1 This request for a preliminary ruling concerns the interpretation of Article 35(1) of Commission Regulation (EU) 2017/460 of 16 March 2017 establishing a network code on harmonised transmission tariff structures for gas (OJ 2017 L 72, p. 29).
2 The request has been made in proceedings between MET Magyarország Energiakereskedő Zrt. (‘MET’), a Hungarian company, and Global NRG ROM SRL (‘Global NRG’), a Romanian company, and the Magyar Energetikai és Közmű-szabályozási Hivatal (Hungarian Regulatory Authority for the Energy Sector and Public Utilities) (‘MEKH’) concerning the legality of the latter’s decision establishing the reference price methodology for gas transmission and declaring it applicable to contracts concluded before 6 April 2017 between FGSZ Földgázszállító Zrt. (‘FGSZ’), the Hungarian gas transmission system operator, and those two companies, users of that network.
3 Recital 7 of Regulation (EC) No 715/2009 of the European Parliament and of the Council of 13 July 2009 on conditions for access to the natural gas transmission networks and repealing Regulation (EC) No 1775/2005 (OJ 2009 L 211, p. 36), provided: ‘It is necessary to specify the criteria according to which tariffs for access to the network are determined, in order to ensure that they fully comply with the principle of non-discrimination and the needs of a well-functioning internal market …’
4 Recital 19 of that regulation stated: ‘To enhance competition through liquid wholesale markets for gas, it is vital that gas can be traded independently of its location in the system. The only way to do this is to give network users the freedom to book entry and exit capacity independently, thereby creating gas transport through zones instead of along contractual paths. … Tariffs should not be dependent on the transport route. The tariff set for one or more entry points should therefore not be related to the tariff set for one or more exit points, and vice versa.’
5 Article 13 of that regulation, entitled ‘Tariffs for access to networks’, provided, in the fourth subparagraph of paragraph 1 thereof: ‘Tariffs for network users shall be non-discriminatory and set separately for every entry point into or exit point out of the transmission system. Cost-allocation mechanisms and rate setting methodology regarding entry points and exit points shall be approved by the national regulatory authorities. By 3 September 2011, the Member States shall ensure that, after a transitional period, network charges shall not be calculated on the basis of contract paths.’
6 Recital 3 of Regulation 2017/460 states: ‘After the introduction of the concept of the entry-exit system by Regulation (EC) No 715/2009, transmission costs are no longer directly associated to one specific route as entry and exit capacity can be contracted separately, and network users can have gas transported from any entry to any exit point. Under this framework, the transmission system operator decides the most efficient way of flowing gas through the system. …’
7 Article 3(1) of Regulation 2017/460 defines ‘reference price’ as ‘the price for a capacity product for firm capacity with a duration of one year, which is applicable at entry and exit points and which is used to set capacity-based transmission tariffs’.
8 Article 6 of that regulation, entitled ‘Reference price methodology application’, provides, in paragraph 3 thereof: ‘The same reference price methodology shall be applied to all entry and exit points in a given entry-exit system subject to the exceptions set out in Articles 10 and 11.’
9 Article 35 of that regulation, entitled ‘Existing contracts’, provides in paragraphs 1 and 2: ‘1. This Regulation shall not affect the levels of transmission tariffs resulting from contracts or capacity bookings concluded before 6 April 2017 where such contracts or capacity bookings foresee no change in the levels of the capacity- and/or commodity-based transmission tariffs except for indexation, if any. 2. The contract provisions related to transmission tariffs and capacity bookings referred to in paragraph 1 shall not be renewed, prolonged or rolled over after their expiration date.’
10 Paragraph 104(7) of the a földgázellátásról szóló 2008. évi XL. törvény (Law No XL of 2008 on the supply of natural gas), in the version applicable to the dispute in the main proceedings, provides: ‘A price higher than the official price may not be validly stipulated in the contract. If the parties have not agreed a price and there is an official tariff in force for the product or service, that official tariff shall apply. The official tariff shall also apply where the parties have agreed a different price that is contrary to the law or the decision establishing the official tariff.’
11 On 20 October 2008, MET and Global NRG each concluded a long-term contract with FGSZ for capacity booking, natural gas transmission and network operation (‘the long-term contract’) in connection with the pipeline linking Hungary and Romania for the period 2010-2030. Until 2018, those contracts were amended annually with regard to the tariffs applicable by means of amendments concluded between the parties.
12 As regards the transmission tariff for the border crossing point between Hungary and Romania, the formula in clause 3 of the long-term contracts provides for an annual indexation based on the consumer price index, as established by the Central Statistical Office.
13 When setting the annual transmission tariff, the contracting parties also took account of the official network use tariffs set by MEKH in periodically updated tariff orders. Those tariffs, which were mandatory under Paragraph 104(7) of the Law on the supply of natural gas, constituted the maximum limit of the price to be paid by the applicants in the main proceedings. Those applicants were therefore required to pay the network use charges each year, from the entry into force of the long-term contracts until 30 September 2019, on the basis of the lower of the two tariffs for the period concerned, the indexed tariff provided for in the long-term contract or the official tariff.
14 Until 30 September 2019, MEKH set the official network use tariffs for the border exit point between Hungary and Romania using a methodology different from that used for other points of the Hungarian natural gas transmission system, namely the ‘discounted cash flow’ model, the purpose of which was to ensure the profitability of the investment in the construction of the pipeline. That authority took into account, in addition to indexation, other aspects such as new capacity bookings and the revenue derived from them, as well as the internal rate of return.
15 On 6 April 2017, Regulation 2017/460 entered into force. Article 6(3) thereof provides that the same reference price methodology must be applied to all entry and exit points in a given entry-exit system. The entry into force of that regulation resulted in the mandatory application of that methodology for the entire Hungarian pipeline network, which is now regarded as a single entry-exit system.
16 MEKH implemented those new rules for the first time with effect from 1 October 2019 and therefore determined the tariff for the border exit point between Hungary and Romania to be paid by the applicants in the main proceedings under the long-term contracts in the same way as the tariffs for all the other exit points of the system for the entire Hungarian network.
17 The applicants in the main proceedings, disagreeing with that amendment, did not sign the new amendments to those contracts, the last amendment dating back to 1 October 2018. Since 1 October 2019 they have paid the FGSZ system operator subject to their rights.
18 In its decision of 25 October 2022, MEKH established the reference price methodology for the price regulation cycle from 1 October 2021 to 30 September 2025. It stated that the exemption provided for in Article 35(1) of Regulation 2017/460, under which that regulation does not affect the levels of transmission tariffs resulting from contracts or capacity bookings concluded before 6 April 2017, did not apply to long-term contracts. That provision applies to contracts under which the annual tariff update results solely from the implementation of an indexation clause. According to MEKH, the tariffs set in the long-term contracts did not vary solely as a result of indexation, but also took account of the level of the official tariff.
19 Met and Global NRG brought an action for annulment of the decision of 25 October 2022 before the Fővárosi Törvényszék (Budapest High Court, Hungary), which is the referring court, claiming that the long-term contracts fall within the scope of Article 35(1) of Regulation 2017/460. That provision implements the principle of the protection of legitimate expectations, its objective being to ensure that the entry into force of that regulation does not adversely affect the rights of the contracting parties of long-term contracts concluded prior to it.
20 The referring court states that, according to the Hungarian-language version of Article 35(1) of Regulation 2017/460, the exemption provided for therein applies to contracts which foresee no change in the levels of the capacity- and/or commodity-based transmission tariffs that exceed any indexation. It states that that condition could be met by the contracts at issue in the main proceedings. However, it follows from the English-, French- and German-language versions of Article 35(1) of Regulation 2017/460 that the criterion for exemption does not lie in the level of tariff variation, but in the exclusive causal relationship with the indexation mechanism alone. According to the referring court, it is not clear, as regards those contracts, whether it is possible to consider that the tariffs vary solely as a result of indexation. First, account is taken of the official tariff, which applies where it is lower than the contractual tariff. Second, indexing as a result of the application of the official tariff is carried out, not on the basis of the initial contractual tariff but on the basis of a tariff level incorporating that application. Third, taking into account the official tariff is a legal obligation for the contracting parties. Fourth, when setting the official tariff, MEKH took into account, before the entry into force of Regulation 2017/460, other criteria in addition to indexation.
21 In those circumstances, the Fővárosi Törvényszék (Budapest High Court) decided to stay the proceedings and to refer the following question to the Court of Justice for a preliminary ruling: ‘Having regard to the principles of legal certainty and legitimate expectations, should Article 35(1) of Regulation 2017/460 be interpreted as meaning that the exemption from application of that regulation also covers the long-term capacity booking contracts concluded before 2017, in which the pricing clauses did not provide for the capacity- and/or commodity-based transmission tariff determined at the time the contract was concluded to vary exclusively according to a pre-determined formula based on the consumer price index established by the national statistics office, but rather - by virtue of a mandatory provision of national law - applied the official network use tariff instead of the calculated tariff, wherever the former was lower, the official tariff being the tariff that the parties index in the following period (that tariff being determined by the authority taking into account not only the indexation but also the new short-term capacity booking contracts concluded for a given network interconnection pipeline and the revenue derived from those contracts, and the internal rate of return)?’
22 By its question, the referring court asks, in essence, whether Article 35(1) of Regulation 2017/460, read in the light of the principles of legal certainty and the protection of legitimate expectations, must be interpreted as meaning that the exception laid down therein applies to long-term gas capacity booking contracts concluded before 6 April 2017, foreseeing a change in transmission tariff levels, determined on the basis of the capacity and/or quantity of gas transported, based not only on indexation, in the present case based on the consumer price index, but also by taking into account an official tariff, which itself includes indexation and other factors, that may apply instead of the contractual tariff.
23 As regards the context of the provision to be interpreted, it should be noted that Regulation No 715/2009 is part of the ‘Third Energy Package’, adopted on 13 July 2009, which is intended, inter alia, to liberalise the gas markets further and to make them more transparent. Regulation No 715/2009 introduced the concept of ‘entry-exit system’ which consists, as is apparent from recital 19 and Article 13 of that regulation, in allowing gas transmission system users to trade in gas irrespective of its actual physical circulation, thereby rendering the transmission network use tariffs independent of the specific gas transmission routes.
24 The purpose of Regulation 2017/460, the legal basis of which is Regulation No 715/2009, is to establish a network code on the harmonisation of tariff structures for the transport of gas in accordance with the entry-exit system introduced by Regulation No 715/2009. Thus, Article 6(3) of Regulation 2017/460 provides that, in principle, the same method for calculating reference prices is to be applied to all entry and exit points in a given entry-exit system.
25 It is not disputed that the contracts at issue in the main proceedings set transmission tariffs for a specific gas route and therefore do not comply with Article 6(3) of Regulation 2017/460.
26 In order to ensure compliance with the principles of legal certainty and legitimate expectations, Article 35 of Regulation 2017/460 provides, however, for an exception to the applicability of that regulation in respect of existing contracts. Thus, in accordance with paragraph 1 of that article, that regulation ‘shall not affect the levels of transmission tariffs resulting from contracts or capacity bookings concluded before 6 April 2017 where such contracts or capacity bookings foresee no change in the levels of the capacity- and/or commodity-based transmission tariffs except for indexation, if any’.
27 As regards, in the first place, the wording of that provision, two cumulative conditions must be satisfied in order for that exception to apply. According to the first condition, it must be a contract concluded before 6 April 2017, the date on which Regulation 2017/460 entered into force. The second condition is that the contract does not foresee change in the levels of the capacity- and/or commodity-based transmission tariffs except for possible indexation.
28 As regards the first condition, it is apparent from the documents before the Court that the long-term contracts were concluded on 20 October 2008, with the result that this condition is satisfied.
29 As regards the second condition, it is apparent from the various language versions of Article 35 of Regulation 2017/460, apart from the Hungarian-language version, that the exception applies only to long-term capacity booking contracts for gas transmission concluded before 6 April 2017, under which the level of transmission tariffs may change only as a result of indexation. While the English-, French- and German-language versions of that provision, as well as the other language versions examined by the Court, contain the words ‘no change … except for indexation’, the Hungarian-language version uses the expression ‘no change … exceeding indexation’. That expression could be interpreted in such a way that the level of tariffs could also change according to factors other than indexation, provided that that tariff update does not lead to a level higher than that resulting from any indexation.
30 According to settled case-law, the wording used in one language version of a provision of EU law cannot serve as the sole basis for the interpretation of that provision, or be made to override the other language versions in that regard. Such an approach would be incompatible with the requirement that EU law be applied uniformly. Where there is a divergence between the various language versions, the provision in question must thus be interpreted by reference to the general scheme and the purpose of the rules of which it forms part (see judgments of 27 October 1977, Bouchereau, 30/77, EU:C:1977:172, paragraph 14, and of 9 July 2020, Naturschutzbund Deutschland - Landesverband Schleswig-Holstein, C‑297/19, EU:C:2020:533, paragraph 43 and the case-law cited).
31 The TAR NC Regulation does not define the concept of ‘indexation’ contained in Article 35(1) thereof. Accordingly, the meaning and scope of that concept must be determined by reference, inter alia, to its usual meaning in everyday language (see, to that effect, judgment of 1 October 2020, Entoma, C‑526/19, EU:C:2020:769, paragraph 29 and the case-law cited).
32 In that regard, indexation is generally understood as a contractual or legal mechanism which tends to vary automatically, over time, the amount of a financial value initially defined in accordance with the evolution of a given benchmark.
33 In the present case, the contracts at issue in the main proceedings include an indexation mechanism under which the transmission tariff applicable for a given period is calculated using a formula determined in advance and based on changes in the consumer price index as established by the Central Statistical Office.
34 However, it is apparent from the order for reference that those contracts also stipulate, pursuant to a mandatory provision of national law, the application of the official network use tariff instead of the initially agreed, index-linked tariff, where the former is lower than the latter. Indeed, the official tariff was applied several times and then served as the basis for contractual indexation for a given period. It is also apparent from that decision that MEKH took into account, when setting that official tariff, in addition to indexation, other factors such as the new short-term capacity booking contracts concluded for the pipeline in question, the revenue which they generate and the internal rate of return. It thus appears that the level of the contractual transmission tariff evolved over time according to factors other than the indexation agreed in the contract.
35 As regards, in the second place, the context of Article 35(1) of Regulation 2017/460, it should be noted that, as is apparent from paragraphs 23 and 24 of the present judgment, that provision constitutes a provision derogating from the principle that the same reference price methodology must be applied to all entry and exit points in a given entry-exit system, provided for in Article 6(3) of that regulation, and that it is, therefore, to be interpreted strictly.
36 That is confirmed by Article 35(2) thereof, according to which the contractual provisions relating to transmission tariffs and capacity bookings referred to in Article 35(1) may not be renewed, prolonged or rolled over after their expiration date.
37 As regards, in the third place, the objectives pursued by Regulation No 715/2009 and Regulation 2017/460, they seek, in accordance with recitals 7 and 19 of Regulation No 715/2009, to ensure that network access tariffs fully comply with the principle of non-discrimination and the requirements of the proper functioning of the internal market, and to increase competition through the creation of liquid wholesale markets for gas. Recital 19 of that regulation and recital 3 of Regulation 2017/460 state that, to that end, it is vital that gas can be traded independently of its location in the system and that the only way to do this is to give network users the freedom to book entry and exit capacity independently, thereby creating gas transport through zones instead of along contractual paths, since tariffs should not be dependent on the transport route. The non-discriminatory nature of the tariffs or the methodologies used to calculate them is also emphasised in Article 13(1) of Regulation No 715/2009.
38 Therefore, a restrictive interpretation of the exception contained in Article 35(1) of Regulation 2017/460 implies, having regard to the context and purpose of that regulation as set out in paragraphs 23 and 35 to 37 of the present judgment, that it cannot apply if, during the term of the contract, the tariff provided for therein is subject to adjustments taking into account factors other than indexation based on the consumer price index.
39 As regards the principles of legal certainty and the protection of legitimate expectations, according to settled case-law, any economic operator on whose part an institution has promoted reasonable expectations may rely on the principle of the protection of legitimate expectations. Furthermore, while the principle of the protection of legitimate expectations is one of the fundamental principles of the European Union, economic operators are not justified in having a legitimate expectation that an existing situation which is capable of being altered by the institutions of the European Union in the exercise of their discretionary power will be maintained (judgment of 26 June 2012, Poland v Commission, C‑335/09 P, EU:C:2012:385, paragraph 180 and the case-law cited).
40 In view of the above, the answer to the question referred is that Article 35(1) of Regulation 2017/460, read in the light of the principles of legal certainty and the protection of legitimate expectations, must be interpreted as meaning that the exception laid down therein applies only to long-term gas capacity booking contracts concluded before 6 April 2017 in which no change in the levels of transmission tariffs, determined on the basis of the capacity and/or quantity of gas transported is foreseen other than on the basis of indexation, in particular on the basis of the consumer price index. That exception shall not apply to contracts where changes in tariff levels result from other factors, including where the contracting parties so agree or where an official tariff applies.
41 Since these proceedings are, for the parties to the main proceedings, a step in the action pending before the referring court, the decision on costs is a matter for that court. Costs incurred in submitting observations to the Court, other than the costs of those parties, are not recoverable.