CELEX: 61976CC0064(01)
Language: en
Date: 1982-04-27 00:00:00
Title: Opinion of Mr Advocate General Capotorti delivered on 27 April 1982. # P. Dumortier Frères SA and others v Council of the European Communities. # Maize gritz - Exchange rate applicable to damages. # Joined cases 64 and 113/76, 167 and 239/78, 27, 28 and 45/79.

OPINION OF MR ADVOCATE GENERAL CAPOTORTI —
                      JOINED CASES 64 AND 113/76. 167 AND 239/76, 27, 28 AND 45/79
           OPINION OF MR ADVOCATE GENERAL CAPOTORTI
                                 DELIVERED ON 27 APRIL 1982 '
Mr President,                                        Council to pay compensation for the
Members of the Court,                                damage suffered by reason of the failure
                                                     to make the restoration            of  the
                                                     production refunds retroactive.
1. The Court has so far twice had
occasion to give a ruling on the problems
caused by the temporary abolition of the             The Court upheld the claim and bv
production refunds for gritz (maize                  judgment of 4 October 1979 ([1979]
groats and meal intended for use in the               ECR 3091) ordered the European
brewing of beer) brought about by Regu-               Economic Community to pay to the
lation No 665/75 of the Council of                    applicant companies "amounts equivalent
4 March 1975. On the first occasion the              to the production refunds on maize gritz
judgment of 19 October 1977 in Joined                 used by the brewing industry which each
Cases 124/76 and 20/77 (Moulins &                     of those undertakings would have been
Huileries de Pont-à-Mousson and Société               entitled to receive if, during the period
Coopérative "Providence Agricole de la                from 1 August 1975 to 19 October 1977,
 Champagne" [1977] ECR 1975) declared                 the use of maize for the production of
the      abolition         of      those  refunds     gritz had conferred an entitlement to the
incompatible with the principle of                    same refunds as the use of maize for the
equality but left it to the appropriate               manufacture of starch"; an exception
Community institutions concerned with                 was to be made "for the quantities of
agricultural policy to put an end to the              gritz sold at prices increased by amounts
discriminatory situation. Thereupon, bv               equivalent to the unpaid refunds under
 Regulations Nos 1125/78 and 1127/78                  contracts guaranteeing the buyer the
of 22 May 1978, the Council restored                  benefit of any re-introduction of the
the production refunds for gritz until the            refunds". The Court further ordered that
 end of the 1978-79 marketing year but                interest at 6 % should be paid on the
 only as from the date of the judgment,               aforesaid amounts as from the date of
 namely 19 October 1977. The French                   the judgment and that the parties should
 companies Dumonier, Maïseries de                     inform the Court within 12 months from
 Beauce,        Costimex           and   Maïseries    the delivery of the judgment "of the
 Alsaciennes were dissatisfied with that               amounts of compensation arrived at
 limitation and. together with the two                 bv agreement". In the absence of
 aforesaid companies Moulins & Huile-                  agreement the parties were to transmit to
 ries de Pont-ã-Mousson and Providence                 the Court "within the same period a
 Agricole de la Champagne, they sought                 statement of their views, with supporting
 an order from the Court requiring the                 figures".
  I — Translated from the Italian.
  1752
 ---pagebreak---                                    DUMORTIER v COUNCIL
After various extensions of the period        the production of each quantity of gritz.
laid down by that judgment the applicant      The argument put forward by the
undertakings ultimately reached agree-        Council rests on a comparison between
ment with the Commission and Council          the applicants' claims and the operative
in January 1981 on the quantities of          part of the judgment. The applicants put
maize used in the production of gritz         forward a main claim and one in the
and on the amount of refunds expressed        alternative: in the main claim they
in units of account for the period from 1     sought compensation on the basis of the
August 1975 to 19 October 1977. The           rate for convening units of account into
undertakings      and     the    institutions French francs prevailing at the time of
remained at issue, however, on the            production, with interest from the dates
relevant date for convening the units of      when the monthly unpaid instalments of
account into French francs, which were        refunds fell due; in the alternative, in the
the national currency of all the applicant    event of their entitlement to interest
companies. The institutions maintained        not being recognized, they asked that
that the relevant date was that of the        the Community be ordered to pay-
production of the gritz, while the under-     compensation for the damage on the
takings were of the opinion that it was       basis of the value of the unit of account
the date of the judgment which had            at the date of judgment. In the Council's
recognized      the    right    to     obtain view, the fact that the Coun recognized
compensation and had laid down the            the applicants' right to interest, albeit
criteria for quantifying the damage.          calculated on a different basis, means
Pending resolution of that issue (which,      that it upheld the main claim and
as we shall see, is not of negligible         rejected the claim in the alternative: it
economic importance), the institutions        is therefore not now possible to hold
paid the sums calculated on the basis of      that the applicants are entitled to
the conversion which they considered          compensation in a larger sum than that
applicable: FF 5.633 per unit of account      requested in their main claim, as would
in respect of the period from 1 August        be the case if a more advantageous rate
1975 to 31 July 1977 and FF 5.7806 per        were applied for the conversion into
unit of account in respect of the period      French francs of the sum expressed in
from 1 August 1977 to 18 October 1977.        units of account than that prevailing
The applicant undertakings are now            when the monthly payments of refunds
asking the Court to determine the             fell due. The Council funher observes
compensation due to them on the basis         that to interpret the judgment otherwise
of a rate of FF 6.73056 per European          would mean holding that the C o u n
currency unit (which in the meantime
replaced the unit of account) prevailing
at the date of the judgment and to order
the Council to pay each of the parties
the difference between the sums already
paid provisionally and those resulting
from application of the above-mentioned
rate.
2. In defence of the method used to
calculate the compensation, the Council
refers in the first place to the judgment
of 4 October 1979, which by implication
specified    the    application    of     the
conversion rate prevailing at the time of
                                                                                      1753
 ---pagebreak---                         OPINION OF MR ADVOCATE GENERAL CAPOTORT! —
                    JOINED CASES 6-i AND 113/76, 167 AND 239/76. :7, 2( AND 45/79
intended to allow the undenakings the               the applicants: namely, on the one hand,
more favourable rate of conversion                  the way in which the claim for damage
(claimed by the applicants in the alter-            was formulated in the main claim and,
native) and at the same time to award               on the other, the failure to claim interest
interest (not envisaged in the claim in the         in the alternative. Only if the Court had
alternative), thus awarding a larger sum            awarded the undertakings interest as
than that claimed and offending against             claimed (that is to say, from the date on
the principle that the judgment should              which each unpaid instalment of refunds
correspond to the claim.                            fell due) would it be reasonable to
                                                    assume that the compensation must be
                                                    calculated in accordance with the main
                                                    claim and the judgment would probably
                                                    have to be interpreted to that effect.
                                                    That is however not the case, as we have
Obviously that argument does not take               seen.
account of the fact that the Court
awarded the undertakings interest from
the date of judgment, that is from
4 October 1979, whereas the applicants
had claimed interest from the dates on              The wording of the applicants' claim
which the unpaid monthly payments of                does not therefore provide a sufficiently
refunds fell due. Those payments fell due           solid basis for interpreting the judgment
at various dates between 1 August 1975              in the way proposed by the Council.
and 19 October 1977, so it is clear that            Thus it remains to be established what
there      was    a    significant    financial     the Court intended when it specified the
difference between the claim and the                amount      of compensation        as "the
judgment; in other words the applicants             amounts equivalent to the production
will receive by way of interest an                  refunds on maize gritz . . . which [the]
appreciably smaller sum than that which             undertakings would have been entitled to
they had claimed under that head. The               receive if, during the period from 1
aforesaid judgment does not therefore               August 1975 to 19 October 1977, the use
accord with the main claim.                         of maize for the production of gritz had
                                                    conferred an entitlement to the same
                                                    refunds as the use of maize of the manu-
                                                    facture of starch". The essence of the
                                                    question is to establish whether the
                                                    equivalence between the compensation
Having stated that, I do not think it               and the unpaid refunds must be
possible to say that the Court by                   understood in an economic or a nominal
implication rejected the method of                  sense, that is to say, as a specific sum ot
quantification of the damage advocated               money unaffected by any depreciation
 in the claim in the alternative. Such               which a currency may have suffered
 an interpretation conflicts with the                between the event and the détermination
 requirement of assessing the various                of the amount of compensation.
 heads of a claim, especially a claim for
compensation, with due respect for the
economic significance thev have as a
 whole. From thai it follows thai in an
 action such as the present it is not proper         3. The grounds of the judgment ot *
 artificially to separate the main claim and         October 1979 do not contributi- to the
 the claim in the alternative, stressing in          solution ot the problem. At paragraph M
 each case the position least favourable to          the Court states in a general wa\ that
  1754
 ---pagebreak---                                   DUMORTIER v COUNCIL
since the origin of the damage lies "in      occurred, that is to say, from the time
the abolition by the Council of the          when the unpaid refunds fell due. They
refunds which would have been paid to        observe that since the Court resolved the
the gritz producers if equality of           question of interest in that restrictive
treatment with the producers of maize        fashion it could be explained only on the
starch had been observed", "the amount       basis that, in the Court's view, the
of those refunds must provide a yardstick    assessment of the damage must be made
for the assessment of the damage             at the date of judgment; such an
suffered". Paragraph 18 (on which the        assessment involves taking into account
Council relied) states that "the loss for    all claims to compensation in relation to
which     the    applicants     must    be   the period from the production of the
compensated has to be calculated on the      gritz to the date of the judgment,
basis of its being equivalent to the         including the claim for interest for delay
refunds which would have been paid to        in payment. According to that argument,
them, if, during the period from 1           in brief, there is a strict correlation
August 1975 to 19 October 1977, the use      between the commencement of interest
of maize for the manufacture of gritz        and the method of assessing the damage,
used by the brewing industry had             in the sense that the date fixed for the
conferred a right to the same refunds as     commencement of the interest must
the use of maize for the manufacture of      necessarily coincide with that to which
starch". But such expressions, which         reference is made for the purpose of
basically coincide with that adopted in      quantifying the damage. In that respect,
paragraph 1 of the operative pan, are        the applicants stress that if the payment
ambiguous and lend themselves to be          of compensation had reference to a
interpreted in favour of one or other of     previous date the damage caused by facts
the opposing arguments. When in fact         such as the depreciation of the currency
the judgment speaks of the amount of         following the occurrence of the original
unpaid refunds that does not resolve the     damage would remain without any form
problem of the relevant time for             of compensation.
determining the pecuniary extent of the
damage: it does not specify whether it is
the date when the damage occurred, as
the Council submits, or the date of the
judgment awarding compensation, as the
applicants maintain.
                                             It does not seem to me that the argument
                                             based on the commencement of the
                                             interest is decisive for the purpose of an
                                             interpretation of the judgment in the
                                             sense advocated by the applicants. It is
                                             quite possible that when formulating a
                                             main claim and one in the alternative
 In support of their argument that the       those undertakings assumed that the
damage     is to be determined           by  commencement of interest must coincide
converting the sum expressed in units of      with the date with reference to which
 account at the rate prevailing at the date  compensation was to be paid and it is
 of ludgmeni. the applicants stress that     clear that from a purely economic poini
 the Įudgment of 4 October 1979              of view it is reasonable that the two
 awarded interest as from the date           dates should coincide. However. I doubt
 thereof, and not. as they had claimed,      whether an observation of that kind can
 from the date when the damage                support an argument to resoive the
                                                                                   1755
 ---pagebreak---                       OPINION OF MR ADVOCATE GENERAL C^POTORTl —
                  JOINED CASES »4 AND 115/7e, 167 AND 239/76, 27, 28 AND 45/79
problem      of   interpretation of     the      4. In the laws of the Member States
judgment. The legal systems of the               there is a fairly clear tendency· to the
Member Sutes do not contain a general            effect that the pecuniary extent of the
principle according to which interest            damage must be determined with
must run from the date with reference to         reference to the date of judgment. Allow
which compensation          is paid; the         me to say that that tendenc)· rests above
solutions adopted by national law on this        all on an argument of a logical nature:
subject are most diverse. In some                the obligation to compensate aims to
countries the award of interest and the          restore the capital which has been
date from which it is to commence is in          diminished (restitutio in integrum) and
the discretion of the court (that is the         effective restoration is possible only by
case in English law and, to some extent,         assessing the damage at the date of the
also in Danish law); in others interest          award and not at an earlier date. If that
runs from the date on which payment is           were not so, the victim of an unlawful
demanded of the debtor (that is the case         act unconnected with a contraa would
in the Federal Republic of Germany) or           run a double risk: that of an increase in
from the date of judgment (that is so in         the value of the goods or interest
French and Belgian law). The fact that           damaged, between the date of the
the Court made interest payable from the         damage and the date of the award, and
date of the judgment can in my opinion           the risk of a currency devaluation. Even
 at most serve as evidence of a certain          if the latter is unconnected with the
 inclination to make the award of dam-           conduct of the author of the damage and
 ages coincide with the commencement of          that of the victim, it is not possible to
 interest.                                       overlook the fact that the person bound
                                                 to     compensate       the   damage   has
                                                  committed a wrong and it is therefore
                                                  reasonable that he should suffer all the
                                                  consequences, including those connected
                                                  with a currency devaluation. Further, it
                                                  must be borne in mind that if the
                                                  defendant had compensated the victim
                                                  promptlv the devaluation would have
                                                  had no effect.
 Those      considerations    confirm    my
 opinion that it is not possible to derive
 precise indications from the judgment of
  4 October 1979 on the date to which
  reference must be made for determining
  the rate to be applied for the conversion
  of the units of account into French
  francs. I therefore think it necessary to
  view matters from a different angle and
  try to establish how the award of                It is appropriate now to go on to
  damages would be on the basis of the             consider the cases concerned with the
  principles common to the laws of the             date to which reference musi be made
  Member States, to which Article 213 of           for the award of damages, without at the
  the EEC Treaty refers. The conclusions           same time overlooking the decisions
  reached on that basis may then constitute        concerned with the problem of the rate
  a valid instrument for interpreting the          of exchange to be applied to debts ori-
  judgment.                                        ginally expressed in a foreign currency.
   1756
 ---pagebreak---                                  DUMORTIER v COUNCIL
The two questions are closely connected:    purpose of effectively restoring the
whether it is a question of awarding        victim to his previous financial position
damages or specifying the applicable rate   (cf. Cassazione, 16 February 1978,
of exchange, variations in the value of     No 760; 21 February 1978, No 845; 17
the currency are more or less taken into    January 1979, N o 338; 30 January 1979,
account according as the date on which      No 689). The same decisions state that
the debt arose is further or closer to the  the obligation to compensate retains its
date of judgment. In particular, in both    nature as an "obbligazione di valore"
civil and criminal matters the French       even when the damage consists in the
Cour de Cassation in determining the        loss of a sum of money, since in such a
pecuniary extent of the damage takes        case the sum of money does not
account of the lapse of time between the    constitute the object of the obligation but
occurrence of the damage and the award      onlv a factor in measuring the damage
of compensation, including any variation    (cf.'Cassazione, 13 Julv 1978, No 3542;
in the value of the currency in the         5 January 1979, No 30).
meantime. The relevant cases specify' in
relation to non-contractual liability the
rate of exchange at the date of payment
(cf. Cass. Req. 3 May 1946, Rec.'Sirey
 1951, 1, 33; Cass. Comm. 18 November
1952, Bull. Civ. Ill, No 355, p. 273) or
the date of the court award (cf. Cass.
Crim. 7 July 1966, Gaz. Pal. 1966, 2,
193). On the other hand, the French
Conseil d'État takes the view that as
regards the non-contractual liability of    As regards English law, the approach
the public authorities compensation         recently adopted in the Miliangos and
expressed in foreign currency must be       the Despina cases (judgments of the
converted into national currency at the     House of Lords of 5 November 1975 in
rate prevailing when the obligation         Miliangos v George Frank (Textiles) Ltd
arose, that is to say when the damage       [1976] AC 443 and 19 October 1978 77>e
was caused.                                 Despina R. [1978] 3 WLR 804) is to the
                                            effect that compensation must accord
                                            with the principle of restitutio in integrum
                                            and that the pecuniary extent of the
                                            damage may also be determined in a
                                            foreign currency· and convened into
                                             national currency at the rate applicable
                                            on the day of payment. A similar view is
                                            to be found in the law of the Federal
                                             Republic of Germany, according to
                                             which the damage must be calculated
                                             with reference to the date when the
 According to the Italian courts, an
                                             debtor    fulfils   the    obligation     to
 obligation to compensate for damage
                                             compensate the victim. Belgian law is
 caused by an unlawful act is undoubtedly
                                             based on the principle that compensation
 an "obbligazione di valore": it follows
                                             is intended fully to restore the victim to
 thai if in between the time when the
                                             his previous financial position and trom
 damage occurs and the award of
                                             that point of view damages must be
 compensation there is shown to be a
                                             assessed with reference to the date of
 reduction in the purchasing power of the
                                             judgment; if the ludgment is expressed in
 currency the court must of its own
                                             foreign currency conversion into the
 motion take account thereof for the
                                                                                     1757
 ---pagebreak---                       OPINΊON OF MR ADVOCATE GENERAL CAPOTORTI —
                  JOINED CASES b-i AND 113/76. 167 AND :J9/7S. 2?, 26 AND 45/?9
national currency· must be made at the            which ordered the Community to
rate prevailing at the date of payment. In        compensate the applicants for the
Netherlands law when damages are fixed            damage. In that way the victims will not
in foreign currency the debt may be               have to bear the negative consequences
discharged by paying the corresponding            of the depreciation which affected the
sum in national currency at the rate of           currency after the occurrence of the
exchange prevailing at the date of                unlawful act and their purchasing power
payment. On the other hand, Irish law             will be restored to the level at which it
and Danish law do not seem to take                would have stood at the time if the
account of variations in currency and             refunds     had not been        temporarily
exchange rates between the date when              abolished.
the damage occurred and the court
award of compensation.
                                                  5. The solution which seems to me
                                                  preferable finds significant confirmation
Therefore, I think it possible to say that        in the principle of equality. It suffices to
within the Community there is a                   observe in that respect that the argument
sufficiently clear and widespread tend­           put forward by the Council to the effect
ency to the effect that in determining            that the applicable rate should be that in
compensation in cases of non-contractual          force when each unpaid instalment of
liability account is also taken of the            refunds fell due would give rise to
effects of matters subsequent to the              manifest discrimination in treatment
 unlawful act. That tendency is in my             between      undertakings     operating   in
opinion an expression of the general              countries with a weak currency (such as
 principle that compensation is intended          France) and those operating in countries
 to restore the victim of the unlawful act        with a strong currency, that is to say in
 to his previous        financial   position:     countries in which the currency has
 therefore an award which left out of             acquired greater value in relation to
 account, for example, variations in the          other Community currencies in the time
 value of the currency occurring after the        which has elapsed between the dates
 unlawful act would be illusory and               when the unpaid instalments of refunds
 would not achieve the said effect.               fell due and the date of the judgment of
                                                  this Court (the typical case is that of the
                                                  currency of the Federal Republic of
                                                   Germany). If compensation for the
                                                   damage were paid in accordance with
                                                   the view urged by the Council, under­
                                                   takings in countries whose currency has
                                                   been devalued would now receive less
  In order to apply that principle to this         purchasing power, that is less wealth,
 case the amount of compensation must              than undertakings in countries whose
 be determined bv convening the units of           currency has not been devalued (or has
  account (the amount ot which has been            been devalued to a lesser extent). The
  agreed between the parties) into French          French francs which the French under­
  francs (the national currency of the             takings would have received at the time
  applicants) at the rate prevailing on 4          of the production of the quantities of
  October 1979, the date ot the judgment           gruz which did not eniov aid have at
   1758
 ---pagebreak---                                   DUMORTIER v COUNCIL
 present less purchasing power, whereas      The view which I have taken is further
 the marks which the German under-           confirmed,     albeit indirectly, by a
 takings would have received then have       previous decision of this Court. The
 today a greater purchasing power. The       judgment of 13 February 1980 in Case
 course of time has not been neutral but     256/78 (Misenta v Commission [1980]
 has significantly altered the relationship  ECR 219) determined the rate of
 between currencies and thus the effective   exchange     to    be applied     to   the
 value of the damages awarded to the         reimbursement of medical expenses with
 various undertakings. It seems to me        reference not to the date of treatment, as
 essential that the compensation awarded     the Commission contended, but to the
 today should assure all the undertakings    date of reimbursement and supported
 the same purchasing power that the          that view by stating that "the delay
 refunds would have given them if they      which may occur between the day on
 had been paid at the proper time: only in  which treatment is paid for and the day
 that way can the principle of equal         in which reimbursement is effected is
 treatment be respected.                     likely to create inequality between
                                            officials according to whether they
                                            perform their duties in a country with a
                                            weak currency or in one with a strong
                                            currency"      (Paragraph    11 of      the
                                            Decision). Thus the Court held, with
                                            reference to the performance of an
                                            obligation which had its origin in the
                                            Staff Regulations, that it was necessarv
                                            to apply the rate of exchange prevailing
In its pleadings the Council also cited     at the date of payment, rather than the
that principle, but for the purpose of      rate prevailing when the obligation arose.
drawing the opposite conclusion. It         It seems to me reasonable to apply a
observed that if it were to apply the rate  similar criterion to the obligation to
in force at the time of judgment to the     compensate, both because the principle
conversion of the units of account into     of equality plays a decisive role in this
national currency it would now have to      case also and because only the
pay the undertakings in countries with a    application of the current rate allows
strong currency nominally smaller sums      damages to fulfil their function of re-
than those which they would have            storing the injured party to his previous
received when the unpaid refunds fell       financial position.
due; in its opinion, that would mean
discrimination in favour of the under-
takings in countries with a weak
currency, which would today receive
larger sums than they would have
received if the refunds had been paid at
the time of production. But that
argument has no substance inasmuch as
it seems to overlook the fact that the
value of the currency changed after the
occurrence of the damage and that in
order to ensure effective equality of
treatment it is now essential to pay        Article 4 (2) of Regulation No 1 154/6S
nominally different amounts to under-       of the Council does not. as the Council
takings situated in different Member        contends, support the contran- view.
States.                                     That provides that "sums owed to or bv
                                            a Member State or a duly authorized
                                                                                  1759
 ---pagebreak---                      OPINION OF MR ADVOCATE GENERAL CAPOTORT1 —
                 JOINED CASES 64 AND IIJ/76, 167 AND 239/78, 27, 28 AND 45/79
body, expressed in national currency and        possible to establish a parallel between
representing amounts fixed in those             performance of the obligation to pay the
provisions in units of account, shall be        refunds (to which the said provision
paid on the basis of the relationship           refers) and performance of the obligation
between the unit of account and the             to compensate for damage caused to
national currency which obtained at the         undertakings by failing to pay those
time when the transaction . . . was             refunds during a period in which they
carried out". In my opinion, it is not          were abolished.
6. In conclusion, I propose that the Court, in giving judgment on the
 applications submitted by the French producers of gritz in Joined Cases 64
 and 113/76, 167 and 239/78, 27, 28 and 45/79, should order the European
 Economic Community to pay the applicants, by way of compensation for the
 damage suffered by reason of the breach of the principle of equality, the
 sums resulting from the conversion into French francs of the units of account
 due to each of them under the agreement made with the institutions in
 January 1981 at the rate in force on 4 October 1979, with interest at 6 %
 from the same date, less any sums already paid to the undertakings by way
 of interim payment.
 As for the costs, the Court has been invited by the parties to fix the amount
  payable in connection with the procedural steps taken by the applicants up to
  the partial agreement reached in January 1981 on the amount of the
  damages expressed in units of account. The applicants have indicated a
  lump-sum without specifying the various heads. The costs claimed are thus as
  follows: FF 45 000 in Case 64/76, FF 42 500 in Case 113/76, FF 57 COC
  in Case 167/78, FF 40 000 in Case 239/78, FF 100 000 in Case 27/79,
  FF 86 500 in Case 28/79 and FF 10 000 in Case 45/79. The Council
  considers those claims excessive, especially since the cases were identical and
  required the same treatment.
   I think the Council's obsenations are well-founded. Since the cases zrc
   identical it seems to me right to fix the costs for each undertaking up io
    ļanuarv 1981 as follows: FF 31500 in Case 64/76, FF 29 75C in Case
   '113/76, FF 39 900 in Case 167/78, FF 28 000 in Case 239/78, FF 7Z CCC in
    1760
 ---pagebreak---                               DUMORTIER v COUNCIL
Case 27/79, FF 60 550 in Case 28/79 and FF 7 000 in Case 45/79. That of
course takes account of the different sums involved in each case.
The costs incurred by the applicants after January 1981 must be borne bv the
Council on the basis of the principle that costs follow the event. The question
of the amount must be considered and decided subsequently, in the event of
the parties not reaching agreement thereon.
                                                                          1761