C-62/83

defendant ,

APPLICATION for damages pursuant to Article 178 and the second paragraph of Article 215 of the EEC Treaty ,

THE COURT ( Second Chamber )

composed of: K . Bahlmann , President of Chamber , P . Pescatore and O . Due , Judges ,

Advocate General : C . O . Lenz Registrar : J. A . Pompe , Deputy Registrar

gives the following

The facts of the case, the course of By a communication of 13 November the procedure and the conclusions, sub­ 1981 the Commission informed the missions and arguments of the parties Community traders concerned of its may be summarized as follows: intention, pursuant to Article 5 (3) (as amended) of Regulation No 876/68, to carry out an adjustment at the beginning of the 1982/83 milk year of refunds fixed in advance in order to allow them I — Facts to conclude contracts on that basis for deliveries to be carried out after the beginning of the new year. According to the notice, the adjustment amounts were Regulation (EEC) No 876/68 of the to be determined according to alterations Council of 28 June 1968 (Official in the intervention prices, and were to be Journal, English Special Edition 1969 (I), applicable to refunds fixed in advance at p. 234) lays down general rules for least 14 days before the date of the granting export refunds on milk and Council decision on the intervention milk products and criteria for fixing the prices applicable for the 1982/83 milk amount of such refunds. year. The Commission's notice was re­ published in the Federal Republic of Germany in the Bundesanzeiger of 2 Article 5 , (3) of the regulation, as February 1982. amended by Regulation (EEC) No 2732/71 of the Council of 20 December 1971 (Official Journal, English Special As a general rule intervention prices are Edition 1971 (III), p. 1020) provides that fixed by the Council at the beginning of it may be decided that the refund be each milk year, which normally starts on fixed in advance. In that event, if the 1 April and finishes on 31 March of the party concerned so requests when following year. In 1982, however, the applying for the licence, the refund Council extended the year five times, applicable on the day on which the from 1 to 4 April, from 5 to 25 April, application for an export licence is from 26 April to 2 May, from 3 to 16 lodged is to be applied to exports May and from 17 to 19 May. The new effected during the period of validity of year started only on 20 May 1982, the the licence. It may be decided that the date on which the new target prices and refund fixed in advance be adjusted if intervention prices for milk and milk there is an alteration to intervention products, fixed by Council Regulation prices or to the amount of aid applicable (EEC) No 1184/82 of 18 May 1982 to products entitled to aid to those in (Official Journal, L 140, p. 2), came into which such products are incorporated; force. this provision does not however apply to products for which the refund was fixed without the aid granted being taken into The new export refunds in the milk and account. milk products sector were fixed by

On 12 May 1982, Eximo Molkerei­ erzeugnisse Handelsgesellschaft mbH , a II — Written procedure and con­ German company trading in milk clusions of the parties products and having its registered office in Hamburg, applied to the Bundes­ anstalt für landwirtschaftliche Markt­ By application lodged at the Court ordnung [Federal office for the organ­ Registry on 18 April 1983, Eximo ization of agricultural markets] at brought an action for damages pursuant Frankfurt am Main for an export licence to Articles 178 and 215 of the EEC or advance-fixing certificate for the Treaty against the EEC, represented by export to Switzerland of 500 tonnes of the Commission, in which it claims that butter in tariff subheading 04.03 A. The the Court should order the Community certificate was issued on 18 May 1982, at to pay it the amount of DM 100 300, the rate of 105 ECU per 100 kg in force plus interest at the rate of 0.25% per on the day on which the application was annum from 18 May 1982 on the made. The certificate was issued against amount of DM 53 150, and interest at the deposit by Eximo of security in the the rate of 2 % per annum above the amount of DM 53 150. discount rate fixed by the Deutsche Bundesbank [German Federal Bank] from 29 May 1982 on the balance of After the new intervention prices were DM 47 150. fixed, on 29 May 1982 Eximo made a fresh application for an export licence or advance-fixing certificate at the new rate During the proceedings, the applicant, in of 133 ECU per 100 kg. The exports particular by a supplementary pleading

By order of 7 December 1983 the Court, Moreover, so long as there has been no pursuant to Article 95 (1) and (2) of the final decision on the forfeiture of the Rules of Procedure, decided to assign security, the action is precautionary in the case to the Second Chamber. nature, which is not permissible. It is true that the Court admits actions which are precautionary in nature, seeking recognition of an obligation to pay III — Submissions and arguments compensation, as long as damage is of the parties during the sufficiently certain; however, the written procedure question of the admissibility of an action for the payment of a fixed sum before the damage actually occurs remains A — Admissibility open. There is a risk that such actions might lead to irreconcilable national The Commission takes the view that the and Community decisions; the applicant action is inadmissible in all respects. might thus be entitled twice to the same

JUDGMENT OF 30. 5. 1984 — CASE 62/83

EXIMO / COMMISSION

The Commission's argu concerned of the right to present its ments would lead to the prohibition of defence during the whole of the written any direct action for damages before the stage; in an analogous case the Court Court in cases in which a corresponding has refused to join the Council a claim could first be made to the national posteriori. authority. The result of the system suggested by the Commission would be that the national court would adjudicate on the annulment of the licence, and In this regard the applicant points out where appropriate on part of the claim that the action is directed against the for damages, perhaps after a preliminary Community as such. It is true that the reference, and that the Court of Justice Council, as a Community institution, has would adjudicate directly on the rest of also, by the measures it has adopted, the claim for damages, after all national made the Community liable; however, remedies had been exhausted; such a the measures which directly affect the system would disregard the spirit and applicant, from the point of view of aims of the Treaty, and would be con substance as much as of procedure, were trary to the principles of national and issued by the Commission, which must Community procedural law. therefore represent the Community.

1669/82. given for the delay in indicating it. The supplementary claims do not meet those conditions. According to the first sub paragraph of Article 42 (2) of the Rules Moreover, at the stage of the reply, it is of Procedure, no fresh issue may be not permissible to supplement, in the raised in the course of proceedings alternative, the designation of the unless it is based on matters of law or of defendant to include the Council, along fact which come to light in the course of

the written procedure. The supplemen­ Fault tary claims are therefore vitiated by a procedural defect. In its reply, the applicant fails to indicate the reasons for According to the applicant, the wrongful which it increased its claims regarding conduct of the Community by which it interest only after the bringing of the has incurred liability was of a legislative action. New claims have been brought nature; the wrongful acts in question before the Court, without reasons having were the Commission's communication been given for the delay; this constitutes, of 13 November 1981, published in the an inadmissible alteration to the appli­ Federal Republic of Germany on 2 cation. February 1982, and Regulation No 1669/82 of 14 June 1982. That conduct was illegal; illegality is presumed in the case of infringement of a superior rule of law, such as the principles governing the exercise of a discretion or the written The applicant points out that in its and unwritten legal rules which must be application it has already set out the observed by the Community institutions. damage it has suffered in so far as In this regard the applicant pleads interest and charges are concerned; it limitation of its freedom of action in the reserved the right to show that it had economic sphere, breach of the principle suffered greater harm in this regard. The of the protection of legitimate ex­ conclusions put forward in the sup­ pectation and disregard of the principle plementary claims are merely a more of equality of treatment, amounting to a specific expression of the initial claim. misuse of powers. The Commission The bank certificates produced in the certainly has no great latitude in the course of the proceedings do not amount exercise of its discretion under Article 5 to new evidence within the meaning of of Regulation No 876/68 regarding the Article 42 (1) of the Rules of Procedure. adjustment of refunds. Interest rates may change during the proceedings and the applicant is not able immediately to produce certificates The Commission denies having been regarding accruing interest. The first guilty of any misconduct whatever or subparagraph of Article 42 (2) is not having committed any breach of the applicable, since the supplementary principles referred to by the applicant. It claims do not amount to fresh issues. points out its wide discretion in the exercise of its powers in the field in question. The damage alleged to have been suffered by the applicant is due to the risks inherent in any business activity.

extensions were for less than 14 days, was not possible for the transaction in and for this reason the refunds could not question. In acting contrary to its own be adjusted. The applicant's freedom intention, the Commission breached the of action in business matters was principle of the protection of legitimate considerably affected and no applicable expectation. provision of Community law authorizes any such restriction. It is true that any business activity implies a risk for the trader, but the Commission's exercise of its discretion must necessarily apply the The Commission cannot rely on the fact law and must remain foreseeable for any that the 14-day time-limit for the person concerned. advance fixing of refunds had been announced: on the one hand, it should have expected possible extensions of the milk year; on the other hand, between The Commission notes that the adjust­ the Commission's intention and the ment of refunds is a matter for the simultaneous establishment of a time- discretion of the Community institutions limit there is a contradiction which and that the fact that the latter do not cannot be covered by any communi­ carry out such an adjustment cannot cation. Furthermore, for the beginning of amount to a breach of the law giving rise the 1983/84 year, the Commission to compensation. The exercise of that waived the time-limit condition, thus discretion is not restricted to an "all or complying with the objectives of the nothing" alternative but implies the basic Regulation No 876/68. possibility of determining the conditions and time-limits within which payments will be made. It is not the purpose of the refund system to remove for the benefit The Commission cannot shelter behind of traders the risks inherent in any the Council, which was responsible for business activity. Having decided to the successive extensions of the year. The conclude the contract, and having defendant, the Community, must be chosen advance fixing, in full knowledge considered as a single whole. Moreover, of the time-limits announced in the it was the Commission which adopted notice of 13 November 1981, the ap­ Regulations Nos 1669/82 and 1670/82, plicant accepted the risk of not fixing the new adjustments. It should benefiting from the adjustment. have expected extensions, and adapted its own measures as a result, when the time came. The Commission itself refers to its duty to amend its decisions in (b) Breach of the principle of the response to economic realities. protection of legitimate expectation

that mechanism show: it encourages milk year were to be attributed to the every businessman to think of the Council; it was not possible to foresee possibilities of speculative advance fixing, them at the time the communication was contrary to the spirit and aim of advance issued. The applicant had the same fixing. The Commission's argument that experience and data at its disposal as did intervention prices for the 1982/83 and the Commission. 1983/84 years increased to very different extents is irrelevant, since because of the very small margins involved even very small price variations may promote speculative dealings. The Commission has failed to prove that the supposed The reason for the restriction of the absence of speculative advance fixing adjustments was the Commission's was due to the time-limit mechanism. desire, referred to in the preamble to During the period in question, the Regulation No 1669/82, to combat market was completely blocked, a state speculative dealings. Traders, informed of affairs incompatible with the aims of in advance of the probable rate of the common agricultural policy. It may increase of the intervention prices, are even be suggested that speculative tempted, when those prices are sub­ advance fixing or an increase in exports stantially altered, as was the case at the . might have been considered welcome, in beginning of the 1982/83 year, to view of the increasing stocks of butter. conclude contracts with the sole purpose of exploiting the alterations. The applicant cannot plead that there is no empirical rule whereby intervention prices are always increased. Furthermore, According to the Commission, the it admits itself that it has engaged in adjustment of refunds is a matter for the speculation; any speculation is carried discretion of the Community institutions, out at the trader's own risk. whose decision may depend upon all relevant considerations of economic policy. By its communication of 13 November 1981, the Commission, although not bound to do so, informed traders of its intention to carry out an (c) Breach of the principle of equality adjustment at the beginning of the 1982/83 year. The principle of the protection of legitimate expectation requires that measures announced be actually adopted. The communication gave notice of the time-limit system; the The applicant submits that the situation applicant could not therefore rely on an at the beginning of the 1982/83 year was adjustment which was not subject to a no different from that of the following time-limit. year, in which however the time-limit mechanism was no longer considered necessary. Since identical situations require identical treatment, the limi­ tations provided for by the rules Nor was it inconsistent with the purpose governing the transition to the 1982/83 of Regulation No 876/68. Adjustment is year are deprived of all objective foun­ discretionary and may be accompanied dation. It is idle for the Commission to by restrictions. The extensions of the argue that the danger of speculation was

greater in 1982 than in 1983; instead of Damage and the causal link discouraging speculation, the time-limit mechanism encouraged traders to speculate on advance fixing. The fact that the applicant did not do so cannot The applicant takes the view that it was redound to its disadvantage. compelled to apply for advance fixing when it concluded the contract; in applying for a fresh export licence and a fresh advance fixing it merely wished to The Commission's infringement of the minimize the threatened damage. It was law is made sufficiently clear by the fact able to do this only after the new rates that the losses suffered by the applicant had been fixed. To abandon the contract are considerable in comparison with would have caused it even greater normal commercial risks. The question damage. The Community institutions whether and if so how many other cannot require traders to abstain from exporters suffered the same damage as making contracts. The damage suffered the applicant is irrelevant; if the is the result not of the risks inherent in applicant were the only one to have all business activity but of the illegal suffered loss, or were one of a small measures of the Community. group to do so, it would be a matter of genuinely exceptional damage giving a right to compensation under the rules in force in all Member States as regards The applicant has brought an action compensation for damage. against the Bundesanstalt für landwirt­ schaftliche Marktordnung seeking the annulment of the export licence of 18 The illegality of the measures in dispute May 1982 and an order that the action raises a presumption of misconduct; have suspensory effect; in doing so it moreover, the applicant made the seeks to avoid losing the security. Commission aware of the illegality of the measures in question even before the adoption of the regulations. With reference to the forfeiture of the security, the Commission is of the opinion that it is necessary to await a In the Commission's view the applicant is final decision of the relevant national wrong to rely on the principle of equality courts before it can be ascertained of treatment in relation to other traders: whether damage has occurred. In the time-limit system was applied in the applying for advance fixing, which same way to all. required lodging security, in spite of the imminent alteration of the prices, and in subsequently refraining from using the The submission as to a comparison of licence, the applicant deliberately took the two years is also erroneous, since the risk of losing the security. The owing to the much smaller alteration of applicant was entirely free to abandon the intervention prices for the 1983/84 the contract; the argument that in that year and the resulting decrease in the case its damage would have been still danger of speculation the circumstances greater is no more than a simple were different. The Commission has assertion. wide discretion in this field and is at liberty to alter its decisions on economic policy where circumstances make it The applicant deliberately assumed a risk necessary. in regard to the adjustment of the

1 By application lodged at the Court Registry on 18 April 1983 , Eximo GmbH , Hamburg , brought an action pursuant to Article 178 and the second paragraph of Article 215 of the EEC Treaty seeking compensation for damage allegedly caused to it by the Commission in connection with the export of a consignment of butter under tariff subheading 04.03 A , by reason of the circumstances in which , in the transition from the 1981 / 82 milk year to the 1982 / 83 year , the adjustment of refunds fixed in advance in the milk and milk products sector was effected ( Commission Regulation No 1669 / 82 of 14. 6. 1982 fixing the adjustment to be made to certain refunds fixed in advance for milk and milk products , Official Journal , L 187, p . 1).

EXIMO / COMMISSION

The relevant regulations and the facts of the case

2 Regulation No 876/68 of the Council of 28 June 1968 (Official Journal English Special Edition 1968 (I), p. 234) lays down general rules for granting export refunds on milk and milk products and criteria for fixing their amount. Article 5 (3) of the regulation, as amended by Regulation No 2732/71 of the Council of 20 December 1971 (Official Journal, English Special Edition 1971 (III), p. 1020), provides that it may be decided that the refund fixed in advance be adjusted, inter alia, if intervention prices are altered.

3 By a communication issued on 13 November 1981, the Commission made known its intentions regarding adjustments to refunds fixed in advance for milk products to be exported during the 1982/83 milk year, stating that the amounts of adjustment would be fixed according to changes in the intervention prices and would be applicable to refunds fixed in advance more than 14 days before the date of the Council decision concerning intervention prices applicable during the 1982/83 milk year.

6 It appears from the case file that on 12 May 1982 the applicant applied for a licence for the export to Switzerland of a consignment of 500 tonnes of butter, with advance fixing of the refunds in the amount of 105 ECU per 100 kg; it obtained the licence on 18 May 1982. In order to obtain the certificate, it was obliged to lodge security in the amount of DM 53 150, pursuant to the applicable rules. It is common ground that the applicant did not use that licence.

7 On 29 May 1982 the applicant applied for and obtained an export licence for the same quantity of butter, with advance fixing of the refund at the rate then in force, that is, 133 ECU per 100 kg. It is likewise common ground that that licence was duly used.

8 The applicant subsequently requested the cancellation of the first export licence. The authorities refused to cancel the licence, and the applicant therefore brought an action against that refusal before the Verwaltungs- gericht [Administrative Court] Frankfurt am Main; the action was dismissed by a decision of 27 September 1983. It appears moreover from a document submitted by the applicant that the security has in the meantime been declared forfeit by decision of the Bundesanstalt für landwirtschaftliche Marktordnung [Federal Office for the Organization of Agricultural Markets] 17 January 1984. The applicant declared during the proceedings that it did not intend to contest that decision.

9 Eximo claims that in Regulation No 1669/82 the Commission failed to extend the adjustment of refunds to all advance fixing certificates obtained before the new intervention prices were set. Since the refund fixed in advance in the first licence, increased by the adjustment, would have given a higher amount (105 + 31.86 ECU = 136.86) than the refund due under the new intervention prices (133 ECU), Eximo considers that it has suffered damage amounting to the difference between those two amounts, that is, 3.86 ECU per 100 kg, plus the forfeiture of the security as a result of the fact that it did not use the first export licence, plus interest.

13 In the first instance the Commission raises an objection of inadmissibility. It argues that if the applicant had used the first export licence, it would have been faced with a decision of the national intervention agency which it could have challenged before the relevant court. In support of such an action it could have put forward the arguments on which it has based its action for damages. In those proceedings the national court could, by way of a pre­ liminary reference, have raised any questions of Community law which might have arisen. In those circumstances, the bringing of an action for damages

JUDGMENT OF 30. 5. 1984 — CASE 62/83

constitutes an interference with the division of jurisdiction between the national courts and the Court of Justice in relation to the implementation of the regulations concerning the common organization of agricultural markets.

16 Because of that special fact, it may therefore be considered that the applicant was not in a position to avail itself of the possible remedies before the national courts in order to challenge a measure of the Community legislature which it considered to be illegal and prejudicial to it.

EXIMO / COMMISSION

17 Since in those circumstances the risk of interference with the division of jurisdiction between the national courts and the Court of Justice may be disregarded, it seems appropriate not to uphold the objection raised by the Commission and to consider the substance of the case.

Substance

18 It is therefore necessary to consider whether the applicant has succeeded in showing that the Community incurred liability by reason of the fact that by Article 1 of Regulation No 1669/82 the Commission excluded the adjustment of refunds fixed in advance for the period during which Eximo applied for and obtained the export licence which it did not use. The question whether the application is well founded must in this regard be examined from the point of view of the requirements to which actions against legislative acts of the Community are subject, according to the established case-law of the Court (see most recently the judgment of 17 12 J ned Cases 197 to 200 243 245 and 247 / 1981, oi , , 80 (Ludwigshafener Walzmühle [1981] ECR 3211, paragraphs 17 to 19 of the decision).

19 The application satisfies none of those requirements. It is sufficient in this respect to refer to two facts which seem decisive.

22 Secondly, it must be observed, as the Court has already pointed out in the context of a different organization of the markets, in its judgment of 28 October 1982 (Joined Cases 292 and 293 / 81 , Société Jean Lion [1982] ECR 3887), that the organization of the market in milk, whose essential purpose is to stabilize the internal prices of the products in question, respects the freedom of traders in their transactions with non-member countries as well as on the internal market. On the other hand it leaves them to bear the relevant business risks. In particular, the organization of the market offers exporters the choice between payment of refunds at the rate in force on the day of exportation and the advance fixing system, which is designed to provide certainty, at the time at which the contract is concluded, as to the amount of refunds to be received.

As the applicant has failed in its submissions it must be ordered to pay the costs.

On those grounds,

THE COURT (Second Chamber)

hereby:

1. Dismisses the application;

2. Orders the applicant to pay the costs.