C-90/78
ECLI:EU:C:1979:85
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JUDGMENT OF 28. 3. 1979 — CASE 90/78
In Case 90/78
GRANARIA B.V., Rotterdam, represented by B. H. ter Kuile and F. O. W. Vogelaar, of the Hague Bar, with an address for service in Luxem bourg at the Chambers of Jacques Loesch, 2 Rue Goethe, applicant, v
COUNCIL OF THE EUROPEAN COMMUNITIES, represented by D. Vignes, Director of the Legal Department, assisted by A. Brautigam, a member of that Department, with an address for service in Luxembourg at the office of J. N. Van den Houten, Director of the Legal Department of the European Investment Bank, 2 Place de Metz,
and
COMMISSION OF THE EUROPEAN COMMUNITIES, represented by H. Bronkhorst, a member of its Legal Department, with an address for service in Luxembourg at the office of its Legal Adviser, M. Cervino, Jean Monnet Building, Kirchberg, defendants,
APPLICATION for damages under Article 175 and the second paragraph of Article 215 of the EEC Treaty,
THE COURT
composed of: J. Mertens de Wilmars, President of the First Chamber, acting President, Lord Mackenzie Stuart (President of Chamber), A. M. Donner, P. Pescatore, M. Sørensen, A. O'Keeffe and G. Bosco, Judges,
Advocate General: F. Capotorti Registrar: A. Van Houtte
gives the following
GRANARIA v COUNCIL AND COMMISSION
JUDGMENT
Facts and Issues
The facts of the case, the course of the 1974, by Regulation No 1125/74 of the procedure and the observations Council. submitted under Article 20 to the Statute The judgment cited above led Granaría of the Court of Justice of the EEC may to submit the following requests to the be summarized as follows: Council and Commission by letters dated 30 January 1978: — In the first place, that the institution I — Facts and procedure concerned pay it, in accordance with the principle of equality referred to in 1. In its judgment of 19 October 1977 the said judgment, within the two in Joined Cases 117/76 A. Ruckdeschel v months prescribed by Article 175 of Hauptzollamt Hamburg-St. Annen and the Treaty, the production refunds 16/77 Diamalt v Hauptzollamt Itzehoe dating back to 1 August 1974, to [1977] ECR 1753 the Court decided which it was entitled for the that: quantities of maize and quellmehl 1. The provisions of Article 11 of Regu concerned, in accordance with lation No 120/67/EEC of the Article 11 of Regulation No 120/67, Council of 13 June 1967, as worded as worded before the amendment with effect from 1 August 1974 made by Regulation No 1125/74; following the amendment made by — In the alternative, that within the two Article 5 of Regulation (EEC) No months following the date of the said 1125/74 of the Council of 29 April letters the institution concerned 1974, and repeated in subsequent regu recognizes its liability towards the lations, are incompatible with the applicant for any damage which it principle of equality in so far as they had suffered as a result of the provide for quellmehl and pre abolition of the said refunds contrary gelatinized starch to receive different to the principle of equality, such treatment in respect of production damage to be ascertained on the basis refunds for maize used in the manu of particulars to be supplied by the facture of these two products. applicant and to be made good in 2. It is for the institutions competent in accordance with the law. matters of common agricultural policy to adopt the measures necessary to Granaría addressed similar requests to correct this incompatibility. the Hoofdproduktschap voor Akker bouwprodukten [Central Board for Agri- 2. The Granaría undertaking, the applicant in this case, is engaged in producing, buying and selling, importing and exporting various agricultural products and, of particular interest in this case, quellmehl. Granaría received production refunds for quellmehl from 1972 until their abolition, on 1 August
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cultural Products], to the Produktschap the Commission have failed, contrary voor Granen, Zaden en Peulvruchten to the Treaty or to their obligations [Board for Grain, Seeds and Leguminous arising under the Treaty or under Plants] and to the Netherlands some general principle of law, having Government. been first called upon within the pre This action was brought on the ground scribed period by Granaría to act, to that the Council and the Commission take a decision or address to
failed to take, within the period pre Granaría an act (other than a scribed by Article 175 of the Treaty, the recommendation or an opinion); decisions requested by Granaría. — In the alternative, annul the implied decision or decisions of the Council 3. In fact it was only by Regulation No and/or the Commission not to take a 1125/78 of 22 May 1978, amending decision or not to act in accordance Regulation No 2727/75 on the common with the request which the applicant organization of the market in cereals, had previously addressed to them for and Regulation No 1127/78 of 22 May that purpose; 1978, amending Regulation No 2742/75 on production refunds in the cereals and — Order the European Economic rice sectors (Official Journal L 142 of 30 Community, pursuant to Article 215 May 1978, pp. 21 and 24) that the of the Treaty, to compensate Council reintroduced a scheme of Granaría for the damage caused by production refunds for the manufacture its institutions, which damage Granaría has suffered and will of quellmehl from common wheat and maize. The main features of those regu continue to suffer as a result of the lations are as follows: non-payment, or failure to order payment, to the applicant of the — Provision was made for equality of treatment between the manufacture production refunds for maize and quellmehl covering the period sub of quellmehl intended for bread sequent to 1 August 1974, in respect making and the manufacture of starch; of the quantities periodically notified to the competent authorities by the — At the request of the parties applicant, in accordance with Article concerned the refunds were to be 11 of Regulation No 120/67 of the granted retroactively as from 19 Council; October 1977, the date of the judgment of the Court cited above. — Declare that such damage is to be ascertained on the basis of particulars 4. The action was brought on 3 April to be supplied by Granaría and is to 1978. After hearing the report of the be made good in accordance with the Judge-Rapporteur and the views of the law; Advocate General, the Court decided to — Order the Council and the open the oral procedure without any Commission, jointly with the preparatory inquiry. European Economic Community, to pay the costs.
II — Conclusions of the parties 2. The Council and the Commission contend that the Court should: 1. Granaría claims that the Court should: — Declare the application inadmissible or alternatively declare it groundless; — Declare, pursuant to Article 175 of the Treaty, that the Council and/or — Order the applicant to pay the costs.
GRANARIA v COUNCIL AND COMMISSION
III — Submissions and argu this action for the purpose of obtaining a ments of the parties legislative provision. In this regard refers to the solutions which it suggested in its A — Admissibility letters of 30 January 1978.
2. The action based on the second 1. The action based on the third paragraph of Article 215 of the Treaty paragraph of Article 175 of the Treaty (a) The Council submits that the application does not comply with the (a) The Council submits that requirements of Article 38 (1) of the irrespective of the manner in which it Rules of Procedure of the Court. complied with the judgment of the Court According to the Council Granaría does of 19 October 1977, it had to amend its not specify either the nature or the Regulation No 2727/75. In the Council's extent of any damage suffered by it. In view Granaria's action is designed to the Council's opinion it would have been obtain a general provision of a legislative easy to give particulars of the damage, nature, identical in scope to a regulation, rather than an act of direct and for example in the form of a numerical calculation of the unpaid refunds, since it individual concern to it. As the Court is a question of damage which has stated in its judgment of 15 January 1974 already occurred. This is not, therefore, in Case 134/73, Holtz and Willemsen v the situation described in the judgment Council [1974] ECR 1, such an action is of the Court of 2 June 1976 in Joined inadmissible. Cases 56 to 60/74 Kampffmeyer and Others v Commission and Council [1976] (b) The Commission endorses the obser ECR 711, where the Court considered vations of the Council. It adds in admissible an action for liability in particular that the only legal instrument respect of future damage. As no figure by which the equality of treatment indicating the amount of the claim is demanded by Granaría may be stated, this head of the claim must in the established in law is the regulation. In Council's view be regarded as ancillary fact a regulation is intended to contain a to the previous claim, which is likewise general legislative provision applicable to inadmissible. an indeterminate number of persons. As for the causal connexion, the Council criticizes Granaría for merely asserting (c) Granaría submits that, with Regu that the non-payment of the refunds lations Nos 1125/78 and 1127/78, the caused it damage. The Council points Council has only partially complied with the judgment of the Court of 19 October 1977 and that therefore those regulations are not valid and do not render the application groundless. It considers that, as the amendment to Article 11 of Regu lation No 120/67 was not valid, that article continues in force in its original version. Equality of treatment may, according to Granaría, be re-established by paying the refunds on the basis of the rules in force before 1 August 1974. Granaría further submits that the form of a regulation is not appropriate in this case and states that it has not brought
JUDGMENT OF 28. 3. 1979 — CASE 90/78
out in this regard that it is probable that more than adequately in its application, Granaría passed on in its selling prices if this is considered as a whole. the increase in the cost of quellmehl, It is not necessary, in its view, for the resulting from the fact that the refunds application to state the actual amount of were not paid, and that therefore no the damage; it is customary in cases in damage was suffered by the applicant. which precise calculations cannot yet be The Council concludes that it is a carried out to ask that the defendants be question of an action for liability for ordered to pay compensation for damage unspecified damage, which the Court "to be ascertained on the basis of par acknowledged to be inadmissible in its ticulars to be supplied and to be made judgment of 2 December 1971 in Case good in accordance with the law". 5/71, Zuckerfabrik Schöppenstedt v Granaría adds that it is not possible at Council [1971] ECR 975. present to quantify the damage because since 1 August 1974 the Council and the (b) The Commission endorses the obser Commission have no longer determined vations of the Council. It adds in the essential element thereof, namely the particular that the Court established in exact amount of the refunds.
Therefore, its judgment of 15 June 1976 in Case it is the principle of. equality which 74/74, CNTA v Commission [1976] ECR should determine precisely the damage. 797, that the amount which may be According to Granaría, it is apparent, claimed as damages can never be equal moreover, from the defendants' to the amount of the unpaid refunds. arguments that they are aware of the subject-matter of the dispute and of the It also points out that, in order to prove grounds relied on, so that they cannot the damage, Granaría will have to prove that it is a result of the discrimination, complain that they are hampered in their
defence. established by the Court, consisting in the fact that manufacturers of animal In Granaria's opinion it would be feed, in competition with the quellmehl contrary to the independent nature of in question, received a subsidy; in other the action for failure to act and would words, it must be a question of damage impair the proper functioning of the caused by the fact that the manufacturers entire system of remedies established by of quellmehl were in a less favourable the Treaty if the fact that in certain competitive position than the manufac circumstances an action for damages turers of starch owing to the fact that the may lead to the same result as an action for failure to act were considered a latter received a production subsidy. According to the Commission Granaria reason for inadmissibility.
In Granaria's has made no attempt to furnish such submission the action for damages is different from the action for failure to proof and, moreover, it has not made any such declaration, with the result that act in that its object is not to secure the its application must be regarded as adoption of a specific measure but to inadmissible by virtue of Article 38 of the obtain compensation for the damage Rules of Procedure. caused by an institution in the per formance of its duties. Finally Granaría calls attention to the rule to which it has (c) According to Granaria, it is clear from the application that the subject- matter of the dispute is the payment of the refunds subsequent to 1 August 1974 and compensation for the damage sustained as a result of the non-payment. Granaría is equally of the opinion that it has set out the grounds on which it relies
GRANARIA v COUNCIL AND COMMISSION
referred on the admissibility of the action (b) The Council observes that the under Article 175 of the Treaty. Court did not decide in its judgment of 19 October 1977 that Regulation No 1125/74 was not valid but rather that it B — Substance was illegal and that therefore it was for the competent institutions to adopt the 1. The action based on the third measures necessary to remove that paragraph of Article 175 of the Treaty illegality. But the argument pursued by Granaría would not in the Council's (a) Granaría submits that as a result of opinion leave the institutions any choice. the judgment of the Court of 19 October Consequently the Council rejects 1977 Regulation No 1125/74 of the Granaria's view that the entitlement to Council is not valid. Council Regulations refunds provided for quellmehl by the No 1125/78 and No 1127/78 are not rules in force before 1 August 1974 valid either, in its submission, since the continued without interruption. principle of equality between the As for Granaria's argument that Regu products in question was not re lations No 1125/78 and No 1127/78 had established for the period from 1 August the effect of removing equality of 1974 to 19 October 1977 and since it treatment for quellmehl and pre was not re-established for quellmehl and gelatinized starch, the Council recalls starch intended for use as animal feed. that it had never proposed, from 1964 to The consequence of the invalidity of the 1974, to establish equality between said regulations is, according to different types of animal feed. According Granaría, that Article 11 of Regulation to the Council, the use of quellmehl as No 120/67 continues in force in the animal feed was merely the consequence version existing prior to 1 August 1974 of the fact that with the grant of the and that the refunds must be paid, in refund quellmehl was able to become respect of the period subsequent to that competitive for other uses than those to date, on the basis of those provisions. which it was traditionally put. That consequence of the refund is, however, Granaría states in its reply that the contrary to the underlying reason for the quantity of maize which it converted into scheme of refunds, namely the main quellmehl from 1 August 1974 to 31 tenance of quellmehl in its traditional December 1977 inclusive amounted to a market. The Council recalls, moreover, total of 313 769.78 kg. If the refunds had in this context that the main object of remained identical to the refunds paid granting a refund for cereal and potato for maize converted into starch, the sums starches and other similar products was payable in respect of that quantity would to enable those products to meet the be approximately 1 652 690.64 guilders. competition from chemical substitutes. In Moreover, says Granaría, the rules in the Council's opinion that reason is not force before 1 August 1974 did not valid as regards the market in animal forbid the sale of quellmehl for the purpose of feeding cattle. The judgment of the Court of 19 October 1977 is not, in Granaria's opinion, based on the assumption that inequality of treatment does not exist when it is a question of the relationship between quellmehl and starch used as animal feed. Besides it is well-known that subsidized starch is used for that purpose on a vast scale.
JUDGMENT OF 28. 3. 1979 — CASE 90/78
feed since there are no chemical sub (b) The Council submits that any stitutes on that market. The Council goes damage should be borne by the applicant on to stress that the Court based its because it does not exceed the judgment of 19 October 1977 on the fact "reasonable limits" within the meaning that quellmehl is traditionally used for of the judgment of the Court of 25 May bread-making. 1978 in Joined Cases 83 and 94/76 and 4, 15 and 40/77, Bayerische HNL and (c) The Commission endorses the obser Others v Council and Commission [1978] vations of the Council. It adds in ECR 1209.
particular that the date of 19 October It is clear from its observations on Article 1977 was chosen in accordance with the 175 of the Treaty that the Council is of margin of discretion accorded by the the opinion that the abolition of Court to the Community institutions for production refunds for quellmehl used as the abolition of discrimination. In the animal feed is not contrary to the opinion of the Commission the judgment principle of equality. does not contain any obligation to re Therefore Granaría cannot rely on that establish that system retroactively. principle since, in view of what the Finally, the Commission points out that Court regarded as an established fact in all the factors mentioned by the Court in its judgment of 19 October 1977 on the its judgment of 19 October 1977 as one hand, and in view of what Granaría likely to justify the abolition of the has admitted in this case, in particular in refund for common wheat and for maize its letter of 12 July 1972, on the other used to produce quellmehl for feeding hand, it is probable that the quellmehl animals are present: in fact, only starch produced by Granaría is used solely as manufactured from less expensive raw animal feed. Moreover, this conclusion is materials than wheat and maize, such as corroborated by the fact that Granaría tapioca and manioc, could economically was able, in spite of the abolition of the be used for feeding animals; moreover, it refunds, to double its production, as is is clear from a letter from Granaría clear from the documents produced by it dated 12 June 1972 — in which it for the purpose of these proceedings. addressed to the competent national According to the Council, furthermore, authority a request for production that fact proves either that Granaría refunds for quellmehl — that that passed on the effects of the abolition of product is indeed used as animal feed. the refunds in its selling prices, which would mean that it suffered no loss, or 2. The action based on the second that the abolition did not cause it any paragraph of Article 215 of the damage because it operates in a different Treaty market, namely the market in animal
(a) Granaría is of the opinion that the Community is liable for the damage sustained by it as a direct consequence of the unlawful situation created by the institutions as a result of the abolition of the production refunds for quellmehl, which was illegal because it was contrary to the principle of equality. According to Granaría that fact constitutes a sufficiently serious breach of a superior rule of law enacted for the protection of individuals.
GRANARIA v COUNCIL AND COMMISSION
feed. That fact shows, moreover, that IV — Oral Procedure there is no causal link between a loss, other than the non-payment of the refunds, and the abolition of the refund. The applicant, represented by B. H. ter Kuile, the Council, represented by (c) Granaría states that it has not sold D. Vignes and A. Brautigam, and the quellmehl for use as animal feed: it sells Commission, represented by H. Bronk to buyers, who then decide what to do horst, presented oral argument at the with the quellmehl. hearing on 6 February 1979.
(d) The Commission endorses the obser The Advocate General delivered his vations of the Council. opinion at the hearing on 7 March 1979.
Decision
1 By an application made on 3 April 1978 against the Council and the Commission, the Netherlands company Granaría B.V., hereinafter referred to as "Granaría", asked the Court, in the first place, to declare pursuant to Article 175 of the EEC Treaty that the two institutions, jointly or severally, had disregarded their obligations by failing to address to Granaría an act which it had requested, and, secondly, to order the Community, pursuant to the second paragraph of Article 215 of the Treaty, to compensate it for damage caused to it by the defendant institutions.
2 These requests arise from the fact that on 1 August 1974, the date of the entry into force of Regulation No 1125/74 of 29 April 1974 amending Regu lation No 120/67 on the common organization of the market in cereals •(Official Journal 1974, L 128, p. 12), the grant of production refunds for quellmehl, which Granaría had received after commencing production of that commodity in 1972, ceased and was re-introduced only as regards the manufacture of quellmehl for bread-making, by Council Regulation No 1127/78 of 22 May 1978 amending Regulation No 2742/75 on production refunds in the cereals and rice sectors (Official Journal 1978, L 142, p. 24).
In support of its requests Granaría relies on the judgment of the Court of 19 October 1977 in Joined Cases 117/76, Ruckdeschel v Hauptzollamt Hamburg- St. Annen, and 16/77, Diamalt v Hauptzollamt Itzehoe [1977] ECR 1753, in
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which the Court ruled that the provisions at issue were incompatible with the principle of equality in so far as they provided for quellmehl and pre gelatinized starch to receive different treatment in respect of production refunds for maize used in the manufacture of those two products.
3 The object of the application, taken as a whole, is essentially to obtain compensation for the damage which Granaría claims to have sustained as a result of the refusal to grant it the refunds which it requested.
Therefore, it is first of all necessary to consider the claim under the second paragraph of Article 215.
The admissibility of the application in so far as it is based on Article 178 and the second paragraph of Article 215
4 The Council and the Commission have put forward an objection of inadmissibility, submitting that the application does not comply with the requirements of Article 38 (1) of the Rules of Procedure in that it does not state either the nature or extent of the alleged damage or the causal link between the acts of the Community and the damage allegedly sustained.
5 It is true that in the application Granaría merely states that it has sustained pecuniary damage as a result of the regulations at issue, reserving the right to give details of the extent thereof at a later stage.
Generally an application in such abridged form, made under Article 178 of the Treaty, would not be sufficient to comply with the requirements of the Rules of Procedure as regards stating the subject-matter of the dispute and the grounds on which the application is based.
6 In the particular circumstances of the case, however, the incomplete nature of the application need not necessarily render it inadmissible.
In fact, when an action for damages is brought before the Court under Article 178 of the Treaty and the legal basis of the Community's liability is disputed, the desirability of making the procedure more economical has sometimes led the Court to give a decision at an early stage of the proceedings on the question whether the conduct of the institutions has been such as to entail the liability of the Community, reserving consideration of
GRANARIA v COUNCIL AND COMMISSION
questions relating to causality, as well as those concerning the nature and extent of the damage, for a later stage.
In this case the problem of the legal basis of liability is particularly appro priate for separate treatment in accordance with that practice, so that it is possible, strictly speaking, to consider the application adequate and therefore admissible.
The substance of the application in so far as it is based on the second paragraph of Article 215
7 Granaría submits that the Community is rendered liable by the fact that the abolition of the production refunds for quellmehl created a situation which, in its judgment of 19 October 1977, the Court declared illegal as being contrary to the principle of equality.
8 Whilst it is true, in that judgment, the Court ruled that the provisions at issue were incompatible with the principle of equality in so far as they provided for a difference in treatment between quellmehl and pre-gelatinized starch, none the less it is clear from the grounds of the decision that that finding was based on the information supplied to the Court during the proceedings.
In this regard the Court found that quellmehl had for a long time been exposed to competition from starch on account of the possibility of using the latter product instead of quellmehl for the purpose of certain specific uses in food for human consumption.
9 In view of the allegations made by the Council and the Commission to the effect that quellmehl had been diverted from its specific use in food for human consumption in order to be sold as animal feed, the Court ruled that, even if adequate proof that it was put to such use had been forthcoming, that could have justified the abolition of the refund only in respect of the quantities put to such use and not in respect of the quantities of the product used in food for human consumption.
The Court took the view that the principle of equality is breached to the detriment of quellmehl producers only on the assumption that quellmehl is put to its traditional uses in food for human consumption.
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In the course of the proceedings in the present case the parties have not introduced any new factor capable of altering that view.
10 The institutions entrusted with the operation of the scheme of production refunds within the framework of the common organization of the market may legitimately require a person who claims the refunds to provide evidence that the product is used for the purpose envisaged by the scheme.
In this case Granaría has not produced such evidence, either for the period during which the regulations in force made no provision for any production refund for quellmehl or for the period following the reintroduction of the production refunds for quellmehl intended for bread-making.
11 It follows that the Community is not liable towards Granaría and consequently the application must be rejected as unfounded in so far as it is based on the second paragraph of Article 215 of the Treaty.
The admissibility of the application in so far as it is based on Article 175 of the Treaty
12 The claim submitted by Granaría under Article 175 of the Treaty seeks a declaration that the defendant institutions have failed to fulfil their obligations by not acting upon the request which Granaría had addressed to them, asking them to pay the refunds claimed by it and to recognize their liability for the damage which their conduct had caused.
13 The third paragraph of Article 175 provides that any natural or legal person may, under the conditions laid down in the first and second paragraphs of the same article, complain to the Court of Justice that the Council or the Commission has, in infringement of the Treaty, "failed to address to that person any act other than a recommendation or an opinion".
14 The only legal instrument which would have allowed satisfaction of the claim made on the two institutions in this case would have been a regulation auth-
GRANARIA v COUNCIL AND COMMISSION
orizing the reintroduction of production refunds for quellmehl and laying down rules for the compensation of any damage caused by their abolition.
Such a provision could be described, by reason either of its form or of its nature, as an act which could be addressed to the applicant within the meaning of the third paragraph of Article 175.
15 Thus the application must be dismissed as inadmissible in so far as it is based on Article 175 of the Treaty.
Costs
16 Under Article 69 (2) of the Rules of Procedure the unsuccessful party shall be ordered to pay the costs.
As the applicant has failed in its action it must be ordered to pay the costs.
On those grounds,
THE COURT
hereby:
1. Dismisses the application;
2. Orders the applicant to pay the costs.
Mertens de Wilmars Mackenzie Stuart Donner
Pescatore Sørensen O'Keeffe Bosco
Delivered in open court in Luxembourg on 28 March 1979
A. Van Houtte J. Mertens de Wilmars Registrar President of the First Chamber acting President