C-15/85

Allow me briefly to recall the facts of the According to the applicant, the 1984 case. decision should be declared void on the following grounds: failure to give any, or any proper, statement of reasons, misuse of On 22 December 1978 the Commission powers and breach of the fundamental prin­ decided, pursuant to Council Regulation ciples of legal certainty and of the (EEC) No 355/77, 1 to grant a contribution protection of legitimate expectations. In its from the Guidance Section of the European view, the 1982 decision conferred certain Agricultural Guidance and Guarantee Fund rights on the Consorzio and led it to assume (hereinafter referred to as the 'EAGGF') in relation to third parties certain towards a project entitled 'Construction of a contractual obligations from which it can no regional centre for the processing of grape longer be released. must and for the bottling of wine in the municipality of Frisa (Chieti)', submitted by the Consorzio Cooperative d'Abruzzo The Commission, on the other hand, (hereinafter referred to as the 'Consorzio'). considers that the 1982 decision, which was The EAGGF's maximum contribution was adopted by mistake, is vitiated to such an fixed at LIT 4 446 450 444. extent that it must be regarded as legally non-existent or, in the alternative, as having been withdrawn ab initio. Furthermore, the The Consorzio subsequently reduced the Commission contends that the Consorzio scope of the project, whereupon the was aware of the illegality of the 1982 Commission, by decision of 7 April 1982, decision from the outset and cannot amended the aforesaid decision and reduced therefore claim to acquire any rights the maximum contribution to LIT thereunder. 4 298 543 500. Although it is expressly concerned with an By decision of 31 October 1984, the application for the annulment of the 1984 Commission made a further amendment decision, the dispute raises in particular the to the 1978 decision and reduced the problem of the existence and the effects of EAGGF's maximum contribution to the 1982 decision, namely: LIT 3 343 181 208 without any reference whatsoever to the decision of 7 April 1982. was that decision illegal? The 1984 decision differs from the 1982 decision only as regards the amount of the contribution granted. if so, was it vitiated to such an extent that it may be regarded as non-existent? * Translated from the French. 1 — Council Regulation (EEC) No 355/77 of 15 February 1977 on common measures to improve the conditions under if not, could it be lawfully withdrawn by the which agricultural products are processed and marketed (Official Journal 1977, L 51, p. 1). 1984 decision?

Just as the Consorzio would have been able to rely on the internal rules if the These rules are set out in a working paper Commission had granted it a sum smaller drawn up by the Commission's Directorate- than that payable under those rules, the General for Agriculture. Before considering Commission must be able to rely thereon in whether the amount of the contribution was the opposite circumstances, not in order to in fact miscalculated, it is necessary to exonerate itself after the event from respon­ determine the nature of those rules and, in sibility for the consequences of an error on particular, whether they are binding. its part, but so as to not place an excessive burden on the EAGGF and to ensure that equal treatment is accorded to all recipients of EAGGF contributions. The Commission considers that such rules, which are based on its power to organize its own departments, are binding on it and do not even confer a discretion upon it as In conclusion, therefore, I consider that the regards the amount of the contributions Commission's disregard of its internal rules which it decides to grant. The applicant for determining the maximum contribution denies that those rules are legally binding in available from the EAGGF may in practice any way. render a decision granting such a contri­ bution unlawful.

2 — Judgment of 30 January 1974 in Case 148/73 Louwagev Commission [1974] ECR 81; judgment of 1 December 1983 It is consistent case-law that 'although an in Case 343/82 Michael y Commission [1983] ECR 4023- judgment of 9 October 1984 in Joined Cases 80 to 83/81 internal directive does not have the and 182 to 185/82 Adam v Commission [1984] ECR 3411 m nt 1 3 dec character of a rule of law which the admin­ judge e of ember1984in Joined Cases 129 and' 274/82 Luxt Court ofAuditors [1984] ECR 4127.

Having said that, I believe that, in substance, the Commission's argument must prevail. To begin with, the rule referred to Instead, according to the Consorzio, the by the applicant does not seem to be rules laid down for cases in which the applicable to the circumstances of this case. eligible costs set out in the initial estimate Secondly, although the alterations made by are exceeded (in particular paragraph II. the Consorzio to its initial project involved 2 b) should have been applied by analogy, a substantial reduction of certain since the alterations which it intended to investmenu which would normally have make to its project in fact entailed a been reflected by a decrease in total costs, reduction in the cost thereof. The they entailed at the same time a substantial Consorzio also points out that there seems increase in unit costs with the result that to be a contradiction in the fact that the there was only a slight reduction in the total note setting out the calculation of the cost of the work envisaged (from maximum contribution to be granted for the LIT 9 856 319 000 to LIT 8 666 000 000). altered project, which the Commission has In order to prevent recipients of EAGGF annexed to its defence and which fixed the contributions from compensating for contribution finally granted in 1984 at increased costs, resulting either from LIT 3 343 181 208, puts the excess over the inadequate documentation in the file or initial eligible costs at LIT 1 910 724 582 from delays in implementing the projects, by whilst specifying that the only expenditure curtailing the scope of their projects, the ineligible for a contribution from the maximum contribution available for an

altered project must be calculated on the Structure a draft decision amending the basis of initial unit costs, which may be 1978 decision and reducing the maximum increased by 5% per annum to take account contribution available from the EAGGF of price adjustments for the work initially from LIT 4 446 450 440 to envisaged and retained in the altered LIT 3 343 181208. Is the fact that the project, and on the basis of the total cost ol contribution finally fixed by the decision of the work not initially envisaged. 7 April 1982 was different and amounted to LIT 4 298 543 500 such as to affect the legality of that decision? It follows from the foregoing considerations that the method of calculation on which the 1982 decision was based is not in That raises a preliminary matter: are the conformity with the rules laid down. Since two aforesaid committees consulted only on the Commission has clearly not given any the question whether or not a contribution particular reason to justify its departure in should in principle be made or are they also this case from the rules of conduct by which consulted on the amount of the contribution it has stated itself to be bound especially to be granted (for that is the only point on with a view to according equal treatment to which the 1982 decision differs from the recipients of contributions, I must conclude draft decision submitted to those committees that the Commission is right in stating that for their opinion)? the 1982 decision is illegal (or, as the Commission puts it in paragraph 5 of; its rejoinder, vitiated by an abuse of powers). It must be stated that the Commission's reasoning in that regard seems to be contra­ dictory. On the one hand, it states that the fact that the 1982 decision was not in 2. The procedural defect conformity with the draft which was submitted to the competent committees (and on which they gave a favourable opinion) constitutes a procedural defect which Article 14 (1) of Regulation No 355/77 renders the decision illegal. On the other provides that 'the Commission shall decide hand, the Commission claims that only the upon aid from the Fund according to the decision granting the contribution is procedure laid down in Article 22 after submitted to those committees for their consulting the Fund Committee on the opinion, whilst the amount of the contri­ financial aspects'. bution is determined automatically by the internal rules for calculating the latter (see paragraph 6 of the rejoinder). If the consul­ The reference to the procedure laid down tation did not relate to the amount of the by Article 22 relates to the opinion to be contribution, I fail to see how a difference given by the Standing Committee on Agri­ in the amount alone could vitiate the cultural Structure in accordance with the procedure for adopting the decision to such normal management committee rules. I shall an extent as to render it illegal. In any return to this point in due course. event, the 1978 decision firmly established that a contribution would be made.

It is clear from Article 14 of Regulation No 355/77 in conjunction with Article 14 of Secondly, all the decisions provide that Regulation (EEC) No 729/70 of the 'having regard to the expenditure which Council of 21 April 1970 on the financing may be taken into consideration by the of the common agricultural policy, 4 in Fund, it seems advisable to grant for the contrast to Article 13 of that regulation implementation of the project in question a (which lays down the so-called management contribution from the Fund not exceeding committee procedure that must be applied LIT ... '. Those decisions thus refer to the where reference is expressly made to it), fact that, by virtue of Article 17 of Regu­ that in such matters the EAGGF Committee lation No 355/77, 3the aid granted by the operates as a mere advisory body whose Fund may not exceed a maximum amount opinions are not binding. The Commission expressed as a percentage of the investment may therefore depart from that committee's made. It is only logical, therefore, that opinion in adopting its decision. consultation should also relate to the question whether or not the maximum amount is to be granted for a given project. Hence the EAGGF Committee may be deemed to have been properly consulted even if in the final analysis the amount of Thirdly, as we have seen, the possibility the contribution granted by the Commission cannot be ruled out, from a legal point of is higher than the amount specified in the view, that the Commission may derogate, draft decision submitted to that committee. for exceptional reasons which must be duly stated, from its own internal rules for calcu­ lating the maximum contribution available. The position is quite different with regard Should the Commission avail itself of that to the consultation of the Standing possibility, the competent committees must Committee on Agricultural Structure which of course state their views on the proposed is a genuine management committee. In that derogation and on the relevant procedure. regard, the 1982 decision is inaccurate in stating, in the last recital in its preamble, 3 — This article has been amended on several occasions. In that 'the measures laid down in this decision particular, Council Regulation (EEC) No 1361/78 of 19 June 1978 (Official Journal 1978, L 166, p. 9) introduced are in conformity with the opinion of the Article 17a which raised the maximum aid granted by the EAGGF for projects implemented in the Mezzogiorno (Southern Italy) to 50% of the cost involved. 4 — Official Journal, English Special Edition 1970 (I) p. 218.

Standing Committee on Agricultural A comparative study shows that most of the Structure'. That committee, as we know, legal systems of the Member States was consulted in connection with a different acknowledge the existence of circumstances amount. Moreover, if the Commission had in which a measure which is irregular owing wished to adopt measures that were not in to a serious defect is deemed not to have conformity with that committee's opinion, it any legal effect at all, not even should, pursuant to Article 22 (3) of Regu­ provisionally, with the result that neither the lation No 355/77, have communicated its addressee of the measure nor the enacting decision forthwith to the Council, which body is bound to comply with it, there being would have been able to adopt a different no need for the prior intervention of the decision within one month. No such courts. In some legal systems, such measures communication was made. Accordingly, for are non-existent, whilst in others they are one or other of those reasons, the 1982 automatically null and void. decision is illegal for breach of essential procedural requirements, and in particular on account of a procedural defect. However, since all those legal systems adhere to the principle that an adminis­ trative measure is normally presumed to be lawful, with the result that even an irregular measure is presumed to have the desired Thus, having considered the question legal effects unless it is withdrawn or whether the 1982 decision is lawful per se, I annulled, the possibility that such a measure must conclude that it is unlawful inasmuch may simply be non-existent is restricted to as it infringes the EAGGF's internal rules exceptional cases in which the irregularity is so and the essential procedural requirements glaring and so obvious that the defects relating to its adoption. vitiating the measure are immediately apparent. A flagrant irregularity of that kind seems to arise essentially in extreme cases, for instance a manifest abuse of powers or functions, the absence of any signature or the false, uncertain or unlawful subject- B — Non-existence of the 1982 decision matter of the measure, which go far beyond a normal irregularity resulting from an erroneous assessment of the facts or from a breach of the law.

presumption as to its validity. That validity its judgment of 21 February 1974 in the can be set aside only by means of annulment aforesaid case, 8that a provision originating or withdrawal, in so far as those measures with the competent authority and adopted are permissible'. with due regard to the procedural and formal conditions laid down by the Treaties cannot be termed 'non-existent', even if the Court has declared that provision unlawful owing to other defects (see, in particular, paragraph 33 et seq. of the Decision at Some months later, in its judgment of 10

355/77. After being signed on 7 April 1982 regards its introduction and publication, is by the competent Member of the an act which may be rendered invalid owing Commission, it was notified to its to some incompatibility of its contents with addressees, namely the Iulian Government superior rules or principles, but which can and the Consorzio, by registered letters of never be repudiated as null and void'. The 27 April 1982, and therefore took effect, in Court followed that Opinion by stating, in principle, upon such notification, pursuant

p. 197. Parliament[1974]ECR177.

I must therefore consider the Commission's Secondly, the irregularities referred to alternative defence, namely that if the 1982 earlier are far from self-evident. The decision were to be regarded as having EAGGF's internal rules have neither been come into existence, it was withdrawn by published nor otherwise brought to the the 1984 decision. attention of the persons concerned, who may therefore very well have been unable to detect the error. Furthermore, since the C — Withdrawal of the 1982 decision competent committees were effectively consulted, the discrepancy between the draft that was submitted to them and the decision In this section I propose to examine in more that was adopted may have been the result detail the objections which the applicant of the fact that their opinion was taken into raised against the 1984 decision in support account. of its contention that the Commission did not validly withdraw the 1982 decision. Nor, finally, is it possible in my view to accept the Commission's argument to the 1. Absence of a statement of reasons effect that the measure in question is non-existent because the Commission did not intend to adopt it in that form, as is In order to justify its failure to state in the clear from the existence of a clerical error in 1984 decision the reasons for the with­ the document presented to the competent drawal of the 1982 decision, the Member of the Commission for him to sign. Commission contends that there was no need to give any reasons because the 1982 decision was to be deemed non-existent. In that regard, I would,recall the words of Mr Advocate General Roemer in his Opinion of 11 March 1965 in Case 36/64 However, it is difficult in my view for the Sorema v High Authority [1965] ECR 329 at Court to accept that reasoning and to take p. 344: into consideration the subjective belief of

It remains to be seen whether the Moreover, the two decisions are identical inadequate statement of reasons in the 1984 word for word except, of course, as regards decision is 'redeemed' by the explanations the amount of the contribution granted (and furnished by the Commission in the the share of the cost of financing the project registered letter which it sent to the Italian to be borne by the Consorzio, which Government and to the Consorzio on 24 increases in proportion to the decrease in October 1984, some days before notifying ' the contribution). In the 1984 'copy , the the new decision to them. Commission adhered so closely to the 1982 'original' that it omitted to adjust the second recital in keeping with the various In that letter the Commission refers to its amendments which had been made to Regu­ telex message of 6 November 1981 in which lation No 355/77 between 27 April 1982 it had pointed out that the contribution and 31 October 1984, and repeated in the would be reduced from LIT 4 446 million operative part (Article 1) the error to LIT 3 343 million. The Commission also concerning the date (22 December 1981 refers to the information communicated instead of 22 December 1978). The 1984 orally to the Consorzio's representatives decision also provides that 'the work is to who were in Brussels on 3 November 1981, commence in December 1981 and is to last and to the fact that the two committees had 24 months'! been consulted on a draft decision involving a contribution of LIT 3 343 million.

Accordingly, there is nothing in the second decision to indicate that it repeals and In the letter the Commission makes it clear replaces the first decision. Nor does it that owing to a mere clerical error a draft follow by implication from a comparison of decision specifying a different amount was the two decisions that the 1984 decision was signed and notified, and it proceeds to adopted because in 1982 one document had correct that error.

In my view, however, this case is not institution must state, even if in a concise concerned with the kind of situation which form, which reasons were decisive with the Court had in mind when it regard to its adoption. acknowledged that a summary and succinct statement of reasons could be sufficient because the addressee of the decision had As in this case the Commission has failed to been fairly closely involved in the procedure state the reasons which led it to adopt a culminating in its adoption and had been decision differing from the 1982 decision, I made aware of the reasons for its suggest that the Court hold that the 1984 adoption. 9 decision contains an inadequate statement of reasons. Here there is no summary and succinct statement of reasons, only two identical sets It remains to be determined whether in 1984 of reasons leading to different and mutually the Commission was entitled, in view of the incompatible conclusions. The logical circumstances of the case regarding both its principle that the reasons stated may not be own conduct and that of the Consorzio and contradictory has thus been contravened. having regard to the interests at stake on both sides, to withdraw the 1982 decision. However, even if the addressees of the The applicant challenges the Commission's decision were able, as a result of the expla­ right to do so on two further grounds which nations set out in the Commission's letter, it has developed in support of its to understand what had happened, it must application, namely: (a) misuse of powers by be borne in mind that the requirement that a the Commission in amending arbitrarily and decision must state the reasons on which it without giving any reasons a decision on the is based was not laid down solely in the basis of which the applicant had concluded interest of the individuals directly affected certain contracts with third parties, which by the decision. constitute irrevocable obligations on its part, and (b) breach of certain fundamental prin- ciples of the Treaty, namely the principles of According to the case-law of the Court, legal certainty and of the protection of Article 190 of the EEC Treaty requires that legitimate expectations, which preclude a regulations, directives and decisions 'should measure which has been duly approved and contain a statement of the reasons which led has duly entered into force in accordance the institution to adopt them, so as to make with the principles of Community law from possible a review by the Court and so that being amended once it has produced the the Member States and the nationals legal effects which it was intended to concerned may have knowledge of the produce and, in any event, from being conditions under which the Community amended in a manner that was quite unfore­ 10 institutions have applied the Treaty'. seeable more than two years after the addressee of the measure had derived My interpretation of that passage is that any therefrom certain rights which must be measure adopted by a Community regarded as acquired rights.

than those stated' (paragraph 30 of the vidual rights or similar benefits is contrary judgment of 21 June 1984 in Case 69/83 to the general principles of law*. Lux v Court of Auditors [1984] ECR 2447). I fail to see what the 'purposes other than those stated' can be. The Commission Next, even if withdrawal on grounds on certainly did not intend to call in question unlawfulness always takes effect from the the obligations assumed by the Consorzio in present, it does not have retroactive effect in 14 relation to third parties, but merely sought certain cases in view of vested rights. to rectify the — in its view initially incorrect — exercise of its powers in relation to the grant of EAGGF contri­ In order to protect those vested rights, the butions. If it becomes apparent that those retroactive withdrawal of a wrongful or obligations should have prevented the erroneous administrative decision is subject 15 Commission from rectifying its 1982 to very strict conditions. decision, the 1984 decision should be annulled on the ground that it unlawfully One of those conditions is that the unlawful withdraws a previous measure, and not on measure must be withdrawn within a account of a misuse of powers. In my view, reasonable period ('the Court accepts the therefore, this submission is difficult to principle of the revocability of illegal distinguish from the submission alleging a measures at least within a reasonable period breach of fundamental principles and, of time' Algera [1957] ECR 39 at p. 56). together with the latter submission, is designed to support the proposition that the withdrawal of the 1982 decision was That criterion of 'a reasonable period' is of unlawful. considerable importance where, as in this case, the decision involved confers indi­ vidual rights, a category of rights which deserves a very high degree of legal 2. Unlawful withdrawal protection.

13 — Judgment of 22 September 1983 in Case 159/82 Veri- Wallace v Commission [1983] ECR 2711, paragraph 8 of To begin with, 'the retroactive withdrawal the decision. of a legal measure which has conferred indi­ 14 — See in that regard the judgment of 1 June 1961 in Case 15/60 Simon v Court ofJustice [1961] ECR 115 at p. 123: 'even if in certain cases in view of vestedrightswithdrawal 5 — Joined Cases 7/56 and 3 to 7/57 Algera v Common on grounds of unlawfulness does not have a retroactive Assembly of the European Coal and Steel Community [1957] effect it always takes effect from the present.' ECR 39 at p. 60 15 — Judgment of 9 March 1978 in Case 54/77 Herpels v 11—Joined Cases 42 and 49/59 SNUPAT v High Authority Commission [1978] ECR 585, paragraph 38 of the decision. [1961] ECR 53. 16 — Judgment of 13 July 1965 in Case 111/63 LemmerzWerke 12 — Case 14/61 Hoogovens v High Authority [1962] ECR 253. v High Authority [1965] ECR 677, in particular at p. 690.

CONSORZIO COOPERATIVE D'ABRUZZO v COMMISSION

In a relatively recent judgment {Alpha That decision has created individuals rights. Steel), 18 the Court summarized that The individuals concerned have no comparison between legal certainty and automatic rights under Regulation No legality in the following terms: 'the with­ 355/77 to a contribution from the EAGGF drawal of an unlawful measure is towards their investment projets. It is only permissible, provided that the withdrawal the decision granting the contribution which occurs within a reasonable time and confers rights on them. In that regard the provided that the Commission has had Commission has a broad discretion which sufficient regard to how far the applicant also extends to fixing the amount of the might have been led to rely on the contribution granted. Regulation No lawfulness of the measure'. In that case, 355/77 specifies only the maximum taking the view that Alpha Steel had not percentage of the total cost of each project, relied upon, nor could have been justified in which the EAGGF's contribution may not relying upon, the lawfulness of the decision exceed. I would point out, moreover, that which had been withdrawn and that the for specific reasons the Commission may delay could be explained and had not occasionally depart from its own internal rules adversely affected the applicant, the Court for calculating the contribution. It could, if held that the decision had been lawfully necessary, even amend them from one day withdrawn within a reasonable time to the next. Since it is the decision granting (paragraphs 11 and 12 of the decision). the contribution which confers the aforesaid rights and determines their scope and 17 — Judgment of 22 March 1961 in Joined Cases 42 and 49/5» extent, considerable though not necessarily SNUPAT v High Authority [1961] ECR 53 at p. 87 Judgment of 21 September 1983 in Joined Cases 205 to decisive importance attaches to the period 215/82 Deutsche Milchkontor y Federal Republic of Germany [1983] ECR 2633. within which the 1982 decision could 18 — Judgment of 3 March 1982 in Case 14/81 Alpha Steel v lawfully be withdrawn. It must be stated Commission[1982] ECR 749, paragraph 10 of the decision. that over two and a half years elapsed

In my view, that period is excessive for two reasons. In the first place, the relevant It follows from the foregoing considerations departments of the Commission that if the Commission had exercised its undoubtedly received a copy certified as supervisory and investigative powers within being in conformity with the decision the periods expressly laid down, it would notified to the Consorzio. They were not have had to await either the presen­ therefore in a position to establish within a tation of a demand for payment by the few days of the notification of that decision Consorzio (see paragraph 5 of the defence) that it did not correspond to the final or the first progress report on the work (see version of the text. the letter of 24 October 1984 in Annex VIII to the defence), before noticing the errors made in 1982. Thus the decision could have been withdrawn at an earlier date and its Moreover, according to the first withdrawal would no doubt have had a subparagraph of Article 19 (2) of Regu­ lesser impact on the obligations already lation No 355/77, the Commission may at assumed by the Consorzio. any time demand production of 'all supporting documents which are of relevance in proving that the financial or other conditions laid down for each project In that regard, I agree with the Commission have been fulfilled'. It may even, in certain that, from its point of view, those obli­ circumstances, go so far as to suspend, gations constitute res inter alios acta and are reduce or discontinue the EAGGF's contri­ not invalidated by the reduction in the bution. amount of the contribution. However, the principle of legal certainty, to which the applicant refers, serves in the first place to protect the legal position of the addressee of In order to ensure that the Commission is an administrative measure. There is a strong kept informed that projects are being possibility that the Consorzio might not have implemented under the conditions and assumed some of the aforesaid obligations had within the period prescribed by the decision, it known from the outset, or leamt sooner, Article 2 of Commission Regulation (EEC) that the amount of the EAGGFs contribution 19 No 1685/78 of 11 July 1978, which was •was to be reduced. Hence the applicant may adopted on the basis of Article 19 (5) of very well have been adversely affected by Regulation No 355/77, provides that *on the Commission's delay in correcting its the expiry of two years from the date of errors. notification of the decision granting aid, the department or agency shall forward to the Commission a document describing the progress made on uncompleted projects'. That observation cannot be called in question by the finding that the Consorzio 19 — Commission Regulation (EEC) No 1685/78 of II July had in any event undertaken to meet out of 1978 laying down detailed rules for the implementation ot its own resources the expenditure not the decision by the Guidance Section of the EAGGF to grant aid for projects designed to improve the conditions covered by the contributions of the EAGGF under which agricultural products are processed and and the Italian Government. An undertaking marketed (Official Journal 1978, L 197, p. 1).

As evidence of the Consorzio's bad faith, That is the context in which, in my view, it the Commission has produced a number of is necessary to place the statement made by documents allegedly showing that the the applicant at the end of the reply Consorzio was aware that the 1982 decision concerning the liability allegedly incurred was adopted as a result of an error and was by the Commission, owing to the errors of therefore unlawful. its officials, for the damage which the applicant has suffered as a result of the withdrawal of the 1982 decision, which The fact remains that all those documents prevented it from performing certain date from the end of October and the contractual obligations it had assumed in beginning of November 1981 and therefore relation to third parties. In these predate the notification of the decision of 7 proceedings, the Commission was right to April 1982 by almost six months. raise an objection of inadmissibility to any claim for damages since this issue was referred to for the first time in the reply. Allow me to add, however, that I do not They are couched in terms which clearly consider such a claim a prion to be wholly envisage a reduction in the amount of the devoid of substance and that it would have EAGGF's contribution following the been prudent to put it forward in the alteration of the project in question. A telex application as an alternative claim in the sent on 6 November 1981 to the Consorzio event of the 1984 decision being upheld. (Annex IV to the defence) even states that the amount should be reduced from LIT 4 446 million to LIT 3 343 million.

The undertaking given by the Consorzio by been established that the Consorzio actually telex of 3 November 1981 (Annex III to the obtained such information. defence), according to which 'as regards Version 1/159/78 of the project it shall meet out of its own resources expenditure Furthermore, the Consorzio may have not covered by the contributions from the believed that the amount in question could EAGGF and Italy', is not expressly still be altered by the Commission itself. An concerned with a specific reduction in the individual has no way of knowing that such EAGGF's contribution (as the Commission decisions are adopted, on the basis of a would have us believe in paragraph 4 of its delegation of powers, by the Member of the defence) and merely constitutes confirm­ Commission responsible for agriculture ation of an undertaking that is an essential (who merely confirms the draft decision on pre-condition for any grant of aid by the which the Standing Committee has given a EAGGF. favourable opinion) and are not discussed internally.

As regards the Commission's telex message of 6 November 1981, referring to the sum Finally, the letter of 12 November 1981 of LIT 3 343 million, it is not entirely (Annex I to the rejoinder), explains, unequivocal since it states that 'this admittedly, that 'the contribution ... has agreement in principle is conditional on the had to be reduced on the basis of the rules opinion of the [Standing] Committee [on which we are required to apply in cases of Agricultural Structure] and on the this kind', but the Consorzio would not Commission's final decision'. have been unjustified in assuming that the Commission may, in exceptional cases, derogate from those rules which are of a purely internal nature.

following the alteration of its project could draft other than that which was finally in no circumstances exceed adopted, and even if they had been the LIT 3 343 181 208 and that a decision applicant would have been entitled to treat concerning a higher amount was necessarily the discrepancy as a consequence of that illegal. consultation, particularly as it had been informed by the aforesaid telex message of 6 November 1981 that the agreement in principle was conditional on the committee's opinion and on the Commission's final Of course, the Consorzio should have decision. anticipated a reduction, and in the end the contribution was reduced. The 1982 decision reduces the amount of the contri­ bution provided for in the 1978 decision by LIT 147 906 944. In those circumstances I would point out that, in its judgment of 19 September 1985 in Joined Cases 194 to 206/83 Asteris and Others v Commission [1985] ECR 2815, the Court did not permit the applicants to rely, The Consorzio may even have feared that for the purpose of contesting the legality of the reduction would be a substantial one. a Commission regulation, on a discrepancy But I do not believe that the Consorzio between the provisions adopted and the must necessarily be deemed to have acted in preliminary documents indicating the bad faith when, almost six months after all proposals referred to the Management kinds of dealings with the Commission, it Committee, on the ground that 'the infor­ learned that the reduction was only a small mation contained in preliminary documents one and refrained from asking the may not be elevated to the status of a rule Commission whether it had made a mistake. of law on the basis of which criticism may It is impossible, in my view, to establish a be directed at the decision which was ulti­ principle to the effect that an individual who mately adopted by the Commission in is treated better than he anticipated is under consultation with the Management an obligation to ascertain whether the Committee' (paragraph 17 of the decision). competent authority has made a mistake.

To begin with, the only rule to have been infringed is an internal rule from which the Finally, out of a sense of duty, and notwith­ Commission could itself have derogated on standing all I have said so far, I should like condition that the derogation was justified. to return to the question whether or not a Accordingly, the public interest, whether it comparison between the public interest and be that of the Community or of the other the private interests involved, which is parties concerned, in remedying that irregu­ referred to in the aforesaid judgment of 22 larity is not of an overriding nature. March 1961 in SNUPAT, can tip the scales in favour of the principle of legality, as opposed to the principles of legal certainty Secondly, the Court generally considers a and of the protection of legitimate expec­ procedural defect to be a ground for tations. declaring an individual decision void only in so far as that defect has had harmful conse­ 20 quences for the applicant or was capable of adversely affecting the applicant's legal 21 position. Similarly, in its judgment of 6 22 It is true that, if the decision of 31 October October 1982 in Case 302/81, the Court 1984 withdrawing the 1982 decision is referred to 'a general principle whereby declared void, the applicant will definitively procedural flaws which are beyond the secure a financial benefit to which it was control of the person to whom not in principle entitled. The Consorzio will compensatory amounts [in this case certain have an advantage over other agricultural rights or benefits] should normally be undertakings or cooperatives which have granted must not have effects which are obtained, or will obtain, only a smaller unfavourable to him' (paragraph 8 of the contribution from the EAGGF for similar decision). Accordingly, the principle of projects. The Community budget will legality does not require that a decision provide financing which is, in itself, unjus­ vitiated by a procedural defect should tified. perforce be declared void. Nor should it require the body which enacted such a decision to withdraw it in any circum­ stances, in particular where the addressee of the decision is not responsible for the defect. However, if the acquisition of an undue benefit were considered decisive, illegal In conclusion, therefore, I do not believe measures would invariably have to be that in this case the principle of legality withdrawn since they generally confer such should take precedence over the principles benefits. of legal certainty and of the protection of legitimate expectations.

3. The 1984 decision constitutes a decision withdrawing an earlier measure and contains an inadequate statement of the reasons on which it is based;

4. Having regard to all the circumstances of the case, including the conduct and interests of both parties, the 1984 decision cannot be deemed to have been adopted within a reasonable period. It follows from that finding, and from other documents in the file, that the applicant was justified in relying on the legality of the decision that was withdrawn and was entitled to derive therefrom certain rights which, according to the principles of legal certainty and of the protection of legitimate expectations, may not be taken away from it.

I therefore suggest that the Court declare void the Commission's decision of 31 October 1984 amending the decision of 22 December 1978 on the grant of a contribution from the Guidance Section of the EAGGF towards a project entitled Construction of a regional centre for the processing of grape must and for the bottling of wine in the municipality of Frisa (Chieti)'.

The applicant has also put forward two further claims seeking:

(a) a declaration that the Commission's decision of 7 April 1982 is valid and irre­ vocable, and

(b) an order requiring the Commission to grant a contribution at the level estab­ lished by that decision and in accordance with the state of progress of the work contracted out by the Consorzio.