Glencore Grain Ltd and Compagnie Continentale (France) SA v Commission of the European Communities.
Date: 2002-11-07
62 As regards the complaint that the Court of First Instance failed to check whether the Commission had followed its usual administrative practice and had had regard for the rights of the defence, suffice it to observe that that complaint was not raised at first instance. To allow a party to put forward for the first time before the Court of Justice a plea in law which it has not raised before the Court of First Instance would be to allow it to bring before the Court, whose jurisdiction in appeals is limited, a dispute of wider ambit than that which came before the Court of First Instance. In an appeal the Court's jurisdiction is confined to review of the findings of law on the pleas argued before the Court of First Instance (see, inter alia, Case C-136/92 P Commission v Brazzelli Lualdi and Others [1994] ECR I-1981, paragraph 59, and Case C-7/95 P Deere v Commission [1998] ECR I-3111, paragraph 62).
65 Under Article 225 EC and the first paragraph of Article 51 of the EC Statute of the Court of Justice the latter thus has no jurisdiction to establish the facts or, in principle, to examine the evidence which the Court of First Instance accepted in support of those facts. Provided that the evidence has been properly obtained and the general principles of law and the rules of procedure in relation to the burden of proof and the taking of evidence have been observed, it is for the Court of First Instance alone to assess the value which should be attached to the evidence produced to it (Case C-185/95 P Baustahlgewebe v Commission [1998] ECR I-8417, paragraph 24). That appraisal does not therefore constitute, save where the clear sense of the evidence has been distorted, a point of law which is subject as such to review by the Court of Justice.
77 It is true that the telefax sent by Exportkhleb to the Commission on 9 March 1993 shows that, whilst the prices offered ranged from USD 155 to USD 158.50, the price ultimately agreed with Exportkhleb was USD 155 in respect of all the undertakings.
78 Nevertheless, that shows, at most, that negotiations took place between Exportkhleb and each applicant before each of the contracts was concluded. On the other hand, also taking into account the foregoing, it does not show that the price in question was the result of at least three undertakings independent of each other having competed for each of the contracts to be awarded.'
The claim for damages
36 Having rejected the pleas in law put forward in support of the applications for annulment, the Court of First Instance concluded, at paragraph 126 of the judgment under appeal, that Glencore and Compagnie Continentale had failed to prove `any wrongful conduct on the part of the Commission'. Consequently, it rejected the application for compensation for the material damage alleged.
37 The actions in Cases T-491/93, T-494/93 and T-61/98 were therefore dismissed in their entirety.
The appeals
38 By their appeals the appellants claim that the Court should set aside the judgment under appeal, annul the contested decision, refer the cases back to the Court of First Instance to rule on the claims for damages brought before it and order the Commission to pay the costs, including those at first instance.
39 The Commission contends that the appeals should be dismissed and the appellants ordered to pay the costs.
40 In support of their appeals the appellants argue, first of all, that the Court of First Instance erred in law by restricting its review to the single condition relating to observance of the principle of free competition in concluding the contracts and by finding that the riders to the contracts were concluded in breach of that condition. Next, they complain that the Court failed to apply Article 68(1) of its Rules of Procedure by failing to summon witnesses. Lastly, they maintain that the Court was wrong to deny them the damages they sought by way of compensation.
Restriction of the review to the condition relating to free competition
Arguments of the parties
41 The appellants maintain that the Court of First Instance erred in law by finding, at paragraph 57 of the judgment under appeal, that the condition relating to the price agreed and the condition concerning adherence to the precepts of free competition in the conclusion of the contracts were cumulative. They take the contrary view that the two conditions are inextricably linked, the condition relating to prices on the international markets making it possible to check whether the condition relating to free competition has been complied with, those prices reflecting, according to the applicants, the results of world-wide free and fair competition.
42 The Commission submits that it is clear from Article 5 of Regulation No 1897/92 that the two conditions are different in nature, the condition relating to free competition concerning the procedure for the conclusion of the contracts, and the condition relating to international market prices concerning the content of the contracts. The Court thus rightly considered them to be cumulative.
Findings of the Court
43 Under Article 5(1) and (2) of Regulation No 1897/92 two conditions must be satisfied in order for the Commission to be able to approve the funding of the purchases to be made by the Republics of the former Soviet Union and the supply of the goods to them. Article 5 requires that `the contract [is] awarded following a procedure guaranteeing free competition' and that `the contract offers the most favourable terms of purchase in relation to the price normally obtained on the international markets'.
44 As has been pointed out by the Commission and by the Advocate General, in point 50 of his Opinion, it is clear from the wording of Article 5(1) and (2) of Regulation No 1897/92 that, by contrast with the condition relating to international market prices, the condition relating to free competition must be understood as a procedural, rather than a substantive rule.
45 Thus, having rightly taken the view that the two conditions mentioned in paragraph 43 of the present judgment were cumulative, the Court of First Instance was entitled to restrict its review to the single condition relating to free competition.
46 The first plea in law must therefore be rejected as unfounded.
The findings of the Court of First Instance on observance of the principle of free competition
Arguments of the parties
47 The appellants complain that the Court of First Instance found that it had not been shown that the Commission had made any error in concluding that the principle of free competition had not been observed when the riders to the contracts were concluded.
48 This plea has four parts.
49 First of all, according to the appellants, the Court was wrong to find, at paragraph 68 of the judgment under appeal, that the condition relating to observance of the principle of free competition required, for each contract, that offers be submitted from at least three independent undertakings. Neither Decision 91/658 nor Regulation No 1897/92 imposes such a requirement.
50 The Commission, on the other hand, submits that that requirement is indeed set out in Article 5(1) of Regulation No 1897/92, the seventh indent of Article 7 of the Memorandum of Understanding and Clause 5.1(a), read together with Schedule 2-A, of the loan agreement.
51 Secondly, the appellants argue that the Court of First Instance erred in holding, at paragraph 67 of the judgment under appeal, that `[t]he legality of the decision must be assessed in the light of all the rules needing to be complied with by the Commission in the matter, including those relating to the agreements concluded with the Russian authorities'. To make such an assertion is tantamount to making contractual conditions contained in unpublished documents capable of operating against third parties.
52 According to the Commission, it was for the Court of First Instance to make an objective assessment of the legality of the contested decision in the light of all the rules needing to be complied with by the Commission, including those contained in the Memorandum of Understanding.
53 Thirdly, the appellants complain that the Court failed to take account of the Commission's administrative practice and the obligations arising therefrom and of the rights of the defence. They maintain that the Commission ought, in accordance with its administrative practice, to have requested from them other documents in addition to the amended contracts and ought to have conducted a more thoroughgoing enquiry, rather than simply wait passively for information to be supplied to it.
54 The Commission maintains that this plea, unconnected with any issue of public policy, was not put forward at first instance and must therefore be regarded as a new plea and rejected as inadmissible. In any event, the appellants have failed to show in what way the Commission departed from its usual administrative practice or failed to have regard for the rights of the defence.
55 Fourthly, the appellants argue that the Court of First Instance's evaluation of the evidence of observance of the principle of free competition was inaccurate. The Court ought to have taken account of the particular characteristics of the tenders at issue, which were needed to answer an emergency. The requirements to be filled were so enormous that no single trader could ever have satisfied them. The riders ought therefore to have been regarded as parallel to and connected with the contracts, rather than separate from them as the Court found in paragraphs 68 and 74 of the judgment under appeal. Exportkhleb did indeed solicit offers from more than three suppliers: it called eleven cereal traders, all of them competing in the wheat market, to a meeting on 22 and 23 February 1993 in Brussels. Seven of the eleven put forward an offer, five of those entered into simultaneous contracts with Exportkhleb and four traders refrained from making any offer, for reasons unknown. Lastly, Exportkhleb managed to ensure that the riders to the contracts were concluded at the lowest of the prices offered by those traders. All of the foregoing is evidence that there was free competition. That being so, the appellants take the view that the Court of First Instance ought to have inferred from the telefax sent by Exportkhleb to the Commission on 9 March 1993, which mentioned that seven offers had been received from cereal traders as a result of invitations addressed to eleven traders, that the condition relating to free competition had been satisfied.
56 According to the Commission, it is clear from paragraph 74 of the judgment under appeal that the Court of First Instance reviewed the telefax of 9 March 1993 thoroughly and concluded that it provided `no proof that each rider was concluded after competing offers had been solicited from at least three undertakings independent of each other'.
Findings of the Court
57 As regards the obligation to have competing offers from at least three undertakings in order to ensure compliance with the condition relating to free competition, suffice it to observe that that condition is explicitly set out in Article 5(1) of Regulation No 1897/92: `The contract [must be] awarded following a procedure guaranteeing free competition. To this end, the purchasing organisations of the Republics shall, when selecting supplier firms within the Community, seek at least three offers from firms independent of each other and shall, when selecting supplier firms in the non-Community supplier countries, seek at least three offers from firms independent of each other ...'.
58 In this case, however, at paragraph 68 of the judgment under appeal, the Court of First Instance found, in the exercise of its exclusive jurisdiction, that `[t]he riders concluded with the various Community undertakings constitute, in relation to one another, specific contracts, each of them requiring the Commission's authorisation'. It follows that the Court was right to hold that, for each of the contracts, three independent offers had to be sought and, as it found at paragraph 74 of the judgment under appeal, that had not been the case.
59 The first part of the second plea must therefore be dismissed as unfounded.
60 As regards the consideration given by the Court of First Instance, in the context of its review of the legality of the contested decision, to the contracts concluded with the Russian authorities, it is evident that the obligations arising from the Memorandum of Understanding, or even from the loan agreement, themselves constitute the implementation of Decision 91/658 and Regulation No 1897/92, both of which have been published. The conditions relating to international market prices and free competition, which are at the centre of the present dispute, are set out in Article 5 of Regulation No 1897/92.
61 Consequently, the second part of the second plea must also be rejected as being of no effect.
62 As regards the complaint that the Court of First Instance failed to check whether the Commission had followed its usual administrative practice and had had regard for the rights of the defence, suffice it to observe that that complaint was not raised at first instance. To allow a party to put forward for the first time before the Court of Justice a plea in law which it has not raised before the Court of First Instance would be to allow it to bring before the Court, whose jurisdiction in appeals is limited, a dispute of wider ambit than that which came before the Court of First Instance. In an appeal the Court's jurisdiction is confined to review of the findings of law on the pleas argued before the Court of First Instance (see, inter alia, Case C-136/92 P Commission v Brazzelli Lualdi and Others [1994] ECR I-1981, paragraph 59, and Case C-7/95 P Deere v Commission [1998] ECR I-3111, paragraph 62).
63 Consequently, the third part of the second plea must be rejected as inadmissible.
64 Coming to the fourth part of the second plea, it is appropriate to point out that the appellants seek by their arguments to challenge the determination and assessment of the facts which led the Court of First Instance to find that the Commission was entitled to take the view that the condition relating to observance of the precepts of free competition had not been satisfied.
65 Under Article 225 EC and the first paragraph of Article 51 of the EC Statute of the Court of Justice the latter thus has no jurisdiction to establish the facts or, in principle, to examine the evidence which the Court of First Instance accepted in support of those facts. Provided that the evidence has been properly obtained and the general principles of law and the rules of procedure in relation to the burden of proof and the taking of evidence have been observed, it is for the Court of First Instance alone to assess the value which should be attached to the evidence produced to it (Case C-185/95 P Baustahlgewebe v Commission [1998] ECR I-8417, paragraph 24). That appraisal does not therefore constitute, save where the clear sense of the evidence has been distorted, a point of law which is subject as such to review by the Court of Justice.
66 In the present case the Court of First Instance began by finding, at paragraphs 69 and 70 of the judgment under appeal, that the telex sent by Exportkhleb to the appellants inviting them to attend a meeting in Brussels on 22 and 23 February 1993, `which was worded in a general way and which did not state, in particular, the quantities to be supplied or the delivery terms', could not be regarded as proof that each undertaking, prior to concluding the riders, had been required to compete with at least two undertakings independent of each other.
67 Next, the Court noted, at paragraph 71 of the judgment under appeal, that extracts from the trade press produced by the appellants also failed to provide that proof.
68 Lastly, as regards the telefax which Exportkhleb sent to the Commission on 9 March 1993 in order to inform the Commission of the changes made to the contracts, the Court of First Instance held, at paragraph 74 of the judgment under appeal, that that too failed to show that each rider had been concluded after competing offers had been solicited from at least three undertakings independent of each other. In this connection, the Court held that `[i]n respect of each contract, mention was made only of the bid submitted by the undertaking to which the contract was awarded and the terms agreed following the negotiations between Exportkhleb and the undertaking in question. In relation to each of those contracts, no indication is given of at least two other responses, even negative ones, having been given to the invitations to submit offers. The telefax merely states that each undertaking had concluded with Exportkhleb a contract corresponding to the tonnage still to be delivered by it as at the date of the meeting in Brussels. In actual fact, although offers were indeed annexed to the telefax of 9 March 1993, these were separate offers for separate contracts, and not for one and the same contract.'
69 The Court of First Instance also stated, at paragraph 78 of the judgment under appeal, that although the price agreed with Exportkhleb was the lowest offered, that shows, at most, that `negotiations took place between Exportkhleb and each applicant before each of the contracts was concluded'. It does not show that the price was `the result of at least three undertakings independent of each other having competed for each of the contracts to be awarded'.
70 The appellants have thus failed to show in what way those findings indicate that the clear sense of the evidence submitted to the Court was distorted.
71 Consequently, the fourth part of the second plea must also be rejected as inadmissible.
72 In view of the foregoing, the second plea must be rejected in its entirety.
Infringement of Article 68(1) of the Rules of Procedure of the Court of First Instance
Arguments of the parties
73 The appellants maintain that the Court of First Instance infringed Article 68(1) of its Rules of Procedure by failing to summon witnesses such as Exportkhleb or one or more of the traders who attended the meeting in Brussels on 22 and 23 February 1993. Had it heard witness evidence, the Court would have been in a position to see that those traders had been competing with a considerable number of other traders.
74 The Commission argues that there is no indication in the documents before the Court that the appellants asked the Court of First Instance to call witnesses. In any event, the appellants failed to state precisely about what facts and for what reasons the witnesses should be examined, as is required by the third subparagraph of Article 68(1) of the Rules of Procedure of the Court of First Instance.
75 The Commission adds that Article 68(1) confers a discretion on the Court of First Instance in deciding whether or not it is appropriate to call witnesses. Its decision is amenable to challenge in the context of an appeal only if it can be shown that not calling witnesses was manifestly unreasonable.
Findings of the Court
76 Under Article 68(1) of the Rules of Procedure of the Court of First Instance:
`The Court of First Instance may, either of its own motion or on application by a party, and after hearing the Advocate General and the parties, order that certain facts be proved by witnesses. The order shall set out the facts to be established.
The Court of First Instance may summon a witness of its own motion or on application by a party or at the instance of the Advocate General.
An application by a party for the examination of a witness shall state precisely about what facts and for what reasons the witness should be examined.'
77 It must be pointed out, first, that the Court of First Instance cannot be required to call witnesses of its own motion, since Article 66(1) of its Rules of Procedure makes clear that it is to prescribe such measures of inquiry as it considers appropriate by means of an order setting out the facts to be proved (see Baustahlgewebe v Commission, cited above, paragraph 77). The Court of First Instance is thus the sole judge of whether it is necessary to supplement the information available to it concerning the cases before it (see, inter alia, Case C-315/99 P Ismeri Europa v Court of Auditors [2001] ECR I-5281, paragraph 19).
78 Moreover, whether or not the evidence before it is convincing is a matter to be appraised by it alone and is not subject to review by the Court of Justice on appeal, as has been pointed out in paragraph 65 of the present judgment, except where the clear sense of the evidence submitted has been distorted or the substantive inaccuracy of the Court of First Instance's findings is apparent from the documents in the case-file (Ismeri Europa v Court of Auditors, cited above, paragraph 19).
83 Suffice it to observe that the Community can incur non-contractual liability only if, inter alia, the acts alleged against the institution in question were unlawful (see, inter alia, Case C-146/91 KYDEP v Council and Commission [1994] ECR I-4199, paragraph 19).