OPINION OF ADVOCATE GENERAL

SIR GORDON SLYNN

delivered on 13 November 1986

My Lords,

By a contract in writing, dated 23 December 1971 and expressed to be governed by Belgian law, Mr Jan Zoubek agreed to prepare for the Commission a study entitled ‘Catalogue, analyse et exploitation des positions des pays de l'Est pour une coopération économique en Europe’. The agreed fee was BFR 100000 payable by the Commission as to one-third on the signature of the contract, one-third on receipt of a progress report due on 31 March 1972 and one-third on receipt of the final report which was due on 30 June 1972.

By Article 7 (1) of the contract the Commission was entitled to terminate the contract for nonperformance, or faulty performance, attributable to Mr Zoubek. It was provided that if, after notice by the Commission to Mr Zoubek by registered letter not followed by execution within 30 days, the Commission declared that it was exercising its right to terminate the contract, the contract was automatically terminated without prejudice to damages for the nonperformance of the contract.

Article 8 provided that the Court of Justice of the European Communities should have exclusive jurisdiction to deal with any dispute relating to the performance of the contract.

On 7 January 1972, following signature of the contract, the Commission paid to Mr Zoubek BFR 33000. However, neither the progress report nor the study were delivered on the dates stipulated. By registered letter of 27 October 1972 the Commission, pursuant to Article 7 of the contract, gave Mr Zoubek 30 days' notice to deliver the study failing which, it said, it would terminate the contract. His reply was that he would like to explain the serious reasons for the delay, but when he failed to respond to an invitation to arrange an appointment for that purpose the Commission, by letter dated 21 December 1972, pursuant to Article 7 of the contract, terminated the contract and asked Mr Zoubek to repay the BFR 33000 which he had been paid. He did not pay that sum.

Pursuant to Article 8 of the contract and Article 181 of the EEC Treaty the Commission now asks the Court to order Mr Zoubek to repay the sum of BFR 33000 plus interest at the statutory rate in force in Belgium as from 7 January 1972 on the basis that termination of the contract was solely attributable to the fault of Mr Zoubek.

It is plain that Mr Zoubek did fail to prepare the study and he has not sought to justify his failure. What he says, however, is that there was a subsequent agreement that he would supply a fortnightly bulletin and monthly supplement entitled East-West as a means of repaying the BFR 33000 and, it seems to be suggested, in discharge of his obligations under the contract. His case is that this publication was supplied between 1974 and 1978 without charge. The cost of the copies supplied amounted to BFR 65000, so that he not only satisfied the debt but is entitled to BFR 32000 as the price of goods supplied.

The Commission makes two preliminary points. It says first that the publisher of the bulletin, East-West Sprl, is a separate legal entity, even if Mr Zoubek was a shareholder of it. Accordingly, the supply by that company, it is said, could not in law amount to compensation by the defendant. That argument I do not accept. I see no reason in law why Mr Zoubek should not agree himself to provide or to procure the provision by the company of the bulletin as a discharge of his obligation under the contract with the Commission.

Secondly, the Commission says that the counterclaim is inadmissible as not falling within Article 8 of the contract. In the result the Court has no jurisdiction under Article 181 of the Treaty. For my part I do not accept that argument either. It seems to me that the challenge to the claim that the obligation under the contract had been satisfied by a subsequent arrangement constitutes a ‘dispute relating to the performance of the contract’.

The question remains whether there was any such subsequent arrangement. Mr Zoubek's case is that there was an oral agreement with a Mr Lecomte of DG I in November 1973 to that effect. He relies on a letter which he wrote to Mr Lecomte on 20 December 1973 in which he says:

‘Following our agreement of November this year, I am sending you two recent copies of East-West (fortnightly bulletin) and its monthly supplement’. Mr Lecomte, on 21 December, replied immediately to that letter. He acknowledged receipt of the publication, but continued: ‘I must, however, insist on the fact that there has never been an “agreement” between us’. He adds a curious sentence: ‘Nevertheless I will inform you as soon as possible if there is any news concerning you’.

In the defence it is said that the agreement was subsequently confirmed in a later interview and the publications were sent. No details are given as to when this interview was supposed to have taken place. The Commission accepts that it did have the bulletin and the supplements during the period in question. These, however, came until 1977 from a firm known as Office International de Librairie, Bruxelles, and from 1978 directly from East-West. The Commission's case is that these copies were sent to the library of the Commission pursuant to a subscription and that they were paid for. In the reply details are given of annual payments by the library to the two suppliers. The defendant has not served a rejoinder in this case so that these figures are not challenged.

It is, of course, possible that an extra copy was supplied by, or at the instigation of, Mr Zoubek in addition to those purchased by the library. For my part, however, I have no hesitation in concluding that his claim is not made out. The sum involved, BFR 33000 is not insignificant and if the agreement had been to send the copies in satisfaction of his debt, he would have said so in his letter of 20 December 1973 or, at the very least, in reply to Mr Lecomte's letter of 21 December 1973. In fact he did not reply at

all. Moreover, he has produced nothing to show that copies were sent by him additional to those paid for by the library of the Commission. His counterclaim for BFR 32000 in any event fails on his own case, since he contends that these copies were all sent to satisfy the debt. He produces no subsequent request for, or evidence of, an agreement to send copies against payment.

In my view, there is no defence to this claim and the counterclaim should be dismissed.

It will be noted that the contract in question was terminated in December 1972. The application was brought in December 1985, 13 years later. Under Belgian law the prer scription period is 30 years. Even though the case is thus brought within time, the question arises whether it is right to grant interest, as claimed, for the whole period from the date of payment, 7 January 1972, until repayment.

On a claim of this kind in Belgian law interest, it seems, can be awarded starting from the date when notice (‘mise en demeure’) is duly given: Articles 1142 and 1146 of the Belgian Civil Code. I note that this rule was applied by the Court in its judgment of 13 November 1986 in Case 220/85 Fadex NV v Commission [1986] ECR 3387, which also concerned a dispute governed by Belgian law.

In this case Article 7 (1) of the contract specifies precisely the form of ‘mise en demeure’, and its provisions were complied with by the Commission when it sent its registered letter on 27 October 1972 giving Mr Zoubek 30 days to perform the contract. This seems to me to constitute a due ‘mise en demeure’ in accordance with Belgian law and with the terms of the contract. Interest can, therefore, be awarded as from the end of the 30-day period after the date of the letter stipulated in Article 7 of the contract, that is to say from 27 November 1972, but not from the earlier date claimed by the Commission.

The award of interest is, however, a matter of discretion. There have been, in this case, unexplained delays on the part of the Commission. For example, the matter seems to have gone to sleep from 1973 to 1979. The case could have been brought long ago. It seems to me reasonable and equitable to award interest, not in respect of the whole of that period, but in respect of a period reasonably needed to pursue the claim other than by litigation and to prepare the case and in respect of the period between the date of the application, 13 December 1985, and the date of judgment. Taking these factors into account a reasonable award, in my view, would be in respect of two years at what I understand to be the current statutory rate, namely 10%.

As I understand it, the general practice of Belgian courts in claims of this kind is not to make a separate award of interest but to award a single sum representing damages and interest together, ‘dommages et intérêts’ in the words of Article 1142 of the Civil Code. Following that practice, the appropriate award would be for a single sum comprising the amount claimed together with an amount in respect of interest, which I would round off in total at BFR 40000. This award of ‘dommages et intérêts’ should, in my view, bear interest at the Belgian statutory rate from the date of judgment to the date of actual payment.

Accordingly, in my opinion, Mr Zoubek should pay the Commission the sum of BFR 40000 with interest, at the Belgian statutory rate in force, from the date of judgment to the date of payment and he should also pay the Commission's costs of these proceedings.