C-370/89

The Republic of Mali planned the construc­ tion of a high-voltage electricity line between two towns and applied for financial support The authorities in Mali thereupon decided to award the contract to a company other than the applicant. The applicants in this case con­ * Original language: Danish. tend that the Bank's conduct was the reason

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for the company's not being awarded the In the circumstances it cannot be argued that contract and that such conduct was unlawful. the issue is one of major practical impor­ tance. However, the issue is important in principle and also because it raises the ques­ tion of the Bank's special position within the system established by the Treaty, which may Introductory remarks on the Court's jurisdic- also have significance in other areas. The tion to examine the substance of the case fundamental question is whether the Bank can be treated, for the purposes of Article 215, as one of the Community institutions, in respect of which the Community can thus 3. Article 178 of the EEC Treaty provides incur non-contractual liability. that:

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5. In my opinion, it is clear that the question The choice of the second interpretation is not as straightforward as would appear would mean that: from the procedural documents of the par­ 1 ties. The Bank has a special position within the organizational system of the Treaty and (i) the applicant could choose to bring pro­ there were fundamental reasons for that ceedings before the courts having juris­ choice. As I shall discuss below, the Court diction at the Bank's address for service has stressed the ambivalent position of the or before the courts for the place where Bank within the organizational system of the 2 the harmful event occurred, and Treaty, and it is a far from simple matter to determine whether the Bank should be treated, for the purpose of the second para­ graph of Article 215, as a Community insti­ (ii) the substantive rules for the determina­ tution, or whether such an interpretation tion of the case would be those which should be rejected. The first interpretation follow from the rules of private interna­ would have the following consequences: tional law applicable in accordance with the lex fori.

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The Bank shall have an address for service in subject to a number of restrictions, be each Member State. It may, however, in any brought before national courts. The reason contract, specify a particular address for ser­ normally given for this is that such a legal vice or provide for arbitration.' arrangement is necessary in order to safe­ guard the confidence of the lender in the context of the raising of a loan by the finan­ cial institution. 3 Notwithstanding that reasoning, it is assumed that any type of That provision corresponds in principle to proceedings may be brought against financial Article 183 of the EEC Treaty, which pro­ institutions, that is to say, even proceedings vides that: which do not arise from contractual rela­ tions. That is the legal position which applies, for example, to the International Bank for Reconstruction and Development ('the World Bank'), established in 1947, and 'Save where jurisdiction is conferred on the the European Bank for Reconstruction and Court of Justice by this Treaty, disputes to Development, which was established in which the Community is a party shall not on 1990. 4 that ground be excluded from the jurisdic­ tion of the courts or tribunals of the Member States.'

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courts may decide disputes 'save where juris­ Court ruled in that connection that its juris­ diction has been conferred on the Court of diction to deal with such disputes was not Justice'. excluded by reason of the provisions in Arti­ cle 180 of the Treaty, which expressly confers jurisdiction on the Court to deal with certain 8. The central question in respect of the disputes to which the Bank is a party. The Bank is therefore not whether its conduct is Court ruled on that point as follows: exempt from judicial review, but whether such review should be carried out by the Court of Justice or by national courts. It fol­ 'This provision merely confers upon the lows from the wording of Article 29 of the Board of Directors of the Bank powers anal­ Bank's Statute that that question must be ogous to those conferred upon the Commis­ resolved on the basis of an interpretation of sion by Article 169 and renders measures the EEC Treaty provisions which confer adopted by the Board of Governors and jurisdiction on the Court of Justice. those adopted by the Board of Directors subject to the same jurisdiction of the Court of Justice as that conferred by Article This means that an interpretation of the sec­ 173 with regard to the measures of the ond paragraph of Article 215 of the Treaty is Council and of the Commission. necessary in order to resolve the issue whether the Court has jurisdiction to enter­ tain proceedings brought against the Bank for compensation in respect of non­ This complementary nature of Article contractual liability. 180 thus confirms the conclusion that when in Article 179 mention is made of the Com­ munity this does not exclude the Bank' (Paragraphs 16 and 17). Is the Bank covered by the second paragraph of Article 215 of the Treaty?

11. In its judgment in Case 85/86 Commis- It is also important to note that the Court sion v Board of Governors of the European 7 emphasized in the Mills case that the Bank is Investment Bank, the Court was given an a Community body, while at the same time it opportunity to analyse the Bank's position stressed the distinction between the Com­ within the organizational and operational munity institutions on the one hand and the system of the Treaty. The case concerned the Bank on the other. The Court stated at Para­ issue of whether the tax paid by servants of graph 14 of its judgment: the Bank was to be levied for the benefit of the Bank or for the benefit of the Commu­ nity. It was hardly in doubt that the relevant tax provisions were to be understood as meaning that the tax should be allocated to 'It must thus be concluded that by the words the Community. The Bank, however, argued "any dispute between the Community and that its servants" Article 179 is not restricted exclusively to the institutions of the Com­ munity and their staff but also includes the Bank as a Community institution established 'it is neither an institution nor a department and with a legal personality conferred by the of the Communities; rather, it enjoys auton­ Treaty.' 6 omy vis-à-vis the Communities by virtue of its legal status, its composition and its insti­ tutional structure, as well as by virtue of the nature and origin of its resources, which are absolutely independent of the Communities' It may perhaps at this point be worth men­ budget' (Paragraph 27). tioning that the provisions which clearly confer jurisdiction on the Court of Justice to deal with cases to which the Bank is a party, On this point, the Court ruled, inter alia, as that is to say, Articles 179 and 180, deal with follows: disputes in respect of the internal relations of the Community. The present case is the first

own in accordance with its statute. In order is collected for the benefit of the Communi­ to perform the tasks assigned to it by Article ties' budget. Contrary to the contentions of 130 of the Treaty the Bank must be able to the Board of Governors, the fact that the tax act in complete independence on the finan­ is allotted to that purpose is not liable to cial markets, like any other bank. Indeed, the undermine the operational autonomy and Bank is not financed out of the budget but reputation of the Bank as an independent from its own resources, which consist in par­ institution on the financial markets since it ticular of the capital subscribed by the Mem­ does not affect the capital or the actual man­ ber States and funds borrowed on the finan­ agement of the Bank' (Paragraphs 28, 29 and cial markets. Lastly, the Bank draws up 30). annual accounts and a profit and loss account which are audited annually by a committee appointed by the Board of Gov­ ernors. Of fundamental significance is the fact that the Court points out in those paragraphs that the legal position of the Bank within the system of the Treaty is ambivalent. It is, on the one hand, undisputed that the Bank is required under the Treaty (Article 130 inter Nevertheless, the fact that the Bank has that alia) to contribute to the pursuit of Commu­ degree of operational and institutional nity objectives, for which purpose it is part autonomy does not mean that it is totally of the Community, and on the other hand it separated from the Communities and exempt is undisputed that the Bank has legal person­ from every rule of Community law. It is ality under Article 129 of the Treaty and that clear in particular from Article 130 of the that legal personality is separate from that of Treaty that the Bank is intended to contrib­ the Community, the legal personality of ute towards the attainment of the Communi­ which is established in Article 210 of the ty's objectives and thus by virtue of the Treaty. The Court points out that the Bank's Treaty forms part of the framework of the independent status as a legal person is based Community. on the need to ensure that the Bank must be able to act in complete independence like any other bank on the financial markets, in such a way that it can fulfil the duties imposed on it by Article 130 of the Treaty. The reasoning of the Court demonstrates that it attaches The position of the Bank is therefore ambiv­ importance in its interpretation of the rele­ alent inasmuch as it is characterized on the vant Community rules to the question one hand by independence in the manage­ whether the application to the Bank of those ment of its affairs, in particular in the sphere rules can damage its operational autonomy of financial operations, and on the other by a or its reputation as an independent institu­ close link with the Community as regards its tion on the financial markets. objectives. It is entirely compatible with the ambivalent nature of the Bank that the pro­ visions generally applicable to the taxation of staff at the Community level should also apply to the staff of the Bank. This is true in 12. Those two judgments thus make an particular of the rule that the tax in question important, but inconclusive, contribution to

the proper interpretation of the second para provisions governing the Bank are to be graph of Article 215. found in Articles 129 and 130 of Title IV in Part 3 of the Treaty on the policy of the Community. This distinction between the Bank and the Community institutions is a natural reflection of the Bank's special posi tion in the organizational system of the 13. Of particular importance for this inter Treaty, which is emphasized by its status as pretation is the fact that the Court has con an independent legal person.

However, the munity budget. Bank is still not designated as a Community institution under Article 4, and the inclusion of the Bank in Part 5 of the Treaty occurs in an independent Chapter 5 which is quite separate from Chapter 1 dealing with the institutions of the Community. 14. More problematic is the attempt to over come the difficulty posed by the fact that the Community, according to the words of the second paragraph of Article 215, is liable only The Bank cannot accordingly be treated as a in respect of damage caused by its institutions Community institution, as that concept is or by its servants. 8As mentioned above, the used in Article 4 of the Treaty, and the most Court assumed in the Mills case, correctly in obvious step is to proceed on the basis that it my view, that the Bank is not a Community is in this sense that the concept is also used

Communities. Another example is the analogous reference to the Bank and the Community institutions in Article 1 of the Rules of Procedure of the Court of Justice. These and other examples demonstrate that there have been reasons to draw 8 — The Bank argued that the second paragraph of Article analogies in a range of contexts. However, it h not possible 215 must be applicable to it, even though it could not be to infer from this that such an analogy is correct in all cases. treated as a Community institution. It argues that it must in It may perhaps even be argued that the examples — if they any event be covered by the term '(Community) servants'. I arc at all relevant to the case at issue — confirm, on the one do not believe that it is necessary to examine that submission hand, the distinction between the Bank and the Community in any greater detail. It is in my view clear that the decisive institutions and, on the other, demonstrate the perceived question is whether the Bank is an institution of the Com need to state expressly that the Bank must in particular cir munity within the meaning of the second paragraph of Arti cumstances be treated in the same way as the Community cle 215 or whether it can be treated as one of the institutions. institutions.

It is, however, possible, in my opinion, for EIB in the Treaty on European Union in the second paragraph of Article 215 to be view of the fact that it has existed since the given a wide interpretation such that the original Treaty was adopted and the issue of Bank may, in the context of that provision, its non-contractual liability has not hitherto 1 be treated as one of the Community institu given rise to problems. 1 tions. The Treaty provisions on the jurisdic tion of the Court of Justice have to a limited extent been given an extensive interpretation in cases where the Court has identified cogent reasons for such an interpretation; It is in my opinion clear that the new provi one example is the Court's judgment in Case sion cannot in any event be used as a positive

The two banks are not included in the enumera 15. Before I examine that question, I wish to tion of Community institutions which con refer to an argument put forward by the tinues to feature in Article 4. That fact pre Bank in support of its contention that it is sumably explains why it was felt necessary covered by the second paragraph of Article expressly to include the Central Bank in 215. It has pointed out that the following Article 215. It is worth noting that the two provision is added by the Treaty on Euro banks, which are treated together in the pean Union as a new third paragraph to introductory provisions of the Treaty, are Article 215: not so treated in Article 215.

215 and that it is understandable that the is not valid, since it is based on a false premiss. The practice of the Council shows that new areas of jurisdiction can be Member States did not expressly include the conferred on the Court of Justice without any amendment to the Treaty. The Court ruled in another context that that practice was lawful in its Opinion 1/91 of 14 December 1991 concerning the draft agreement on the creation of the European Economic Area [1991] ECR 1-6079 (Paragraph

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Bank being treated in the same manner as Be that as it may, my view, nonetheless, is Community institutions for the purposes of that the interpretative contribution of the compensation were not put forward in new provision in Article 215 on the Central respect of the European Investment Bank, Bank is so doubtful that it cannot be of con­ with the result that it was considered proper clusive significance for the interpretation of to treat the two banks differently for the the existing provision with regard to the purposes of Article 215. The European Cen­ EIB. tral Bank has been given duties and powers by the new Treaty, which, owing to their public-law nature, make it necessary to include the Central Bank in the Treaty rules relating to the jurisdiction of the Court (see 16. In my view, decisive importance for that the amendments to Articles 173, 175, 177 interpretation attaches, as outlined above, to and 180 of the Treaty), and which make it the question whether there are positive natural to draw an analogy between the Cen­ reasons to allow the Bank to come within tral Bank and the Community institutions the Court's jurisdiction under the second for the purpose of matters relating to com­ paragraph of Article 215 in the light of pensation. The new Treaty does not alter the relevant considerations based on the Bank's duties of the Investment Bank, which only to duties and its position in the organizational a limited extent, if at all, involve the exercise system of the Treaty, and whether any of public authority in a restricted sense. cogent arguments can be adduced against such a result.

markets'. It is difficult to imagine anyone financial autonomy] . When it came to a claiming that the autonomy or reputation of choice between the idea put forward at the the Bank could be undermined if proceed­ Conference of Messina of entrusting the pro­ ings against it in respect of non-contractual motion of investment in Europe to a special liability were to be brought before the Court fund and the proposal to pursue that aim by of Justice. setting up a genuine bank, the latter proposal was successful for a number of reasons. These reasons included resistance on the part of the rich Member States which would have borne the greater part of the burden of There is also, in my view, good reason to financing the fund, the scope of the commit­ accept the Bank's additional argument that it ments assumed by the new Community, may be appropriate to leave it to the Court which was much larger than in the case of of Justice to decide all cases concerning com­ the ECSC, and the desire to adopt a solution pensation in respect of non-contractual lia­ for which international precedents already bility. existed (the Bank for Reconstruction and Development, for one). However, once it had been decided to set up the European Investment Bank it was an obvious, and in 18. That, however, is not necessarily conclu­ some ways, an obligatory step to give it legal sive for the resolution of the problem. It can­ personality, if only to enable the new body not be ruled out that the Bank's special sta­ to operate within the various Member States tus within the organizational system of the in the same way as any other credit institu­ Community may have been based on other, tion.' more far-reaching considerations than those discussed above; alternately, there may be arguments in favour of conferring jurisdic­ tion on national courts.

It is possible, because the present case can be treated as admissible in the special context of Community law within which the Bank 19. Finally, one cannot overlook the fact that acted in connection with the loan to Mali. the interests of the person suffering damage may argue in favour of allowing national courts to have jurisdiction to deal with cases involving non-contractual liability on the part of the Bank. All other things being equal, the person suffering the damage may It is also appropriate, because it can hardly have a legitimate interest in being able to be entirely ruled out that relevant new bring proceedings against the person or body aspects may be added to the Court's reason­ causing the damage before the courts in the ing in a new case where this fundamental place where the damage occurred. question must necessarily be decided, which quite possibly can happen on the basis of a reference for a preliminary ruling from a national court before which proceedings for 12 — The reason generally given for the different treatment under Article 215 of cases involving contractual and non­ compensation have been brought against the contractual liability is as follows: Bank. Furthermore, the possibility cannot 'International organizations normally enjoy immunity from judicial proceedings in the Member States. The purpose of entirely be discounted that the issue may that immunity is to guarantee their independence. For its part, the EEC does not enjoy total immunity: so far as its expressly be resolved in the context of a sub­ contractual relations arc concerned, proceedings may be sequent amendment to the Treaty, which brought against it before the courts of the Member States. National rules on contractual liability arc sufficiently simi­ may be desirable not least when account is lar to dispel the fear of major differences in treatment. There is accordingly no cogent reason to deprive national taken of the express provision in Article courts of jurisdiction in this area. On the other hand, pro­ 13 ceedings relating to non-contractual liability concern Com­ 215 relating to the Central Bank. munity policy much more directly, since they involve an assessment of the unlawful or negligent nature of the con­ duct from which they originate. It was for that reason log­ ical to remove such proceedings from the Jurisdiction of national courts in order to bring them under that of the 13 — If it is desired to establish the jurisdiction of the Court Court of Justice.': sec J. Mégret and Others Le droit de la under the second paragraph of Article 215, that may be Communauté économique européenne, 1983, volume 10, done through an amendment to that provision similar to page 266. A similar view is expressed by H . G. Schermers, that made with regard to the Central Bank. If the opposite Judicial Protection in the European Communities, 1983, result is desired, that can be done through a clarification of page 287 et scq. Article 29 of the Bank's Statute.

It follows from the rules in the Lomé Con­ 21. The Bank acted on the basis of rules set vention on financial and technical coopera­ out in the first place in the Lomé Conven­ tion that the Bank is subject to the same 14 rules as the Commission, unless different tion, secondly, in an Internal Agreement on the Financing and Administration of provisions had been adopted in individual 15 cases (see Article 193(10) of the Convention). Community Aid and, thirdly, in the Finan­ cial Regulation applicable to the Sixth Euro­ For example, both the Bank and Commis­ 16 sion are required to ensure that there is no pean Development Fund. The aid, which is granted in the form, inter alia, of loans of discrimination in the invitation to tender risk capital, comes from Community funds. dossier and that the tender selected is eco­ The rules referred to establish a division of nomically the most advantageous (see Arti­ functions between the Commission and the cles 226 and 236(1) of the Convention). Bank with regard to the administration of the aid. The loans covered by the finance contract at issue in the present case involved risk capital, and it follows from the relevant rules that such loans are administered by the 17 Bank on behalf of the Community. It also

competence which it has when lending its Article 215. Even if the Bank does administer own funds on the basis of the EEC Treaty. Community funds, and even if it does act on Furthermore, the Commission and the Bank behalf of the Community, it is both neces­ act in this area essentially on the basis of the sary and possible in my opinion to interpret same set of rules, and it is for that reason the second paragraph of Article 215 in such a particularly logical that the Court of Justice way that the Bank, if it is ordered to pay should have jurisdiction to deal with pro­ compensation, should pay such compensa­ ceedings concerning non-contractual liability tion out of its own funds. brought not only against the Commission, but also against the Bank. That fact is, in my opinion, the determinant factor in favour of the Bank's being treated in the present con­ 23. The substance of the case should be dealt text as one of the Community institutions with by the Sixth Chamber, in view of the for the purpose of the second paragraph of fact that the parties in the case submitted 18 Article 215. The Court of Justice ought for their arguments on that question before that that reason to examine the substance of the Chamber during the oral procedure on present case under the second paragraph of 23 October 1991.

Conclusion

24. I accordingly propose that the Court should rule that it has jurisdiction under Article 178 of the EEC Treaty, in conjunction with the second paragraph of Article 215 thereof, to decide the substantive issues in the present case.

18 — I find inconclusive the fact that there are provisions, such as Article 52(2) of the Financial Regulation cited above, which state expressly that the Bank acts 'for and on behalf of the Community'. No significance should be attached in the present context to the fact that the Bank may be said, in a restricted sense, to be acting with the full authority of the Community. In the first place, I find it questionable whether it is proper to apply the rules of agency existing in private law to the relationship between the Bank and the Community in the area under discussion; secondly it strikes me as doubtful whether such a position of authority, con­ sidered in vacuo, can render the second paragraph of Arti­ cle 215 applicable.