CELEX: 62019TJ0688
Language: en
Date: 2022-03-02
Title: Judgment of the General Court (Ninth Chamber) of 2 March 2022.#VeriGraft AB v European Innovation Council and SMEs Executive Agency.#Arbitration clause – Grant agreement concluded in the context of the ‘Horizon 2020’ Framework Programme for Research and Innovation – Termination of the agreement – Misconduct – Capacity as beneficiary of the grant or as a natural person acting in his or her name or on his or her behalf.#Case T-688/19.

JUDGMENT OF THE GENERAL COURT (Ninth Chamber)
   2 March 2022 (
         *1
      )
   (Arbitration clause – Grant agreement concluded in the context of the ‘Horizon 2020’ Framework Programme for Research and Innovation – Termination of the agreement – Misconduct – Capacity as beneficiary of the grant or as a natural person acting in his or her name or on his or her behalf)
   In Case T‑688/19,
   
      VeriGraft AB, established in Gothenburg (Sweden), represented by P. Hansson and A. Johansson, lawyers,
   applicant,
   v
   
      European Innovation Council and SMEs Executive Agency, represented by A. Galea, acting as Agent, and by D. Waelbroeck and A. Duron, lawyers,
   defendant,
   APPLICATION based on Article 272 TFEU seeking a declaration of invalidity of the termination by the Executive Agency for Small and Medium-sized Enterprises (EASME) of the grant agreement concerning the project ‘Personalised Tissue Engineered Veins as the first Cure for Patients with Chronic Venous Insufficiency – P‑TEV’, concluded in the context of the instrument to support innovation in small and medium-sized enterprises of Horizon 2020 – the Framework Programme for Research and Innovation (2014-2020),
   THE GENERAL COURT (Ninth Chamber),
   composed of M.J. Costeira, President, M. Kancheva (Rapporteur), and T. Perišin, Judges,
   Registrar: I. Pollalis, Administrator,
   having regard to the written part of the procedure and further to the hearing on 1 July 2021,
   gives the following
   
      Judgment
   
   
      Background to the dispute
   
   
            1
         
         
            The applicant, VeriGraft AB, is a Swedish biotechnology company founded in 2005 under the name NovaHep AB by A and B, professors at the Karolinska Institute, Stockholm (Sweden). Initially specialising in the use of stem cells, it was placed in a dormant state following financial problems in 2011, before being relocated to Gothenburg (Sweden) in 2012. It was restarted in 2014 following a capital injection by new shareholders and now specialises in the sector of personalised transplantation of human-tissue-engineered veins for use in regenerative medicine. Regenerative medicine is a field of medicine that aims to replace or repair human cells, or regenerate tissue or organs to restore normal function. A, who initially owned 41% of the applicant’s capital, gradually relinquished her entire shareholding from 2014. She was also a member of the applicant’s board of directors until July 2015; she was then employed part-time until her contract of employment was terminated on 1 October 2016. The applicant took its current name as from August 2017.
         
      
      
         Investigation by the University of Gothenburg and the CEPN concerning A and her research group
      
   
   
            2
         
         
            In March 2016, Gothenburg University instructed a special committee to investigate allegations relating to several employees, namely A and other members of her research team, concerning research misconduct in connection with 10 academic articles published between 2010 and 2015. That committee, which was responsible for making recommendations to the Vice-Chancellor of Gothenburg University, sought the opinion of the Centrala Etikprövningsnämnden (Central Ethics Review Board of Sweden) (‘the CEPN’) in that regard. The CEPN delivered its opinion in March 2018 and the special committee made its recommendations to the Vice-Chancellor of Gothenburg University in June 2018. The CEPN and the special committee both found misconduct in the research relating to 8 of the 10 articles in question. In particular, the CEPN found systematic shortcomings in the composition and functioning of A’s research group and an almost dysfunctional research environment: there had been no proper meetings, people had come and gone, often on unclear grounds. The CEPN strongly criticised the research culture found around A and further considered that the erroneous images found in 8 out of the 10 articles that had been investigated suggested that serious errors had not merely been the result of negligence but had actually been deliberate. The Vice-Chancellor followed the special committee’s recommendation and made a finding of misconduct in the research carried out in a decision taken in June 2018. The Vice-Chancellor also requested that the Government Disciplinary Body dismiss A. By decision of 21 December 2018, that request was rejected because the research misconduct (‘based on an overall assessment of the specific details of the case’) did not constitute a sufficient ground for dismissal.
         
      
      
         Horizon 2020 Framework Programme and instrument to support innovation in SMEs
      
   
   
            3
         
         
            Horizon 2020 – the Framework Programme for Research and Innovation (2014-2020) (‘the Horizon 2020 Framework Programme’) was established, on the basis of Articles 173 and 182 TFEU, by Regulation (EU) No 1291/2013 of the European Parliament and of the Council of 11 December 2013 establishing Horizon 2020 – the Framework Programme for Research and Innovation (2014-2020) and repealing Decision No 1982/2006/EC (OJ 2013 L 347, p. 104). According to Article 1 thereof, that regulation determines the framework governing Union support to research and innovation activities, thereby strengthening the European scientific and technological base and fostering benefits for society as well as better exploitation of the economic and industrial potential of policies of innovation, research and technological development.
         
      
            4
         
         
            Among the specific fields of action covered by the Horizon 2020 Framework Programme is the participation of small and medium-sized enterprises (SMEs) in research and innovation. Thus, according to Article 22(2) of Regulation No 1291/2013, an instrument to support innovation in SMEs that is targeted at all types of SMEs with an innovation potential, in a broad sense, is to be created under a single centralised management system.
         
      
            5
         
         
            The instrument to support innovation in SMEs is defined in Council Decision 2013/743/EU of 3 December 2013 establishing the specific programme implementing the Horizon 2020 Framework Programme (2014-2020) and repealing Decisions 2006/971/EC, 2006/972/EC, 2006/973/EC, 2006/974/EC and 2006/975/EC (OJ 2013 L 347, p. 965).
         
      
      
         Delegation of the centralised management of the instrument to support innovation in SMEs to EASME
      
   
   
            6
         
         
            The Executive Agency for Small and Medium-sized Enterprises (EASME), which became as of 1 April 2021 the European Innovation Council and SME Executive Agency (Eismea), was established, as of 1 January 2014, by Commission Implementing Decision 2013/771/EU of 17 December 2013 repealing Decisions 2004/20/EC and 2007/372/EC (OJ 2013 L 341, p. 73), in accordance with Council Regulation (EC) No 58/2003 of 19 December 2002 laying down the statute for executive agencies to be entrusted with certain tasks in the management of Community programmes (OJ 2003 L 11, p. 1). Under Article 4(2) of Regulation No 58/2003, that agency had legal personality.
         
      
            7
         
         
            It follows from Article 3(1)(d) of Implementing Decision 2013/771 that EASME was entrusted with the implementation of certain parts of the Horizon 2020 Framework Programme. Thus, by Decision C(2013) 9414 final of 23 December 2013 delegating powers to EASME with a view to performance of tasks linked to the implementation of Union programmes in the field of energy, environment, climate action, competitiveness and SMEs, research and innovation and ICT, comprising, in particular, implementation of appropriations entered in the general budget of the Union, the Commission entrusted EASME with certain management tasks of the instrument to support innovation in SMEs. As is apparent from Annex I to that decision, those tasks include, in particular, the evaluation of proposals with a view to obtaining financial support under the instrument to support innovation in SMEs and the preparation, conclusion and monitoring of the implementation of the grant agreements by the beneficiaries.
         
      
      
         Administrative procedure
      
   
   
            8
         
         
            On 6 April 2017, EASME published call for proposals ‘H2020‑SMEINST‑2‑2016-2017’, supporting inter alia innovative SMEs in the human healthcare biotechnology sector.
         
      
            9
         
         
            The applicant submitted a proposal concerning Phase 2 of the instrument to support innovation in SMEs centered on the marketing of an individualised cardio-vascular product corresponding to the project ‘Personalised Tissue Engineered Veins as the first Cure for Patients with Chronic Venous Insufficiency – P‑TEV’ (‘the P‑TEV project’) for the treatment of patients with severe chronic venous insufficiency.
         
      
            10
         
         
            The proposal submitted by the applicant consisted in evaluating the feasibility, safety and efficacy of implanting tissue-engineered vessels or veins in 12 patients with severe chronic venous insufficiency in their lower extremities. That involved, in particular, harvesting vessels from deceased persons, sampling of peripheral blood from patients in order to harvest cells, decellularisation and subsequent recellularisation of the harvested or engineered vessels, surgical procedures under general anaesthesia, testing of the efficiency of the procedure and assessing quality of life over a period of 12 months post-operation. All research was initially to be carried out in Norway and Sweden.
         
      
            11
         
         
            The applicant’s proposal referred, in section 4, to the most relevant scientific publications pertaining to the content of the P‑TEV project, namely:
            
                     –
                  
                  
                     […], […], […], […], […], […], [A], […], ‘Successful tissue engineering of competent allogeneic venous valves’, Journal of Vascular Surgery: Venous and Lymphatic Disorders, 2015, Issue 4, pp. 421-443;
                  
               
                     –
                  
                  
                     […], […], […], […], […], […], […], […], [A] ‘In Vivo Application of Tissue-Engineered Veins Using Autologous Peripheral Whole Blood: A Proof of Concept Study’, EBioMedicine, 2014, Issue 1, pp. 72-79;
                  
               
                     –
                  
                  
                     […], […], […], […], […], […], […], […], […], [A], ‘Transplantation of an allogeneic vein bioengineered with autologous stem cells: a proof-of-concept study’, Lancet, 2012, No 9838, pp. 230-237.
                  
               
      
            12
         
         
            In May 2017, further to the evaluation process carried out by external experts and covering sections 1, 2 and 3 of the applicant’s proposal, EASME selected that proposal for the award of a grant.
         
      
      
         The grant agreement
      
   
   
            13
         
         
            On 9 August 2017, the applicant, on the one hand, and the European Union, represented by EASME, on the other, concluded a grant agreement for the P‑TEV project, bearing reference 778620 (‘the grant agreement’).
         
      
            14
         
         
            In accordance with Articles 2 to 5 of the grant agreement, the applicant was awarded a grant of a maximum amount of EUR 2 184 603.75 for the P‑TEV project, the implementation of which was to begin on 1 September 2017 and the duration of which was to be 24 months.
         
      
            15
         
         
            Article 34 of the grant agreement concerns compliance with ethical principles.
         
      
            16
         
         
            Article 34.1 of the grant agreement stipulates as follows:
            ‘The beneficiary must carry out the action in compliance with:
            
                     (a)
                  
                  
                     ethical principles (including the highest standards of research integrity – as set out, for instance, in the European Code of Conduct for Research Integrity – and including, in particular, avoiding fabrication, falsification, plagiarism or other research misconduct) and
                  
               
                     (b)
                  
                  
                     applicable international, EU and national law.
                  
               …’
         
      
            17
         
         
            Article 34.2 of the grant agreement sets out the beneficiary’s obligations concerning activities raising ethical issues. That provision thus provides as follows:
            ‘Activities raising ethical issues must comply with the “ethics requirements” set out in Annex 1.
            Before the beginning of an activity raising an ethical issue, the beneficiary must submit … to [EASME] a copy of:
            
                     (a)
                  
                  
                     any ethics committee opinion required under national law and
                  
               
                     (b)
                  
                  
                     any notification or authorisation for activities raising ethical issues required under national law.
                  
               …’
         
      
            18
         
         
            In accordance with Article 34.4 of the grant agreement, if the beneficiary breaches any of its obligations under Articles 34.1 and 34.2 of that agreement, the grant may be reduced and the agreement may be terminated. Such breaches may also lead to any of the other measures described in Chapter 6 of the grant agreement.
         
      
            19
         
         
            Article 50.3 of the grant agreement governs the termination of the agreement by EASME.
         
      
            20
         
         
            According to Article 50.3.1 of the grant agreement, EASME may terminate the agreement if:
            ‘…
            
                     (f)
                  
                  
                     the beneficiary (or a natural person who has the power to represent or take decisions on its behalf) has been found guilty of professional misconduct, proven by any means;
                  
               …
            
                     (l)
                  
                  
                     the beneficiary (or a natural person who has the power to represent or take decisions on its behalf) has – in the award procedure or under the Agreement – committed:
                     
                              –
                           
                           
                              (i) substantial errors, irregularities, fraud or
                           
                        
                              –
                           
                           
                              (ii) serious breach of obligations, including improper implementation of the action, submission of false information, failure to provide required information, breach of ethical principles;
                           
                        …’
                  
               
      
            21
         
         
            The procedure for termination of the grant agreement is laid down in Article 50.3.2 of the agreement, which states as follows:
            ‘Before terminating the Agreement, [EASME] will formally notify the beneficiary:
            
                     –
                  
                  
                     informing it of its intention to terminate and the reasons why and
                  
               
                     –
                  
                  
                     inviting it, within 30 days of receiving notification, to submit observations and – in case of Point (l.ii) above – to inform [EASME] of the measures to ensure compliance with the obligations under the Agreement.
                  
               If [EASME] does not receive observations or decides to pursue the procedure despite the observations it has received, it will formally notify to the beneficiary confirmation of the termination and the date it will take effect. Otherwise, it will formally notify that the procedure is not continued.
            The termination will take effect:
            
                     –
                  
                  
                     for terminations under Points (b), (e), (g), (h), (j) and (l.ii) above: on the day specified in the notification of confirmation (see above);
                  
               
                     –
                  
                  
                     for terminations under Points (d), (f), (i), (k), (l.i) and (m) above: on the day after the notification of the confirmation is received by the coordinator.’
                  
               
      
            22
         
         
            Under Article 57.1 of the grant agreement, ‘the [grant agreement] is governed by the applicable EU law, supplemented if necessary by the law of Belgium’.
         
      
            23
         
         
            Article 57.2 of the grant agreement provides that ‘if a dispute concerning the interpretation, application or validity of the Agreement cannot be settled amicably, the General Court – or, on appeal, the Court of Justice … – has sole jurisdiction’ and ‘such actions must be brought under Article 272 [TFEU]’.
         
      
      
         EASME’S review of the project
      
   
   
            24
         
         
            During the autumn of 2018, EASME appointed an external reviewer to review the progress of the P‑TEV project.
         
      
            25
         
         
            By letter of 22 November 2018, EASME sent the applicant the external reviewer’s report.
         
      
            26
         
         
            Under the heading ‘Significant results linked to dissemination, exploitation and impact potential’, the external reviewer’s report stated as follows:
            ‘Project will likely provide results with significant immediate or potential impact in the next reporting period (even if not all objectives mentioned in Annex 1 to [the grant agreement] were achieved).
            Despite of the delays regarding work package 3 in the short and medium term, it shouldn’t have a major impact on the overall clinical development and commercialisation of the project results.’
         
      
            27
         
         
            The external reviewer’s report also stated that ‘the objectives of the project are still scientifically and technologically relevant’.
         
      
            28
         
         
            In his letter of 22 November 2018, the EASME officer responsible for the P‑TEV project informed that applicant that, ‘based on the enclosed review report [drafted by the external reviewer], [EASME] consider[ed] the project implementation satisfactory’ and that ‘in order to avoid major impact on the overall clinical development and commercialisation of the [advanced therapy medical products] in the longer run, [it] recommend[ed] cost neutral extension of the project that would allow to perform clinical study phase I in whole as planned’.
         
      
            29
         
         
            At the same time, in the course of 2018, EASME carried out a number of ethics checks relating to the P‑TEV project. In its report drawn up following the first ethics check, which took place between 21 and 23 February 2018, the panel of ethics experts instructed by EASME found a certain number of issues and recommended that a second ethics check be carried out. Following that second check, carried out on 24 and 25 May 2018, the panel of ethics experts stated in its report that the applicant had partially responded to some of the ethics issues raised in the first check but that other issues still needed to be addressed, and it recommended that a third ethics check be carried out. The third ethics check was carried out between 26 and 28 September 2018. In its report, the panel of ethics experts indicated that the applicant had resolved some of the ethics issues raised by the second check, but that some ethics issues remained. In particular, the report indicated certain documents required, such as authorisations for clinical trials included in the EU Clinical Trials Registers for Spain and Lithuania, approval of the competent ethics committee in Spain and laboratory accreditations for manufacturing tissues for use in humans for Spain and Lithuania. The report also stated that all the documents requested had to relate expressly to the P‑TEV project and that data processing activities carried out with personal data from relatives of human tissue donors for the purposes of research had not been addressed sufficiently and did not include information concerning data protection rights and mechanisms to execute them, as well as the right of relatives to withdraw consent.
         
      
            30
         
         
            Furthermore, the report stated that recently official research misconduct and ethics investigations had been carried out in Sweden and they had established proof of research misconduct in the seminal works that the P‑TEV project referred to, as well as in the clinical work that had provided proof-of-concept for the procedures used in the project.
         
      
            31
         
         
            According to the report of the panel of ethics experts, that situation had raised a number of concerns in connection with the biased evaluation of which the applicant’s proposal had been subject and the development of the proof-of-concept without proper prior approval, and also possible harm and risks to future research participants.
         
      
            32
         
         
            The panel of ethics experts concluded that the overall assessment was still unsatisfactory and recommended a further ethics check, pending the result of an investigation into the research failings by the appropriate EASME committee.
         
      
      
         Termination of the grant agreement
      
   
   
            33
         
         
            By letter of 18 October 2018, EASME informed the applicant that it intended to terminate the grant agreement (‘the first pre-information letter’). In that letter, EASME stated that, following the third ethics check of 26 September 2018, the panel of ethics experts had indicated that the applicant had resolved some of the ethics issues raised by the ethics check of 24 May 2018, but that other critical ethics issues remained. EASME expressly referred, in that regard, to the first five ethics issues identified in the report of the panel of ethics experts following the third check, set out in paragraph 29 above. EASME made clear that it therefore considered that the grant agreement should be terminated, as the applicant had ‘committed [a] serious breach of obligations under the [grant agreement] or during the award procedure’. EASME requested the applicant to submit its observations within 30 days of receipt of that letter.
         
      
            34
         
         
            By letter of 18 November 2018, the applicant submitted its observations to EASME on the first pre-information letter, disputing EASME’s objections and maintaining that it had not committed a breach of its obligations under the grant agreement.
         
      
            35
         
         
            EASME instructed an external ethics expert to evaluate the observations submitted by the applicant concerning the first pre-information letter. In the report which he submitted to EASME on 11 December 2018, the external ethics expert, first, expressed his view on the observations submitted by the applicant in respect of the ethics issues in connection with the implementation of the P‑TEV project that had been identified in the first pre-information letter and, second, referred to an investigation into research misconduct which included allegations such as fabrication of data, lying about ethics approvals and false reporting on the outcome of the clinical treatment. Reference was also made to the fact that the Chancellor of Gothenburg University had ‘asked for the retractions of eight papers published by researchers with ties to the project, after the use of fabricated data was uncovered by PubPeer and later confirmed by the [CEPN]. It was thus stated that one of those articles, which contained fabricated data, featured at the top of the list of relevant publications for the P‑TEV project. The report then referred, for a thorough account of that investigation and its results, and the links to all the appropriate documentation, to two articles published on an internet blog of a person presenting himself as an independent scientific journalist.
         
      
            36
         
         
            On 18 February 2019, EASME sent a second pre-information letter to the applicant (‘the second pre-information letter’). In that letter, EASME stated that, after examining the applicant’s observations, it still intended to terminate the grant agreement, but on different grounds from those set out in the first pre-information letter, and extended the pre-information procedure accordingly. EASME stated that, ‘according to the publicly available information, [A] (co-founder of [the applicant]) [had] been guilty of professional misconduct’. EASME also stated that two of the documents which had been presented in the applicant’s proposal as being the ‘most relevant [scientific] publications pertaining to the content of the [P‑TEV] project’, contained, according to the CEPN, evidence of the misconduct in question, namely the article ‘In Vivo Application of Tissue-Engineered Veins Using Autologous Peripheral Whole Blood: A Proof of Concept Study’, EBioMedicine journal, 22 September 2014 (‘the Ebio Medicine article’), and the article ‘Transplantation of an allogeneic vein bioengineered with autologous stem cells: a proof-of-concept study’, Lancet journal, 21 July 2012 (‘the Lancet article’). According to EASME, the CEPN’s investigation had also concluded that the case showed systematic shortcomings in the composition and function of the research group and an almost dysfunctional research environment. Thus, no meetings had been held and the persons involved had come and gone, often on unclear grounds. EASME added that the group of experts had been strongly critical of the research culture found in the group around A. EASME considered that those findings put in question the overall professional integrity of A and thus the operational capacity of the applicant to properly implement the project and its compliance with the non-exclusion requirements set out in the EU Financial Regulation. EASME therefore considered that the grant agreement could not be continued and should be terminated on the ground set out in Article 50.3.1(f) of the grant agreement.
         
      
            37
         
         
            By letter of 15 March 2019, the applicant submitted its observations on the second pre-information letter to EASME. The applicant claimed that the investigation carried out by the CEPN concerned A and her academic research group specifically. The applicant also stated that it had not been in any way involved in that research and that that research had been carried out and published before the applicant became operational at the end of 2015. The applicant explained that since its new management was put in place in 2014 it had been physically separated from the university in which A carried out her research and that all the management, scientists and human tissue engineers who were active in the development of its technology were employed by the applicant, with no personnel being shared with Gothenburg University. The applicant further stated that, after receiving information on 3 March 2016 indicating that A was suspected of research misconduct, it had suspended her contract of employment on the following day and she had had no operational or representative role within the applicant as from that date until the end of her contract of employment on 1 October 2016.
         
      
            38
         
         
            In that letter, as regards more specifically the scientific publications mentioned in its proposal, the applicant stated that while they had been cited to support the feasibility of the technology at issue in the P‑TEV project, they had all been produced at Gothenburg University without the applicant’s involvement. According to the applicant, some of the publications cited had turned out to contain incorrect images. Thus, the Lancet article, which concerned older technology, contained a potentially duplicated or incorrectly magnified image, but the journal had considered that that error was minor and did not affect the findings of the article, and decided not to publish an erratum. The applicant explained that the Lancet article remained published in its original form. As regards the EBioMedicine article, which was also mentioned in the second pre-information letter, the applicant observed that the investigation into that article had not revealed any inconsistency and that it had therefore not been taken into account by the CEPN in its report. The applicant added that the article ‘Successful tissue engineering of competent allogeneic venous valves’, Journal of Vascular Surgery, which was cited in its proposal but had not been mentioned in the second pre-information letter, contained an incorrect table, which had led to the publication of an erratum by the journal in March 2017. That article had then been withdrawn in March 2019 because of a policy specific to the Journal of Vascular Surgery.
         
      
            39
         
         
            The applicant further emphasised in its letter of 15 March 2019 that, since 2015, it had taken care to develop its own technology completely independently of the academic group involved and that it had succeeded in developing a complete preclinical data package using its own personnel and its own standardised instructions, in collaboration with third parties and under the supervision of the accredited government Research Institutes of Sweden. In addition, the development carried out in-house in the last three years had led to significantly improved processes for tissue engineering that were different from those practised in the academic setting and published, and for which patent applications had been filed without A’s involvement. Lastly, the applicant invited EASME to appoint independent experts or internal reviewers in order to verify its capacity to perform the P‑TEV project and to verify it was completely independent from A.
         
      
            40
         
         
            By letter of 15 April 2019, EASME informed the applicant that it confirmed the termination of the grant (‘the termination letter’). It stated that, for the reasons set out in a list of arguments enclosed with the termination letter, it was unable to accept the applicant’s arguments and that it therefore fully maintained its position as explained in its pre-information letter.
         
      
            41
         
         
            In the document enclosed with the termination letter entitled ‘List of arguments (Contradictory procedure)’, EASME stated, in answer to the observations set out by the applicant in its letter of 15 March 2019, that the third ethics check had revealed that official investigations carried out in Sweden by the CEPN and Gothenburg University had established proof of research misconduct in the work presented by the beneficiaries of the P‑TEV project in Annex 1 (Part A) to the grant agreement. According to EASME, that research misconduct included manipulation of data and clinical tests carried out without proper ethics approval. EASME added that two of the papers that had been presented in the applicant’s proposal as ‘the most relevant publications pertaining to the content of the [P‑TEV] project’ contained, according to the CEPN, evidence of the misconduct in question. EASME considered that, as that material had underpinned the scientific evaluation which had led to the award of the grant, that evaluation must be considered skewed or seriously biased. In conclusion, EASME stated that the objective ground for terminating the grant agreement set out in Article 50.3.1(f) was satisfied in this case, since ‘A was a co-founder of the beneficiary who [had] been found guilty of professional misconduct by the CEPN’.
         
      
      Procedure and forms of order sought
   
   
            42
         
         
            By application lodged at the Court Registry on 8 October 2019, the applicant brought the present action.
         
      
            43
         
         
            On 27 January 2019, EASME lodged the defence at the Court Registry.
         
      
            44
         
         
            The applicant lodged the reply on 23 March 2020. EASME lodged its rejoinder on 23 July 2020.
         
      
            45
         
         
            On 12 April 2021, Eismea brought to the attention of the General Court the fact that it had become the legal and universal successor of EASME as of 1 April 2021.
         
      
            46
         
         
            The parties presented oral argument and replied to the Court’s oral questions at the hearing on 1 July 2021.
         
      
            47
         
         
            Following the death of Judge Berke on 1 August 2021, the President of the Ninth Chamber designated another Judge to complete the Chamber.
         
      
            48
         
         
            By order of 26 August 2021, the Court (Ninth Chamber) ordered that the oral part of the procedure be reopened.
         
      
            49
         
         
            On 14 September 2021, the parties having informed the Court that they did not request a new hearing and the Court considering that it had sufficient information, the President of the Ninth Chamber decided to close the oral part of the procedure again.
         
      
            50
         
         
            The applicant claims that the Court should:
            
                     –
                  
                  
                     find and declare that the termination of the agreement by EASME is invalid;
                  
               
                     –
                  
                  
                     order Eismea to pay the costs.
                  
               
      
            51
         
         
            Eismea contends that the Court should:
            
                     –
                  
                  
                     dismiss the action;
                  
               
                     –
                  
                  
                     order the applicant to pay the costs.
                  
               
      
      Law
   
   
      
         The jurisdiction of the General Court
      
   
   
            52
         
         
            It must be recalled that under Article 272 TFEU, read in conjunction with Article 256 TFEU, the General Court has jurisdiction to give judgment pursuant to any arbitration clause contained in a contract governed by public or private law concluded by or on behalf of the European Union. Article 272 TFEU is thus a specific provision allowing the Courts of the European Union to be seised under an arbitration clause without restriction as regards the nature of the action to be brought before the Courts of the European Union (judgment of 26 February 2015, Planet v Commission, C‑564/13 P, EU:C:2015:124, paragraphs 22 and 23).
         
      
            53
         
         
            In the present case, as the parties correctly submit, the Court therefore has jurisdiction to hear the present action, in accordance with Article 272 TFEU, read in conjunction with Article 256 TFEU, pursuant to the arbitration clause contained in the first paragraph of Article 57.2 of the grant agreement.
         
      
      
         Merits of the action
      
   
   
            54
         
         
            In support of its action, the applicant raises three pleas in law. The first plea in law alleges breach of Article 50.3.1(f) of the grant agreement, on the ground that the alleged professional research misconduct is not attributable to the applicant or to a natural person empowered to represent it or to take decisions on its behalf and, in any event, the misconduct in question did not affect the P‑TEV project. The second plea in law alleges infringement of the principle of proportionality in that the decision to terminate did not take account of the fact that the alleged professional misconduct had no impact on the scientific relevance of the P‑TEV project. The third plea in law alleges infringement of the rights of the defence in that EASME failed to communicate to the applicant the report of the external ethics expert on which the decision to terminate the grant agreement was based.
         
      
            55
         
         
            It must be observed that, when seised under an arbitration clause pursuant to Article 272 TFEU, the Court must resolve the dispute on the basis of the substantive law applicable to the contract (see, to that effect, judgments of 4 February 2016, Isotis v Commission, T‑562/13, not published, EU:T:2016:63, paragraph 51, and of 20 May 2019, Fundación Tecnalia Research & Innovation v REA, T‑104/18, not published, EU:T:2019:345, paragraph 55 and the case-law cited), namely, in the present case, principally, in the light of the provisions of the grant agreement at issue, the provisions of EU acts relating to the Horizon 2020 Framework Programme, those of Regulation (EU, Euratom) No 966/2012 of the European Parliament and of the Council of 25 October 2012 on the financial rules applicable to the general budget of the Union and repealing Council Regulation (EC, Euratom) No 1605/2002 (OJ 2012 L 298, p. 1), in the version applicable to the facts of the case, and the other rules arising from EU law, and, in the alternative, in the light of Belgian law, in accordance with Article 57.1 of the grant agreement.
         
      
            56
         
         
            The Court considers it appropriate to examine the third plea in law first.
         
      
      The third plea in law, alleging infringement of the rights of the defence
   
   
            57
         
         
            The applicant observes that it first became aware upon reading the defence of the existence of the report of the external ethics expert dated 11 December 2018 and of the fact that EASME had based its decision to terminate the grant agreement on that report. EASME failed to send that report to the applicant during the termination procedure. In addition, in answer to a letter from the applicant to EASME with a view to prepare the reply, EASME confirmed, first, that the report had not been sent to the applicant because it was an internal document that served exclusively for the purpose of carrying out EASME’s own check, the outcome of which, that is to say the termination of the grant agreement, had been communicated to the applicant and, second, it refused to give the applicant full access to that document or to disclose to it the name of the expert in question. In the applicant’s submission, EASME thus deprived it of the opportunity to rebut certain allegations in the report of the external ethics expert. Thus, the applicant was deprived of the opportunity to challenge the assertion that ‘this was not a normal project’, that ‘the background work had been fraught with research misconduct’ or that ‘there were a number of ethics compliance deficiencies in this project’. In adopting that approach, EASME infringed the applicant’s rights of defence. As regards the content of the report of the external ethics expert of 11 December 2018, the applicant observes that that report refers to the blog ‘www.forbetterscience.com’, by a person who presents himself as an ‘independent science journalist’, which does not appear to be externally fact-checked or peer-reviewed.
         
      
            58
         
         
            Eismea contends that, contrary to the applicant’s assertion, it produced the report of the external ethics expert in an annex to the defence and redacted only the name of the expert in question. It makes clear that the report was in principle a document for internal use that enabled it to carry out its assessment and was therefore not intended to be communicated to the beneficiaries. It emphasises that in this instance the applicant had the opportunity to express its views on the grounds for termination set out in the second pre-information letter in its observations on that letter and that there is thus no question of any infringement of the applicant’s rights of defence in that respect. In any event, Eismea states that although the report of the external ethics expert, which had been commissioned for the purpose of evaluating the applicant’s observations on the first pre-information letter, did indeed flag the instances of professional misconduct, it did not serve as the basis for the second pre-information letter, as EASME had itself already become aware of those instances of professional misconduct. It follows that the report in question did not harm the applicant.
         
      
            59
         
         
            It should be noted at the outset that that plea was raised for the first time in the reply. It is clear from Article 84(1) of the Rules of Procedure of the General Court that no new plea in law may be introduced in the course of proceedings unless it is based on matters of law or of fact which come to light in the course of the procedure. In the present case, it must be held that that plea is based on the existence of the report of an external ethics expert instructed by EASME in the context of an internal procedure, which was not communicated to the applicant during the procedure for termination of the grant agreement, the existence of which the applicant learned through the defence. In that regard, it should be noted that it is apparent from the email exchanges between the applicant and EASME concerning the report in question that it was not on the internet portal for participants in the Horizon 2020 Framework Programme and that it was not communicated to the applicant, since it was, according to EASME, an internal document. It should also be noted that Eismea does not dispute the applicant’s assertion that it became aware of the existence of that report for the first time through the defence.
         
      
            60
         
         
            It must therefore be held that that plea is based on matters of fact and of law which came to light in the course of the procedure before the General Court and, consequently, it must be regarded as admissible in the light of the requirements laid down in Article 84(1) of the Rules of Procedure.
         
      
            61
         
         
            Furthermore, it must be borne in mind that, as the Court has held, if the parties decide, in their contract, to confer on the EU judicature, by means of an arbitration clause, jurisdiction over disputes relating to that contract, that judicature will have jurisdiction, independently of the applicable law stipulated in that contract, to examine any infringement of the Charter of Fundamental Rights of the European Union (‘the Charter’) or of the general principles of EU law (judgment of 16 July 2020, Inclusion Alliance for Europe v Commission, C‑378/16 P, EU:C:2020:575, paragraph 81).
         
      
            62
         
         
            Accordingly, when EASME performs a contract, it remains subject to its obligations under the Charter and the general principles of EU law. Therefore, the fact that the law applicable to the contract concerned does not guarantee the same rights as those guaranteed by the Charter and the general principles of EU law does not exempt EASME from ensuring that the rights guaranteed by the latter are respected in relation to its contracting parties (judgment of 16 July 2020, Inclusion Alliance for Europe v Commission, C‑378/16 P, EU:C:2020:575, paragraph 82; see also, to that effect, judgment of 16 July 2020, ADR Center v Commission, C‑584/17 P, EU:C:2020:576, paragraph 86).
         
      
            63
         
         
            It follows that, in the present case, the Court has jurisdiction to examine an alleged infringement of the applicant’s rights of defence by EASME.
         
      
            64
         
         
            The applicant complains that EASME, in essence, first, did not give it the opportunity to comment on the assessments made by the external ethics expert in his report of 11 December 2018 concerning its observations on the first pre-information letter, before taking the decision to terminate the grant agreement and, therefore, infringed its right to be heard and, second, failed to inform it of the name of the external ethics expert in the course of the proceedings before the General Court in infringement of its rights of defence.
         
      
            65
         
         
            In that regard, it should be recalled that Article 41(2)(a) of the Charter, which has, since 1 December 2009, the same legal value as the Treaties, recognises ‘the right of every person to be heard before any individual measure which would affect him or her adversely is taken’. The right to be heard is of general application (see judgment of 11 September 2013, L v Parliament, T‑317/10 P, EU:T:2013:413, paragraph 81 and the case-law cited). Thus, that principle applies, irrespective of the nature of the administrative procedure leading to the adoption of an individual measure, where, in respect of a person, the administration proposes to take, according to the wording of that provision, ‘a decision which would affect him or her adversely’. The right to be heard, which must be safeguarded even where there are no applicable rules, requires that the person concerned must have been afforded the prior opportunity effectively to make known his or her views on any information against him or her which might have been taken into account in the measure to be adopted (judgment of 24 April 2017, HF v Parliament, T‑584/16, EU:T:2017:282, paragraph 150).
         
      
            66
         
         
            More specifically, observance of the right to be heard involves the person concerned being put in a position, prior to the adoption of the decision adversely affecting him or her, effectively to make known his or her views on the truth and relevance of the facts and circumstances on the basis of which that decision will be adopted (judgment of 11 September 2013, L v Parliament, T‑317/10 P, EU:T:2013:413, paragraphs 80 and 81, and order of 17 June 2019, BS v Parliament, T‑593/18, not published, EU:T:2019:425, paragraphs 76 and 77).
         
      
            67
         
         
            It is apparent from Article 22.1.1 of the grant agreement that EASME may have recourse to external experts in order to check the proper implementation of a project and whether that project complies with the obligations laid down in the agreement.
         
      
            68
         
         
            Furthermore, it is apparent from Article 50.3.2 of the grant agreement that, before terminating the agreement, on the basis of Article 50.3.1(f), EASME is required formally to notify the beneficiary of its intention to do so and the reasons why and to invite it to submit its observations within 30 days of notification.
         
      
            69
         
         
            In the present case, it should be noted that the report of the external ethics expert of 11 December 2018 concerned the applicant’s observations on the first pre-information letter. While it is true that that report also included a passage, the content of which is set out in paragraph 35 above, concerning the CEPN’s investigation into the work of A and her working group, and into their connection with the P‑TEV project, it must be stated that that passage merely confirmed the information already mentioned in the report of the third ethics check of 28 September 2018, which contained a passage worded as follows:
            ‘Recently, there have been official research misconduct and ethics investigations in Sweden that have established proof of research misconduct in the seminal works that P‑TEV refers to, as well as in the clinical work that provided proof-of-concept for the procedures used in the project.’
         
      
            70
         
         
            It is also apparent from the very wording of the list of contradictory arguments attached to the termination letter that EASME relied, as regards the finding of the existence of the CEPN’s investigation into A’s work concerning the P‑TEV project, on the report of the third ethics check.
         
      
            71
         
         
            It follows that, contrary to what the applicant claims, it cannot be considered that EASME based the termination of the grant agreement on the assessments contained in the report of the external ethics expert of 11 December 2018.
         
      
            72
         
         
            In addition, it should also be noted that the reasons for the termination of the grant agreement were indicated to the applicant in the second pre-information letter, on which it had the opportunity to comment, as shown by the observations which it submitted on 19 March 2019, in accordance with Article 50.3.2 of the grant agreement.
         
      
            73
         
         
            In those circumstances, it must be held that, in the present case, EASME did not infringe the applicant’s right to be heard.
         
      
            74
         
         
            Moreover, it must be stated that, since, as stated in paragraph 71 above, EASME did not base the decision to terminate the grant agreement on the report of the external ethics expert, the fact that Eismea did not communicate to the applicant the name of the expert in question in the proceedings before the Court is not, in any event, such as to infringe the applicant’s rights of defence in those proceedings.
         
      
            75
         
         
            Accordingly, the third plea in law must be rejected as unfounded.
         
      
      The first plea in law, alleging infringement of Article 50.3.1(f) of the grant agreement
   
   
            76
         
         
            The applicant maintains that A, who was designated by EASME in the second pre-information letter and in the termination letter as the person found by the CEPN to be guilty of professional misconduct, is neither the beneficiary of the grant, nor a natural person with the power to represent or take decisions on the applicant’s behalf, within the meaning of Article 50.3.1(f) of the grant agreement. Thus, in its capacity as a party to the grant agreement and the only recipient of the funding, the applicant is the beneficiary of the agreement, in accordance with the Commission’s glossary made available to grant applicants and as is clear from the actual wording of the grant agreement. Furthermore, since her departure from the applicant’s board of directors in July 2015, A had no authority to represent the applicant or to take decisions on its behalf. Nor was such a power conferred on her by her position as co-founder of the applicant. In that regard, under Swedish company law, the minority shareholding held by A at the time when the proposal relating to the P‑TEV project was submitted did not allow her to represent the applicant or to take decisions on its behalf. Moreover, in the applicant’s submission, the contract under which A was employed on a part-time basis until it was terminated on 1 October 2016 also did not empower her to represent the applicant or to act on its behalf. The applicant further asserts that A had not participated in any of its activities between the time when her contract of employment was suspended, without pay, on 4 March 2016 and the date of its termination and she therefore had no influence on the proposal relating to the P‑TEV project submitted in April 2017. In the applicant’s submission, in those circumstances, it is clear that A does not fall within the category of persons referred to in Article 50.3.1(f) of the grant agreement and that, accordingly, the misconduct of which she was guilty could not justify the termination of the grant agreement.
         
      
            77
         
         
            The applicant maintains that it is for that reason that Eismea is seeking to amend retroactively the grounds for terminating the grant agreement by maintaining for the first time before the Court that it is in reality the applicant, in its capacity as beneficiary, that is responsible for the research misconduct. In the applicant’s submission, Eismea has no right to reargue the grounds for termination at this stage in the procedure without being in breach of the principle of foreseeability of the judicial procedure. Furthermore, under the European Code of Good Administrative Behaviour, the authorities are required to take decisions that are foreseeable and clear.
         
      
            78
         
         
            The applicant claims that, even if the Court were to accept that Eismea could retroactively amend the grounds for terminating the grant agreement, that termination would still be unfounded. Thus, the applicant observes that it does not dispute the CEPN’s findings in relation to the research misconduct committed by A and her research group. However, it maintains that it cannot be accused for having knowingly included academic articles vitiated by research misconduct in the proposal relating to the P‑TEV project which affected the scientific and technological relevance of that project.
         
      
            79
         
         
            In that regard, first, the applicant states that the proposal relating to the P‑TEV project was submitted to EASME in April 2017, whereas the CEPN report was made public only in March 2018. In reply to Eismea’s argument that the applicant was aware of the issues affecting A’s work at the time of the submission of the P‑TEV project, since it had suspended her following allegations of research misconduct in March 2016, the applicant observes that at that time the result of the investigation carried out by Gothenburg University was uncertain and the issues were clearly complex, as shown by the duration of that investigation. Accordingly, it observes that the decision of the Vice-Chancellor of Gothenburg University formally finding shortcomings in the research of A and her research group dates from June 2018.
         
      
            80
         
         
            Second, the applicant observes that the academic publications cited in the proposal relating to the P‑TEV project did not contain, or no longer contained, incorrect images at the time that proposal was submitted in April 2017. Thus, first of all, as regards the Lancet article, the applicant states that it referred to that article to support the fact that tissue-engineered blood vessels do not entail rejection or other serious safety issues. The results referred to in that article are based on an older technology, which is not used by the applicant, under which re-cellularisation is carried out with the use of bone-marrow-derived cells. The applicant observes that, contrary to what is stated in the second pre-information letter, the Lancet article, which contained a minor error relating to a magnified image, was not the subject of a finding of research misconduct by the CEPN and was still published in its original form when the proposal relating to the P‑TEV project was submitted to EASME, since the journal had not deemed it necessary to publish an erratum. Next, as regards the article published in the journal EBioMedicine, the applicant states that that article is the most central reference for the P‑TEV project because it indicates that the clinical results show that tissue engineering using peripheral blood, which corresponds to the technology developed by the applicant, does not in general lead to rejection or to other serious safety risks. The applicant emphasises that the CEPN found no inconsistency in that article that would justify bringing it within the scope of its investigation and the article was therefore not the subject of a finding of research misconduct, as incorrectly stated in the second pre-information letter. Lastly, as regards the article in the Journal of Vascular Surgery, the applicant states that that article was used as a reference for experiments concerning veins with valves, but that its importance was not as great for the P‑TEV project because it did not relate to clinical experiments but to in vitro experiments. The applicant observes that that article was not mentioned in the second pre-information letter, but that it contained incorrect image tables at the time of its publication, which justified the finding of research misconduct by the CEPN. However, the applicant emphasises that that article was the subject of an erratum published by the Journal of Vascular Surgery in March 2017, before being retracted in March 2019 on account of the journal’s policy.
         
      
            81
         
         
            Furthermore, the applicant claims that the findings of the panel of ethics experts made during the three ethics checks carried out in 2018, described in the defence, are of no relevance in the present case because EASME eventually did not use those alleged breaches of ethical principles to justify its decision to terminate the grant agreement, as is apparent from the second pre-information letter. Likewise, the applicant also considers that the reference to Article 34 of the grant agreement is irrelevant.
         
      
            82
         
         
            Eismea notes the shortcomings found during the three successive ethics checks, which the applicant deliberately failed to mention in the application, and emphasises that the fact that the applicant failed, on three occasions, to satisfy the ethical requirements which had already been identified in the ethics reports relating to those checks is of particular concern in the case of a project which by its nature raises significant ethical concerns.
         
      
            83
         
         
            Thus, Eismea contends that the applicant’s interpretation of Article 50.3.1(f) of the grant agreement is too narrow. In its view, the applicant does not understand that that provision is applicable to it in the present case in its capacity as beneficiary, independently of A. The same applies to Article 34 of the grant agreement, which states that if the beneficiary breaches any of its ethical obligations the agreement may be terminated. In Eismea’s submission, it is in that context that the termination decision must be read. It is clear from the wording of the list of arguments attached to the termination letter that the decision to terminate the grant agreement had no connection with A’s shareholding, employment or membership of the applicant’s board and EASME never made any reference to such matters. The applicant’s arguments that A does not come within the category of persons referred to in Article 50.3.1(f) of the grant agreement are therefore irrelevant.
         
      
            84
         
         
            By contrast, according to Eismea, there is no doubt that the proposal relating to the P‑TEV project was based on a technology developed in collaboration with A and on research conducted by her and her research team. In addition, Eismea states that the proposal relating to the P‑TEV project made reference to the most relevant scientific publications pertaining to the content of the project.
         
      
            85
         
         
            According to Eismea, as it had been explained in the second pre-information letter, the elements of research on which the applicant’s proposal was based were vitiated by misconduct. Proof of research misconduct was established, so far as the work submitted by the beneficiaries of the P‑TEV project is concerned, in the proposal submitted by the applicant in April 2017, by the CEPN.
         
      
            86
         
         
            Eismea observes that the articles cited at the applicant’s initiative in Section 4 of the proposal relating to the P‑TEV project, such as the most relevant publications pertaining to the content of the project in question, were also mentioned in part A of Annex 1 to the grant agreement. In that regard, Eismea acknowledges that the EBiomedicine article was not mentioned in the CEPN report, but notes that, according to the applicant, the CEPN had nonetheless taken care to ascertain that it did not contain any inconsistencies. Eismea also observes that the applicant does not dispute that, according to the CEPN, the Lancet article, which seemed to be particularly relevant for the P‑TEV project, contained an incorrect magnification of an image and, even though it had not been possible to establish that it was false, the explanation provided seemed strange and cast doubt on the reliability of the research. As regards the article of the Journal of Vascular Surgery, Eismea notes that the CEPN found that two mispositioned and compressed images were present, which amounted to image manipulation and scientific dishonesty, and that, consequently, all co-authors, including A, were found to be guilty of scientific fraud.
         
      
            87
         
         
            Eismea also emphasises the contradictory nature of the applicant’s argument that the research misconduct identified in A’s publications had no impact on the P‑TEV project because it relied on new preclinical data. Eismea maintains, moreover, that it is a matter for concern that the applicant did not deem it necessary to inform it that the P‑TEV project relied on new preclinical research and to provide a publication or body of research to support the work done, as it was required to do under Article 17.2 of the grant agreement.
         
      
            88
         
         
            Eismea further submits that the applicant was perfectly aware of the allegations of research misconduct against A in 2016 and of their impact on the P‑TEV project when it submitted that project. That is demonstrated by the fact that, as the applicant stated in the application, it had adopted measures specifically to distance A from its organisation, in particular by suspending her contract of employment in March 2016 and then terminating it in September 2016, and by buying back her shareholding. It is also demonstrated by the applicant’s assertion in the reply that ‘given the controversies surrounding [A], [it] decided at an early stage of the implementation of the P‑TEV project not to rely on any data from her research’ and according to which ‘instead [the applicant] and its partners generated all necessary preclinical data for [clinical trial authorisation] applications’. According to Eismea, it is therefore apparent that the applicant knowingly presented two articles in its proposal as being the ‘most relevant scientific publications pertaining to the content of the proposed project’, which contained verified evidence of misconduct, as established before the proposal was submitted to it. Eismea maintains that, having regard to those elements, the fact that, at the time of submission of the proposal, none of the articles contained any manipulated images and that the CEPN delivered its opinion one year after the proposal was submitted, is not conclusive.
         
      
            89
         
         
            Eismea asserts that at no time, be it during the proposal or grant evaluation phase or after the grant award, did the applicant inform EASME that the publications included in its proposal and the technology on which the P‑TEV project relied had been the subject of research misconduct and breach of ethics, which clearly runs counter to the trust-based approach inherent to a project submitted in the context of the Horizon 2020 Framework Programme and constituted a breach of Article 17.2 of the grant agreement. In that regard, it observes that the applicant signed a declaration of honour at the beginning of the grant preparation phase, in which it confirmed that it had not made false declarations in supplying the information required as a condition of participation in the grant award procedure and that it had not failed to supply that information.
         
      
            90
         
         
            According to Eismea, had the information concerning the fact that the applicant had relied on work affected by misconduct been known to EASME, the P‑TEV project would not have been selected for funding. By concealing A’s research misconduct, the applicant effectively misled EASME and undermined the trust-based approach.
         
      
            91
         
         
            Eismea further observes that the applicant acknowledged the findings of professional misconduct in the articles which it knowingly chose to mention in its proposal only once EASME had confronted it during the pre-information procedure stage.
         
      
            92
         
         
            The applicant’s conduct therefore amounts to a breach of the obligation to respect ethical principles set out in Article 34 of the grant agreement, which, according to the Code of Conduct for Research Integrity of the European Federation of Academies of Sciences and Humanities – All European Academies, ALLEA and the European Science Foundation, may be regarded as professional misconduct proven by any means, within the meaning of Article 50.3.1(f) of the grant agreement.
         
      
            93
         
         
            As a preliminary point, it should be noted that, as is apparent from the declaration of honour signed on behalf of the applicant by its Director-General, on 18 May 2017, the applicant confirmed that it was not in one of the situations which precluded it from receiving EU subsidies within the meaning of Article 131(5) of Regulation No 966/2012, emphasising the following circumstances:
            ‘…
            
                     –
                  
                  
                     it (or persons having powers of representation, decision making or control over it) have not been convicted of an offence concerning their professional conduct by a judgment of a competent authority of a Member State which has the force of res judicata;
                  
               
                     –
                  
                  
                     has not been guilty of grave professional misconduct proven by any means which the [EASME] can justify, including by decisions of the [European Investment Bank (EIB)] and international organisations;
                  
               …’
         
      
            94
         
         
            It should also be noted that, in accordance with Article 50.3.1(l) of the grant agreement, EASME may terminate that agreement if the beneficiary or any natural person who has the power to represent or take decisions on its behalf has, in the award procedure or under the agreement, committed substantial errors, irregularities, fraud or serious breach of its contractual obligations, including improper implementation of the action, submission of false information, failure to provide required information or breach of the ethical principles set out in Article 34 of that agreement.
         
      
            95
         
         
            It should be noted that, in the present case, EASME did not base the termination of the grant agreement on Article 50.3.1(l) of that agreement, but on Article 50.3.1(f) thereof, under which EASME may terminate the agreement if ‘the beneficiary (or a natural person who has the power to represent or take decisions on its behalf) has been found guilty of professional misconduct, proven by any means’.
         
      
            96
         
         
            It should be borne in mind that EASME initiated two successive procedures for the termination of the grant agreement. The first termination procedure was initiated by the first pre-information letter of 18 October 2018. In that letter, EASME thus stated that, in the light of persisting failures to comply with ethics obligations identified by the panel of ethics experts following the third ethics check, it considered that ‘[the applicant had] committed [a] serious breach of obligations under the Agreement or during the award procedure’ (paragraph 33 above).
         
      
            97
         
         
            The second procedure for termination of the grant agreement was initiated by the second pre-information letter of 18 February 2019. In that second letter, EASME expressly stated that, after having examined the applicant’s observations on the first pre-information letter, it maintained its intention to terminate the grant agreement ‘but on different grounds’. In that letter, after giving details of those ‘different grounds’, EASME stated that it considered that the grant agreement should be terminated on the basis of Article 50.3.1(f) of that agreement (paragraph 36 above).
         
      
            98
         
         
            It follows that, contrary to what Eismea claims, the arguments based on alleged failures by the applicant to comply with ethical principles, referred to in the report drawn up following the third ethics check and mentioned by EASME in the first pre-information letter, are irrelevant for the purpose of assessing the merits of the termination of the grant agreement.
         
      
            99
         
         
            It should also be noted that the ground relied on by EASME to justify the termination of the grant agreement on the basis of Article 50.3.1(f) of that agreement was, without any ambiguity, the fact that A had been found guilty of professional misconduct and not, as Eismea maintained in its pleadings and at the hearing, the fact that the applicant knowingly included in the proposal for the P‑TEV project work vitiated by research misconduct and, therefore, misled EASME regarding its capacity to implement properly the project or that it had knowingly relied, in the implementation of the project, on A’s work which had been found to be vitiated by research misconduct.
         
      
            100
         
         
            The argument put forward by Eismea before the Court is thus contradicted by the content of the second pre-information letter. In that letter, EASME first noted that A, ‘co-founder of the [applicant]’, had been found guilty of grave professional misconduct by the CEPN, and next stated that two publications presented as the most relevant scientific publications pertaining to the content of the P‑TEV project contained evidence of the misconduct in question and noted the CEPN’s strong criticisms of the functioning of A’s research group (paragraph 36 above). Next, it then stated that ‘these findings put in question the overall professional integrity of [A] and thus the operational capacity of the [applicant] to implement properly the project and its compliance with the non-exclusion requirements set out by the EU Financial Regulation’ (paragraph 36 above).
         
      
            101
         
         
            In that context, it is particularly noteworthy that the second pre-information letter referred to a possible breach by the applicant of its non-exclusion obligations on account of the situation of its co-founder, which, had it been demonstrated, could have justified terminating the grant agreement on the basis of Article 50.3.1(l) of that agreement, but that, by contrast, it did not contain any evidence to show that the applicant had itself been guilty of professional misconduct.
         
      
            102
         
         
            It must therefore be held that, in the second pre-information letter, EASME considered that it was A’s professional misconduct that called into question the applicant’s capacity to implement the P‑TEV project and its compliance with its non-exclusion obligations, and not some misconduct on the part of the applicant itself.
         
      
            103
         
         
            That finding is also apparent from the very wording of the conclusion appearing in the list of contradictory arguments in the termination letter, which reads as follows:
            ‘In this particular case, the objective ground [set out in Article 50.3.1(f)] is confirmed. [A] was a co-founder of the beneficiary who has been found guilty of professional misconduct by the CEPN.’
         
      
            104
         
         
            In that regard, it should be noted that, under Article 50.3.1(f) of the grant agreement, EASME may terminate the agreement if ‘the beneficiary (or a natural person who has the power to represent or take decisions on its behalf) has been found guilty of professional misconduct, proven by any means’.
         
      
            105
         
         
            First, it is apparent from the first page of the grant agreement that the beneficiary of that agreement was not A, but the applicant.
         
      
            106
         
         
            Second, it is apparent from the evidence in the file, which is not disputed by Eismea, that, first, the employment contract of A, who was employed on a part-time basis by the applicant as Chief Scientific Officer since September 2015, was suspended, without pay, in March 2016 and terminated in December 2016, second, A has not been a member of the applicant’s board of directors since July 2015 and, third, A’s shareholding in the applicant’s capital was, at the time the application for the grant for the P‑TEV project was submitted and until A sold all her shares at the end of 2018, inferior to the threshold allowing, under Swedish company law, decisions to be taken on behalf of the applicant.
         
      
            107
         
         
            It is true that Eismea argued, for the first time at the hearing, that, contrary to the applicant’s assertions, the applicant had not cut all its links with A as of April 2016, on the ground that she had been appointed as a scientific supervisor in a ‘Marie Skłodowska-Curie’ action under the Horizon 2020 Framework Programme in which the applicant participated. First of all, it should be observed that that statement illustrates the contradictory nature of Eismea’s arguments before the Court, in that, moreover, it maintains that EASME based the termination of the grant agreement on grave professional misconduct allegedly committed by the applicant and not by a natural person who has the power to represent or act on its behalf. Next, it should be noted that Eismea did not produce any evidence in support of its assertion at the hearing. Finally, it must be noted that Eismea’s assertion is not, in any event, capable of demonstrating that A represented or acted on behalf of the applicant in the P‑TEV project.
         
      
            108
         
         
            It must therefore be held that A did not fall within the category of persons referred to in Article 50.3.1(f) of the grant agreement, in that she was neither the beneficiary of the grant nor a person acting in the name of or on behalf of the beneficiary while or after she had committed the acts which the Vice-Chancellor of Gothenburg University found to be research misconduct on the basis of the findings of the CEPN’s investigation.
         
      
            109
         
         
            Therefore, it must be concluded that the termination of the grant agreement by EASME under Article 50.3.1(f) of that agreement, on the ground set out in the termination letter of 19 April 2019, was unfounded.
         
      
            110
         
         
            That conclusion cannot be called into question by the other arguments put forward by Eismea in the present case.
         
      
            111
         
         
            First, it should be noted that Eismea’s argument that the applicant itself committed professional misconduct by knowingly concealing misconduct in the research carried out by A, when submitting its proposal for the P‑TEV project, in breach of the obligation to respect the ethical principles laid down in Article 34 of the grant agreement or, again, that the applicant committed grave professional misconduct by knowingly relying in the performance of the P‑TEV project on A’s work, which had been found to be affected by research misconduct, constitutes a new ground for terminating the grant agreement. If Eismea were to be allowed to amend, at the stage of the judicial proceedings, the grounds on which it decided to terminate the grant agreement, the effectiveness of the termination procedure provided for in Article 50.3.2 of that agreement and the rights which it guarantees to beneficiaries would necessarily be undermined.
         
      
            112
         
         
            Second, and in any event, it should be noted that Eismea’s line of argument is based on the incorrect premiss that the applicant knowingly concealed from it the research misconduct affecting the work cited in the proposal relating to the P‑TEV project.
         
      
            113
         
         
            Thus, it should be noted that while the applicant, on its own admission, was aware of the accusations concerning A as early as 3 March 2016 and, consequently, suspended the contract of employment of [A] before ultimately terminating it at the end of September of that year and cut all contact with her research group, the fact remains that, at the time of the submission of the P‑TEV project, the CEPN’s investigation was still ongoing and the official finding of research misconduct by A and her working group was made by the Vice-Chancellor of the University of Gothenburg, on the basis of the CEPN’s findings made public in March 2018, only in June 2018. It follows that Eismea cannot criticise the applicant for having concealed from it the errors in question. The fact that the applicant itself stated that it distanced itself at an early stage of the implementation of the P‑TEV project from A’s research by producing its own preclinical data, in view of the controversies surrounding A, is not, in itself, capable of calling that finding into question.
         
      
            114
         
         
            Furthermore, it should also be noted that Eismea’s assertion that the articles presented as the most relevant for the content of the P‑TEV project were affected by research misconduct at the time when the proposal relating to the P‑TEV project was submitted to it is erroneous. Thus, contrary to what was stated in the second pre-information letter and as Eismea acknowledges, the EBiomedicine article was not the subject of a finding of research misconduct by the CEPN, which did not note inconsistencies justifying its inclusion in the scope of its investigation. Likewise, contrary to what was also stated in the second pre-information letter, it is apparent from the CEPN’s report that, although the article of the Lancet included an incorrect magnified image giving rise to doubts as to the reliability of its results, it was not the subject of a finding of research fraud. Finally, as regards the article in the Journal of Vascular Surgery, which was the subject of a finding of research misconduct by the CEPN, Eismea does not dispute that, on the date on which the proposal relating to the P‑TEV project was submitted to it, an erratum relating to the image table which justified the finding of research misconduct had already been published. Furthermore, it should be noted that Eismea adduces no evidence in support of the claim that it was because of the shortcomings in the research, identified by the CEPN in relation to A’s work, that the Journal of Vascular Surgery subsequently removed the article in question by invoking its editorial policy.
         
      
            115
         
         
            In the light of the foregoing considerations, the first plea in law must be upheld and, therefore, the action must be dismissed in its entirety, without it being necessary to examine the second plea in law, alleging infringement of the principle of proportionality.
         
      
      Costs
   
   
            116
         
         
            Under Article 134(1) of the Rules of Procedure, the unsuccessful party is to be ordered to pay the costs if they have been applied for in the successful party’s pleadings. Since Eismea has been unsuccessful, it must be ordered to pay the costs, in accordance with the form of order sought by the applicant.
         
       
         
            On those grounds,
            THE GENERAL COURT (Ninth Chamber)
            hereby:
         
       
         
            
                     
                        1.
                     
                  
                  
                     
                        Declares that the termination by the Executive Agency for Small and Medium-sized Enterprises of the grant agreement for the project ‘Personalised Tissue Engineered Veins as the first Cure for Patients with Chronic Venous Insufficiency – P‑TEV’, bearing reference 778620, is invalid;
                     
                  
               
       
         
            
                     
                        2.
                     
                  
                  
                     
                        Orders the European Innovation Council and SMEs Executive Agency to pay the costs.
                     
                  
               
       
            
               
                  
                     
                        Costeira
                     
                     
                        Kancheva
                     
                     
                        Perišin
                     
                  
                  Delivered in open court in Luxembourg on 2 March 2022.
                  
                     
                        E. Coulon
                        Registrar
                     
                     
                        M. van der Woude
                        President
                     
                  
               
            
         (
         *1
      )	Language of the case: English.