C-44/76

declare the Community liable for Community liable and to require it to imminent damage foreseeable with make good the damage suffered by sufficient certainty even if the damage the applicant since the competent cannot yet be precisely assessed. institution is only required to grant 2. Neither the publication by the variable refunds if the goods are in Council of Regulation No 876/68 nor free circulation in the territory of the behaviour of the Commission as destination.

In Case 44/76

MILCH-, FETT-UND EIER-KONTOR GMBH, 72-74 Amandastraße, 2000 Hamburg 50, represented by its Managers, Joachim Brandenburg and Friedrich Schulz, and assisted by Peter Wendt and Hans -E. Heyn, of the Hamburg Bar, with an address for service in Luxembourg at the Chambers of Félicien Jansen, Huissier, 21 rue Aldringen,

applicant,

v

COUNCIL OF THE EUROPEAN COMMUNITIES,, represented by its Legal Adviser, Bernard Schloh, acting as Agent, with an address for service in Luxembourg at the office of J. Nicolaas Van den Houten, Director of the Legal Department of the European Investment Bank, 2 place de Metz,

composed of: H. Kutscher, President, P. Pescatore, President of Chamber, J. Mertens de Wilmars, M. Sørensen, Lord Mackenzie Stuart, A. O'Keeffe and G. Bosco, Judges,

Advocate-General: G. Reischl

Registrar: A. Van Houtte

gives the following

JUDGMENT

Facts

On 2 September 1970 the applicant A refund of DM 1 335 900 was obtained, for itself or for the pool, export accordingly refused and a refund of DM certificates to Morocco, Algeria or 823 417.75 was then paid and finally Tunisia fixing in advance the refunds for reclaimed by the customs office. certain quantities of butter, which the applicant maintains amounted to 10 000 The applicant then brought a number of tonnes and the Commission to 21 500 actions directly before the Finanzgericht tonnes. Hamburg and these led the Court of Justice, upon a reference for a On the basis of those certificates the preliminary ruling, to deliver a judgment applicant sold on 12 January 1971 to N. on 2 June 1976 in Case 125/75 (Milch-, Corman & Fils SA. (hereinafter referred Fett-und Eier-Kontor GmbH [1976] to as 'Corman'), a Belgian member of the ECR 771) in which it ruled that 'where pool, 3 000 tonnes of butter, of which it the refund is varied, … the goods must had only taken delivery fo 2 000 tonnes, have been given customs clearance and on the following conditions: put into free circulation at the 'Destination: North Africa (Morocco)' destination'. and 'Delivery to take effect only an Tangiers quay'. However, 'as a precaution and in order to keep within the period' prescribed in Article 43 of the Protocol on the Statute On the same day the contract was modified from 'fob' to 'civ' loaded on of the Court of Justice of the EEC the quay'. applicant, after addressing an initial request on 16 January 1976 to the The refund was claimed on submission Commission and failing to receive a of the declaration within the meaning of reply, lodged the present application on Article 1 (1) of Regulation No 1041/67 of 12 May 1976. the Commission of 21 December 1967 The claim for damages is based on the (OJ, English Special Edition 1967, p. applicant's view that the Commission 323). wrongfully misled the applicant in its communications during the period 1967 When the Principal Customs Office, to 1970 and indeed in 1971 regarding Hamburg-Jonas (hereinafter referred to the material conditions for claiming the as 'the customs office') which was export refund. The Commission has competent to pay the refund, demanded infringed the superior legal principle of proof of marketing in Morocco the legal certainty and wrongfully violated applicant was unable to supply it. As the the principle of the protection of customs office considered that the legitimate expectation. consignment of butter in dispute had really been dispatched from Morocco to The application is also directed against Eastern European countries and that of the Council on the ground that it has

failed to establish clearly the legal respect of court fees and by situation regarding export refunds and paying this sum on behalf of that, contrary to Article 152 of the EEC the applicant to the said Treaty, it has omitted to request the cashier upon demand being Commission to submit to it appropriate made by the Finanzgericht rules. Hamburg; (cc) order the defendants to The application was recorded at the discharge the applicant from Court Registry on 17 May 1976. claims by the Hauptzollamt Hamburg-Jonas for legal fees On hearing the report of the amounting to DM 551.50 by Judge-Rapporteur and the views of the paying this sum on behalf Advocate-General the Court decided to of the applicant to the open the oral procedure without a Hauptzollamt Hamburg- preliminary inquiry. Jonas upon its demanding the payment thereof. 2. (a) declare declare that the defendants II — Conclusions of the parties are obliged to compensate the applicant for all damage which the The applicant claims that the Court applicant has suffered or will should: suffer because from August 1970 1. (a) order the defendants to pay the to March 1971 it relied on the fact applicant the sum of DM that payment of the full refunds, 1 355 900 together with interest which were fixed for exports to from 1 May 1971 at the rate Morocco, in accordance with mentioned in Annex 2 for the Section II (a) of the Annex to respective periods therein Regulation No 1420/70 of the mentioned; Commission, depends solely upon (b) order the defendants to discharge fulfilment of the condition that the applicant from the claims for the butter has in fact arrived in repayment of a sum of DM Morocco and that this be proved 823 417.75 made by the by a control copy (as proof of the Hauptzollamt (Principal Customs exportation) together with a copy Office) Hamburg-Jonas together of a transport document (a with interest at 2% over the duplicate of the bill of lading) or appropriate discount rate of the by a certificate of unloading (both German Federal Bank from 5 as proof of 'arrival' in Morocco); February 1971, and to pay those (b) alternatively, sums to the said Hauptzollamt order the defendants to compen­ Hamburg-Jonas on behalf of the sate the applicant for all the applicant; damage which it has suffered (c) (aa) order the defendants to pay through relying upon the fact that the applicant the sum of DM payment of the full refunds, which 72 922.96 together with 4% were fixed for exports to Morocco, interest from the date of in accordance with Section II (a) of commencement of these the Annex to Regulation No proceedings; 1420/70 of the Commission (bb) order the defendants to depends solely upon fulfilment of discharge the applicant from the conditions that the butter has

(a) Facts The exports in dispute in no way constitute isolated exceptions. The The applicant recalls that at the time in applicant itself has recognized that of the question it was the Bundeszentrale der 18 000 tonnes delivered in February 1971 deutschen Milchwirtschaft (the Federal in Morocco only 88 remained there. Central Office of the Germany Dairy Industry) and that its capital was held The Commission notes other deflections entirely by two bodies governed by public law. of trade effected by the applicant, in particular, sales to the Czechoslovakian It collaborated closely with the foreign trade undertaking, Koospol, authorities in the Federal Republic through other countries of destination such as Morocco, and the East Berlin competent with regard to food, which requested it in the summer of 1970 to undertaking, Nahrung Export-Import make greater efforts to reduce the through Lebanon. The undertaking German 'butter mountain'. Since the Koospol did not accept the offer but applicant was incapable of doing so alone when false documentary evidence was submitted to the customs office the it associated itself with other, private, butter dealers. This was how the pool latter, 'as a routine matter', paid the come into being. applicant more than DM 28 000 000 as export refunds for butter which never The decision to export 10 000 tonnes of arrived in Lebanon and was immediately sent direct to Rostock. butter to North Africa was not taken because the refund granted for that area was apparently the greatest but in view of The Council maintains that the customs an appraisal of the opportunities for sale, office asked the applicant to furnish it as confirmed by the reply of the with proof that the goods exported not Commission of 18 March 1970 to only actually reached their destination Written Question 311/69 of Mr H. but further that they were put into free Vredeling (JO 1970, C 38, p. 1). circulation.

The Commission replies that it no longer Court of Justice of the EEC and the knows whether it is liable for independence of the institutions prevent compensation because the applicant was a claim against one institution from unable to convince the customs office interrupting the period of limitation that its butter did indeed arrive in concerning another. Furthermore for the Morocco because, as the Commission has period from 1967 to 1970, or indeed to learned, the customs office does not 1971, there was no 'communication' recognize the documentary proof of from the Council apart from Regulation arrival which the applicant has produced, No 876/68 of the Council of 28 June or because of the argument that mere 1968 which could be interpreted as arrival in the country of destination is constituting cooperation. insufficient in all cases to confer entitlement to variable refunds. The two Both the 'event giving rise' to the parts of this alternative are mutually proceedings which took place on 1 May exclusive. 1976 (the day from which the applicant claims interest) and the entire 'normal (b) Admissibility course' of the case date back more than five years. The Council accordingly The Commission remarks first of all that contends that the application is the application cannot be directed time-barred. against 'the European Communities'. In so far as the application is directed With regard to the objection that the against the European Economic application is time-barred it is possible to Community the request for a declaration disregard the question whether in is inadmissible for want of particulars Community law it must be joined to the (Article 38 (1) of the Rules of Procedure) question of admissibility or the substance if the claims under 2 (a) and (b) relate to of an application. If the objection is

the Statute of the Court of Justice of the It would only be a pointless formality to EEC concerns 'the relevant institution of require the same telex message to be sent the Community'. There are a number of twice when it was to be expected that the institutions independent of one another, Commission would inform the Council. possessing various powers which have been specifically conferred upon them. It has always been the applicant's The revenues and expenses of the Council and of the Commission have intention to institute proceedings against the EEC alone. Furthermore, since there always been included in the common is no separate budget for the Council or 'EEC' budget like those of the Parliament and of the Court. the Commission (Article 20 of the Merger Treaty of 28 April 1965), there is no foundation for the objection that the It is incorrect to refer to a 'legal person' telex message of 16 January 1976 was bearing the name of 'European not also addressed to the Council. Communities'. The applicant does not quote any provision whereby the Commission was for example bound to In addition the said telex message was inform the Council of the receipt of the only sent as a measure of especial relevant telex message. Furthermore caution. The applicant could have although it is true that when there is suffered damage at the earliest when the 'cooperation between several institutions' customs office refused the application for it is sufficient for a litigant to assert his the refund for the 2 000 tonnes in rights against one of them in this case dispute, that is on 15 June 1972. The there has been no cooperation. So far as notes claiming the reimbursements were the Council is concerned there was thus only dated 17 July and 10 October 1972; no interruption of the period of the various communications from the limitation on 16 January 1976. Commission merely constitute the uncompleted acts preliminary to the The applicant lodged its application with event giving rise to the damage. reference to the expiry of the period of time prescribed for instituting pro­ Before those dates the applicant was ceedings against the Commission on the unaware of its injury. There can thus be ground of failure to act having regard to no question whatever of a time-bar. The its failure to reply to the applicant's telex date from which interest may be claimed message. If this procedure were also to be depends on different criteria: it is a permitted as against the Council, in spite question of when the applicant could of the fact that the telex message was not have used the amount of the refund. addressed to it, this would amount

to infringing the first sentence of the applicant thought it could rely as an second paragraph of Article 175 of the exporter of goods subject to the EEC Treaty. organization of the markets. It was accordingly justified in believing that it The telex message of 16 January 1976 was sufficient for the butter to have lists three dates none of them going back actually reached Morocco. more than five years from that date. Thus the applicant asserted its rights as a The Commission has also failed to precaution. The application which it inform exporters which undertakings lodged on 17 May 1976 is thus in fact an were recognized as 'international control application for damages and not a and surveillance companies' within the 'genuine application for failure to act' meaning of Article 8 (1) of Regulation based on the failure of the Commission No 1041/67, or to ensure that the to reply. Although the Council has stated Member States empowered to do so that so far as it is concerned only the published a list of such undertakings. date of 17 May 1976 is relevant the applicant only accepts the date of 15 Regulation No 876/68 of the Council

After the Commission can no longer follow what At all events the applicant should have becomes of the goods exported.' In this given the Council particulars of its connexion the applicant was in no way complaint but only for the period after interested in the sales which it effected 17 May 1971. on other markets being hampered by competition encountered from the goods (c) Substance which it thought it had sold to the Maghreb. The applicant alleges that the Commission, through the com On 6 October 1971 the Commission munications which it issued from 1967 notified the applicant by telephone that until the exports were effected, has the fact goods had actually reached created a situation on which the Morocco was sufficient and thereafter it

has not replied to the applicant's requests In addition the applicant would have for confirmation. been able and compelled to make a quite different appraisal of the marketing The legal situation in which the opportunities and to estimate what applicant reposed its trust was also based quantities could in fact be definitively on the constant practice adhered to up to imported and sold in North Africa. If the that point by the competent German new requirements had been known after administration. The applicant offers to the advance fixings were made but before prove this. the contract with Corman was concluded the damage would have been The practice of the other Member States, considerably reduced (cf. judgment in which was the same in this sphere, was Case 74/74 [1975] ECR 533). also adhered to until the entry into force of Regulation No 2110/74 (OJ L 220, With regard to claim 1 (a) the amount of p. 1) amending Regulation No 1041/67. the damage was occasioned by the The applicant also offers to prove this. combined effect of the decisions of refusal. The claim for interest for the The Commission has infringed Articles period until 19 May 1973 is based on the 40 (2) and (3) and 155 of the EEC Treaty fact that the applicant was able to claim a by tolerating up to the beginning of 1971 bank credit for DM 1 335 900 on which a practice on the part of all the Member it had itself paid interest; for the period States which, according to the view that from 11 May 1973 the damage is based it has adopted from 1976, was illegal and on the fact that the applicant invested to which the Member States continued to money which it did not require and it adhere from the beginning of 1971 until would have done the same with the the entry into force of Regulation No abovementioned sums. With regard to 2110/74 whilst the Federal Republic of claim 1 (b) the applicant would have to Germany imposed stricter requirements. pay the DM 823 417.75 to the customs In accordance with the case-law of the office if the judgment in Case 125/75 Court it must be concluded that an was unfavourable to it. A decision would amendment of a regulation from 1967 therefore have to be taken; meanwhile effected nine years later is out of time. the applicant submits a list of the discount rates of the Deutsche Bank. In its observations in Case 125/75 the Commission, contradicting its previous communications and relying on the The other expenses (lawyers' and court economic objective, suddenly interpreted fees and the like) are not yet known; the the concept of 'country of destination' in rate of interest might increase in the meantime. Since this would constitute Regulation No 1041/67 as the 'market defined' by the national territory of additional damage the applicant must destination and required that the goods request a declaration that it is entitled to qualifying for the refund 'actually reach compensation; this also holds good the market'. The Commission thus should other harmful consequences be occasioned by the event described in adopts stricter requirements than it did head 2 of the conclusions. in Regulation No 2110/74.

is in existence when the application is (b) The causal connexion between the lodged. Furthermore the alternative head behaviour of the institution and the 2 (b) pursues the same aim (interruption loss claimed of the period of limitation) as head 2 (a). The behaviour of the Commission which The Commission maintains that in this was subsequent in point of time to the case none of the conditions required by exports in dispute could not have led the the case-law of the Court (for example applicant to rely upon the belief that it the judgment in Case 153/73, Holtz could obtain refunds applicable to [1974] ECR 675) to involve the liability Morocco for deliveries to Czechoslovakia. of the Community has been fulfilled. The behaviour of the Commission prior (a) The event giving rise to the damage to the exports in question did not adversely affect the rights of the In accordance with Article 4 of applicant. If the applicant did not receive Regulation No 1041/67 Member States the refunds to which it thought it was had the right, which they already entitled that is its own responsibility. possessed under Article 8, to require for Even if its hopes had been falsely payment of refunds other documentary aroused by the Commission the evidence than that proving the arrival of applicant did not acquire any right. With the goods. The actions of the customs regard to the lawyers' and court fees the office in requiring proof of a commercial applicant has been obliged to incur costs transaction or evidence of a purchaser because the customs office acted in residing in the country of destination accordance with the requirements of were fully in accordance with the said Regulation No 1041/67. regulation. The agencies paying refunds in other Member States were in general In any event the Commission does not extremely cautious in applying Article 4. accept the applicant's statement that it For this reason the Commission acted in good faith. The constant practice associates itself with the request for proof of the customs office was known at least which the applicant has submitted in to the applicant's legal adviser and the this connexion. applicant could only rely on the fact that the customs office would not notice what

from operating the pool were divided Commission to submit to it a new amongst all the members, and since, regulation. at the meeting of 3 November 1970 with the Commission, Corman had The applicant replies that the guaranteed the payment of the refund, Commission is trying to discredit it and the applicant has not suffered any to encourage the Court to overlook an damage. absolutely essential factor: when it requested the advance fixings in August With regard to head 1 (b) the applicant and September 1970 the rates of the improperly received the amounts paid refund for European and non-European since it was not entitled to a refund. third countries were in principle the There has been a judicial composition same, that is 133 u. a. The supplementary between it and its creditors, including the refund of 4 u. a. which was provided for customs office. Of the total sum of DM the countries of the Maghreb was not 823 417.75 there was security for the even enough to cover the increased reimbursement of DM 164 617.65. Under transport costs.

JUDGMENT OF 2. 3. 1977 - CASE 44/76

the customs office (which only dated The applicant's complaint against the from February or March 1971). Commission does not relate to the legal view which it advanced in Case 125/75 During the period prior to 30 September but to its communications dating from 1974 the competent authorities of the 1967 which have occasioned the court other Member States on no occasion fees, procedural costs and lawyers' fees. applied Article 4 of Regulation No 1041/67. There is no ground for complaint against the exporter in the fact that it The applicant has never maintained that approached a firm in Morocco which it Corman had obtained refunds 'for properly considered as an international devious transactions'. control and surveillance company but The applicant was unaware at the outset which the national authority responsible that the goods in question would be sent for refunds subsequently did not to Czechoslovakia. It only learned of this recognize as such. when it had long since lost its power to dispose of the goods and to influence the The judicial composition which the course of the transaction. applicant had to seek to avoid bankruptcy contained a clause covering Accepting the allegation of the the contingency of a recovery in its Commission as correct, any onward fortunes. If the outcome of the

transmission of the goods to proceedings were to be favourable to the Czechoslovakia (of which the applicant applicant this would in fact lead to the has never received any clear evidence) is customs office's benefiting to the extent to be explained by the fact that after the of DM 329 400.

EIER-KONTOR v COUNCIL AND COMMISSION

its point of view. Moreover the finding right to refunds for a loss for which the that none of the competent organizations applicant wishes to obtain compensation paid the variable refund when they when it asserts that if it had been suspected that the exports in question notified in time it would have refrained were in the nature of a 'devious entirely from obtaining the certificates transaction' proves that neither those and effecting the exports? The applicant organizations nor the Commission (by its cannot now claim as damages a sum toleration of this practice) could have which it could not have obtained in any misled the applicant. case.

importing into Morocco butter intended applicant's request has been complied for Czechoslovakia? How can there be a with and is thus no longer relevant.

Law

1 The present application for compensation, which was lodged on 12 May 1976, must be regarded as directed against the European Economic Community represented by the Council and the Commission pursuant to the second paragraph of Article 215 of the EEC Treaty.

JUDGMENT OF 2. 3. 1977 - CASE 44/76

2 On 2 September 1970 the applicant obtained export certificates for Morocco, Algeria or Tunisia fixing in advance refunds for certain quantities of butter obtained from the German intervention agency, for the marketing of which it had entered into a pooling agreement ('the butter pool').

On the basis of those certificates the applicant sold to a Belgian undertaking, a party to the pooling agreement, 2 000 tonnes of butter for delivery to Morocco.

6 The main claim is for:

— Payment by the defendants of DM 1 355 900 constituting the refund refused to the applicant by the customs office together with interest from

EIER-KONTOR v COUNCIL AND COMMISSION

1 May 1971 since the refund should have been paid at the latest on the day before that date; and

— Discharge by the defendants of the customs office's claims for repayment of the sum disbursed, namely DM 823 417∙75, together with interest from 5 February 1971, the defendants paying these sums on behalf of the applicant to the said customs office.

It is claimed in the alternative that the defendants should pay the lawyers' fees already incurred (DM 72 922∙96 together with interest from the date of commencing the proceedings), the court fees (DM 28 145∙60) together with legal fees (DM 551∙50) and that in addition the Court should declare that the defendants are obliged to compensate the applicant for all damage which it has suffered or will suffer on account of its assumption during the period from August 1970 to March 1971 that payment of the refunds depended solely on the butter's having actually arrived in Morocco.

10 Before considering whether this objection is well founded it is appropriate to examine whether the Community is liable.

JUDGMENT OF 2. 3. 1977 - CASE 44/76

Substance

11 The main complaint which the applicant puts forward against the defendants amounts to claiming that Regulation No 876/68 of the Council of 28 June 1968 laying down general rules for granting export refunds on milk and milk products and criteria for fixing the amount of such refunds (OJ, English Special Edition, 1968, (I), L 155, p. 234) and Regulation No 1041/67 of the Commission of 21 December 1967 on detailed rules for the application of export refunds on products subject to a single price-system (OJ, English Special Edition, 1967, L 314, p. 323) make payment of the 'variable' refund depend solely on the requirement of proof of arrival in the territory of destination.

12 The reason why the refund varies according to the destination of the products is, according to the fourth recital of the preamble to Regulation No 876/68 that 'markets in the countries of destination are at [varying] distances from Community markets and special conditions apply to imports in certain countries of destination'.

It follows from Article 4 and the recitals of the preamble to the aforementioned regulation that the amount of the refund depends on the conditions of the market on which the product in question is to be placed and as a result on the actual import of the product into the given country of destination.

16 It is clear from the file that, even before 1971, the competent German customs office had often required proof of marketing in the country of destination — a requirement which was justified in particular by the need to avoid fraudulent practices in connexion with the refunds.

Moreover the applicant itself has conceded that, in any event, since the demand on the Moroccan market was limited, only part of the butter dispatched to Morocco could remain there and that it proved necessary to effect a re-consignment to other countries with a less favourable rate of refund.

The applicant has not provided a scintilla of evidence in support of its allegation that the Commission had by its various communications led it to believe that proof of marketing in the country of destination could not be required.

It must thus be held that neither the Commission nor the competent national authorities could have induced doubts on the part of the applicant as to what could be required by way of proof in connexion with the payment of variable refunds.

17 In those circumstances the proceedings against the Commission are also unfounded.

18 It is consequently unnecessary to consider further the objection put forward by the Council and the Commission to the effect that the application is out of time.

hereby:

1. Dismisses the application;

2. Orders the applicant to bear all the costs.

Kutscher Pescatore Mertens de Wilmars

Sørensen Mackenzie Stuart O'Keeffe Bosco

Delivered in open court in Luxembourg on 2 March 1977.