C-12/77

1. It follows from Regulation No 2. Where the action is in substance 1608/74 taken as a whole that the directed against measures taken by latter has given the Member States a the national authorities pursuant to margin of discretion which permits provisions of Community law, the them to judge the application to each conditions for instituting proceedings individual case of the discretionary measure, including the circumstances before the Court of justice under such as to justifiy the grant or the Article 178 and the second paragraph refusal of the exemption from the of Article 215 of the Treaty are not compensatory amounts. fulfilled.

In Joined Cases 12, 18 and 21/77

DEBAYSER SA. (Case 12/77),

Sucres Union SA. (Case 18/77),

Jean Lion S.A. (Case 21/77),

having their registered offices in Paris, represented and assisted by Roland and Lise Funck-Brentano, Advocates at the Paris Bar, with an address for service in Luxembourg at the Chambers of Georges Reuter, 1, Rue Notre Dame, applicants,

composed of: H. Kutscher, President, M. Sørensen and G. Bosco (Presidents of Chambers), A. M. Donner, P. Pescatore, Lord Mackenzie Stuart and A. Touffait, Judges, Advocate General: H. Mayras Registrar: A. Van Houtte gives the following

JUDGMENT

Facts and Issues

The facts and the arguments of the "Where monetary compensatory parlies put forward during the written amounts are introduced or increased as procedure may be summarized as a result of the fixing or the amendment follows : of the central rate or of the represen­ tative rate of the currency of a Member Sute used in the context of the common agricultural policy, or where I — Facts and written procedure the decision of a Member Sute to permit its currency to float in relation to 1. Article 1 of Regulation (EEC) No the currencies of the Member States 1608/74 of the Commission of 26 June where the fluctuation of the rate of 1974 on special provisions in respect exchange is kept within a maximum of monetary compensatory amounts spread of 2.25 %, the Member Sute in (Official Journal 1974, L 170, p. 38) question shall be authorized to waive, provides that: on a discretionary basis and according

DEBAYSER v COMMISSION

Article 6 of the regulation provides that the regulation applies as of 4 June 1973, In the first case, the applicants the date of the entry into force of Regu­ requested exemption from the monetary lation (EEC) No 1463/73 of the compensatory amounts which had Commission of 30 May 1973 laying newly been re-introduced and applied down detailed rules for the application as from 25 March 1976 for the exports of monetary compensatory amounts referred to in the contracts. With regard (Official Journal 1973, L. 146, p. 1) to that class of contract, the applicants were informed by a circular from the 2. The system of monetary com­ F.I.R.S. of 29 March 1976 that Regu­ pensatory amounts had been pro­ lation No 1608/74 should in principle visionally set aside in the case of France be applied to them. during 1975 because the franc had at In the second case, exemption from the that time returned to the "monetary increases in the monetary compensatory snake". However, as a result of the amounts which had occurred after the decision taken by the French conclusion of each contraa was Government on 15 March 1976 to requested for the exports referred to in

JUDGMENT OF 2. 3. 1978 — JOINED CASES 12, 18 AND 21/77

The monetary compensatory amounts three applications were lodged on 25 applicable on the date of exportation. January 1977 (Case 12/77), 4 February In that circular, the Director of the 1977 (Case 18/77) and 9 February 1977 F.I_R_S_ stated more particularly that the (Case 21/77). monetary measure to which Article 2 of Regulation No 1608/74 refers, as 3. By order of 3 March 1977 the Court decided, in accordance with defined in Article 1 of that regulation, was in that case "the decision of the Article 43 of the Rules of Procedure, to French Government of 15 March 1976 join the three cases for the purposes of to permit the franc to float, which led the procedure and the judgment. to the introduction in France of the By document lodged on 11 March system of compensatory amounts.

The variation in the rate of exchange of a Advocate General delivered his opinion currency to be considered as the at the hearing on 29 June 1977. monetary event referred to in Article 1. By order of 1 July 1977, the Court The 'discretionary relief regulation was decided to reserve its decision on the designed with a view to a monetary objection of inadmissibility for the final event of a rather exceptional nature . . . judgment, in accordance with Article 91 Therefore, that regulation considers as a (4) of the Rules of Procedure. 'monetary measure' which must be taken into consideration for the Under the same article, the President of purposes of its application only the the Court prescribed new time-limits for fixing or the amendment of the central the further steps in the proceedings. rate or of the representative rate used in By letter of 26 October 1977, the the context of tne common agricultural Commission informed the Court that it policy, such as the decision of a would not lodge a reply in the present Member State to permit its currency to case.

— FF 1 560 866.55 (Case 18/77) Secondly, it must be borne in mind that and the application of Regulation No — FF 539 325.53 (Case 21/77); 1608/74 is principally entrusted to the — Order the defendant to bear the Member States who are better placed to "judge the circumstances and to verify costs. the facts of the case" (see the fifth recital of the preamble to that regu­ The defendant contends that the Court lation). The national authorities have should: therefore been entrusted in this case — Dismiss the applications as inad­ with a wide margin of discretion which, missible or at least declare them un­ although limited by the special founded; conditions laid down in Regulation No — In any case, order the applicants to 1608/74, leaves room however in each bear the costs. individual case for considerations based on the principles of natural justice. Even if the applicants wish to invoke the III — Submissions and argu­ existence of a lacuna in the system laid ments of the parties down in Regulation No 1608/74, on the ground that that regulation does not 1. Admissibility take into account all the specific cases In its document of 11 March 1977 and at which may justify a solution based on the hearing on 9 June 1977, the the principles of natural justice, the defendant claimed in particular that the problem in question should also be disputes at the origin of the applications brought before the national courts do not in this case come within the which may refer to the Court of Justice jurisdiction of the Court of Justice and for a preliminary ruling questions should have first been brought before concerning the validity of the regu­ the national court having jurisdiction. lation.

of 7 December 1976: that reply may be national court which has jurisdiction has analysed as merely information given to determined exactly the effect of those the Syndicat du Commerce des Sucres questions on the outcome of the dispute and does not therefore constitute a legal between the applicants and the national "act" which may be contested. This is authority. Since in the present case the all the more so since the services of the matter has not been brought before the Commission are only called upon to national court in that way, in spite of intervene in very specific cases in which the fact that this would have been quite the national authorities envisage possible according to the procedures complying with the requests for and within the periods prescribed by exemption addressed to them (Article 4 French law, the present applications for of Regulation No 1608/74).

argument of the Commission that the case the services of the Commission had applications sought the recovery of not reached a decision within the "own resources" and that the present context of and according to the pro case was a dispute coming within the cedures laid down by Regulation No jurisdiction of the national court. The 1608/74 and that therefore there is no fact that the amount of the alleged loss causal connexion between the damage corresponds approximately to the claimed and the alleged wrongful act or increase in the monetary compensatory omission (assuming that that act exists amounts is not a criterion accepted by

date on which the contracts were case to invoke the case-law of the Court concluded and that they therefore raise in the Haegemann Case, Case 96/71 a question concerning the validity, in and the I.B_C_ Case, Case 46/75, since relation to the Treaty, of the measures in those cases the applicants criticized adopted by the French Sute for the the application of Community rules by implementation of the rules in question. the national authority whilst in the Such a question, in the same way as that present cases they are merely calling in of any liability incurred by the question the wrongful omission of the Community, may however only be Commission to adapt Reguladon No examined by the Court in so far as the 1608/74 to its objective.

It is moreover incorrect to state that the before the Court of Justice itself. In alleged loss may be imputed principally view of the delay which such procedure to the national authorities. The limited would in fact have involved, the right of task which the Commission admits to action of the applicants before the having does not correspond either to Community court would therefore have the wording of Regulation No 1608/74 been very likely to be affected by the nor to the practical experience of period of limitation relating to the

Treaty. In fact, the applicants could not connexion comes within the exami in this case have brought proceedings nation of the substance of the case. before the national court having Secondly, the letter of the Commission jurisdiction, in other words the of 7 December 1976, which the administrative court, since it is only applicants have analysed as a precise possible to bring an action before that and incontestable refusal to grant the court by means of an action on the request of the Syndicat du Commerce ground of misuse of powers or a recours des Sucres, has no effect on the en plein contentieux (proceedings in outcome of the dispute.

It has previously the Court of Justice that court would been decided on numerous occasions not however have had jurisdiction to that an application for damages order the Community, if necessary, to constitutes, on the contrary, an compensate for the damage resulting independent application the class from an illegal omission and would ification of which does not depend on therefore have had to direct the the fact that its result might be similar applicants to lodge an application to that of another application.

Finally, with regard to the impossibility concluded. The reason for this is in for the applicants of bringing the particular the specific organization of subject-matter of the present dispute the market in sugar, which is based before the national court, this is upon weekly awards upon tender and confirmed by implication by the very provides for the power on the part of case-law of the Court (the judgment in the Commission to limit in respect of the Balkan Case, Case 118/76 of 28 each award upon tender the quantities June 1977) which, by delimiting the awarded and to fix the rates of refund. distribution of functions between the In these circumstances, most contracts Community, to whom problems relating similar to those in the present case are to the basis of assessment, the manner only to be performed several months of imposition and the amount of after the date on which they are Community charges fall, and the concluded and the trader, who must national authorities, to whom recovery cover the sale, may possibly have to of those charges is entrusted, shows that tender several weeks running before the national court did not in the present obtaining the export licence or licences case have the power to extend the scope corresponding to his sale (see of the exemption from the monetary application, Annex 7). compensatory amounts by filling a The fact that some of the contracts in

omission, moreover wholly unforeseeable. The — a causal connexion between the prices laid down in the contracts were damage and the wrongful act or thus calculated on the basis of the omission. monetary compensatory amounts applicable on the date of the conclusion (a) The existence of damage thereof. Since the profit margin of sugar The applicants first set out the context merchants, which is approximately 1%, of the dispute by explaining the does not enable them subsequently to provisions of Community law relating to absorb the risk of those increases, the the monetary compensatory amounts on large increase in the monetary sugar and describe the factual situation compensatory amounts which occurred in which the alleged damage arose. after the contracts in question had been concluded corresponds roughly to the They point out in particular that, with loss suffered by the applicants. regard to the contracts entered into after 15 March 1976 and performed In the second case, it is incorrect to after 23 July 1976, the monetary consider that, having concluded those compensatory amounts to be paid upon contracts, the applicants will not suffer exportation were much higher than losses since any upward variation in the those at the date on which they were currency mentioned in the contract will

involve an increase in the amount the fact that it is extremely ponderous, necessary for the payment in French was not possible in this case since it is francs and will thus enable the increase strictly prohibited by French legislation in the monetary compensatory amounts which permits the buying on credit of which occurred between the date on currency only under regulations which the contraa was concluded and corresponding to an actual importation that on which it was performed to be at of goods. least partially covered. In fact, the Confronted with that situation, the situation of those applicants was in that case identical to their situation when applicants therefore requested that Regu­ lation No 1608/74, called a "dis­ selling in French francs. cretionary relief regulation", be applied In fact, in accordance with the recitals to them. In refusing this request, the of the preamble to Regulation No F.I.R.S. explained that the amendment 2042/73 and acting as prudent traders of the monetary compensatory amounts they had to have recourse, in order to which occurs each week is, according to cover themselves against the risk of a the Community institutions, only a variation in the rate of exchange measure adopted in implementation of between the French franc and the the system of the above-mentioned currency laid down in the contract, to a amounts and does not itself constitute a measure necessary in international trade monetary measure within the meaning consisting in transacting arbitrage of Article 1 of Regulation No 1608/74 business in relation to the currency used which is capable of resulting in the in the contract on the date on which the application of the discretionary measure contraa was signed. They were thus laid down therein. This point of view, obliged to sell the currency laid down in which is confirmed by the Commission, the contract on credit for French francs fails however to meet the objective of on the abovementioned date (in other that regulation and makes the Com­ words, buy on credit, on that date, the mission liable for the damage which the equivalent in French francs of the applicants have suffered in this case. currency laid down in the contraa), As for the nature and the existence of which however resulted in fixing their position in French francs and leaving such damage it is necessary in particular them, just as in the case of the contracts to note that:

— on the other, although the contracts entered into .with third countries are The literal interpretation given to Regu­ lation No 1608/74 by the Commission the subject of export refunds the and the fact that it omitted to adapt its amount whereof is fixed by regu­ lation on the basis of the price on regulation to its spirit are contrary to the principle laid down by the Court of the world market and is affected by Justice and by learned authors that a correcting factor which aims to Community law must be interpreted on mitigate the effect of the monetary the basis of its objectives and its general compensatory amount on the selling scheme and so as to bring out its effects. price, the increase in the refund owing to that factor does not In accordance with this principle, the however wholly reduce the charge Commission should have given identical treatment both to the contracts on arising from the monetary compensatory amounts. which traders suffer losses owing to a monetary measure the repercussions of which affect for the same reason (b) The existence of a wrongful act or contracts which were concluded before omission on the part of the Commission 15 March 1976 and to those entered into after that date. According to the applicants, the Commission did not comply with the By its literal interpretation and its requirements of the rules of natural omission, the Commission on the justice underlying all the Community contrary was guilty of an illegal act rules on compensatory amounts, from involving discrimination against the Regulations Nos 1660/69 and 2042/73 applicants and contrary to the principle to Regulation No 1608/74. The latter of the protection of the legitimate regulation clearly states that: expectation of traders.

on foreign exchange made any particular circumstances of individual guarantee against fluctuations in the situations, it would be excessive to monetary compensatory amounts convert this concept into a general practically impossible for them for principle obliging the authors of rules the above-mentioned reasons; based on grounds of natural justice in all circumstances to go beyond the — the application to the applicants of the increases in question was not situations covered by those rules on the even necessary in the case of the pretext that those rules did not take into consideration, at the time at which they contracts drawn up in French francs in order to compensate for the effect were adopted, all the particular circum stances of the individual situations. of the depreciation of the French franc on the price laid down in the Moreover, since the regulation in

This special system had die Directorate General for Agriculture therefore to be interpreted strictly and on 7 December 1976 to the President of the general rule remained that of the the Syndicat Français du Commerce des application of the monetary compen Sucres merely constitutes information satory amounts. given in reply to that President and is On the other hand, the general system not a measure which is capable of being of monetary compensatory amounts contested. Because of the way in which itself is called in question when the that letter was drafted, the context existence of alleged lacunae in Regu within which the viewpoint expressed lation No 1608/74 is claimed.

The 1608/74 to its objective". applicants in fact disregard the fact that because it is "standard" in nature such a Without prejudice to the admissibility of system prevents the taking into that amendment, the ground of consideration of individual situations or complaint invoked in this case is in otherwise it would become wholly inap addition unfounded. First, although the plicable. concept of natural justice implies a certain moderation of the stria For that very reason the submission of provisions of the law owing to the infringement of the protection of the

legitimate expectation of traders appears reserved is unjustified. Their requests in to be unfounded. Moreover, for such a fact relate only to the proportion of the submission to be justified a flagrant damage which was incontestably breach of a superior rule of law for the suffered and easily assessable and do protection of individuals would be not, because these are difficult to assess, necessary. Such a breach may not refer to the commercial difficulties however be invoked in the present case caused by the insecurity created in their since the applicants do not contest an working conditions and to the failure to amendment to the Community rules make a profit owing to a considerable which has affected their legal situation, reduction in their volume of business an argument which is in fact typical in during the second half of 1976. cases in which an infringement of the With regard to the problem of the protection of legitimate expectation is existence of lacunae in Regulation No capable of being alleged, but contest the 1608/74, although it is correct that not absence of an amendement to Regu every case for which no provision is lation No 1608/74 and claim that such made by that regulation necessarily absence is contrary to the principle of constitutes a lacuna in the system, it is natural justice which is contained in that nevertheless true that the situation in regulation and in which they had which the applicants are at present is complete confidence.

respect. In fact, the applicants seek to certain cases the ordinary legal obtain exemption by the Commission arrangements which preceded the intro "instead of the French Sute" from the duction of the monetary compensatory proportion of the monetary com amounts. Secondly, a discretionary pensatory amounts exceeding the rate relief regulation cannot by its essence be applicable on 12 July 1976. interpreted restrictively because the The Commission ends by suggesting to rules of natural justice form the basis of the Court that it should reserve the every legal system and an essential discussion as to the extent of the reference point in cases of doubt.

DEBAYSER v COMMISSION

JUDGMENT OF 2. 3. 1978 — JOINED CASES 12, 18 AND 21/77

Decision

1 The applicants claim, by the present applications lodged under Article 178 and the second paragraph of Article 215 of the EEC Treaty, that the Commission should be ordered to pay damages for the loss which they have suffered owing to the failure to apply to exports of sugar carried out on the basis of binding contracts concluded after 15 March 1976 the discretionary measure laid down in Article 1 of Regulation (EEC) No 1608/74 of the Commission of 26 June 1974 on special provisions in respect of monetary compensatory amounts (Official Journal 1974, L 170, p. 38).

2 Article 1 of Regulation No 1608/74 provides that: "Where monetary compensatory amounts are introduced or increased as a result of the fixing or the amendment of the central rate or of the representative rate of the currency of a Member State used in the context of the common agricultural policy, or where the decision of a Member State to permit its currency to float in relation to the currencies of the Member States where the fluc­ tuation of the rates of exchange is kept within a maximum spread of 2.25%, the Member State in question shall be authorized to waive, on a dis­ cretionary basis and according to the following conditions, the monetary compensatory amount or so much thereof as corresponds to the increase".

3 On the other hand, Article 2 (1) of that regulation specifies that: "Article 1 shall apply only to imports and exports carried out pursuant to binding contracts concluded before the monetary measure referred to in that article".

9 In these circumstances, the applicants lodged the present applications.

10 The Commission objects that the applications are inadmissible, on the ground that the application of the discretionary measure contained in Regu­ lation No 1608/74 comes in the first place within the decision-making power of the Member States.

11 It concludes that the applicants should first have brought their action before the national courts which could if necessary have had recourse to the procedure under Article 177 of the Treaty with regard to any question concerning the interpretation of Regulation No 1608/74.

12 Moreover, assuming that the applications are directed against the above.­ mentioned letter of 7 November 1976, they should be dismissed as inadmissible since that letter was simply information sent in reply to a report submitted by the Syndicat du Commerce des Sucres and did not therefore constitute a legal act capable of forming the subject-matter of an application under the Treaty.

JUDGMENT OF 2. 3. 1978 — JOINED CASES 12. 18 AND 21/77

13 On the other hand, the applicants claim that the Commission has, within the context of Regulation No 1608/74, a general power of supervision over all the provisions contained in that regulation, including Articles 1 and 2, and that that power is such as to make it liable to those concerned.

19 For the purposes of the application of that system the sixth recital (in the English version) of the preamble to the regulation provides expressly that "it is, in principle desirable to entrust the administration of the rules concerned to Member States" on the ground in particular that they are better placed

DEBAYSER v COMMISSION

not only to verify the facts of the case but also to "judge the circum­ stances".

20 In fact it follows from those rules taken as a whole that they have given the Member States a margin of discretion which permits them to judge the application to each individual case of the discretionary measure, including the circumstances such as to justify the grant or the refusal of the exemption referred to in Article 1 of the regulation.

21 Although the regulation makes the application of the system thus established subject to the Commission's agreement in the cases expressly laid down in Article 4, where a Member Sute intends to make use of the discretionary measure in respect of contracts the validity of which exceeds a certain length of time, it leaves to the charge of the Member States alone the decision concerning the refusal to apply the discretionary measure.

22 The first paragraph of Article 5 of the regulation merely recognizes in general the right of the Community to be notified by the Member States of the criteria for application which they intend to adopt and the cases in which it is proposed to grant an exemption.

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

28 The applicants have failed in their submissions.

On those grounds,

THE COURT

hereby:

1. Dismisses the applications as inadmissible;