Commission of the European Communities v Camar Srl and Tico Srl.
Date: 2002-12-10
27.  Since the common organisation of the market came into force Camar has repeatedly requested the Commission to increase its third country banana quota by an amount equal to the difference between the traditional quantity of Somalian bananas provided for by Regulation No 404/93 (60 000 tonnes) and the quantities which Camar actually imported or could have imported into the Community, and to issue it with licences corresponding to the difference between those quantities.  The applicant cited as precedents here the measures which the Commission had adopted after cyclones Debbie, Iris, Luis and Marilyn.
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The actions before the Court of First Instance
Case T-79/96
4.  In Case T-79/96, Camar Srl (hereinafter   "Camar"  ) asked the Court of First Instance to declare that, by failing to take, for the 1996 marketing year, the steps which were necessary to enable it to overcome its supply problems resulting from the crisis in Somalia and which it had sought from the Commission in the course of proceedings under the second paragraph of Article 175 of the EC Treaty (now the second paragraph of Article 232 EC) for failure to act, the Commission had infringed Article 30 of Regulation No 404/93 and Article 40(3) of the EC Treaty (now, after amendment, Article 34(2) EC).  Camar also sought an order that the Commission pay compensation for the damage it had suffered as a result of such failure to act.
5.  In support of its action for failure to act, Camar relied upon two grounds alleging, first, infringement of the obligation to take action imposed by Article 30 of Regulation No 404/93 in order to assist the transition from the various national arrangements to the common organisation of the markets established by that regulation and, secondly, the Commission's obligation to act in accordance with the principle of non-discrimination with regard to operators who had traditionally marketed bananas from certain ACP countries and from certain overseas French departments affected by the tropical storms.
Case T-260/97
6.  In Case T-260/97, Camar asked the Court of First Instance to annul the Commission's Decision of 17 July 1997 (hereinafter   "the Decision of 17 July 1997"  ), rejecting Camar's request, pursuant to Article 30 of Regulation No 404/93, that it determine the licences to be issued to Camar to import bananas from third countries and non-traditional ACP countries as a category B operator for 1997 and subsequent years on the basis of the quantities of bananas which it had marketed during the years 1988 to 1990 until its normal reference quantities were restored.  It also asked that the Commission be ordered to pay compensation for the past and future losses it suffered as a result of that decision.  In the alternative, it asked that the Council be ordered to pay compensation for failing to adopt special provisions under Regulation No 404/93 to deal with situations such as Camar's.
7.  In support of its claims for annulment, Camar relied on several grounds, the first three of which were based on infringement of Article 30 as a result first, of incorrect interpretation of Regulation No 404/93; second, of incorrect appraisal of the facts; and third, misuse of powers.
8.  In support of its claims for compensation against the Council, Camar argued that if it appeared that the Commission did not have the necessary powers to resolve the situation, it must be inferred from this that Regulation No 404/93 was to be regarded as unlawful for having allowed the existence of such a legal vacuum.
Case T-117/98
9.  In Case T-117/98, Camar and Tico Srl (hereinafter   "Tico"  ) asked the Court of First Instance to annul the Commission's Decision of 23 April 1998 rejecting their application for adjustment of the tariff quota, as provided for in Article 16(3) of Regulation No 404/93, for the first two quarters of 1998 to take account of imports from Somalia in 1996, having regard to the reduction in the quantities of Somalian bananas available as a result of the meteorological phenomenon known as   "El Niño"   which had damaged banana plantations in Somalia between October 1997 and January 1998.  Camar and Tico claimed, in addition, that the Commission should be ordered to compensate them for the losses suffered as a result of that decision.
10.  In support of their action for annulment, Camar and Tico put forward four pleas, three of which alleged infringement of Article 16(3) of Regulation No 404/93 in that, first, the Commission breached the conditions for application of that article; second, it failed to consider the effects of the exceptional circumstances referred to in that article; and third, it failed to apply the procedure provided for in Article 27 of that regulation.
The contested judgment
The operative part
11.  In the contested judgment, the Court of First Instance:
"1.  In Case T-79/96, declares that, by failing to take the necessary measures provided for in Article 30 of Council Regulation (EEC) No 404/93 of 13 February 1993 on the common organisation of the market in bananas with respect to the applicant, the Commission has failed to fulfil its obligations under that article;
2.  In Case T-260/97, annuls the Commission's decision of 17 July 1997 rejecting the application which the applicant submitted on the basis of Article 30 of Regulation No 404/93;
3.  In Case T-117/98, annuls the Commission's decision of 23 April 1998 rejecting the application which the applicants submitted on the basis of Article 16(3) of Regulation No 404/93;
4.  In Cases T-79/96 and T-117/98, dismisses the action for compensation as inadmissible;
5.  In Case T-260/97, orders the Commission to pay compensation for the damage suffered by the applicant as a result of the decision of 17 July 1997 rejecting the application submitted by the applicant on the basis of Article 30 of Regulation No 404/93;
Orders the parties to inform the Court, within six months of the date on which this judgment is delivered, of the sums to be paid, determined by common accord;
Orders that, in the event of failure to reach agreement, they shall submit their quantified claims to the Court within that period;
6.  Orders the Commission to pay the costs in Cases T-79/96 and T-117/98;
7.  Orders the Commission to pay 90% of the costs in Case T-260/97;
8.  Orders the Council to pay 10% of the costs in Case T-260/97;
9.  Orders the Italian Republic and the French Republic to bear their own costs.
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12.  Following an application by the Commission under Article 85 of its Rules of Procedure, the Court of First Instance, by order of 6 December 2000, ruled as follows on the costs of the interlocutory proceedings which Camar had brought in Cases T-79/96 and T-260/97:
"1.  The Commission is ordered to bear its own costs, as well as those incurred by Camar in Case T-79/96 R.
2.  The Commission is ordered to bear its own costs in Case T-260/97 R and 90% of those incurred by Camar in the same case.
3.  The Council shall bear its own costs in Case T-260/97 R.
4.  Camar shall bear 10% of the costs it incurred in Case T-260/97 R.
5.  The Italian Republic and the French Republic shall bear their own costs in Case T-79/96 R.
6.  The French Republic shall bear its own costs in Case T-260/97 R.
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13.  Under Article 77(b) of its Rules of Procedure, the Court of First Instance decided, by order of 7 February 2001, to stay proceedings in Case T-260/97 pending the judgment of the Court of Justice disposing of this appeal.
The grounds of judgment in Cases T-79/96 and T-260/97
14.  With regard to Cases T-79/96 and T-260/97, the Court of First Instance found, first of all, at paragraph 102 of the contested judgment, that both in its action for declaration of failure to act in Case T-79/96 and in its action for annulment in Case T-260/97, Camar was seeking a declaration that the Commission, by its failure to act in the first case and its express refusal to act in the second, had failed to have regard to its obligation to act under Article 30 of Regulation No 404/93.  It decided, therefore, to examine the pleas relating to that article.
15.  The Court of First Instance pointed out first of all, at paragraph 138 of the contested judgment, that the Court of Justice had already ruled on the interpretation of Article 30 of Regulation No 404/93 in Case C-68/95   T. Port   [1996] ECR I-6065.  Stating, at paragraph 139 of the contested judgment, that it was not disputed that Camar's difficulties were not the result of action it took before Regulation No 404/93 came into force, it held, having regard to paragraphs 36 and 38 of the judgment in   T. Port  , cited above, that the conditions for application of Article 30 thereof could be regarded as satisfied in the present case if Camar had encountered difficulties associated with the transition from national arrangements to the Community system and if the intervention of the Commission was required in order to resolve those difficulties.
16.  In that regard, the Court of First Instance particularly stated, at paragraph 140 of the contested judgment, as follows:
"As for the supply problems pleaded by the applicant, it should be pointed out first of all that, as regards the possibility of interchanging sources of banana supplies, the Italian arrangements before Regulation No 404/93 came into force were considerably more flexible than the Community system.  As the applicant stresses, without being disproved by the Commission, the Italian arrangements allowed unlimited quantities of ACP bananas to be imported free of customs duties. Furthermore, as regards the import of third country bananas, even though the Italian arrangements provided for a quota, operators could obtain such a quota without reference to the quantities and origin of the bananas they had imported in previous years.  The common organisation of the market in bananas, on the other hand, which was established by Regulation No 404/93, provides that ACP bananas may enter the Community market free of customs duties only until the traditional quantities or the tariff quota have been used up, and that each operator may obtain import licences only according to the origin of the bananas (Community, traditional ACP countries, third countries and non-traditional ACP countries) and on the basis of the average quantities imported over a reference period.  Clearly, the introduction of the common organisation of the market limited the scope for imports which existed under Italian legislation prior to Regulation No 404/93."
17.  After having held, at paragraphs 141 and 142 of the contested judgment, that as a result particularly of the system established by Regulation No 404/93, it is difficult for an operator who loses his usual suppliers of Community or traditional ACP bananas to replace them from other suppliers of such bananas, the Court of First Instance held, at paragraph 143 of the contested judgment, as follows:
"... even if the applicant's difficulties in obtaining supplies of bananas were associated with the civil war which occurred in Somalia at the end of 1990, they are a direct consequence of the introduction of the common organisation of the market because the system in fact significantly reduced the scope provided under the previous Italian arrangements for Camar to replace the shortfall in Somalian bananas.  Those difficulties thus had very serious consequences for the viability of Camar's economic activity and could have endangered the continuation of that activity.  They therefore constituted   "difficulties of a sensitive nature"   which, for the purposes of Article 30 of Regulation No 404/93 as explained in paragraph 38 of the judgment in   T. Port  , give rise to an obligation on the Commission to take any measures it judges necessary.
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18.  The Court of First Instance considered, at paragraphs 144 to 148 of the contested judgment, whether the measures requested by Camar in response to those difficulties were necessary or if the difficulties could have been overcome in some other way. It held, in that regard, at paragraph 149 of the contested judgment, that the Commission had committed a manifest error of appraisal in considering that Camar was capable of overcoming the difficulties caused by the transition from the Italian national arrangements to the Community system by relying on the operation of the market.  It added in the same paragraph that, in point of fact, the only way for Camar to deal with the difficulties it faced would have been for the Commission to adopt transitional measures as provided for in Article 30 of Regulation No 404/93.
19.  At paragraphs 150 and 151 of the contested judgment, the Court of First Instance continued as follows:
"150.  This conclusion is not invalidated by the Commission's argument that Article 30 of Regulation No 404/93, as interpreted by the Court of Justice in its judgment inT. Port  , requires the Commission to take action only where banana importers encounter difficulties which are not just inherent in the transition from the national arrangements to the Community system, but which also threaten their existence.
151.  It should also be pointed out that in paragraph 43 of the judgment inT. Port   the Court of Justice stated that Article 30 may require the Commission   "to lay down rules catering for cases of hardship arising from the fact that importers of third-country bananas or non-traditional ACP bananas meet difficulties threatening their existence"  .  However, this statement cannot be understood to mean that the Commission is under an obligation to take action only in such cases.  Such an interpretation would conflict with the wording of Article 30, which, as has already been stressed, provides that the Commission must take any measures necessary to overcome   "difficulties of a sensitive nature"  , and it would be incompatible with the principles of sound administration and protection for the right to pursue a professional or trade activity.  Furthermore, the reference to the threat to the operator's existence followed from the specific wording of the question referred for a preliminary ruling (see judgment in   T. Port  , paragraph 23).
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20.  At paragraphs 152 and 153 of the contested judgment, the Court of First Instance upheld, in the light of all those considerations, the first plea in Case T-79/96 and the first to third pleas in Case T-260/97 and, without examining the other pleas raised, declared to be well founded Camar's applications for declarations that, in Case T-79/96, the Commission had unlawfully failed to take the necessary measures as provided for in Article 30 of Regulation No 404/93 and, in Case T-260/97, that the Decision of 17 July 1997 was unlawful.
21.  In Case T-260/97, the Court of First Instance also held that the claim for damages against the Commission was well founded.  At paragraph 205 of the contested judgment, it recalled its case-law according to which, in the field of administrative action, any infringement of law constitutes illegality which may give rise to liability on the part of the Community.  At paragraph 206 of that judgment, it held that the Decision of 17 July 1997 was to be regarded as an administrative act, even if it was based on Article 30 of Regulation No 404/93, which gives the Commission broad discretionary power, and that, therefore, since the decision had been taken in breach of that provision, the first condition required to render the Commission liable was satisfied.
22.  After holding that the other conditions in that regard were also satisfied and that, therefore, the liability of the Community was incurred by virtue of the Commission's action, the Court of First Instance stated, at paragraph 212 of the contested judgment, that there was no need to adjudicate on the liability of the Council, which Camar had alleged in the alternative.
The grounds of judgment in Case T-117/98
23.  In relation to the admissibility of the claims for annulment in Case T-117/98, the Court of First Instance noted, at paragraph 93 of the contested judgment, that it follows from the case-law of the Court of Justice that, where, as in the present case, a rejection by the Commission relates to the adoption of a regulation, the persons concerned can seek annulment of that decision only if they demonstrate that, although the regulation in question would not have been addressed to them, it would have been of direct and individual concern to them.
24.  On the question whether the regulation which the Commission refused to adopt in that case would have been of direct and individual concern to Camar and Tico, the Court of First Instance held, at paragraph 96 of the contested judgment, as follows:
"... that regulation, in whose implementation the national authorities would have had no discretionary power, would have affected the applicants by reason of circumstances in which they are differentiated from all other persons.  The purpose of the measures sought from the Commission was to allocate an additional quantity of import licences to those operators who had been victims of the floods in Somalia, in proportion to the damage they had suffered.  It is apparent from the documents before the Court that until 1997 Camar was the main importer of Somalian bananas, and that from the fourth quarter of 1997 Tico temporarily took over that position.  The reduction in the quantities of Somalian bananas available during the fourth quarter of 1997 and the first quarter of 1998 thus particularly affected the applicants, who would consequently have been the main ones to benefit from the increase in the tariff quota.  Accordingly, the Commission's refusal to adjust the tariff quota clearly did not affect the applicants in the same way as any other importer of Somalian bananas, but affected them by reason of circumstances in which they were differentiated from all other operators trading on the same market."
25.  As a result, at paragraph 97 of the contested judgment, the Court of First Instance declared the claim for annulment in Case T-117/98 admissible.
26.  Turning to the substance, the Court of First Instance started by stating, at paragraph 161 of the contested judgment, that, by the first plea in Case T-117/98, Camar and Tico were claiming that during the last quarter of 1997 and the first two quarters of 1998 the conditions for application of Article 16(3) of Regulation No 404/93 were satisfied having regard to the impact which   "El Niño"   had on production in Somalia.
27.  The Court of First Instance noted at paragraph 163 of the contested judgment, that it follows particularly from paragraphs 27 and 31 of the judgment in   T. Port  , cited above, that two conditions must be satisfied at the same time if Article 16(3) is to be applied: there must be an exceptional circumstance affecting the production of Community bananas or imports of traditional ACP bananas, and there must be a risk of a shortfall in banana supplies to the Community market.
42.  It is clear from the 22nd recital in the preamble to Regulation No 404/93 that Article 30 of that regulation is intended to deal with any disturbance in the internal market which the replacement, in the banana sector, of the various national markets by the common organisation of the market threatened to bring about. According to that recital, Article 30 gives the Commission the power to take any transitional measures required to overcome the difficulties of implementing the common organisation of the market.  Furthermore, the Court has held that application of Article 30 is subject to the condition that the specific measures which the Commission must adopt are intended to assist transition from national arrangements to the common organisation of the market and that they are necessary for that purpose (see, particularly, Case C-442/99 P   Cordis   v   Commission   [2001] ECR I-6629, paragraph 12).
46.  In the case which gave rise to that judgment, the Court was asked to reply to a question referred to it for a preliminary ruling, namely whether Article 16(3) or Article 30 of Regulation No 404/93 requires the Commission   "to lay down rules catering for cases of hardship arising from the fact that importers of third-country bananas or non-traditional ACP bananas meet difficulties threatening their existence when an exceptionally low quota is allocated to them on the basis of the reference years to be taken into consideration under Article 19(2) of Regulation [No 404/93]"   (see   T. Port  , cited above, paragraphs 23 and 26).
52.  As for the Council's ground of appeal complaining that the Court of First Instance based itself, in order to hold the Commission liable, on its case-law according to which, in the field of administrative action, any infringement of the law constitutes illegality that is capable of rendering the Community liable, it is appropriate to point out that the system of rules which the Court has worked out in relation to the non-contractual liability of the Community takes into account,   inter alia  , the complexity of the situations to be regulated, difficulties in the application or interpretation of the texts and, more particularly, the margin of discretion available to the author of the act in question (see Joined Cases C-46/93 and C-48/93   Brasserie du pêcheur and Factortame   [1996] ECR I-1029, paragraph 43, and   Bergaderm and Goupil   v   Commission  , cited above, paragraph 40).
53.  It is appropriate to point out also that, Community law confers a right to reparation where three conditions are met: the rule of law infringed must be intended to confer rights on individuals; the breach must be sufficiently serious; and there must be a direct causal link between the breach of the obligation resting on the author of the act and the damage sustained by the injured parties (see the judgments cited above   Brasserie du pêcheur and Factortame  , paragraph 51, and   Bergaderm and Goupil   v   Commission  , paragraphs 41 and 42).
54.  As to the second condition, the decisive test for finding that a breach of Community law is sufficiently serious is whether the Community institution concerned manifestly and gravely disregarded the limits on its discretion (see the judgments cited above   Brasserie du pêcheur and Factortame  , paragraph 55, and   Bergaderm and Goupil   v   Commission  , paragraph 43).  Where that institution has only considerably reduced, or even no, discretion, the mere infringement of Community law may be sufficient to establish the existence of a sufficiently serious breach (Case C-5/94   Hedley Lomas   [1996] ECR I-2553, paragraph 28; Joined Cases C-178/94, C-179/94 and C-188/94 to C-190/94   Dillenkofer and Others   [1996] ECR I-4845, paragraph 25; Case C-127/95   Norbrook Laboratories   [1998] ECR I-1531, paragraph 109; Case C-424/97   Haim   [2000] ECR I-5123, paragraph 38, and   Bergaderm and Goupil   v   Commission  , cited above, paragraph 44).
55.  It follows from the foregoing that the decisive test for determining whether there has been such an infringement is not the individual nature of the act in question, but the discretion available to the institution when it was adopted.
57.  However, it should be pointed out that where the grounds of a judgment of the Court of First Instance disclose an infringement of Community law but the operative part of the judgment is shown to be well founded for other legal reasons, the appeal must be dismissed (see Case C-30/91 P   Lestelle   v   Commission   [1992] ECR I-3755, paragraph 28, and Case C-210/98 P   Salzgitter   v   Commission   [2000] ECR I-5843, paragraph 58).
58.  At paragraph 145 of the contested judgment, the Court of First Instance held that, as the Court of Justice pointed out in paragraph 38 of its judgment in   T. Port  , cited above, the Commission has a broad discretion when assessing whether transitional measures are necessary on the basis of Article 30 of Regulation No 404/93.
69.  With regard to the admissibility of this ground of appeal, while it is true that under Article 225 EC and Article 51 of the EC Statute of the Court of Justice an appeal lies on a point of law only and that, therefore, the Court of First Instance has, in principle, sole jurisdiction to find and appraise the facts, the Court of Justice nevertheless has jurisdiction to review the legal characterisation of those facts by the Court of First Instance and the legal conclusions it has drawn from them (see, among others, Case C-7/95 P   Deere   v   Commission   [1998] ECR I-3111, paragraph 21, and Case C-449/99 P   EIB   v   Hautem   [2001] ECR I-6733, paragraphs 44 and 45).
71.  Since it thus puts in issue the legal conclusions which the Court of First Instance drew from that finding of fact, that ground of appeal must be declared admissible.
73.  According to the Court's consistent case-law a measure of general application such as a regulation can be of individual concern to natural and legal persons only if it affects them by reason of certain attributes peculiar to them, or by reason of a factual situation which differentiates them from all other persons and distinguishes them individually in the same way as the addressee (see, particularly, Case C-451/98   Antillean Rice Mills   v   Council   [2001] ECR I-8949, paragraph 49, and Case C-50/00 P   Unión de Pequeños Agricultores   v   Council   [2002] ECR I-6677, paragraph 36).
76.  Even if that regulation could have derogated, in respect of the fraction of the tariff quota which is adjusted, from the allocation formula fixed by Article 19(1) of Regulation No 404/93 (see, to that effect, Joined Cases C-9/95, C-23/95 and C-156/95   Belgium and Germany   v   Commission   [1997] ECR I-645, paragraph 34), it would have concerned Camar and Tico only by reason of their objective status of importers of Somalian bananas, in the same way as every other operator in a similar situation.
77.  Camar and Tico cannot be regarded as being concerned individually by that regulation on the ground that, as main importers of Somalian bananas, they might have benefited more from it than other operators, given that the fact that a legal provision may have different specific effects on the various persons to whom it applies is not inconsistent with its nature as a regulation when that situation is objectively defined (see, in particular, Case 101/76   Koninklijke Scholten Honig   v   Council and Commission   [1977] ECR 797, paragraph 24, and Case C-96/01 P   Galileo and Galileo International   v   Council   [2002] ECR I-4025, paragraph 41).
78.  Clearly, as the Court pointed out in paragraph 44 of the judgment in   Unión de Pequeños Agricultores   v   Council  , cited above, the condition that natural or legal persons may bring an action challenging a regulation only if they are concerned individually must be interpreted in the light of the principle of effective judicial protection by taking account of the various circumstances that may distinguish an applicant individually.