C-80/76

JUDGMENT OF THE COURT 3 MARCH 1977 <apnote>1</apnote>

North Kerry Milk Products Ltd v Minister for Agriculture and Fisheries (preliminary ruling requested by the High Court of Justice, Ireland)

Case 80/76

1. Community law — Linguistic discrepancies — Elimination — Interpretation

2. Agriculture — Common organization of the market — Skimmed milk — Processing into casein before 7 October 1974 — Marketing after that date — Aid — Calculation — Rate of conversion

1 — Language of the Case: English.

JUDGMENT OF 3. 3. 1977 - CASE 80/76

primarily on the interpretation of Article 6 of Regulation (EEC) No 1134/68 of the Council of 30 July 1968, laying down rules for the implementation of Regulation (EEC) No 653/68 on conditions for alterations to the value of the unit of account used for the common agricultural policy (JO L 188, p. 1 — OJ, English Special Edition 1968 (II), p. 396),

THE COURT

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

Advocate-General: F. Capotorti Registrar: A. Van Houtte

4 of Regulation (EEC) No 756/70 of Regulation No 1134/68 provides in the Commission of 24 April 1970, on Article 6 that: granting aid for skimmed milk processed into casein and caseinates, JO L 91, p. 28 'For the purposes of this Regulation, the - OJ, English Special Edition 1970 (I), time when a transaction is carried out p. 201) shall be considered as being the date on which occurs the event, as defined by Article 1 of Regulation (EEC) No Community rules or, in the absence of 3061/73 of the Commission of 12 and pending adoption of such rules, by November 1973, amending Regulation the rules of the Member State concerned, (EEC) No 756/70 (OJ L 312, p. 11), in in which the amount involved in the force during the period in question in transaction becomes due and payable. the present case, fixes the aid at 3.20 u.a. per 100 kg of skimmed milk. 2. North Kerry Milk Products Ltd (hereinafter referred to as 'NKM'), the On 7 October 1974 the representative plaintiff in the main action, carries on conversion rate between the unit of the business of milk and milk product account and the Irish pound was producers including the production and changed from £ = 2.1644 u.a. to £ = manufacture of casein and caseinates 1.9485 u.a. (Regulation (EEC) No from skimmed milk. 2498/74 of the Council of 2 October 1974 fixing representative conversion Between 4 July 1974 and 10 October rates to be applied in agriculture for the 1974 it manufactured 859 400 tonnes of currencies of the new Member States. OJ casein and caseinates from skimmed L 126, p. 6). The rules laid down in milk. Regulation (EEC) No 1134/68 of the Council of 30 July 1968, laying down The Minister of Agriculture and rules for the implementation of Fisheries, the defendant in the main Regulation (EEC) No 653/68 on action, is the agency in Ireland conditions for alterations to the value of responsible for the carrying out of the the unit of account used for the common operations and arrangements of the agricultural policy (JO L 188, p. 1 - OJ, common agricultural policy of the English Special Edition 1968 (II), p. 396) Community including the payment of were deemed to apply to the aids and subsidies on agricultural abovementioned case of alteration of the products. representative conversion rate.

NKM claims an additional sum of £44 687.71, which it alleges is due to it II — Written observations sub­ because the said units of account should mitted to the Court be converted into Irish pounds at the representative conversion rate prevailing A — Written observations submitted on the day the casein and caseinates in by North Kerry Milk Products question were marketed, which was after Ltd, the plaintiff in the main the entry into force of Regulation No action 2498/74 altering the conversion rate to £ = 1.9485 u.a. NKM recalls that a failure to market the processed product is a complete bar to NKM brought an action on these receiving any part of the aid. The grounds before the High Court of transaction which entitles the applicant Ireland. to receive aid is a two-part transaction of manufacturing and marketing, and the 3. Before deciding further, the High transaction is not complete until the Court stayed the proceedings and latter stage has been concluded. requested the Court of Justice, pursuant to Article 177 of the EEC Treaty, to give According to NKM the only Community a preliminary ruling on the following rule which is of any relevance to Article question: 6 of Regulation No 1134/68 is Article 4 of Regulation No 756/70. As a result of 'Is the amount of aid payable to the the latter article the point in time when plaintiff to be calculated by reference to the amount involved in the processing of skimmed milk into casein 'becomes due (a) The rate of exchange between the Irish pound and the unit of account and payable' is the point in time applicable on the date of manufacture immediately after marketing. Thus, if a manufacturer submitted a claim for aid of the casein or caseinates, or, (b) The rate of exchange between the in respect of casein manufactured but not Irish pound and the unit of account yet sold, the competent authority would applicable on the date of marketing be entitled and obliged to answer: 'You of the casein or caseinates.' have not yet marketed your casein as required by Article 4; the aid is therefore 4. The order of the High Court of 21 not yet due and payable to you.' June 1976 was registered at the Court of In the opinion of NKM this construction Justice on 13 August 1976. of the combined effects of Regulation No 756/70, Article 4, and Regulation No Written observations have been sub­ 1134/68, Article 6, is corroborated by the mitted on behalf of the plaintiff in the language used in the other official texts main action by Arthur Cox & Co., of Article 6. The French and Italian texts Solicitors, on behalf of the defendant in particularly speak of 'le fait générateur de the main action by Liam J. Lysaght, la créance' and 'il fatto generatore del Chief State Solicitor and on behalf of the credito' or in English, the fact which Commission of the European creats the debt. Communities by its Legal Adviser, R. Wainwright. The plaintiff in the main action further submits that its interpretation of the After hearing the report of the relevant Community provisions stated Judge-Rapporteur and the views of the above is confirmed by the emphasis Advocate-General the Court decided to given to the stage of sale or marketing in

Regulation (EEC) No 756/70 on granting on 4 March 1975 was granted an amount aid for skimmed milk processed into of aid equivalent to 4.00 u.a. per 100 kg casein and caseinates (OJ L 301, p. 23) when marketed. But neither amount of that there is a reference to its application aid would be actually paid out to the to casein and caseinates manufactured as manufacturer until one of the conditions from the date of entry into force. The of payment, namely marketing, had been significance lies in the fact that this fulfilled.

regulation does not amend the basic rate of aid for skimmed milk processed into NKM admits that the regulation was casein, but alters the list of products to enacted long after the present case arose, which the aid is granted. and that the purported clarification could not retroactively alter the company's NKM points out that the defendant in legal position as on 7 October 1974. But the main action has confused two even if it had been in force at the distinct issues namely: relevant time it would in the company's

JUDGMENT OF 3. 3. 1977 - CASE 80/76

This is a regulation on the question at issue in the position which it had already adopted present case. He does not wish to make previously in October 1973, at a time any independent submission of his own when a revaluation of the Dutch guilder in the proceedings before the Court of had led to the fixing of a representative Justice, but awaits the ruling of the Court rate for this currency (Regulation (EEC) on the question referred to it by the No 2544/73 of the Council of 19

Article Commission has a preference for 6 however is a more difficult provision specifying the manufacture as being the to apply in the Commission's view event which fixes the amount of aid due. notwithstanding that it purports to clarify the notion of 'transaction' mentioned in According to the Commission the Article 4 by defining it in a particular supplier of skimmed milk will already by way.

It further submits that the concept 'due According to the Commission such a and payable' as it appears in Article 6 of solution is in accordance with the Regulation No 1134/68 is to be judgment of the Court of 12 November interpreted in the light of the versions of 1969 in Erich Stauder v City of Ulm, this article in all the Community Sozialamt (Case 29/69, [1969] ECR 419). languages. In the French text the comparable phrase used is 'le fait In the Commission's submission générateur de la créance …'. The Italian Regulation No 533/75 only has text uses exactly the same form of words: application in the event of a change in 'il fatto generatore del credito …'. In the the aid expressed in Community terms. German text the following phrase is used The Commission submits, however, that '… der Tatbestand, … an den die the reasoning behind the provision, said Entstehung der Forderung geknupft ist in the second recital to be a clarification, …'. The Dutch speaks of 'het feit … is of interest, since it is the same waardoor het bedrag … verschuldigd reasoning that has already been invoked wordt'. Finally, the Danish text reads as in the Commission's observations, follows' … det forhold indtraeder, der namely that it is the date of manufacture ligger til grund for stiftelsen af denne which should determine the amount of fordring'. aid, the marketing of the casein being only one of the conditions of payment These extracts from the texts of the other under the particular control arrange­ five Community languages show, in the ments provided for. Commission's view, that the English text is unique in making reference to 'payment'. The texts in the other III — Oral procedure languages look only to the notion of 'right' or 'obligation'. In all the other North Kerry Milk Products Ltd, Community languages but English the represented by R. O'Hanlon S.C., and the text of Article 6 is easily reconcilable Commission, represented by its Agent, R. with the interpretation suggested by the Wainwright, submitted oral observations Commission. Taking, for example, the at the hearing on 19 January 1977. French text, the processing of the skimmed milk into casein appears At this hearing the parties adduced new naturally to be 'le fait générateur de la factors summarized below:

Regulation No 756/70, sums become due the aid until the casein is marketed, the only after the product has been Commission submits that there are other marketed. conditions which have to be fulfilled, non-fulfilment of which removes the NKM understands that in the entitlement of the manufacturer to claim Commission's submission Article 6 is that aid: the submission of a monthly concerned with some factor which record, the submission to supervision, generates a claim but does not and the making of the claim in a certain necessarily complete it so that it is form. In the Commission's submission legally maintainable. According to NKM failure to comply with any one of these this interpretation would mean that in other conditions would render the claim every case where the problem of the untenable. conversion rate arises one would have to examine the transaction in a search for The Commission further submits that the central element in the transaction the reason why it has itself in a number which could be regarded as generating of regulations, whereby the system of aid the claim, although not necessarily and the amount of aid have been

KERRY MILK v MINISTER FOR AGRICULTURE AND FISHERIES

question would have no right to destroyed his accounts, but did not payment, according to the Commission: destroy the casein. there was a right to payment of the aid and there is in this situation, in a sense, In reply to a second question put by the still a right to payment of the aid, but it Court NKM stated that if it obtained the is a right which can no longer be additional amount of aid claimed that realized, which can no longer be put into amount would be paid to the suppliers of effect, because one of the conditions of the skimmed milk, NKM being a payment is no longer fulfilled. According farmers cooperative company. to the Commission the same solution would have to be applied if the The Advocate-General delivered his manufacturer suffered a fire, not in his opinion at the hearing on 9 February warehouse, but in his office, which 1977.

Law

1 By order of 21 June 1976, received at the Court Registry on the following 13 August, the High Court of Ireland referred to the Court under Article 177 of the EEC Treaty a question concerning the interpretation of certain Community rules relating to the payment of aid for the manufacture of casein and caseinates from skimmed milk.

2 This question arose within the context of an action brought by an Irish manufacturer of milk products (hereinafter referred to as 'the Company') against the Minister for Agriculture and Fisheries which is the agency in Ireland responsible for carrying out the operations and arrangements of the common agricultural policy. The dispute between these parties concerns the rate of conversion as between the unit of account and the Irish pound which should be applied in respect of Community aid for certain quantities of casein which had been manufactured by the Company before 7 October, the date on which the conversion rate was altered, but had not been marketed until after that date.

7 The meaning of this latter term for the purposes of the regulation is defined by Article 6 according to which the time when a transaction is carried out shall be considered to be the date on which occurs the event by which 'the amount involved in the transaction becomes due and payable'. Therefore, the crucial issue in the present case is whether that event occurred at a point in time before or after the alteration of the conversion rate, or in other words whether that event should be understood to be the processing or the marketing of the casein.

8 On this point the Company argues that it follows from the rules concerning the grant of aid for skimmed milk processed into casein that marketing is the decisive event, whereas the Commission argues that these rules must be understood to mean in this context that the processing is the relevant event.

9 Before examining the question further it should be noted that there is an apparent discrepancy between the English wording of Article 6 and the wording of that article in the other official languages. The words in English 'the event ... in which the amount ... becomes due and payable' are rendered

KERRY MILK v MINISTER FOR AGRICULTURE AND FISHERIES

in French by the words 'le fait générateur de la créance' and by equivalent expressions in the other languages.

10 In its written and oral observations before the Court the Commission

13 Article 11 (1) of Regulation No 804/68 of the Council of 27 June 1968 on the common organization of the market in milk and milk products (JO L 148, p. 13 — OJ, English Special Edition 1968 (I), p. 176) provides that under conditions laid down by the Council aid shall be granted for Community-produced skimmed milk processed into casein. Under Article 2 of Regulation No 987/68 of the Council of 15 July 1968 laying down general rules for the granting of such aid (JO L 169, p. 6 — OJ, English Special Edition 1968 (I), p. 262) aid shall be paid by the national intervention agency to the manufacturer of casein. By successive regulations of the Commission it has been prescribed that aid shall be granted only after the caseins has been marketed, and that the application in writing by the manufacturer to the intervention agency must show the quantity of casein of his own manufacture which he has marketed and for which he seeks aid. At the material time in

the present case provisions to that effect had been laid down in Article 4 of Regulation No 756/70 of the Commission of 24 April 1970 on granting aid for skimmed milk processed into casein, (JO L 91, p. 28 — OJ, English Special Edition 1970 (I), p. 201).

14 It follows from these provisions that the processing as such does not confer upon the manufacturer any enforceable right to aid. Not only is he not thereby entitled to payment of aid, but he cannot even submit an application to the national intervention agency before having marketed the quantities of casein for which he seeks aid.

JUDGMENT OF 3. 3. 1977 - CASE 80/76

Costs

19 The costs incurred by the Commission of the European Communities, 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, in the nature of a step in the action pending before the national court, the decision as to costs is a matter for that court.

KERRY MILK v MINISTER FOR AGRICULTURE AND FISHERIES

On those grounds,

THE COURT

in answer to the question referred to it by the High Court of Justice, Ireland, hereby rules:

OPINION OF MR ADVOCATE-GENERAL CAPOTORTI DELIVERED ON 9 FEBRUARY 1977 <apnote>1</apnote>

Mr President, several occasions been called upon to Members of the Court, resolve. On this occasion, the High Court of the Republic of Ireland is seeking an 1. The recurrent currency fluctuations interpretation of Community provisions in recent years have, in the application of relating to the granting of aids to Community legislation, especially in manufacturers of casein or caseinates agricultural matters, given rise to a from skimmed milk with a view to number of disputes involving questions determining at which point in time the of interpretation which this Court has on amount of aid payable to an Irish

1 — Translated from the Italian.