C-101/78

JUDGMENT OF 13. 2. 1979 — CASE 101/78

exemptions from the conditions laid omission contrary to national law, in down by that regulation. the application of Community law does not fall within the second 3. A question relating to the application of the second paragraph of Article paragraph of Article 215 of the Treaty 215 of the Treaty cannot be and must be determined by the national courts in accordance with the determined in proceedings for a pre- national law of the Member State liminary ruling. concerned. 4. The question of compensation by a national agency for damage caused to 5. The application of the second private individuals by the agencies and paragraph of Article 215 of the Treaty servants of Member States, either by falls within the exclusive jurisdiction reason of an infringement of of the Court of Justice and lies Community law or by an act or outside that of the national courts.

In Case 101/78

REFERENCE to the Court under Article 117 of the EEC Treaty by the College van Beroep voor het Bedrijfsleven for a preliminary ruling in the action pending before that court between

Granaría BV Rotterdam,

and

GRANARIA v HOOFDPRODUKTSCHAP VOOR AKKERBOUWPRODUCTEN

JUDGMENT

Facts and Issues

The facts of the case, the course of the 4. Following that judgment the parties procedure and the observations filed further submissions on 8 September submitted pursuant to Article 20 of the 1977. In its submissions Granaría Protocol on the Statute of the Court of requested the College to annul the Justice of the EEC may be summarized decisions appealed against and to order as follows: the Hoofdproduktschap to make good the damage which it has suffered as a result of those decisions and also the costs and disbursements of the action. I — Facts and procedure In support of its submissions Granaría 1. The Hoofdproduktschap voor stresses that the decisions against which Akkerbouwprodukten (Central Board for it has appealed are based on Regulation Agricultural Products), the defendant in No 563/76 which the Court in its

the main action,.by its decisions of 24 judgment of 5 July 1977 ruled was March and 8 September 1976, refused to invalid. Granaría assesses the damage issue to the undertaking Granaría, the which it has suffered, made up of plaintiff in the main action, a protein financing charges, staff and certificate for certain vegetable administrative expenses and also loss feedingstuffs on the ground that of profit and loss of turnover, at Hfl 604 070. Granaría had not provided a security as laid by Council Regulation No 563/76 The Hoofdproduktschap has agreed that of 15 March 1976 on the compulsory the application for the annulment of the purchase of skimmed-milk powder held decisions appealed against should be by intervention agencies for use in granted but has denied that it is liable for feedingstuffs (Official Journal No L 67 the damage suffered by Granaría as a of 15 March 1976, p. 18). result of those decisions.

5. Since the College van Beroep 3. Must the second paragraph of considered that the action raises Article 215 of the Treaty be questions of interpretation of interpreted as meaning that Community law, it stayed proceedings by because the Community enacted an order of 31 March 1978 and, the regulation and because the pursuant to Article 177 of the Treaty, regulation was declared null and requested the Court of Justice to give a void by the Court of Justice of preliminary ruling on the following the European Communities in its questions of interpretation: aforementioned judgment on the grounds relied on in that I. 1. On a true interpretation, does it judgment which are set out result from the provisions of Regu- above, the Community is directly lation No 653/76, so long as the liable to the injured party, in the latter had not been declared null present instance the plaintiff, for and void, that the defendant, in the damage suffered by the answer to an application such as injured party as a consequence of that by the plaintiff for the issue the sole fact that for so long as it had not been declared null and of a protein certificate, was obliged to refuse to issue such void by the Court of Justice that certificate : regulation was implemented and applied by the competent before 1 April 1976: if the authority wholly in accordance applicant had not lodged a with its content and scope? security within the meaning of 4. If so, is the second paragraph of Article 11 of the regulation? Article 215 of the Treaty to be and understood as meaning that the Community is directly and as from 1 April 1976: if the exclusively liable for the damage applicant had not either produced suffered or that the Member State a document as prescribed by or the authority appointed by the Article 6 of the regulation or Member State which implemented provided a security as prescribed and applied the regulation is by Article 3 (2) of the regulation? liable, either wholly or in part? 2. If Question 1 is answered in the 5. On a true interpretation of the affirmative, must it then be held second paragraph of Article 215 that on a true interpretation of of the Treaty, if the Member the Treaty and the principles State or the authority appointed which are fundamental thereto by it is directly liable in whole or the defendant was nevertheless in part for the damage referred to empowered to exempt an in the two previous questions, is applicant for a protein certificate the Member State or the from the obligation to comply authority entitled to have with the conditions for the issue recourse to and seek redress from of a protein certificate imposed by the Community? the regulation for the period before 1 April 1976 and for the period from 1 April 1976?

must the College in that case In accordance with Article 20 of the reach its decision pursuant to the Protocol on the Statute of the Court of principles set out in the second Justice of the EEC written observations paragraph of Articles 215 of the were submitted by the plaintiff in the Treaty or exclusively on the basis main action, the Netherlands of Netherlands national law? Government and also by the Council and 7. If, in that case, the College must the Commission of the European Communities. reach its decision pursuant to the principles set out in the second Upon hearing the report of the Judge- paragraph of Article 215 of the Rapporteur and the views of the Treaty, on a true interpretation of Advocate General the Court decided to the second paragraph of Article open the oral procedure without any 215 is compensation payable for preparatory inquiry. all damage suffered in so far as it was reasonably foreseeable? II — Written observations sub- 8. Do those principles or other mitted to the Court provisions of the Treaty mean that in proceedings such as these the costs of legal representation A — Observations of the plaintiff in the main action are to be regarded as damage suffered for which the injured 1. With regard to the first question for a party can in principle demand full preliminary riding Granaria submits that compensation or as procedural national authority responsible for the costs which must be awarded in implementation of Community provisions accordance with the relevant may in principle assume that those national provisions? provisions are valid until the competent court has held otherwise. However, there 6. It is clear from the order making the is an exception to that principle where reference that, apart from the question the provisions in question are provisions whether the heads of damage mentioned of general applications the im- by Granaría and the sums which it has plementation of which has been arrived at are in fact correct, the College entrusted to the Member States; that is of the opinion that the method exception arises where the national auth- adopted by Granaría for the purpose of orities concerned, taking into account assessing the amount of the damage the general principles of good which it has suffered as a result of the administration and legal certainty, have two decisions appealed against is in reasonable grounds for apprehending, principle acceptable. The College even before the court has given its ruling, assumes that in connexion with the

that a Community provision is invalid Granaria is of the opinion that the Court and that its application is contrary to has already given a negative answer in Article 5 of the Treaty. principle to the third question, in Joined Cases 83 and 94/76, 4, 15 and 40/77, According to Granaria it is the latter Bayerische HNL Vermehrungsbetriebe situation which has arisen in the present GmbH & Co. KG and Others v Council

valid. It is clear from the judgment of the Court in the beforementioned Case damage", which is entirely different and which Granaria can under no circum- 116/76, Granaria, that it has in this stances pass on to its customers: respect made a mistake of law. It must administrative and staff expenses. That accept the consequences of such a mistake. "individual damage", because of its unusual extent, cannot be regarded as a part of the risk involved in every business 2.

3. With regard to the third question for a case-law of the Court on Article 215, preliminary ruling Granaria emphasizes bring a separate action against the that it has not pleaded that the Community on the basis of the latter's Community is liable for the damage non-contractual liability under the which it has suffered through the second paragraph of Article 215 of the application of the invalid regulation. Treaty. According to Granaria, under domestic law the defendant in the main action is

GRANARIA HOOFDPRODUKTSCHAP VOOR AKKERBOUWPRODUCTEN

the Community or from the Member In case the Court should come to a State concerned, if and to the extent to different conclusion Granaría asserts that

courts which have to apply the regu- 6. Granaría points out with regard to lation must always, before giving effect the sixth question for a preliminary ruling to it, form an opinion as to its possible that it is clear from the foregoing that invalidity, is incompatible with the the liability of the defendant in the main institutional system established by the action for the "European" damage and for the "national" damage caused by the application of the invalid regulation and by the contested decisions must be determined on the basis of Netherlands law.

7. According to Granaría the seventh question referred to the Court by the College van Beroep is not relevant.

JUDGMENT OF 13. 2. 1979 — CASE 101/78

Treaties and could give rise to enormous 4. The Netherlands Government gives practical difficulties. This emerges from the same answer to the second question the judgment of the Court of 7 February for a preliminary ruling: there is nothing 1973 in Case 39/72, Commission of the in the regulations at issue to indicate that European Communities Italian Republic in certain circumstances the Member

[1973] ECR 101. States were empowered to exempt the plaintiff from compliance with the In the view of the Netherlands formalities laid down in the regulation Government both the Communities and for the purpose of obtaining the protein the Member States who apply a regu- certificate. lation which is subsequently declared to be null and void are liable only to the C — Observations of the Council extent to which they have manifestly and seriously exceeded their powers. It refers 1. The Council is of the opinion that on this point to the judgment of the the first question for a preliminary ruling Court in the abovementioned Joined should be answered in the affirmative.

impossible from the administrative point 1. According to the Commission the of view, before 1 April 1976, to waive answer to the first question for a pre- the requirement of the provision of a liminary ruling must be in the affirmative. security. 2. In the judgment of the Commission The Netherlands Government points out the answer to the second question for a with reference to the period subsequent preliminary ruling must be in the negative to 1 April 1976 that there is nothing in owing to the fact that Regulation No the regulations at issue to indicate that in 563/76 does not allow the Member certain circumstances the Member States States to exercise any real discretion. A were not obliged to make the issue of a Member State wishing to call in question protein certificate conditional upon the the validity of a regulation must do so in provision of a security as mentioned in accordance with the procedure laid Article 3 (2) of Regulation No 563/76 or down for that purpose in the Treaty. upon production of the document referred to in Article 6 of the said regu- lation.

GRANARIA v HOOFDPRODUKTSCHAP VOOR AKKERBOUWPRODUCTEN

3. (a) The Commission, in answer to implementing provisions of Community the third question for a preliminary ruling, law they in fact act within the ambit and submits that it is clear from the Court's by virtue of their own sovereign power judgment in the above-mentioned Joined rather than as representatives of the Cases 83 and 94/76, 4, 15 and 40/77, Community; the Court has confirmed Bayerische HNL, that the Community is this in connexion with measures taken by not in the present case directly liable for Member States on behalf of the

in the main action. It first of all points liability of Member States when out in this connexion that actions for implementing a valid Community regu- non-contractual damages against lation — for example in its judgment of national authorities which are alleged to 2 March 1978 in Joined Cases 12, 18 be in breach of Community provisions, and 21/77, Debayser SA and Others v because for instance they have Commission of the European Communities implemented a regulation subsequently [1978] ECR 553. This is also apparent declared to be invalid, must be brought from the second and third paragraphs of before the national courts. In fact the Article 215 of the Treaty, which do not second paragraph of Article 215 of the mention that there is any such indirect Treaty gives the Court sole jurisdiction liability or that the Community may have in actions brought against the a right of recourse against the Member States or vice versa. Community for compensation for damage caused by its institutions or The Commission then asks itself the servants. The national authorities do not following question: on the assumption form part of those institutions, even that a Member State is held to be liable when they implement Community regu- for non-contractual damage caused by lations. the measures which it has taken to

chain of causation between the damage nevertheless refer a question for a pre- and the unlawful act of the Community. liminary ruling to the Court, which has jurisdiction under the second paragraph 3. (c) The Commission next gives its of Article 174 of the Treaty to state opinion on the elimination of the effects which of the effects of the regulation of an invalid regulation. which it has declared void shall be It points out in this connexion that considered as definitive. actions for restitution of a given sum The Commission also emphasizes that must, according to the. well-established the application for repayment of the case-law of the Court, for example whole or part of the purchase price of according to the judgment which it gave the skimmed-milk powder is linked to in the beforementioned Case 96/71, R. the question of the validity or continued & V. Haegeman, be brought before the enforcement of agreements subject to national courts. Actions for restitution private law entered into subsequent to seek a declaration that an act undertaken and even for the purpose of the for the purpose of the immediate implementation of a regulation later implementation of the regulation which declared to be invalid.

The which it has suffered to its customers, Commission considers that the same are questions for the national court to applies where the Court declares that a determine in accordance with national regulation is invalid in proceedings based law, subject to the possibility of referring on Article 177 of the Treaty. The questions to the Court for a preliminary Commission emphasizes that such an ruling. elimination of the effects of a regulation If the national court neither declares that is different from compensation for dam- the contracts for the purchase of age within the meaning of the second skimmed-milk powder are void or paragraph of Article 215 of the Treaty. terminates them nor makes an order for An application for repayment of sums repayment of the whole or part of the paid by way of security together, where price then the question of compensation appropriate, with interest and an for continued enforcement of the application for the release of a bank contracts concerned may arise. guarantee are actions for restitution. The Nevertheless, the possibility cannot be question whether there are grounds for ruled out that a claim for further damage granting such applications has to be might be made if the contracts are decided by the national court in declared to be void or are terminated, accordance with its domestic law.

In this connexion the national court may

applied for but were not granted a legal order actions for restitution by protein certificate because they refused direct purchasers of skimmed-milk to provide a security or to buy skimmed- powder can succeed only if it can be milk powder, their claim is not for shown that the relevant sums, charges repayment of a given sum but for and/or expenses have not been passed on compensation. to the subsequent purchasers. In this connexion it refers to the system 3. (d) The Commission then applies the introduced by Article 2 of Commission above-mentioned observations to the Regulation No 749/76 of 31 March claims made by the plaintiff in the main 1976 laying down rules for the action. application of Article 5 of Regulation No 563 on the compulsory purchase of According to the Commission, actions skimmed-milk powder (Official Journal for the release of a security or bank No L 86 of 1 April 1976, p. 50). The guarantees and the recovery of Court should also draw the attention of administrative expenses and financing the College to the fact that actions charges incidental thereto must be brought by the customers of direct pur- brought against the national authorities chasers at the different successive levels in the national courts. cannot be entertained, for the reasons set Actions for a declaration that a contract out in the sixth paragraph of its of purchase is void or for the termination judgment in the beforementioned Joined thereof and, where the contract is Cases 83 and 94/76, 4, 15 and 40/77, declared to be void or is terminated, Bayerische HNL in connexion with actions for recovery of the whole or part actions for damages against the of the price and for payment of the Community. charges and expenses incidental thereto must also be brought against the national 4. In reply to the fourth and fifth authorities in the national courts. questions for a preliminary ruling the Actions for damages where contracts are Commission refers specifically to its maintained in force or for incidental observations on the third question. damages where contracts are declared to It adds that by reason of the institutional be void or terminated and also actions structure of the Community it is for damages caused by the refusal to impossible to accept that, where the grant an application for a "protein" certi- Community and a Member State or a ficate because a security has not been national authority are liable provided or a contract of purchase has concurrently, the Community and the not been concluded must be brought national authorities are jointly and against the Community before the Court severally liable. of Justice and/or against the national The application of the rules proposed by authorities before the national court. the Commission can, according to the However, in this case such an action latter, scarcely raise any difficulties in could not be entertained since, according this case, because in its view it is to the Court, on the one hand, the impossible to accept in casu that the Community has not incurred non-con- Member States or the national auth- tractual liability and neither, on the other hand, at least according to the Commission, have the national auth- orities.

questions for a preliminary ruling the 2. Granaría submitted, in particular, in Commission also refers to its obser- connexion with the fourth question for a vations on the preceding questions. preliminary ruling, that a Member State of the Community can be jointly and It adds the specific observation that the severally liable only where the liability question whether the national authorities arises under the same legal order. That may be liable must be determined on the legal order can only be Community law. basis of the national law applicable to the Liability under national law and matter. However, the national courts Community law, which are two different whose task it is to settle this question of legal orders, is not joint and several. liability are often prompted to request Granaría submitted with reference to the the Court for a preliminary ruling on the interpretation or validity of the fifth question for a preliminary ruling Community provisions at issue. In fact, that it seems to be possible in principle to according to the Commission, in order bring an action for contribution where to assess whether or not acts of a there is concurrent liability under a national authority are in order, it is often single legal order but not where such material to know the precise scope of the liability arises under two different legal orders. Community provisions, the application of which has given rise to the irregularity With reference to the sixth question for a which has been found to exist. The preliminary ruling Granaría added to its national court might also wish, when written observations the further obser-

eighth questions, upon which it did not In the Federal Republic a claim for define its position in its written obser- DM 2.9 million has also been lodged vations, agreed with the observations of with the administrative authority the Netherlands Government and the representing reimbursement of the Commission. difference between the purchase price of the skimmed-milk powder and the 5. The Court had requested the standard value of imported value of Commission to supply particulars of the imponed feedingstuffs. The national decisions which have been taken in the administrative authority has rejected this Member States following its judgments claim and the Commission expects that of 5 July 1977 in Case 114/76, Bela- proceedings will shortly be commenced Mühle v Grows-Farm, in Case 116/76, in this connexion. Granaría BV v Hoofdproduktschap voor In Belgium the administrative authority Akkerbouwprodukten, in Joined Cases has rejected two claims for repayment of 119 and 120/76, Ölmühle Hamburg AG v the security. Hauptzollamt Hamburg-Waltershof and Firma Kurt A. Becher v Hauptzollamt In Denmark no claim for repayment of Bremen-Nord [1977] ECR 1211, 1247 the security has been lodged with the and 1269, and its judgment of 25 May administrative authority. 1978 in Joined Cases 83 and 94/76, 4, In France objections have been raised 15 and 40/77, Bayerische HNL v Council against the failure to repay the security. and Commission [1978] ECR 1209, and especially in connexion with proceedings In Ireland a claim for repayment of the which may have been brought for security has been rejected on the ground reimbursement of amounts paid under that the importer concerned had passed the system introduced by Regulation No the charge on to his purchasers. 563/76. In Italy a claim for repayment has been The Commission answered that apart lodged relating to a security which has from the present case, no proceedings not yet been declared forfeit in the have been commenced, except in the absence of certain formalities. Federal Republic where there are five In the Netherlands letters have been sent pending actions. They are concerned to the administrative authority placing with the refusal by the administrative the onus of liability for the damage authority to grant applications for resulting from the regulation which has reimbursement of the security on the been declared to be invalid on the State; ground that the importers concerned these letters have remained unanswered. have been able to pass the charge on to their purchasers and with its refusal to Unlike the other Member States, the issue protein certificates. Some two United Kingdom has repaid the securities thousand applications have been lodged which had been forfeited. with the relevant German administrative

The first question

The first question asks, in essence, whether the competent national administrative authority was obliged to refuse to issue a "protein certificate" pursuant to Regulation No 563/76 to all those persons who did not fulfil the conditions laid down by that regulation as long as it had not been declared to be invalid.

4 Every regulation which is brought into force in accordance with the Treaty must be presumed to be valid so long as a competent court has not made a finding that it is invalid.

This presumption may be derived, on the one hand, from Articles 173, 174 and 184 of the Treaty, which reserve to the Court of Justice alone the power to review the legality of regulations and to determine, where necessary, to what extent they are to be declared to be invalid and, on the other hand, from Article 177, which empowers the same Court to give rulings as a court of last instance on the validity of regulations where a dispute on that issue has been brought before a national court.

GRANARIA v HOOFDPRODUKTSCHAP VOOR AKKERBOUWPRODUCTEN

5 Thus it follows from the legislative and judicial system established by the Treaty that, although respect for the principle of the rule of law within the Community context entails for persons amenable to Community law the right to challenge the validity of regulations by legal action, that principle also imposes upon all persons subject to Community law the obligation to acknowledge that regulations are fully effective so long as they have not been declared to be invalid by a competent court.

9 The third question asks, in essence, whether the second paragraph of Article 215 of the Treaty must be understood as meaning that, since the Community adopted Regulation No 563/76, it is directly liable towards persons who claim to have been injured for the damage which they have suffered merely by reason of the fact that the national authorities applied the regulation.

10 The Court in its judgment of 25 May 1978 in Joined Cases 83 and 94/76, 4, 15 and 40/77, Bayerische HNL v Council and Commission [1978] ECR 1209,

JUDGMENT OF 13. 2. 1979 — CASE 101/78

stated that the finding that Regulation No 563/76 is null and void is insufficient by itself to render the Community liable under the second paragraph of Article 215 of the Treaty.

The above reference to that decision removes the need for the Court to

answer the question referred to it, especially as a question relating to the application of the second paragraph of Article 215 cannot be determined in proceedings under Article 177 of the Treaty.

The question of compensation by a national agency for damage caused to private individuals by the agencies and servants of Member States, either by reason of an infringement of Community law or by an act or omission contrary to national law, in the application of Community law does not fall within the second paragraph of Article 215 of the Treaty and must be determined by the national courts in accordance with the national law of the Member State concerned.

GRANARIA v HOOFDPRODUKTSCHAP VOOR AKKERBOUWPRODUCTEN

The seventh and eighth questions

15 These questions refer to the possible application of the second paragraph of Article 215 of the Treaty by the national court.

16 It is clear from the foregoing that the application of that provision falls within the exclusive jurisdiction of the Court of Justice and lies outside that of the national courts.

These questions are consequently devoid of purpose.

1. So long as Regulation No 563/76 of 15 March 1976 had not been declared null and void under the Treaty the national authorities responsible for its implementation were obliged to refuse to issue a "protein certificate" under that regulation to all those who did not comply with the prescribed conditions.

2. In the absence of an express derogative clause the national authorities could not grant exemptions from the conditions prescribed by the regulation.

OPINION OF MR CAPOTORTI — CASE 101/78

3. The question of compensation by a national agency for damage caused to private individuals by the agencies and servants of Member States, either by reason of an infringement of Community law or by an act or omission contrary to national law, in the application of Community law does not fall within the second paragraph of Article 215 of the Treaty and must be determined by the national courts in accordance with the national law of the Member State concerned.

Kutscher Mertens de Wilmars Mackenzie Stuart Donner Pescatore

Sørensen O'Keeffe Bosco Touffait

1 — Transtaled from the Italian.