C-143/73

(FORMA), of Paris and FONDS D'INTERVENTION ET DE RÉGULARISATION DU MARCHÉ DU SUCRE (FIRS), of Paris,

on the interpretation of Regulations No 1098/68 of the Commission of 27 July 1968, establishing detailed rules for the application of export refunds on milk and milk products (OJ L 184 of 29 July 1968), No 951/71 of the Commission of 7 May 1971 amending Regulation No 1098/68 (OJ No 103 of 8 May 1971) and No 1048/71 of the Council of 25 May 1971 amending Regulation No 766/68 laying down general rules for granting export refunds on sugar on the subject of adjustment of the refund (OJ L 114 of 26 May 1971),

THE COURT

composed of: M. Sørensen, acting President, R. Monaco, J. Mertens de Wilmars, P. Pescatore, H. Kutscher, C. Ó Dálaigh (Rapporteur) and A. J. Mackenzie Stuart, Judges,

Advocate-General: J. P. Warner Registrar: A. Van Houtte

gives the following

The facts of the case, the subject matter Regulation No 766/68 provided for the of the applications and the views of the main 'sugar' sector. This modification of parties may be summarized as follows: Article 2 (3), second paragraph, of Regulation No 1098/68 therefore makes the adjustment of the 'sugar' element contained in composite products depend I — Facts and procedure on what happens to the refund fixed for white sugar. 1. Regulation No 876/68 of the Council of 28 June 1968 laying down By its Regulation No 1048/71 of 25 May 1971, it was precisely Article 12 of general rules for granting export refunds on milk and milk products and criteria Regulation No 766/68 which the Council modified, so that it henceforth for fixing the amount of such refunds read: 'if during the period between the was made more specific for the purpose date of lodging the application for an of its application by Regulation No export licence together with an 1098/68 of the Commission of 27 July application for fixing the refund in 1968. The last-mentioned Regulation, in advance . . . and the date of exportation, line with Regulation No 766/68 of the an alteration occurs in the price of sugar Council of 18 June 1968, laying down or molasses, fixed under Regulation No general rules for granting export refunds 1009/67 of the Council, the amount of on sugar and providing for a strict the refund may be adjusted'. The adaptation of export refunds fixed in adjustment is therefore no longer advance in the event of a change in the automatic. price of sugar, stipulates in its Article 2 (3), second paragraph, that where the 2. Relying on the increase in the refund is fixed in advance, the basic intervention price for white sugar that amount. . . shall be that applicable on occurred on 1 July 1971, SOPAD the day when the application for an (Société des produits alimentaires et export licence was lodged, adjusted, as diététiques) the plaintiff in the main necessary, for any alteration in the inter­ action, pursuant to the system for vention price for white sugar'. 'automatic adjustment' provided for by This applies to certain special products, Regulation No 1098/68, applied for an made up of milk and sugar, including adjustment — in the sense of an increase those the subject matter of the present — of the refund for the sugar content of proceedings. the product for which it had obtained an Regulation No 951/71 of the export licence. This licence was on 29 Commission of 7 May 1971 amended October 1970 granted by FORMA Regulation No 1098/68, by providing (Fonds d'orientation et de régularisation that an automatic adjustment is not des marches agricoles) — one of the necessary in all cases, and henceforth defendants in the main action — only takes place where — the sugar covering 10 million kg of milk and cream, prices having been modified between the preserved or concentrated, other than in day when the application for an export powder, containing added sugar, and of licence was lodged and the day on which a fat content of 9 % for export to the goods are exported — an adjustment Algeria before 28 February 1972. The was under the provisions of Article 12 of export licence laid down that the refund

was fixed in advance at FF 61-10 per 100 the Advocate-General, decided to open kg of the finished product and FF 64-93 the oral procedure without any per 100 kg of the sugar contained in this preparatory inquiry. product. Following upon the request on the part II — Written observations of the plaintiff in the main action, submitted under Arti FORMA and FIRS (Fonds d'intervention cle 20 of the Statute et de régularisation du marché du sucre) the second defendant in the main action rejected the application, on the basis that 1. As regards the first question they had no power to grant it, and of the submitted by the Tribunal adminis change in the Community system that tratif of Paris had meanwhile taken place. (a) The plaintiff in the main action

The whether on the contrary, the possible very text of this Regulation, that of variations in the refund rates had to Regulation No 951/71 modifying the be applied by reference to the new same and that of the Commission's letter rules resulting from Community of 21 October 1971 addressed ro the Regulations No 951/71 and No 'Chambre syndicale nationale des 1048/71 of 7 May and 25 May 1971. fabricants de lait concentré et poudre de lait infantile et alimentaire' stating that

the Court on 20 June 1973. either the export licence of 29 October. Pursuant to Article 20 of the Protocol on 1970 or to the contract entered into with the Statute of the Court of Justice of the the Algerian Government: this licence European Communities, the plaintiff in and the contract signed under the the main action and the Commission of provisions of Regulation No 1098/68 the European Communities presented must until their expiry continue to be their written observations. governed by the provisions of this The Court, upon hearing the report of Regulation which provides for an the Judge-Rapporteur and the opinion of automatic readjustment, by reason of the

general and unchanging legal principle provided for by Regulation No 1098/68. that the consequences of contracts in Finally, since it had only a very restricted force at the date of a legislative change working stock of sweetened concentrat continue to be determined by the law in ed milk, it would have been quite unable force at the time when they came into to rely upon this stock in order to existence. This principle of non-retros supply the Algerian Government at the pective effect, laid down by Article 2 of old price, since its contract continued the French Code Civil, which arises from from 1 July 1971 to February 1972. the necessity of ensuring the certainty of Refusing the readjustment therefore contracting parties has been developed amounts to a disregard of an acquired in a consistent fashion by French civil right resulting from the export licence of and administrative case law, according 29 October 1970 which provided the to which any later development under a guarantee of an automatic adjustment in contract must remained governed by the the event of an increase in the sugar law in force at the time when it was price, a guarantee without which the entered into. plaintiff in the main action would

at the old rate. It is in order to avoid violation of the principle having as its such awkward features that Regulation purpose the protection of legitimate No 1098/68 provided for the automatic confidence. This principle has repeatedly readjustment of the refund. In order been endorsed by the Court. to maintain the high quality of Besides, in Judgment 1/73, Westzucker concentrated milk which it sold, the GmbH v Einfuhr- und Vorratsstelle für plaintiff in the main action is faced with Zucker (1973) E.C_R_ 723, the Court the necessity of purchasing sugar found that the discontinuance of the likewise of high quality, which is not automatic adjustment of refunds upon commonly found either on the market or exportation of sugar, introduced by with the intervention agencies and any Regulation No 1048/71, applied to possibility of falling back upon advance fixing certificates signed before intervention sugar has been closed to it. the entry into force of this Regulation 'to Besides, being only a user of sugar for the extent that the exportations in the purpose of including this in a milk question had not yet taken place and . . . product, and not a producer, it has an adjustment of the intervention price placed orders in accordance with its had not been made'.

JUDGMENT OF J. 12. 1973 — CASE 143/73

A manufacturer Consequently the amendment to Article of goods for export, such as the 12 of Regulation No 766/68 applies not plaintiff, could at the point of time only to advance fixing certificates issued have restocked with sugar at the 'old' after its entry into force, but also to price, since stocks were available at those certificates issued before such date the French intervention agencies. to the extent that exportation had not Nor can the individual situation of the yet taken place and an adjustment of the applicant lead to a finding of an intervention price had not been made.' infringement of a protected legal These dicta must also apply to the position. The French enterprises that, amendment of Article 2 (3), second just like the applicant, had received paragraph of Regulation No 1098/68. export licences for the products in Besides, the Commission argues that one question, had bought sugar for the cannot treat this as a case of purpose of export on the basis of a infringement of the protection of tender, at the intervention price before its increase, and had released it on the

concerned, as adversely affecting any pointed out by the Commission's established position which they hold', services, it was the enterprises concerned also fully applies to a case such as the that had placed themselves in this present one. situation and they could not under any In the case of an export licence of so circumstances obtain therefrom the right long a period of validity, that is to say to an increase in the refund; on the 16 months, it would be very difficult to contrary they ought themselves to bear prohibit the Community legislator from the entire commercial risk of such an amending the law governing such operation.

SOPAD v FORMA and FIRS

The Commission draws attention to the decision to be taken under Article 12 of fact that under the practice in France, Regulation No 766/68, as amended. the exporter must in his application for This decision is discretionary, as the the licence declare: 'I undertake if Commission underlined in its observa­ necessary to bear the cost involved in an tions in Case 1/73, and must be adopted adjustment of the refund, such as results uniformly throughout the Community; it from the application of Article 12 of must therefore originate with the Regulation No 766/68' and that Community authorities and more this declaration applies solely to the particularly with the Commission. possibility of a reduction in the refund. The Commission concludes that, bearing To sum up, the Commission is of the in mind the reply given to Question No opinion that the new Community 1, Question No 2 referred by the Regulation that came into force on 27 Tribunal administratif of Paris does not May 1971 applies also to export licences arise. with the rate of refund fixed in advance, 3. As a subsidiary point, the that were issued before that date, when Commission notes that the questions the export had not yet taken place. referred only relate to the interpretation 2. As regards the second question by the of the Regulations, but that in reality Tribunal administratif of Paris from some points of view it is in fact (a) The plaintiff in the main action their validity that is in question. The first considers that FORMA and FIRS could question is concerned with ascertaining have paid the readjusted figures without whether the alteration in Community any formal act on the part of the law extends to export licences and to the refunds fixed in advance in those Community authorities, since the different Regulations bearing upon this licences, and the Commission considers question nowhere mention the necessity that the Court ought, in order to avoid a for such an act. Quite to the contrary, further reference in this case, to take into Regulation No 1098/68 which is account the problem of the proper legal applicable in the present case, provides scope of these provisions taken together, for the automatic nature of the as was done in Case 1/73.

2 It appears from the order of reference that the plaintiff in the main action — consequent upon the increase in the intervention price for white sugar which took effect on 1 July 1971 under the provisions of Regulation No 1061/71 of the Council of 25 May 1971 (OJ L 115 of 27 May 1971) — applied for the refund fixed in advance for sugar contained in milk and cream to be increased as was expressly provided for by the export licence which the plaintiff had obtained on 29 October 1970 for the export of these products to Algeria before 28 February 1972;

3 The Regulations establishing the common organization of the market for the sector of milk and milk products provide for the grant of export refunds for these products in order to cover the difference between the world market price and the Community price and for the fixing in advance, for a definite period, of the refund to be paid;

4 In its original version, Article 2 (3), second paragraph, of Regulation No 1098/68 provided that in the event of an alteration in the intervention price for white sugar, the amount fixed in advance would be adjusted in accordance with this alteration;

5 Regulation No 951/71, which came into force on 8 May 1971, altered this provision to read: 'when . . . the prices for sugar . . . are altered during the period between the day when the application for an export licence was lodged and the day on which the goods are exported, the amount of the refund shall be adjusted if an adjustment is provided for pursuant to Article 12 of Regulation (EEC) No 766/68' for the sugar sector;

11 Prior to the modification that occurred in 1971, the adjustment in the refund was automatic and could be applied by the competent national organizations without the need for a formal act by the Community authorities;

12 In the framework of the new Regulations it seems on the contrary that in order to ensure the necessary uniformity of measures taken within the Community, the adjustment of the refund must result from a formal act on the part of the Community;

Costs

13 The costs incurred by the Commission, which has submitted observations to the Court, are not recoverable, and as these proceedings are, in so far as the parties to the main action are concerned, a step in the action pending before the national court, the decision on costs is a matter for that court.

On those grounds,

Upon reading the pleadings; Upon hearing the report of the Judge-Rapporteur;

Sørensen Monaco Mertens de Wilmars

Pescatore Kutscher Ó Dálaigh Mackenzie Stuart

Delivered in open court in Luxembourg on 5 December 1973.

A. Van Houtte M. Sørensen

Registrar for the President