CELEX: 62003CO0233
Language: en
Date: 2003-07-24 00:00:00
Title: Order of the President of the Court of 24 July 2003. # Linea GIG Srl (in liquidation) v Commission of the European Communities. # Appeal - Competition. # Case C-233/03 P(R).

Case C-233/03 P(R) Linea GIG Srl in liquidazionevCommission of the European Communities
            «(Appeal – Procedure for interim relief – Competition – Payment of fine – Bank guarantee – Balancing of interests)»
            
               
                  Order of the President of the Court, 24 July 2003  
                     
               I - 0000 
               
            
                   
               
               
            
            Summary of the Order
         
         
                  1..
                  Applications for interim measures – Suspension of operation of a measure – Interim measures – Conditions for granting – Prima facie case – Serious and irreparable harm – Balancing of all the interests involved – Discretion of the judge hearing the application for interim measures(Arts 242 EC and 243 EC; Rules of Procedure of the Court, Art. 83(2); Rules of Procedure of the Court of First Instance, Art.
                     104(2)) 
         
                  2..
                  Applications for interim measures – Suspension of operation of a measure – Suspension of the obligation to provide a bank guarantee as a condition for non-enforcement of the right to immediate payment
                     of a fine – Conditions for granting – Exceptional circumstances – Judge's discretion as to whether to balance the interests – Applicant  undertaking in liquidation – Risk of irreversible harm to the Community's interests
                  (Art. 242 EC) 
         
                  3..
                  Appeal – Grounds of appeal – Incorrect assessment of the facts – Inadmissible – Application in the case of an appeal against an interlocutory order – Not possible, unless the clear sense of the evidence has been distorted, to challenge the balancing of interests(Art. 225 EC; Statute of the Court of Justice, Arts 57 and 58) 
         
         1.
          The judge hearing an application for interim relief may order suspension of operation of an act, or other interim measures,
         if it is established that such an order is justified, prima facie, in fact and in law and that it is urgent in so far as,
         in order to avoid serious and irreparable harm to the applicant's interests, it must be made and produce its effects before
         a decision is reached in the main action. Where appropriate, the judge hearing such an application must also weigh up the
         interests involved. In the context of the overall examination that the judge must undertake, he enjoys a broad discretion and is free to determine,
         having regard to the specific circumstances of the case, the manner and order in which those various conditions are to be
         examined, there being no rule of Community law imposing a pre-established scheme of analysis within which the need to order
         interim measures must be assessed. see paras 26-27
         
         2.
          While the presence of exceptional circumstances is necessary for the judge hearing the application for interim measures to
         order the suspension of operation of a Commission decision making the non-enforcement of the right to immediate payment of
         a fine subject to the provision of a bank guarantee, it does not necessarily result in the granting of that suspension. The
         determination of whether there are exceptional circumstances takes place at the level of the examination of urgency, so that
         a finding by the judge hearing the application for interim relief that suspension should be granted in order to avoid serious
         and irreparable damage to the interests of the party seeking that relief does not prevent him from considering the effects
         which a possible suspension might have on the interests of any other party to the proceedings. In the light of the particular
         circumstances of each case, the judge must therefore be able to determine whether it is appropriate to weigh up the interests
         involved.  In that respect, it may prove particularly expedient to weigh up the interests where the applicant is in liquidation. In such
         circumstances, granting suspension of operation of the decision imposing the fine might have harmful consequences for the
         Community's interests and affect them irreversibly. see paras 29-31
         
         3.
          Article 225 EC and Article 58 of the Statute of the Court of Justice, which limit appeals to points of law, to the exclusion
         of any appraisal of the facts, apply equally to appeals brought under the second paragraph of Article 57 of that statute against
         decisions of the Court of First Instance given in applications for interim relief. It follows that, save where the clear sense
         of the evidence has been distorted, the balancing of the interests which the judge hearing an application for interim relief
         has carried out cannot be challenged in appeal proceedings brought under the second subparagraph of Article 57 of the Statute.
          see paras 34, 36-37
      

      
      
      
      
      
      
      
      
      
      
      
      
      
      
      
            
            ORDER OF THE PRESIDENT OF THE COURT24 July 2003  (1)
            
            
         
         
            
         
            ((Appeal – Procedure for interim relief – Competition – Payment of fine – Bank guarantee – Balancing of interests))
            
         In Case C-233/03 P(R), 
         
         
          Linea GIG Srl in liquidazione,   established in Sesto Fiorentino (Italy), represented by L. D'Amario and B. Calzia, avvocati, with an address for service in
         Luxembourg,
         
         
         appellant, 
         
         APPEAL against the order of the President of the Court of First Instance of the European Communities of 27 March 2003 in Case
         T-398/02 R  
          Linea GIG  v  
          Commission  [2003] ECR II-1139, seeking to have that order set aside
         
         the other party to the proceedings being: 
          Commission of the European Communities,   represented by L. Pignataro-Nolin and O. Beynet, acting as Agents, with an address for service in Luxembourg,defendant at first instance, 
         
         
         
         
         THE PRESIDENT OF THE COURT
         
         after hearing Advocate General Mischo, makes the following 
         
         
         Order
         1
            
         By application lodged at the Court Registry on 27 May 2003, Linea GIG Srl in liquidazione appealed, pursuant to Article 225
         EC and the second paragraph of Article 57 of the Statute of the Court of Justice, against the order of the President of the
         Court of First Instance of 27 March 2003 in Case T-398/02 R  
          Linea GIG   v  
          Commission  [2003] ECR II-1139 (
         the order under appeal), dismissing its application for interim relief brought under Article 104(1) of the Rules of Procedure of the Court of First
         Instance. In that application it had sought suspension of operation of the Commission's decision of 30 October 2002 relating
         to a proceeding pursuant to Article 81 of the EC Treaty and Article 53 of the EEA Agreement (COMP/35.587 PO Video Games, COMP/35.706
         PO Nintendo Distribution and COMP/35.321 Omega-Nintendo) (
         the contested decision), in that it imposes a fine of EUR 1.5 million on the appellant. 
         
         
         2
            
         In addition to annulment of the order under appeal, Linea GIG Srl in liquidazione seeks the same form of order as it sought
         at first instance and an order for costs against the Commission. 
         
         
         3
            
         By document lodged at the Registry on 16 June 2003, the Commission submitted its written observations to the Court.  
         
            
               Facts and procedure before the Court of First Instance
            
         
         4
            
         The facts and procedure before the Court of First Instance, as set out in paragraphs 1 to 14 of the order under appeal, may
         be summarised as follows. 
         
         
         5
            
         Linea GIG SpA (
         Linea GIG) was the exclusive distributor of Nintendo products in Italy, at least from 1 October 1992 until 31 December 1997. Because
         the company was in a difficult financial situation, at an extraordinary general meeting on 8 January 1999 it was decided to
         put it into liquidation. 
         
         
         6
            
         Linea GIG applied to the Tribunale civile e penale di Firenze (Florence District Court) (Italy) which, by judgment of 17 November
         1999, approved the composition with creditors (
         concordato preventivo) submitted by the company. Under the judgment, the company is required to liquidate all its assets in order to pay the preferential
         creditors in full and the unsecured creditors at least 40% of the amount of their claims. 
         
         
         7
            
         On 30 October 2002, the Commission adopted the contested decision, in which it found that Nintendo Corporation Ltd/Nintendo
         of Europe GmbH and seven other companies which distributed the latter's products, among them Linea GIG, had infringed Article
         81(1) EC.  
          Inter  alia   it imposed a fine of EUR 1.5 million on Linea GIG.  
         
         
         8
            
         The Commission notified Linea GIG of the contested decision by letter dated 7 November 2002. The Commission stated that, if
         an action were brought before the Court of First Instance, it would take no steps to recover the fine until judgment had been
         delivered, provided that the amount due bore interest calculated from the end of the term of payment and that an acceptable
         bank guarantee was furnished. 
         
         
         9
            
         On 24 September 2002, Linea GIG was converted into a limited liability company. Since that date the company name has been
          
         Linea GIG Srl in liquidazione (
         Linea).  
         
         
         10
            
         By application lodged at the Registry of the Court of First Instance on 30 December 2002, Linea brought an action under the
         fourth paragraph of Article 230 EC for annulment of the contested decision, in whole or in part, or, in the alternative, cancellation
         or reduction of the fine imposed upon it. 
         
         
         11
            
         By separate document lodged at the Court Registry on 30 January 2003, Linea filed an application for suspension of the operation
         of the decision in so far as it imposed a fine on it. 
         The order under appeal
         
         12
            
         In the order under appeal, the judge hearing the application for interim relief found, first, in paragraph 54, that, in its
         letter of 7 November 2002 notifying the contested decision,  
         the Commission stated that, if an action were brought, it would take no measures to enforce the fine provided that the applicant
         furnished an acceptable bank guarantee. In those circumstances, the application for suspension of operation can have no aim
         other than to obtain dispensation from the obligation to provide a bank guarantee as a condition for non-enforcement by the
         Commission of its right to immediate payment of the amount of the fine imposed by [that decision]. An application of that
         nature can be granted only in exceptional circumstances (orders of the President of the Court of Justice in Case 107/82 R
          
          AEG  v  
          Commission   [1982] ECR 1549, paragraph 6; Case C-364/99 P(R)  
          DSR-Senator Lines   v  
          Commission   [1999] ECR I-8733, paragraph 48; and Case C-7/01 P(R)
          FEG   v  
          Commission  [2001] ECR I-2559, paragraph 44). In the context of applications for interim relief, express provision is made in the Rules
         of Procedure of both the Court of Justice and the Court of First Instance for requiring security to be lodged, which is a
         general and reasonable policy pursued by the Commission.
         
         
         13
            
         In paragraph 55 of the order under appeal, the judge hearing the application for interim relief pointed out that the presence
         of such exceptional circumstances  
         may, as a rule, be regarded as established if the parties seeking dispensation from an obligation to provide a bank guarantee
         prove that it is objectively impossible to provide that guarantee ... or that it is unable to provide a bank guarantee without
         risking being wound up .... 
         
         
         14
            
         In that regard, he pointed out, in paragraph 59 of the order under appeal, that,  
         even if the main action were dismissed, the bank would enter the proportionate ranking with the applicant's other creditors
         and it would then be for the national court to determine the nature and rank of the claim in question, which would have arisen
         after the composition with creditors procedure had been opened. The risk thus incurred of never being paid by the applicant
         seems to have been substantiated to the point that it must be accepted that no bank would agree to provide the required bank
         guarantee. He therefore held, in paragraph 60 of that order, that  
         Linea has shown to the requisite legal standard that its current company and financial situation makes it objectively impossible
         to obtain the guarantee from a bank. 
         
         
         15
            
         However, the judge hearing the application held, in paragraph 61 of the order under appeal, that  
         the balance of the interests at stake precludes the granting of this application for interim relief, on the basis of the following considerations: 
         
         62.
          In the light of the particular circumstances of the case, suspension of the operation of the [contested decision], in that
         it requires the applicant to pay a fine, would have the effect of preventing the Commission from bringing any action before
         the national court to recover the fine and to protect, as well as its own interests, the Community's financial interests (Case
         T-191/98 R II  
          Cho Yang Shipping   v  
          Commission   [2000] ECR II-2551, paragraph 53), the sole aim being, in fact, to protect Linea's other creditors. However, as the Commission
         has rightly pointed out, the risk that, were the main action to be dismissed, the applicant's assets might then no longer
         be adequate to pay the fine, in whole or in part, cannot be ruled out with certainty. Furthermore , it is by no means guaranteed,
         as the applicant acknowledged at the hearing, that the sum of EUR 1.65 million which it has set aside will be allocated solely
         to paying Linea's debt to the Commission in the event that the main action is dismissed. It is therefore necessary to maintain
         the enforceability of the [contested decision] in order not to preclude the measures which the Commission considers it necessary
         to take for the purposes of recovering the amount of the fine imposed by [that decision].  
         
         
         63.
          As for the alleged interest of Linea and its creditors in avoiding action being taken to recover the fine, this can be assessed
         only in the light of the classification and rank of the Commission's claim, which it is for the national court to determine,
         if appropriate after making a reference to the Court of Justice under Article 234 EC.
         
         
         
         16
            
         Consequently, the judge hearing the application for interim relief held that the balance of interests indicated that the application
         should be dismissed. 
         The appeal
         
         17
            
         The appellant puts forward two pleas in law in support of its appeal. 
         
         
         18
            
         By its first plea, it complains that the judge hearing the application for interim relief misapplied the principle of the
         balancing of interests. The objective impossibility of obtaining the bank guarantee required by the Commission precludes balancing
         the interests. Since it has been shown that there are exceptional circumstances justifying dispensation from providing the
         bank guarantee required by the Commission, it is not feasible to balance the interests. It is impossible to weigh up the risk
         that the Commission will not be able to enforce the fine against the fact that it is materially impossible for the appellant
         to provide the required guarantee. If, as the judge hearing the application pointed out in paragraph 54 of the order under
         appeal, the application for suspension of operation could have no aim other than to obtain dispensation from the obligation
         to provide a bank guarantee, once it has been shown that it is objectively impossible to provide that guarantee it is inconsistent
         to balance the interests. 
         
         
         19
            
         By its second plea, put forward in the alternative, the appellant complains that the judge hearing the application for interim
         relief committed an error of law when balancing the interests and, more particularly, when he held that the setting aside
         of the sum of EUR 1.65 million by the judge overseeing the composition with creditors, to secure the Commission's claim, will
         not fully protect the Commission's interests in obtaining recovery of its debt if the main action brought by Linea is dismissed
         by the Court of First Instance. Either the Commission's claim may be regarded as a preferential claim, in which case the sum
         set aside is intended solely to secure that claim, or it is classified as an unsecured claim and, accordingly, the setting
         aside of that sum protects the Commission's rights only in proportion to the percentage referred to in the composition with
         creditors and in accordance with the principle that the creditors should be treated equally. Even accepting that the Commission
         were still able to obtain satisfaction today, it would obtain it only pro rata if its claim were unsecured. Setting aside
         that sum therefore ensures that, when the Court of First Instance has given a ruling on the merits, the Commission will be
         in exactly the same position as it is in today.  
         
         
         20
            
         As regards the first plea, the Commission considers that it is apparent from paragraph 48 of the order in  
          DSR-Senator Lines   v  
          Commission  that the appraisal of the exceptional circumstances which make it possible not to seek enforcement of a fine even though
         a bank guarantee has not been furnished is made only when the matter of urgency is considered, so that the existence of such
         circumstances does not necessarily mean that operation of the decision in question will be suspended. Therefore, after it
         had been found, from the point of view of urgency, that it was objectively impossible for Linea to provide a bank guarantee,
         the judge hearing the application for interim relief was right to weigh up the interests, in order to decide whether or not
         it was necessary to suspend operation of the contested decision. He weighed the applicant's interest in avoiding immediate
         enforcement of the fine against the Community's financial interest in enforcing it. Therefore, contrary to the appellant's
         assertions, he did not misapply the criterion of balancing the interests by seeking to weigh up the risk of non-enforcement
         of the fine against the  
         objective impossibility for Linea of providing the bank guarantee, because the assessment of the interests at stake was made on the basis of the
         finding that it was objectively impossible. 
         
         
         21
            
         As regards the second plea, the Commission considers that it is inadmissible in that it reiterates a plea already raised before
         the judge hearing the application for interim relief, and simply seeks a re-examination of the application lodged at first
         instance, or a review of the appraisal of the facts already made by the judge at first instance. On the substance of the case,
         the Commission points out that the appellant acknowledges that the sum of EUR 1.65 million set aside is not intended solely
         for the Commission, but that the sum necessary to satisfy the Commission's claim must be taken from that sum in the same proportion
         as the claims of the other unsecured creditors. The Court of First Instance appraised the facts correctly, and that appraisal
         cannot be challenged in appeal proceedings. As for the argument that the debt could be described as a preferential claim,
         which would mean that the amount set aside would give full protection to the Commission's rights, the Commission contends
         that it is for the national court alone to classify a claim. The Commission also expresses its doubts as to that classification
         in Italian law. 
         
         
         22
            
         The Commission also considers that the refusal of the judge hearing the application for interim relief to grant the application
         is not based solely on that consideration concerning the nature of the claim in question. Paragraph 62 of the order under
         appeal also acknowledges that suspension of operation of the contested decision would have the effect of preventing the Commission,
         pending judgment on the merits of the case, from bringing any action before the national courts to enforce the fine and to
         protect the Community's financial interests, thus making the Community run the risk that the applicant's assets would not
         suffice to pay the fine, in whole or in part, on the date when the main action might ultimately be dismissed. That assessment
         of the facts, which is in itself sufficient to justify the operative part of the order under appeal, is not disputed by the
         appellant. The second plea is therefore ineffective. 
         Findings
         
         23
            
         Since the written observations submitted by the parties contain all the information necessary for a decision in this appeal,
         it is not necessary to hear oral pleadings. 
         The first plea in law
         
         
         24
            
         By the first plea of its appeal, the appellant complains that the judge hearing the application for interim relief committed
         an error of law by balancing the interests involved. 
         
         
         25
            
         The appellant therefore seeks to rely on the case-law relating to the specific case of a dispensation from the obligation
         to provide a bank guarantee as a condition for non-enforcement of the right to immediate payment of a fine. According to that
         case-law, dispensation from that obligation can be granted only in exceptional circumstances (see  
          inter alia  the order in  
          DSR-Senator Lines   v  
          Commission ,  paragraph 48). It considers that the presence of exceptional circumstances precludes the balancing of interests. 
         
         
         26
            
         In that regard, it must be pointed out that it is settled case-law that the judge hearing an application for interim relief
         may order suspension of operation of an act, or other interim measures, if it is established that such an order is justified,
          
          prima facie , in fact and in law  and that it is urgent in so far as, in order to avoid serious and irreparable harm to the applicant's
         interests, it must be made and produce its effects before a decision is reached in the main action. Where appropriate, the
         judge hearing such an application must also weigh up the interests involved (see  
          inter alia  order in Case C-377/98 R  
          Netherlands  v  
          Parliament and Council   [2000] ECR I-6229, paragraph 41). 
         
         
         27
            
         In the context of the overall examination that the judge hearing an application for interim relief must undertake, he enjoys
         a broad discretion and is free to determine, having regard to the specific circumstances of the case, the manner and order
         in which those various conditions governing the grant of interim measures are to be examined, there being no rule of Community
         law imposing a pre-established scheme of analysis within which the need to order interim measures must be assessed (order
         in Case C-149/95 P(R)  
          Commission   v  
          Atlantic Container Line and Others   [1995] ECR I-2165, paragraph 23).  
         
         
         28
            
         Consequently, the fact that, in the order under appeal, the judge hearing the application for interim relief balanced the
         interests at stake cannot be regarded, in itself, as an error of law.  
         
         
         29
            
         Furthermore, the case-law referred to in paragraph 25 of this order, concerning applications for dispensation from the obligation
         to provide a bank guarantee as a condition for non-enforcement of the right to immediate payment of a fine, cannot be interpreted
         as meaning that the presence of exceptional circumstances within the meaning of that case-law necessarily results in the granting
         of suspension and precludes the judge hearing the application for interim relief from weighing up the interests involved,
         where appropriate. 
         
         
         30
            
         The determination of whether there are exceptional circumstances takes place at the level of the examination of urgency (see,
         to that effect, the order in  
          DSR-Senator Lines   v  
          Commission , paragraph 48). A finding by the judge hearing the application for interim relief that suspension should be granted in order
         to avoid serious and irreparable damage to the applicant's interests does not prevent him from considering the effects which
         a possible suspension might have on the interests of any other party to the proceedings. In the light of the particular circumstances
         of each case, the judge must therefore be able to determine whether it is appropriate to weigh up the interests involved.
          
         
         
         31
            
         It could prove particularly expedient to weigh up the interests in the present case, since the appellant is in liquidation.
         Granting suspension of operation of the contested decision in such circumstances might have had harmful consequences for the
         Community's interests and affected them irreversibly. 
         
         
         32
            
         In those circumstances, the judge hearing the application for interim relilef did not commit an error of law, in the order
         under appeal, by balancing the interests involved. 
         
         
         33
            
         The first plea must therefore be rejected. 
         The second plea in law
         
         
         34
            
         As regards the second plea raised by the appellant, alleging that the interests involved were incorrectly weighed up and that
         the Commission ran no risk, it should be pointed out that, under Article 225 EC and Article 58 of the Statute of the Court
         of Justice, an appeal is limited to points of law, to the exclusion of appraisal of the facts. 
         
         
         35
            
         Therefore, the Court of First Instance has exclusive jurisdiction to find the facts, save where a substantive inaccuracy in
         its findings is attributable to the documents submitted to it, and to appraise those facts. That appraisal thus does not,
         save where the clear sense of the evidence has been distorted, constitute a point of law which is subject, as such, to review
         by the Court of Justice at the appellate stage (see  
          inter alia  the judgment in Case C-390/95 P  
          Antillean Rice Mills and Others   v  
          Commission  [1999] ECR I-769, paragraph 29). 
         
         
         36
            
         The provisions and the case-law referred to in paragraphs 34 and 35 of this order apply equally to appeals brought under the
         second paragraph of Article 57 of the Statute of the Court of Justice (order in  
          Commission   v  
          Atlantic Container Line and Others , paragraph 18). 
         
         
         37
            
         By disputing the balancing of the interests involved that was carried out by the judge hearing the application for interim
         relief, the appellant calls in question the appraisal of the facts made by that judge. Such appraisal cannot be examined in
         these appeal proceedings, save where the clear sense of the evidence has been distorted.  
         
         
         38
            
         In this case, the judge hearing the application for interim relief held, in paragraphs 62 and 63 of the order under appeal,
         that the setting aside of the sum of EUR 1.65 million by the judge overseeing the composition with creditors, to secure the
         Commission's claim, was not capable of fully protecting the Commission's interests unless that claim was classified as a preferential
         claim. However, it is for the national court alone to make that classification, if necessary after referral to the Court of
         Justice under Article 234 EC. It is true that the appellant has disputed that appraisal; however, it has not shown that it
         constitutes a distortion of the clear sense of the evidence.  
         
         
         39
            
         Lastly, the appellant has signally failed to show how the judge hearing the application for interim relief distorted the clear
         sense of the evidence submitted to the Court by holding that the grant of the interim measures sought by the appellant would
         have the effect of preventing the Commission from bringing any action before the national court to recover the fine, and that
         that inability to bring an action might damage the Community's financial interests, thus making the balance of interests lean
         in favour of the Commission and justifying the refusal to grant those interim measures. 
         
         
         40
            
         The second plea must therefore also be rejected. 
         
         
         41
            
         It is apparent from all the foregoing considerations that the two pleas in law raised by the appellant in support of its appeal
         cannot be upheld, and, accordingly, the appeal must be dismissed. 
         
         Costs
         42
            
         Under Article 69(2) of the Rules of Procedure, which is applicable to the appeal procedure by virtue of Article 118, the unsuccessful
         party is to be ordered to pay the costs if they have been applied for in the successful party's pleadings. Since the Commission
         has applied for costs and the appellant has been unsuccessful, the appellant must be ordered to pay the costs. 
         
         On those grounds, 
         
         
         
            
            THE PRESIDENT OF THE COURT
         
         
         hereby orders:
         
            
            1.
              The appeal is dismissed.  
            
            
            2.
              Linea GIG Srl in liquidazione is ordered to pay the costs of these proceedings.  
            
            Luxembourg, 24 July 2003. 
         
         
         
                  R. Grass 
               
               
                  G.C. Rodríguez Iglesias  
               
            
         
         
         
                  Registrar
               
               
                  President
               
            
      
      
          1 –
            
             Language of the case: Italian.