C-109/83

defendant,

on the interpretation of the Community provisions regarding food aid, for the purpose of defining the relationship between the Community, the national intervention agencies and traders when an operation forming part of the Community food-aid programme is carried out,

T H E C O U R T (Fifth Chamber)

composed of: O. Due, President of Chamber, C. Kakouris, U. Everling, Y. Galmot and R. Joliét, Judges,

Advocate General: C. O. Lenz Registrar: H. A. Rühi, Principal Administrator

gives the following

1. Facts 2. The proceedings before the Italian courts On 25 March 1976 the Council of the European Communities declared that it proposed, by way of Community action, (a) On 23 December 1977, Eurico to grant 3 750 tonnes of rice to the summoned the ENR to appear before Republic of Niger under its 1975/76 the Tribunale di Milano, seeking an food-aid programme. order that that agency should pay it the sum of LIT 270 000 000 plus compensation for monetary depreciation By Decision 76/648/EEC of 10 Sep- and interest. tember 1976 (Official Journal 1976, L 259, p. 22) addressed to the Italian Republic, the Commission decided in By judgment of 19 June 1980 the accordance with Article 1 of Council Tribunale di Milano dismissed the Regulation (EEC) No 696/76 of 25 plaintiff's claim on the ground that the March 1976 that the Ente Nazionale Risi ENR was not a proper defendant since [hereinafter referred to as "the E N R " ] , it had acted as representative of the Italian intervention agency re- the Commission and that that legal sponsible in particular for carrying out relationship was apparent in particular and supervising operations relating to from the fact that the Commission had food aid, would conclude a private been involved in the performance of the contract for the purchase on the contract at every stage by giving in- Community market of 3 750 tonnes of structions and orders to the E N R to rice; the contract was to be for the adopt or refrain from adopting certain purchase and supply of products measures. delivered to a specified destination. The court then excluded the ENR from Eurico, Società a Responsabilità Limitata the proceedings, considering that the [hereinafter referred to as "Eurico"] was action by Eurico "should have been chosen by the ENR as the other brought directly against the Commission contracting party. of the EEC".

Eurico appealed against that judgment to expressed doubts as to the answer to that the Corte d'Appello [Court of Appeal], question. Milan, but in the meantime summoned the Commission to appear before the 3. The question submitted for a pre- Tribunale di Milano. liminary ruling (b) The proceedings instituted by The Tribunale di Milano did not adopt Eurico against the Commission before the wording suggested by the Com- the Tribunale di Milano mission for the reference for a pre- liminary ruling, which was as follows: By a summons served on " 1 November 1981, Eurico brought an action against Must the Community rules regarding the Commission before the Tribunale di food aid be interpreted as meaning that Milano for an order that it should pay in the event of a dispute with the the plaintiff the sum of LIT 283 000 000 successful tenderer only the Member plus interest and a sum in respect of States and the agencies designated by monetary depreciation. them are proper defendants in pro- ceedings instituted before the national In those proceedings the Commission courts to the exclusion of the immediately objected that the case could Commission or any other Community not be proceeded with since it was not a institution? proper defendant and it contended that the view expressed by the Tribunale di Instead, by order of 24 March 1983 Milano in its aforementioned judgment which was received at the Court Registry of 19 June 1980 was unacceptable. It also on 14 June 1983, the First Civil Division contested the substance of the claim. of the Tribunale di Milano asked the Court to reply to the following question : For its part, Eurico maintained that the "Was the Ente Nazionale Risi, the ENR had acted as an agent representing Italian intervention agency, expressly or the Commission and that the nego- by implication vested with specific tiations undertaken by that intervention authority to act in the name of the EEC agency were attributable directly to the ['mandato con rappresentanza'] for the Commission. purpose of concluding the private contract for the purchase of 3 750 metric The Tribunale di Milano considered that tonnes of husked long-grain rice it ,had _jurisdiction__by jvirtue. of _the. first intended- for the—Republic-of-Niger by paragraph of Article 215 of the EEC virtue of the Commission decision of 10

EURICO v COMMISSION

Milan Bar, with an address for service in (b) Details of the management of the Luxembourg at the office of Oreste food-aid policy Montako, a member of the Legal Department of the Commission, Jean 4. As regards aid with respect to Monnet Building, Kirchberg. cereals, in the event of urgent need or non-availability on the Com- Upon hearing the report of the Judge- munity market, how were those Rapporteur and the views of the products obtained at the time of Advocate General, the Court decided to the material events? open the oral procedure without any preparatory inquiry. Did the Commission enter into a contract directly for that purpose However, the Court decided to invite the and, if so, did the contract Commission to reply to the following contain a clause attributing questions before the oral procedure : jurisdiction?

(a) The legal basis of the food-aid policy Did the Commission approach the national intervention agencies? 1. The Commission is invited to produce a complete list of the Did the Commission have regulations on the food-aid policy recourse in general or occasion- adopted since the conclusion of ally to agents acting on its behalf? the Wheat Agreement and the 1981 Food-Aid Convention. If so, the Commission is invited to produce a number of relevant 2. Does the Commission consider decisions in that connection. that at the present time the food-aid policy: 5. If the management of the Merely constitutes a facet of the food-aid policy differs according common agricultural policy; to the products concerned (cereals, milk products, sugar, vegetable oils and other pro- Is more closely associated with ducts), what is the basis of and the common commercial policy; justification for such differen- or tiation?

7. Does the Commission agree with mobilization of cereals intended as food the description of the facts con- aid (Official Journal 1975, L 281, p. 89). tained in the letter dated 12 May 1977 from the E N R to Eurico? (Annex 101 to Eurico's obser- Article 3 of Regulation No 2681/74 lays vations). down in the first place the rules and conditions regarding the payments made by the Member States through the bodies 8. The Commission is invited to give designated by them for the carrying out details of how financing was of Community operations for the supply arranged for the operation and to of agricultural products as food aid; in indicate in particular, in so far as the second place it lays down the Community credits were used for procedures to be followed by the Com- that operation, whether the payee mission in granting the appropriate was the Italian Republic or the advances to the Member States in order Ente Nazionale Risi. to cover their expenses in that connection and in auditing the accounts for those operations in compliance with the provisions of Regulation No 729/70 The Court also invited the Government on the financing of the common agri- of the Italian Republic to produce the cultural policy. Italian legislation governing the E N R and Eurico was invited to produce the contract for the supply of rice concluded Commission Regulation No 249/77 of between it and the ENR, following 2 February 1977 (Official Journal 1977, Commission Decision 76/748 of 10 L 34, p. 21) laid down detailed rules for September 1976. the application of that regulation.

cases to resort to a procedure other than In that document, the ENR stated in a tendering procedure for the supply and particular that it was not in fact the delivery of products as food aid. other party to the contract with Eurico but merely the agent of the Commission, The Commission decision of 10 Sep- having confined itself to implementing tember 1976 relating to the urgent supply scrupulously the instructions and de- of husked long-grain rice as food aid to cisions of the Commission, including the Republic of Niger authorized those of a financial nature, since it is the recourse tó that derogation. Commission which makes the necessary means of payment available to it. Finally, Article 7 (4) of the regulation provides that "As soon as the principle of For that reason the ENR submitted that an emergency Community action has the action against it was brought against been adopted, the Commission shall the wrong party and that the applicant decide which Member State or States ought to proceed against the Com- shall be responsible for carrying out the mission. action, fix the date thereof, determine the place where the products must be made available within the Community or (b) The existence of such an authority within the recipient country, as appro- to act as agent is apparent from the very priate, and finally determine any other wording of the Commission Decision of elements necessary for carrying out this 10 September 1976. action".

Thus, Article 6 of the aforementioned (c) It is also confirmed by the Commission Decision of 10 December Commission's conduct during the per- 1976 states that "This Decision is formance of the contract. addressed to the Italian Republic" and Articles 1 to 5 thereof lay down the The plaintiff company in the main specific rules for that Community aid proceedings maintains that the action to be carried into effect. Commission intended to be directly answerable for the effects of the contract, by denying the Italian intervention agency any scope for Ill — Written observations sub- initiative and any responsibility: mitted to the C o u r t

By rejecting the request submitted for In fact there are no Community rules that purpose by Eurico, and at the same preventing the Commission from being time stating that the Commission would represented by the intervention agency inform the ENR of what action might be designated by it for the conclusion of taken regarding that request. particular contracts or, in any event, from granting direct authority to act as agent. The plaintiff company in the main proceedings therefore infers that the Moreover, as far as food aid is Commission interfered unrestrictedly at concerned, at least in the area of urgent every stage of the contract and thus Community action, no exclusive powers intended to be directly responsible for all are reserved to the Member States. the effects of the contract entered into on its behalf by the ENR. Since Article 215 of the Treaty allows the Commission to accept contractual Thus, according to Eurico, since it was liability on the basis of the law applicable apparent that the ENR was a necessary to the contract in question, there is no opposing party, at least if its position as reason to deny that the Commission is a intermediary between the Commission proper defendant in the proceedings and Eurico was taken into account, the brought by Eurico since it intended to Court making the reference wrongly confer direct authority upon the ENR to believed that it could make the outcome conclude the contract in question and it of the dispute conditional upon the also decided to treat itself as the proper answer given to the question submitted party to supervise the performance of the for a preliminary ruling. contract.

Thus, even if it were admitted that the 2. In the second place, the plaintiff ENR was merely empowered to act as company is of the opinion that there is an agent, but not to act in the no doubt that the Italian legal provisions Commission's name, the Italian legal on agency and representation are concept of ratification, by virtue of applicable. which conduct on the part of the Commission proving that it accepted the effects of contracts concluded on its (a) It considers that the decisions of the behalf by the ENR would be decisive, Court cited by the Commission, and in must apply in any event. particular the judgment of 10 June 1982 (Case 217/81 Interagra SA v Commission [1982] ECR 2233) is not significant, For all those reasons, Eurico proposes because the'Court was not dealing with a that the question submitted by the question relating to a contract entered national court should be answered as into by an agent of the Commission, follows : either with or without the authority to act in the name of its principal. "Preliminarily : Moreover, by contrast with the other judgments cited by the Commission, the point of law raised in the present case 1. The Court is unable to give any ruling concerns the effects of a contract on the question referred to it by "the decided upon by the Commission in an Tribunale di Milano because the area falling within its powers and not answer would involve a finding and within the powers reserved to the an assessment of fact which is the national bodies. responsibility of the Italian trial court.

In the alternative: creation of a single market within the Community area for the sectors covered 3. In this case, for the purpose of by a common organization of the market deciding who is a proper defendant and the attribution of exclusive legislative and as to the resultant contractual power to the Community institutions to liability, it is immaterial whether the govern the functioning of the market authority conferred upon the Ente organizations. Nazionale Risi by the Commission of the EEC was an authority to act as Those exclusive legislative powers ex- representative of the Commission of clude any competing powers vested in the EEC." the Member States and in fact it is provided in Article 43 (3) of the Treaty that the European market organization B — The observations of the Commission replaces the national market organi- zation. By way of preliminary, the Commission states on the one hand that it would have The decisions of the Court have been preferable if the national court had confirmed the exclusive nature of those submitted the question seeking a pre- legislative powers (judgment °f ^ . ^- liminary ruling from the Court in the 1970 in Case 74/69 Krohn [1970] ECR . terms which it had suggested and, on the 451: judgment of 18. 2. 1970 in Case other, that it is probably the exceptional 40/69 Bollmann [1970] ECR 69; nature of the food-aid action in judgment of 30. 1. 1974 in Case 159/73 question, based on an emergency, pro- Hannoversehe Zucker AG [1974] ECR cedure and thereby formally mentioning 121). However, it stated that the the Italian intervention agency, which Member States retain powers to explains the erroneous view of the court implement Community rules through making the reference that there is a tbeir administrations and, in particular, genuine agency contract between the their intervention agencies for the Commission and the ENR. various agricultural sectors. In the Commission's opinion, con- sideration of the fundamental principles As a result of this attribution of powers, of the Community rules on agriculture there is a corresponding attribution of (1) and.-a- study, of„.the. attribution _of .. - liability as-between-the institutions and liability under the Community rules on the Member States. agriculture (2) lead, in the present case, to the adoption of a solution consonant with the principle of Community law whereby proceedings to establish liability 2. The attribution of liability under may be brought before the Italian courts Community law only against the Italian State and against its intervention agency, the ENR, acting on its behalf (3). (a) The liability of the European Community

Council and Commission (Joined Cases In its opinion, it is clear from an analysis - 83 and 94/76, 4, 15 and 40/77 [1978] of the general theory of agency, of ECR 1209). In the case of implementing Community law and of Italian law that measures, the liability of the Community when the Tribunale di Milano concluded " may be incurred only in the rare cases in its judgment of 19 June 1980 that where Community provisions attribute the ENR acted as an agent for the specific powers to the institutions, and Commission it reached a wholly the principle remains that the Com- erroneous conclusion. munity cannot incur liability at the stage of implementation of Community rules by the Member States. * The general theory of the agency contract (b) The liability of the Member States (and of their intervention agencies) According to the Commission, an agency contract is, essentially, a form of cooperation between two parties Since the Member States are empowered governed by private law, the principal to implement Community rules on agri- and the agent, based on a consensus. culture within their territory, liability The agent takes the place of the arising from any consequences of the principal in order to undertake action implementation of those Community and operations which the latter can or rules by the intervention agencies could undertake himself. attaches to the Member States since they appoint the intervention agencies and lay down the detailed provisions in The agency contract has also become accordance with which the agencies are established in the area of public law to apply Community rules on agriculture. where a public authority entrusts to another the task of taking measures producing legal effects and undertaking That liability on the part of the Member operations which fall within the former's States has moreover been recognized by powers. the Court (judgment of 22. 1. 1976 in Case 60/75 Russo v AIMA [1976] ECR 45; judgment of 13. 2. 1979 in Case One of the characteristic features of the 101/78 Granaria [1979] ECR 623). The agency contract therefore lies in the fact Commission considers that the solution that the principal is always empowered adopted regarding extra-contractual to take the measures whose execution he liability must, a fortiori, be adopted in entrusts to the agent. the case of contractual relations. That is not the case in this instance since the Commission does not possess the (c) The liability of the Italian State and powers which the ENR exercised in of the ENR in this case implementation of Decision 76/748 cited above, regard being had to the powers The Commission considers that there is a conferred upon it by the Italian contractual relationship between Eurico Republic. and the Italian State (through the ENR) and that it is the latter's liability which Furthermore, in both private and public is necessarily incurred following an law, the agency contract implies a direct infringement of the Community or relationship between the principal and national rules applicable in this case. the agent, with a view to achieving

Thus, the Commission could have used In the second place, it is pointed out that the instrument of a decision in order to the Commission cannot be regarded as address the ENR directly rather than the the ENR's principal because under Italian State. Instead of doing so, it Italian law the principal is empowered to imposed an obligation only on Italy and give the agent precise instructions which in those circumstances such a decision the latter must follow scrupulously (last creates no direct relationship between paragraph of Article 1711 of the Civil the Commission and the intervention Code). agency. That is not the case in this instance. According to the Commission, even though Decision 76/784 indicates that In the third place, and contrary to the obligations are incumbent upon the Article 1723 of the Italian Civil Code, by ENR, that is only for technical reasons. virtue of which the principal may, as a general rule, revoke the authority granted to the agent, no such revocation The absence of a direct relationship and, is possible in this case since the a fortiori, of a relationship of principal Commission would not have been able to and agent is also clearly to be inferred revoke the instructions given by the from the fact that the Commission is Italian State to the ENR. unable to compel the ENR directly to observe the relevant provisions. In the fourth place, contrary to the provisions of Article 1726 of the Italian The Court so held in its judgment of 27 Civil Code, whereby an agent may March 1980 (Case 133/79 Sucrimex SA repudiate the agency contract, repudi- ECR 1299) and in its judgment of 10 ation of that kind would be meaningless June 1982 (Case 217/81 Interagra, cited in this case: a notice of repudiation sent above). by the ENR to the Commission would

be ineffective since the ENR has If any doubts were to arise as to obligations only towards the Italian the interpretation of the applicable Com- Republic. munity provisions they could be interpreted by the Court in response to a In the fifth place, whilst Article 1719 of reference for a preliminary ruling under the Italian Civil Code makes it in- Article 177 of the Treaty. cumbent upon the principal to provide the agent with the necessary means for It is for the national court to determine carrying out his task, the Commission, any liability in legal proceedings between by virtue of Article 3 (2) of Regulation on the one hand persons governed by No 2681/74 cited above, grants the private law (Eurico) and, on the other, credits necessary for financing the food the Member States and their internal aid direct to the Member States agencies (the Italian Republic and the concerned, and those Member States ENR) acting pursuant to an explicit must provide for the needs of their delegation of powers. intervention agencies in accordance with the national provisions. This view is indirectly confirmed in the decisions of the Court and in particular the judgments of 4 April 1974 (Belgian From all the foregoing, the Commission State and Grand Duchy of Luxembourg v infers that the relationship existing Mertens and Others, Joined Cases 178, between it and the ENR is not classi- 179 and 180/73 [1974] ECR 383), 13 fiable as one of agency but falls within June 1972 (Joined Cases 9 and 11/72 the sphere of the allocation of re- Grands Moulins v Commission [1972]- sponsibilities as between the Community ECR 391), 5 May 1977 (Case 110/76 institutions and the Member States. Pretore di Cento v A person or persons unknown [1977] ECR 851) and 27 In the same way, the regulations on the March 1980 (Case 133/79 Sucrimex v common organization of the markets not Commission, cited above). only lay down rules creating rights and obligations for the Member States and By analogy with those various cases their nationals but also contain pro- which the Court has considered, the visions regarding organization and pro- Commission takes the view that in this visions defining the powers of the bodies case the only person who is a proper in question. defendant is the ENR in its capacity of intervention agency designated by the Italian State. 3. Resolution of the present case in accordance with the principles of Community law (b) Relations between the Member State (ENR) and the European Community (Commission) (a) The incurring of liability by the State under national law The Commission points out that even if the liability of a Member State is The Commission is of the opinion that in established before its own courts, the the present case proceedings under Member State does not necessarily have Italian law to establish liability may be to bear the consequences thereof. brought before the Italian courts only against the Italian State and against its A Member State may in fact plead that it intervention agency acting on its behalf. has no liability towards the Community

when the Community accounts are For all those reasons, the Commission cleared, that is to say at the time of the proposes that the Court should state in annual audit of the balance of accounts reply to the court making the reference between the Member States and the that there is no relationship of principal Community, in the context of the and agent between the Commission and obligations incumbent upon the Member the Ente Nazionale Risi. States under Community agricultural law. That is the system provided for in IV — R e p l i e s to t h e questions Community law for settling, at the pre- p u t by t h e C o u r t contentious stage, any differences of opinion between the Member States and the Community. (1) The Commission gave the following answers to the various questions put to it In the absence of agreement, recourse by the Court. may be had to proceedings before the Court of Justice to determine who is to bear the consequences of the incorrect (a) The legal basis of the food-aid policy application of Community agricultural law. 1. The Commission produced a list, broken down according to product, of By virtue of numerous decisions of the the 1537 regulations on the food-aid Court and in particular the judgment of policy adopted since 1971. 14 January 1981 (Case 819/79 Federal 'Republic of Germany v Commission [1981] ECR 21), expenses incurred by 2. The present basis of the food-aid Member States in connection with policy management of the agricultural markets pursuant to the Community provisions The Commission considers that it is cannot be charged to the Community (in apparent from the very terms of Council that case the European Agricultural Regulation No 3331/82 of 3 December Guidance and Guarantee Fund) unless 1982 (Official Journal 1982, L 352, p. 1) the management operations have been that the food-aid policy cannot today be carried out in accordance with the regarded as a branch of the common Community provisions applicable to agricultural policy. them. In conclusion, the Commission considers Similarly, in the Commission's view, it is that the proceedings commenced by also quite clear that the food-aid policy Eurico indicate confusion between cannot be regarded as being associated powers relating to the implementation of with the common commercial policy; the a food-aid operation and jurisdiction in only connection between those two legal proceedings. In fact, the Tribunale Community policies lies in the fact that di Milano has before it a problem the Community's accession to the 1980 concerned with the financial liability of Food-Aid Convention was decided upon the Community which in reality falls by the Council pursuant to Article 113 of within the exclusive jurisdiction of the the EEC Treaty. Court of Justice, once the specific procedure prescribed for that purpose is According to the Commission, it is quite completed, that is to say the clearance of clear from the foregoing that the accounts between the Community and food-aid policy now represents a new the Member State concerned. common policy closely linked with the

3. However, the Commission makes clear that the situation was very different when the decision giving rise to the The products were mobilized on the present proceedings was adopted (10 internal market, in accordance with the September 1976). Commission regulations or decisions adopted in accordance with the management committee procedure for cereals and, in the case of decisions, Thus, in the 1970's, the link between were sent to the Member State which Community food-aid policy and the was to proceed with mobilization. In common agricultural policy was much cases of urgent need, the supplier had to closer than it is today. This is apparent be chosen not by a tendering procedure not only from the practice ordinarily but by the private contract procedure. followed by the Community but also from the very legal basis of the measures governing food aid. At that date, in fact, the most frequent and best structured The Commission has thus never entered food aid (relating in particular to cereals into a purchase contract directly and has and milk products) was governed by the never used agents acting on its behalf. basic regulations concerning the common organization of the agricultural markets, whilst action relating to other products fell within the management committee On the contrary, it has systematically procedure provided for in the various observed the principle of the "separation basic regulations. The Commission of duties" whereby the political decision points out that whilst Article 113 of the is the responsibility of the Community Treaty was the sole basis adopted for the and management is the exclusive re- Community's accession to the 1971 sponsibility of the Member States acting , Food-Aid Convention, the reason is that through intervention agencies. at that time it was erroneously considered that the legal basis of the external aspects of the common agri- That legal interpretation, by virtue of cultural policy should be Article 113 which the only parties having dealings rather than Article 43 of the Treaty. with traders and, in particular, with successful tenderers are the Member States and, on their behalf, the intervention agencies, necessarily follows (b) Details of the management of the from the regulations adopted by the food-aid policy Council and, particularly at the time of the material events, Regulations Nos 2052/69 of 17 October 1969 (Journal Officiel L 263, p. 3), 1703/72 of 4. In reply to the question on the 3 August 1972 (Journal Officiel L 180, detailed provisions for mobilization of p. 1), 2681/74 of 21 October 1974 cereals for the purposes of food aid at (Official Journal L 288, p. 1), on the time of the material events, in the Community financing of expenditure event of urgent need or non-availability incurred in respect of the supply of agri- on the Community market, the Com- cultural products as food aid.

5. In reply to the question whether or not the management of the food-aid 8. In reply to the question regarding policy differs according to the products the arrangements for financing of the concerned, the Commission stated that operation, the Commission stated as the same indirect management system, follows : that is to say one using the Member States as intermediary, has been adopted The arrangement for financing the systematically from the very outset for food-aid operation involved in the main aid in respect of milk products for which proceedings were those provided for by the legal justification is to be found in the rules which were in force at the time the basic regulations in that sector of the material events and remain in (Regulation No 1347/75 of the Council force, subject to certain amendments of of 26. 5. 1975 (Official Journal L 138, detail. In parallel with the requirements p. 1) and Regulation No 1541/75 of the of the system established for the expenses Council of 16. 6. 1975 (Official Journal of the EAGGF, Guarantee Section, the L 157, p. 4)). Italian Republic forwarded to the Commission before the 20th of each month a request for an advance to cover On the other hand, in the case of the financial needs of the departments ' food-aid action involving the mo- and agencies authorized to pay for the bilization of other products, which operations. The Commission paid the occurs much less frequently in the monthly advances to the Italian Community, the basic Council regu- Republic. lations and the Commission im- plementing regulations went into less The Italian Republic then notified the detail, but in broad outline observed the Commission of the expenses incurred so principle that management was entrusted that they could be the subject of an to the Member States and the in- expenditure commitment and could be tervention agencies. It was only with allocated to the appropriate budget regard to sugar that the Commission headings, and it entered those expenses considered itself authorized to act in the annual accounts intended for directly when purchases had to be made clearance by the Commission. on the world market because the Member States, and the intervention In accordance with the rules in force, the agencies acting on their behalf, were nol recipient of the Community funds could in a position, from a technical point oJ only be the Italian Republic, and the view, to manage the aid. Commission complied with those rules.

Decision

1 By o r d e r of 24 M a r c h 1983, which was received at the C o u r t o n 14 J u n e 1983, the T r i b u n a l e di M i l a n o [District C o u r t , Milan] referred a question to the C o u r t of Justice u n d e r Article 177 of the E E C T r e a t y for a preliminary ruling o n the interpretation of the provisions of C o m m u n i t y law regarding the C o m m u n i t y ' s food-aid policy.

2 7^*1 Q u e s t i ° n w a s raised in proceedings before the T r i b u n a l e di M i l a n o , initially between Eurico srl a n d the Ente N a z i o n a l e Risi a n d later between Eurico srl and the Commission of the E u r o p e a n C o m m u n i t i e s , in which the plaintiff c o m p a n y s o u g h t p a y m e n t of the a m o u n t o u t s t a n d i n g o n a public contract which it h a d concluded with the Ente N a z i o n a l e Risi.

JUDGMENT OF 18. 10. 1984 — CASE 109/83

3 By Decision 76/748 of 10 September 1976 (Official Journal 1976, L 259, p. 22), addressed to the Italian Republic, the Commission decided that the Ente Nazionale Risi, an Italian intervention agency with particular responsibility for carrying out and supervising operations relating to food-aid [hereinafter referred to as "the ENR"], was to conclude a private contract for the purchase on the Community market of 3 750 tonnes of rice and for the supply of the product to the Republic of the Niger.

4 Eurico was chosen by the ENR as the other contracting party and performed that contract, but the quality of the product supplied was criticized by the authorities in the country of destination. For that reason, the ENR, in compliance with telex messages received from the Commission and after initially suspending payment of the invoice issued to it by Eurico, made only a payment on account of LIT 1 500 000 000, although the total amount of the invoice was LIT 1 770 000 000. The main proceedings relate to the recovery by Eurico of the outstanding amount of LIT 270 million.

"Was the Ente Nazionale Risi, the Italian intervention agency, vested with specific authority to act in the name of the EEC ["mandato con rappres- entanza"] for the purpose of concluding the private contract for the purchase of 3 750 metric tons of husked long-grain rice intended for the Republic of the Niger by virtue of the Commission Decision of 10 December 1976 (Official Journal, L 259 of 23. 9. 1976, p. 22) and the legislative measures referred to therein expressly or by implication?"

s It is apparent from the facts of the case as they have just been set out and from the grounds of the order for reference that the question submitted by the national court seeks, in reality, to etablish whether it is to the Commission or to the national intervention agency that any liability would attach, under the Community provisions regarding food aid which were in force at the date of the Commission Decision of 10 September 1976, vis- à-vis an undertaking which the national intervention agency had chosen as the other party to a contract and had instructed to carry out a food-aid operation decided on by the Commission.

T h e j u r i s d i c t i o n of t h e C o u r t t o r u l e on t h e q u e s t i o n

9 According to the plaintiff in the main proceedings, a question of the kind submitted for a preliminary ruling in this case cannot fall within the jurisdiction of the Court of Justice since in order to reply to that question it would have to decide whether the ENR was to be regarded as the Commission's agent under the terms of the Italian Civil Code and would have to appraise facts which fell for consideration solely by the Italian court dealing with the substance of the case.

As regards the facts, the existence of the agency relationship is confirmed by the Commission's behaviour during the performance of the contract, since it involved itself totally at every stage of the contract and thus intended to take direct responsibility for all the effects of the contract concluded on its behalf by the ENR.

n It is true that food aid constitutes a Community action, financed out of Community funds and that, from that point of view, the intervention of the Member States and their agencies in the implementation of a food-aid operation contributes to the achievement of Community objectives. That very general statement is, however, insufficient to provide a useful answer to the

EURICO v COMMISSION

question raised. The way in which the relevant Community legislation provides for the organization and financing of food-aid must also be examined so as to determine the role and the powers of the national intervention agencies in that regard.

1 3 It should be noted in the first place, as the Commission emphasizes, that when the events which gave rise to the main proceedings took place, the rules governing the granting of food-aid were closely modelled on those governing the common agricultural policy.

H As regards the general framework in which food-aid operations are carried out, the conditions under which obligations arising under agreements relating to food-aid are to be carried out and the conditions for determi- nation of the criteria for the mobilization of goods intended for food-aid are laid down in Article 28 of Regulation N o 2727/75 of the Council of 29 October 1975 on the common organization of the market in cereals (Official Journal 1975, L 281, p. 1) and Article 25 of Council Regulation N o 1418/76 of 21 June 1976 on the common organization of the market in rice (Official Journal 1976, L 166, p. 1).

is With regard to the common agricultural policy, the Court has already had occasion to rule on the scope of the relevant provisions concerning the powers of the Member States and their intervention agencies, as well as 'their non-contractual liability towards third parties. According to well-established case-law (judgment of 22. 1. 1976 in Case 60/75, Carmine Russo v AIMA, [1976] ECR 45; judgment of 13. 2. 1979 in Case 101/78, Granaria BV v Hoofdproduktschap voor Akkerbouwprodukten, [1979] ECR 623; judgment of 10. 6. 1982 in Case 217/81, Compagnie Interagra SA v Commission [1982] ECR 2233), 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, is entirely a matter for the Member State or for the agency acting on its behalf and must be determined by the national courts in accordance with the national law of the Member State concerned, without prejudice to the possibility of those courts submitting questions to the Court of Justice for a preliminary ruling under Article 177 of the EEC Treaty.

i9 The same principles must be applied to contractual liability where the national intervention agencies conclude contracts for the purpose of giving effect to Community law regarding food aid. Consequently, according to the provisions in force during the period to which the main proceedings relate, only the intervention agency of the Member State concerned, to which implementation of the Commission's decision was entrusted, can incur liability towards private traders with whom it has concluded contracts, even though the financial burden of the food-aid operation must ultimately be borne by the Community.

22 The reply to the question submitted by the national court must therefore be that the effect of the provisions of Community law regarding food aid in force at the time of the Commission Decision of 10 September 1976 is that only the national intervention agency of the Member State concerned, which was responsible for carrying out and supervising food-aid operations decided on by the Commission, can be held liable to the undertaking to which it has, by contract, delegated the actual implementation of the operations for any damage "suffered by the latter in the course of carrying out that food-aid operation.

JUDGMENT OF 18. 10. 1984 — CASE 109/83

Costs

23 As these proceedings are, in so far as the parties to the main proceedings are concerned, in the nature of a step in the action pending before the national court, the decision as to costs is a matter for that court.

On those grounds,

T H E C O U R T (Fifth Chamber)

D. Louterman O. Due Administrator President of the Fifth Chamber