed an opinion.

35 In the light of all the above considerations, since the applicant has been unsuccessful, it must be ordered to pay the costs, including those of the interlocutory proceedings, in accordance with the form of order sought by the Commission.

Operative part

On those grounds,

THE COURT OF FIRST INSTANCE (Fourth Chamber)

hereby orders:

1. The application is dismissed as inadmissible.

2. The applicant shall pay the costs, including those of the interlocutory proceedings.