C-126/76

FIRMA GEBRÜDER DIETZ, 15 Oberlindau, 6000 Frankfurt am Main, represented by Messrs D. Ehle, U. Feldmann and U. Wiemann, Advocates at the Cologne Bar, with an address for service in Luxembourg at the offices of Félicien Jansen, Huissier de Justice, 21, rue Aldringen,

applicant, V

Commission of the European Communities, represented by its Legal Adviser, G. zur Hausen, acting as Agent, with an address for service in Luxembourg at the offices of M. Cervino, Legal Adviser to the Commission, Jean Monnet Building, Kirchberg, defendant,

Application for damages under Article 178 and the second paragraph of Article 215 of the EEC Treaty,

THE COURT

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

The facts and the arguments of the (EEC) No 2887/71 of 30 December parties put forward during the written 1971 (OJ, English Special Edition procedure may be summarized as 1966—1972, p. 67) amending Regulation follows: (EEC) No 1013/71 laying down detailed rules for the application of Regulation (EEC) No 974/71. I — Facts and procedure In the applicant's view, the new situation The German undertaking Dietz, the meant that the compensatory amount applicant, is active in the international which it was granted in Germany on its sugar trade. On 17 December 1971, it exports to Italy was reduced by the concluded a sales contract with the compensatory amount applied to the Italian undertaking Peccotta for goods in Italy. approximately 10 000 tonnes of white sugar to be delivered between January It bases the calculation of the resulting and June 1972 (in fact only 6 000 tonnes damages which it has suffered on the was delivered). difference between the purchase price of the 6 000 tonnes in question, increased The agreed price, Lit 15 250 for 100 by the expenses (DM 5 429 829.75) and kilograms net weight, had been the proceeds of sale (DM 4 891 806.65), calculated in accordance with Regulation in other words DM 538 023.10. The No 2635/71 of the Commission of damage for which it requests 10 December 1971 amending the compensation, DM 329 429.40, re­ compensatory amounts in agriculture presents the difference between the following the temporary widening of the monetary compensation which it would margins of fluctuation for the currencies have obtained if the system of of certain Member States (OJ L 273, p. 1) compensatory amounts in force at the which provided for a compensatory date when the contract was concluded amount of DM 8.85 per 100 kilograms had remained applicable (DM for exports from Germany to Italy. 649 452.50) and what it in fact received (DM 320 052.50). The actual loss which it Only at the end of December 1971 did suffered is equal to the difference Italy decide to make use of the between the purchase price of the 6 000 authorization provided for in Article 1 (1) tonnes in question and the proceeds of of Regulation (EEC) No 974/71 of the sale therefrom (DM 538 023. 10) less the Council of 12 May 1971 on certain monetary compensation actually received measures of conjunctural policy to be (DM 320 052.50), in other words DM taken in agriculture following the 217 970.60.

application on the procedural issue. should decide that point by means of an interlocutory judgment and should By order of 30 March 1977, the Court reserve the question of the amount of the reserved its decision on the objection damage for a later stage of the procedure. raised by the defendant for the final judgment. III — Submissions and arguments The written procedure then followed the of the parties normal course.

A — Admissibility The Court, after hearing the report of the Judge-Rapporteur and the views of the According to the applicant, the right to Advocate-General, decided to open the compensation for the damage does not oral procedure without any preparatory result from measures adopted by the inquiry. national authorities (cf. Case 46/75, I.B.C. Importazione Bestiame Carni s.r.l. v Commission of the European Com­ II — Conclusions of the parties munities [1976] ECR 65) but from an omission on the part of the Commission The applicant claims that the Court within the framework of the provisions should: issued in implementation of Article 6 of (a) Order the defendant to pay to the Regulation No 974/71. applicant DM 329 429·40, together with 6 % interest from 1 October The Commission takes the view that the 1972; application is inadmissible. It claims that (b) Order the defendant to pay the costs. it follows from the case-law of the Court that an application for damages under It suggests that the Court should first Article 215 may not be used for the state that the Commission must pay purpose of contesting national measures compensation and should leave the adopted in application of Community parties to reach agreement on the final provisions (cf. Case 96/71, R & V amount of the damage, failing which the Haegeman v Commission of the Court would decide the matter. European Communities [1972] ECR

mission of the European Communi­ ties [1973] ECR 1055 might however be The applicant observes that: mentioned, in which the applicant was — if the Commission had laid down

spared the 'long journey' through the special or transitional rules, they national courts. But although in that case would have created a direct right for the independent nature of an application the applicant and their application by for damages and the question of the the authorities of the Member State interest of legal protection were still would rather be technical in nature; determining, in the meantime the — the Commission's argument amounts problem of the division of jurisdiction to granting the remedy of an between the Member States and the application for damages only to Community has become determining. undertakings which have directly suffered the damage caused by the In the present case, it follows from the Community's actions. This direct provisions of Article 1 (1) of Regulation link is broken by the concrete No 974/71 and from those of the first implementing measures which the paragraph of Article 4 of Regulation No national authorities must necessarily 2887/71 that the authorities of the adopt. However, in the judgments in Member States have power to apply the Cases 99/74 and 46/75, cited above, rules on monetary compensatory the Court only declared that it had amounts. For an application for damages no jurisdiction in cases in which the to be admissible it is necessary for all application was in fact directed domestic methods of recourse to have against measures adopted by the been exhausted in order to avoid double national authorities for the purpose of

properly does not adopt special or In its rejoinder, the Commission replies transitional rules there is under that the applicant must assert its right to Community law a duty on Member the payment of a (monetary) refund States to adopt such rules; however it before the competent national authorities is irrelevant with regard to the and before the national courts. During purpose of the application whether, that procedure, the Court of Justice within the framework of the system might be asked to give a preliminary which was then in force, the Member ruling but an application for damages States were by virtue of their own cannot replace an abstract application for jurisdiction authorized or even under a declaration that a provision of a duty to compensate for undue Community law the application of which hardships by means of national an individual considers has caused him measures; damage is invalid. — the procedure under Article 215 is an independent method of recourse and the idea of 'exhausting all domestic B — The substance of the case methods of recourse' has no basis either in the Rules of Procedure of The applicant maintains that the right to the Court or in general principles. compensation for the damage suffered is based on a wrongful omission on the part In its defence, the Commission makes of the Commission which, in breach of

the following observations: superior rules of Community law, did not — whether the implementation by the lay down in Regulation No 2887/71 or authorities of the Member States of in a supplementary regulation, special or special rules proves to be simple or transitional rules protecting contracts concluded before 19 December 1971. complex, it remains a measure issued in implementation of Community law which might result in causing This omission constitutes a breach of the

of difference between the old parity of Compensation for the damage in the the dollar in relation to the Deutschmark amount of DM 329 429.40 (the and the new parity, in constant calculation of which is set out above) fluctuation as a result of the floating of must be granted to the applicant at least the currency, was compensated for by a for the damage actually suffered, in other refund regardless of the development of words DM 217 970.60 (see also above). the parity between the Deutschmark and the lira) and for that reason there was no The Commission, which only adopts a economic need for the decision to adhere view-point as to whether the application to that system. is well founded in the alternative, replies that the requirements for the The applicant had also expected that if Community to incur liability as the the system was amended its contract result of an infringement of the principle would be protected by special or of the legitimate expectation of transitional rules. It was not able to cover interested parties are not fulfilled. In fact, itself against risks of changes. The the adoption of transitional or special Commission recognized this in the measures constitutes a legislative measure recitals of the preamble to Regulation involving a measure of economic policy No 2042/73 ('... under the former so that the Commission has wide system the risk of changes in the rate of discretionary power in the matter and exchange in relation to the dollar was there can be no question in these covered by the monetary compensatory circumstances of its incurring liability amount'). According to the case-law of except in the case of a flagrant breach of the Court, the Community is liable if the a superior rule of law for the protection Commission abolishes with immediate of individuals.

DIETZ v COMMISSION

In the 1013/71 and 1871/71). present case, through the effect of the rule relating to the balance laid down in The special provision laid down in Article 2 (3) of Regulation No 974/71, Article 4 of Regulation No 1013/71, the amendment of the rules in force according to which certain 'imports' are would have resulted not in the not subject to the application of imposition of a compensatory amount on compensatory amounts, cannot provide the imports from Germany into Italy but an argument in the present case. In fact, certainly in the reduction of the according to the penultimate recital in compensatory amount to be granted on the preamble to the same regulation, exports from Germany to Italy. 'compensatory amounts should not be levied on goods imported'. Moreover, it is The public interest in the im necessary to observe above all that in all plementation of the authorization the regulations fixing monetary granted was identical to that which led to compensatory amounts the balance the creation of the whole system and operation has been carried out. therefore to the interest in the maintenance of the proper functioning Likewise, no contracts concluded before of the Common Market. the action which is alleged to have caused damage existed or were It is impossible to draw a contrary irrevocable.

On the other the case of import contracts. hand the applicant only suffered a reduction in a benefit which it had been In the same way it is possible to call in granted and not the imposition of a new question the inevitable nature of the financial charge. losses. The applicant could have concluded the contract in dollars and With regard to the infringement of the protected itself by means of forward deals principle of equality, the applicant in foreign currency instead of dealing in obtained, just as in the past, monetary

JUDGMENT OF 15. 12. 1977 — CASE 126/76

With regard to the amount of the go beyond the simple acceptance of the damages, the Court decided in Case business risk which the applicant must 74/74 that it is impossible to claim normally accept and against which it damages greater than the amount of the should be protected. losses suffered on account of the repeal of the compensatory amount. The reference to Regulation No 1013/71 is irrelevant since at the time when the The applicant replies that the system of compensatory amounts was put defendants failure to act may not be into force no export contract calculated described as a measure of economic and concluded on the basis of the policy and that it is only the exercise of (monetary) refunds applicable existed. the power conferred by Article 6 of The problem of interim rules was not Regulation No 974/71 from the legal and brought before the Commission, perhaps constitutional view-point of the because the provisions relating to the protection of legitimate expectation, of balance resulting from the operations did the principle of equality, of good not result in a large reduction in the administration and of natural justice. compensatory amounts.

registered with the import agency as a With regard to a possible overriding precautionary measure since the matter of public interest the Com­ applicant could not deduce expressly mission, by amending Article 4 of from the regulation amending Regulation No 1013/71, recognized that Regulation No 1013/71 that the it was not necessary to apply provision relating to the balance did not immediately the general system of apply to old export contracts. compensatory amounts. The defendant is therefore attempting in the present case With regard to the principle of the to undermine a principle which it itself protection of the legitimate expectation has recognized. of interested parties, the applicant claims that Italy was forced in certain respects to The infringement of the principle of apply the system of compensatory equality means that the foreign exchange amounts. Those circumstances therefore losses must be compensated for in the

DIETZ v COMMISSION

same way for all the branches of the contracts after the publication of the economy. The fact that one branch of measures which had been adopted. the economy receives, in addition to direct subsidies, supplementary aid The action taken by Italy and what its through the system of compensatory motives may have been have nothing amounts, while the business sector to to do with the question of the which the applicant belongs does not non-contractual liability of the Com­ even receive compensation for foreign munity. In view of the fact that exchange losses constitutes a flagrant Regulation No 974/71 contained from breach of this principle. the outset a flexible system of authorization for the Member States and

JUDGMENT OF 15. 12. 1977 —CASE 126/76

Decision

1 The application, lodged on 23 December 1976, is for an order that the European Community should pay the sum of DM 329 429.40 as compensation for the damage which the applicant claims to have suffered as the result of the application to Italy, by Regulation No 2887/71 of the Commission of 30 December 1971 (OJ English Special Edition 1966 to 1972, p. 67) of the system of monetary compensatory amounts fixed in agriculture following the temporary widening of the margins of fluctuation for the currencies of certain Member States.

2 The applicant had concluded on 17 December 1971 a sales contract with an Italian undertaking for the delivery between January and June 1972 of approximately 10 000 tonnes of white sugar.

It states that the price was calculated in lire taking into account the monetary compensatory amounts provided for by Regulation No 2635/71 of the Commission of 10 December 1971 (OJ L 273, p. 1) for exports from Germany into Italy.

Following the decision taken by Italy to apply the system of monetary compensatory amounts, the Commission fixed in its Regulation No 2887/71 of 30 December 1971 detailed rules for the application of the monetary compensatory amounts to be imposed on imports into Italy but without laying down transitional measures in respect of old contracts.

The applicant, which took the view that it was adversely affected by an implementing measure adopted by the national authorities, should have contested that measure before the national court since that course of action

was, where appropriate, such as to prompt the German courts to submit to the Court of Justice under Article 177 of the Treaty the question of the validity of Regulation No 2887/71.

4 The applicant instituted proceedings in the Federal Republic of Germany but as it was uncertain whether the court would comply with its suggestion that the question should be referred to the Court of Justice for a preliminary ruling, it lodged the present application bearing in mind the period of limitation laid down in Article 43 of the Protocol on the Statute of the Court

of Justice.

5 According to the applicant, the damage suffered does not result from measures adopted by the national authorities but from an omission on the part of the Commission within the context of the regulations issued in implementation of Article 6 of Regulation No 974/71.

The Court has only stated that it has no jurisdiction in cases in which the application was in fact directed against measures adopted by the national authorities for the purpose of applying provisions of Community law.

The Commission, by not protecting the legitimate expectation of individuals, thus committed a flagrant breach of a superior rule of law and incurred the liability of the Community under the second paragraph of Article 215 of the EEC Treaty.

That regulation exempted from compensatory amounts imports into Italy carried out as the result of contracts which were concluded before 19

December 1971 and registered before 28 December 1971 with the authorities of the relevant Member State or which can be proved by official documents to have been concluded.

On the other hand, the regulation did not provide for an exemption for exports from one Member State to another which were carried out as a result of similar contracts.

The fact that Italy would adhere to the system of monetary compensatory amounts was not foreseeable at the date of the export contract, 17 December 1971, and the applicant was therefore able to enter into the contract on the basis of the legal situation in force at that time and to expect that in the unforeseeable case of the application of the system in Italy, the Commission would issue appropriate transitional provisions for the purpose of protecting the legitimate interests of exporters who were bound by contracts concluded before the date of application of the system.

Moreover, the principle of equality has been infringed in that Article 4 of the regulation in question provided for an exemption for existing import contracts, but not for export contracts.

10 Consequently, the application must be dismissed.

Costs

11 Under Article 69 (2) of the Rules of Procedure, the unsuccessful party shall be ordered to pay the costs.

The applicant has failed in its submissions.

It must therefore be ordered to pay the costs.

On those grounds,

Donner Mertens de Wilmars Pescatore O'Keeffe

Delivered in open court in Luxembourg on 15 December 1977.

A. Van Houtte H. Kutscher

Registrar President

OPINION OF MR ADVOCATE-GENERAL WARNER DELIVERED ON 6 DECEMBER 1977

My Lords, in principle liable in damages to the applicant, it would be necessary to admit In this action the applicant, the Firma evidence in order to establish the actual Gebrüder Dietz of Frankfurt-am-Main, facts in so far as they are in issue and to whose business includes trading in sugar, determine the actual amount of the claims damages from the Commission Commission's liability on the basis of under Article 178 and the second para­ those facts). graph of Article 215 of the EEC Treaty, on the ground that the Commission was On 17 December 1971 the applicant at fault in not including, in the concluded a contract with one Camillo legislation whereby monetary compensa­ Pezzotta of Bergamo, in Italy, for the sale tory amounts ('mca's') were made to the latter of 10 000 tonnes (up to 5 % applicable in Italy as from 3 January more or less) of white sugar of German 1972, transitional provisions for the origin, at the price of Lit 15 250 per 100 protection of traders who had entered kg net. Delivery was to be effected before that date into contracts for the during the period January to June 1972. export to Italy of products affected by Payment was to be made in full on the that legislation. first presentation of documents. The contract (a photo-copy of which is Annex The facts of the case, as pleaded by the 1 to the application) contained a special applicant are as follows. (I say 'as pleaded condition in these terms: by the applicant' because the Com­ mission does not admit them all. If Your 'This contract is based on the prices at Lordships were to decide that, on the present ruling in the EEC and the facts as so pleaded, the Commission was regulations issued thereon. Possible