C-130/79

JUDGMENT OF 12. 6. 1980 — CASE 130/79

impossible in practice the exercise of national law applicable all ancillary rights conferred by Community law. questions such as, on the one hand, whether the fact that it may have been possible for the charge improperly In these circumstances and in the imposed to be passed on to other absence of Community provisions it is traders or to consumers should be for the national authorities to decide taken into account, and, on the other as to the recovery of sums unduly hand, the payment of interest, in charged on the basis of Community particular the rate of interest and the regulations which have been declared date from which interest must be invalid and to settle in terms of the calculated.

In Case 130/79

REFERENCE to the Court under Article 177 of the EEC Treaty by the High Court of Justice, Queen's Bench Division, Commercial Court, for a preliminary ruling in the action pending before that court between

EXPRESS DAIRY FOODS LIMITED

and

EXPRESS DAIRY FOODS ν INTERVENTION BOARD FOR AGRICULTURAL PRODUCE

JUDGMENT

Facts and Issues

I — F a c t s and w r i t t e n p r o c e d u r e amounts in respect of powdered whey in trade between Member States. Express Dairy Foods Ltd, the plaintiff in the main action, is a company in­ corporated in England and Wales. The defendant resisted the claim, Between 1 February 1973 and 7 August contending that it was bound to collect 1977 it exported considerable quantities the compensatory amounts by virtue of of powdered whey (Common Customs the regulations, of which none, apart Tariff heading 04.02 A I) from the from Regulation No 539/75, had been United Kingdom to other Member declared invalid and that it was obliged States. Pursuant to Commission regu­ to apply even that regulation up to the lations which were applicable at that date on which the Court ruled that it time, the plaintiff paid, by way of was invalid. monetary compensatory amounts, a total sum of approximately £267 000 to the Intervention Board for Agricultural The High Court thereupon stayed the Produce, which is the appropriate proceedings and on 23 July 1979 issued authority under United Kingdom law for an order in which it requested the Court, the collection of sums of money payable under Article 177 of the Treaty, to give a to the European Community under the preliminary ruling on the following three common agricultural policy. questions:

By its judgment of 3 May 1978 in Case 131/77, Milac ν Hauptzollamt Saar­ 1. Whether in the light of the decision of brücken [1978] ECR 1041, the Court of the Court of Justice in Case 131/77, Justice ruled that Regulation (EEC) No all Commission regulations made 539/75 of the Commission (Official between 1 February 1973 and 11 Journal 1975, L 57, p. 2), which applied August 1977 are invalid, in so far as from 3 March to 4 August 1975, was they purport to fix compensatory invalid in so far as it fixed compensatory amounts in respect of trade in amounts in respect of trade in powdered powdered whey; whey.

3. Whether, if the competent authorities (a) First, the validity of the other regu- of a Member State are bound to lations; refund any part of such sums, they are bound under Community law to pay interest thereon and if so, from (b) Secondly, the effect of a judgment of what date and at what rate. the Court of Justice of the European Communities and, in the present case, the effect of the ' Milac judgment. The order making the reference was received at the Court Registry on 10 August 1979. In accordance with Ar- ticle 20 of the Protocol on the Statute of (1) The validity of the other regulations. the Court of Justice of the EEC, written observations were submitted on 25 October 1979 by the Commission of The plaintiff in the main action reminds the European Communities, represented the Court first of its reasoning in the for these purposes by its Legal Adviser, Milac judgment and asserts moreover Richard Wainwright, acting as Agent; on that at no time between 1971 and 1977 13 November 1979 by Express Dairy did the price of powdered whey depend Foods, represented for these purposes by upon the price of skimmed-milk powder. David Vaughan and Nicholas Forwood, It proposes, moreover, if new questions both of the Bar of England and Wales, arise in relation to the Milac decision, to instructed by Martin N. D. Steward, offer evidence demonstrating the Solicitor; and on 16 November 1979 by invalidity of the various regulations. the Intervention Board for Agricultural Produce, represented for these purposes Consequently, the plaintiff submits that by Peter Langdon-Davies, of the Bar of the Court should answer the first England and Wales, instructed by G. E. question to the effect that all Gammie, Solicitor. Commission regulations effective between 1 February 1973 and 11 August On hearing the report of the Judge- 1977 adopted pursuant to Regulation No Rapporteur and the views of the 974/71 of the Council of 12 May 1971 Advocate General the Court decided to are invalid in so far as they fix open the oral procedure without any compensatory amounts in respect of preparatory inquiry. trade in powdered whey.

The Commission believes that the The plaintiff in the main action considers national court may also implicitly be that it is very important to know what is raising "the question . . . as to the effect the position under Community law with of a ruling of the Court of Justice under regard to repayment. The answer to this Article 177 of the Treaty — in particular question is even more important since whether such a ruling has an effect erga the position is "far from clear" in the omnes or merely inter partes". The United Kingdom, where, according to Commission shares the opinion of Mr the plaintiff, it may perhaps be Advocate General Warner (Opinion of impossible to obtain recovery of monies 20 September 1977 in Case 112/76, unduly paid. For this reason, the plaintiff [1977] ECR 1647 at p. 1662) who in the main action hopes that the considered that although a preliminary Commission will clarify its own attitude, ruling binds strictly speaking only the that is to say, that it should state whether national court which has requested it, all it will itself reimburse the monies unduly national courts are entitled and bound to paid or whether it will undertake to apply the ratio decidendi of such a reimburse the sums in question to any judgment. Member State making restitution of sums unduly paid. The plaintiff believes that in the other Member States, the appropriate national authorities have refunded the The Commission adds that such a rule is sums wrongly collected on powdered subject to exceptions and it cites, in that whey and that the only problem out­ regard, the decisions of the Court in: standing is that of interest. It is therefore

In proceeding to an examination of three points, the plaintiff submits first that "Community law places upon the Commission the obligation to repay or to The plaintiff states, furthermore, that take all steps to ensure that monies so although a regulation is valid until it is paid are refunded by national auth­ declared invalid or unlawful, once the orities". regulation is declared unlawful, it becomes unlawful ah initio, and the previous demands for payment also become unlawful. The plaintiff adds, on this matter, that any other interpretation On the basis of the decisions given in would mean that monies paid could Case 11/76, Kingdom of the Netherlands never be recovered. The plaintiff also ν Commission of the European lays stress on the fact that even in a Communities [1979] ECR 245 and Case situation where it has been held by the 18/76, Federal Republic of Germany ν Court that national laws are to apply Commission of the European Communities (Case 45/76, Comet BV ν Produktschap [1979] ECR 343, the plaintiff submits voor Siergewassen [1976] ECR 2043 and that the Commission has accepted that it Case 33/76, REWE ν Landwirtschafts­ has an obligation to bear the financial kammer für das Saarland [1976] ECR consequences of its own unlawful 1989), the Court accepted that the conduct in adopting unlawful legislation; undertakings had rights which the and, in the present case, for compliance national courts had to protect. with that obligation it would suffice for Accordingly, in the present case, the the Commission to inform the defendant plaintiff submits that were there to be no that it accepts that it must bear the remedy in English law to allow for such financial consequences of its own repayment then Community law, par- conduct thus enabling the defendant to ticularly in the light of Article 5 of the make the appropriate payments to the EEC Treaty, would provide the plaintiff. necessary remedy in order to enable the English courts to make an order for repayment and thus- to facilitate achievement of the Community's tasks in The plaintiff in the main action submits, accordance with Article 5 of the EEC secondly, that "Community law places Treaty. upon the national authority, which has received such payments, the obligation to refund the monies so received, and then in turn the national authority can recover or obtain credit from the Commission The plaintiff submits, thirdly, "that cases for such sums refunded". The plaintiff already decided by this court to the considers that that obligation flows effect that national remedies must be clearly from the judgment in Case 6/60 used to recover from national authorities (Humblet ν Belgian State [1960] ECR deal with the situation which arises when 559) and that it arises not only when the payment was due to the misap-

According to the defendant, if this solution is not adopted and the The defendant in the main action is consequences of the invalidation of concerned above all to establish "that, Community legislation are left to be having loyally enforced the regulation at regulated by the municipal law of each a time when it had not been declared to Member State, then, given the disparities be invalid, and having duly accounted to which exist between the Member States the Commission for the money collected in regard to recovery of undue payment, under it", the defendant is under no injustice to both individuals and Member liability to compensate, out of its own States would result. The defendant funds, persons who are aggrieved by the submits further that the solution which it invalidity of the Commission's regu­ advances is not incompatible with the lation. Such repayments are a matter for earlier case-law of the Court. Thus, in the Community alone. The only Case 101/78, Granaria [1979] ECR 623, obligation incumbent on the agencies of Mr Advocate General Capotorti stated: the Member States — acting as agents of "It is therefore impossible to refer to the Commission — would be to effect unlawful measures on the part of a out of Community funds any repayment Member State, or by an agency subject to individuals required by Community to its control, in relation to measures in law. In these circumstances, the implementation of Community provisions defendant in the main action considers in force". Liability on the part of a that the real question of interpretation Member State may only arise if the for the Court is whether the Member Member State exercises a discretionary States, in collecting these compensatory power to enact implementing legislation amounts and making them available to in such a manner as to enact specific the Community, are acting on behalf of provisions which are contrary to the Community; the defendant answers Community law or if it continues to give that question in the affirmative. effect to a measure after it has been declared to be invalid.

principle thus formulated by Mr accounted for them to the Commission is Advocate General Capotorti the under no obligation under Community defendant is of the view that it is appro­ law to refund any part of them to the priate to reconsider the decision in Case person from whom they were collected". 96/71, Haegeman [1972] ECR 1005, in which the Court held, contrary to the opinion of Mr Advocate General The Commission is of the opinion that Mayras, that a claim for a refund of this general question cannot be answered countervailing charges which had been in the abstract, for the reason that the collected was inadmissible. It is answer must depend on the nature of the submitted that that judgment cannot charge, the circumstances in which it was mean that the Member State may be imposed, and the grounds and formu­ liable to refund charges made under lation of the Court's judgment. The invalid regulations "in the absence of Commission mentions, by way of some unlawful act of its own in applying reminder, that certain rules have been them". adopted at the Community level on the repayment of customs duties, which are defined to include compensatory Even though, according to the defendant amounts. These rules provide for the in the main action, it appears that on repayment of duties wrongly paid that hypothesis the Court assumed that provided that an application for the Commission would provide the funds repayment is submitted within three necessary to make any reimbursement, years of the date on which the charges the defendant considers that any dispute are entered into the accounts of the as to the amount of refund or interest collecting authority. But the Commission due could only be decided in points out, in this regard, that these proceedings between the claimant and provisions do not enter into force until 1 the Commission. July 1980 and furthermore it is not clear that they cover the case where a duty is properly charged, but on the basis of a legislative act subsequently declared Finally, the defendant submits that the invalid. solution adopted in Case 46/75 (I. B. C. ν Commission [1976] ECR 65) is not applicable to the present case either since Reverting to the present case, the the question is not whether the claims Commission submits that an individual involve the Community's resources but who has been obliged to make payment whether there is any complaint against of such a compensatory amount does not the Member State. have a right to automatic reimbursement. It is submitted that the answer to the question put by the national court has to Accordingly the defendant submits that be sought, in the first place, in the the second question should be answered principles of Community law, in order to as follows: avoid the differences which might arise if the solution of this problem were reserved to national law. "When a Commission regulation has been declared invalid a Member State which has collected sums of money It is true that, in the absence of express under the authority of that regulation Community rules on the matter, .the before it was declared invalid and Court has always left it to national law

to resolve the problems presented by the date of the Court's judgment” and thus diversity of rules of procedure. But, follow a principle analogous to that according to the Commission, the recognized by German and Italian reasons which induced the Court to constitutional law, according to which adopt this position do not really apply administrative decisions which are where a matter of substantive law is definitive and not subject to any remedy concerned. After recalling that it has and which are based on a provision of an refrained from exercising its power to act declared void shall not be affected. make specific rules to govern the The Commission adds that, although the practical consequences of a declaration judgment given in Case 131/77 did not of invalidity by the Court, the include any limitation of that kind, the Commission wonders under what Court could, none the less, add such a conditions the refunding of a qualification, even at a later stage, in Community tax, collected without any another case concerning the question of legal basis, could be refused whilst the invalidity, as is in fact the case here. tax has been passed on by the exporter Furthermore, that solution is all the more to his purchaser and the claim for justified by the fact that a solution under reimbursement has been presented some national law involves not only a five years after the collection of the tax considerable difference in treatment and after the judgment of the Court in between traders in the Community but Case 131/77. also involves, in the case of traders having the advantage of national systems of law which permit recovery of undue payment, advantages which the Commission describes as “windfall profits”, which are without economic Given the differences to be found in the justification and would have to be made legal systems of the Member States in at the expense of the European taxpayer. regard to recovery of undue payment, the Commission is of the view that the Court might apply by analogy the second paragraph of Article 174 of the EEC Treaty and state which of the effects of the regulations which it has declared Accordingly, the Commission is of the void are to be considered as definitive, a view that the second question should be possibility which appears to flow from answered in the following manner: the decision in De/renne, already referred to, and the opinion of Mr Advocate General Capotorti of 23 January 1979 in Case 101/78 (Granaria, also mentioned above). “The competent authorities of the Member States are bound to refund the sums collected under the authority of the said regulations. In the absence of proof that the charge has not been passed on In this context, the Commission suggests to customers, refunds should however be that the Court limit the application of its limited to these cases where claims have declaration of invalidity by ruling, for been made to the authorities prior to 3 example, that “reimbursement of a tax May 1978, subject always to any more declared invalid should be limited to restrictive procedural provisions or claims which had already been submitted limitation periods which are laid down to the national authorities prior to the by national law”.

Decision

1 By order of 23 July 1979, which was received at the Registry of the C o u r t of Justice on 10 August 1979, the H i g h C o u r t of Justice, Q u e e n ' s Bench Division, Commercial C o u r t , submitted under Article 177 of the E E C T r e a t y three questions relating to the validity of all regulations adopted by the

EXPRESS DAIRY FOODS ν INTERVENTION BOARD FOR AGRICULTURAL PRODUCE

Commission between 1 February 1973 and 11 August 1977 fixing monetary compensatory amounts applicable to trade in powdered whey, the effect of a declaration of invalidity of a regulation delivered by the Court in proceedings for a preliminary ruling and the obligation to make repayment of sums unduly charged by the competent authorities of a Member State together, where appropriate, with the obligation to pay interest.

2 Those questions have been submitted in the context of a dispute between a trader, Express Dairy Foods Limited, and the British intervention agency, the Intervention Board for Agricultural Produce (hereinafter referred to as "the Board") which is the appropriate authority in the United Kingdom for the collection of sums payable under the common agricultural policy. Between 1 February 1973 and 7 August 1977 the undertaking, Express Dairy Foods Ltd, exported considerable quantities of powdered whey classified under heading 04.02 A I of the Common Customs Tariff and was obliged by virtue of Commission regulations in force at the time of those exports to pay to the Board by way of monetary compensatory amounts a total of £267 355.40.

6 In order to answer this question it is of importance to examine the reasons upon which the invalidation by the Court of Article 1 of Regulation No 539/75 was founded in so far as that provision fixed monetary compensatory amounts in respect of trade in powdered whey, to consider thereafter whether such reasons may equally apply to all the regulations fixing monetary compensatory amounts for the period in question in respect of the said product and to deduce therefrom whether or not the regulations were valid.

7 It appears from the reasons on which the judgment in Case 131/77 was based that Article 1 of Regulation No 539/75, in so far as it fixed monetary compensatory amounts in respect of trade in powdered whey, was declared invalid following upon a finding that the price of skimmed-milk powder had no decisive influence on the market price of powdered whey. The Court accordingly held that the application of monetary compensatory amounts to whey was contrary to Article 1 (2) (b) of Regulation No 974/71 of the Council of 12 May 1971 (Official Journal, English Special Edition 1971 (I), p. 257), which authorizes the introduction of such amounts only for products the price of which depends on the price of products which are covered by intervention arrangements.

8 It is not disputed1 that that requirement was disregarded by all the regulations in dispute, the successive redrafting of which had moreover the purpose only of amending the rates necessary for the application of monetary compensatory amounts in order to bring them into line with changes in currency parities. It is further to be observed that it has not been alleged in the written observations or in the course of oral argument, in particular by the Commission, that the regulations in question might be other than invalid

11 In the words of Article 6 of the Decision of 21 April 1970, repeated by Article 1 of Regulation N o 2/71, these resources are collected by the Member States in accordance with national provisions imposed by law, regu­ lation or administrative action; disputes relating to the recovery of sums levied on behalf of the Community therefore come within the jurisdiction of national courts and must be settled by those courts in application of their national law as regards both procedure and substance to the extent to which Community law has not made other provision in the matter.

JUDGMENT OF 12. 6. 1980 — CASE 130/79

The Court has already ruled that the protection of rights guaranteed in the matter by the Community legal order does not require the grant of an order for the recovery of charges improperly levied in conditions such as would involve an unjustified enrichment of assigns and that from the point of view of Community law there is therefore nothing to prevent national courts from taking account in accordance with their national law of the fact that it has been possible for charges unduly levied to be incorporated in the prices of the undertaking liable for the charge and to be passed on to the purchasers of the products in question (judgment of 27 March 1980, Denkavit Italiana, Case 61/79, [1980] ECR).

1 4 The reply to Question 2 should therefore be that it is for the national auth- orities to decide as to the recovery of sums unduly charged on the basis of

EXPRESS DAIRY FOODS ν INTERVENTION BOARD FOR AGRICULTURAL PRODUCE

Community regulations which have been declared invalid; it is for them to settle in terms of the national law applicable all ancillary questions such as whether the fact that it may have been possible for the charge improperly imposed to be passed on to other traders or to consumers should be taken into account.

Third question

15 Question 3 is worded as follows:

On those grounds,

T H E COURT, in answer to the questions referred to it by the High Court of Justice, Queen's Bench Division, Commercial Court, by order of 23 July 1979, lodged at the Court Registry on 10 August 1979, hereby rules: 1. The Commission regulations adopted between 1 February 1973 and 11 August 1977 must be regarded as invalid in so far as they fix monetary compensatory amounts in respect of trade in powdered whey.

2. It is for the national authorities to decide as to the recovery of sums unduly charged on the basis of Community regulations which have been declared invalid; it is for them to settle in terms of the national law applicable all ancillary questions such as whether the fact that it may have been possible for the charge improperly imposed to be passed on to other traders or to consumers should be taken into account.

3. It is at present for the national authorities, and particularly for national courts, in a case concerning the recovery of charges improperly imposed, to settle all ancillary questions relating to such reimbursement, such as the payment of interest, by applying their domestic rules regarding the rate of interest and the date from which interest must be calculated.

4. The application of national legislation must be effected in a non- discriminatory manner having regard to the procedural rules relating to disputes of the same type, but purely national, and the procedural rules cannot have the result of making impossible in practice the exercise of rights conferred by Community law.

Kutscher O'Keeffe Touffait Mertens de Wilmars Pescatore