Judgment of the Court (First Chamber) of 2 October 1991. - Gebrüder Schulte AG and H & E Reinert KG v Belgische Dienst voor Bedrijfsleven en Landbouw, Belgische Staat, Instituut voor veterinaire keuring and Vanden Avenne-Ooigem NV. - Reference for a preliminary ruling: Rechtbank van eerste aanleg Brussel - Belgium. - Contract for the sale of beef from intervention stocks - Latent defects - Claim made subsequent to the purchase. - Case C-113/90.



European Court reports 1991 Page I-04407



Summary

Parties

Grounds

Decision on costs

Operative part



Keywords

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Agriculture - Common organization of the markets - Beef - Purchase of meat from intervention for processing - Conditions of purchase - Waiver by the prospective purchaser of all claims as to the quality and characteristics of the product - Scope - Latent defects not susceptible of prior inspection which render the product unfit for processing - Excluded

(Commission Regulation No 2173/79, Art. 2(2)(d) )

Summary

The declaration waiving all claims which is made by the potential purchaser and which is provided for in Article 2(2)(d) of Regulation No 2173/79 on detailed rules of application for the disposal of beef bought in by intervention agencies does not extend to cover possible latent defects which, by their nature, escape detection by any prior inspection by the purchaser before the submission of his purchase application and render the meat put up for sale for processing unfit for that purpose.

Parties

In Case C-113/90,

REFERENCE to the Court under Article 177 of the EEC Treaty by the Rechtbank van Eerste Aanleg, Brussels for a preliminary ruling in the proceedings pending before that court between

Gebroeders Schulte AG,

H & E Reinert KG

and

Belgische Dienst voor Bedrijfsleven en Landbouw (Belgian Office for Commerce and Agriculture),

Belgian State,

Instituut voor Veterinaire Keuring (Institute for Veterinary Inspection),

NV Vanden Avenne-Ooigem,

on the interpretation of Article 2(2) of Commission Regulation (EEC) No 2173/79 of 4 October 1979 on detailed rules of application for the disposal of beef bought in by intervention agencies and repealing Regulation (EEC) No 216/69 (Official Journal 1979 L 251, p. 12),

THE COURT (First Chamber),

composed of: G.C. Rodríguez Iglesias, President of the Chamber, Sir Gordon Slynn and R. Joliet, Judges,

Advocate General: J. Mischo,

Registrar: J.A. Pompe, Deputy Registrar,

after considering the written observations submitted on behalf of:

- Gebroeders Schulte AG and H & E Reinert KG, by F. Herbert and J. Everaert, of the Brussels Bar,

- the Belgian Office for Commerce and Agriculture, by Monique Fruy and Bart de Moor, of the Brussels Bar,

- the Belgian State and the Institute for Veterinary Inspection, by Piet Siffert, of the Louvain Bar,

- the United Kingdom, by J.E. Collins. of the Treasury Solicitor' s Department, acting as Agent,

- the Commission of the European Communities, by Patrick Hetsch and Thomas van Rijn, members of its Legal Service, acting as Agents,

having regard to the Report for the Hearing,

after hearing oral argument from Gebroeders Schulte AG and H & E Reinert KG, the Belgian Office for Commerce and Agriculture, the United Kingdom, represented by Christopher Vajda, Barrister, acting as Agent, and the Commission of European Communities, represented by T. van Rijn and J. Gaster, members of DG VI, acting as Agents, at the hearing on 30 April 1991,

after hearing the Opinion of the Advocate General at the sitting on 8 April 1992,

gives the following

Judgment

Grounds

1 By order of 9 April 1990 which was received at the Court on 23 April 1990, the Rechtbank van Eerste Aanleg (Court of First Instance), Brussels, referred to the Court for a preliminary ruling under Article 177 of the EEC Treaty two questions on the interpretation of Article 2(2) of Commission Regulation (EEC) No 2173/79 of 4 October 1979 on detailed rules of application for the disposal of beef bought in by intervention agencies and repealing Regulation (EEC) No 216/89 (Official Journal 1979 L 251, p. 12).

2 Those questions were raised in the course of proceedings between Gebroeders Schulte and H & E Reinert, hereinafter referred to as "the plaintiffs in the main proceedings", on the one hand, and the Belgische Dienst voor Bedrijfsleven en Landbouw (Belgian Office for Commerce and Agriculture, hereinafter referred to as "the Belgian intervention agency"), the Belgian State, the Instituut voor Veterinaire Keuring (Institute for Veterinary Inspection) and Vanden Avenne, the defendants in the main proceedings, on the other hand.

3 Commission Regulation (EEC) No 1431/87 of 25 May 1987 on the sale at prices fixed at a standard rate in advance of certain beef from intervention stocks for processing in the Community, repealing Regulation (EEC) No 786/87 and amending Regulation (EEC) No 2182/77 (Official Journal 1987 L 136, p. 26) provided in Article 1(1) that an approximate quantity of 1 500 tonnes of bone-in beef held by the Belgian intervention agency and bought in before 1 September 1986 was to be put up for sale during the period 27 May to 3 July 1987.

4 Pursuant to Regulation No 2173/79, the Belgian intervention agency published on 21 January 1987 a communiqué concerning the conditions of sale of the abovementioned meat.

5 The plaintiffs in the main proceedings responded to that offer by purchasing various quantities of meat. During the period 25 June to 17 July 1987 the two undertakings, acting through their representative, took delivery of the product in cold stores belonging to Vanden Avenne and transported it to Germany.

6 By telexes of 21 and 22 July 1987, the representative of the plaintiffs in the main proceedings informed the Belgian intervention agency that it had found, after thawing the meat, that some pieces showed traces of mould. On 15 October 1987 an expert' s report declaring the meat unfit for human consumption was drawn up by a veterinarian approved by the EEC. On 19 October 1987 part of the meat was destroyed.

7 The Belgian intervention agency refused to accept the claim submitted by the representative of the plaintiffs in the main proceedings. It relied on Article 2(2)(d) of Regulation No 2173/79, which provides that the validity of a purchase application is conditional upon a declaration by the purchaser that he waives all claims as to the quality and characteristics of the product which may be assigned to him.

8 The national court, before which the case came, decided to stay its proceedings pending a preliminary ruling by the Court on the following questions:

"1. May it be inferred from Article 2(2)(d) of Commission Regulation (EEC) No 2173/79 of 4 October 1979 that the declaration made by the applicant prevents him from making a claim on the basis of the non-compliance of the goods supplied or on the basis of latent defects when the goods are sold in the form of deep-frozen products and those goods show signs of mould after thawing at their place of destination and cannot therefore be considered for processing, or does the 'declaration' in question cover the externally ascertainable commercial characteristics of the product?

2. Does not the extension of this 'declaration' to cover hygiene characteristics which make the product unsuitable for processing but which are not immediately ascertainable on the spot, conflict:

(a) with the purpose of Commission Regulation (EEC) No 1431/87 of 25 May 1987 in so far as it concerns sales of stocks 'for processing' ;

(b) with the purpose of Directive 64/433/EEC in so far as it makes the exporting State responsible for carrying out the health controls on the meat to be exported?"

9 Reference is made to the Report for the Hearing for a fuller account of the facts of the main proceedings, the procedure and the written observations submitted to the Court, which are mentioned or discussed hereinafter only in so far as is necessary for the reasoning of the Court.

Question 1

10 Article 2(2) of Regulation No 2173/79 requires that every application, in order to be deemed valid for consideration, must:

"...

(d) include a declaration whereby the applicant waives all claims as to the quality and characteristics of the product which may be assigned to him".

11 Article 13 of that regulation provides that:

"Intervention agencies shall make all necessary arrangements to enable prospective tenderers to inspect the products for sale before making their applications or submitting their tenders."

12 According to the statement of reasons provided with that regulation, the waiver of all claims following the purchase is justified by the possibility afforded to prospective purchasers of inspecting beforehand the products put up for sale.

13 The eighth recital of the preamble to Regulation No 2173/79 states:

"Whereas the submission of an application or a tender is facilitated if prospective purchasers are permitted to inspect the products; whereas it should consequently be provided that the parties concerned waive in advance their right to lodge any complaint in respect of the quality and characteristics of the product which may be assigned to them".

14 The declaration waiving all claims can therefore concern only the quality and characteristics of the product which are susceptible of prior inspection by prospective purchasers and, accordingly, cannot be extended to cover possible latent defects which, by their nature, escape detection by prior inspection carried out by them.

15 That interpretation is borne out by Article 4(1) of Commission Regulation (EEC) No 2182/77 of 30 September 1977 on detailed rules of application for the sale of frozen beef from intervention stocks and intended for processing within the Community and amending Regulation (EEC) No 1687/76 (Official Journal 1976 L 251, p. 60), according to which "a security calculated to guarantee that the products will be processed shall be lodged with the competent authority of the Member State where the processing is to take place". It would not be in accordance with the principle of proportionality if the purchaser were to bear the loss of the security in the event that the processing could not take place owing to the existence of latent defects which could not be detected by him by prior inspection.

16 This interpretation is the only one which is consistent with the scheme and purpose of Regulation No 1431/87, pursuant to which the sale referred to in the main proceedings was made.

17 The purpose of that regulation, which is to ensure that the meat put up for sale is processed, would not be achieved if latent defects were to render the meat in question unfit for processing, as has happened in this case.

18 Moreover, pursuant to Article 1(5) of the regulation, purchase applications are not to name the coldstore or stores where the products applied for are stored. It follows that a purchaser cannot foresee from which store the product which may be assigned to him will come and that he is not therefore in a position to carry out an effective prior inspection, for example by taking samples.

19 The reply to the first question must therefore be that the declaration waiving all claims which is provided for in Article 2(2)(d) of Regulation No 2173/79 does not extend to cover possible latent defects which by their nature escape detection by any prior inspection by the prospective purchaser and render the product unfit for processing.

Question 2

20 In view of the reply given to the first question, there is no need to examine the second question.

Decision on costs

Costs

21 The costs incurred by the United Kingdom and the Commission of the European Communities, which have submitted observations to the Court, are not recoverable. Since these proceedings are, for the parties to the main proceedings, a step in the proceedings pending before the national court, the decision on costs is a matter for that court.

Operative part

On those grounds,

THE COURT (First Chamber),

in answer to the questions referred to it by the Rechtbank van Eerste Aanleg, Brussels, by order of 9 April 1990, hereby rules:

The declaration waiving all claims which is provided for in Article 2(2)(d) of Regulation No 2173/79 of 4 October 1979 on detailed rules of application for the disposal of beef bought in by intervention agencies and repealing Regulation (EEC) No 216/69 does not extend to cover possible latent defects which by their nature escape detection by any prior inspection by the prospective purchaser and render the product unfit for processing.