1 By its appeal, Global Nanotechnologies AE schediasmou anaptyxis paraskevis kai emporias ylikon nanotechnologias (Glonatech) seeks the setting aside of the judgment of the General Court of 13 December 2023, Glonatech v REA (T‑409/22, the judgment under appeal, EU:T:2023:802), which dismissed its action based on Article 272 TFEU and seeking, first, a declaration that it correctly fulfilled its contractual obligations and was fully entitled to payment of the costs claimed for the ‘Synthesis of Advanced top Nano-coatings with improved Aerodynamic and De-icing behaviour’ (SANAD) project and, second, the annulment of debit note No 3242113938 of the European Research Executive Agency (REA) of 22 December 2021, requesting the appellant to pay the sum of EUR 202 883.48.
2 Article 125 of Regulation (EU, Euratom) 2018/1046 of the European Parliament and of the Council of 18 July 2018 on the financial rules applicable to the general budget of the Union, amending Regulations (EU) No 1296/2013, (EU) No 1301/2013, (EU) No 1303/2013, (EU) No 1304/2013, (EU) No 1309/2013, (EU) No 1316/2013, (EU) No 223/2014, (EU) No 283/2014, and Decision No 541/2014/EU and repealing Regulation (EU, Euratom) No 966/2012 (OJ 2018 L 193, p. 1) (‘the Financial Regulation 2018’), entitled ‘Forms of Union contribution’, provided: ‘1. [European] Union contributions under direct, shared and indirect management shall help achieve a Union policy objective and the results specified and may take any of the following forms: (a) financing not linked to the costs of the relevant operations based on: (i) the fulfilment of conditions set out in sector-specific rules or [European] Commission decisions; or (ii) the achievement of results measured by reference to previously set milestones or through performance indicators; (b) reimbursement of eligible costs actually incurred; (c) unit costs, which cover all or certain specific categories of eligible costs which are clearly identified in advance by reference to an amount per unit; (d) lump sums, which cover in global terms all or certain specific categories of eligible costs which are clearly identified in advance; (e) flat-rate financing, which covers specific categories of eligible costs, which are clearly identified in advance, by applying a percentage; (f) a combination of the forms referred to in points (a) to (e). Union contributions under point (a) of the first subparagraph of this paragraph shall, in direct and indirect management, be established in accordance with Article 181, sector-specific rules or a Commission decision and, in shared management, in accordance with sector-specific rules. Union contributions under points (c), (d) and (e) of the first subparagraph of this paragraph shall, in direct and indirect management, be established in accordance with Article 181 or sector-specific rules and, in shared management, in accordance with sector-specific rules. 2. When determining the appropriate form of a contribution, the potential recipients’ interests and accounting methods shall be taken into account to the greatest extent possible. 3. The authorising officer responsible shall report on financing not linked to costs pursuant to points (a) and (f) of the first subparagraph of paragraph 1 of this Article in the annual activity report referred to in Article 74(9).’
3 Article 181 of the Financial Regulation 2018, entitled ‘Lump sums, unit costs and flat-rate financing’, provides: ‘1. Where the grant takes the form of lump sums, unit costs or flat-rate financing as referred to in point (c), (d) or (e) of the first subparagraph of Article 125(1), this Title shall apply, with the exception of the provisions or parts of the provisions related to the verification of eligible costs actually incurred. 2. Where possible and appropriate, lump sums, unit costs or flat rates shall be determined in such a way as to allow their payment upon achievement of concrete outputs and/or results. 3. Unless otherwise provided in the basic act, the use of lump sums, unit costs or flat-rate financing shall be authorised by a decision of the authorising officer responsible, who shall act in accordance with the internal rules of the Union institution concerned. …’
4 Article 182 of the Financial Regulation 2018, entitled ‘Single lump sums’, was worded as follows: ‘1. A lump sum as referred to in point (d) of the first subparagraph of Article 125(1) may cover the entire eligible costs of an action or a work programme (“single lump sum”). 2. In accordance with Article 181(4), single lump sums may be determined on the basis of the estimated budget of the action or work programme. Such estimated budget shall comply with the principles of economy, efficiency and effectiveness. The compliance with those principles shall be verified ex ante at the time of evaluation of the grant application. 3. When authorising single lump sums the authorising officer responsible shall comply with Article 181.’
5 Article 183 of the Financial Regulation 2018, entitled ‘Checks and controls on beneficiaries related to lump sums, unit costs and flat rates’, provided: ‘1. The authorising officer responsible shall check, at the latest before the payment of the balance, the fulfilment of the conditions triggering the payment of lump sums, unit costs or flat-rates, including, where required, the achievement of outputs and/or results. In addition, the fulfilment of those conditions may be subject to ex post controls. The amounts of lump sums, unit costs or flat-rate financing determined ex ante by application of the method authorised by the authorising officer responsible or the Commission in accordance with Article 181 shall not be challenged by ex post controls. This is without prejudice to the right of the authorising officer responsible to check that the conditions triggering the payment as referred to in the first subparagraph of this paragraph are fulfilled, and to reduce the grant in accordance with Article 131(4) where those conditions are not fulfilled or in the event of irregularity, fraud or a breach of other obligations. Where lump sums, unit costs or flat rates are established on the basis of the usual cost accounting practices of the beneficiary Article 185(2) shall apply. 2. The frequency and scope of checks and controls may depend, inter alia, upon the nature of the action or the beneficiary, including past irregularities or fraud attributable to that beneficiary. 3. The conditions triggering the payment of lump sums, unit costs or flat-rates shall not require reporting on the costs actually incurred by the beneficiary. 4. Payment of the grant on the basis of lump sums, unit costs or flat-rate financing shall not affect the right of access to the statutory records of the beneficiaries for the purposes referred to in Articles 129 and 184. 5. For the purposes of the checks and controls referred to in paragraph 1 of this Article, points (a) and (b) of Article 186(3) shall apply.’
6 As regards Belgian law, the General Court stated in paragraph 32 of the judgment under appeal that it was necessary to refer to the Civil Code in the version in force at the conclusion and performance of the grant agreement.
7 Article 1134 of the Belgian Civil Code provided: ‘Agreements legally entered into operate as law for those that entered into them. They may be rescinded only by common consent, or as provided for by law. They must be executed in good faith.’
8 Article 1161 of that code provided: ‘All the clauses in a contract shall be interpreted by reference to one another, so that each is interpreted in the manner called for by the document as a whole.’
9 Article 1162 of that code read as follows: ‘In case of doubt, the agreement is to be interpreted against the party that imposed and in favour of the party that undertook the obligation.’
10 Article 1163 of the same code stated: ‘No matter how general the terms in which the contract is conceived, it includes only those matters on which it appears that the parties intended to contract.’
11 Article 1315 of the Belgian Civil Code provided that ‘the party that seeks the performance of an obligation must prove the obligation’ and that, ‘conversely, a party that claims to have been released from an obligation must prove that it has made the payment or performed the act which has brought about the extinction of its obligation’.
12 The background to the dispute was set out in paragraphs 3 to 24 of the judgment under appeal as follows: ‘3 The [appellant] is a company governed by Greek law and operating in the sector of nanotechnologies. 4 On 20 December 2012, the [appellant], as coordinator of a consortium, concluded with the REA Grant Agreement No 324443 for the execution of the SANAD project (“the grant agreement”), as part of the Seventh Framework Programme for research, technological development and demonstration activities (2007-2013). That agreement, which entered into force on the same day, provided for a maximum financial contribution by the European Union to that project of EUR 2872 668.87 (Article 5), the project being required to be completed within a period of 48 months, starting from 1 January 2013, divided into two reporting periods of 24 months (Articles 3 and 4). 5 The objective of the SANAD project was to improve the efficiency of air transport by having selected coatings tested for improved de-icing behaviours and reduced retention of condensation by aircraft, that testing to be done by researchers in participating organisations, and by promoting knowledge sharing between participants in the project and collaboration between universities and small and medium-sized enterprises (SMEs). 6 On 7, 15, 17 and 28 January 2013, four other participants in the SANAD project acceded, in turn, to the grant agreement as beneficiaries, including a university intended to host researchers on secondment (“the host university”). 7 On 31 December 2016, the SANAD project was completed. 8 Under the grant agreement, the beneficiaries of the SANAD project received pre-financing from the European Union in the sum of EUR 1867 234.77 and an interim payment of EUR 718 167.21, namely EUR 2585 401.98 in total. 9 On 8 October 2018, in the context of the final payment of the EU contribution to the SANAD project, in an email sent to the [appellant] the REA raised a number of discrepancies and gaps in supporting documents that it had provided. 10 On 21 August 2019, the REA informed the [appellant] that it was launching, in its regard, a financial audit of the grant agreement for the period between 1 January 2013 and 31 December 2016, with the reference RAIA 201901 (“the financial audit”). The REA set out a detailed list of data and documents to be made available for the purpose of the audit. 11 The financial audit was carried out between 22 and 24 October 2019. 12 On 22 July 2019, the REA communicated to the [appellant] a draft audit report setting out the result of the financial audit and covering both reporting periods of the SANAD project: the first from 1 January 2013 to 31 December 2014, and the second from 1 January 2015 to 31 December 2016. That draft concluded, inter alia, that certain categories of costs incurred by the [appellant] in that project should be regarded as ineligible under the provisions of the grant agreement, in particular the monthly living allowances of EUR 177 074.80, and the mobility allowances of EUR 22 202.88, relating to the secondment of researchers to the host university. 13 On 23 September 2020, following an extension of the time limit to provide observations, the [appellant] contested the findings of the draft audit report. 14 On 30 March 2021, the REA communicated to the [appellant] the final audit report (“the final audit report”) which stated that the sum of EUR 224 463.00 had been over-claimed by the [appellant] having regard to the requirements of the grant agreement. In that regard, it was stated that, while the sum of EUR 33 129.76 for management activities should be held to be eligible, by contrast it was necessary to reject the following costs: EUR 177 074.80 for the monthly living allowance; EUR 22 202.88 for the monthly mobility allowance; EUR 36 840.00 for the contribution to the “research/training/transfer of knowledge programme expenses”; EUR 1 069.35 for management activities; and EUR 20 405.73 for the contributions to overhead costs. 15 Thus, in the final audit report, the REA maintained the findings of the draft audit report as regards, in particular, the “monthly living and mobility allowances claimed for secondments”, which concerned four researchers seconded by the [appellant] to the host university, and also the findings in relation to the “research/training/transfer of knowledge programme expenses”, which related to the secondments of three researchers from the host university to the [appellant]. It also stated that the financial audit was regarded as closed and that the adjustments set out in it would be put into effect, including an order for the recovery of the amounts overpaid and the calculation of liquidated damages pursuant to Article II.24 of the general conditions of the grant agreement. 16 On 22 April 2021, the REA adopted the assessment report on the performance of the second reporting period of the SANAD project (years 2015 and 2016). 17 On 5 May 2021, the REA communicated to the [appellant] a pre-information letter stating that it approved the final audit report and that it would proceed with the recovery of the outcome of the financial audit regarding the expenditure under the grant agreement and confirming the amount of EUR 224 463.00 as the claim to be recovered from the [appellant]. The REA also invited the [appellant] to indicate in writing, within two months, any objections as regards the findings following that audit. 18 On 17 May 2021, the [appellant] contested the final audit report. 19 On 18 May 2021, the REA sent a response to the [appellant]. 20 On 28 May 2021, the [appellant] again wrote to the REA stating its disagreement with the final audit report and explained the reasons why it considered that it had satisfied its obligations under the grant agreement. 21 On 1 July 2021, the [appellant] wrote to the REA repeating that it disputed the findings of the final audit report and repeating its position that requirements under the grant agreement had been satisfied and that the evidence produced regarding the contested costs was sufficient and conclusive. 22 On 22 December 2021, the REA wrote to the [appellant] addressing the arguments set out in its letters of 17 May, 28 May and 1 July 2021, and explaining that those arguments were not capable of changing the conclusions of the final audit report. It attached to its letter relating to the financial audit debit note No 3242113938, also dated 22 December 2021, demanding payment of a sum totalling EUR 681 364.81 for the SANAD project to all the participants in that project, of which EUR 224 463.0[0] was claimed from the [appellant]. 23 On 22 June 2022, the [appellant] informed the REA of an updated allocation of the total amount of the claim of EUR 681 364.81 to be recovered from the various participants in the SANAD project. Whilst stating that it maintained its challenge in principle, it stated that its share amounted to EUR 202 833.48 and that of the other participants to EUR 211 855.32 and EUR 266 626.01 respectively. 24 On 29 September 2022, the REA communicated to the [appellant], first, credit note No 3234220185 for the amount of EUR 681 364.81 cancelling, inter alia, debit note No 3242113938 and taking account of the allocation of its claim between the various participants in the SANAD project in accordance with the [appellant’s] letter of 22 June 2022, and, secondly, the new debit note specific to its claim against the [appellant].’
13 On 30 June 2022, the appellant brought an action before the General Court under Article 272 TFEU seeking, in essence, a declaration that it had correctly fulfilled its contractual obligations and that it was therefore not liable for the sum stated in debit note No 3242113938, as well as the annulment of that note.
14 In support of its action, the appellant raised four pleas in law, alleging, in essence, (i) an infringement of the scope of the grant agreement, (ii) an infringement of the means of verifying expenditure, (iii) an infringement of the principle of good faith having led to a reversal of the burden of proof, and (iv) an infringement of the principle of proportionality.
15 On 13 December 2023, the General Court delivered the judgment under appeal. By that judgment, the Court, first, dismissed the action brought by the appellant and, second, upheld the counterclaim submitted by the REA seeking a declaration that its claim against the appellant was established in accordance with the grant agreement and rendered enforceable, thus ordering the appellant to pay the REA the amount of EUR 202 883.48, in accordance with the form of order sought by the REA.
16 By way of preliminary considerations, the General Court noted, in paragraphs 28 to 32 of the judgment under appeal, that it was necessary for it to rule on the dispute on the basis of the substantive law applicable to the grant agreement. It emphasised that, in the present case, in accordance with the first paragraph of Article 9 of the grant agreement, that agreement is governed by its own terms, by the acts of EU law relating to the Seventh Framework Programme for research, technological development and demonstration activities (2007-2013), by the financial regulation applicable to the general budget of the European Union and its implementing rules, by other provisions of EU law and, on a subsidiary basis, by Belgian law. The Court added that the substantive rules governing the grant agreement are laid down by 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) and that the procedural rules governing financial audit derive from the Financial Regulation 2018. As regards Belgian law, the Court stated that it was necessary to refer to the Belgian Civil Code in the version in force at the conclusion and performance of the grant agreement.
17 As regards the merits of the action, the General Court, in the first place, examined and rejected as being unfounded, in paragraphs 35 to 54 of the judgment under appeal, the appellant’s first plea in law which alleged, in essence, that the REA had wrongly drawn up a final audit report, which did not fall within the scope of the grant agreement, in respect of flat-rate financing which, as a result, should not have been subject to ex post verification.
18 In that regard, the Court held in paragraph 42 of the judgment under appeal that, having regard to the requirements of the grant agreement, in particular Article II.17 and Article II.21 of the general conditions thereof, the payment of eligible costs, including secondment costs, on a flat-rate basis did not have any effect on the option for the REA or the Commission to carry out a financial audit and, in that context, to ask the appellant, as beneficiary, to submit evidence to show the real nature of the expenses incurred in order to verify that ‘[that agreement] is properly managed and performed in accordance with its provisions’, as provided in Article II.21(2) of the general conditions of that agreement.
19 The General Court accordingly held, in paragraph 43 of the judgment under appeal, that, in so doing, the request for that supporting evidence, which nothing in the case indicated was made belatedly, did not call into question, contrary to the appellant’s submission, the flat-rate nature of the payment of the costs in question, but solely had the objective of showing that those costs, in particular those relating to the secondment of researchers, had in fact been incurred, which gave rise to the entitlement for them to be paid on the basis of a flat rate.
20 The Court then rejected, in paragraphs 44 to 53 of the judgment under appeal, the appellant’s arguments challenging that approach and held, inter alia, in paragraphs 50 to 52 of the judgment under appeal, that the fact that it had been possible for the SANAD project to have been completed successfully did not make it possible to call into question the conduct of a financial audit or the conditions under which that audit was conducted by the REA.
21 In the second place, the Court examined and rejected as being unfounded, in paragraphs 55 to 66 of the judgment under appeal, the second plea in law, alleging, in essence, infringement by the REA of the methods for verifying expenditure incurred by the appellant, in that, in order to supplement the evidence initially submitted by the appellant, the REA requested additional evidence from the appellant, such as boarding passes or receipts for accommodation costs of the researchers involved in the project.
22 In that regard, the Court recalled, in paragraph 59 of the judgment under appeal, that, under the requirements of Article II.21(2) of the general conditions of the grant agreement, like the right of audit which accompanies it, the beneficiary is obliged to be in a position to produce ‘all detailed information and data’ to prove the costs and activities as well as their compliance with that agreement.
23 However, according to the Court’s considerations set out in paragraphs 60 and 61 of the judgment under appeal, since the financial audit had revealed certain omissions, or even inconsistencies, in the request for payments in respect of the secondment costs at issue, it was incumbent on the REA to request supporting evidence which could take the form, as regards proof of travel to the host university, inter alia of transport tickets and boarding passes, and as regards staying there, inter alia, receipts for the costs of accommodation.
24 In that regard, the Court recalled, in paragraph 62 of the judgment under appeal, that, according to a fundamental principle governing EU financial aid, the European Union could subsidise only expenses which have actually been incurred. It follows from that principle that it is not sufficient for the beneficiary of the aid to show that a project has been carried out for the allocation of a specific grant to be justified. The beneficiary of the aid must, in addition, produce evidence that it has incurred the expenses declared in accordance with the conditions laid down for the award of the grant or financial aid concerned, with only those expenses which are properly justified being capable of being regarded as eligible. Its obligation to satisfy the prescribed financial conditions is one of its essential commitments and accordingly determines the allocation of the EU grant.
25 In the third place, the Court examined and rejected as being unfounded, in paragraphs 67 to 96 of the judgment under appeal, the third plea in law, alleging, in essence, infringement of the principle of good faith on the part of the REA in that the appellant had, in any event, communicated in time all the documents requested and that the refusal to pay the secondment costs in the context of an ex post verification infringed that principle.
26 In that regard, the Court held, in paragraphs 78 and 79 of the judgment under appeal, that, in a context of flat-rate financing, checks may be carried out ex post in the context of a financial audit, in accordance with Article 183 of the Financial Regulation 2018.
27 Furthermore, the Court repeated, in paragraph 80 of the judgment under appeal, that it is not sufficient that concrete outputs and/or results have been achieved in the context of the SANAD project from a scientific or technical point of view and in a manner consistent with the requirements of the grant agreement to enable the automatic payment of the flat-rate EU financial assistance or to render unnecessary a financial audit which, as in the present case, was intended to verify not the implementation of the specific objectives assigned to that project, but the accuracy of the information giving rise to the entitlement to payment of that assistance.
28 The Court also held, in paragraphs 83 and 84 of the judgment under appeal, that the relationship between the parties is governed, primarily, by the requirements of the grant agreement, of which Article II.21(2) and (3) of the general conditions of that agreement provides for the possibility for the REA or the Commission, in the context of a financial audit being carried out, to request that the appellant, as beneficiary, submit supporting documents, up to five years after the end of the SANAD project, in order to demonstrate that the expenses incurred were genuine. However, according to the Court, the REA never intended to alter its rights under the grant agreement or to renounce any part of them, as regards the option available to it of requiring the production of supporting documents from the appellant.
29 In the fourth and last place, the Court examined and rejected as being unfounded, in paragraphs 97 to 104 of the judgment under appeal, the fourth plea, alleging, in essence, infringement by the REA of the principle of proportionality in its assessment of the evidence of the costs declared by the appellant.
30 In that regard, the Court recalled, in paragraph 99 of the judgment under appeal, that there is no infringement of the principle of proportionality where an authorising officer for expenditure, which takes the form of EU financial assistance, considers that it was not sufficient for the beneficiary of that assistance, in order to justify the award of that assistance, to show that a project had been carried out, and requires that the beneficiary had to prove that the costs declared had been incurred in accordance with the conditions laid down for the award of the grant concerned.
31 According to the Court’s findings in paragraph 100 of the judgment under appeal, the REA was fully entitled to find that the evidence initially submitted by the appellant and relating to the travel and stay expenses of several seconded researchers did not meet the requirements of the grant agreement.
32 It follows therefrom, as the Court found in paragraphs 101 and 102 of the judgment under appeal, that, in the light of its obligations as the authorising officer for expenditure, the REA had no choice but to seek repayment from the appellant of part of the financial assistance it had unduly received, and that the REA could not be criticised as having infringed the principle of proportionality when it merely complied with its obligation to demand repayment of the financial assistance granted to the appellant, in proportion to the latter’s failure to comply with its contractual obligations.
33 The appellant requests the Court of Justice to: - set aside, in whole or in part, the judgment under appeal; - declare the REA’s debit note No 3242113938, dated 22 December 2021, requiring the appellant to repay a sum amounting, as revised, to EUR 202 833.48, as deprived of validity and legal effects; - in the alternative, refer the case back to the General Court for a new ruling in the sense of the orders sought before the General Court; and - in any case, order the REA to pay the appellant’s legal fees and other costs and expenses incurred with the present appeal and previously with the procedure before the General Court.
34 The REA contends that the Court of Justice should: - dismiss the appeal in its entirety; and - order the appellant to pay the costs.
35 In support of its appeal, the appellant raises five grounds of appeal, alleging, first, a breach of the right to effective judicial protection, second, an error of law committed by the General Court in the interpretation of EU law in a context of flat-rate financing, third, misinterpretation of the grant agreement and of Belgian law, fourth, distortion of the evidence and, fifth, reversal of the burden of proof and infringement of the principle of proportionality.
36 The first ground of appeal is directed against paragraphs 34 and 53 of the judgment under appeal and alleges a breach of the right to effective judicial protection, within the meaning of Article 47 of the Charter of Fundamental Rights of the European Union (‘the Charter’), in that the General Court failed to take account of the asymmetry between the parties to the grant agreement and refused to apply the principle of good administration, enshrined in Article 41 of the Charter.
37 That ground consists of two parts.
38 By the first part of the first ground of appeal, the appellant submits that the General Court erred in law in finding, in paragraph 53 of the judgment under appeal, that an infringement of Article 41 of the Charter cannot, in principle, be validly relied on in a dispute which is contractual in nature and is covered by Article 272 TFEU, on the ground that the latter can rely only on infringements of contractual provisions or of the law applicable to the contract where, as in the present case, the General Court is not simultaneously seised, pursuant to Article 263 TFEU, of an action for annulment against an enforceable Commission decision formally establishing a contractual claim. In that respect, the General Court was wrong to rely on the judgment of 16 July 2020, ADR Center v Commission (C‑584/17 P, EU:C:2020:576, paragraph 88), which is cited to apply by analogy. Furthermore, according to the appellant, the General Court also wrongly held, in paragraph 34 of the judgment under appeal, that, despite the use of terminology characteristic of actions brought pursuant to Article 263 TFEU, the action had to be regarded as being based on Article 272 TFEU and as raising a contractual dispute.
39 The appellant considers that such an assessment infringes the right to effective judicial protection, within the meaning of Article 47 of the Charter, and submits that, in its judgment of 16 July 2020, Inclusion Alliance for Europe v Commission (C‑378/16 P, EU:C:2020:575, paragraph 81), the Court of Justice stated that, 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 or of the general principles of EU law.
40 The REA submits, as a preliminary point, that paragraphs 34 and 53 of the judgment under appeal do not infringe the right to effective judicial protection, within the meaning of Article 47 of the Charter, in so far as, first, paragraph 53 of that judgment sets out the reasons why the General Court considers that an infringement of Article 41 of the Charter cannot, in principle, be validly relied on in the context of an action based on Article 272 TFEU and, second, paragraph 34 of that judgment provides clarification as to the scope of the appellant’s head of claim at first instance. That ground of appeal should therefore be rejected as ineffective.
41 In the alternative, the REA submits that that part of the ground of appeal is unfounded in so far as, first, paragraph 34 of the judgment under appeal sets out the General Court’s preliminary observations with a view to finding that the appellant’s action, based on Article 272 TFEU and not on Article 263 TFEU, is admissible and, second, the appellant’s challenges referred to in paragraph 54 of the judgment under appeal are unsupported by any argument.
42 It should be noted that the principle of good administration entails the duty of the competent institution to examine carefully and impartially all the relevant aspects of the individual case (judgments of 29 March 2012, Commission v Estonia, C‑505/09 P, EU:C:2012:179, paragraph 95, and of 8 October 2020, Union des industries de la protection des plantes, C‑514/19, EU:C:2020:803, paragraph 50 and the case-law cited).
43 Where the institutions, bodies, offices or agencies of the European Union act in the performance of a contract whose clauses they have stipulated, that situation falls within the scope of EU law and therefore within the scope of the Charter, within the meaning of Article 51 thereof.
44 Thus, as the Court has already held, when the institutions, bodies, offices or agencies of the European Union perform a contract, they remain subject to their obligations under the Charter and the general principles of EU law. Consequently, 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 the institutions, bodies, offices or agencies of the European Union from ensuring that the rights guaranteed by the latter are respected in relation to their contracting parties (judgments of 16 July 2020, Inclusion Alliance for Europe v Commission, C‑378/16 P, EU:C:2020:575, paragraph 82, and of 16 July 2020, ADR Center v Commission, C‑584/17 P, EU:C:2020:576, paragraph 86).
45 Furthermore, 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 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).
46 That case-law has been confirmed more recently, and prior to the delivery of the judgment under appeal, in a context analogous to that of the present case, namely in the context of an appeal against a judgment of the General Court ruling on an action based on Article 272 TFEU, in which the appellant submitted, inter alia, that the Commission had infringed the principle of good administration within the meaning of Article 41 of the Charter (judgments of 14 July 2022, SGI Studio Galli Ingegneria v Commission, C‑371/21 P, EU:C:2022:566, paragraph 79, and of 29 September 2022, HIM v Commission, C‑500/21 P, EU:C:2022:741, paragraph 41).
47 In those circumstances, it must be held that the General Court erred in law by excluding, in paragraph 53 of the judgment under appeal, the possibility for the EU judicature to determine whether there had been an infringement of the principle of good administration enshrined in Article 41 of the Charter in a dispute which, as in the present case, is covered by Article 272 TFEU.
48 However, it should be recalled that, in accordance with settled case-law of the Court of Justice, if the grounds of a judgment of the General Court disclose an infringement of EU law but its operative part is shown to be well founded on other legal grounds, such an infringement cannot lead to the setting aside of that judgment, and a substitution of grounds must be made and the appeal dismissed (judgment of 19 September 2024, Coppo Gavazzi and Others v Parliament, C‑725/20 P, EU:C:2024:766, paragraph 114 and the case-law cited).
49 It is therefore necessary to ascertain whether the rejection of the complaint alleging a breach of the right to good administration enshrined in Article 41 of the Charter is shown to be well founded on legal grounds other than those vitiated by the error identified in paragraph 47 of the present judgment.
50 In that regard, first, in accordance with Article 183(1) of the Financial Regulation 2018, the authorising officer responsible is to check, inter alia, at the latest before the payment of the balance, the fulfilment of the conditions triggering the payment of lump sums, unit costs or flat rates, including, where required, the achievement of outputs and/or results. That provision states that the fulfilment of those conditions may be subject to ex post checks and thus expressly recognises the right of the authorising officer responsible to check that the conditions triggering payment have been fulfilled and to reduce the grant where those conditions are not fulfilled or in the event of irregularity, fraud or a breach of other obligations. In that regard, it must be pointed out that, in accordance with the provisions of the grant agreement concluded between the parties, and in particular Article II.21(1) thereof, at any time during the implementation of the project and up to five years after the end of the project, the REA or the Commission may carry out financial audits relating to the proper implementation of the grant agreement.
51 Second, Article II.21(3) of that agreement lays down the obligation for the beneficiary of the funding to retain, up until five years after the end of the project, the originals or, in exceptional cases, certified copies of the originals, including electronic copies, of all documents relating to the grant agreement.
52 It is apparent from the General Court’s findings in paragraphs 7 to 10 of the judgment under appeal that the SANAD project was completed on 31 December 2016 and that the REA informed the appellant on 21 August 2019 that an audit procedure had been initiated, after sending an email on 8 October 2018, by which it had already raised, in the context of the final payment of the EU contribution to the SANAD project and therefore before payment of the balance, the existence of a number of discrepancies and gaps in the supporting documents produced by the appellant.
53 In addition, in paragraph 46 of the judgment under appeal, the General Court noted that the grant agreement stipulated that the financial audits could be carried out by staff of the REA or of the Commission, and found that, although the appellant relied on a lack of impartiality on the part of those staff, it did not produce the slightest evidence in that regard.
54 In those circumstances, it must be held that the audit in question was not carried out belatedly nor in a manner contrary to the principle of impartiality.
55 It is thus apparent that, notwithstanding the error of law identified in paragraph 47 of the present judgment, Glonatech’s argument alleging a breach of the right to good administration, provided for in Article 41 of the Charter, was unfounded and could therefore be rejected by the General Court.
56 It follows from the foregoing that, in the light of the case-law referred to in paragraph 48 of the present judgment, the first part of the first ground of appeal must be rejected as unfounded.
57 By the second part of the first ground of appeal, the appellant submits that, by excluding the application, in the present case, of the principle of good administration, enshrined in Article 41 of the Charter, the General Court erred in law in that it disregarded the asymmetry between the parties to the grant agreement. In that context, the question arises as to whether the Commission may simultaneously be both judge and party, thus combining two prerogatives of a public authority. In that regard, the appellant submits that Article 41 of the Charter precludes the use of prerogatives emanating from public authority in exercising rights deriving from contractual relationships where by principle the parties should stand on the same footing.
58 The appellant submits that, by disregarding that aspect, the General Court infringed the fundamental principle enshrined in Article 1161 of the Belgian Civil Code, namely the need for an overall approach to the interpretation of a contract, in that it did not take into consideration, in the present case, the effect of the flat-rate financing. Similarly, the Court failed to have regard to Article 1162 of the Belgian Civil Code, according to which, in cases of doubt, the agreement is to be interpreted against the person that imposed the obligation and in favour of the party that undertook the obligation.
59 The REA contends that the second part of the first ground of appeal is unfounded.
60 It should be recalled that, in accordance with the requirements under Article 256 TFEU, the first paragraph of Article 58 of the Statute of the Court of Justice of the European Union and Article 168(1)(d) and Article 169 of the Rules of Procedure of the Court of Justice, an appeal must indicate precisely the contested paragraphs of the judgment which the person bringing the appeal seeks to have set aside and the legal arguments specifically advanced in support of the appeal, failing which the appeal or the ground of appeal concerned may be inadmissible (judgment of 16 January 2025, Região Autónoma da Madeira v Commission (Madeira Free Zone), C‑547/23 P, EU:C:2025:22, paragraph 40 and the case-law cited).
61 Furthermore, it follows from those provisions that an appeal is inadmissible in so far as it merely repeats the pleas in law and arguments previously submitted to the General Court, including those based on facts expressly rejected by it. Such an appeal amounts in reality to no more than a request for re-examination of the application submitted to the General Court, which the Court of Justice does not have jurisdiction to undertake on appeal (judgment of 10 November 2016, DTS Distribuidora de Televisión Digital v Commission, C‑449/14 P, EU:C:2016:848, paragraph 28 and the case-law cited).
62 In the present case, it must be noted, in the first place, that, as the REA submits, the appellant’s line of argument is not directed against findings in the judgment under appeal, but, as is apparent in particular from the reference made by the appellant in its appeal to its application before the General Court, instead concerns the dispute between the parties to the grant agreement, which has already been the subject of the proceedings at first instance.
63 In the second place, it should be noted that the references made by the appellant to Articles 1161 and 1162 of the Belgian Civil Code do not refer to paragraphs 34 and 53 of the judgment under appeal or to any other identified part of the judgment under appeal. Thus, the appellant merely refers to disagreements between the parties to the grant agreement and challenges, in essence, the judgment for not having upheld the pleas in law and arguments which it put forward in the proceedings at first instance, without identifying an error of law or an incorrect characterisation of the facts by the General Court that could specifically have involved an infringement of Article 41 of the Charter.
64 In those circumstances, in the light of the case-law referred to in paragraphs 60 and 61 of the present judgment, the second part of the first ground of appeal must be rejected as inadmissible.
65 Accordingly, the first ground of appeal must be rejected as in part inadmissible and in part unfounded.
66 The second ground of appeal is directed against paragraphs 40 to 47 of the judgment under appeal and alleges that the General Court erred in law in the interpretation of EU law in a context of flat-rate financing.
67 The appellant submits that the judgment under appeal is vitiated by errors of law, in that the General Court found that the grant agreement was first governed by its own provisions and that the flat-rate nature of the financing of certain expenditure under that agreement was not relevant to the determination of the checks which may be carried out ex post in the context of a financial audit. The appellant submits that therefore the judgment infringes the relevant provisions of EU law on flat-rate financing.
68 In that respect, the appellant submits that the Court erred in holding, in paragraph 42 of the judgment under appeal, that ‘the payment of eligible costs, including secondment costs, on a flat-rate basis does not have any effect on the option for the REA or the Commission to carry out a financial audit and, in that context, to ask the [appellant], as beneficiary, to submit evidence to show the real nature of the expenses incurred’ and, in paragraph 43 of that judgment, that ‘the request for that supporting evidence … does not call into question … the flat-rate nature of the payment of the costs in question, but solely for the objective of showing that those costs, in particular those relating to the secondment of researchers, were in fact incurred, which gives rise to the entitlement for them to be paid on the basis of a flat rate’.
69 In so doing, the General Court misinterpreted the relevant provisions of EU law on flat-rate financing, in particular Articles 181 and 183 of the Financial Regulation 2018. In essence, according to the appellant, in a context of flat-rate financing, such as that at issue in the present case, ex post controls cannot call into question the amount of funding granted.
70 The REA claims that the second ground of appeal is unfounded.
71 The second ground of appeal is directed against paragraphs 40 to 47 of the judgment under appeal and alleges that the General Court erred in law in its interpretation of the relevant provisions of EU law on flat-rate financing, in particular Articles 181 and 183 of the Financial Regulation 2018. In essence, the appellant considers that, in the context of flat-rate financing, such as that at issue in the present case, it is not possible to carry out ex post checks and thus to reduce the amount of funding granted.
72 It should be noted, as a preliminary point, as the REA submits, that the General Court’s conclusion in paragraph 40 of the judgment under appeal, according to which the grant agreement is ‘first governed by its own stipulations’, must be interpreted not as entailing an exclusive application of the provisions of the grant agreement, but rather as giving priority to the provisions of that agreement over other provisions which may, as the case may be, be applicable, with the result that that argument of the appellant is based on a misreading of that judgment.
73 In particular, after recalling, in paragraphs 40 and 41 of the judgment under appeal, the provisions of Articles II.17 and II.21 of the grant agreement, the General Court held, in paragraph 42 of that judgment, that ‘a reading of [that] agreement makes clear that the payment of eligible costs, including secondment costs, on a flat-rate basis does not have any effect on the option for the REA or the Commission to carry out a financial audit and, in that context, to ask the [appellant], as beneficiary, to submit evidence to show the real nature of the expenses incurred in order to verify that “[that agreement] is properly managed and performed in accordance with its provisions”, as provided in Article II.21(2) of the general conditions of that agreement.’
74 In that regard, it should be noted that, contrary to the appellant’s claims, the General Court correctly interpreted, in the judgment under appeal, Articles 181 and 183 of the Financial Regulation 2018, as is apparent in particular from paragraphs 77 to 80 of that judgment. In particular, it is clear from those provisions that, even in cases of flat-rate financing, checks may be carried out ex post in the context of a financial audit.
75 As has already been held in paragraph 50 of the present judgment, in accordance with Article 183(1) of the Financial Regulation 2018, the authorising officer responsible is to check, at the latest before the payment of the balance, the fulfilment of the conditions triggering the payment of lump sums, unit costs or flat rates, including, where required, the achievement of outputs and/or results. That provision states that the fulfilment of those conditions may be subject to ex post checks and thus expressly recognises the right of the authorising officer responsible to check that the conditions triggering payment have been fulfilled and to reduce the grant where those conditions are not fulfilled or in the event of irregularity, fraud or a breach of other obligations.
76 Furthermore, the grant agreement expressly lays down, in Article II.21(3) of its general conditions, under the heading ‘Financial audits and controls’, the content of which is recalled in particular in paragraph 41 of the judgment under appeal, the obligation for the beneficiary of the funding to retain, up to five years after the end of the project, the originals or, in exceptional cases, certified copies of the originals, including electronic copies, of all documents relating to the grant agreement, and it also lays down an obligation on that beneficiary to make those documents available to the REA or the Commission during any audit under that agreement.
77 The appellant is therefore wrong to claim that it is not possible, in the context of flat-rate financing such as that in the present case, for ex post checks to be carried out.
78 In those circumstances, the second ground of appeal must be rejected as unfounded.
79 The third ground of appeal is directed against paragraphs 40 to 49, 57 and 91 of the judgment under appeal and alleges that the General Court erred in law in its interpretation of several provisions of the grant agreement, in particular of Articles II.17 and II.21, and Annex III thereto, and of Articles 1161 to 1163 of the Belgian Civil Code.
80 The appellant submits that the General Court erred in law by relying, in paragraphs 40 and 41 of the judgment under appeal, on Articles II.17 and II.21 of the grant agreement in order to describe the conditions triggering payments in the context of flat-rate financing even though those conditions are set out precisely in Annex III to that agreement. As a result, the Court infringed the obligation to state reasons for such an interpretation and infringed the provisions of the Financial Regulation 2018 which prevail over those of the grant agreement.
81 In addition, according to the appellant, by relying on the general clause of Article II.21(3) of the grant agreement - which refers without distinction to all forms of financing without taking into consideration the specific features of flat-rate financing as set out in the Financial Regulation 2018 and in Annex III to that agreement - in order to justify the REA’s request for the production of additional evidence, the Court infringed Articles 1161 to 1163 of the Belgian Civil Code.
82 The REA contends that the third ground of appeal must be rejected as inadmissible and, in the alternative, as unfounded.
83 By the third ground of appeal, the appellant submits that the General Court erred in law in its interpretation of several provisions of the grant agreement and of Articles 1161 to 1163 of the Belgian Civil Code.
84 In that regard, it should be borne in mind that, according to settled case-law of the Court of Justice, the General Court’s examination of a contractual provision, such as the provisions of the grant agreement, cannot be considered to be an interpretation of law and cannot therefore be reviewed in the context of an appeal without encroaching upon the jurisdiction of the General Court to establish the facts (judgment of 14 January 2021, ERCEA v Aristoteleio Panepistimio Thessalonikis, C‑280/19 P, EU:C:2021:23, paragraph 43 and the case-law cited).
85 Such a conclusion is also relevant to the appellant’s argument that the General Court failed to interpret the grant agreement’s lack of clarity in its favour, in accordance with Article 1162 of the Belgian Civil Code. In so doing, the appellant is in fact challenging the Court’s assessment in paragraph 46 of the judgment under appeal that the wording of the contractual provisions was clear and unequivocal (see, to that effect, judgment of 16 November 2017, Ludwig-Bölkow-Systemtechnik v Commission, C‑250/16 P, EU:C:2017:871, paragraphs 48 and 49).
86 In addition, it should be recalled that the Court of Justice has also held that, as regards an interpretation by the General Court of the national law applicable to contracts concluded by the institutions, bodies, offices and agencies of the European Union, the Court of Justice has jurisdiction, on appeal, only to determine whether that law was distorted, and the distortion must be obvious from the documents in the file, without there being any need to carry out a new assessment of the facts and the evidence (judgment of 18 January 2024, Jenkinson v Council and Others, C‑46/22 P, EU:C:2024:50, paragraph 107).
87 In the present case, the appellant does not claim that the General Court erred as a result of a distortion of the provisions of the Belgian Civil Code.
88 The appellant also cannot validly submit, by referring to the clause of Article II.21(3) of the general conditions of the grant agreement, that the General Court infringed the provisions of the Financial Regulation 2018, which take precedence over those of that agreement. It is apparent from paragraphs 74 to 77 of the present judgment that the provisions of the grant agreement which lay down an obligation to retain the documents relating to that agreement and to make them available to the REA or the Commission in the event of an audit are consistent with the provisions of the Financial Regulation 2018, which authorises ex post checks in the context of a financial audit, including in the case of flat-rate financing.
89 Lastly, as regards the argument that the General Court failed to state reasons to the requisite legal standard for its interpretation of the grant agreement, it should be noted that the Court’s interpretation, according to which the flat-rate nature of the payment was not incompatible with ex post requests for evidence, follows from the detailed analysis of the terms of that agreement carried out in paragraphs 41, 42 and 46 of the judgment under appeal. Consequently, the Court provided reasons to the requisite legal standard for its assessment in that regard.
90 In those circumstances, the third ground of appeal must be rejected as being in part inadmissible and in part unfounded.
91 The fourth ground of appeal is directed against paragraphs 48, 55, 61, 62, 82 to 86 and 103 of the judgment under appeal and alleges, first, an error of law committed by the General Court in the assessment of the evidence produced by the appellant in a context of flat-rate financing and, second, distortion of that evidence.
92 By this ground of appeal, which is divided into three parts, the appellant submits that the General Court made errors as regards, respectively, the assessment of the standard of proof required in order to establish eligibility for payments subject to flat-rate financing; the rejection of the evidence produced by the appellant; and distortion of that evidence and the General Court’s characterisation of the REA’s capacity to assess evidence during an audit.
93 The first part of the fourth ground of appeal is directed against paragraphs 48 and 62 of the judgment under appeal.
94 The appellant submits that, by affirming, in paragraph 62 of the judgment under appeal, that ‘according to a fundamental principle of EU financial aid, the European Union can subsidise only expenses which have actually been incurred’, the General Court disregarded the distinctions laid down in Article 125(1) and Articles 181 and 182 of the Financial Regulation 2018, relating to the conditions for triggering payments according to the forms of financing concerned, which led the Court to disregard the specific features of flat-rate financing.
95 In addition, the appellant submits that the General Court erred, in paragraph 48 of the judgment under appeal, in rejecting its argument alleging, in essence, that ‘all the expenses assumed on a flat rate basis are justified because it has properly completed the SANAD project’, or even that the completion of that project would have been impossible if the secondments had never, or only very partially, taken place. According to the appellant, in the context of that project, and in view of the fact that the mere occurrence of secondments of researchers constitutes a condition for triggering the payment of the costs linked to the flat-rate financing, the achievement of the expected results is already evidence which, in itself, makes it possible to establish that those secondments did in fact take place. The present case concerns a project to be carried out solely through ‘knowledge-sharing and inter-sector mobility activities’. In other words, if those secondments had not taken place, no results whatsoever would have been obtained.
96 The REA contends that the present part of this ground of appeal is inadmissible and, in any event, unfounded.
97 It must be observed that the General Court was fully entitled to find, in paragraph 52 of the judgment under appeal, that the fact that it had been possible to successfully complete the SANAD project does not call into question a financial audit being carried out or the conditions under which that audit was conducted by the REA. As the General Court pointed out in paragraph 50 of that judgment, the fact that, technically and in compliance with the requirements of the grant agreement, the project concerned has been properly carried out does not suffice for the appellant to be entitled to the financial aid provided for. It is also necessary for the appellant to have properly carried out its obligations under that agreement so as to enable the REA, in accordance with Article II.21 of the general conditions of that agreement, to verify, notably during a financial audit, that the costs declared are eligible costs and substantiated by evidence. To that end, it is important in particular that the beneficiary is able to prove that the costs declared were actually incurred in order to carry out the project in question.
98 Consequently, as the General Court correctly found in paragraph 51 of that judgment, in the event of a breach of the financial obligations laid down in the grant agreement, the beneficiary of the financial aid loses the right to payment of the grants and, hence, pursuant to Article II.21(6) of the general conditions of that agreement, the co-contractor of the appellant is required to take all appropriate measures in that regard, including the complete or partial recovery of the grant, irrespective of whether the SANAD project has technically been properly carried out.
99 It follows that the beneficiary of the grant therefore acquires a definitive right to payment of the EU financial contribution only if all the conditions to which the award of the grant is subject are satisfied. It is not sufficient for the beneficiary of the grant to show that a project has been carried out to justify the award of a particular grant, since it is incumbent on the beneficiary to prove that the costs declared have been incurred in accordance with the conditions laid down in particular in the grant agreement for the award of the grants concerned.
100 In those circumstances, the first part of the fourth ground of appeal must be rejected as unfounded.
101 By the second part of the fourth ground of appeal, which is directed against paragraphs 55 and 61 of the judgment under appeal, the appellant submits, first, that the General Court erred in holding, in paragraph 55 of that judgment, that the monitoring system known as the ‘Reporting and Participants Portal’, contrived by the REA and operated under its own responsibility in order to meet basic operational needs, was lacking in both reliability and sufficient probative value. In that context, the appellant submits that the General Court’s rejection of there being a duty on the REA to accept its own monitoring system as sufficient parallel evidence in respect of secondments is abusive and infringes Article 1162 of the Belgian Civil Code.
102 Second, the appellant submits that neither the General Court nor the REA has provided reasons why even a supposed failure by the beneficiary to register, in that monitoring system, the performance at its premises of a secondee from the home organisation could cast doubt on the fact that that secondee was actually present. The Court merely stated, in paragraph 61 of the judgment under appeal, that the records in the monitoring system provided for in the present case were ‘drawn up on the basis of the mere certified statements of the participants in the SANAD project’, without further clarification. According to the appellant, the evidence was thus distorted in such a way as to cast suspicions over all the beneficiaries as having acted in collusion, which was never the case and is, in any event, contrary to the findings of the European Anti-Fraud Office (OLAF).
103 By the third part of the fourth ground of appeal, which is directed against paragraphs 82 to 86 and 103 of the judgment under appeal, the appellant submits, in essence, that, by its email of 8 October 2018, the REA amended the terms of the grant agreement and that it gave rise to a legitimate expectation on the part of the appellant that the travel expenses of researchers, as they are subject to a flat-rate contribution, would not be subject to verification of their reality. It follows that the appellant could not expect that, by the letter of 21 August 2019, the REA would initiate a financial audit of the grant agreement. Accordingly, the beneficiaries of the project, including the appellant, relied decisively on the REA’s email of 8 October 2018 before finding themselves, following the letter of 21 August 2019, unexpectedly confronted with a long list of information to be provided when the audit had already commenced.
104 In that regard, the appellant submits that the General Court erred in finding, in paragraph 86 of the judgment under appeal, that ‘it is not possible to find that the wording of the REA’s [email] of 8 October 2018 contradicts that which appears, inter alia, in the REA’s subsequent letter of 21 August 2019’ and that ‘it is by no means excluded that the documents required must make it possible to verify the actual dates of the secondments’.
105 In addition, according to the appellant, the email of 8 October 2018 had the effect of comforting the appellant in its practice of possibly failing to retain travel documents relating to secondments.
106 The REA contends that the second and third parts of the fourth ground of appeal are inadmissible and, in any event, unfounded.
107 It must be borne in mind that the Court of Justice has repeatedly held that the General Court has exclusive jurisdiction to establish the facts, except where the substantive inaccuracy of its findings is apparent from the documents submitted to it, and to assess the evidence accepted. The establishment of those facts and the assessment of that evidence therefore do not, save where the clear sense of the evidence has been distorted, constitute a point of law which is subject as such to review by the Court of Justice (judgments of 29 October 2015, Commission v ANKO, C‑78/14 P, EU:C:2015:732, paragraph 22, and of 14 January 2021, ERCEA v Aristoteleio Panepistimio Thessalonikis, C‑280/19 P, EU:C:2021:23, paragraph 45 and the case-law cited).
108 Furthermore, where an appellant alleges distortion of elements of fact or of evidence by the General Court, that person must, under Article 256 TFEU, the first paragraph of Article 58 of the Statute of the Court of Justice of the European Union and Article 168(1)(d) of the Rules of Procedure of the Court of Justice, indicate precisely the evidence alleged to have been distorted by the General Court and show the errors of appraisal which, according to the appellant, led to that distortion. In addition, according to the settled case-law of the Court of Justice, that distortion must be obvious from the documents in the Court’s file, without there being any need to carry out a new assessment of the facts and the evidence (judgment of 6 June 2024, Ryanair v Commission, C‑441/21 P, EU:C:2024:477, paragraph 55 and the case-law cited).
109 In addition, it must be recalled that, in the context of an appeal, the appraisal by the General Court of the probative value of the documents before it cannot, save where the rules on the burden of proof and the taking of evidence have not been observed or the evidence has been distorted, be challenged before the Court of Justice (judgment of 14 July 2022, SGI Studio Galli Ingegneria v Commission, C‑371/21 P, EU:C:2022:566, paragraph 55 and the case-law cited).
110 In the present case, it must be observed that, as regards the second part of the fourth ground of appeal, as the REA submits, first, that, in paragraph 55 of the judgment under appeal, the General Court merely summarises the appellant’s second plea in its action at first instance and does not make any assessment in that regard and, second, that the conclusion reached by the General Court in paragraph 61 of that judgment constitutes an assessment of the facts and evidence in that action. The appellant does not explain how that assessment is the result of a distortion by the General Court of that evidence.
111 Similarly, as regards the third part of the fourth ground of appeal, even if the appellant seeks, by its arguments, to establish a distortion by the General Court of the email of 8 October 2018, it must be pointed out, as noted in paragraph 108 of the present judgment, that the distortion must be obvious from the documents in the file submitted to the Court of Justice. In that regard, in accordance with settled case-law, the review carried out by the Court of Justice when examining a ground of appeal alleging distortion of the facts is limited to verifying that the General Court, in relying on those facts, did not manifestly exceed the limits of a reasonable assessment of those facts, with the result that it is not sufficient to demonstrate that a document could be the subject of a different interpretation from that adopted by the General Court (judgment of 14 July 2022, SGI Studio Galli Ingegneria v Commission, C‑371/21 P, EU:C:2022:566, paragraph 56 and the case-law cited).
112 In finding, in paragraph 86 of the judgment under appeal, that ‘it is not possible to find that the wording of the REA’s [email] of 8 October 2018 contradicts that which appears, inter alia, in the REA’s subsequent letter of 21 August 2019’ and that ‘it is by no means excluded that the documents required must make it possible to verify the actual dates of the secondments’, the General Court did not manifestly exceed the limits of a reasonable assessment of the documents at issue and, consequently, did not distort them.
113 As the General Court rightly pointed out in paragraph 86 of the judgment under appeal, although the email of 8 October 2018 mentions that a check is not intended to verify the actual costs incurred in connection with travel, since the corresponding costs are assumed on a flat-rate basis, it is by no means excluded that the documents required make it possible to verify the actual dates of the secondments. In that regard, the verification of the dates of the flights taken by the seconded researchers, by means, inter alia, of boarding passes, makes it possible to verify that those researchers actually attended the host university and that the secondments did indeed take place in accordance with the requirements of the grant agreement.
114 In the present case, as the General Court noted in paragraph 88 of the judgment under appeal, while it is true that the appellant produced employment contracts which had been concluded with the researchers concerned, those contracts do not make it possible to establish that those researchers had actually been seconded, in particular because the dates to which those contracts refer do not correspond specifically to the dates of secondments, with the result that the production of additional documents, such as boarding passes, was entirely necessary in order to demonstrate that those secondments in fact took place.
115 In that regard, by maintaining that the General Court should have concluded that the wording of the REA’s email of 8 October 2018 contradicts that which appears, inter alia, in the REA’s subsequent letter of 21 August 2019, by which the REA launched a financial audit of the grant agreement, the appellant is in fact challenging the General Court’s assessment of the probative value of the evidence submitted by the REA. Such arguments are, in accordance with the case-law referred to in paragraph 109 of the present judgment, inadmissible at the appeal stage, since the appellant has neither demonstrated a distortion of the evidence in question nor put forward arguments from which it may be concluded that the General Court infringed the rules relating to the burden of proof and the taking of evidence.
116 In those circumstances, the second and third parts of the fourth ground of appeal must be rejected as in part inadmissible and in part unfounded.
117 The fifth ground of appeal is directed against paragraphs 64 and 69 of the judgment under appeal and alleges that the General Court erred in law in that it reversed the burden of proof and infringed the principle of proportionality.
118 In paragraph 64 of the judgment under appeal, the General Court recalled that it is settled case-law that, in the context of an agreement which contains an arbitration clause within the meaning of Article 272 TFEU, it is for the party which, in order to be awarded a financial contribution by the European Union, has declared costs to the entity granting that finance to produce evidence that those costs meet the financial conditions of the grant agreement in force.
119 In that regard, in paragraph 69 of the judgment, the General Court held that there is no infringement of the principle of proportionality where an authorising officer for expenditure, which takes the form of EU financial assistance, considers that it was not sufficient for the beneficiary of that assistance, in order to justify the award of that assistance, to show that a project had been carried out, and requires that the beneficiary had to prove that the costs declared had been incurred in accordance with the conditions laid down for the award of the grant concerned.
120 According to the appellant, the question arises as to which financial conditions were applicable to the grant agreement, given their original content and the way in which they evolved during the implementation of that agreement. In the present case, doubts arose after the completion of the project and following a financial audit during which the appellant found itself being faced with an unexpected ex post verification. Those doubts proved to be unjustified as to their systematic nature, as is apparent in particular from an investigation carried out by OLAF.
121 The REA submits that the fifth ground of appeal is unfounded.
122 It should be noted, first, as regards paragraph 64 of the judgment under appeal, that the appellant disputes the principle set out therein, according to which the beneficiary of an EU financial contribution must prove that the costs declared to the entity granting the funding satisfy the financial conditions of the grant agreement in force.
123 Second, as regards paragraph 99 of the judgment under appeal, the appellant challenges the General Court’s finding that the principle of proportionality is not infringed where the beneficiary of an EU financial contribution is required to prove not only that the activity that was subsidised was carried out, but also that the costs declared were incurred in accordance with the conditions laid down for the award of the grant concerned.
124 In the present case, it should be noted that, far from supporting a finding that the burden of proof was reversed, as alleged by the appellant, both paragraph 64 and paragraph 99 of the judgment under appeal seek rather to recall settled case-law, which the General Court correctly applied in the judgment under appeal, as regards the allocation and extent of the burden of proof borne by the beneficiary of EU funding under the grant agreement.
125 Therefore, by referring to the obligation for the beneficiary of a grant to prove that the costs were actually incurred, in accordance with the applicable conditions of the grant agreement, the General Court did not infringe the principle of proportionality.
126 As regards the reference to the audit and the investigation carried out by OLAF, it must be held that the appellant is in fact asking the Court of Justice to carry out a new assessment of the facts of the case to substitute that already carried out by the General Court. Consequently, that request must be held to be inadmissible, in accordance with the case-law recalled in paragraph 108 of the present judgment.
127 In those circumstances, the fifth ground of appeal must be rejected as in part inadmissible and in part unfounded.
128 Since none of the grounds of appeal put forward by the appellant has been upheld, the appeal must be dismissed in its entirety.
129 Article 184(2) of the Rules of Procedure provides that where the appeal is unfounded, the Court of Justice is to make a decision as to the costs.
130 Under Article 138(1) of those rules, which applies to appeal proceedings by virtue of Article 184(1) thereof, the unsuccessful party is to be ordered to pay the costs if they have been applied for in the successful party’s pleadings.
131 In the present case, since the REA has applied for costs and Glonatech has been unsuccessful in its grounds of appeal, Glonatech must be ordered to pay the costs.