C-68/77

1. In adopting Regulation No 2033/75 performance of an obligation upon the Commission did not exceed the the individual with respect to the limits of its discretionary power administration. No general legal under Regulation No 805/68. principle of force majeure is to be 2. The application of the principle of force majeure in the relationship discerned in the national legal between an individual and the public systems where there is no such administration presupposes the non- obligation.

In Case 68/77

IFG-INTERCONTINENTALE FLEISCHHANDELSGESELLSCHAFT MBH & CO. KG, Groß-Gerau (Germany), represented by Counsel in partnership Dr Dietrich Ehle, Ulrich C. Feldmann and Dr Ulrich Wiemann, Cologne, with an address for service in Luxembourg c/o Madame Jeanne Housse, 21, rue Aidlingen, applicant, v

COMMISSION OF THE EUROPEAN COMMUNITIES, represented by its Legal Adviser, Dr Peter Kalbe, acting as Agent, with an address for service in

1 — Language of the Case: German.

JUDGMENT OF 14. 2. 1978 — CASE 68/77

JUDGMENT

Facts and issues

The facts and the arguments put 2. Article 21 of Regulation (EEC) No forward by the parties in the course of 805/68 of the Council of 27 June 1968 the written procedure may be on the common organization of the summarized as follows: market in beef and veal (Official Journal, English Special Edition 1968 I — Facts and procedure (I), p. 187) provides inter alia as follows: 1. On 14 May 1975 the applicant concluded with Prodexport, the '1. If by reason of imports or exports Romanian State corporation for foreign the Community market in one or trade, a contraa for the delivery of more of the products listed in Article 6 000 tonnes of seasoned bovine meat 1 experiences or is threatened with preparations coming under subheading serious disturbances which may 16.02 B III (b) I of the Common endanger the objectives set out in Customs Tariff (CCT), 3 000 tonnes of Article 39 of the Treaty, appropriate which were to be delivered during June, measures may be applied in trade July and August 1975 and the remaining with third countries until such 3 000 tonnes during the last quarter of disturbance or threat of disturbance 1975 and the first quarter of 1976. has ceased.'

IFG v COMMISSION

'Free circulation within the Community of products falling within subheading Whereas the current position on the 16.02 B III (b) 1 of the Common Community market enables import Customs Tariff originating in third restrictions on certain products falling countries shall be suspended, with the within subheading 16.02 B III (b) 1 of exception of prepared or preserved the Common Customs Tariff, which bovine meat or bovine meat offal put up have a specific market, to be abolished in sealed containers weighing not more entirely;' than three kg net.' The scope of the exception arising The system thus established was under the provision quoted was changed replaced by Regulation (EEC) No by Regulation (EEC) No 2033/75 of 1090/75 of the Commission of 23 April the Commission of 5 August 1975, 1975 on the issue by way of protective amending the definition as laid down in measures of import licences for certain Regulation (EEC) No 1090/75 (EXIM) beef and veal products (EXIM) of products falling within CCT sub­ (Official Journal L 108 of 26 April heading 16.02 B III (b) 1 (Official 1975, p. 1) which entered into force on Journal L 207 of 6 August 1975, p. 8). 1 May 1975. The so-called EXIM system thus introduced made the issue Article 1 of that regulation, after repro­ of import licences subject to prior expor­ ducing without amendment Article 1 (2) tation of an equivalent quantity of beef of Regulation No 1090/75, added the or veal (Article 3). following paragraph to that article: '4. Meat and offal which has been However, under subparagraph (a) of the second paragraph of Article 1 of the subject to seasoning (with pepper regulation, no impon licence was and salt, for example), whether required for: minced, cut up or in a single piece shall not be regarded as falling 'prepared or preserved beef and veal or under paragraph 2 (a) above, beef and veal offal in hermetically irrespective of the type of packing in sealed containers weighing not more which it is put up.' than 5 kg net.' The second, third and penultimate The following reasons were given for recitals of the preamble to Regulation the amendment in the fourth recital of No 1090/75 read: the preamble to the regulation:

'Whereas there has been a steady the applicant had concluded with Prod growth in the importation of seasoned export suffered serious damage. In meats exempted . . . from the protective consequence, the applicant was able to measures; whereas the total imports import before the entry into force of effected and to be effected have reached Regulation No 2033/75 on 1 September a level incompatible with sound 1975 only about 1 100 tonnes out of the management of the market in beef and 3 000 tonnes of meat, the delivery of veal'; which was due to have taken place during June, July and August 1975.

This is Article unboned frozen meat held by the 20, which reads as follows: intervention agencies. '1. Where as a result of force majeure Finally, changes were made in the importation or exportation cannot system applicable to imports of beef and be effected during the period of veal as a result of Council Regulation validity of the licence or certificate, (EEC) No 425/77 of 14 February 1977, the competent agency of the issuing amending Regulation No 805/68 on the Member State shall decide, at the common organization of the market in request of the titular holder, either beef and veal and adapting Regulation that the obligation to import or No 827/68 and Regulation No 950/68 export be cancelled, the security on the Common Customs Tariff being released, or that the period of (Official Journal L 61 of 5 March 1967, validity of the licence or certificate p. 1); it was applicable as from 1 April be extended for such period as may

3. As a result of floods in Romania in described under 3 above.

Upon hearing the report of the Judger and also in so far as the applicant claims Rapporteur and the views of the that the Commission did not ensure that Advocate General the Court decided to the competent German authority open the oral procedure without any applied the principles of force majeure. preparatory inquiry, the oral procedure The action was not one to be brought being restricted at this stage to the against the Federal Republic of questions of the admissibility of the Germany. The complaint is concerned action and the liability of the with the question whether the Einfuhr- Community, the questions of the origin und Vorratsstelle was, in the circum­ of the damage and the nature and stances of the case, competent to apply extent thereof being reserved. Article 20 of Regulation (EEC) No 193/75. This question was answered in II — Conclusions of the parties the negative not only by the German authority but in particular by the The applicant claims that the Court Commission, which is itself competent should: to decide whether a case of force 1. Declare that the Commission is majeure exists. The action for damages bound by way of damages to must therefore be brought exclusively guarantee performance of the against the Commission. Thus the loss was due to the Community's failure to applicant's contraa of 14 May 1975; act: see the judgments of the Court of 2. In the alternative, order the 26 November 1975 in Case 99/74, Commission to pay the applicant by Grands Moulins v Commission [1975] way of damages the profit which it ECR 1531, of 21 May 1976 in Case failed to make through the non-per­ 26/74, Roquette v Commission [1976] formance of the contract concluded ECR 677 and of 27 January 1976 in on 14 May 1975. Case 46/75, IBC v Commission [1976] 3. Order the Commission to pay the ECR 65. costs. 2. The Commission states that the In an annex to the reply' the applicant stated that the loss suffered amounted application for a 'declaration that it is to DM 848 733.80. bound by way of damages to guarantee performance of the applicant's contraa The Commission contends that the of 14 May 1975' is inadmissible. The Court should: damages claimed are not cash damages 1. Dismiss the main application under 1 but 'compensation in kind'. as inadmissible; Since at the present time the import­ 2. Dismiss the alternative application ation of seasoned meat is in principle under 2 as in part inadmissible and as unrestricted, what the applicant is wholly unfounded; seeking is that the provisions of Community law making the licence and 3. Order the applicant to pay the costs. levy mandatory should be declared inapplicable in its particular case. III — Submissions and argu­ The Commission could act in ments of the parties accordance with the request made by A — Admissibility of the action the applicant only by formally amending the relevant regulations. These 1. The applicant contends in its proceedings, which seek the promul­ application that the latter is admissible gation of a legislative act of specific under Article 178 and the second content are not intended to make good paragraph of Article 215 of the Treaty damage within the meaning of the

have been issued unconditionally since 1 176 of the Treaty refers to the second April 1977. The only relevant competent paragraph of Article 215 shows that the body in Germany is the Federal Court may, pursuant to the latter Authority for the organization of agri­ provision, impose obligations on the cultural markets. Consequently, the institutions of the Community which are applicant's alternative claim is wider than those provided for under Article 176. admissible only in so far as it is based on the fact that, since 1 September The applicant goes on to dispute the 1975, imports of seasoned bovine meat Commission's contention that the im­ have also been subject to a levy or a portation of the products in question system equivalent to a levy. was not made economically impossible. In this connexion it points out that 3. The applicant replies by before 1 September 1975 the charge on emphasizing that it has demanded importation of the product in question compensation for damage pursuant to was DM 0.853 per kg for an article the second paragraph of Article 215 of priced at DM 3.30 per kg; under the the Treaty. The enforcement of its right present system the charge is DM 7.12 to compensation means that the per kg and its effect is equivalent Commission must inform the competent therefore to a prohibition of impor­ authorities in the Federal Republic of tation. Germany that the applicant is entided to Moreover from 1 September 1975 to 30 impon the goods in question under the March 1977 linked-sales systems of conditions in force before 1 September various kinds were applied, in particular 1975. To do this, no formal amendment under Regulation (EEC) No 76/76. The of the regulations involved is necessary. 'intervention meat' the purchase of The application of Article 175 of the which was compulsory under these Treaty is excluded by the fact that the systems was from three to four DM Commission took a decision on the dearer per kg than the meat purchased letters sent to it by the applicant. by the applicant in Romania. Thus from

an economic point of view an import to submit an application on the same ation of meat preparations under the lines in specific terms. In these circum linked-sales system was out of the stances, the mere declaration of a vague question for the applicant since it would guarantee of performance has no have involved losses which it would not purpose or effectiveness. The applicant have been able to bear. can show no interest in legal protection. The reason why other importers were able to import under the linked-sales Nor is the applicant's main head of system is that they had bought claim any more admissible as an action

requirements of Article 38 (1) of the meat preparations which would Rules of Procedure of the Court. immediately purchase from it three to five thousand tonnes of meat and that If an attempt is made to give a positive Prodexport is still in a position to execute the contraa which binds it to meaning to the empty wording of that claim by referring to the text of the the applicant. reply, it will be seen that it seeks a In the applicant's view this account of 'measure ensuring that the applicant is the facts demonstrates that the action is enabled to execute the contract'.

of 2 June 1976 in Joined Cases 56 to such a measure, rendering inoperative 60/74, Kampffmeyer and Others v the legal duty to pay the levies, could be Commission and Council [1976] ECR 711. Those conditions do not obtain in obtained only under the conditions laid this case. down in Article 175 of the Treaty, and those conditions are not satisfied. The applicant wants the Commission to ask the competent German customs The actions for compensation referred authority not to impose the levy on to under Article 178 and the second imports effected by it. paragraph of Article 215 of the Treaty If the applicant is now in a position to can be instituted only for the purpose of make such a claim it must also be able obtaining financial compensation.

B — Substance 2033/75 pays insufficient regard to the principle of equality of treatment. That 1. The applicant claims in the first provision amounts to discrimination place that by virtue of the principles of against traders who had concluded protection of legitimate expectations, of contracts prior to 5 August 1975 but proportionality and of equality of who were no longer able to import the treatment, the Commission ought, in goods before 1 September 1975. This is addition to the transitional period especially the case when importation provided for under Article 2 of Regu was impeded by a case of force majeure. lation No 2033/75, to have provided rules to make it possible for, inter alia, 2. Secondly, the applicant states that any contraa concluded before 1 June the Commission acted illegally in 1975 to be performed. This claim is refusing to authorize the Federal based on the following considerations: Republic of Germany to permit it to import, under the conditions which (a) After suspending imports of beef apply to cases of force majeure, the 1 900 and veal from third countries by Regu tonnes of meat affected by the machines lation No 2668/74 of 21 October 1974 being put out of action.

beef and veal there was no overriding ECR 745. In all those cases the Court interest calling for interference with recognized that it was proper 'to have definitely concluded contracts. recourse to the concept of force majeure when importation was impeded by (c) Similarly, the transitional provision circumstances outside the control of the contained in Article 2 of Regulation No holder of an import licence.

In its judgment of 20 February 1975 in does not make financial compensation Case 64/74, Reich v Hauptzollamt obligatory and that the loss can Landau [1975] ECR 261, the Court therefore be made good in kind. found that special rules which provide for the case of force majeure are justified 5. According to the Commission it is by reasons of natural justice. It not true that the contraa which the accordingly applied the principle of force applicant concluded with its Romanian majeure by analogy to a case which was associates could not be performed not expressly provided for. because of the Community import systems promulgated on 1 September The Commission ought to have

3. Thirdly, the applicant contends that made them economically impossible. It in the light of the principle of the states that: protection of legitimate expectations and in view of the circumstances of force — Import licences have also been issued without restriction for majeure the Commission ought, at least in the context of the relaxation of the seasoned meats since 1 April 1977; measures prohibiting imports, to have — At present market prices in tne permitted performance of the contraa Community are in some sectors of 14 May 1975 under the conditions markedly higher than those in 1975 applicable until 1 September 1975. This but the applicant need only pay the view of the applicant is based on a 1975 purchase price;

6. In any case it was not any action on meat held by intervention agencies the part of the Commission which concluded under the linking system prevented the applicant from effecting before the suspension of the issue of the importations in time. The inclusion, import licences and in respect of which under Regulation No 2033/75, of it has not been possible to issue seasoned meats in the arrangements licences'. involving the protective clause appli On the nature of the loss sustained the cable to beef and veal was published in applicant points out that the second the Official Journal of 6 August 1975 paragraph of Article 215 of the Treaty and came into force only on 1

September 1975. If the applicant was 9. The Commission further states that unable to make use of the opportunity in all cases in which the Community which was thus offered him to import agricultural regulations provide for the remaining 1 900 tonnes of seasoned exceptions on the ground of force meats, it is not the Commission which is majeure these are cases where the to blame for this but only the fan that person concerned is himself bound to the applicant's Romanian producers did perform a specific act in relation to the not deliver in accordance with the Community or the authorities of the conditions agreed.

7. The Commission has not infringed p. 18). the' principle of the protection of As the Court has laid down in its legitimate expectation. The applicant decisions, force majeure constitutes an concluded the delivery contraa at a exception to the duty to respect time when the market in beef and veal obligations entered into when certain had long been passing through a period circumstances make it impossible for the of considerable and lasting crisis, during person concerned to fulfil them. which protective measures appeared one after the other and imports of seasoned The aforesaid conditions, which must be beef and veal were rightly subject to present to constitute a case of force

As regards the alleged discrimi latter applied for an import licence or nation against the applicant the declared its goods for the purpose of Commission states that there were other import formalities. undertakings who were unable to effect The position is quite different when the in time the whole of the seasoned beef situation lies outside this type of legal and veal imports which they had relationship established by Community bargained for. The Commission did not law. If the Commission were bound to grant any exempting arrangements to adjust its import system to individual any of those undertakings. The fact that cases in accordance with the importer's the Commission treats the applicant in original intentions, decisions regarding the same way as all the other under the level of charges applicable on im takings concerned in the same situation portation would depend not on the and that it refuses to grant it special factual situation on the market but on privileges denied to those other under importers' assumptions and presumed takings cannot amount to discrimination intentions. This would bring to a halt against the applicant. the working of the system of foreign

has been no importation of quantities of — The delay in the importation of meat which would militate against goods caused by the sudden and sound management of the market in unforeseeable effects of the energy beef and veal. The principles of legal crisis; and certainty and of protection of legitimate — The damage sustained by processing expectation require that authority be machines installed in the exporting given for the performance within a country. suitable period of contracts which can be proved to have been firmly The strict interpretation placed by the concluded, by reason of the two Commission on the concept of force following factors: the establishment of a majeure cannot be deduced from the basis of trust in accordance with Regu­ rules in force or from the general legal lation No 1090/75 and the absence of principles common to the laws of the an emergency requiring the reintro­ Member States. The rule on force duction of a protective measure. In the majeure is in fact a necessary relaxation light of these two considerations, a of any special import system. In transitional period from 6 August to 1 exceptional circumstances beyond the September 1975 is not particularly control of the importer, the rule should generous. provide him with a guarantee that he

JUDGMENT OF 14. 2. 1978 — CASE 68/77

But if Article 1 (4) of Regulation No applicable. The fact that, as part of the 1090/75 as amended by Regulation No rules concerning protective clauses, 2033/75 contains irregularities, the seasoned meats were exempted from the Commission must make good the obligation also to obtain a licence does damage suffered by the applicant owing not mean that, at the same time, the to the fact that the latter has, until now, Community legislature excluded cases been unable to import the remaining of force majeure. 1 900 tonnes provided for under the contract with Prodexport.

That coming under subheading 16.02 B III situation does not obtain in this case: (b) 1 of the CCT. The Community does none of the provisions of the levy not in fact have sufficient quantities of system applicable under the common meat preparation. High quality organization of the market in beef and 'intervention meat' is too dear to be veal as established by Regulation No used for sausages. The conditions laid 425/77 authorizes any special

exemption to be accorded to the has caused market prices to fall to a applicant. level well below that of the guide price. The Community's intervention system 15. It is not necessary to consider has not enabled this fall in prices to be whether the protective measures avoided. In those circumstances the first contained in Regulation No 1090/75 requirement is to give Community infringe general legal principles. If they production first claim on existing outlets were found to do so, this would at most in the Community, by far the most involve the annulment or withdrawal of important of which are those offered by the regulation, which has already been the processing industry. This objective

1090/75. In order to set up any such from the customs viewpoint it still system of exemption, the Commisson remains the same as any other bovine must in all cases be able to rely on a sound foundation in law, but such a meat so far as the processer is concerned. The use of seasoned meat legal basis is lacking in this case. does not secure any natural, technical 16. With regard to the applicant's or qualitative advantages for the alternative claim, the Commission points processer. The advantage of its use lies out that since it is neither bound nor solely in its cheapness.

view. 17. Nor can any such obligation to compensate be founded on any legal Under one contract among many others irregularities in Regulation No 2033/75. the applicant alone placed an order for at least 6 000 tonnes of seasoned meat The formal requirements attaching to from a manufacturer. Nor did other big the application of the protective dealers show any more restraint. On a measure provided for in Article 21 of Community market already saturated Regulation No 805/68 have been

In 805/68. A chronic surplus in the supply trade with third countries it adopted the of beef and veal on the internal market appropriate measures to protect the

market of the Community against dis and veal, placed it in the position of turbances arising from imports which being unable to effect the intended. would have imperilled the objectives of importations. Article 39 of the Treaty. The Commission considers that Regu The obligations of the Community in lation No 2033/77 constituted an the field of commercial policy were also obstacle solely to those importations complied with. Article 21 of Regulation which could have been effected during No 805/68 expressly authorizes the the period of its validity.

18. Finally, the Commission notes that of profit, this must be attributed not to in its statement of 10 October 1977, the regulation or to any legal defects lodged 14 days after the rejoinder, the thereof but solely to those other applicant touches for the first time on obstacles. the question of the calculation of its loss of profit and that of the amount which If it is held that any legal irregularity in it is claiming as damages. Regulation No 2033/75 gives rise to an obligation to make reparation the The applicant could have set out in its Commission can be held liable only for application the claims, arguments and the loss of profit suffered by the documents which it put in late.

1977. imposed by that regulation, which makes the importation of the contested The Advocate General delivered his seasoned meat subject to the prior expor opinion at the hearing on 18 January tation of an equivalent quantity of beef 1978.

3 As a result of floods in Romania in June 1975, the delivery of certain consignments of meat which should have taken place before 1 September 1975 was delayed until after that date.

That was the date of the entry into force of Regulation (EEC) No 2033/75 of the Commission of 5 August 1975 (Official Journal L 207 of 6 August 1975, p. 8), the effect of which was that seasoned meat was no longer exempt from the system provided for under Regulation No 1090/75.

The subject matter of the present action is the damage which the applicant claims to have suffered as the result of the application of Regulation No 2033/75 to the deliveries in question.

JUDGMENT OF 14. 2. 1978 — CASE 68/77

4 While the Commission raises no objection as to the admissibility of the alter­ native application for financial compensation, it has raised an objection of inadmissibility regarding the main application, arguing in effect that an application of this kind cannot be entertained in the form of an action for damages based on Article 178 and the second paragraph of Article 215 of the Treaty.

The main and alternative claims have, however, a common basis in that they assume that the Community is liable because of an unlawful act or attitude on the part of the Commission.

7 The applicant further claims that the Commission infringed the principle of respect for legitimate expectation by not adopting a transitional measure which, even after the entry into force of the regulation of 1 September

IFG v COMMISSION

1975, would have enabled contracts concluded before 6 August 1975, the date of publication of the regulation, to receive the benefit of the conditions for importation arising under the previous regulations.

However, the import system at issue required no previous authorization or any firm commitment on the part of the person concerned with respect to the authorities responsible for the management of the organization of the markets in question and the Commission conveved nothing to importers which could have justified the expectation that, regardless of the development of conditions on the market, the previous rules would be main­ tained without alteration during the time when prior contracts were to be performed.

This submission must, accordingly, also be rejected.

9 Finally, the applicant claims that the Community incurs liability because the Commission refused to take account of force majeure, which prevented the performance of the contract before the entry into force of Regulation No 2033/75.

Because of this material difference the conditions governing an application by analogy of the provisions cited to the present case are wanting.

11 With regard to the reference to the existence of a general legal principle governing cases of force majeure, it is true that the legal systems of the Member States provide, in certain contexts and legal relationships, for the possibility of derogation from the stria requirements of the law, especially from the legal consequences resulting from the non-fulfilment of an obligation, on account of force majeure.

Nevertheless, in the relationship between an individual and the public administration, as in the present case, where to exceed the material date does not involve the non-fulfilment of any obligation binding the individual but merely renders the importations in question subject to a system less favourable than that in force before that date, the existence of a general legal principle to the effect alleged is not to be discerned in the national legal systems.

If an importer finds that the performance of the contraa under the new system is detrimental to his interests he must seek the appropriate remedy on the basis of his legal relationship with his co- contractor, relying as necesary on the occurrence of force majeure.

Accordingly, the conduct of the Commission cannot be considered unlawful and is not therefore such as to render the Community liable.

12 Since, in the circumstances, the principal and alternative claims must, on the same ground, be dismissed as unfounded, no consideration need be given to the particular question of the admissibility of the principal claim.

hereby:

1. Dismisses the application;

2. Orders the applicant to pay the costs.

Kutscher Sørensen Bosco

Donner Pescatore O'Keeffe Touffait

Delivered in open court in Luxembourg on 14 February 1978.