C-188/92

2. The applicant in the main proceedings, TWD Textilwerke Deggendorf GmbH (here­ 3. The decision was addressed solely to the after 'TWD'), manufactures various synthetic Federal Republic of Germany and does not fibres in Germany and elsewhere. In 1983 mention TWD by name; it refers instead to and 1984 it received investment grants total­ 'a producer of polyamide and polyester yarn

* Original language: English. 1 — OJ 1986 L 300, p. 34.

I-835

OPINION OF MR JACOBS — CASE C-188/92

I-836

TWD TEXTILWERKE DEGGENDORF

I-837

OPINION OF MR JACOBS — CASE C-188/92

8. The Commission's view is based partly on the second subparagraph of Article 93 (2) of the principle of legal certainty, which the Treaty. The Court based its decision requires that once a decision has become partly on 'the fact that the periods within definitive upon the expiry of the limitation which applications must be lodged are period laid down in Article 173 its validity intended to safeguard legal certainty by pre­ may no longer be called in question, and venting Community measures which involve partly on the need to ensure the coherence of legal effects from being called in question the system of remedies established by the indefinitely'. Treaty. The Commission contends that the appropriate remedy for challenging the deci­ sion in question was a direct action under Article 173. TWD was informed by the Ger­ man Government not only of the Commis­ sion's decision but also of the possibility of an action under Article 173. It could undoubtedly have brought such an action, 10. The German Government, whose point since it was directly and individually con­ of view is broadly analogous to that of the cerned by the decision, and having failed to Commission, also invokes the principle of do so within the limitation period of two legal certainty and argues that it is important months it is now precluded from challenging for the competitors of the recipient of aid to the decision, which has become definitive. be able to establish with certainty whether the aid is compatible with the common mar­ ket.

to all importations of the type of scientific procedure for challenging such a measure, instrument in question, not just to the for reasons which I shall set out below (para­ importation effected by Hamburg Univers­ graphs 20 to 22). ity. The decision at issue in the present case was addressed to a single Member State and was concerned exclusively with aid granted to a single undertaking. On the other hand, the judgment in Commission v Belgium also has no direct bearing on the present case. 14. At the other extreme, an individual who There the Court held that a Member State is adversely affected by a general measure, which fails to contest a decision addressed to such as a regulation, but who might have dif­ it within the prescribed time limit cannot ficulty in establishing that he is directly and question the validity of that decision when individually concerned by the measure, as the Commission seeks a declaration that the required by the second paragraph of Art­ Member State has failed to fulfil its obliga­ icle 173, should not be prevented from chal­ tions by not implementing the decision. That lenging the measure indirectly on the ground does not necessarily mean that an undertak­ that he did not mount a direct challenge ing affected by such a decision, of which it is which might easily have been declared inad­ not an addressee, is in the same situation if it missible. As regards regulations, that is clear fails to contest the decision directly within from the wording of Article 184, which pro­ the time limit. vides:

15. The present case is situated somewhere between the two extremes described above. 16. In my view, the present type of case On the one hand, it differs from the type of should be treated as analogous to a case in case in which an individual measure is chal­ which an individual measure is contested by lenged by the person to whom it was the person to whom it is addressed, with the addressed. Since the decision at issue in these result that the failure to mount a direct chal­ proceedings was not addressed to TWD, that lenge under Article 173 precludes an indirect undertaking did not have an automatic right challenge under Article 177. The reasons of action under Article 173 but would have which justify not allowing the addressee of been required to satisfy the test of direct and an individual measure to challenge it indi­ individual concern. On the other hand, the rectly under Article 177, when he has failed present case differs in many respects from to challenge it directly under Article 173, the type of case in which a general measure, apply with equal force to the present type of such as a regulation, is challenged by a natu­ case. ral or legal person. The measure in question is not of a general nature but is individual. It is concerned solely with the aid granted to TWD by the German authorities in 1983 and 1984. Although TWD is not referred to by name in the decision, it is clearly identified by the terms of the decision. TWD is the only undertaking directly affected by the decision and it is so affected not by virtue of its membership of a category of undertakings 17. An action under the second paragraph of but by virtue of its status as the sole recipi­ Article 173 is clearly the appropriate remedy ent of the aid which must, according to the for a challenge to the validity of an individ­ decision, be recovered. In the circumstances ual decision by a natural or legal person who there cannot be any doubt that TWD would is an addressee of the decision or is directly have been able to satisfy the requirement of and individually concerned by it. That is direct and individual concern under the sec­ apparent from the wording of the provision.

Such an action should be brought within a an individual measure directly but omitted to special limitation period of two months laid do so. down in the third paragraph of Article 173. Failure to commence proceedings within that 6 period extinguishes the right of action. That limitation period would be deprived of all sense and purpose if a person who undoubt­ edly has locus standi to challenge a decision under Article 173 could simply ignore the decision and contest its validity in subse­ 19. Nor is there any particular policy con­ quent proceedings brought to enforce the sideration that militates in favour of allowing decision. an undertaking in TWD's position to have a second opportunity to challenge a decision that it has failed to contest under Article 173. There is no compelling reason to look favourably on persons who fail to make use of the remedy available to them within the prescribed time-limit. On the contrary, the 18. The purpose of the short limitation maxim vigilantibus non dormientibus subve- period under Article 173 is to promote legal niunt jura should be applied. As regards 7 certainty. Once the limitation period has TWD's argument about the paradox of pro­ expired the decision becomes definitive and viding a simple and cheap remedy, not sub­ is in principle no longer open to challenge. ject to a time limit, for persons who are not As the German Government has pointed directly and individually concerned by a out, there are good reasons for desiring legal measure, while those who are so concerned certainty in the context of State aid: compet­ have a less satisfactory remedy, it is in fact itors of the recipient of aid have an interest questionable whether an indirect challenge in knowing whether the aid will be revoked, under Article 177 is simpler and cheaper than since it may influence their own investment a direct action under Article 173. If there is a decisions. Legal certainty is not of course an paradox, it seems to me that such paradoxes absolute requirement, as is proved by the are inevitable in any reasonably complete possibility that normative acts may be system of remedies. declared invalid many years after their adop­ tion. But that is a necessary consequence of the limited locus standi for individuals to challenge normative acts directly, in conjunc­ tion with the principle that any measure which produces binding legal effects must be amenable to some form of challenge by per­ sons who are adversely affected by it. That does not justify derogating from the princi­ 20. Greater damage to the coherence of the ple of legal certainty in favour of persons system of remedies would be done if an who undoubtedly had locus standi to contest undertaking were allowed to challenge indir­ ectly, under Article 177, a decision against which the appropriate remedy is clearly a direct action under Article 173. Although 6 — Sec, for example. Case 20/65 Collotts v Court of Justice Articles 173 and 177 may lead to essentially [1965] ECR 847, at p. 850. 7 — See Commission v Belgium (cited in note 3), at paragraph 21. the same result, namely a declaration that a

measure is invalid, there are important differ­ a direct action under Article 173 as the ences between those two forms of proce­ appropriate procedure for challenging the dure. A direct action under Article 173, type of decision in issue. which involves a full exchange of pleadings, as opposed to a single round of observations, is in general more appropriate for determin­ ing issues of fact than reference proceedings under Article 177, in which the Court's task is essentially to rule on questions of law. But the validity of an individual decision, in par­ ticular a decision declaring State aid incom­ patible with the common market, will often depend on issues of fact, sometimes complex 22. The argument based on the need to pre­ issues involving the appraisal of economic serve the coherence of the system of reme­ data. It is manifestly desirable that such dies is strengthened by the establishment of issues should be determined under the pro­ the Court of First Instance, which was cre­ cedure best suited to resolving them. ated for the specific purpose of reviewing individual decisions in proceedings initiated by natural and legal persons and which does not of course have jurisdiction to deliver preliminary rulings. If a decision which should in principle be reviewable in the Court of First Instance could be challenged in the national courts and in the Court of Justice under Article 177, that would have the effect of removing the proceedings from 21. At the hearing the Commission drew the competent court. attention to another procedural difference between a direct action and a reference for a preliminary ruling. Where a direct action is brought, competitors of the recipient of the aid are informed of the existence of the action by means of a notice published in the Official Journal and may, if able to establish a sufficient interest, intervene in accordance with Article 37 of the Statute of the Court. In reference proceedings competitors cannot 23. That argument is now further strength­ submit observations under Article 20 of the ened by the recent extension in the jurisdic­ Statute unless they are able to intervene in tion of the Court of First Instance, which the action before the national court, which took effect on 1 August 1993. 9 Although may be difficult, especially for a competitor that decision cannot have any direct bearing in another Member State, who is unlikely to on this case, since it was adopted after these know of the existence of the action. In my proceedings were commenced, it may none opinion, that is a further reason for regarding the less be noted that natural and legal per­ sons who wish to challenge Commission

decisions in relation to State aid must now case has suggested, in addition to argu­ do so in the Court of First Instance. Thus in ments which I have already examined, two the field of State aid different courts have further arguments in favour of allowing a jurisdiction depending on whether the pro­ person who could have challenged directly a ceedings arise under Article 173 or Article decision addressed to another person to chal­ 177. For the future therefore it would be lenge the decision indirectly in the national even more inappropriate if Article 177 were courts and in the Court of Justice under available as an alternative to Article 173 in Article 177. It is argued first that the power this type of case. to refer a question regarding the validity of a decision is the prerogative of the national court and that only the national court's doubts about validity — not those of a pri­ vate party — are relevant. Thus the failure of the undertaking concerned to challenge the decision directly cannot divest the national court of its power to refer the question of 24. None of the above arguments would be validity to the Court of Justice. In my view, decisive if TWD had been prevented from that argument disregards the definitive char­ challenging the decision because the limita­ acter of an individual decision which has not tion period had expired before it knew of the been challenged under the appropriate pro­ decision's existence. It is clear that in the cir­ cedure within the relevant time limit by any cumstances of the present case there has been of the persons who had locus standi for such no such denial of justice. TWD was an action. It also disregards the fact that a informed of the decision by the German direct action under Article 173 is the proper Government in a letter dated 1 Septem­ remedy for contesting an individual decision ber 1986 (i. e. several weeks before the deci­ that has no normative effects. It would be sion was published in the Official Journal, wrong to impair the coherence of the system which did not take place until 24 October of remedies for the sake of preserving the 1986). It is not therefore necessary to con­ supposedly unfettered power of national sider the difficult question whether the limi­ courts to question the validity of any deci­ tation period under Article 173 would have sion adopted by a Community institution. been set in motion by the publication of the Clearly, there are certain decisions that may decision in the Official Journal on 24 Octo­ only be contested in a direct action under ber 1986, even if TWD had not been Article 173. expressly informed of it until a later date. What matters is that TWD had actual knowledge of the decision and failed to take the necessary steps to initiate the appropriate procedure for challenging it.

challenged in the national courts even by court to resolve. Such an approach is further persons to whom they were not addressed, commended by the consideration that the on the ground that they can only be con­ rights of individuals should not be preju­ tested in a direct action under Article 173, diced as a result of uncertainty in the law. It national courts will have to determine is, moreover, consistent with both Commis- whether the person in question was directly sion v Belgium and Universität Hamburg. and individually concerned by a decision before they will know whether they have jurisdiction to examine the decision's validity and refer the matter to the Court of Justice. 27. A final point, which I mention only Thus national courts will have to resolve a because of the weight attached to it by the complex preliminary issue (namely, that of Commission, is the latter's suggestion that locus standi under Article 173) before they the Court should allude in its ruling to the can decide whether to seek a preliminary rul­ possibility that national courts may refer to ing on the substantive issue of the decision's the Court of Justice questions of interpreta­ validity. The answer to that objection is that tion concerning the exceptional circum­ there is no such difficulty in a case like the stances in which a recipient of aid may present one, where TWD's locus standi invoke the principle of legitimate expectation under Article 173 cannot have been in any in proceedings to recover the aid. In my doubt. In my view, it is only in situations opinion, it would not be appropriate for the where locus standi under Article 173 is clear Court to deal expressly with that issue, beyond doubt that the availability of a direct which has not been raised by the Oberver­ action under that provision should preclude waltungsgericht and which is not in any a natural or legal person from challenging event concerned with the validity of the indirectly a decision addressed to another Commission's decision. If the national court person. If that approach is adopted, there subsequently decides that it wishes to refer will be no complex preliminary issue of locus such a question to the Court, it will of standi under Article 173 for the national course be free to do so.

I-845