Parties

Grounds

Operative part



Parties

In Case T‑59/11,

Koinonia Tis Pliroforias Anoichti Stis Eidikes Anagkes — Isotis, established in Athens (Greece), represented by V. Christianos, lawyer,

applicant,

v

European Commission, represented by M. Condou-Durande and V. Savov, acting as Agents, assisted by S. Pappas, lawyer,

defendant,

APPLICATIONS, based on Article 272 TFEU, seeking, on the one hand, first, to have declared unfounded the Commission’s application for reimbursement of grants paid to the applicant under contracts No 027020 ‘Access to e-Government Services Employing Semantic Technologies’, No 035242 ‘A virtual platform to enhance and organise the coordination among centres for accessibility resources and support’, No 511298 ‘Ambient Intelligence System of Agents for Knowledge-based and Integrated Services for Mobility Impaired Users’, No 034778 ‘European Unified Approach for Accessible Lifelong Learning’, No 045056 ‘Emergency Monitoring and Prevention’, No 045563 ‘A wearable system supporting services to enable elderly people to live well, independently and at ease’, No 029255 ‘NavigAbile: e-inclusion for communication disabilities’, No 517506 ‘European Recommended Materials for Distance Learning Courses for Educators’ and No 224988 ‘T-Seniority: Expanding the benefits of information society to older people through digital TV channels’, concluded between the European Community and the applicant, and, second, seeking an order that the Commission pay the final balance of grants under contracts No 511298 ‘Ambient Intelligence System of Agents for Knowledge-based and Integrated Services for Mobility Impaired Users’ and No 034778 ‘European Unified Approach for Accessible Lifelong Learning’ and, on the other hand, a counterclaim seeking an order that the applicant reimburse the grants unduly paid in connection with all those contracts and liquidated damages,

THE GENERAL COURT (First Chamber),

composed of S. Frimodt Nielsen, acting as President, M. Kancheva (Rapporteur) and E. Buttigieg, Judges,

Registrar: S. Spyropoulos, Administrator,

having regard to the written procedure and further to the hearing on 4 July 2013,

gives the following

Grounds

Judgment

Background to the dispute

1. The applicant, Koinonia Tis Pliroforias Anoichti Stis Eidikes Anagkes — Isotis, is a civil non-profit company governed by Greek law, incorporated on 7 January 2004, whose head office is located in Athens (Greece).

2. Under an agreement concluded on 28 December 2010 and published in the companies bulletin of the Protodikeio Athinon (Court of First Instance, Athens) on 17 January 2011, the applicant was put into liquidation. At this time, Mr X, who was, up to that date, in charge of European programmes for the applicant (‘the programme director’), was appointed as the representative for the liquidation of the applicant.

3. According to its articles of association, the applicant’s objects are the transfer of technology, the promotion of equal treatment, the integration of people with disabilities into the information society, and the improvement of employment opportunities for people with special needs in Europe and internationally.

4. The applicant concluded several contracts with the European Community, represented by the Commission of the European Communities, concerning the implementation of certain projects. The present dispute concerns nine of those contracts (‘the contracts at issue’).

A – Description of the contracts at issue

5. The contracts at issue were concluded between, on the one hand, the Community, represented by the Commission, and, on the other, a coordinator and members of a consortium, which included the applicant. Each of those contracts contains, in addition to the main text, six annexes, the first of which contains a description of the programme to which it relates and the second of which sets out the applicable general conditions.

6. Of the contracts at issue, six contracts (‘the FP6 contracts’) were concluded within the framework of the sixth framework programme adopted by Decision No 1513/2002/EC of the European Parliament and of the Council of 27 June 2002 concerning the sixth framework programme of the European Community for research, technological development and demonstration activities, contributing to the creation of the European Research Area and to innovation (2002-2006) (OJ 2002 L 232, p. 1).

7. Those contracts were:

– contract No 027020 ‘Access to e-Government Services Employing Semantic Technologies’ (‘the Access-eGOV contract’), concluded within the framework of the specific programme ‘Integrating and strengthening the European Research Area (2002-2006)’, Article 4 of which fixed the project’s length at 36 months from the first day of the month following its signature by the Commission, Article 5 of which provided for a maximum Community financial contribution of EUR 1 983 000, EUR 157 320 of which was intended for the applicant, and which was amended on 3 June 2008, as a result of which the project’s length was increased to 48 months;

– contract No 035242 ‘A virtual platform to enhance and organise the coordination among centres for accessibility resources and support’ (‘the eABILITIES contract’), concluded within the framework of the specific programme ‘Integrating and strengthening the European Research Area (2002-2006)’, Article 4 of which fixed the project’s length at 24 months from 1 September 2006 and Article 5 of which provided for a maximum Community financial contribution of EUR 750 000, EUR 95 201.61 of which was intended for the applicant;

– contract No 511298 ‘Ambient Intelligence System of Agents for Knowledge-based and Integrated Services for Mobility Impaired Users’ (‘the Ask-It contract’), concluded within the framework of the specific programme ‘Integrating and strengthening the European Research Area (2002-2006)’, Article 4 of which fixed the project’s length at 48 months from 1 October 2004, Article 5 of which provided for a maximum Community financial contribution of EUR 8 499 657, EUR 183 320.89 of which was intended for the applicant, and which was amended on 25 July 2008, as a result of which the project’s length was increased to 51 months;

– contract No 034778 ‘European Unified Approach for Accessible Lifelong Learning’ (‘the EU4ALL contract’), concluded within the framework of the specific programme ‘Integrating and strengthening the European Research Area (2002-2006)’, Article 4 of which fixed the project’s length at 48 months from 1 October 2006, Article 5 of which provided for a maximum Community financial contribution of EUR 7 400 000, EUR 268 008 of which was intended for the applicant, and which was amended on 21 October 2010, as a result of which the project’s length was increased to 54 months;

– contract No 045056 ‘Emergency Monitoring and Prevention’ (‘the Emerge contract’), concluded within the framework of the specific programme ‘Integrating and strengthening the European Research Area (2002-2006)’, Article 4 of which fixed the project’s length at 33 months from 1 February 2007, Article 5 of which provided for a maximum Community financial contribution of EUR 2 449 964, EUR 203 712 of which was intended for the applicant, and which was amended on 28 October 2008, as a result of which the project’s length was increased to 36 months;

– contract No 045563 ‘A wearable system supporting services to enable elderly people to live well, independently and at ease’ (‘the Enable contract’), concluded within the framework of the specific programme ‘Integrating and strengthening the European Research Area (2002-2006)’, Article 4 of which fixed the project’s length at 36 months from the date of its signature by the Commission, which was, according to the applicant, from 1 January 2007, Article 5 of which provided for a maximum Community financial contribution of EUR 2 800 000, EUR 196 700 of which was intended for the applicant, and which was amended on 13 September 2010, as a result of which the project’s length was increased to 44 months and the amount of the maximum Community contribution was reduced to EUR 2 477 040.

8. The general conditions for FP6 contracts (‘the FP6 conditions’) provide, inter alia, as follows:

‘Article II.1. Definitions

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4. Consortium: means all the contractors participating in the project covered by this contract.

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6. Coordinator: means the contractor identified in this contract who, in addition to its obligations as a contractor, is obliged to carry out the specific coordination tasks provided for in this contract on behalf of the consortium.

7. Contractor: means a participant as defined in Article 2.7 of the Rules for Participation and a signatory to this contract other than the [European Commission Joint Research Centre], which signs a separate arrangement with the Commission with respect to its participation in the contract.

...

11. Irregularity: means any infringement of a provision of Community law or any breach of a contractual obligation resulting from an act or omission by a contractor which has, or would have, the effect of prejudicing the general budget of the European Communities or budgets managed by it through unjustified expenditure.

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Article II.8 Evaluation and approval of reports and deliverables

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4. Approval of any report does not imply exemption from any audit or review, which may be carried out in accordance with the provisions of Article II.29.

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Article II.16 Termination for breach of contract and irregularity

1. In the case of breach of any obligation imposed by this contract the Commission shall request the consortium to find appropriate solutions to make good that breach within a maximum period of 30 days.

Costs incurred by the consortium, after the date of receipt of such request, shall be eligible only if an appropriate solution to the breach is accepted by the Commission.

Where appropriate, the consortium may request the Commission to suspend part, or all, of the project in accordance with Article II.5.

In the absence of any satisfactory solution, the Commission will terminate the participation of the defaulting contractor.

2. The Commission may immediately terminate the participation of a contractor:

(a) where the contractor has deliberately or through negligence committed an irregularity in the performance of any contract with the Commission;

(b) where the contractor has contravened fundamental ethical principles as referred to in the Rules for Participation.

3. Notification of termination shall be addressed to the contractor and copied to the consortium.

Termination shall take effect upon receipt of such notification by the contractor and shall be without prejudice to the obligations established or referred to in the present contract.

The Commission shall inform the consortium of the effective date of termination.

...

Article II.19 Eligible costs of the project

1. Eligible costs incurred for the implementation of the project must fulfil all of the following conditions:

(a) they must be actual, economic and necessary for the implementation of the project; and

(b) they must be determined in accordance with the usual accounting principles of the contractor; and;

(c) they must be incurred during the duration of the project as identified in Article 4.2 except for the costs incurred in drawing up the final reports referred to in Article II.7.4, which may be incurred during the period of up to 45 days after the end of the project or the date of termination whichever is earlier; and

(d) they must be recorded in the accounts of the contractor that incurred them, no later than at the date of the establishment of the audit certificate referred to in Article II.26. The accounting procedures used in the recording of costs and receipts shall respect the accounting rules of the State in which the contractor is established as well as permit the direct reconciliation between the costs and receipts incurred for the implementation of the project and the overall statement of accounts relating to the overall business activity of the contractor;

...

2. The following non-eligible costs may not be charged to the project:

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(e) costs declared, incurred or reimbursed in respect of another Community project;

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(h) excessive or reckless expenditure;

(i) any cost which does not meet the conditions established in Article II.19.1.

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Article II.28 Payment modalities

1. Without prejudice to Article II.29, the Commission shall adopt the amount of the final payment to be made to the contractor on the basis of the documents referred to in Article II.7 which it has approved.

...

7. In the event of late payment the contractor(s) may claim interest, within two months of receipt of the payment. Interest shall be calculated at the rate applied by the European Central Bank to its principal refinancing operations, as published in the C series of the Official Journal of the European Communities , in force on the first calendar day of the month in which the due date falls, plus one and a half percentage points. Interest shall be payable for the time elapsed between expiry of the payment deadline and the date of payment. Date of payment is the date upon which the Commission’s account is debited. Any such interest payment is not considered as part of the financial contribution of the Community established by the provisions of Article 5 of the contract.

8. The periods identified in Article 8 regarding the delays for payment may be suspended by the Commission at any time by notification of the coordinator that the financial statement is not acceptable, either because it does not conform to the requirements of the contract or because it is not in conformity with the activity reports submitted for approval to the Commission. The delay for approval of the financial statement will be suspended until the submission of the corrected or revised version as requested and the balance of the delay for approval will start again upon receipt by the Commission of this information.

The Commission may suspend its payments at any time in case of non-respect by the contractor(s) of any contractual provision, particularly regarding the audit and control provisions in Article II.29. In such case, the Commission shall notify the contractor(s) directly by means of registered letter with acknowledgement of receipt.

The Commission may suspend its payments at any time where there is a suspicion of irregularity committed by one or more contractor(s) in the performance of the contract. Only the portion destined for the contractor(s) suspected of irregularity will be suspended. The Commission shall notify the contractor(s) of the justification for the suspension of payment directly by means of registered letter with acknowledgement of receipt.

Article II.29 Controls and audits

1. The Commission may, at any time during the contract and up to five years after the end of the project, arrange for audits to be carried out, either by outside scientific or technological reviewers or auditors, or by the Commission departments themselves including [the European Anti-Fraud Office]. Such audits may cover scientific, financial, technological and other aspects (such as accounting and management principles) relating to the proper execution of the project and the contract. Any such audit shall be car ried out on a confidential basis. Any amounts due to the Commission as a result of the findings of any such audit may be the subject of a recovery as mentioned in Article II.31.

The contractor(s) shall have the right to refuse the participation of a particular outside scientific or technological reviewer or auditor on grounds of commercial confidentiality.

2. The contractors shall make available directly to the Commission all the detailed data that may be requested by the Commission with a view to verifying that the contract is being properly managed and performed.

3. The contractors shall keep the original or, in exceptional cases, duly substantiated, authenticated copies, of all documents relating to the contract for up to five years from the end of the project. These shall be put at the Commission’s disposal where requested during the execution of any audit under the contract.

4. In order to carry out these audits, the contractors shall ensure that the Commission’s departments and any outside body(ies) nominated by it have on-the-spot access, notably to the contractor’s offices, at all reasonable times and to all the information needed to carry out those audits.

...

6. In addition, the Commission may carry out on-the-spot checks and inspections in accordance with Council Regulation (Euratom, EC) No 2185/96 of 11 November 1996 concerning on-the-spot checks and inspections carried out by the Commission in order to protect the European Communities’ financial interests against fraud and other irregularities and Regulation (EC) No 1073/1999 of the European Parliament and of the Council of 25 May 1999 concerning investigations conducted by the European Anti-Fraud Office (OLAF) [Council Regulation (Euratom) No 1074/1999 of 25 May 1999 concerning investigations conducted by the European Anti-Fraud Office (OLAF)]

...

Article II.30 Liquidated damages

Without prejudice to any other measures provided for in this contract, the contractors agree that the Community, with the aim of protecting its financial interests, is entitled to claim liquidated damages from a contractor who is found to have overstated expenditure and who has consequently received an unjustified financial contribution from the Community. Liquidated damages are due in addition to the recovery of the unjustified financial contribution from the contractor.

1. Any amount of liquidated damages shall be proportionate to the overstated expenditure and unjustified portion of the Community contribution. The following formula shall be used to calculate any possible liquidated damages:

Liquidated damages = unjustified financial contribution x (overstated expenditure/total claimed)

The calculation of any liquidated damages shall only take into consideration the period relating to the contractor’s claim for the Community contribution for that period. It shall not be calculated in relation to the entire Community contribution.

2. The Commission shall inform the contractor which it considers liable to pay liquidated damages in writing of its claim by way of a registered letter with acknowledgement of receipt. The contractor shall have a period of 30 days to answer the Community’s claim.

3. The procedure for repayment of unjustified financial contribution and for payment of liquidated damages will be determined in accordance with the provisions of Article II.31.

4. The Commission shall be entitled to compensation in respect of any overstated expenditures which come to light after the contract has been completed, in accordance with the provisions of paragraphs 1 to 6.

5. These provisions shall be without prejudice to any administrative or financial sanctions that the Commission may impose on any defaulting contractor in accordance with the Financial Regulation or to any other civil remedy to which the Community or any other contractor may be entitled. Furthermore, these provisions shall not preclude any criminal proceedings which may be initiated by the Member States’ authorities.

6. Further, as established by the Financial Regulation, any contractor declared to be in grave breach of its contractual obligations shall be liable to financial penalties of between 2% and 10% of the value of the Community financial contribution received by that contractor. The rate may be increased to between 4% and 20% in the event of a repeated breach in the five years following the first breach.

Article II.31 Reimbursement to the Commission and recovery orders

1. If any amount is unduly paid to the contractor or if recovery is justified under the terms of the contract, the contractor undertakes to repay the Commission the sum in question on whatever terms and by whatever date it may specify.

2. If the contractor fails to pay by the date set by the Commission, the sum due shall bear interest at the rate indicated in Article II.28. Interest on late payment shall cover the period between the date set for payment and the date when the Commission receives full payment of the amount owed.

...

3. Sums owed to the Commission may be recovered by offsetting them against any sums owed to the contractor, after informing the latter accordingly, or by calling in any financial guarantee. The contractor’s prior consent shall not be required.

...

5. The contractor understands that under Article 256 of the Treaty establishing the European Community, and as provided by the Rules for Participation, the Commission may adopt an enforceable decision formally establishing an amount as receivable from persons other than States.’

9. Two other contracts (‘the eTEN contracts’) were concluded within the framework of the eTEN specific programme, which related to trans-European telecommunication networks and was governed by Council Regulation (EC) No 2236/95 of 18 September 1995 laying down general rules for the granting of Community financial aid in the field of trans-European networks (OJ 1995 L 228, p. 1), as amended by Regulation (EC) No 1655/1999 of the European Parliament and of the Council of 19 July 1999 (OJ 1999 L 197, p. 1).

10. Those contracts were:

– contract No 029255 ‘NavigAbile: e-inclusion for communication disabilities’ (‘the NavigAbile contract’), Article 2 of which fixed the project’s length at 15 months from the first day of the month following the last signature by the parties, which was, according to the applicant, 1 January 2007, and Article 3 of which provided for a maximum Community financial contribution of EUR 756 275, EUR 62 148 of which was intended for the applicant;

– contract No 517506 ‘European Recommended Materials for Distance Learning Courses for Educators’ (‘the Euridice contract’), Article 2 of which fixed the project’s length at 18 months from the first day of the month following the last signature by the parties, which was, according to the applicant, 1 August 2005, and Article 3 of which provided for a maximum Community financial contribution of EUR 860 834, EUR 55 750 was intended for the applicant.

11. The general conditions for eTEN contracts (‘the eTEN conditions’) provide, inter alia, as follows:

‘Article II.1 Definitions

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2. “Beneficiary” means a legal entity, an international organisation or the Joint Research Centre (JRC), which has concluded this grant agreement with the Community.

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4. “Member” means a legal entity, an international organisation, or the JRC, other than a beneficiary, which has concluded a membership agreement signed with a beneficiary in agreement with the Community and in accordance with this grant agreement and having, by virtue of that membership agreement, the same rights and obligations as the beneficiary unless the former stipulates otherwise.

5. “Participant” means a beneficiary or a member.

...

28. “Eligible costs” means the costs referred to in Articles 14 and 15 of this Annex, in compliance with the conditions set out in Articles 13.1 to 13.7 thereof.

...

32. “Irregularity”: means any infringement of a provision of Community law or any breach of a contractual obligation resulting from an act or omission by a beneficiary or a member which has, or would have, the effect of prejudicing the general budget of the European Communities or budgets managed by it through unjustified expenditure.

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Article II.3 The Community’s financial contribution

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4. Subject to Article 17 of this Annex, all payments shall be considered as final only after the last project deliverable is approved.

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6. After the grant agreement completion date, the termination of the grant agreement or of the participation of a beneficiary or a member, the Commission may or shall, as appropriate, request from the beneficiary concerned, or from the beneficiary involved with regard to one of his members, repayment of the entire Community’s contribution paid to it, where fraud or serious financial irregularities are discovered in the course of an audit carried out in accordance with Article 17 of this Annex. Interest at the rate applied by the European Central Bank for its main refinancing operations on the first calendar day of the month during which the beneficiary concerned received the funds plus three and a half percentage points shall be added to the amount to be repaid. The interest shall cover the period between the receipt of the funds and their repayment.

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Article II.7 Termination of the grant agreement or of the participation of a beneficiary or member

...

3. The Commission may immediately terminate this grant agreement or the participation of a beneficiary or request the beneficiary involved to terminate the participation of one of his members from the date of receipt of the registered letter with acknowledgement of receipt sent by the Commission or, in the case of a member, by the beneficiary concerned in accordance with paragraph 6, third subparagraph, of this Article:

(a) where the project has not effectively commenced within three months of the payment of the pre-financing and the new date proposed is considered unacceptable by the Commission;

(b) where the participant directly concerned has not fully performed his contractual obligations despite a written request from the Commission, or the coordinator in agreement with the other beneficiaries, or, in the case of a member, the beneficiary involved, to remedy a failure to comply with such obligations within a period not exceeding one month;

(c) where a change of control over a beneficiary is likely substantially to affect the project or the interests of the Community;

(d) in the event of bankruptcy, of winding up, of cessation of trading, of winding up by court order or composition, suspension of activities of a participant or any similar proceeding provided for by national laws or regulations and leading to a similar result;

(e) in the event of a serious financial irregularity.

4. The Commission shall immediately terminate this grant agreement or the participation of a beneficiary or shall request a beneficiary concerned to terminate the participation of a member from the date of receipt of the registered letter with acknowledgement of receipt sent by the Commission or, in the case of a member, by the beneficiary concerned in accordance with paragraph 6, third subparagraph of this Article where a participant has made false declarations for which he may be held responsible or has deliberately withheld information in order to obtain the Community’s financial contribution or any other advantage provided for in the grant agreement.

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Article II.13 Eligible costs — general principles

1. Eligible costs are the costs defined in Articles 14 and 15 of this Annex. They shall fulfil the following conditions:

– be necessary for the project;

– be incurred during the duration of the project;

– be determined in accordance with the accounting principle based on historic costs and the usual internal rules of the participant, provided that they are regarded as being acceptable by the Commission;

– be recorded in the accounts no later than at the date of establishment of the final financial statements or in the tax documents, or, where applicable, no later than at the date of the establishment of the audit certificate referred to in Article 4.2(c) of this Annex, whichever date is the earliest,

and

– exclude any profit margin.

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4. Non-eligible costs are in particular the following:

...

– unnecessary or ill-considered expenses;

...

– entertainment or hospitality expenses, except such reasonable expenses accepted by the Commission as being absolutely necessary for carrying out the grant agreement.

Article II.14 Direct costs

1. Personnel

With regard to personnel costs,

(a) Only the costs of the actual hours worked by the persons directly carrying out the managerial and technical work under the project may be charged to the grant agreement.

Such persons must:

– be directly hired by the participant in accordance with his national legislation,

– be under the sole supervision of the latter,

and

– be remunerated in accordance with the normal practices of the participant, provided that these are regarded as acceptable by the Commission.

All the working time charged to the grant agreement must be recorded throughout the duration of the project, or, in the case of the coordinator, within a maximum period of two months from the end of the duration of the project, and be certified at least once a month by the person in charge of the work designated by the participant in accordance with Article 2.2(b) of this Annex or by the duly authorised financial officer of the participant.

...

4. Travel and subsistence

Actual travel and related subsistence costs for personnel working on the project may be charged to the grant agreement.

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Article II.16 Justification of costs

Eligible costs shall be reimbursed where they are justified by the participant.

To this end, the participant shall maintain, on a regular basis and in accordance with the normal accounting conventions of the State in which he is established, the accounts for the project and appropriate documentation to support and justify in particular the costs and time reported in his financial statements.

This documentation must be precise, complete and effective.

Article II.17 Financial audit

1. The Commission, or any representative authorised by it, may initiate an audit in respect of a participant at any time during the grant agreement and up to five years after the final payment of the Community contribution, as referred to in Article 3 of this Annex.

...

2. The Commission or any authorised representative may have access, at any reasonable time, in particular to the personnel of the participants connected with the project, the documentation referred to in Article 16 of this Annex, computer records and equipment that it considers relevant. In this connection, it may request that data be handed over to it in an appropriate form in order, for instance, to ascertain the eligibility of the costs.

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4. On the basis of the conclusions of the audit, the Commission shall take all appropriate measures which it considers necessary, including the issuing of a recovery order regarding all or part of the payments made by it. The recovery order shall be addressed to the beneficiary concerned or involved in the case of financial audit in respect of one of his members.

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Article II.19 Reimbursement to the Commission and recovery orders

1. If any amount is unduly paid to the participant or if recovery is justified under the terms of the agreement, the beneficiary undertakes to repay the Commission the sum in question on whatever terms and by whatever date it may specify.

2. If the beneficiary fails to pay by the date set by the Commission, the sum due shall bear interest at the rate indicated in Article 3.6 to this Annex. Interest on late payment shall cover the period between the date set for payment, exclusive, and the date when the Commission receives full payment of the amount owed, inclusive.

...’

12. The last contract at issue (‘the CIP contract’ or ‘the T-Seniority contract’) was concluded within the framework of the Competitiveness and Innovation Framework Programme established by Decision No 1639/2006/EC of the European Parliament and of the Council of 24 October 2006 establishing a Competitiveness and Innovation Framework Programme (2007 to 2013) (2007-2013) (OJ 2006 L 310, p. 15).

13. That contract was contract No 224988 ‘T-Seniority: Expanding the benefits of information society to older people through digital TV channels’, Article 3 of which fixed the project’s length at 24 months from 1 July 2008 and Article 5 of which provided for a maximum Community financial contribution of EUR 2 669 999, EUR 72 562.50 was intended for the applicant.

14. The general conditions of the CIP contract (‘the CIP conditions’) provide, inter alia, as follows:

‘Article II.1 Definitions

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“beneficiary” means a legal entity which participates in this grant agreement concluded with the Community.

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“eligible costs” means the costs referred to in Articles II.21 and II.22, in compliance with the conditions set out in Articles II.20 and II.23.

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“irregularity” means any infringement of a provision of Community law or a provision of this grant agreement resulting from an act or omission on the part of the beneficiary(ies) which causes or might cause a loss to the Community budget.

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Article II.5 Approval of reports and deliverables, time-limit for payments

1. At the end of each reporting period, the Commission shall evaluate the project reports and deliverables required by Annex I and disburse the corresponding payments within 105 days of their receipt unless the time-limit, th e payment or the project has been suspended. The Commission may be assisted by external experts in the analysis and evaluation of reports and deliverables.

2. Payments shall be made after the Commission’s approval of the reports and/or deliverables. The absence of a response from the Commission within the time-limit shall not imply approval. The Commission may reject reports and deliverables even after the time-limit for payment. Approval of the reports shall not imply recognition of their regularity or of the authenticity of the declarations and information they contain and shall not imply exemption from any audit or review.

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Article II.10 Termination of the grant agreement or of the participation of a beneficiary

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2. The Commission shall not object:

(a) to the termination of the grant agreement at the written request of the coordinator in agreement with all the other beneficiaries on the grounds mentioned in paragraph 1 of this Article;

(b) to the withdrawal of a beneficiary from the project, unless this withdrawal substantially affects the implementation of the project.

The termination of the grant agreement or the withdrawal of a beneficiary shall be effective:

– on the date of the letter of acceptance by the Commission as notified by registered letter with acknowledgement of receipt;

– not later than one month following receipt of notification by the interested part(y)(ies) in the absence of written observations by the Commission within that time-limit.

3. The Commission may immediately terminate this grant agreement or the participation of a beneficiary from the date of receipt of the registered letter with acknowledgement of receipt sent by the Commission:

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(f) in the event of an irregularity or fraud on the part of a beneficiary;

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Article II.11 Financial and other consequences of termination

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3. In the event of termination, payments by the Commission shall be limited to those eligible costs incurred and accepted up to the effective date of termination and to any legitimate commitments undertaken prior to that date which cannot be cancelled.

4. By derogation from the above paragraph:

– In the event of termination pursuant to Article II.10, paragraph 2, first subparagraph, point (b), or paragraph 3, points (b), (c), (e), (f) or (g), the Commission may require repayment of all or part of the Community financial contribution, taking into account the nature and results of the work carried out and its usefulness to the Community in the context of the present programme;

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7. The Commission may exercise all rights under this grant agreement to accept or reject reports and deliverables, to accept, reduce or reject a cost claim and to initiate an audit or a technical review.

8. Notwithstanding the termination of the grant agreement or the participation of a beneficiary, the provisions in Part B and Part D of Annex II continue to apply after the termination of the grant agreement or the termination of a beneficiary’s participation. Any other provisions in this grant agreement which specifically indicate their continued application after the termination shall also apply for the duration specified in those provisions.

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Article II.20 Eligible costs — general principles

1. Eligible costs are the costs defined in Articles II.21 and II.22. They shall fulfil the following conditions:

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– be necessary for the implementation of the project;

– be actually incurred by the beneficiary;

– be identifiable and verifiable, be recorded in the beneficiary’s accounts and determined in accordance with the applicable accounting standards of the country where the beneficiary is established and with the usual cost accounting practices of the beneficiary. The beneficiary’s internal accounting and auditing procedures must permit the direct reconciliation of the costs and receipts declared in respect of the project with the corresponding financial statements and supporting documents;

– comply with the requirements of the applicable tax and social legislation;

– be reasonable and justified and comply with the requirements of sound financial management, in particular regarding economy and efficiency;

and

– be incurred during the duration of the project.

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2. Non-eligible costs are in particular the following:

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– unnecessary or ill-considered expenses;

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– any cost incurred or reimbursed in respect of, in particular, another Community, international or national project.

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Article II.23 Justification of costs

Eligible costs shall be reimbursed where they are justified by the beneficiary.

To this end, the beneficiary shall maintain, on a regular basis and in accordance with the normal accounting conventions of the State in which it is established, the accounts for the project and appropriate documentation to support and justify in particular the costs and time reported in its financial statements. These accounts shall be maintained for at least five years after the date of the final payment. All the working time charged to the agreement shall be recorded throughout the duration of the project, or not later than two months from the end of the duration of the project, and shall be certified by the person in charge of the work as designated by the beneficiary in accordance with Article II.3(b) or by the duly authorised financial officer of the beneficiary.

This documentation shall be precise, complete and effective.

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Article II.26 Payment modalities

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6. Any payment may be subject to an audit or review and may be adjusted or recovered based on the results of the audit or review.

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Article II.28 Financial audit

1. The Commission may initiate an audit in respect of a beneficiary at any time during the implementation of the project and up to five years after the date of the final payment. The audit procedure in respect of a beneficiary shall be deemed to be initiated on the date of receipt by the latter of the relevant registered letter with acknowledgement of receipt sent by the Commission.

The audit procedure may be carried out by external auditors or by the Commission Services themselves, including OLAF. The audit procedure shall be carried out on a confidential basis.

2. The beneficiaries shall make available directly to the Commission all detailed information and data that may be requested by the Commission, or any representative authorised by it, with a view to verifying that the grant agreement is properly managed and performed in accordance with its provisions and that costs have been charged in compliance with it.

3. The beneficiaries shall ensure that the Commission, or any external body authorised by it, has on-the-spot access, at any reasonable time, in particular to the beneficiary’s offices, the personnel of the beneficiaries connected with the project, the documentation referred to in Article II.23 needed to carry out the audit, including information on individual salaries of persons involved in the project, accounting data, computer records and equipment. In this connection, the Commission, or any external body authorised by it, may request that data be handed over to it in an appropriate form in order, for instance, to ascertain the eligibility of the costs.

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5. On the basis of the conclusions of the audit, the Commission shall take all appropriate measures which it considers necessary, including the issuing of a recovery order regarding all or part of the payments made by it and the application of any applicable sanction.

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Article II.30 Reimbursement to the Commission and recovery orders

1. Where an amount paid by the Commission to the coordinator in its capacity as the recipient of all payments is to be recovered under the terms of this grant agreement, the beneficiary concerned undertakes to repay the Commission the sum in question, on whatever terms and by whatever date it may specify.

2. If the obligation to pay the amount due is not honoured by the date set by the Commission, the sum due shall bear interest at the rate indicated in Article II.5(5). Interest on late payment shall cover the period between the date set for payment, exclusive, and the date when the Commission receives full payment of the amount owed, inclusive.

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4. The beneficiaries understand that under Article 256 of the Treaty establishing the European Community, the Commission may adopt an enforceable decision formally establishing an amount as receivable from persons other than States.’

15. As regards the law applicable to the contracts at issue, Article 12 of the FP6 contracts stipulates that ‘[t]he law of Belgium shall govern this contract’.

16. Similarly, Article 5(1) of the eTEN contracts provides that ‘[t]he law of Belgium shall govern this grant agreement’.

17. The first paragraph of Article 10 of the CIP contract provides that ‘this grant agreement shall be governed by its terms, the relevant Community acts related to the CIP, the Financial Regulation applicable to the general budget of the European Communities and its Implementing Rules, other Community law and, on a subsidiary basis, the law of Belgium’.

18. As far as jurisdiction is concerned, Article 13 of the FP6 contracts contains an arbitration clause under which the Court of First Instance or the Court of Justice, as is appropriate in the specific case, has sole jurisdiction to hear any disputes between the Community and the contractors as regards the validity, the application or any interpretation of those contracts.

19. The same provision is made in Article 5(2) of the eTEN contracts and in the third paragraph of Article 10 of the CIP contract.

B – Performance of the contracts at issue and audit

20. From 8 to 12 February 2010, the Commission carried out a financial audit of the contracts at issue at the applicant’s offices.

21. Before that audit was conducted, the Commission had already paid the applicant the final instalment of the Community financial contribution for some of the contracts at issue.

22. These were, first, three of the contracts governed by the FP6 conditions, namely the Access-eGOV, eABILITIES and Emerge contracts, for which payment of the final instalment of the Community financial contribution was made, respectively, on 15 December, 30 September and 30 October 2009. The performance of those three contracts by the applicant was definitively approved by the Commission, respectively, on 13 July 2009, 17 March 2009 and 15 May 2010.

23. They were, second, the contracts governed by the eTEN conditions, namely the NavigAbile and Euridice contracts, for which payment was made, respectively, on 28 January 2009 and 28 December 2007. The performance of those two contracts by the applicant was definitively approved by the Commission on 8 December 2008 and 27 March 2007.

24. On the date of the audit, the other contracts at issue were at different stages of performance.

25. With regard to the contract governed by the CIP conditions, namely the T-Seniority contract, the Commission had paid the applicant, through the project coordinator, the first instalment of the Community financial contribution of EUR 43 934.90 on 23 February 2009. By a letter of 1 March 2010, the applicant informed the T-Seniority project coordinator that it was withdrawing from the consortium as from that date.

26. With regard to the other three contracts governed by the FP6 conditions, namely the Ask-It, EU4ALL and Enable contracts, the situation was as follows.

27. In connection with the Ask-It contract, the Commission had paid the first four instalments of the Community financial contribution intended for the applicant, the last payment being made on 27 May 2008. The final instalment of that contribution had not yet been paid. The consortium had sent the Commission the last deliverables on 21 July 2009.

28. In connection with the EU4ALL contract, the Commission had paid the applicant the first two instalments of the Community financial contribution on 4 April 2007 and on 19 January 2009. Following an examination of the reports submitted by the consortium for the third reference period for the project, the Commission had sent the project coordinator a letter dated 13 January 2010 in which it stated that those reports were approved provided the consortium presented a programme implementation plan for the subsequent period including a number of modifications relating to the services to be provided and the tasks to be performed. The Commission also fixed a time-limit of one month for the consortium to take into account its recommendations and to submit a new implementation plan.

29. Subsequently, by letter of 29 March 2010, the Commission granted a new time-limit of one month, with regard to the EU4ALL contract, for the consortium to take into account additional recommendations following the production of new documents and to produce a new implementation plan that took into account those recommendations.

30. After the consortium had produced new documents in connection with the EU4ALL contract, the Commission informed the consortium, in a letter of 9 June 2010, that it considered, subject to the production of additional documents before the end of June 2010, that the consortium was executing the project in a satisfactory manner.

31. By a letter of 4 August 2010, the applicant pointed out to the Commission that, even though the project coordinator had submitted the additional documents requested by the Commission in its letter of 9 June 2010, the Commission had not made any payment. As that situation made it impossible to execute the project provided for in the EU4ALL contract on account of a lack of financial resources, it informed the Commission that it was suspending all execution and all implementation of the project as from the date of that letter until the Commission had fulfilled its contractual obligations, without prejudice to its rights under the contract and to any further damage.

32. By letter of 25 August 2010, the Commission informed the applicant that it had suspended payment of the Community financial contribution for the last reference period in connection with the EU4ALL contract pursuant to the third subparagraph of Article II.28(8) of the FP6 conditions.

33. With regard to the Enable contract, the Commission had paid the applicant the first six instalments of the Community financial contribution which were intended for it, the last payment having been made on 7 June 2009.

34. Subsequently, in a letter of 16 July 2010, the applicant informed the Commission that, in the absence of payment by the Commission, it could not continue to execute the project provided for in the Enable contract on account of a lack of financial resources. It also informed the Commission that it was suspending all execution and all implementation of the project as from the date of that letter until the Commission had fulfilled its contractual obligations, without prejudice to its rights under the contract and to any further damage. It nevertheless submitted to the Commission its last financial report relating to this project on 15 October 2010.

35. On 28 June 2010, the Commission sent the applicant a provisional audit report concerning the performance of the contracts at issue. The applicant sent the Commission its comments on that report on 30 September 2010.

36. By letter of 22 December 2010, the Commission informed the applicant that it had adopted the final audit report, annexed to that letter, whose findings it approved.

37. In the final audit report annexed to the Commission’s letter of 22 December 2010, it was stated that:

– for several successive years, the applicant had failed to record, in particular, its precise receipts in its accounts and its records, contrary to the relevant provisions of Greek law; its accounting records were not therefore reliable and a direct comparison could not be made between the costs and the receipts relating to the implementation of the programmes and its overall statement of accounts;

– a significant percentage of personnel time sheets systematically included handwritten corrections which had been made a posteriori by the programme director without the consent of the member of personnel; this had significant consequences for the declared working hours and raised doubts over the recording of working hours;

– the programme director’s time sheets showed an overstated number of hours worked, which overlapped with hours spent on other professional activities;

– the applicant had falsely declared that the programme director had not participated in the performance of ETSI STF 333 contract financed by the Commission;

– the justification of travel costs did not give a reliable, objective picture of the conditions and the activities carried out in connection with that travel in so far as the majority of trips were not directly connected with the programmes in question.

38. The audit report concluded that all the costs incurred by the applicant in the course of the performance of the Access-eGOV, eABILITIES, Ask-It, EU4ALL, Emerge and Enable contracts and the NavigAbile, Euridice and T-Seniority contracts were therefore to be considered as non-eligible and that all relevant amounts paid to the applicant were to be recovered.

39. The audit report also recommended, in view of the seriousness of the infringements found, that all current contracts concluded by the applicant with the Commission should be terminated in accordance with Article II.16.2 of the FP6 conditions, Articles II.7.3 (serious financial irregularity) and II.7.4 (false declarations) of the eTEN conditions and Article II.10.3 (breach of contract and failure to provide information) of the CIP conditions.

40. In its letter of 22 December 2010, the Commission also indicated the sum to be reimbursed for each of the contracts at issue, totalling EUR 951 029.21, in the form of the following table:

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41. The Commission stated in this regard that the adjustments necessitated by the payment of non-eligible sums to the applicant could affect future payments in respect of the contracts at issue or take the form of a recovery order.

42. In the same letter, the Commission also informed the applicant that, in addition to making these adjustments, its departments would be able to calculate the amount of liquidated damages due to the European Union under Article II.30 of the FP6 conditions and, if necessary, issue a recovery order in respect of those damages.

43. On 4 February 2011, the programme director was interviewed by officials from the European Anti-Fraud Office (OLAF) about the implementation of the projects under the contracts at issue and his participation therein.

44. By letter sent to the applicant on 21 March 2011, the Commission informed the applicant that the amounts that had been unduly paid to the applicant were as follows:

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45. The Commission also informed the applicant that if it failed to submit comments on the matter within 15 days following receipt of the letter, its departments would continue the procedure to recover an amount of EUR 643 782.81 and that it would receive a debit note for each project, containing instructions for making the reimbursement to the Commission within a prescribed time-limit. It also informed the applicant that if it failed to make the reimbursement within the time-limit prescribed in the debit note, the amount to be reimbursed would bear interest at the rate fixed in that debit note. It added that if the total amount, including interest if appropriate, was not reimbursed, it would be subject to either enforcement or compensation with any sums due. Lastly, it stated that, in addition to the recovery order, the responsible department would also calculate the amount of damages owed by the applicant under Article II.30 of the FP6 conditions.

46. By letter of 1 April 2011, the Commission sent the applicant a ‘corrected table’ of the sums unduly paid to it. According to that table, the total amount to be reimbursed was EUR 999 366.40 and not EUR 643 782.81.

47. By letter of 4 April 2011, the Commission informed the applicant that, in the light of the findings of the audit, it considered that the applicant had made false declarations and committed irregularities within the meaning of Article II.1.11 of the FP6 conditions, Article II.1.32 of the eTEN conditions and Article II.1 of the CIP conditions. It also notified the applicant that it considered that it had infringed the terms of the contracts at issue relating to the eligibility of costs and that the aim of those infringements and the false declarations was to obtain an undue contribution from the Union. Accordingly, it informed the applicant of its decision to terminate the applicant’s participation in the Ask-It, EU4ALL, Emerge and Enable contracts, pursuant to Article II.16.2 of the FP6 conditions, as from receipt of that letter. It also requested that the applicant send it, within 30 days from receipt of that letter, all reports and documents due to be submitted to it in connection with the Enable contract concerning the work carried out up to that date pursuant to Article II.7 of the FP6 conditions. It also drew the applicant’s attention to the fact that, in the light of the final results of the audit, it was unlikely that the costs submitted by the applicant for periods not covered by the audit would be considered eligible.

48. On 29 April 2011, the Commission issued nine debit notes indicating the amount to be reimbursed in respect of each of the contracts at issue, totalling EUR 999 213.45. Those debit notes fixed a time-limit of 45 days for the applicant to reimburse the sums due, which expired on 14 June 2011 and at the end of which those sums would bear default interest as provided for in the contracts at issue at the European Central Bank (ECB) rate plus 3.5 percentage points.

49. By letter of the same date, the Commission informed the applicant that the total amount of the damages due in respect of the FP6 contracts was EUR 70 471.47. It also stated that the amount obtained using the formula provided for in Article II.30 of the general conditions of those contracts had been reduced, in order to take account of the requirements of proportionality, to 10% of the amount of the grant paid before the audit.

50. In this connection, the Commission enclosed the following table:

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1 * Amount limited to 10% of the financial contribution paid by the financial coordinator for the projects (95 201.60 € for eABILITIES and 164 988.02 € for Ask-It)

51. In the same letter, the Commission also stated that if the applicant failed to make comments within 30 days of receipt of that letter, a debit note for an amount of EUR 70 471.47 would be issued in accordance with Article II.31 of the FP6 conditions. In addition, it pointed out that if the sum due was not reimbursed within the time-limit prescribed in the debit note, that sum would bear interest on late payment at a rate indicated in the debit note.

52. On 20 June 2011, the Commission issued six debit notes in respect of the contracts concluded between the Community and the applicant for the Access-eGOV, eABILITIES, Ask-It, EU4ALL, Emerge and Enable projects, fixing the total amount owed by the applicant by way of liquidated damages under Article II.30 of the FP6 conditions at EUR 70 471.47. The time-limit within which the applicant had to pay the sums in question was fixed by the Commission at 4 August 2011.

Procedure and forms of order sought

53. By application lodged at the Registry of the General Court on 31 January 2011, the applicant brought the present action.

54. By document lodged at the Registry of the General Court on 13 May 2011, the Commission submitted the defence, which contained a counterclaim.

55. By documents lodged at the Registry of the General Court, the applicant and the Commission submitted, respectively, the reply on 17 August 2011 and the rejoinder on 14 November 2011.

56. The applicant claims that the Court should:

– ‘declare that it has not infringed Article ΙΙ.16.2 of the FP6 conditions, Articles ΙΙ.7.3 (serious financial irregularity) and ΙΙ.7.4 (false declarations) of the eTEN conditions, and Article ΙΙ.10.3 (breach of contract and failure to provide information) of the CIP conditions’;

– ‘declare that by calling into question the eligibility of its costs the Commission has infringed the contracts at issue’;

– declare that the costs amounting to EUR 932 362.44 which it submitted to the Commission in connection with the Access-eGOV, eABILITIES, Ask-It, EU4ALL, Emerge and Enable contracts and the NavigAbile, Euridice and T-Seniority contracts are eligible costs and that it is not obliged to repay the sums contributed by the Commission;

– ‘declare that the Commission’s delay in paying the final funding payments in respect of the EU4ALL, Ask-It and Enable contracts constitutes a breach by the Commission of its contractual obligations’;

– declare that the Commission must pay it the sum of EUR 52 584.05 plus interest payable from the notification of this application, in respect of the costs incurred by it in connection with the EU4ALL contract;

– declare that the Commission must pay it the sum of EUR 20 678.61 plus interest payable from the notification of this application, in respect of the costs incurred by it in connection with the Ask-It contract;

– declare that the Commission must pay it the sum of EUR 11 693.05 plus interest payable from the notification of this application, in respect of the costs incurred by it in connection with the Enable contract;

– order the Commission to pay the costs.

57. In the reply, the applicant withdrew its fourth head of claim in so far as it concerns the Enable contract and its seventh head of claim. In addition, it claimed that the Court should:

– dismiss the Commission’s counterclaim as inadmissible;

– in the alternative, dismiss the Commission’s counterclaim as unfounded.

58. The Commission contends that Court should:

– by way of counterclaim, order the applicant to pay it the sums indicated in the debit notes, totalling EUR 999 213.45, plus interest calculated as from 15 June 2011, at the ECB rate increased by 3.5 points, corresponding to the reimbursement of financial contributions from which the applicant benefitted, and the sum of EUR 70 471.47 plus interest payable from the date of expiry, in the absence of payment, of the time-limit for payment prescribed in the relevant debit note, at the abovementioned rate, corresponding to the damages due in respect of the FP6 contracts;

– dismiss the action brought by the applicant;

– order the applicant to pay the costs.

59. In the rejoinder, the Commission stated that the sum of EUR 70 471.47 corresponding to the damages due in respect of the FP6 contracts had to be increased at the ECB rate plus 3.5 points calculated as from 5 August 2011.

60. Upon hearing the report of the Judge-Rapporteur, the Court (First Chamber) decided to open the oral procedure and, by way of measures of organisation of procedure pursuant to Article 64 of its Rules of Procedure, requested the applicant to produce various documents and to give written answers to certain questions. The applicant complied with that request within the prescribed time-limit.

61. At the hearing held on 4 July 2013, the parties presented their oral arguments and answered the questions asked by the Court.

Law

62. It should be noted as a preliminary point that under Article 272 TFEU the Court of Justice has jurisdiction to give judgment pursuant to any arbitration clause contained in a contract concluded by or on behalf of the Union, whether that contract be governed by public or private law. Under Article 256(1) TFEU, the General Court has jurisdiction to hear and determine at first instance actions or proceedings referred to in Article 272 TFEU.

63. In the present case, under Article 13 of the FP6 contracts, Article 5(2) of the eTEN contracts and the third paragraph of Article 10 of the CIP contract, the General Court has jurisdiction to hear any disputes between the Community and contractors as regards the validity, the interpretation and the application of those contracts.

A – The scope of the dispute

64. It must be stated that the dispute between the parties concerns two distinct aspects of their contractual relations.

65. First, the parties disagree on the eligibility of the costs submitted by the applicant to the Commission in connection with the contracts at issue and on the subsequent obligations to reimburse all the sums paid to the applicant in respect of those costs and to pay liquidated damages.

66. By its third head of claim, the applicant essentially asks the Court to declare that the costs which it submitted to the Commission in connection with the contracts at issue are eligible and that it is not therefore obliged to reimburse to the Commission the sums which the Commission paid it in connection with those contracts.

67. It should also be noted that, in the reply, the applicant claimed that the Court should dismiss the Commission’s counterclaim for the applicant to be ordered to pay the sums indicated in the debit notes of 29 April and 20 June 2011 plus interest as provided for in those notes.

68. Second, the parties also disagree on the Commission’s obligation to make the final payments provided for under the EU4ALL and Ask-It contracts.

69. By its fifth and sixth heads of claim, the applicant claims that the Court should declare that the Commission must pay it the sum of EUR 52 584.05 plus interest in respect of the costs submitted in connection with the EU4ALL contract and the sum of EUR 20 678.61, also plus interest, in respect of the costs submitted in connection with the Ask-It contract, to which the Commission objects, claiming that the Court should dismiss the applicant’s action.

70. Furthermore, by its first and second heads of claim, the applicant essentially claims that the Court should declare that, contrary to the allegations made against it by the Commission, it did not infringe its contractual obligations under Article II.16.2 of the FP6 conditions, Articles II.7.3 and II.7.4 of the eTEN conditions and Article II.10.3 of the CIP conditions and that, by challenging the eligibility of its costs, the Commission has breached its contractual obligations.

71. Similarly, by its fourth head of claim, the applicant claims that the Court should declare that the Commission’s delay in paying the final funding payments in respect of the contracts for the EU4ALL and Ask-It programmes constitutes a breach by the Commission of its contractual obligations.

72. Such requests do not in themselves constitute heads of claim per se, but actually relate to arguments raised by the applicant in support of the action, which will be examined in connection with the explanations concerning the applicant’s third, fifth and sixth heads of claim.

B – The law applicable to the dispute

73. As these proceedings have been instituted pursuant to an arbitration clause under Article 272 TFEU, the General Court must resolve the dispute on the basis of the substantive rules of the national law applicable to the contract (see, to this effect, Case 426/85 Commission v Zoubek [1986] ECR 4057, paragraph 4), in this case Belgian law, which governs the contracts at issue under Article 12 of the FP6 contracts, Article 5(1) of the eTEN contracts and the third paragraph of Article 10 of the CIP contract.

74. Clarification should be given in this regard of the rules governing the performance of contracts in Belgian law.

75. Article 1134 of the Belgian Civil Code provides that ‘agreements lawfully entered into take the place of the law for those who have made them’ (first paragraph) and ‘may be revoked only by mutual consent or on grounds permitted by law’ (second paragraph).

76. The third paragraph of Article 1134 provides that agreements must be performed in good faith. Article 1135 of the Civil Code provides that ‘agreements are binding not only as to what is therein expressed, but also as to all the consequences which equity, custom or statute give to the obligation according to its nature’, thereby also expressing the principle of good faith performance of contracts.

77. Where a dispute arises with regard to the performance of a contract, the burden of proof is governed by the provisions of Article 1315 of the Belgian Civil Code, under which:

‘A person who claims the performance of an obligation must prove it.

Reciprocally, a person who claims to be released must justify the payment or the fact which has produced the extinguishment of his obligation.’

78. Furthermore, in accordance with the generally recognised principle of law that each court applies its own procedural rules, jurisdiction and the admissibility of the claims — whether made by the applicant or the defendant — fall to be determined solely with regard to Union law (see, to this effect, Commission v Zoubek , paragraph 73 above, paragraph 10, and Case C‑209/90 Commission v Feilhauer [1992] ECR I‑2613, paragraph 13).

79. It is in the light of these considerations that the applicant’s different heads of claim and the Commission’s counterclaims will have to be examined.

C – The applicant’s third head of claim

80. In support of its third head of claim, the applicant asserts that the Commission wrongly refused to regard as eligible all the costs which it had asked the applicant to reimburse.

81. In order to prove the validity of that assertion, the applicant puts forward two sets of arguments. The first concerns the findings made by the Commission in the final audit report on the basis of which it concluded that the costs submitted in connection with the contracts at issue were non-eligible. The second concerns the quality of the audit and the conditions under which it was carried out.

1. The findings of the audit report justifying the non-eligibility of the costs

82. The applicant puts forward several arguments relating to the findings contained in the audit report on the basis of which the Commission concluded that the contracts at issue had been infringed and, therefore, that all the costs submitted in connection with those contracts were non-eligible and that the applicant was required to reimburse the sums that had been unduly paid to it.

83. It should be pointed out in this regard that, in accordance with the principles mentioned in paragraphs 73 to 77 above, it follows from, first, Article II.19 of the FP6 conditions, Article II.16 of the eTEN conditions and Article II.20 of the CIP conditions and, second, Article 1315 of the Belgian Civil Code, which is applicable in this case, that the costs claimed by the applicant may be reimbursed to it only if it has proved that they had actually been incurred, they were related to the contracts at issue and other eligibility criteria laid down by those contracts had been respected (see, to this effect, Case T‑68/99 Toditec v Commission [2001] ECR II‑1443, paragraphs 94 and 95). If such proof is given, the Commission must demonstrate that it should be disregarded.

(a) The accounts kept by the applicant

84. The applicant claims, in essence, that its accounts were reliable, that they were kept in accordance with the Greek legislation applicable in the present case and that they permitted the reconciliation provided for by Article II.19(1)(d) of the FP6 conditions, Articles II.20(1) and II.23 of the CIP conditions and Article II.16 of the e-TEN conditions between, on the one hand, the declared costs and the receipts collected in connection with the contracts at issue and, on the other, its overall activity.

85. It should be observed as a preliminary point that, with regard to the irregularities found in the applicant’s accounts, it is clear from the audit report that, further to a request made by the auditors, the applicant identified several errors in its accounts, in particular a failure to record two payments of EUR 63 000 and EUR 11 000 received respectively in connection with the Access-eGOV project and another project not covered by the audit.

86. It is also clear from the audit report that, further to another request made by the auditors for the applicant to provide them with an annual balance sheet for all the years covered by the audit, the applicant stated that it was not legally required to prepare such documents, but that, in any event, they would be available after a brief review. That review revealed errors in the accounts with regard to the recording of certain costs. Consequently, the applicant was asked to produce a new version of the accounts. Despite the corrections made to the accounts, the auditors found that the balance sheets submitted to them did not permit a reconciliation between the declared costs and the payments made in connection with the contracts at issue and the receipts and the costs recorded in the applicant’s accounts. The reconciliation between the applicant’s end-of-year bank statements and the annual balance sheets provided to the auditors also resulted in significant differences between those documents being identified. Several weeks after the on-the-spot check, the applicant also provided different, new reconciliations to show that the accounts were not materially inaccurate and that they could still be used as a reliable basis for the auditors to issue an opinion on the eligibility of the costs. It is also clear from the audit report that, according to the auditors, all these errors largely stem from the use of different accounting principles over the years. Thus, certain receipts and costs had been recorded on the date of issue of the invoice, whilst others had been recorded on the date of payment.

87. In addition, the audit report contains a table which shows a difference between the receipts initially recorded in the applicant’s accounts and the revised receipts of EUR ‑20 936.04 for 2005, EUR +74 060.08 for 2006, EUR ‑300 for 2007 and EUR ‑8 034.90 for 2008. With regard to costs, the differences were EUR ‑750.63 for 2004, EUR ‑175.70 for 2006 and EUR ‑490.74 for 2007.

88. According to the audit report, the difference with regard to receipts identified for 2006 stemmed from a failure to record two payments from the Commission in the applicant’s accounts: the first, amounting to EUR 63 000, for the Access-eGOV project and, the second, amounting to EUR 11 000, for another project.

89. It should be noted in this regard that the applicant does not dispute the existence of the differences found by the auditors between the amounts of the costs and receipts for the period from 2004 to 2008 as shown in the accounts initially provided to the auditors and the amounts of the costs and receipts revised after the Commission auditors found inconsistencies at the end of the audit.

90. In order to assess whether these differences could affect the eligibility of the costs submitted by the applicant in connection with the contracts at issue, it should be pointed out that, under Article II.19(1)(d) of the FP6 conditions, the eligible costs incurred for the implementation of the project ‘must be recorded in the accounts of the contractor that incurred them [and] the accounting procedures used in the recording of costs and receipts shall respect the accounting rules of the State in which the contractor is established as well as permit the direct reconciliation between the costs and receipts incurred for the implementation of the project and the overall statement of accounts relating to the overall business activity of the contractor’.

91. Under Article II.16 of the eTEN conditions:

‘Eligible costs shall be reimbursed where they are justified by the participant. To this end, the participant shall maintain, on a regular basis and in accordance with the normal accounting conventions of the State in which he is established, the accounts for the project and appropriate documentation to support and justify in particular the costs and time reported in his financial statements. This documentation must be precise, complete and effective.’

92. Article II.20 of the CIP conditions provides that eligible costs must be ‘identifiable and verifiable, be recorded in the beneficiary’s accounts and determined in accordance with the applicable accounting standards of the country where the beneficiary is established and with the usual cost accounting practices of the beneficiary. The beneficiary’s internal accounting and auditing procedures must permit the direct reconciliation of the costs and receipts declared in respect of the project with the corresponding financial statements and supporting documents’.

93. Article II.23 of the CIP conditions further provides:

‘Eligible costs shall be reimbursed where they are justified by the beneficiary. To this end, the beneficiary shall maintain, on a regular basis and in accordance with the normal accounting conventions of the State in which it is established, the accounts for the project and appropriate documentation to support and justify in particular the costs and time reported in its financial statements. These accounts shall be maintained for at least five years after the date of the final payment. All the working time charged to the agreement shall be recorded throughout the duration of the project, or not later than two months from the end of the duration of the project, and shall be certified by the person in charge of the work as designated by the beneficiary in accordance with Article II.3(b) or by the duly authorised financial officer of the beneficiary. This documentation shall be precise, complete and effective.’

94. It is clear from those provisions that, for a cost incurred by the applicant in connection with the contracts at issue to be regarded as eligible, it must, among other things, be recorded in the applicant’s accounts, which are to be maintained in accordance with the legislation of the State in which it is established, namely the Hellenic Republic. In addition, the applicant’s accounts must permit, in the case of the FP6 contracts, a reconciliation allowing a direct comparison between the costs and receipts incurred for the implementation of the project and the overall statement of accounts relating to the applicant’s overall activity and, in the case of the eTEN and CIP contracts, a direct comparison between those costs and the financial statements submitted to the Commission.

95. With regard, first, to the question whether in the present case the applicant infringed the provisions of Greek law applicable to the keeping of its accounts, it should be noted that, on page 19 of the final audit report of 22 December 2010, the auditors merely report the infringement of Article 17(1) of the Proedriko diatagma yp’arithmon 186 — kodikas vivlion kai stihion (Code of Books and Records of the Hellenic Republic) (CBR). However, it is clear from the Commission’s written submissions that it also claims that, in accordance with Article 30(4) of the CBR, the applicant’s accounts must be considered as inaccurate and to give rise to the non-accounting determination of the applicant’s results, as provided for in Article 32(1) and (2) of the Nomos yp’arithmon 2238 — Kyrosi tou kodika forologias isodimatos (Income Tax Code of the Hellenic Republic) (ITC), and the payment of an additional tax in accordance with Article 86 of the ITC.

96. It should be pointed out in this regard that the parties agree that the applicant comes under the second category of accounts for the purposes of Article 6 of the CBR, under which:

‘1. In order to carry on his profession, an operator coming under the second category shall keep a book of receipts and costs in which he records, in separate columns:

(a) the type of documentary evidence, its order number and the date of issue or of receipt ...

(b) gross receipts from the sale of goods ..., from the provision of services and from other transactions,

(c) costs for all purchases of goods ..., costs relating to services received, overhead expenses and other transactions ...

2. The amount of each transaction referred to in the preceding paragraph shall be itemised in separate columns of the accounts book or in lists, depending on the requirements of income tax and VAT. This itemised presentation shall be comple ted by the expiry of the time-limit for submission of income tax returns at the latest ...’

97. The applicant does not deny that Article 17(1) of the CBR, entitled ‘Time-limit for updating books’, provides that ‘[t]he updating of books ... in the second category shall be completed by the fifteenth day of the month following the issue or the receipt, as the case may be, of the documentary evidence’.

98. It is also common ground between the parties that Article 30 of the CBR, entitled ‘Validity and probative force of books and records’, provides:

‘1. Without prejudice to the provisions of the following paragraphs of the present article, the validity and the reliability of books and records falling within the ambit of this Code shall not be affected by the identification of irregularities or omissions therein and the head of the competent tax service shall recognise the resulting data in determining the operators’ tax obligations. The abovementioned irregularities or omissions shall, except where otherwise specially provided, give rise only to financial and administrative penalties in proportion to their nature and their extent, with reference to the amounts shown in the books.

2. Books and records shall be regarded as incomplete or inaccurate and give rise to the non-accounting determination of the tax base, where appropriate, only in the cases provided for in paragraphs 3, 4, 6 and 7 below.

3. Books and records in the second and third categories shall be regarded as insufficient where one of the following conditions or all those conditions are met: the taxable person ... (b) keeps or issues or maintains the books and records provided for by the present Code in a manner contrary to its provisions.

...

The acts or irregularities or omissions mentioned in the present paragraph shall be regarded as insufficient only where they do not stem from excusable error or negligence or where they make the accounting control of tax obligations objectively impossible, and not simply difficult.

Cases of deficiencies identified in books and records kept and the inability to reproduce the contents of the optical disk of the inventory book do not constitute an objective inability to conduct a review where the relevant information may be compensated by lists or electromagnetic media or other detailed information provided to the tax auditor within the time-limit prescribed by him, on the condition that the information is clear, in order to make the financial audits possible and to permit that information to be audited on the basis of the books and records.

The insufficiency must concern the inability to carry out specific financial audits for amounts which are higher than those contained in the books and records and it must be justified.

4. Books and records in the second and third categories shall be regarded as inaccurate where one of the following conditions or all those conditions are met:

(a) the taxable person does not record receipts or costs in his books or he records them inaccurately or he records costs which have not been incurred and for which no tax document has been issued ...

To give rise to a non-accounting determination of results, the acts or omissions referred to in the present paragraph must be on a large scale and have a significant effect on the results or make the accounting control of tax obligations objectively impossible, the provisions of the latter two subparagraphs of paragraph 3 of this article applying by analogy to the acts or omissions referred to in points (f) and (i) of this paragraph.

... The following shall not be regarded insufficient or inaccurate: (a) the entry in the accounts of a receipt or a cost for a financial year other than the one to which it pertains ...’

99. It follows from these provisions that books and records in the second category of accounts for the purposes of Article 6 of the CBR may, under certain conditions, be regarded as insufficient or inaccurate and, therefore, have their validity and their probative force called into question.

100. Books and records in the second category of accounts for the purposes of Article 6 of the CBR are regarded as insufficient, in particular, where the taxable person keeps those books and records in a manner contrary to the provisions of the CBR provided the irregularities and omissions do not stem from excusable error or negligence and they make the accounting control objectively impossible, and not simply difficult. The accounting control is not made objectively impossible by deficiencies affecting books and records where the relevant information may be compensated by lists or electromagnetic media or other detailed information provided to the tax auditor within the time-limit prescribed by him, on the condition that the information is clear.

101. Books and records in the second category of accounts for the purposes of Article 6 of the CBR are regarded as inaccurate, in particular, where the taxable person does not record receipts or costs in his books or he records them inaccurately or he records costs which have not been incurred and for which no tax document has been issued. However, to give rise to a non-accounting determination of the taxable person’s results, those acts or omissions must be on a large scale and have a significant effect on the results or make the accounting control of tax obligations objectively impossible.

102. In addition, the entry in the accounts of a receipt or a cost for a financial year other than the one to which it pertains is not regarded as insufficient or inaccurate.

103. The Commission claims, in it written pleadings, that the errors identified by the auditors in the applicant’s accounts constitute inaccuracies for the purposes of Article 30(4) of the CBR.

104. Furthermore, the Court notes that in their written pleadings the parties extensively debated whether the provisions of the ITC are applicable in the present case, the main issue of that debate being whether the applicant could be subject to the non-accounting determination of the tax base provided for in Article 32 of the ITC. It is clear from the wording of Article 30(2) of the CBR that the insufficient or inaccurate nature of books and records may be established irrespective of the penalty, represented by the non-accounting determination of the tax base, which may ensue ‘where appropriate’. In those circumstances, the question whether or not the applicant is subject to the provisions of the ITC would seem to be irrelevant, in this case, in determining whether the applicant’s accounts are inaccurate.

105. It is therefore necessary to examine only whether, in the present case, the errors identified by the auditors in the applicant’s accounts had the effect of making those accounts inaccurate within the meaning of Article 30(4) of the CBR.

106. In this regard, it is apparent from the audit report that a substantial proportion of the errors identified during the audit stem from the fact that certain costs and certain receipts were recorded on the date of issue or of receipt of the documentary evidence, whilst others were recorded on the date of payment made or received by the applicant.

107. According to the applicant, the alternative use of these recording methods is consistent with Greek law and resulted in certain receipts and certain costs being entered into the accounts in financial years to which they do not pertain. However, under Article 30(4) of the CBR, such errors do not constitute inaccuracies.

108. It should nevertheless be pointed out that the applicant does not dispute that the errors identified with regard to the amount of receipts for 2006 stem from a simple failure to record them and not from those receipts being recorded on a wrong date. The failure to record a receipt constitutes an inaccuracy in accordance with the wording of Article 30(4) of the CBR.

109. Accordingly, on the basis of a reading of Article 30(1) and (4) of the CBR, the validity and the probative force of the applicant’s accounts for 2006 could be called into question by the Commission.

110. Furthermore, it should also be pointed out that the applicant does not explicitly contest the finding made by the auditors in the audit report according to which the fact that it updated its accounts only after they had noted the failure to record certain costs and certain receipts, namely during the week in which the on-the-spot check was made, constitutes an infringement of Article 17(1) of the CBR, under which it was required to update its accounts no later than the fifteenth day of the month following the receipt or the issue of the relevant documentary evidence.

111. In this regard, the applicant simply asserts that a circular interpreting that provision states that ‘[w]here, in the course of the financial year, the operator receives documents relating to the purchase of goods (invoices) prior to the receipt of those goods, no entry is made in the books kept by the operator and those items are entered into the accounts when the goods are received’, without explaining to what extent this justifies the failure to record in its accounts the payments made by the Commission within the prescribed time-limit.

112. Accordingly, for 2006 at least, the applicant’s accounts would not appear to be consistent with the Greek legislation applicable to them.

113. This conclusion cannot be affected by Article 5(5) of the Nomos yp’arithmon 2523 — Diikitikes kai pinikes kyrosis sti forologiki nomothesia kai alles diataxeis (Law No 2523/97 on administrative and criminal penalties in tax laws), which is relied upon by the applicant and which provides that, by way of exception, a fine is not imposed where irregularities or omissions are identified which represent breaches of procedural requirements that are among those which have an effect on the validity of books and records, making them inaccurate and not making financial audits extremely difficult, provided they stem from an excusable error or omission, unless it can be proved that a recommendation was made previously by any tax auditor or any tax authority regarding the proper application of the provisions of the CBR. The errors identified in the applicant’s accounts, for 2006 at least, are indeed among those which have an effect on their validity, making them inaccurate.

114. With regard, second, to the question whether the reconciliation provided for in Article II.19(1)(d) of the FP6 conditions, Article II.20(1) and Article II.23 of the CIP conditions and Article II.16 of the eTEN conditions between, on the one hand, the declared costs and the receipts collected in connection with the contracts at issue and, on the other, the applicant’s overall activity was possible in this case, it should be pointed out that the parties have not produced any version of the applicant’s accounts initially provided to the auditors or of the accounting documents which were subsequently supplied to the auditors by the applicant during the audit and even after the end of the audit.

115. Nevertheless, such an operation required, at the very least, the receipts and the costs relating to the contracts at issue to be correctly recorded in the applicant’s accounts. In so far as the accounts initially presented to the auditors contained errors, they did not permit a reconciliation.

116. In addition, the Court is not persuaded by the arguments put forward by the applicant claiming that, despite the errors identified in its accounts, it was not objectively impossible to carry out the reconciliation.

117. With regard, first, to the applicant’s claim that the Commission does not specify the unofficial accounting data with which it tried to ascertain the reliability of the accounts and the use of such data is contrary to the fundamental principles governing auditing of accounts, it must be stated that it effectively reverses the burden of proof. It is for the applicant to show that, despite the errors identified in its accounts, the audit is objectively possible and can be carried out on the basis of other information. The applicant cannot therefore criticise the Commission for having tried, by reason of the errors identified in the accounts, to carry out the audit on the basis of unofficial data.

118. With regard, second, to the applicant’s argument that the Commission’s reliance on the amendments made, at its request, to the applicant’s accounts to justify the impossibility of conducting a reconciliation is contrary to the principle of non concedit venire contra factum proprium , it should be stated that it has no factual basis. It is clear both from the audit report and from the Commission’s written pleadings that the Commission does not claim that the amendments in question made the reconciliation impossible but that, despite those amendments made to rectify the errors identified in the applicant’s accounts, it was not possible to conduct that reconciliation.

119. With regard, third, to the applicant’s argument that the reconciliation was possible in so far as it had recorded in its accounts all the costs declared and receipts received in respect of the contracts at issue and retained the relevant documentary evidence, this claim is directly refuted by the finding, which is not disputed by the applicant, of the failure to record a receipt of EUR 63 000 in connection with the Access-eGOV contract. In addition, assuming that the claim should be interpreted as applying only to other receipts and costs pertaining to the contracts at issue, it must be stated that the applicant does not furnish any evidence in this regard.

120. With regard, fourth, to the applicant’s argument that the Commission had acknowledged that a direct comparison between the costs and the receipts relating to the projects financed by the Union and the applicant’s overall state of accounts was possible by stating, in the defence, that 84.14% of the applicant’s total revenue for the years 2007 to 2009 came from its remunerated participation in projects financed by the Union and that 53.19% of those projects were projects managed by the Commission’s Directorate General (DG) for Information Society and Media, it should be noted that the period covered by the audit commenced in 2004 and that, consequently, the fact that the Commission was able to calculate the proportion represented by projects financed by the Union in the applicant’s total receipts for the years 2007 to 2009 does not show that, in doing so, the Commission was able to carry out the reconciliation in accordance with the provisions of the contracts at issue.

121. With regard, lastly, to the applicant’s claim that, as the Commission recognises, it eventually presented to the Commission the precise accounting records together with the relevant documentary evidence, it should be noted that the Commission disputes this claim, asserting that the records in question still contained errors, and that the applicant does not produce those records, with the result that it is not possible to determine that the reconciliation could be carried out on that basis.

122. It follows that the applicant does not show that, despite the errors identified in its accounts, the auditors were able to make a direct comparison between the costs and the receipts relating to the contracts at issue, on the one hand, and its overall state of accounts, on the other.

123. Therefore, by keeping its accounts in a manner that was not consistent with the applicable Greek legislation and that did not permit the Commission to carry out a reconciliation, the applicant failed to comply with the conditions laid down in Article II.19(1)(d) of the FP6 conditions, Article II.16 of the eTEN conditions and Articles II.20 and II.23 of the CIP conditions regarding the keeping of its accounts.

(b) The amendment of personnel time sheets

124. The applicant essentially claims that its system for keeping personnel time sheets was reliable. In this regard, it submits that the handwritten corrections to the personnel time sheets noted by the Commission were not amendments made a posteriori without the knowledge of the members of personnel, but stem from the use of a double-checking system by the programme director, relate only to dates and not to the number of hours worked and affect only 72 time sheets, which precludes those amendments having any effect on the actual hours worked.

125. In this regard, the Court points out that under Article 19(1)(a) of the FP6 conditions, Article II.13(1) of the eTEN conditions and Article II.20(1) of the CIP conditions, eligible costs must be incurred for the implementation of the project. Under Article II.14(1) of the eTEN conditions and Article II.21(2) of the CIP conditions, only the costs of the actual hours worked by the persons directly carrying out work under the project may be charged to the project.

126. The applicant does not deny the existence of handwritten amendments to personnel time sheets. It does argue, however, that, first, only 72 of 1 600 time sheets were corrected and, second, those corrections were made by the programme director as part of a system for double-checking working hours so as to reflect the exact time worked. In addition, those corrections related only to dates and not the time worked.

127. With regard, first, to the proportion of time sheets containing corrections, the number of 72 time sheets should not be considered in relation to the total number of time sheets made up by the applicant in connection with the contracts at issue, but the number of time sheets checked by the Commission, that is to say 770. The number of corrected time sheets to be taken into account represents almost 10% of the time sheets checked by the Commission. It should be pointed out in this regard that it is for the applicant to show that no other time sheets contain handwritten amendments, which it has failed to do in the present case, merely stating that it was making the time sheets in question available to the Court. However, even if the applicant had proved that no other time sheets contained handwritten amendments, the proportion of amended time sheets, even in relation to the total number of time sheets, is sufficient to introduce reasonable doubt as to the effectiveness of its system for recording working hours.

128. Second, the claim that the corrections related only to the dates on which work was done and had no bearing on the number of hours worked must be rejected. Simply by reading the programme director’s monthly time sheet for October 2004 in the Ask-It project, included in Annex B101, it can be seen that the corrections relate not only to the dates on which the hours worked were completed, but also to the number of working hours. It is thus clear that the total number of working hours, which was initially 136, was corrected to 120. In addition, the programme director’s monthly time sheets for October 2006 show that the working hours initially declared in connection with the EU4ALL project on 18 and 19 October 2006 are, after correction, declared in connection with the eABILITIES project.

129. With regard, third, to the claim that the corrections identified corresponded to a system for double-checking working hours which was intended to reflect the exact time worked, it is clear from the audit report that that system was based on a first check made at the end of each month when the monthly time sheet was issued, with a second check being carried out by the programme director after the official report had been sent to the project coordinator or to the Commission. The applicant has failed to give a convincing explanation why the second check made by the programme director gave rise to the handwritten amendment of such a large number of time sheets. It is relevant in this regard that the applicant has neither claimed nor demonstrated that the handwritten amendments made to monthly time sheets after they had been made up were justified. In these circumstances, the operation of the applicant’s system for recording working hours seems to seek less to ensure that the precise number of hours declared by each employee carrying out work under a particular programme is recorded than to allow the number of hours to be adjusted, for reasons that are not explained by the applicant, before the final report is sent to the Commission.

130. In those circumstances, it must be stated that, contrary to the claims made by the applicant, that system for recording working hours did not make it possible to determine whether t he personnel costs had actually been incurred, as required by Article ΙΙ.19(1) of the FP6 conditions, Article ΙΙ.13(1) of the eTEN conditions and Article ΙΙ.20(1) of the CIP conditions, whether only the costs corresponding to the hours actually worked by personnel had been charged to the project, as required by Article ΙΙ.14(1) of the eTEN conditions and Article ΙΙ.21(1) of the CIP conditions, or whether the company had declared periods in which its personnel carried out work under other projects as working hours completed in connection with the contracts at issue.

(c) The working hours declared by the programme director

131. The applicant essentially claims that the Commission does not furnish proof that the number of working hours declared for the programme director in connection with the contracts at issue is overstated per se or having regard to the activities unrelated to the performance of those contracts carried out by him.

132. It should be pointed out in this regard that, as was stated in paragraph 83 above, under the law applicable to the present dispute, the applicant must show that the costs submitted to the Commission were actually incurred if they are to be reimbursed. Once the applicant has provided justifications for the costs submitted to the Commission in connection with the contracts at issue, the Commission must show why they should be disregarded.

133. In this case, the applicant justified the personnel costs corresponding to the working hours submitted to the Commission in connection with the contracts at issue by means of the personnel time sheets, in respect of which it has been found, in paragraph 130 above, that they did not make it possible to determine that the costs in question had actually been incurred.

134. In addition, in the conclusions