Case C-280/14 P: Appeal brought on 9 June 2014 by the Italian Republic against the judgment of the General Court (First Chamber) of 28 March 2014 in Case T-117/10 Italian Republic v Commission
Date: 2014-06-09
Institutions: Court of Justice
Subjects: European Regional Development Fund, Italy, control of State aid, operational programme, proof, rights of the defence








C_2014315EN.01003501.xml










15.9.2014   


EN


Official Journal of the European Union


C 315/35





Appeal brought on 9 June 2014 by the Italian Republic against the judgment of the General Court (First Chamber) of 28 March 2014 in Case T-117/10 Italian Republic v Commission
(Case C-280/14 P)
2014/C 315/57
Language of the case: Italian

Parties


Appellant: Italian Republic (represented by: G. Palmieri, acting as Agent, and P. Gentili, avvocato dello Stato)

Other party to the proceedings: European Commission

Form of order sought

The appellant submits that the Court should:






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set aside, in accordance with Article 56 of the Statute of the Court of Justice, the judgment of the General Court of the European Union of 28 March 2014 in Case T-117/10, concerning the action brought by the Italian Government under Articles 263 TFEU and 264 TFEU for annulment of European Commission Decision No C(2009) 10350 of 22 December 2009, notified on 23 December 2009, concerning the cancellation of part of the contribution from the European Regional Development Fund allocated to Italy for the operational programme POR Puglia, Objective I, 2000-2006;










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consequently, annul, pursuant to Article 61 of Statute of the Court of Justice, that European Commission decision on its substance and order the European Commission to pay the costs.





Pleas in law and main arguments

In support of its appeal, the Italian Republic has put forward the following grounds of appeal:






 



First ground: infringement of the principle of audi alteram partem and failure to state reasons
The General Court rejected the first two pleas in law — having dealt with them together — relating to the evaluations made by the Commission in respect of the first- and second-level checks. According to the appellant, the two matters were, however, quite distinct, inasmuch as each gave rise to a separate objection in respect of the efficiency and reliability of the checks. The contested decision listed the various objections raised against the regional checks as ‘heads of complaint’, all of which led to the sole and final conclusion that the regional checks were unreliable and that there was a risk of harm to the EU budget which justified a flat-rate correction of 10 %. Thus, the different ‘heads of complaint’ should have been examined separately, since any exclusion or reduction of one or more of one of them would have affected all of them taken together. Consequently, examination of such diverse arguments in a joint and mixed fashion, as carried out by the General Court, impeded full and proper consideration of the issues of fact and law raised by the Italian Government and also resulted in a clear failure to state reasons: by acting in this way, the General Court failed to explain fully, as it was required to do, why it considered the different grounds of objection to be unfounded.










 



Second ground: breach of Article 39(2)(c) and 39(3) of Regulation No 1260/1999, (1) and of Article 4 of Regulation No 438/2001 (2); infringement of the principles relating to the burden of proof; material inaccuracy of the findings of facts in comparison with those resulting from the case-file before the General Court; distortion of the evidence adduced before the General Court.
The appellant claims that the General Court distorted the uncontested facts and the evidence from the case-file, in particular the fact that the Italian authorities had analysed, on an individual basis, the evaluations made by the Commission’s inspectors concerning the deficiencies identified in nine first-level checks. According to the appellant, the General Court should have recognised that the contested decision was erroneous in the part pertaining to those nine checks, and should therefore have upheld the Italian Government’s submissions that the Commission had breached Article 39(2) and (3) of Regulation No 1260/1999, given that it had adopted a decision to make a flat-rate correction of 10 % without there being any proof of irregularities from the sample of first-level checks, and (even if the other irregularities are assumed to have occurred) in a manner which was certainly excessive in the light of the principle of proportionality, as laid down in Article 39 of Regulation No 1260/1999.
The General Court disregarded the documents in the case-file relating to the findings of facts pertaining to the progress of the checks inasmuch as it failed to take into account the actual quantitative (the threshold agreed with the Commission) and qualitative development of the first- and second-level checks which occurred during 2009.
Finally, the General Court distorted the uncontested facts and evidence from the case-file, and breached the articles cited above, by taking the view that the contested decision was justified because the Italian authorities had not demonstrated the progress made by the paying authority.










 



Third ground: breach of Article 39(2)(c) and 39(3) of Regulation No 1260/1999, and of Article 10 of Regulation No 438/2001; infringement of the principles relating to the burden of proof; material inaccuracy of the findings of facts in comparison with those resulting from the case-file before the General Court; distortion of the evidence adduced before the General Court.
According to the appellant, the findings of the General Court are based on an entirely abstract reconstruction of the de facto situation relating to the progress made and the distribution of second-level checks. The General Court should have annulled the part of the decision concerning the analysis made by the Commission in respect of the second-level checks and their unreliability, which completely lacked any credible evidence as to the existence and size of any actual risk for the ERDF.






(1)  Council Regulation (EC) No 1260/1999 of 21 June 1999 laying down general provisions on the Structural Funds (OJ 1999 L 161, p. 1).

(2)  Commission Regulation (EC) No 438/2001 of 2 March 2001 laying down detailed rules for the implementation of Council Regulation (EC) No 1260/1999 as regards the management and control systems for assistance granted under the Structural Funds (OJ 2001 L 63, p. 21).