C-25/91

PESQUERAS ECHEBASTAR SA v COMMISSION OF THE EUROPEAN COMMUNITIES

OPINION OF ADVOCATE GENERAL GULMANN delivered on 26 November 1992 *

Mr President, Summary of the legal and factual aspects Members of the Court, of the case and the arguments of the par- ties

1. This action is brought by a Spanish com- 2. In pursuance of Council Regulation pany, Pesqueras Echebastar SA (hereinafter (EEC) N o 4028/86 of 18 December 1986 on 'Echebastar'), against the Commission, and Community measures to improve and adapt concerns the Commission's failure to award structures in the fisheries and aquaculture Echebastar Community aid for the construc- sector, 1 the Commission is empowered to tion of a fishing vessel. grant Community financial aid for a series of measures in the fisheries sector.

The action is brought: Title II of the regulation contains provisions on measures for the restructuring and renewal of the fishing fleet. Article 6(1) pro- — in pursuance of Article 175 of the EEC vides that the Commission may grant aid Treaty, claiming that the Commission's inter alia towards private projects for the failure to award Echebastar the aid construction of new fishing vessels. By an requested by the company constitutes an application received by the Commission on unlawful failure to act; 30 October 1987 Echebastar requested aid for such a project.

— under Article 176 of the Treaty claiming that the Commission should be ordered Structural policy in the fisheries sector is to grant Echebastar the aid in question; implemented within the framework of multi- and annual guidance programmes for each indi- vidual Member State. The Commission has explained that conditions in the fishing industry are different in the various Member — in pursuance of Article 178 and the sec- States and that it is therefore necessary for ond paragraph of Article 215, claiming measures concerning adaptation of the fleets that the Commission is required to com- to be adjusted according to the individual pensate Echebastar for the damage the Member State. By a decision of 11 December company has suffered as a result of the 1987, 2 amended by a decision of 9 February Commission's failure to act.

According to Article 6(2)(a) of the regulation it is an express condition for the grant of It may be seen from Article 40 of the regu- Community aid for the construction of new lation that for the period 1987 to 1991 the fishing vessels that such projects shall form Commission had a total budget appropria- part of the multiannual guidance programme tion of 800 m. ECU for implementation of approved by the Commission. measures in the fisheries sector. The Com- mission has explained that the budgetary authorities fix a maximum amount available 3. Title XI of the regulation contains rules within those limits for each financial year. on the procedure for the examination of projects. According to Article 35 the Com- mission is to take decisions twice a year on projects of the type in question here, that is, not later than 30 April on applications sub- Applications which meet the conditions of mitted not later than 31 October of the pre- the regulation for the receipt of aid but ceding year and not later than 31 October on which it has not been possible to accept applications submitted not later than because the appropriations available are 31 March of the current year. insufficient are carried forward in pursuance of Article 37(1), once only, to the following budgetary year. The procedure for the award of Community aid is such that applications for aid are sub- mitted to the Commission through the Member State concerned once the approval 4. The Commission has stated that in 1988 it of the latter has been obtained (see Article was unable to take decisions for the award of 34 of the regulation). The Member States aid because the Member States had not for- have previously examined the applications warded the information with regard to the development of their fishing fleets, which was necessary to decide whether the applica- 3 — OJ 1990 L 66, p. 27. tions for aid which had been received came

By a letter of 18 December 1990, which The Commission has stated that by the reached Echebastar on 21 January 1991, the application of that priority rule it wished to officers of the Commission informed Eche- ensure that owners of ships which had been bastar that the company's application for aid accidentally lost should also receive aid could not be granted because the appropria- under the terms of the project and that the tions available for financing projects in total capacity of vessels lost should corre- 1990 were not sufficient. spond to that of the new vessel. Moreover for a variety of reasons the Commission gives priority to vessels which have been accidentally lost over vessels which have O n 25 January 1991 Echebastar brought an been voluntarily withdrawn from fishing action before the Court of Justice. It appears activities. Accordingly, as regards Eche- from the application that the company had bastar's application for aid, the Commission been notified before the application was sub- has stated that it received a lower priority

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The Commission, on the other hand, has stated that the rule set out in Article 37(1) simply gives a right to a fresh appraisal the 9. In essentials, Echebastar supports its following year conjointly with all the appli- claim that the Commission's failure to award cations which may be received during the it aid constitutes an unlawful failure to act, next budgetary year but in no way gives any contrary to the Treaty, on the fact that the priority over them. Commission has not complied with the time-limits laid down in Article 35(l)(a) of the regulation for the taking of decisions. In Echebastar's view the Commission ought to 8. Finally Echebastar has, in addition to the have taken a decision to grant the company arguments already mentioned, also con- aid either by 31 October 1989 or by 30 April tended that the Commission had not 1990 or, at the latest, by 31 October 1990. exhausted the resources available either in 1989 or in 1990 and that there was conse- quently no justification for the company, which satisfied the conditions of the regu- lation, to be deprived of aid. Echebastar has endeavoured to substantiate that argument in several ways and takes as its basis the idea that, from a total appropriation of E C U 800 m. for five years, the Commission was The Commission has pointed out that the obliged to use E C U 160 m. each year. delays which occurred with regard to a

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11. The Commission contends that Eche- bastar's claim that the Commission unlaw- It is therefore a legal act which, irrespective fully failed to take a decision granting the of its nature or form, had legal consequences company the aid for which it had applied for Echebastar and which could therefore should be dismissed as inadmissible. By way have been made the subject of an action for of introduction the Commission has stated annulment under Article 173 of the Treaty. 4 that its letter of 18 December 1990 consti- tuted a definition of its position with regard to Echebastar's application and the reasons on which it was based, and that the condi- The questions of whether the Commission tions under Article 175 of the Treaty for was justified in notifying Echebastar of its bringing an action for failure to act are there- refusal by means of a letter signed by the fore not met. director of the relevant directorate, whether there is a sufficient statement of the reasons on which the decision is based and whether Echebastar contends that its claim must be the alleged failure to observe the time-limits accepted as admissible because the period of for taking a decision affect the possible con- two months prescribed by the second para- tent of the decision are not relevant for graph of Article 175 of the Treaty within which the Commission must define its pos- ition expired on 2 December 1990 and 4 — Sec the judgment of the Court in Case 22/70 Commission v Council ('AETR') [1971] ECR 263 in which the Court because the letter of 18 December 1990 con- declared that 'an action for annulment must... be available in stitutes neither a formal decision nor a defi- the case of all measures adopted by the institutions, whatever their nature or form, which are intended to have legal nition of its position within the meaning of effects'.

The fact that the Commission took a decision in the matter before the action for failure to act was brought must, according to In this case the Commission defined its pos- the Court's case-law, result in the action's ition on the question of whether Echebastar being dismissed as inadmissible. That case- was entided to receive aid. Even though that law applies irrespective of the fact that Eche- decision had a content and was adopted in a bastar, by its action for failure to act, is form other than those desired by Echebastar, claiming not only that the Commission was it must in my view lead to a dismissal of the obliged to define its position on Echebastar's action for failure to act as inadmissible. application, but also that it was obliged to take a positive decision awarding it aid.

The purpose of the regulation when Echebastar claims that it follows of the period of two months prescribed by from that provision that the only consequence of the Com- mission's letter is that the company's application is carried over for reconsideration in the following year. It is stated expressly in Article 37(1) that an application may be carried over to the following budgetary year once only. As far as Echebastar was concerned, that possibility had therefore 7 — It may be noted that a decision which is adopted only after already been exhausted with the Commission's decision proceedings are brought can, in my view, only have the notified to Echebastar on 22 November 1989. Moreover, it result that there is no need to give judgment in the case in so may be noted that any possibility of carriage forward to the far as the applicant has thereby received what he wished for. following budgetary year does not, in my view, deprive a See the judgment in Case 377/87 Parliament V Council decision not to grant aid in the current year of its nature of a [1988] ECR 4017 ('budgetary procedure'), and my Opinion measure engendering legal effects. delivered on 8 July 1992 in Joined Cases C-15 and 6 — See the judgment in Case 8/71 Komponistenverband V Com- 108/91 Josef Buckl & Söhne at section 16.

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the second paragraph of Article 175 is to give question is required under Article 176 of the the Commission the opportunity to put an Treaty to take the necessary measures to end to the alleged failure to act and the comply with the judgment of the Court. action for failure to act cannot therefore be brought before that period has expired. The expiry of the period, however, does not entitle the applicant to a declaration of a fail- The claim for compensation ure to act in cases in which that failure ceased before the action was brought. The Court has held that an applicant who has accordingly the opportunity to bring an 16. Echebastar has claimed compensation action for annulment, has no longer a legal under the second paragraph of Article interest in an action for failure to act. 8 215 and under Article 178 for the damage it has suffered by reason of the Commission's failure to act. In its application Echebastar has stated that the claim for compensation covers both the damage the company has 14. I shall propose that the Court dismiss suffered as a result of not being awarded the action for failure to act as inadmissible Community aid and the damage resulting on those grounds and I think it is therefore from the fact that it has itself had to finance unnecessary to give an opinion on the Com- the Community aid from the day on which mission's remaining arguments. it should have been awarded. In its reply, Echebastar has estimated its loss at the amount corresponding to interest on the amount of aid, calculated from the day on The claim that the Commission be ordered which Echebastar thinks it should have been in pursuance of Article 176 of the Treaty to awarded. grant aid to Echebastar

8 — In its judgment in Joined Cases 5 to 11 and 13 to 15/62 San Michele v High Authority [1962] ECR 449 the Court stated, with regard to an action for failure to act under the ECSC Treaty that: On the assumption that the claim for com- 'it is not disputed that the decision reached the applicants before they brought their action for failure to act. pensation has been thus limited in the reply, In these circumstances, the applicants had no legitimate that leaves only the question of a claim for grounds for complaining of a failure to act which no longer existed at the time the actions were brought, since their legal the payment of interest on the late payment protection was sufficiendy assured by the possibility of mak- ing an application for annulment of the decision under Arti- of Community aid and consequently of a cle 33 of the Treaty. purely ancillary claim as compared with the Consequently, the actions for failure to act must be ruled to be inadmissible owing to lack of legal interest.' principal 'claim for payment'.

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If the claim is to be understood in that way, not the adoption of a particular measure it may be rejected for the simple reason that but compensation for damage caused by no decision can be taken on the principal an institution in the performance of its claim. duties'. 10

However, that does not mean that that case- — 'the action for damages ... was established law also implies that the claim for damages by the Treaty as an independent form of in this case may be regarded as admissible. action with a particular purpose to fulfil within the system of actions and subject to conditions for its use, conceived with a view to its specific purpose. It would be 19. As I have said, Echebastar has drawn up contrary to the independent nature of its claim for damages as a claim for compen- this action as well as to the efficacy of the sation for the damage caused by the Com- general system of forms of action created mission's failure to act. It is true that the by the Treaty to regard as a ground of case-law cited above means that a dismissal inadmissibility the fact that, in certain cir- of the action for failure to act brought at the cumstances, an action for damages might same time does not in itself mean that the lead to a result similar to that of an action action for damages must be dismissed. How- for failure to act under Article 175', 9 ever, it is in my view decisive that in this case

— 'an action for damages ... differs from an 10 — See lhe judgment in Case 153/73 Holtz & Willemsen v Council [1974] ECR 675, paragraph 4. action for failure to act in that its end is 1 1 — See the judgment in Case 5/71 Zuckerfabrik Schöppenstedt y Council [1971] ECR 975, in which the Court stated inter alia in paragraph 3 that «the action for damages ... differs from an application for annulment in that its end is not the abolition of a particular measure, but compensation for 9 — Judgment in Case 4/69 Lütticke v Commission [1971] ECR damage caused by an institution in the performance of its 325. oaraeraoh 6. duties».

21. The first such way is based on the fact that if the company's claim for damages is sustained, Echebastar will be placed in the same situation as if the Commission had 20. However, the question is whether the awarded the aid sought and will therefore Court can reasonably dismiss the action for achieve a result which in my view could not damages solely on the consideration just have been achieved on the basis of an action mentioned. However the claim for damages for annulment. In my opinion it may be is formulated, the substance of this action taken as fundamental that a judgment annul- seems to be that Echebastar thinks that the ling the Commission's refusal is not tanta- Commission is liable for damages because its mount to a finding that in a situation such as refusal of the company's application for aid this the Commission has a positive duty to is unlawful. It is therefore necessary to con- grant an application. As the Commission sider whether the action for damages, seen in must necessarily exercise a discretion in this light, may be regarded as admissible. deciding which applications may be granted, a finding that it has acted unlawfully will only imply that the Commission has a duty to rectify the errors which have occurred in dealing with the application and to exercise its discretion afresh on that basis.

Court laid down in its judgment in Case an application for compensation is brought 25/62 Plaumann v Commission, 1 2the con- for the payment of an amount precisely tent of which the Court clarified in its judg- equal to the duty which the applicant was ment in Case 175/84 Krohn v Commission. 13 required to pay under an individual decision, In that case the Commission had contended so that the application seeks in fact the with- that Krohn's claim for compensation should drawal of that individual decision' (para- be rejected, relying upon the Plaumann graph 33). judgment and claiming that 'an application for compensation cannot be brought if it would nullify the legal effects of an individ- It may be claimed that this action for dam- ual decision which has become definitive'. 14 ages constitutes such an exceptional case. By The Court rejected the Commission's objec- its claim for damages Echebastar is seeking tion, referring to the autonomous nature of payment of the amount for which the com- an action for damages and stating that the pany had applied and hence the indirect existence of an individual decision which has annulment of the individual decision consist- become definitive cannot act as a bar to the ing in a refusal of the company's application admissibility of such an action. However, the for aid. In these special circumstances it Court continued as follows: would not, in my view, be incompatible with the case-law of the Court concerning the fact that the action for damages, which is in prin- 'The decision cited by the Commission ciple of an independent nature, to regard the relates solely to the exceptional case where claim for damages as inadmissible.