OPINION OF ADVOCATE GENERAL

Sharpston

delivered on 27 March 2014 ( )

Case C‑578/11 P

Deltafina SpA

v

European Commission

(Appeal — Competition — Immunity from fines and reduction of fines in cartel cases — An undertaking’s obligation to cooperate under a Leniency Notice — Procedural irregularity — Decision founded on evidence from witnesses heard in contravention of the Rules of Procedure of the General Court — Infringement of the rights of the defence — Breach of fundamental right to a fair hearing within a reasonable time by the General Court)

1. By this appeal Deltafina SpA (‘Deltafina’) challenges a judgment of the General Court ( ) confirming a decision of the European Commission concerning infringements of the competition rules relating to a cartel in the Italian market for the purchase and first processing of raw tobacco. ( ) During the administrative stage of the procedure and within the context of the leniency regime ( ) that applied at that time, the Commission had granted Deltafina conditional immunity from fines for cooperation in its investigation. However, the Commission subsequently withdrew that immunity in the contested decision. The principal issues raised by Deltafina in the present proceedings concern the meaning of an undertaking’s obligation to cooperate within the leniency regime, whether the proceedings at first instance gave rise to procedural irregularities that infringed Deltafina’s rights of defence and the complaint that the General Court failed to adjudicate within a reasonable time.

Legal background

The European Convention on Human Rights

2. Article 6(1) ECHR provides that everyone is entitled to a fair and public hearing within a reasonable time by an independent and impartial tribunal.

Fundamental rights

3. Article 41 of the Charter of Fundamental Rights of the European Union ( ) guarantees that every person has the right to have his affairs handled impartially, fairly and within a reasonable time by the institutions, bodies and agencies of the Union.

4. Article 47 of the Charter is entitled ‘Right to an effective remedy and to a fair trial’. It provides inter alia: ‘Everyone is entitled to a fair and public hearing within a reasonable time by an independent and impartial tribunal previously established by law. …’ Article 48 of the Charter guarantees the presumption of innocence and the rights of the defence. ( )

5. The Charter states that its provisions are addressed to the institutions and bodies of the Union with due regard for the principle of subsidiarity and to the Member States only when they are implementing Union law. They must therefore respect the rights, observe the principles and promote the application thereof in accordance with their respective powers and respecting the limits of the powers of the Union as conferred on it in the Treaties. ( )

6. Where rights guaranteed by the Charter correspond to rights laid down in the ECHR, their interpretation should be the same. ( )

Treaty on the Functioning of the European Union

7. Article 101 TFEU (formerly Article 81 EC) prohibits undertakings from participating in agreements, decisions and concerted practices which prevent, restrict, or distort competition within the internal market.

Fines in competition law

Council Regulation (EC) No 1/2003

8. Under Article 23 of Regulation No 1/2003, ( ) the Commission may adopt a decision imposing fines on undertakings where, inter alia, either intentionally or negligently they infringe Article 101 TFEU. ( ) In fixing the amount of the fine, regard must be had both to the gravity and to the duration of the infringement. ( ) Fundamental rights and the principles in the Charter must be recognised when setting fines; and Regulation No 1/2003 should be interpreted and applied respecting those principles. ( )

9. Article 31 of Regulation No 1/2003 provides: ‘The Court of Justice shall have unlimited jurisdiction to review decisions whereby the Commission has fixed a fine or periodic penalty payment. It may cancel, reduce or increase the fine or periodic penalty payment imposed.’ ( )

Guidelines on the method of setting fines

10. Also applicable at the material time were the Commission’s 1998 Guidelines. ( ) According to the preamble, the basic amount of the fine was determined by adding together the sums established for the gravity and the duration of the infringement. That amount might then be reduced where there were attenuating circumstances such as effective cooperation by an undertaking in the proceedings outside the scope of the Leniency Notice. ( ) The 1998 Guidelines also recognised that in certain circumstances an undertaking might be eligible for immunity from fines. ( )

Commission notice on immunity from fines and reduction of fines in cartel cases

11. The introduction to the Commission notice on immunity from fines and reduction of fines in cartel cases ( ) explained that it concerned serious infringements of the competition rules such as price fixing, establishing production or sales quotas and market sharing carried out by cartels. The Commission noted that certain undertakings involved in such illegal practices were willing to put an end to their participation and inform it of the existence of such agreements, but were dissuaded from doing so by the high fines to which they were potentially exposed. It considered that it was in the (then) Community’s interest to grant favourable treatment to undertakings which cooperated with it. A decisive contribution to the opening of an investigation or to the finding of an infringement could justify granting immunity from any fine to the undertaking in question, on condition that certain additional requirements were fulfilled. Moreover, cooperation by one or more undertakings could lead to the Commission reducing any fine imposed. Any such reduction must reflect an undertaking’s actual contribution, in terms of quality and timing, to the Commission’s establishment of an infringement. Reductions were limited to those undertakings that provided the Commission with evidence that added significant value to that already in its possession. ( )

12. Section A of the Leniency Notice 2002 was entitled ‘Immunity from fines’. Point 8 stated that the Commission would grant an undertaking immunity from any fine which would otherwise have been imposed if, in connection with an alleged cartel affecting the Community, that undertaking was the first to submit evidence which in the Commission’s view: (a) enabled it to adopt a decision to carry out an investigation; or (b) could enable it to find an infringement of Article 81 EC. Under Section B, undertakings that did not meet the conditions for obtaining immunity might nevertheless be eligible for a reduction of any fine that might otherwise have been imposed. ( )

13. In addition to those requirements, the following cumulative conditions in point 11 of the notice had to be met in order for an undertaking to qualify for immunity from a fine:

‘(a) the undertaking cooperates fully, on a continuous basis and expeditiously throughout the Commission’s administrative procedure and provides the Commission with all evidence that comes into its possession or is available to it relating to the suspected infringement. In particular, it remains at the Commission’s disposal to answer swiftly any request that may contribute to the establishment of the facts concerned;

(b) the undertaking ends its involvement in the suspected infringement no later than the time at which it submits evidence under points 8(a) or 8(b), as appropriate;

(c) the undertaking did not take steps to coerce other undertakings to participate in the infringement.’

14. The procedure for applying for immunity from fines was set out in points 12 to 19. If at the end of the administrative procedure the undertaking met the conditions set out in point 11, the Commission could grant it immunity from fines in its final decision. Failure to meet any of the requirements set out in Sections A or B, as the case might be, at any stage of the administrative procedure might result in the loss of any favourable treatment. ( )

The contested decision and its background

The cartel

15. Paragraphs 2 to 20 of the judgment under appeal set out a full explanation of the background to the contested decision.

16. In brief, the sequence of events was as follows. On 3, 4 and 5 October 2001 the Commission carried out inspections at the headquarters of the Fédération européenne des transformateurs de tabac (‘the Fédération’) and the Maison des métiers du tabac in Brussels (Belgium). On the same day, by fax, the Fédération informed all its members of the inspections, including the Associazione professionale trasformatori tabacchi italiani (the Professional Association of Italian Raw Tobacco Processors: ‘APTI’). The Commission also carried out inspections at the headquarters of the three main Spanish raw tobacco processors and of the two Spanish associations of raw tobacco processors and producers on those days.

17. On 19 February 2002 Deltafina, an Italian processor of raw tobacco (and member of APTI) submitted to the Commission an application for immunity from fines under Leniency Notice 2002 and, in the alternative, an application for a reduction of the amount of the fine under Section B of that notice. The application for immunity related to a presumed cartel between raw tobacco processors on the Italian market. On 6 March 2002 the Commission informed Deltafina that its application met the conditions set out at point 8(b) of Leniency Notice 2002 and that it would grant Deltafina, at the end of the administrative procedure, immunity from fines for any infringement found following the investigation carried out by the Commission in connection with the evidence supplied, provided that Deltafina met all the conditions set out at point 11 of that notice. On 14 March 2002 a meeting took place between the Commission’s services and the representatives of Deltafina and Universal Corporation ( ) in order to discuss the details of Deltafina’s cooperation with the Commission (‘the meeting of 14 March 2002’). At that meeting the confidential nature of Deltafina’s application for immunity was among the items discussed. On 19, 21, 25 and 26 March 2002 Deltafina supplied the Commission with further information. On 22 March 2002 a telephone conversation took place between Deltafina’s representatives and the Commission official handling the case, during which several questions relating to Deltafina’s cooperation with the Commission were discussed.

18. On 2 April 2002 Universal’s external counsel informed the external counsels of Standard Commercial Corp. and Dimon Inc., the parent companies of Transcatab SpA (‘Transcatab’) and Dimon Italia Srl (‘Dimon Italia’) respectively, two Italian companies involved in the first processing of raw tobacco, that Deltafina had applied to the Commission for immunity concerning the cartel between processors on the tobacco market in Italy. On the morning of 4 April 2002 a meeting was held at APTI’s offices (‘the APTI meeting’). At that meeting Deltafina’s chairman informed those present that Deltafina had begun to cooperate with the Commission under Leniency Notice 2002. On that afternoon, 4 April 2002, Dimon Italia and Transcatab, whose representatives were present at the APTI meeting, also submitted applications for favourable treatment under Leniency Notice 2002.

19. The Commission issued its Statement of Objections on 25 February 2004. At the oral hearing before the Hearing Officer on 22 June 2004, in which Deltafina participated, a representative of Dimon Italia drew the Commission’s attention to two documents in the file which summarised the statement made by Deltafina’s chairman at the APTI meeting. On 21 December 2004 the Commission adopted an addendum to its Statement of Objections, informing Deltafina and the other undertakings concerned that it intended not to grant Deltafina immunity from fines on the ground that it had breached the obligation to cooperate set out at point 11(a) of Leniency Notice 2002.

The contested decision and determination of the fine

20. The Commission adopted the contested decision on 20 October 2005. Article 1 of that decision states that Deltafina and Universal infringed Article 81(1) EC during the periods ( ) indicated by way of agreements and/or concerted practices in the Italian raw tobacco sector. Under Article 2 of the contested decision Deltafina and Universal were jointly and severally fined EUR 30 000 000.

21. All relevant circumstances were taken into account in determining the basic amount of the fine in accordance with Article 23(3) of Regulation No 1/2003. Thus, the Commission examined in particular: (i) the gravity of the infringement; (ii) the very serious nature of the breach of the competition rules; (iii) the specific market share of each undertaking (Deltafina was the biggest purchaser in the raw tobacco market concerned); (iv) the fact that Deltafina belonged to a multinational group representing the biggest tobacco merchants in the world (a multiplier of 1.5 was applied to the starting amount of the fine to produce a deterrent effect); and (v) the duration of the infringement (that amount was then increased by 60%).

22. Next, as an attenuating circumstance in favour of Deltafina, the Commission took into account its effective cooperation in the proceedings outside the scope of Leniency Notice 2002. The basic amount of the fine was reduced for two reasons. Deltafina was the first undertaking to request the application of Leniency Notice 2002 and the first to which the Commission granted conditional immunity; and Deltafina made a substantial contribution to the Commission’s investigation from the outset and continued to do so throughout the whole procedure, with the exception of the facts that justified the withholding of final immunity.

23. Immunity from fines was withdrawn because the Commission considered that Deltafina had failed to satisfy the conditions in point 11(a) of Leniency Notice 2002. Although Deltafina was aware that the Commission intended to carry out on-the-spot investigations between 18 and 20 April 2002, Deltafina’s chairman voluntarily informed its two main competitors of its application for immunity on 4 April 2002, before those investigations had been carried out. Deltafina’s behaviour was perfectly capable of undermining the result of the Commission’s inspections and Deltafina knew or at least ought to have known that that was so, notably because it had been specifically informed by the Commission of the forthcoming inspections and had been requested to conceal its application for immunity, in order not to jeopardise the outcome of the inspections. In that regard, neither the discussions at the meeting of 14 March 2002 nor the Commission’s subsequent conduct indicated that it had accepted that Deltafina would inevitably disclose to its competitors its request for the application of Leniency Notice 2002.

24. The Commission recognised both the practical difficulties that Deltafina would encounter in concealing its application for immunity and the fact that, if Deltafina had been obliged to disclose that application to its competitors, it was highly unlikely that the subsequent inspections would have been productive. However, Deltafina’s disclosure of its application for immunity at the APTI meeting was voluntary and spontaneous. The fact that Deltafina never informed the Commission of that disclosure indicated that it did not expect the Commission to approve of its conduct. Furthermore, Universal also did not inform the Commission promptly of the disclosure made by its external counsel on 2 April 2002.

Proceedings before the General Court and the judgment under appeal

25. At first instance Deltafina asked the General Court to:

– annul the fine imposed on it by Article 2 of the contested decision;

– in the alternative, reduce the amount of that fine;

– order the Commission to pay the costs of the proceedings.

26. Deltafina put forward seven pleas in law. By its first three principal pleas seeking annulment of the contested decision Deltafina alleged that the Commission had made three manifest errors: (i) in withdrawing immunity from fines based on an incorrect factual premiss; (ii) in considering that Deltafina had breached the obligation to cooperate in point 11(a) of Leniency Notice 2002; and (iii) in claiming that Deltafina’s disclosure of its application for immunity had jeopardised the investigation. By its fourth plea Deltafina alleged breach of the principles of the protection of legitimate expectations, of sound administration and of proportionality. Deltafina then raised three pleas in the alternative seeking a reduction of the amount of the fine. The fifth plea alleged breach of the principle of proportionality owing to the excessive nature of the starting amount of the fine. The sixth plea alleged that the Commission had erred in considering that Universal was jointly liable for Deltafina’s conduct and therefore imposed an excessive fine on Deltafina. The seventh plea alleged incorrect assessment of the attenuating circumstances. Deltafina subsequently withdrew the sixth plea.

27. At the hearing before the General Court Deltafina sought for the first time to allege that the Commission had breached the principle of equal treatment in so far as it had reduced both Deltafina’s and Dimon Italia’s fines by 50%. The General Court ruled that plea to be inadmissible under Article 48(2) of its Rules of Procedure.

28. By judgment delivered on 9 September 2011 the General Court dismissed the application in its entirety and ordered Deltafina to pay the costs of the proceedings.

The appeal and the procedure before the Court

29. Deltafina puts forward four grounds of appeal which may be summarised as follows. First, the General Court erred in failing to rule on the issue whether, in the light of the ‘ground rules’ ( ) established at the meeting on 14 March 2002, the Commission was entitled to find that Deltafina had breached its obligation to cooperate by disclosing that it had applied for immunity at the APTI meeting. In so doing, the General Court substituted itself for the parties by defining ex post the conditions governing Deltafina’s duty to cooperate and thereby infringed Deltafina’s rights of defence.

30. Second, the General Court failed to make adequate or correct findings of fact and disregarded fundamental rules regarding obtaining evidence, because it heard testimony following an allegedly informal, and thus defective, procedure from two participants at the meeting of 14 March 2002 on the subject of the ground rules, without having regard to the guarantees laid down in its own Rules of Procedure.

31. Third, the General Court failed to adjudicate within a reasonable time. The proceedings before it were excessively lengthy, lasting 5 years and 8 months, and more than 43 months elapsed between the close of the written procedure and the decision to open the oral procedure.

32. Fourth, the General Court unlawfully refused to rule, in accordance with its unlimited jurisdiction, on Deltafina’s argument submitted for the first time at the hearing that the fine imposed by the Commission was disproportionate and discriminatory because the Commission applied the same level of reduction to Deltafina’s fine as that of Dimon Italia, in spite of the substantial difference between their respective contributions to the Commission’s investigation which led to the finding of an infringement.

33. The proceedings before this Court were suspended following the hearing on 13 November 2012, pending the Grand Chamber’s decision in Gascogne Sack Deutschland v Commission, ( )Kendrion v Commission ( ) and Groupe Gascogne v Commission. ( ) In those cases the Court reappraised its case-law dealing with complaints brought within the context of an appeal that the General Court has failed to adjudicate within a reasonable time. Judgments in those cases were delivered on 26 November 2013. This Opinion was accordingly deferred in order to enable those judgments to be taken into account.

Third ground: failure to adjudicate within a reasonable time

34. It is convenient to deal with Deltafina’s third ground of appeal first, because it is entirely distinct from the issues of substance raised in the first, second and fourth grounds.

Summary of the submissions

35. Deltafina submits that the General Court infringed Articles 42 and 47 of the Charter by failing to adjudicate within a reasonable time. Accordingly, Deltafina asks the Court to quash the judgment under appeal, or alternatively to reduce substantially the amount of its fine.

36. Measured against the length of the proceedings in Baustahlgewebe v Commission, ( ) a more complex case where the Court held that 5 years and 6 months was an excessive delay (32 months elapsed between the end of the written and the opening of the oral proceedings), it is clear that the procedure before the General Court in the present case was excessively lengthy. Here the procedure lasted 5 years and 8 months, and 43 months elapsed between the end of the written procedure and the decision to open the oral phase. Deltafina did not contribute to the duration of those proceedings. Whilst it is true that the deadline for lodging the reply was suspended from 6 July 2006 to 16 October 2006 after Deltafina requested the General Court to order the Commission to produce a document, Deltafina lodged its reply within the time-limit imposed. The case has significant importance for Deltafina for two reasons. First, the fine imposed is considerable. Second, it concerns an issue of principle, namely whether an undertaking that has requested immunity from fines can legitimately conclude an agreement with the Commission as to how its obligation to cooperate for the purposes of Leniency Notice 2002 should be discharged.

37. The Commission submits that Deltafina’s plea is unfounded. First, the Commission contests Deltafina’s calculation of the length of the proceedings. It considers that the proceedings lasted 5 years, 3 months and 8 days (less than the length of the proceedings in Baustahlgewebe). Deltafina’s request for an extension of time in lodging its reply lengthened the procedure by 4 months and 12 days. Second, it is settled case-law that in assessing whether there has been excessive delay in adjudication, the particular circumstances of the case must be taken into account. Deltafina was involved in a complex cartel that gave rise to a series of related infringements where the undertakings concerned lodged applications for annulment of the same Commission decision. ( ) Those cases were conducted in three different languages (English, Italian and Spanish). Furthermore, in Deltafina’s case there were complex issues of fact and law to examine. Therefore, the length of proceedings before the General Court should not be regarded as excessive. Third, even if the Court finds that the proceedings before the General Court were excessively lengthy, that circumstance should not lead to the annulment of the contested decision.

Assessment

38. First, according to the European Court of Human Rights a failure to adjudicate within a reasonable time must, as a procedural irregularity constituting the breach of a fundamental right, then entitle the party concerned to an effective remedy granting him appropriate relief. ( )

39. Second, where there are no indications that the excessive length of the proceedings before the General Court affected their outcome, failure to deliver judgment within a reasonable time cannot lead to the setting aside of the judgment under appeal. ( ) That is because where the failure to adjudicate within a reasonable time has had no effect on the outcome of the dispute, the setting aside of the judgment under appeal would not remedy the infringement of the principle of effective legal protection committed by the General Court. ( )

40. Third, in the present case, Deltafina has provided no evidence to this Court from which it may be inferred that a failure by the General Court to adjudicate within a reasonable time could have affected the outcome of the dispute.

41. Fourth, having regard to the need to ensure compliance with the competition rules of the European Union, the Court cannot allow an appellant to reopen the question of the validity or amount of a fine, on the sole ground that there was a failure to adjudicate within a reasonable time, where all of its pleas directed against the findings made by the General Court concerning the amount of that fine and the conduct that it penalises have been rejected. ( ) For the reasons that I set out below in points 73 to 101 (first ground of appeal), 110 to 121 (second ground of appeal) and 126 to 130 (fourth ground of appeal), I conclude that Deltafina’s substantive pleas in the present appeal should indeed be rejected.

42. It follows that Deltafina’s third ground of appeal cannot lead to the setting aside of the judgment under appeal.

43. In so far as Deltafina seeks a reduction in its fine in order to take into account the financial consequences arising for it from the excessive duration of the proceedings before the General Court, it must be borne in mind that when first faced with a similar situation in Baustahlgewebe the Court granted that application and reduced the fine for reasons of economy of procedure and in order to ensure an immediate and effective remedy for the procedural irregularity. ( ) Conversely, in Der Grüne Punkt — Duales System Deutschland v Commission, ( ) a later case in which the Commission had found an abuse of a dominant position but not imposed a fine, the Court held that the failure on the part of the General Court to adjudicate within a reasonable time could give rise to a claim for damages.

44. Deltafina has not specified whether its claim is founded on Baustahlgewebe or whether it seeks damages; nor has it indicated whether or to what extent it has suffered pecuniary loss. It seems to me that Deltafina’s appeal is based implicitly upon the Court’s approach in Baustahlgewebe, rather than being presented as a separate claim for material loss and/or non-pecuniary damages. In the supervening period between the suspension and reopening of the oral procedure, the Court has confirmed that a claim for damages brought against the European Union pursuant to Article 268 TFEU and the second paragraph of Article 340 TFEU constitutes an effective remedy of general application for asserting and penalising such a breach. ( ) Deltafina’s claim must therefore be rejected in so far as it is based upon Baustahlgewebe. If Deltafina wishes to submit a claim for damages, that must be brought before the General Court. ( )

45. As regards the criteria for assessing whether the General Court ruled within a reasonable time, that question must be appraised in the light of the circumstances specific to each case, such as its complexity and the conduct of the parties. ( ) The list of relevant criteria is not exhaustive and the assessment of the reasonableness of a period does not require a systematic examination of the circumstances of the case in the light of each factor where the duration of the proceedings appears justified in the light of one of them. Thus, the complexity of the case or the dilatory conduct of the applicant may be deemed to justify a duration which is prima facie too long. ( )

46. Applying those principles to the present matter, Deltafina lodged its application for annulment on 19 January 2006. On 26 June 2006 Deltafina asked the General Court to order the Commission to produce the full version of a document annexed to the defence. By letter of 22 November 2006, the Registry of the General Court informed Deltafina that its request had been rejected. According to Deltafina the written procedure closed on 26 February 2007. The hearing took place on 29 September 2010 and judgment was delivered on 9 September 2011.

47. The overall length of proceedings at first instance was approximately 5 years and 8 months, and there was a period of approximately 43 months between the end of the written procedure and the hearing. The length of the proceedings before the General Court cannot be justified by any of the particular circumstances of Deltafina’s case. The length of the period between the written and oral phase of the procedure cannot be explained by the complexity of the dispute, the conduct of the parties or any supervening procedural matters. In particular Deltafina’s request for an order for the production of a document held by the Commission had no impact whatsoever on the period of apparent inactivity between the close of the written procedure and the opening of the oral phase. The Court has not been provided with any information that explains or justifies that period.

48. As regards more particularly the complexity of the dispute, it is clear that whilst the pleas relied on required detailed examination, they did not present any exceptional difficulties. Although it is true that a number of addressees of the contested decision brought actions for its annulment before the General Court, that fact did not make it impossible to scrutinise the documents in the case and prepare for the oral procedure in less than 3 years and 7 months. It should be pointed out that the General Court adopted no measures of organisation of procedure during that period that interrupted or delayed the proceedings.

49. These facts lead me to conclude that the procedure in the General Court breached the second paragraph of Article 47 of the Charter and that the General Court failed to adjudicate within a reasonable time. That constitutes a sufficiently serious breach of a rule of law that is intended to confer rights on individuals; ( ) and accordingly it is open to Deltafina to bring a separate action for damages should it wish to do so.

50. However, since Deltafina’s claim cannot lead to annulment of the judgment under appeal, the third ground of appeal should be rejected as unfounded.

First and second grounds: summary of the relevant passages of the judgment under appeal

51. The General Court began by setting out its approach in paragraphs 102 to 148 of the judgment under appeal. The leniency programme is designed to give favourable treatment to undertakings cooperating with the Commission in investigations into secret cartels. Thus, the programme pursues the objective of investigating, suppressing and deterring practices forming part of the most serious infringements of the competition rules. The leniency programme is based on an agreement between the Commission and the undertakings which decide to cooperate with it. Under Leniency Notice 2002, the Commission could both give immunity from fines to the first undertaking to cooperate in the investigation and grant reductions in fines to undertakings that cooperated subsequently. In that regard, it is inherent in the rationale of the leniency programme that only one of the members of a cartel can receive immunity from fines, since the desired effect is to create a climate of uncertainty within cartels by encouraging their denunciation to the Commission. Cartel participants know that only one of them can benefit from immunity from a fine by denouncing the other participants in the infringement, thereby placing them in danger of receiving fines. ( )

52. It follows from Leniency Notice 2002 that the procedure for granting an undertaking immunity from fines has three distinct stages: (i) the undertaking seeking immunity approaches the Commission and provides evidence of a presumed cartel affecting competition within the European Union; (ii) the Commission then assesses that evidence in the light of the conditions set out at point 8(a) or (b), as appropriate, of Leniency Notice 2002 and, if that undertaking is the first whistle-blower to satisfy those conditions, the Commission might grant it, in writing, conditional immunity from fines; (iii) at the end of the administrative procedure, when the final decision is adopted, the Commission decides whether or not to give final immunity from fines. That can only be granted if the undertaking in question has met, throughout the administrative procedure and until the time when the final decision is taken, the three cumulative conditions set out at point 11(a) to (c) of Leniency Notice 2002. ( )

53. As regards the scope of the obligation to cooperate under Leniency Notice 2002, the General Court stated that it follows from the actual wording of point 11(a), in particular from the qualification that the undertaking concerned must cooperate ‘fully, on a continuous basis and expeditiously’, that that obligation is very general, the parameters are not precisely defined and the exact scope of the obligation can be understood only in the context of the leniency programme. The General Court considered that the word ‘fully’ signified that such cooperation must be complete, absolute and unreserved in order for immunity to be granted in any final decision. The qualifications ‘on a continuous basis’ and ‘expeditiously’ meant that the undertaking’s cooperation must satisfy two conditions: (i) it must last throughout the administrative procedure; and (ii) it must be immediate. ( )

54. The General Court explained that within the leniency regime ‘cooperation’ means genuine and full cooperation. It followed from settled case-law that a reduction of the fine under Leniency Notice 2002 can be justified only where the information provided and, more generally, the conduct of the undertaking concerned can be considered to demonstrate genuine cooperation. ( ) The General Court stated that that consideration applied a fortiori to the cooperation necessary to justify granting immunity from fines, in so far as such immunity constitutes treatment even more favourable than merely reducing the fine. ( )

55. The General Court went on to state that where an undertaking provided a factual account that was incomplete or inaccurate, its conduct could not be regarded as reflecting a spirit of genuine cooperation within the meaning of that case-law. ( ) Thus, an undertaking wishing to benefit from immunity from fines could not fail to inform the Commission of relevant facts of which it was aware and which were capable of affecting, even potentially, the conduct of the administrative procedure and the effectiveness of the Commission’s investigation. Whether there was conduct reflecting a genuine spirit of cooperation could be assessed only by reference to the circumstances existing at the time when that conduct took place. Thus, an ex post facto finding that the conduct in breach of the obligation to cooperate had no negative effects on the Commission’s investigation could not be relied upon in order to justify that conduct. ( )

56. Against that background, the General Court found the following facts.

57. First, Deltafina had failed to inform the Commission of circumstances relevant to the investigation, namely that its chairman had disclosed at the APTI meeting of 4 April 2002 that Deltafina had applied for immunity and that Universal’s counsel had made a similar disclosure to the parent companies of certain of its competitors on 2 April 2002. Second, the Commission had been unaware of those circumstances — which were relevant to its investigation — for more than two years. Third, it was also clear from the contested decision and from the case-file that, during the contacts between Deltafina and the Commission’s services in the context of the leniency programme and in particular at the meeting of 14 March 2002, the parties had expressly discussed the question of concealing Deltafina’s application for immunity in order not to alert competitors and not to undermine the effectiveness of the inspections. In particular, it was clear that the Commission had expressly requested Deltafina to keep the application for immunity secret because it intended to carry out such inspections. Thus, Deltafina knew that the Commission regarded any disclosure of the application for immunity as a relevant circumstance capable, at least potentially, of influencing the proper conduct of the investigation. Fourth, Deltafina could not claim not to have known that maintaining confidentiality concerning the application for immunity was regarded as an important element for the success of the investigation. ( )

58. The General Court ruled that, in those circumstances, conduct showing a spirit of genuine cooperation required that Deltafina should have informed the Commission promptly of the fact that its application for immunity had been disclosed. ( )

59. The General Court rejected Deltafina’s claim that the Commission knew that it would tell other cartel members that it had applied for immunity at the APTI meeting held on 4 April 2002. The General Court found that as the Commission was not aware that Deltafina intended to make such a spontaneous disclosure, it could not have accepted or previously authorised it. ( )

60. The General Court then considered the specific arguments put forward by Deltafina alleging errors vitiating the contested decision, in particular concerning the alleged agreement on the ‘ground rules’. The General Court rejected Deltafina’s submission that it followed either from the contested decision or the documents in the file that Deltafina had explicitly and clearly informed the Commission before the APTI meeting that it would spontaneously disclose its application for immunity on that occasion. Thus, neither the minutes of the meeting of 14 March 2002 drawn up by the Commission’s services nor the notes taken by one of Universal’s representatives at that meeting referred to Deltafina having expressly warned the Commission that it would make such a disclosure. The notes drawn up by Universal’s representative showed that Deltafina had confined itself to emphasising its difficulties in keeping its application for immunity secret since, if its conduct during the imminent APTI meeting should differ from its conduct at previous meetings, its competitors would be likely to suspect that it had applied for immunity. The General Court noted that in answer to a question that it put at the hearing, Deltafina itself had acknowledged in substance that it had not expressly informed the Commission’s services at the meeting of 14 March 2002 that it would spontaneously disclose its application for immunity at the APTI meeting on 4 April 2002. Nor did any document in the file indicate that on a different occasion Deltafina had expressly warned the Commission in advance that it would make such a spontaneous declaration. ( )

61. In particular, the General Court examined the separate notes on file made by Deltafina’s representatives and by the Commission’s services of the telephone conversation of 22 March 2002 (between Mr Jacchia for Deltafina and Mr Van Erps of the Commission’s services). The General Court did not accept Deltafina’s argument that during that telephone conversation Deltafina had informed the Commission that it would disclose its application for immunity. ( )

62. Finally, the General Court examined Deltafina’s submission that at the meeting of 14 March 2002 it had agreed certain ‘ground rules’ with the Commission. According to Deltafina, the principal parts of the alleged agreement were that the Commission had accepted that Deltafina’s disclosure was inevitable and that, in exchange, Deltafina had assumed a heavier burden by undertaking to provide more evidence as quickly as possible. Deltafina argued that it had therefore complied with its obligation to cooperate, in so far as it had supplied the additional information requested by the Commission. The General Court pointed out that even if Deltafina’s view were correct, that could not undermine the finding that Deltafina had breached its obligation to cooperate by failing subsequently to inform the Commission of the disclosure of the application for immunity. The Commission was therefore justified in not granting Deltafina immunity in its final decision.

63. The General Court considered that, even if the Commission had agreed at the meeting of 14 March 2002 that it was impossible for Deltafina to conceal its application for immunity (a point which was in dispute), that would not affect the finding that, in the framework of conduct demonstrating a spirit of genuine cooperation, it was incumbent upon Deltafina to inform the Commission promptly of the fact that disclosure of the application for immunity had indeed taken place. The same reasoning held good if Deltafina had in fact been compelled to disclose its application for immunity for one of the reasons which it put forward during the administrative procedure — in particular, in the event that Deltafina was in fact, as it maintained, in a situation so ‘pressing’ that, since Deltafina had a legitimate desire not to breach its obligation to cease the infringement under point 11(b) of Leniency Notice 2002, it had no option but to disclose its application for leniency to the other cartel members. Because Deltafina had applied for immunity, it was in any event subject to the obligation to cooperate. That required it to inform the Commission promptly of the disclosures made. Likewise, even on the assumption that the circumstance on which Deltafina relied — namely that it had complied with the ‘second-best option’ allegedly agreed with the Commission in order to attenuate the negative effects of the ‘inevitable’ disclosure by supplying the information requested by the Commission — were established, that circumstance too would not be capable of relieving Deltafina of its obligation to inform the Commission promptly of the disclosure of Deltafina’s application for immunity. ( )

First ground: error of assessment in relation to the duty to cooperate and infringement of the rights of the defence

Summary of the submissions

64. Deltafina complains that the General Court infringed its rights of defence by failing to rule on its principal plea that it followed from the agreement on the ground rules established at the meeting of 14 March 2002 that Deltafina had been discharged from the obligation to conceal its application for immunity from other members of the cartel. Accordingly Deltafina did not breach its obligation of confidentiality when it disclosed that fact at the APTI meeting. Instead, the General Court substituted its own grounds for those submitted by the parties by introducing a new point: that Deltafina breached its obligation to cooperate by failing to inform the Commission that it had disclosed its application for immunity to other members of the cartel. In so doing the General Court went beyond its jurisdiction which is restricted to reviewing the contested decision. The General Court cannot substitute what it considered that Deltafina should have done to meet its obligation to cooperate for the ground rules that the parties agreed between themselves at the meeting of 14 March 2002. Furthermore, that agreement was contractual in nature. The judgment under appeal is irretrievably inconsistent.

65. Deltafina further submits that the content of the ground rules derives from the details it agreed with the Commission. Deltafina’s position that it was discharged from its duty of non-disclosure at the meeting of 14 March 2002 is supported by contemporaneous evidence, including the minutes of that meeting. These show that in exchange for agreeing to release Deltafina from its obligation, the Commission imposed more onerous requirements upon the undertaking to furnish the information necessary to pursue the investigations into the cartel. If the General Court had examined the minutes, it would have found that the Commission had agreed that it was inevitable that Deltafina would be obliged to disclose its request for immunity. Those minutes do not show that Deltafina was subject to a requirement to inform the Commission if it disclosed that it had made an application for immunity. The Commission subsequently never asked Deltafina’s representatives about the position. Indeed the Commission did not appear interested in that issue. The Commission accused Deltafina of having made a voluntary and spontaneous disclosure of its request for immunity. However, there is nothing in the minutes of the meeting of 14 March 2002 indicating that any disclosure had to be involuntary and be inevitable because a third party sought information.

66. Deltafina submits that its duty to cooperate under Leniency Notice 2002 is not the same as that previously considered by the Court in Dansk Rørindustri. ( ) There, undertakings requesting favourable treatment were subject to an obligation to provide the Commission with complete and accurate information concerning the existence of an infringement of the competition rules. In such circumstances the undertaking concerned could not be released from its obligation to cooperate under the applicable Leniency Notice. In contrast Deltafina was subject to an obligation of confidentiality from which it might be discharged. That position is confirmed by point 12(a) of Leniency Notice 2006. In any event Deltafina adds that it should be given the benefit of any doubt regarding what were agreed as the ground rules and the means of collaboration between it and the Commission.

67. The Commission submits that Deltafina’s first ground of appeal is unfounded. It did not agree to discharge Deltafina from its obligation to conceal the application for immunity. The General Court diligently considered Deltafina’s submissions concerning the alleged agreement with the Commission on disclosing its request for immunity and concluded on the facts that there was no such agreement. Accordingly, the General Court did not infringe Deltafina’s rights of defence, nor did it go beyond the limits of its jurisdiction in ruling that Deltafina breached its duty to cooperate.

68. The Commission contests Deltafina’s claim that the General Court based its ruling on a new ground that did not form part of the contested decision. Deltafina’s failure to inform the Commission of its disclosure (the alleged new ground) is mentioned in the recitals in the preamble to that decision. ( ) It is true that the General Court placed more emphasis on that particular omission than the Commission. However, like the General Court the Commission also considers that Deltafina thereby breached point 11(a) of Leniency Notice 2002. It follows from Deltafina’s omission that it continued to conduct itself as a member of the cartel and that it was unable to demonstrate a spirit of genuine and loyal cooperation. Article 31 of Regulation No 1/2003 provides that the General Court has unlimited jurisdiction with regard to setting fines. In the light of that provision it cannot follow that the General Court went beyond its jurisdiction in assessing whether Deltafina fulfilled its duty to cooperate under Leniency Notice 2002.

69. The Commission points out that the General Court rejected Deltafina’s submission that it had not been possible for it to keep its request for immunity secret from other cartel members, and considered that that disclosure had been made voluntarily. Deltafina’s claim that the Commission failed to make it clear that any disclosure of Deltafina’s request for immunity to other members of the cartel should not be given voluntarily is a linguistic quibble; and Deltafina’s argument is without any merit.

70. The rules of the leniency programme are based upon the Treaty, secondary legislation and the Commission’s communications. It is inconceivable that different ‘ground rules’ could be fixed by a Commission official who is in charge of a particular case. The role of officials is to explain the content of the rules, but in so doing they may express their views on the way the rules might be applied in any particular case. Accordingly, the General Court was correct in ruling that it should examine Leniency Notice 2002 in order to identify the provisions that applied to Deltafina. The Commission points out that it could not have authorised Deltafina to disclose its application for immunity to other cartel members under point 12 of Leniency Notice 2006. That Leniency Notice was not applicable ratione temporis. In any event the appeal is inadmissible in so far as it seeks a reassessment of the facts.

71. Finally, in the event that the Court considers the first ground of appeal to be admissible and to be founded, the Commission submits that the Court should make the following findings: (i) Deltafina breached its obligation to cooperate under point 11(a) of Leniency Notice 2002; (ii) the Commission’s inspections risked being rendered ineffective by Deltafina’s disclosure of the request for immunity to other cartel members; (iii) in the context of the leniency programme there is always an inherent risk that other cartel members will become suspicious of fellow members; (iv) it was not impossible for Deltafina to keep its request for immunity secret, but instead it chose to make a voluntary disclosure which shows that it persisted in its anti-competitive conduct.

Assessment

72. Deltafina’s first ground of appeal is divided broadly into three parts: (i) the General Court failed to determine its principal plea that the Commission discharged Deltafina from the obligation to conceal its application for immunity under the ground rules agreed at the meeting of 14 March 2002; (ii) the General Court substituted its own reasoning for that contained in the contested decision by deciding that Deltafina should have informed the Commission before disclosing that it had applied for immunity; and (iii) Deltafina’s rights of defence were infringed.

73. Did the General Court determine Deltafina’s principal plea?

74. At first instance Deltafina claimed that there were three manifest errors vitiating the failure to grant it immunity from fines in the contested decision: first, an error of fact based on an incorrect premiss that the Italian raw tobacco processors were unaware of the Commission’s investigations; second, an error of assessment by the Commission because it considered that Deltafina had breached its obligation to cooperate as set out in point 11(a) of Leniency Notice 2002; and third, a further error of assessment in that the Commission considered that the disclosure of Deltafina’s application for immunity undermined the investigation.

75. What Deltafina describes as its principal plea is in fact the second plea put at first instance (concerning an undertaking’s obligation to cooperate for the purposes of point 11(a) of Leniency Notice 2002), and it is with the General Court’s treatment of that plea that Deltafina takes issue. I have examined Deltafina’s application for annulment. It is clear that Deltafina argued at first instance that the Commission had accepted at the meeting of 14 March 2002 that it would be impossible for Deltafina to conceal its application for immunity from other members of the cartel. Deltafina alleged that the Commission therefore insisted that in exchange for allowing that information to be made available, it had become more pressing that Deltafina should provide the Commission with the further information required to enable the investigations to be carried out (the so called ‘ground rules’ or ‘rules of the game’).

76. It seems to me that the General Court correctly interpreted Deltafina’s plea as concerning the obligation to cooperate as set out in point 11(a) of Leniency Notice 2002. The General Court diligently recorded Deltafina’s submissions, in particular regarding the meeting of 14 March 2002, in paragraphs 90 to 93 of the judgment under appeal. The General Court found that Deltafina had not succeeded in demonstrating that it had informed the Commission in advance that it would spontaneously disclose the application for immunity at the APTI meeting. ( ) The General Court also specifically considered the alleged agreement concerning the ground rules at the meeting of 14 March 2002. ( )

77. Importantly, however, the General Court did not determine whether there had (or had not) been such an agreement. Rather, the General Court stated that even if the Commission and Deltafina had agreed ground rules as alleged, the fact that Deltafina had not informed the Commission in advance of its intention to disclose its application for immunity constituted a breach of the duty to cooperate under point 11(a) of Leniency Notice 2002. The General Court also took the view that there were no circumstances capable of relieving Deltafina of its subsequent obligation to inform the Commission promptly of the disclosures that it had made.

78. The crux of the matter is whether the reasoning in the judgment under appeal is deficient because the General Court failed to reply specifically to Deltafina’s argument that under the alleged ground rules it had been discharged from its obligation to conceal its application for immunity in exchange for accepting a more onerous obligation to provide the Commission with information (an obligation which it claims it fulfilled).

79. According to settled case-law, the statement of reasons on which a judgment is based must clearly and unequivocally disclose the General Court’s thinking, so that the persons concerned can be apprised of the justification for the decision taken and the Court can exercise its power of review. ( ) The obligation to state reasons does not however require the General Court to provide an account which responds exhaustively and one by one to all the arguments put forward by the parties to the case. The reasoning may therefore be implicit on condition that it enables the persons concerned to know why the General Court has not upheld their arguments and provides the Court with sufficient material for it to exercise its power of review. ( )

80. When rejecting Deltafina’s submission that the Commission knew that it would disclose the application for immunity at the APTI meeting, the General Court found that the Commission was not aware that Deltafina would make such a spontaneous disclosure and that it could not have accepted or previously authorised it. ( )

81. In so far as Deltafina seeks to question the General Court’s assessment of the facts by challenging the findings regarding the contemporaneous records of the meeting of 14 March 2002 and the details of subsequent contacts between Deltafina’s representatives and the Commission officials charged with handling the case, those arguments are inadmissible. Deltafina thereby seeks in effect to secure a re-examination of factual assessments, and the Court has no jurisdiction to conduct such an exercise in the context of an appeal. ( )

82. Was the General Court correct to conclude that Deltafina had failed to meet its obligation to cooperate for the purposes of Leniency Notice 2002?

83. As the General Court explained, three cumulative conditions must be met in order to qualify for immunity from fines. ( ) The issue here concerns the General Court’s assessment as to whether Deltafina cooperated fully, on a continuous basis and expeditiously throughout the administrative procedure.

84. I consider that the General Court correctly described the scope of an undertaking’s obligation to cooperate in paragraphs 124 to 132 of its judgment. It is settled case-law that reduction of a fine under Leniency Notice 2002 can be justified only where the information provided and, more generally, the conduct of the undertaking concerned may be considered to demonstrate genuine cooperation on its part. ( ) It is only where the conduct of the undertaking concerned reveals such a spirit of cooperation that a reduction may be granted on the basis of that notice. ( ) I do not accept Deltafina’s submission that that criterion does not apply here because Deltafina’s situation (an obligation to conceal the application for immunity) was different from that of an undertaking seeking immunity in exchange for the provision of complete and accurate factual information.

85. In my view, the obligation to cooperate under a Leniency Notice applies equally to the conduct of an undertaking subject to an obligation of confidentiality. To qualify for immunity from a fine, that undertaking must place itself at the Commission’s disposal in order to demonstrate genuine cooperation. It must therefore inform the Commission of any relevant facts within its knowledge that are capable of having an impact on the conduct of the administrative procedure and the Commission’s investigations. The agreement between the Commission and the undertaking concerned for the purposes of a Leniency Notice is not a contract; nor is there any compulsion. The undertaking’s cooperation is voluntary, but it must be unreserved and complete in order to obtain the benefit of immunity.

86. In its assessment of the scope of that obligation, should the General Court have determined whether the Commission had agreed that Deltafina was no longer required to conceal its application for immunity?

87. In my view, not necessarily.

88. When it assessed the scope of the obligation to cooperate the General Court had a number of alternatives. It could have found (as the Commission argued) that there was no agreement discharging Deltafina from its obligation to conceal the application for immunity. In such a case there would have been a clear breach of the undertaking’s duty to cooperate. For the sake of good order I add that an undertaking in Deltafina’s position would need to produce evidence of a decision that had been taken at an appropriate level within the Commission to establish that such an agreement had been reached.

89. It should be borne in mind that Deltafina was potentially liable to a fine for a serious infringement of the competition rules and according to the principle of personal responsibility it was obliged to answer for that infringement. ( ) Nevertheless for the reasons explained in the introduction to Leniency Notice 2002 ( ) the Commission was able to grant immunity from that penalty. In that respect the Commission had confirmed Deltafina’s conditional immunity by letter of 6 March 2002 signed by the member of the Commission responsible for competition matters at that time. In the light of those elements, statements made by an official during the course of a meeting or in subsequent exchanges could not constitute definitive proof of the Commission’s agreement to vary a factor fundamental to establishing the undertaking’s cooperation for the purposes of the leniency regime. In order to establish that the Commission had agreed to change the terms of agreement for the purposes of Leniency Notice 2002, the undertaking concerned would have had to obtain formal confirmation from the Commission signed off at the appropriate level: I would suggest, by the same person who confirmed that conditional immunity had been granted (or his successor). That seems to me to follow from the importance attached to decisions made in the context of the leniency regime and the need to guarantee that such decisions may be relied upon and provide applicants with the security necessary to ensure that the leniency regime is applied consistently. Those elements would be lacking if any Commission official were able to vary the conditions under which immunity is granted without confirmation of agreement from the Commission hierarchy.

90. Deltafina refers to the fifth indent of point 12(a) of Leniency Notice 2006, which states that an undertaking cooperates genuinely, fully, on a continuous basis and expeditiously from the time it submits its application throughout the Commission’s administrative procedure, by, inter alia, not disclosing the fact or any of the content of its application before the Commission issues a statement of objections, unless otherwise agreed. However, Leniency Notice 2006 was not applicable ratione temporis and I shall refrain from exploring further precisely how its phraseology should be interpreted.

91. Even if the General Court had found, as Deltafina alleges, that there was an agreement permitting disclosure of its application for immunity, it does not follow that the General Court would have been obliged to conclude that the duty to cooperate for the purposes of Leniency Notice 2002 had been fulfilled. It follows from the broad parameters of the duty to cooperate that the General Court is entitled in its examination to identify other elements of that duty and to rule on whether the applicant for immunity has met those elements.

92. Here, the General Court put forward a hypothesis giving Deltafina the benefit of the doubt, because it posited that the ground rules had been agreed as Deltafina alleged. ( ) The General Court nevertheless took the view that Deltafina had breached its obligation to cooperate under point 11(a) of Leniency Notice 2002 because it had disclosed its application for immunity to other cartel members without informing the Commission services beforehand. Thus, the General Court identified an element of the duty to cooperate that it considered Deltafina had unequivocally failed to meet.

93. It is true that the judgment under appeal would have been more complete if the General Court had first determined whether there was in fact an agreement to discharge Deltafina from its obligation to conceal its application for immunity. However the absence of such a finding does not vitiate the General Court’s reasoning.

94. It seems to me that the reasoning in the judgment under appeal is sufficiently clear and comprehensible to constitute adequate grounds for the conclusion reached by the General Court; and therefore satisfies the requirements for the statement of reasons.

95. The General Court stated unambiguously, first, that Deltafina never informed the Commission of its intention to disclose. Second, Deltafina was subject to a duty to cooperate fully on a continuous basis and to do so expeditiously in order to demonstrate genuine cooperation for the purposes of point 11(a) of Leniency Notice 2002. Third, Deltafina breached that duty by failing to inform the Commission in advance or even promptly after the disclosure had been made. Fourth, whether the ground rules had been agreed as Deltafina alleged could not be determinative because it was not contested that Deltafina had not promptly informed the Commission of its disclosure — that fact first became apparent at the hearing some three years later before the Hearing Officer.

96. It seems to me that the General Court correctly interpreted the essence of Deltafina’s principal plea as concerning the Commission’s failure to grant it immunity from fines and the meaning and scope of the duty to cooperate for the purposes of Leniency Notice 2002. The General Court did not go beyond an acceptable interpretation of that plea by emphasising Deltafina’s failure to meet a particular element of that duty. The General Court did not therefore substitute its own grounds for those set out in the contested decision.

97. The General Court identified the elements of fact that the Commission had taken into account in its examination of that plea. It is true that the General Court emphasised that Deltafina had failed to inform the Commission promptly of its disclosure. However, that fact constitutes a relevant circumstance in the contested decision. The General Court then considered the meaning of the duty to cooperate in point 11(a) of Leniency Notice 2002, as did the Commission. ( ) It therefore seems to me that the General Court did not base its judgment on a new ground of reasoning that did not comprise part of the contested decision.

98. The rule that the parties should be heard forms part of the rights of the defence which is a general principle of EU law. ( ) A court must itself observe that rule, in particular, when it decides a dispute on a ground it has identified of its own motion. ( ) Therefore, to satisfy the requirements associated with the right to a fair hearing, it is important for the parties to be apprised of, and to be able to debate and be heard on, matters of fact and law which will determine the outcome of the proceedings. ( )

99. Were Deltafina’s rights of defence respected?

100. The proceedings before the General Court concerned the meaning and the scope of the duty to cooperate. Those two issues formed part of Deltafina’s principal pleas, and it therefore had ample opportunity to put its case on all relevant matters of fact and law at first instance.

101. Moreover, the General Court did not determine the proceedings on the basis of a new plea raised of its own motion. Rather, it (i) identified the pleas raised by Deltafina; (ii) identified the relevant grounds in the contested decision; and (iii) interpreted the obligation to cooperate for the purposes of Leniency Notice 2002. Deltafina submitted written and oral observations on those matters. There was therefore no infringement of Deltafina’s rights of defence; and I conclude that the first ground of appeal is unfounded.

Second ground: infringement of the rules of procedure concerning the summoning and examination of witnesses

102. The second ground of appeal concerns the General Court’s examination of the evidence concerning the alleged ground rules established at the meeting of 14 March 2002; whether that evidence was properly obtained; and whether Deltafina’s right to a fair hearing was infringed.

Summary of the submissions

103. Deltafina argues that the summoning and examination of witnesses must be conducted in accordance with the Rules of Procedure of the General Court. At the hearing on 29 September 2010, in contravention of those rules, the General Court heard evidence from two witnesses, Mr Reher (Deltafina’s lawyer) and Mr Van Erps (the Commission official in charge of the case). Both witnesses gave evidence about the meeting of 14 March 2002, in particular concerning the alleged agreement on the ground rules. However, the General Court had adopted no measures of inquiry pursuant to Article 65 of its Rules of Procedure, nor had it issued any witness orders under Article 68 of those rules. Furthermore, there is no record of the evidence given by Mr Reher (whereas Mr Van Erps’ evidence is reflected in the text of the judgment). ( ) The minutes of the hearing held before the General Court describe the evidence as an ‘exchange of opinions’.

104. The General Court found on the basis of Mr Van Erps’ evidence that Deltafina did not indicate clearly, either at the meeting of 14 March 2002 or in a subsequent telephone conversation between Mr Van Erps and Mr Jacchia (another of Deltafina’s lawyers) on 22 March 2002, that it would spontaneously disclose its application for immunity at the APTI meeting. If the Commission had been aware of Deltafina’s intention to do so it would not have given its consent. However, the General Court did not hear Mr Jacchia’s recollection of those events even though he was present in court.

105. The General Court was wrong to attribute greater weight to Mr Van Erps’ oral testimony given some eight years after the events than it gave to the contemporaneous record made by Mr Jacchia of his exchange with the Commission at the time. Accordingly, the General Court infringed Deltafina’s rights under Article 6(1) and (3) ECHR and Article 47 of the Charter, the right to a fair hearing and the availability of resources to ensure its defence. It follows that the judgment under appeal is vitiated by error of law.

106. The Commission submits that the second ground of appeal should be rejected.

107. The Commission maintains that neither Mr Van Erps nor Mr Reher were heard as witnesses. Rather, they were heard in their capacity as representatives of the parties in the procedure. Whilst it is correct that only lawyers and agents (as set out in the mandate ad litem) make oral submissions, with the agreement of both sides other persons may address the Court. That practice facilitates proceedings since it allows the Court to hear directly from those who have the relevant knowledge and information and it avoids the need for lawyers and agents to take instructions constantly where technical matters or complex questions of fact are in issue. It is an accepted practice that has never been penalised by the Court of Justice.

108. Even if Mr Reher and Mr Van Erps were heard as witnesses, Deltafina’s complaint is either inadmissible or unfounded because at the time Deltafina raised no objections before the General Court. Furthermore, Deltafina did not ask the General Court to hear evidence from Mr Jacchia (who was, indeed, appearing as Deltafina’s counsel).

109. In any event, the General Court has a wide discretion regarding the weight that it attaches to the evidence submitted to it and its assessment in that respect cannot be overturned on appeal. Even if the Court of Justice considers that Deltafina’s submissions are well founded, in the light of the other evidence reviewed and facts found by the General Court the result of the proceedings would have been the same.

Assessment

110. The complaint that the judgment under appeal is vitiated by an error of law because the General Court’s decision is based upon evidence that was obtained in breach of its own rules of procedure cannot lead to the annulment of the judgment under appeal unless Deltafina is able to establish that there was an irregularity of procedure that adversely affected its interests. ( )

111. Under Article 65 of the Rules of Procedure of the General Court, measures of inquiry relating to oral testimony may be adopted. Article 68(1) states that the General Court may, either of its own motion or on application by a party, order that certain facts be proved by witnesses. Such evidence must be given under oath.

112. Without recourse to a transcript of the oral proceedings ( ) it is not possible to obtain a contemporaneous account of events at the hearing. The following facts are, however, not contested. Mr Reher and Mr Van Erps participated in the meeting of 14 March 2002 and were heard by the General Court on their respective recollections of that event. The minutes of the hearing of 29 September 2010 describe that process as ‘an exchange of opinions’. The General Court did not hear from Mr Jacchia regarding the meeting of 14 March 2002 or his subsequent telephone conversation with Mr Van Erps on 22 March 2002. However, it did hear Mr Van Erps’ recollection of that conversation. ( ) Neither Deltafina nor the Commission applied for an order to summon and examine witnesses and the General Court did not of its own motion issue such an order. Nor were any measures of inquiry pursuant to Article 65 adopted. The statements of Mr Reher and Mr Van Erps do not appear to have been made under oath. ( )

113. It is settled case-law that the General Court has a wide discretion regarding whether there is any need to supplement the information that is available to it. ( )

114. It seems to me that during the hearing Mr Reher and Mr Van Erps were probably requested to assist the General Court. Neither Deltafina nor the Commission objected to the General Court hearing from them during the oral procedure. Neither party claimed that its right to a fair hearing might be infringed because Mr Reher and Mr Van Erps were giving evidence without proper notice and in contravention of the General Court’s Rules of Procedure. Nor is there any indication in the minutes of the hearing that either party complained that it was denied the opportunity to challenge that testimony. It seems that both parties accepted the General Court’s approach without protest at the time.

115. The exact position of Mr Reher and Mr Van Erps in supplementing the information before the General Court is ambiguous. It is clear they were not witnesses in the formal sense. However, there is nothing to suggest that they supplied the General Court with new technical information or that they explained information of that type which was already on the file. The information they provided does not seem to me to fall within the unobjectionable category described by the Commission in its submissions. That category covers situations where the Court is confronted by an arcane issue and — often at the Court’s own prompting — the experts who accompany the respective legal teams reply directly to the Court’s questions. That facilitates the proceedings by avoiding the (sometimes frantic) whispered exchanges between the expert and the advocate taking instructions who then relays to the Court the information given by his expert. On such occasions it can indeed be eminently sensible for the Court to put its questions directly to the experts and to receive direct replies from them.

116. However, it seems that here both Mr Reher and Mr Van Erps gave information concerning certain facts and their respective understanding of those facts, namely: (i) whether ground rules were agreed at the meeting on 14 March 2002; (i) whether the Commission agreed Deltafina would disclose its application for immunity; (iii) whether that agreement was confirmed in subsequent exchanges; and (iv) whether Deltafina informed the Commission in advance of its intention to disclose its application for immunity at the APTI meeting. The first three of those elements of fact were contentious ( ) (as I understand it, the answer to the fourth issue, by common accord, was ‘no’). ( ) None of them constitute what I would call technical information.

117. I can see no reason why the General Court could not have summoned witnesses, either of its own motion or pursuant to an application by either party. That might have had the advantage of allowing Deltafina to decide on a clear role for its lawyer, Mr Jacchia, who was mandated to appear before the General Court (and indeed did so), but who was also potentially able to give relevant evidence about exchanges with the Commission in the period leading up to the APTI meeting. (I pause to observe that it is difficult to see how Deltafina could expect, as it contends, that he should have assumed a second role and given evidence in the hearing where he appeared as counsel.)

118. Where there are disputed issues of fact that are relevant to the outcome of a case and that must be resolved, the proper course must be to hear evidence in accordance with the General Court’s Rules of Procedure, one of the purposes of which is to guarantee the right to a fair hearing. I therefore consider that the General Court committed a procedural irregularity in hearing Mr Reher and Mr Van Erps as it did.

119. Were Deltafina’s interests adversely affected by that irregularity?

120. It is not disputed that Deltafina never informed the Commission that it had disclosed its application for immunity to other members of the cartel, either before or after the APTI meeting. ( ) Furthermore, the General Court relied on documents in the file, including the contemporaneous records of the meeting of 14 March 2002 and the telephone conversation of 22 March 2002, in finding that Deltafina did not warn the Commission expressly in advance that it would make that disclosure. ( ) The General Court therefore did not need to rely on the statements at the hearing made by Mr Reher and Mr Van Erps ( ) to establish Deltafina’s breach of the duty to cooperate under Leniency Notice 2002. ( )

121. It follows that Deltafina’s interests were not adversely affected by the General Court’s procedural irregularity in hearing Mr Reher and Mr Van Erps, that Deltafina’s rights to a fair hearing were not infringed and that the judgment under appeal is not vitiated by error of law in that respect. The second ground of appeal is therefore unfounded.

Fourth ground: breach of the principle of equal treatment in calculating the reduction to Deltafina’s fine

122. At the hearing before the General Court, Deltafina raised for the first time a plea that the Commission had infringed the principle of equal treatment. Deltafina’s fourth ground of appeal before this Court is raised in the alternative; it asks the Court to annul the General Court’s judgment and to substantially increase the 50% reduction that Deltafina was granted for cooperating with the Commission during the administrative procedure. Deltafina does so on the basis that the General Court erred in law when it ruled that new plea to be inadmissible under Article 48(2) of the General Court’s Rules of Procedure. ( )

Summary of the submissions

123. Deltafina submits that the General Court is not precluded from considering new pleas raised at the hearing concerning the calculation of fines, because such matters fall within the General Court’s unlimited jurisdiction with regard to penalties. ( ) Furthermore the General Court’s refusal to rule on Deltafina’s new plea was particularly unfair because the judgment in Nintendo ( ) upon which Deltafina relied had become available only after the close of the written procedure.

124. Deltafina argues that it made a greater contribution to the administrative proceedings than Dimon Italia in two respects: (i) it provided a greater qualitative contribution; and (ii) it was the first undertaking to cooperate with the Commission. The Commission therefore committed a manifest error of assessment in granting Deltafina and Dimon Italia the same percentage reduction to their respective fines.

125. The Commission submits that the fourth ground of appeal is manifestly unfounded. The principle of equal treatment set out in Nintendo is not a new matter of law or fact which came to light during the course of the proceedings. It is settled case-law that a judgment confirming law that existed at the time that an application was introduced does not constitute a new element that gives rise to a new plea. ( ) The principle of equal treatment concerning the reduction of fines was not applied for the first time in Nintendo. ( ) Furthermore, Deltafina and Dimon Italia are not comparable and they were therefore treated differently. In Deltafina’s case, the Commission withdrew immunity (which had been granted conditionally) and decided to impose a fine. That fine was then reduced by 50% because there had none the less been some cooperation. Dimon Italia had never enjoyed immunity from fines, but the Commission reduced its fine by 50% because it had cooperated with the Commission’s investigation.

Assessment

126. In my view the General Court correctly ruled that Deltafina’s new plea made at the hearing was inadmissible.

127. First, the principle of equal treatment is not new. It is one of the general principles of EU law. ( ) Second, it is settled case-law that it falls within the General Court’s unlimited jurisdiction to rule on the amount of fines imposed on undertakings for infringements of EU law and that the exercise of that jurisdiction in respect of the determination of those fines cannot result in discrimination between undertakings which have participated in a cartel. ( ) Third, it is also clear that, when appraising the cooperation provided by undertakings during the administrative procedure initiated in respect of a prohibited agreement, the Commission must comply with the principle of equal treatment, which, according to settled case-law, is infringed where comparable situations are treated differently or different situations are treated in the same way, unless such treatment is objectively justified. ( ) Fourth, the Court has already had occasion to consider the position of undertakings claiming that they deserve a greater reduction for cooperation because they have not contested the infringement or because they were the first to reveal a cartel to the Commission under the leniency regime. ( )

128. Against that background, I do not accept that Nintendo gave rise to a new point of law. As the Commission submits, confirmation of an existing legal principle does not constitute a new element of law or fact for the purposes of Article 48(2) of the Rules of Procedure.

129. I also disagree with Deltafina’s interpretation of the General Court’s judgment in Arkema. ( ) The General Court decided there that it was unnecessary to examine whether the applicant had raised a new matter because the plea was manifestly unfounded. The General Court did not rule that it is not precluded from considering a new plea where its unlimited jurisdiction concerning the determination of fines is in issue.

130. I therefore conclude that Deltafina’s fourth ground of appeal is inadmissible.

Costs

131. In accordance with Articles 137, 138, 140 and 184 of the Rules of Procedure, read together, Deltafina as the unsuccessful party on all grounds of appeal should be ordered to pay the costs of the proceedings.

Conclusion

132. In the light of all the foregoing considerations, I propose that the Court should:

– dismiss the appeal; and

– order Deltafina to pay the costs of the proceedings.