Case T-335/09

Groupement Adriano, Jaime Ribeiro, Conduril – Construção, ACE

v

European Commission

(Action for annulment – MEDA I programme – Specific financing agreement – Authority given to the European Union to recover debts owed by a third party to the Kingdom of Morocco – Debit note – Reminder letter – Measures inseparable from the contract – Measure not subject to review – Inadmissibility)

Summary of the Order

Actions for annulment – Action relating in reality to a contractual dispute – Exercise of contractual rights by an institution in the name of and on behalf of one of the contractual parties – Lack of jurisdiction of the Community judicature – Inadmissibility

(Arts 230 EC and 249 EC)

Under Article 230 EC, the Community Courts review the legality of acts of the institutions intended to produce legal effects vis-à-vis third parties by bringing about a distinct change in their legal position. That jurisdiction concerns only the acts referred to by Article 249 EC, which the institutions must adopt under the conditions laid down by the Treaty.

By contrast, measures adopted by the institutions in a purely contractual context from which they are inseparable are, by their very nature, not among the measures covered by Article 249 EC, annulment of which may be sought before the Community judicature pursuant to Article 230 EC.

However, the measure adopted by an institution in a contractual context must be considered as being severable from the latter where, first, the measure was adopted by that institution in the exercise of its own powers, and, second, it produces, by itself, obligatory legal effects capable of affecting the interests of its recipient against which, therefore, an action for annulment may be brought. Accordingly, an action for annulment brought by the addressee of the measure must be considered to be admissible. In that context, the ‘own powers of an institution’ must be understood as those deriving from the Treaties or secondary law which are part of its public power prerogatives and accordingly allow it to create or amend, unilaterally, rights and obligations for a third party. On the other hand, the exercise of contractual rights by an institution, if the Union has received authority to act in the name of and on behalf of one of the contractual parties, does not constitute exercise of its own powers.

(see paras 24-26, 32-33)

ORDER OF THE GENERAL COURT (Fourth Chamber)

21 October 2011( )

(Action for annulment – MEDA I programme – Specific financing agreement – Authority given to the European Union to recover debts owed by a third party to the Kingdom of Morocco – Debit note – Reminder letter – Measures inseparable from the contract – Measure not subject to review – Inadmissibility)

In Case T‑335/09,

Groupement Adriano, Jaime Ribeiro, Conduril – Construção, ACE, established in Porto (Portugal), represented by A. Pinto Cardoso and L. Fuzeta da Ponte, lawyers,

applicant,

v

European Commission, represented by A.-M. Rouchaud-Joët and S. Delaude, acting as Agents, and by R. Faria da Cunha, lawyer,

defendant,

APPLICATION for annulment of, first, debit note No 3230905272 issued by the Commission on 12 June 2009 and, second, the letter dated 3 August 2009 by which the Commission ordered payment of the sum claimed by means of the debit note and related default interest,

THE GENERAL COURT (Fourth Chamber),

composed of I. Pelikánová, President, K. Jürimäe (Rapporteur) and M. van der Woude, Judges,

Registrar: E. Coulon,

makes the following

Order

Background to the dispute

1 On 22 September 2000, the European Community, represented by the Commission of the European Communities, and the Kingdom of Morocco concluded a specific financing agreement in the context of the MEDA I programme. That programme is founded on Council Regulation (EC) No 1488/96 of 23 July 1996 on financial and technical measures to accompany (MEDA) the reform of economic and social structures in the framework of the Euro-Mediterranean partnership (OJ 1996 L 189, p. 1). The specific financing agreement is for part of the Rocade méditerranéenne (Mediterranean ring road) – road infrastructure – connecting El Jebha and Ajdir in Morocco. It provides for the methods for implementing and financing the construction project of this part of the road.

2 On 21 May 2004, the Kingdom of Morocco and the applicant, Groupement Adriano, Jaime Ribeiro, Conduril – Construção, ACE, concluded contract AH 04/2004 (‘the Contract’), in the context of the project relating to the section of the Rocade méditerranéenne financed by the Community. The contract concerns in particular the construction of the part of the road between Beni Boufra (Morocco) and Ajdir.

3 Under Article 2(1) of the specific conditions of the Contract, the law applicable to the Contract is Moroccan law.

4 By letter dated 31 July 2006, the Kingdom of Morocco noted significant delays in the execution of the work which was to be completed under the Contract, and gave the applicant notice to rectify that situation.

5 By letter dated 16 November 2006, the Kingdom of Morocco notified the applicant that an extension to the period for executing the work was granted to it.

6 By letter dated 12 August 2008, the Kingdom of Morocco informed the applicant that the Contract had been terminated as from 1 August 2008, under Article 61 of Section 2 of the Contract entitled ‘General Conditions’ (‘the General Conditions of the Contract’) and under Article 61 of Section 3 of the Contract entitled ‘Special Conditions’ (‘the Special Conditions of the Contract’).

7 On 28 October 2008, the Kingdom of Morocco drew up the provisional statement No 41 of the work undertaken and of the costs (‘Provisional Statement No 41’), from which, inter alia, it is apparent that penalties for delay amounting to EUR 3 745 444.76 are chargeable to the applicant under Article 34 of the Special Conditions of the Contract. That document states that the total amount of the sums to be paid by the applicant to the Kingdom of Morocco amount to EUR 3 948 424.99.

8 By letter dated 22 January 2009, the Commission, declaring to act on behalf of the Kingdom of Morocco, informed the applicant of its intention to recover the sum of EUR 3 948 424.99 on the basis of Provisional Statement No 41 and under Article 34 of the Special Conditions of the Contract and Article 43.5 of the General Provisions of the Contract. In that letter the Commission indicated to the applicant that it had a period of 30 days to submit observations, otherwise a debit note would be sent to it in which the payment of that amount would be claimed against it.

9 By letter dated 23 March 2009, the applicant indicated to the Commission that it disputed Provisional Statement No 41 and that it wished to proceed with an amicable settlement of the differences between the parties to the contract.

10 By service order of 23 April 2009, the Kingdom of Morocco informed the applicant that recovery of an amount of EUR 3 825 324.11 would be made in the statement of the work undertaken and of expenses which were established following Provisional Statement No 40.

11 By letter dated 12 June 2009, the Commission sent debit note No 3230905272 (‘the debit note’) to the applicant in which an amount of EUR 3 949 869.02 is demanded from the applicant, corresponding to the application of penalties for delay, of EUR 3 745 444.76, and recovery of the ‘amount of the advance which had not been recovered until Provisional Statement No 40 inclusive’, of EUR 204 424.26.

12 On 22 June 2009, by letter addressed to the Commission, the applicant requested annulment of the debit note.

13 By letter dated 1 July 2009, the Commission informed the applicant that it could not give a positive response to its letter of 22 June 2009. In addition, in that letter the Commission stated that the amount mentioned in the service order of 23 April 2009, namely EUR 3 825 324.11, corresponded to the ‘amount of the advance which had not been recovered until Provisional Statement No 40 inclusive’, that is EUR 3 745 444.76, with a deduction of an amount of EUR 124 544.91 approved by Provisional Statement No 40.

14 On 3 August 2009, the Commission sent a reminder letter to the applicant (‘the reminder letter’) stating that the payment relating to the debit note had not been made and requesting it to make that payment, plus default interest, within a period of 15 days from receipt of the letter.

15 By letter dated 26 March 2010 sent to the Commission delegation to Morocco, the Kingdom of Morocco confirmed having given authority to act in its name and on its behalf to the Commission delegation to Morocco to recover the amounts due from the applicant.

Procedure and forms of order sought by the parties

16 By application lodged at the Registry of the Court on 24 August 2009, the applicant brought the present action.

17 By separate document lodged at the Registry of the Court on 22 December 2009, the Commission raised a plea of inadmissibility, pursuant to Article 114 of the Rules of Procedure of the General Court.

18 On 12 February 2010 the applicant submitted its observations on the plea of inadmissibility.

19 The applicant claims that the Court should:

– annul the debit note and the reminder letter;

– order the Commission to pay the costs, even if the action is dismissed as being inadmissible.

20 The Commission contends that the Court should:

– dismiss the action as clearly inadmissible;

– order the applicant to pay the costs.

Law

21 Under Article 114(1) of the Rules of Procedure, if a party so requests, the Court may make a decision on admissibility without considering the substance. Under Article 114(3), unless the Court otherwise decides, the remainder of the proceedings is to be oral.

22 In the present case, the Court considers that the documents before it provide sufficient information to enable it to rule upon the Commission’s plea without opening the oral procedure.

23 The Commission objects that this action is inadmissible, on the grounds that, first, the Court is not competent in so far as the debit note has been issued in a contractual context and, second, that neither the debit note nor the reminder letter are measures against which an action may lie within the meaning of Article 230 EC.

24 In that regard, it must be borne in mind that under Article 230 EC, the Community Courts review the legality of acts of the institutions intended to produce legal effects vis-à-vis third parties by bringing about a distinct change in their legal position (Case 60/81 IBM v Commission [1981] ECR 2639, paragraph 9, and Joined Cases T‑377/00, T‑379/00, T‑380/00, T‑260/01 and T‑272/01 Philip Morris International v Commission [2003] ECR II‑1, paragraph 81).

25 According to settled case-law, that jurisdiction concerns only the acts referred to by Article 249 EC, which the institutions must adopt under the conditions laid down by the Treaty (see order in Joined Cases T‑314/03 and T‑378/03 Musée Grévin v Commission [2004] ECR II‑1421, paragraph 63 and the case-law cited).

26 By contrast, measures adopted by the institutions in a purely contractual context from which they are inseparable are, by their very nature, not among the measures covered by Article 249 EC, annulment of which may be sought before the Community judicature pursuant to Article 230 EC (order in Musée Grévin v Commission, paragraph 25 above, paragraph 64).

27 In the present case, it is apparent from the documents submitted before the Court that, by the debit note and the reminder letter, which are intended to recover the penalties for delay due from the applicant to the Kingdom of Morocco on account of the failure to execute the Contract and of the balance of the advance which has not been recovered, the Commission, as it pointed out itself, acted in the name of and on behalf of the Kingdom of Morocco, in the context of the Contract.

28 First of all, it is apparent from the letters dated 31 July 2006 and 12 August 2008, addressed to the applicant by the Kingdom of Morocco, that the failure to execute the Contract has been declared by the Kingdom of Morocco, in 2006, which led it, in 2008, to terminate that Contract. By Provisional Statement No 41, dated 28 October 2008, the Kingdom of Morocco informed the applicant that the penalties for delay were due to it, under Article 34 of the General Conditions and under Article 34 of the Special Conditions of the Contract. Article 34 of the General Conditions of the Contract provides that liquidated damages are due to the Kingdom of Morocco in the event of delay in executing the Contract and Article 34 of the Special Conditions of the Contract provide the methods for calculating those liquidated damages.

29 Next, it is important to note that the letter dated 22 January 2009, by which the Commission informed the applicant that a debit note would be sent to it, clearly shows that that debit note is based on Article 34 of the Special Conditions of the Contract and on Article 43.5 of the General Conditions of the Contract. Article 43.5 of the General Conditions of the Contract provides the obligation on the contractor to reimburse the Kingdom of Morocco for the amount paid in excess of the final amount due. It must also be pointed out that, first, in the letter dated 22 January 2009, the Commission declared that it was acting on behalf of the Kingdom of Morocco and, second, in its letter dated 26 March 2010 addressed to the Commission delegation to Morocco, the Kingdom of Morocco confirmed that it had given it authority to act in its name and on its behalf, to recover the amounts which were owed to it by the applicant.

30 Finally, it is apparent from the letter dated 1 July 2009, addressed by the Commission to the applicant, that the debit note had been issued on the basis of Article 34.1 of the General Conditions of the Contract. In that same letter, the Commission explains that the debit note followed the service order of 23 April 2009, by which the Kingdom of Morocco had notified the applicant that recovery of EUR 3 825 324.11 would be executed, corresponding in particular to the penalties for delay and to the amount of the advance which had not been recovered.

31 Having regard to the foregoing, the debit note issued by the Commission must be considered to be part of the context of the contractual relations existing between the applicant and the Kingdom of Morocco. In addition, since the reminder letter has the sole objective of instructing the applicant to pay the amounts set out in the debit note, that reminder letter is also part of the contractual context.

32 However, the measure adopted by an institution in a contractual context must be considered as being severable from the latter where, first, the measure was adopted by that institution in the exercise of its own powers, and, second, it produces, by itself, obligatory legal effects capable of affecting the interests of its recipient against which, therefore, an action for annulment may be brought. Accordingly, an action for annulment brought by the addressee of the measure must be considered to be admissible (see, to that effect, and by analogy, Case C‑395/95 P Geotronics v Commission [1997] ECR I‑2271, paragraphs 14 and 15, and order in Case T‑481/08 Alisei v Commission [2010] ECR II‑117, paragraphs 63 and 64).

33 In that context, the ‘own powers of an institution’ must be understood as those deriving from the Treaties or secondary law which are part of its public power prerogatives and accordingly allow it to create or amend, unilaterally, rights and obligations for a third party. On the other hand, the exercise of contractual rights by an institution, if the Union has received authority to act in the name of and on behalf of one of the contractual parties, does not constitute exercise of its own powers, within the meaning of the case-law referred to in the previous paragraph.

34 However, in the present case, as was pointed out in paragraphs 27 to 31 above, both the debit note and the reminder letter were adopted in exercising the authority which the Kingdom of Morocco gave to the Union to recover the debts which were owed to it by the applicant under the General Conditions and the Special Conditions of the Contract. Accordingly, those instruments do not constitute the exercise of public law prerogatives by the Commission which it has under EU law.

35 Consequently, the condition that the Commission is exercising its own powers is not satisfied.

36 It follows, without it being necessary to examine whether the debit note and the reminder letter produce, by themselves, obligatory legal effects capable of affecting the applicant’s interests, that the present action must be dismissed as being inadmissible.

Costs

37 Under Article 87(3) of the Rules of Procedure, where each party succeeds on some and fails on other heads, or where the circumstances are exceptional, the Court may order that the costs be shared or that each party bear its own costs.

38 In the present case, although the applicant has been unsuccessful, the Court takes the view that the Commission did not use clear and unequivocal language in drafting the debit note. Indeed, some aspects of the note, and, in particular, the reference to the possible adoption of a decision enforceable under Article 256 EC, could give rise to the impression, in the applicant’s mind, that it concerned a measure adopted in the exercise of the Commission’s own powers. In the light of that fact, the Court will make an equitable assessment of the facts of the present case in ruling that the Commission is to bear its own costs and pay those incurred by the applicant.

On those grounds,

THE GENERAL COURT (Fourth Chamber)

hereby orders:

1. The action is dismissed as inadmissible.

2. The European Commission shall bear its own costs and shall pay those incurred by Groupement Adriano, Jaime Ribeiro, Conduril – Construção, ACE.

Luxembourg, 21 October 2011.

E. Coulon I. Pelikánová