III —

The submission with regard to breach of the principle of legitimate expectation or of legal certainty may seem to have no relevance in an application for annulment; such a submission clearly belongs to an action under Article 215 of the Treaty. But since the applicant has also based its application in the alternative on that article of the Treaty I must consider it. (a) I have already said that there is a difference between admitting that the number of persons affected by Regulation No 1583/77 was known on the date when it was adopted and acknowledging that this regulation actually has retroactive effect. The applicant did not have an established right at this date: it was merely in the course of being established; the right only vested at the moment when the applicant's export licence was ‘discharged’, that is to say when the customs export formalities were completed. The Commission was only entitled to alter the amount of compensation in the case of transactions irrevocably and finally completed before 15 July 1977, the date when the said regulation entered into force and was published. As Mr Advocate General Reischl states in his opinion in Case 88/76, Société pour l'Exportation des Sucres, S.A. v Commission of the European Communities [1977] ECR 735‘No more than in that case’ (judgment of 5 July 1973 in Case 1/73 Westzucker GmbH v Einfuhr- und Vorratsstelle für Zucker [1973] ECR 728) ‘can the possibility be ruled out that further modifications of the law may be undertaken up to the time when the condition is fulfilled, that is up to the time when an actual right arises’. Consequendy the applicant had at best a mere prospect. Can its legitimate expectation with regard to that prospect be regarded as having been frustrated in circumstances which might render the Community liable? (b) Since this submission is in the highest degree subjective it is necessary to ascertain first of all the nature of the damage alleged. In fact the protection of the legitimate expectation of traders in the continuance of a given legal situation can only have the purpose of sheltering them from any positive damage which they have suffered precisely as a result of that expectation, but not of indemnifying them against loss of profits. The disadvantage pleaded by the applicant stemming from the change in the ‘green’ rate corresponds to the alteration of the monetary compensatory amount compared with what it was before this rate was changed. It considers that offsetting the disadvantage must include the increase of the monetary compensatory amount caused by the increase in the price of sugar as from 1 July 1977and of the change in the exchange rate. I am unable to accept the applicant's claim. In fact the Tdpfer company, before and after, collected the whole of the refund fixed in advance in its licences. As the Commission states this sum does not in the end undergo any alteration by reason of the simultaneous adjustment of the coefficient referred to in Article 4 (3) of Commission Regulation No 1380/75 which gives the ratio between the representative rate of exchange and the actual rate of exchange of the currency under consideration. The applicant complains only of the difference between the monetary compensatory amounts as calculated at the end of a marketing year and as calculated after a change in the representative exchange rate coinciding with the commencement of a new marketing year. The differences affecting the positive compensatory amounts which accompanied these refunds as a matter of fact represent altogether a sum which is by no means inconsiderable. But this amounts at most to a ‘loss of profit’ compared with the compensation which the applicant claims was ‘fixed in advance’ by Commission Regulation (EEC) No 937/77; we have seen that this way of representing the situation is not correct: the ‘advance fixing’ thus effected was complied with in the case of the quantities of sugar in respect of which customs export formalities were completed before 15 July 1977. It rested entirely with the applicant to try to discharge its licences before that date. As soon as Council Regulation (EEC) No 878/77 of 26 April 1977 was published it could have been foreseen that the discontinuance of the monetary compensatory amounts relating to licences applied for and issued before 26 April 1977, the date when the principle of the new fixing of the rate of the ‘green’ mark had been adopted, would only be offset to an ‘appropriate’ extent. (c) It remains to be seen whether this is in fact the case. Even if the compensation is mandatory and replaces the right to cancel, it is only intended to protect the trader from a reduction in the aggregate amount on which he could count but not to provide him with additional profit, whether unexpected or even expected, by reason of the market trend which supervened after the developments affecting the currency. If what Mr Advocate General Reischl said in his opinion in Case 88/76 Société pour l'Exportation des Sucres, S.A. v Commission of the European Communities [1977] ECR 737 is transposed, the sole aim of the compensation is to make good the difference between the monetary compensatory amounts applicable before and after 1 July 1977 and this could be regarded as sufficient for the interests of exporters because it had the effect of preventing the disadvantages which were the only matters in respect of which Council Regulation (EEC) No 878/77 in principle gave a guarantee. In fact care has been taken by this method to ensure that a person who has complied with the rules, that is to say who made his arrangements only after 15 July 1977, could export without suffering any loss on the basis of the licences issued originally. The figure of 2.33 is determined, not by the difference between, on the one hand, the monetary compensatory amount (11.20), calculated in accordance with the new gross intervention price (34.60) taking into account the old representative rate (3.48084) and the old percentage for revaluing the mark in relation to the intervention price (0.093), and, on the other hand, the compensatory amount (8.86) calculated in accordance with the new gross intervention price taking into account the new representative rate (3.41258) and of the new percentage (0.075), but by the difference between, on the one hand, the compensatory amount (10.73), calculated in accordance with the old gross intervention price (33.14) taking into account the old representative rate and the old percentage, and, on the other hand, the compensatory amount (8.40), calculated in accordance with the new net intervention price taking into account the new rate and the new percentage. This method of calculating the intervention price was not formally stated until 1 July 1977 by Commission Regulation (EEC) No 1466/77 but it emerges clearly from the explanations given as early as 5 May 1977 by the applicant's trade association and also from Council Regulation (EEC) No 1358/77 of 20 June 1977. As the Commission explains, this new definition which takes into account the amount of the levy charged on sugar of Community origin within the framework of the system of compensation for storage costs (Article 1 of Commission Regulation (EEC) No 1466/77) meets the desire to have a better basis of negotiation for the preferential sugar of the African, Caribbean and Pacific countries. It is criticized by the applicant on the ground of politico-economic expediency but that does not in law call in question the provisions by which it has been established. It follows from this that the terms of reference adopted by Commission Regulation (EEC) No 937/77 for the purpose of calculating the amount of the compensation were not comparable; therefore the Commission was perfectly justified in taking the gross intervention price for the 1977/78 marketing year as a comparative reference and this gave a difference of 1.87, which when added to the compensatory amount of 8.86 fixed by Commission Regulation (EEC) No 1474/77 of 30 June 1977, which has not been called in question by the applicant, gives exactly the compensatory amount of 10.73, in force when Commission Regulation (EEC) No 937/77 was adopted. (d) The applicant claims that it can legitimately entertain hopes based on the Commission's earlier practice. It is true that the effect of the method of calculation applied by the Commission in 1976 (Regulation (EEC) No 557/76) was to award exporters more than the compensation for the disadvantages of the impact caused by a new representative rate on the monetary compensatory amounts to be granted. But the fan that the Commission was particularly ‘generous’ in the previous year and continued to be ‘generous’ in the case of licences which were issued before 26 April 1977 and were due to be discharged before 14 July 1977 (I have explained that the Commission had to do this as rights had been established) does not constitute a precedent by which it is bound. Logically the Commission ought to have made this correction even before 1 July 1977 at the same time as it adopted Regulation (EEC) No 1474/77. But the fact that it did not do so until 14 July 1977 has no effect on the legality of its Regulation (EEC) No 1583/77 and does not give the applicant grounds for complaint since the regulation expressly exempted exports in respect of which the customs formalities were completed by that date. One reason of general importance might make the Commission depart from this practice. In view of the applicant's claims account must be taken of the not inconsiderable financial incidence on the charges which are a heavy burden on the budget of the European Agricultural Guidance and Guarantee Fund in so far as the items ‘monetary compensatory amounts’ and ‘storage costs’ are concerned. The applicant alleges that the Commission completely loses sight of the fact that as from 1 July 1977 the Commission must itself pay sugar manufactures the increased intervention price taken as the basis of its dealings with its suppliers. The applicant in fact made its arrangements on the basis of the old intervention price. If that is not the case it has speculated on the trends of compensatory amounts or else has tried to pass on to the Community the effect of the increased intervention price which has been determined by the interplay of clauses in contracts for which it alone must assume responsibility vis-à-vis its suppliers. To allow its claims would amount to considering as predetermined the monetary compensatory amount relating to refunds fixed in advance before 26 April 1977 for quantities exported after 15 July 1977. Once again this advance fixing of the compensatory amount has been accepted in the case of exports effected before 14 July 1977, because it was made necessary by the fact that the expiration of the period within which application was to be made for export licences had been deferred until 30 April 1977 and Commission Regulation (EEC) No 1372/77, which granted this extension, remained in force until 14 July 1977. But this advance fixing of compensatory amounts was altogether exceptional and apart from this specific case it has been impossible to award such a benefit except after the adoption very recently of Regulation (EEC) No 243/78 of 1 February 1978.