Atlanta AG and others v Commission of the European Communities and Council of the European Union.
Date: 1999-10-14
19 By documents lodged at the Registry of the Court of Justice between 29 June 1993 and 12 July 1993, the Republic of the Ivory Coast, the company Terres Rouges Consultant, the company España et fils and the company Cobana Import sought leave to intervene in this case in support of the defendants.
27 Between 8 December 1994 and 6 January 1995, in response to a request from this Court, the parties submitted their observations on the question as to whether the judgment in Case C-280/93 Germany v Council had any consequences for this proceeding. Between 4 and 16 January 1996, in response to a request from this Court, the parties submitted their observations on the question as to whether the judgment in Case C-466/93 Atlanta Fruchthandelsgesellschaft (II) v Bundesamt für Ernährung und Forstwirtschaft had any consequences for this proceeding.'
The contested judgment
5 At paragraph 28 of the contested judgment the Court of First Instance found that, in view of the order made by the Court of Justice on 21 June 1993, dismissing the applicants' action as inadmissible in so far as it sought annulment of provisions of Regulation No 404/93, it would consider only the claims for damages submitted by the applicants.
6 Paragraph 34 of the contested judgment states that, in support of their claims for damages, the applicants advanced 14 pleas in law to show that the Council and Commission had acted unlawfully. The Court of First Instance added that, in their observations as to the consequences to be drawn from the judgment in Case C-280/93 Germany v Council and in their reply, the applicants had stated that they maintained all the pleas advanced in their application but had concentrated on the following four: breach of the principle of non-discrimination; breach of the principle of protection of legitimate expectations; breach of the fundamental freedom to pursue an economic activity and infringement of the rights of the defence. It can be seen also from the same paragraph of the contested judgment that, in their reply and in their observations of 16 January 1996 as to the consequences to be drawn from the judgment in Case C-466/93 Atlanta Fruchthandelsgesellschaft, the applicants had also submitted that, even if that Court were to hold that the provisions in question of Regulation No 404/93 were valid, Atlanta would nevertheless be entitled to damages under the second paragraph of Article 215 of the EC Treaty (now the second paragraph of Article 288 EC).
7 The Court of First Instance, in the contested judgment, dismissed the applicants' action.
8 In its appeal Atlanta is essentially disputing the line of argument followed by that Court in relation to the pleas referred to below.
9 Dealing first with the plea alleging liability on the part of the Council for a lawful act, the Court of First Instance observed:
`39 Both Article 42(2) of the Rules of Procedure of the Court of Justice, before which the action was first brought, and Article 48(2) of the Rules of Procedure of this Court provide that no new plea in law may be introduced in the course of the proceedings unless it is based on matters of law or of fact which come to light in the course of the procedure. It is settled case-law that a judgment of the Court of Justice confirming the validity of an act of the Community institutions cannot be regarded as a factor allowing a new legal ground to be introduced, since such acts are presumed to be valid and the judgments in Case C-280/93 Germany v Council and Case C-466/93 Atlanta Fruchthandelsgesellschaft merely confirmed the law as known to the applicants at the time when they brought their action (see Case 11/81 Dürbeck v Commission [1982] ECR 1251, paragraph 17).
40 In the present case, as the applicants have raised no matter justifying the introduction of a new plea as to the Council's liability for a lawful act, the Court finds that this plea is out of time and therefore inadmissible.'
10 On the plea alleging breach of the principle of non-discrimination, the Court of First Instance observed:
`46 It is settled case-law that the principle of non-discrimination is one of the fundamental principles of Community law (see Case C-280/93 Germany v Council, paragraph 67). This principle requires that comparable situations should not be treated in a different manner unless the difference in treatment is objectively justified. As was found in Case C-280/93 Germany v Council, the situations of the categories of traders amongst whom the tariff quota was divided were not comparable before Regulation No 404/93 was adopted. Those categories of traders were also affected differently by the measures adopted and the Court of Justice specifically recognised that traders who had traditionally been supplied by third country bananas would now find their import possibilities restricted. However, the Court considered that such a difference in treatment appeared to be inherent in the objective of integrating previously compartmentalised markets and in providing a guarantee of disposal of Community production and traditional ACP production (paragraph 74). The Court also found that the machinery for dividing the tariff quota among the various categories of traders was intended to encourage traders in Community and traditional ACP bananas to obtain supplies of third country bananas and to encourage importers of third country bananas to distribute Community and ACP bananas (paragraph 83). It thus recognised that Regulation No 404/93 was not intended to establish identical treatment between the various categories of traders.
47 The Court also found that it was necessary for Regulation No 404/93 to restrict the volume of imports of third country bananas into the Community in connection with the introduction of a common organisation of the market (paragraph 82).
48 Finally, the Court held that it had not been demonstrated that the Council adopted measures which were manifestly inappropriate for achieving the objective pursued by Regulation No 404/93 (paragraph 95).
49 It should be added that in Case C-466/93 Atlanta Fruchthandelsgesellschaft the Court of Justice held that the difficulties in applying Regulation No 404/93 to which the applicants had referred could not affect the validity of the regulation (paragraph 11). Similarly, the consequences in practice of the adoption of Regulation No 404/93 to which the applicants refer cannot be taken into consideration by this Court in this case, since it must examine the question of the legality of Regulation No 404/93 only in the light of the pleas advanced by the applicants.
50 The Court therefore finds that the applicants have not proved that the defendant institutions failed to observe the principle of non-discrimination. This plea must therefore be dismissed as unfounded.'
11 In relation to the plea alleging breach of the principle of protection of legitimate expectations, the Court of First Instance found:
`55 The principle of protection of legitimate expectations is one of the fundamental principles of the Community legal order. Nevertheless, traders cannot have a legitimate expectation that an existing situation which is capable of being altered by the Community institutions in the exercise of their discretionary power will be maintained. This is particularly true in an area such as the common organisation of the markets the objectives of which require constant adjustments in order to meet changes in economic circumstances (see, in particular, Joined Cases C-133/93, C-300/93 and C-362/93 Crispoltoni [1994] ECR I-4863, paragraph 57). Even though Germany did not rely on the principle of protection of legitimate expectations as one of its pleas in Case C-280/93 Germany v Council, the Court of Justice did confirm in that judgment that a trader could not claim an acquired right or even a legitimate expectation to the effect that an existing situation which was capable of being altered by decisions taken by the Community institutions within the limits of their discretionary power would be maintained (paragraph 80).
56 Moreover, the possibility of a breach of that principle was raised in the reference made by the national court in Case C-466/93 Atlanta Fruchthandelsgesellschaft. Nevertheless, the Court of Justice, when finding that the national court had not raised any grounds of invalidity such as to affect the assessment of the validity of Regulation No 404/93, considered that there had been no such breach.
57 In the absence of specific assurances given by the administration, no one may claim a breach of the principle of protection of legitimate expectations (see Case T-571/93 Lefebvre and Others v Commission [1995] ECR II-2379, paragraph 72). The applicants have adduced no evidence of such assurances either in the Commission's previous practice or in the specific context of the introduction of the common organisation of the markets in question here.
58 It follows that the applicants have not established a breach of the principle of protection of legitimate expectations in the present case and that the plea of breach of this principle must be dismissed.'
12 As regards the plea of breach of the fundamental freedom to pursue an economic activity, the Court of First Instance observed:
`62 It is settled case-law that freedom to pursue an economic activity is one of the general principles of Community law. It is not, however, an absolute prerogative and must be considered in relation to its social function. It confers the assurance that a trader will not be arbitrarily deprived of the right to pursue his activity but it does not guarantee him a particular volume of business or a specific share of a given market. The guarantees accorded to traders cannot in any event be extended to protect mere commercial interests or opportunities, the uncertainties of which are part of the very essence of economic activity (see Case 4/73 Nold v Commission [1974] ECR 491, paragraph 14). It follows that restrictions may be placed on the freedom to pursue an economic activity, particularly in a common market organisation, provided that they are required in order to meet objectives of general interest pursued by the Community and that they do not constitute a disproportionate and intolerable interference which entrenches upon the very substance of the right guaranteed (see Case 265/87 Schräder v Hauptzollamt Gronau [1989] ECR 2237, paragraph 15).
63 In this regard, it should be noted that the Court of Justice has already held in Case C-280/93 Germany v Council that the restriction imposed by Regulation No 404/93 on the freedom of traditional traders in third country bananas to pursue their trade or business met objectives of general Community interest and did not impair the very substance of that right (paragraph 87). Again, it should be recalled that in Case C-466/93 Atlanta Fruchthandelsgesellschaft the Court observed that, while the applicants had referred to difficulties in applying Regulation No 404/93 and the resulting consequences for their activities, such circumstances could not affect the validity of the regulation (paragraph 11).
64 The plea of breach of the fundamental right to pursue an economic activity must therefore be dismissed as unfounded.'
13 On the plea of breach of the rights of the defence, the Court of First Instance held:
`70 Contrary to the applicants' argument, the right to be heard in an administrative procedure affecting a specific person cannot be transposed to the context of a legislative process leading to the adoption of general laws. The judgment in CB and Europay v Commission, cited above, followed a line of settled authority in competition law, according to which undertakings suspected of having infringed rules of the Treaty must be heard before any measures, and particularly sanctions, are taken against them. However, that case-law must be considered in its proper context and should not be extended to the context of a Community legislative process culminating in the enactment of legislation involving a choice of economic policy and applying to the generality of the traders concerned.
71 In the context of a procedure for the adoption of a Community act based on an article of the Treaty, the only obligations of consultation incumbent on the Community legislature are those laid down in the article in question. In its judgment in Case 138/79 Roquette Frères v Council [1980] ECR 3333, the Court of Justice held that the obligation to consult the Parliament, as laid down in various places in the Treaty, reflects at Community level the fundamental democratic principle that the people should take part in the exercise of power through the intermediary of a representative assembly.
72 Representation of the various groups of economic and social life also takes place in the Community's legislative process in the form of consultation of the Economic and Social Committee. In the present action, both the Parliament and that committee were in fact consulted before Regulation No 404/93 was adopted, as provided for in the Treaty.
73 The Court considers that, contrary to the thesis advanced by the applicants, the Commission was under no further obligation to consult the various categories of traders concerned by the Community market in bananas. It is quite feasible for the Community legislature to take into consideration the particular situation of distinct categories of traders without hearing them all individually. The Court recalls in this regard that in Case C-280/93 Germany v Council the Court of Justice held that the applicant had not shown that the Council had adopted manifestly inappropriate measures or that it had carried out a manifestly erroneous assessment of the information available to it at the time when the regulation was adopted (paragraph 95). Since Regulation No 404/93 contains provisions concerning traders marketing third country bananas, it follows that the Court of Justice implicitly recognised that the Community legislature had not failed to take into consideration the interests of this category of traders.
74 It follows from the foregoing considerations that the plea of breach of the rights of the defence must be dismissed.'
14 Finally, on the pleas of breach of provisions relating to the legislative procedure and breach of the provisions of the General Agreement on Tariffs and Trade (hereinafter `GATT'), the Court of First Instance held, at paragraph 77 of the contested judgment, that these pleas had been dismissed in Case C-280/93 Germany v Council, at paragraphs 27 to 43 and 103 to 112 of the judgment respectively, leading it to hold, at paragraph 78 of the contested judgment, on the same grounds as those set out in the judgment of the Court of Justice, that all those pleas should be dismissed as unfounded.
15 The Court of First Instance concluded that:
`83 According to settled case-law, in order for the Community to incur non-contractual liability under the second paragraph of Article 215 of the Treaty and for the right to compensation to be enforceable, a number of conditions must be satisfied: the conduct alleged against the institutions must be unlawful, actual damage must have been suffered and there must be a causal link between that conduct and the damage alleged. Furthermore, in the case of legislative measures involving choices of economic policy, the Community can incur liability only if a sufficiently serious breach of a superior rule of law for the protection of individuals has occurred. In a legislative context such as this, the Community can incur liability only if the institution concerned has manifestly and gravely disregarded the limits on the exercise of its powers (Joined Cases C-104/89 and C-37/80 Mulder v Council and Commission, cited above, paragraph 12).
84 It follows from all the foregoing that no illegality such as would impose non-contractual liability on the Community can be found against the defendant parties. Consequently, the action must be dismissed, and it is not necessary to decide whether the other conditions under which the Community incurs liability are satisfied.'
The appeal
16 Atlanta submits seven pleas in law in support of its appeal. The first is based on a decision of the Dispute Settlement Body of the World Trade Organisation (hereinafter `the WTO'), delivered on 25 September 1997 (hereinafter `the WTO decision'). By its second plea, the appellant challenges the Court of First Instance's dismissal as inadmissible of the plea alleging liability for a lawful legislative act. The third, fourth and fifth pleas contend that the Court of First Instance erred as to the extent of the rights of the defence (third plea) and misapplied the principle of non-discrimination, the principle of freedom to pursue an economic activity (fourth plea) and the principle of protection of legitimate expectations (fifth plea). By its sixth plea, it alleges the Council unlawfully delegated its legislative power to the Commission. By its seventh plea, the appellant claims that the Court of First Instance failed to examine all the conditions giving rise to liability for an unlawful act.
The first plea
17 By its first plea, raised for the first time at the stage of the reply before the Court of Justice, the appellant submits that the WTO decision establishes once and for all that essential parts of the common organisation of the market in bananas (hereinafter `common organisation of the market') are incompatible with WTO law, placing beyond doubt the illegality of the common organisation of the market under Community law.
18 The appellant states that it became aware of the illegality of Regulation No 404/93 on publication of the WTO decision, which was six months after the lodging of the appeal on 10 March 1997. This decision, it contends,  is therefore a new matter for the purposes of Article 42(2) of the Rules of Procedure of the Court of Justice, applicable to appeals under Article 118 of those Rules. Atlanta argues on this point that the Court of Justice, when ruling on an appeal, does not make a finding on the facts, but undertakes a legal review of the contested judgment. It claims, as a result, that the Court of Justice should quash the contested judgment and refer the case back to the Court of First Instance.
19 There is in this regard an inescapable and direct link between the WTO decision and the plea of breach of the provisions of GATT, raised by the appellant before the Court of First Instance and not repeated by it in its pleas on appeal.
20 Such a decision could only be taken into consideration if the Court of Justice had found GATT to have direct effect in the context of a plea alleging the invalidity of the common organisation of the market.
21 As correctly pointed out by the Commission, the appellant could have maintained its plea and adduced in particular the dispute settlement mechanism set up within the WTO in 1995 in support of its argument that the provisions of GATT were of direct effect.
22 In these circumstances, to admit the plea based on the WTO decision would be tantamount to allowing the appellant to challenge for the first time at the stage of the reply the dismissal by the Court of First Instance of a plea which it had raised before that court, whereas nothing prevented it from submitting such a plea at the time of its application to the Court of Justice.
23 The first plea must therefore be dismissed as inadmissible.
The second plea
24 By its second plea, the appellant claims that the Court of First Instance wrongly dismissed as inadmissible, on the grounds that it was out of time, the plea of liability for a lawful legislative act.
25 In Atlanta's view, it had already advanced this argument in its application to the Court of First Instance in that it had claimed that it was subject to exceptional burdens (`Sonderopfer'). It considers this is not in any event a new plea but an argument in support of the plea of non-contractual liability on the part of the Community. Lastly, Atlanta contends that the prohibition on bringing a new plea in law should not apply in a case such as this, arguing that it could in any event bring a new action for non-contractual liability which, this time, would be based on the grounds of liability for a lawful act, and that, if the plea submitted at the time of the reply were to be admitted in these proceedings, this would not prejudice the rights of the defence of the parties who have been able effectively to put their case in relation to the plea.
26 As the Advocate General observes at paragraphs 35 to 37 of his Opinion, the question of exceptional burdens was raised in proceedings before the Court of First Instance only in relation to potential liability for an unlawful act.
27 Contrary to what the appellant argues, a submission which changes the very basis on which the Community could be held liable must be regarded as constituting a new plea in law which cannot be introduced in the course of proceedings. This is all the more so given that, as the French Government correctly points out, in the context of an action based solely on liability for an unlawful act, the prohibition on bringing a new plea of itself precludes a party from raising at the stage of the reply breach of a superior rule of law not referred to in the application (judgment in Joined Cases 279/84, 280/84, 285/84 and 286/84 Walter Rau Lebensmittelwerke and Others v Commission [1987] ECR 1069, paragraph 38).  As the Council correctly points out, the fact that the plea, in common with a plea of liability for an unlawful act, is based on Article 215 of the Treaty does not make it any less a new plea in law.
42 It should be noted, first of all, that respect for fundamental rights is an obligation not only on the Community legislature but also on the authorities responsible for implementing legislative acts which it adopts (see, in particular, Case C-68/95 T. Port v Bundesanstalt für Landwirtschaft und Ernährung [1996] ECR I-6065, paragraphs 39 and 40).
45 It is true, as the Commission has quite rightly observed, that, where general legislation requires implementing measures, the latter can be found to be invalid in relation to the same principles where a breach of fundamental rights is directly attributable to such measures (see, in particular, Case C-68/95 T. Port, paragraphs 39 and 40).
46 In the present case, however, it is clear that the alleged breach relates directly to Regulation No 404/93, the validity of which in terms of the principles referred to has been confirmed by the Court of Justice in Case C-280/93 Germany v Council and Case C-466/93 Atlanta Fruchthandelsgesellschaft.
52 It must be observed first of all that the Court of First Instance pointed out quite correctly, at paragraph 55 of the contested judgment, that according to settled case-law the principle of protection of legitimate expectations is one of the fundamental principles of the Community, but that traders are not justified in having a legitimate expectation that an existing situation which is capable of being altered by the Community institutions in the exercise of their discretionary power will be maintained, particularly in an area such as that of the common organisation of the markets, the objective of which involves constant adjustment to reflect changes in economic circumstances.
53 The Court of First Instance also properly pointed out, at paragraph 55 of the contested judgment, that at paragraph 80 of the judgment in Case C-280/93 Germany v Council the Court of Justice had confirmed that a trader could not claim an acquired right or even a legitimate expectation regarding maintenance of an existing situation which was capable of being altered by decisions taken by the Community institutions within the limits of their discretionary power. The Court of First Instance also correctly stated, at paragraph 56 of the contested judgment, that in Case C-466/93 Atlanta Fruchthandelsgesellschaft II the Court of Justice, finding that the court making the reference had not raised any grounds of invalidity such as to affect the assessment of the validity of Regulation No 404/93, had found that there had been no such infringement.
60 Furthermore, the Court of First Instance, in order to reject the complaints concerning breach of the provisions relating to the procedure for adoption of Regulation No 404/93, reiterated, at paragraphs 77 and 78 of the contested judgment, the grounds appearing at paragraphs 27 to 43 of the judgment in Case C-280/93 Germany v Council, and it is apparent from those paragraphs that they were in response solely to the argument that there had been a breach of the Commission's right of initiative, a failure to give reasons and lack of further consultation of the Parliament.
65 In response to that plea, it is sufficient to state that, according to settled case-law (see, in particular, Case C-146/91 KYDEP v Council and Commission [1994] ECR I-4199, paragraph 19), non-contractual liability on the part of the Community under the second paragraph of Article 215 of the Treaty is subject to a number of  conditions relating to the illegality of the conduct alleged against the Community institutions, actual damage and the existence of a causal link between the conduct of the institution and the damage complained of. If any one of those conditions is not satisfied, the entire action must be dismissed and it is unnecessary to consider the other  conditions for non-contractual liability on the part of the Community (Case C-146/91 KYDEP v Council and Commission, paragraph 81).
67 The seventh plea must therefore be dismissed.
76 Given those stipulations, and on the assumption that the concept of operator is one of the elements essential to the subject-matter in question and must, therefore, be a matter reserved for the Council (see, in particular, Case C-240/90 Germany v Commission [1992] ECR I-5383, paragraphs 35 and 36), it must be found that the Council did define in sufficient detail the concept in question, so that it was able validly to delegate to the Commission the powers required for implementing the rules thus laid down, as it is authorised to do under Article 145 of the EC Treaty (now Article 202 EC).