EuGH, Rs. 20/88 v. 30.5.1989 - Roquette


Judgment of the Court of 30 May 1989. - SA Roquette frí¨res v Commission of the European Communities. - Non-contractual liability - Monetary compensatory amounts unduly paid. - Case 20/88.^

 

Keywords

 

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1.Action for compensation - Time limitation - Considered of Court' s own motion - Not permissible

( EEC Treaty, Art . 178 and second paragraph of Art . 215; Protocol on the Statute of the Court of Justice of the EEC, Art . 43 )

2.Action for compensation - Autonomous form of action - Exhaustion of all remedies under national law - Exception - Impossibility of obtaining reparation in national courts

( EEC Treaty, Art . 178 and second paragraph of Art . 215 )

3.Non-contractual liability - Damage - Damage for which compensation is available - Damage represented by the payment of monetary compensatory amounts under a regulation declared void - Collection rendered definitive by judgment of the Court - Excluded

( EEC Treaty, second paragraph of Art . 174 and second paragraph of Art . 215 )

4.Non-contractual liability - Conditions - Legislative measure involving choices of economic policy - Sufficiently serious breach of a superior rule of law - Technical error - No liability

( EEC Treaty, second paragraph of Art . 215 )

Summary

 

1.Actions to establish the Community' s liability are governed, pursuant to the second paragraph of Article 215 of the Treaty, by the general principles common to the laws of the Member States . A comparison of the legal systems of the Member States shows that as a general rule, subject to very few exceptions, a court may not of its own motion raise the issue of time limitation . It follows that, in an action to establish liability under Article 178 of the Treaty, it is not appropriate for the Court to examine, of its own motion, the question of any time limitation under Article 43 of the Protocol on the Statute of the Court of Justice of the EEC where that issue has not been raised by the defendant .

2.The action for compensation provided for in Article 178 and the second paragraph of Article 215 of the EEC Treaty was introduced as an autonomous form of action with a particular purpose to fulfil within the system of remedies . Although its admissibility may be conditional in certain cases on the prior exhaustion of the remedies available under domestic law for obtaining satisfaction from the national authorities, it is essential, for that condition to apply, that those remedies under domestic law effectively ensure protection for individuals aggrieved by measures of Community institutions . That is not the case where the reimbursement by the national authorities of monetary compensatory amounts collected pursuant to a Community regulation declared invalid by a judgment of the Court was excluded by that judgment .

3.Since the Court, in declaring invalid a regulation which served as the basis for the charging of monetary compensatory amounts, exercised the power vested in it by the second paragraph of Article 174 of the Treaty and held that the charging thereof could not be challenged, a trader has no grounds, whatever the basis of his claim, for seeking compensation for the damage represented by the sum which he had to pay in respect of those amounts .

4.The Community' s non-contractual liability cannot be incurred through the adoption of legislative measures involving a choice of economic policy unless a sufficiently flagrant violation of a superior rule of law for the protection of the individual has occurred . In a legislative context characterized by a wide margin of discretion, which is essential for the implementation of the common agricultural policy, such liability can therefore be incurred only if the institution concerned has manifestly and gravely disregarded the limits on the exercise of its powers . That is not the case where monetary compensatory amounts are fixed in breach of the applicable basic regulation, as a result of a technical error, even if it led de facto to unequal treatment for certain producers established in countries with weak currencies .

Parties

 

In Case 20/88

Roquette frí¨res SA, whose registered office is in Lestrem, France, represented by Marcel Varoone, of the Lille Bar, with an address for service in Luxembourg at the Chambers of Louis Schiltz, 83 boulevard Grande-Duchesse Charlotte,

applicant,

v

Commission of the European Communities, represented by its Legal Adviser, Jean-Claude Séché, acting as Agent, with an address for service in Luxembourg at the office of Georgios Kremlis, Wagner Centre, Kirchberg,

defendant,

APPLICATION for compensation made pursuant to the second paragraph of Article 215 of the EEC Treaty, based on the finding by the Court of Justice that certain provisions of Commission Regulation No 652/76 of 24 March 1976 changing the monetary compensatory amounts following changes in exchange rates for the French franc ( Official Journal 1976, L 79, p . 4 ) were invalid,

THE COURT

composed of : O . Due, President, T . Koopmans and F . Grévisse, Presidents of Chambers, G . F . Mancini, C . N . Kakouris, F . A . Schockweiler, J . C . Moitinho de Almeida, M . Dí­ez de Velasco and M . Zuleeg, Judges,

Advocate General : M . Darmon

Registrar : D . Louterman, Administrator

having regard to the Report for the Hearing and further to the hearing on 17 January 1989,

after hearing the Opinion of the Advocate General delivered at the sitting on 10 March 1989,

gives the following

Judgment

Grounds

 

1 By application lodged at the Court Registry on 19 January 1988, Roquette frí¨res SA, whose registered office is in Lestrem, France ( hereinafter referred to as "Roquette "), brought an action under Article 178 and the second paragraph of Article 215 of the EEC Treaty for an award of the sum of ECU 10 million, together with default interest thereon, as compensation for the damage which it claimed to have suffered as a result of the fixing by the Commission of monetary compensatory amounts found to be unlawful by the Court .

2 The applicant considers that the Commission caused the Community to incur non-contractual liability by fixing the monetary compensatory amounts applicable to certain starch products on the basis of calculation methods held by the Court in its judgment of 15 October 1989 in Case 145/79 Roquette frí¨res SA v French customs administration (( 1980 )) ECR 2917 to be illegal .

( a ) Background to the dispute

3 By the abovementioned judgment in Case 145/79, the Court declared that Commission Regulation No 652/76 changing the monetary compensatory amounts following changes in exchange rates for the French franc ( Official Journal 1976, L 79, p . 4 ) was invalid :

( i ) in so far as it fixed the compensatory amounts applicable to maize starch on a basis other than that of the intervention price of maize after deduction of the production refund on starch;

( ii ) in so far as it fixed the compensatory amounts applicable to wheat starch on a basis other than that of the reference price of wheat after deduction of the production refund on starch;

( iii ) in so far as it fixed the compensatory amounts applicable to all the different products obtained by the processing of a given quantity of the same basic product, such as maize or wheat, in a specified manufacturing process at a figure appreciably higher than the monetary compensatory amount fixed for that given quantity of the basic product; and

( iv ) in so far as it fixed compensatory amounts applicable to potato starch which exceeded those applicable to maize starch .

4 The Court also held that the finding of invalidity rendered invalid the provisions of the subsequent Commission regulations intended to alter the monetary compensatory amounts applicable to the products affected by the finding of invalidity .

5 In the same judgment, the Court considered that it was appropriate to rule, on the basis of the second paragraph of Article 174 of the EEC Treaty, that the finding of the invalidity of the provisions in question did not enable the charging or payment of monetary compensatory amounts by the national authorities on the basis of those provisions to be challenged as regards the period prior to the date of its judgment .

6 That judgment of the Court was delivered in response to a request for a preliminary ruling made by the tribunal d' instance ( District Court ), Lille, which was hearing an action brought by Roquette against the French State for reimbursement of the sums improperly charged by the customs authorities on or after 25 March 1976, the date on which Regulation No 652/76 entered into force . Following the judgment of the Court, the tribunal d' instance upheld Roquette' s claim on the ground that, in view of the terms of the questions submitted by it for a preliminary ruling, the Court had no jurisdiction to indicate which of the effects of the measure declared void were to be considered definitive .

7 The judgment of the tribunal d' instance was affirmed by the cour d' appel ( Court of Appeal ), Douai, but the judgment of the latter court was quashed by the Cour de cassation ( Court of Cassation ). The Cour de cassation took the view that only the Court of Justice had jurisdiction to limit the effects in time of the invalidity of the regulations in question and that the cour d' appel had not given due effect to the judgment of the Court of Justice in Case 145/79 . The case was then remitted to the cour d' aAppel, Amiens, which, by judgment of 1 June 1987, set aside the judgment of the tribunal d' instance, Lille, and dismissed Roquette' s action .

8 In the present proceedings, Roquette seeks compensation from the Community for the damage allegedly suffered by it as a result of the application to it of the invalid provisions . That damage is said to comprise two separate components . In the first place, Roquette suffered a considerable loss through payment to the national authorities of monetary compensatory amounts based on Community provisions which had been declared invalid . In the second place, it suffered a loss of profit because it was placed at a disadvantage by comparison with its competitors, particularly those in countries with strong currencies, as a result of the impact of the excessive monetary compensatory amounts .

9 The Commission contends that the application represents a misuse of procedure in so far as Roquette seeks to obtain, by means of an action for compensation, the reimbursement of sums which it was unable to obtain by an action before the French courts for sums unduly paid . In its view, the conditions laid down in decisions of the Court for the Community to incur non-contractual liability by virtue of a legislative measure are not satisfied in the present case . Finally, it denies that Roquette has suffered the damage alleged by it, since it was able to profit from the higher rate of the monetary compensatory amounts, in particular when exporting to countries with weaker currencies .

10 Reference is made to the Report for the Hearing for a fuller account of the facts, the course of the procedure and the submissions and arguments of the parties, which are mentioned or discussed hereinafter only in so far as is necessary for the reasoning of the Court .

( b ) Admissibility

11 According to Article 43 of the Protocol on the Statute of the Court of Justice of the EEC, proceedings against the Community in matters arising from non-contractual liability are barred after a period of five years from the occurrence of the event giving rise thereto . In the present case, the Commission has not claimed that Roquette' s action is time-barred .

12 Actions to establish non-contractual liability are governed, pursuant to the second paragraph of Article 215 of the EEC Treaty, by the general principles common to the laws of the Member States . A comparison of the legal systems of the Member States shows that as a general rule, subject to very few exceptions, a court may not of its own motion raise the issue of time limitation .

13 It is therefore unnecessary to consider the question whether the right of action on which these proceedings are based may be time-barred .

14 On the other hand, it is appropriate for the Court to verify, of its own motion, whether an action to establish non-contractual liability may be brought before it where the alleged damage includes monetary compensatory amounts overcharged by a national administration and only the national courts have jurisdiction to entertain actions for the reimbursement of such amounts .

15 The Court has consistently held that the action for compensation provided for in Article 178 and the second paragraph of Article 215 of the EEC Treaty was introduced as an autonomous form of action with a particular purpose to fulfil within the system of remedies . Although its admissibility may be conditional in certain cases on the prior exhaustion of the remedies available under domestic law for obtaining satisfaction from the national authorities, it is essential, in order for that condition to apply, that those remedies under domestic law effectively ensure protection for individuals aggrieved by measures of Community institutions ( judgments of 12 April 1984 in Case 281/82 Unifrex v Commission and Council (( 1984 )) ECR 1969, and of 26 February 1986 in Case 175/84 Krohn v Commission (( 1986 )) ECR 763 ).

16 In the present case, the remedies provided for by domestic law for obtaining reimbursement of excessive monetary compensatory amounts are unavailable to the applicant for the very reason that the Court' s judgment in Case 145/79, applied by the French courts, ruled that the invalidity of the regulations fixing those amounts could not enable the charging thereof to be challenged as regards the period prior to the date of that judgment . Accordingly, no remedy under national law can effectively ensure reparation for any damage suffered .

17 The action is therefore admissible .

( c ) The damage resulting from the undue payment of monetary compensatory amounts

18 According to the applicant, its loss comprises, in the first place, the sums unduly paid in respect of monetary compensatory amounts to the national authorities . It mentions the sum of FF 29 639 506.74, agreed by the tribunal d' instance, Lille, and the cour d' appel, Douai, and the sum of DM 773 465 corresponding to the sums unduly paid to the customs authorities of the Federal Republic of Germany and evaluated according to calculation methods identical to those used in France .

19 It must be observed that the judgment in Case 145/79 expressly rejected any possibility of "challenging" the charging or payment of monetary compensatory amounts effected, before the date of the judgment, on the basis of the provisions held to be invalid . The charging of the amounts in question by the national authorities is thus no longer open to challenge .

20 Accordingly, no compensation is available for the alleged loss in respect of the payment of the monetary compensatory amounts provided for in Regulation No 652/76 and the subsequent regulations, whatever the basis of the claim . The applicant' s claim in that respect must therefore be dismissed as unfounded .

( d ) The damage arising through loss of profit

21 The applicant refers in the second place to the real damage which it allegedly suffered in the form of a considerable loss of profit . It maintains that the effects of a difference between the rate of monetary compensatory amounts actually applied and the lawful rate are always twofold since when one trader pays too much another trader receives too much . Moreover, since the price of the goods subject to the monetary compensatory amounts is unregulated, the applicant was unable to pass on to its purchasers the adverse incidence of those amounts; it was therefore compelled to align its prices with those of its competitors, in particular with those of companies established in Member States with strong currencies .

22 The amount advanced in this respect, calculated on the basis of the exchange rates ruling on the day of the hearing, represents about 52% of the total claim of ECU 10 million . However, it must be pointed out that the applicant has given no indication of the manner in which that amount was calculated and that, both in its pleadings and at the hearing, it merely repeated that the rate of the monetary compensatory amounts not only placed certain undertakings at a disadvantage but, by the same token, also placed other undertakings at an advantage .

23 The Court has consistently held that the Community' s non-contractual liability cannot be incurred through the adoption of a legislative measure involving a choice of economic policy unless a sufficiently flagrant violation of a superior rule of law for the protection of the individual has occurred . In a legislative context characterized by a wide margin of discretion, which is essential for the implementation of the common agricultural policy, such liability can therefore be incurred only if the institution concerned has manifestly and gravely disregarded the limits on the exercise of its powers ( judgment of 25 May 1978 in Joined Cases 83 and 94/76, 4, 15 and 40/77 Bayerische HNL v Commission (( 1978 )) ECR 1209 ).

24 It is therefore necessary to consider the nature of the rule which, according to the judgment in Case 145/79, was infringed by the fixing of the monetary compensatory amounts applicable to starch products . It is contained, for the most part, in Article 2(2 ) of Regulation No 974/71 of the Council of 12 May 1971 on certain measures of conjunctural policy to be taken in agriculture following the temporary widening of the margins of fluctuation for the currencies of certain Member States ( Official Journal, English Special Edition 1971 ( I ), p . 257 ), the basic regulation concerning monetary compensatory amounts . Under that provision, the monetary compensatory amounts applicable to products processed from maize or wheat must be equal to the incidence, on the product concerned, of the application of the compensatory amount to the price of the basic product .

25 The Court has admitted that the calculation of that incidence raised difficult technical and economic problems regarding products whose manufacturing process and composition might vary in different regions of the Community . However, it took the view that the Commission, in fixing the monetary compensatory amounts applicable to starch products, had made errors of calculation resulting in the fixing of amounts much higher than those corresponding to the incidence of the amounts applicable to the basic products and that it had thus exceeded the limits of its discretion . Those errors related in particular to the supply price of the maize and wheat used for the production of starch, the total of the amounts applicable to all the by-products obtained from the same quantity of maize or wheat in a specified manufacturing process, and the alignment of the amounts applicable to potato starch with those applicable to maize starch .

26 It is apparent from the foregoing considerations that the fixing of the contested monetary compensatory amounts resulted from a technical error which, even if it led de facto to unequal treatment for certain producers established in countries with weak currencies, cannot be considered to constitute a serious breach of a superior rule of law for the protection of the individual or a manifest and grave disregard by the Commission of the limits of its discretion .

27 Since the conditions for the Community to incur non-contractual liability under the second paragraph of Article 215 of the Treaty for unlawful legislative action are not satisfied, the action must be dismissed in its entirety .

Decision on costs

 

Costs

28 Under Article 69(2 ) of the Rules of Procedure, the unsuccessful party is to be ordered to pay the costs . Since the applicant has failed in its submissions, it must be ordered to pay the costs .

Operative part

 

On those grounds,

THE COURT

hereby :

( 1 ) Dismisses the application;

( 2 ) Orders the applicant to pay the costs .