C-135/93

(b) Legal effects of the 1992 decision on the basis of the presumption that Community acts are legally valid I - 1661

(c) Application for a declaration that the decision is non-existent I - 1663

(d) Legal effects of the decision as a result of making a choice between several possible decisions I - 1663

2. Admissibility of the application in so far as it is directed against the first exten- sion of the Community framework I - 1664

(a) Article 184 of the EEC Treaty I - 1665

(b) Non-existence of the decision I - 1665

(c) First paragraph of Article 12 of the Commission's Rules of Procedure ... I - 1670

Costs I - 1671

C — Conclusion I - 1672

* Original language: German.

I -1653

OPINION OF MR LENZ — CASE C-135/93

1 — 89/C 123/03 (OJ 1989 C 123, p. 3). 2 — 91/C 81/05 (OJ 1991 C 81, p. 4).

I - 1654

SPAIN v COMMISSION

5. That initial extension of the Community history of the Community framework and framework was published in the Official sketched out the situation in the motor vehi- Journal. 3 In that notice, too, the Commis- cle industry in 1992. The paper also dis- sion states once again that the Community cussed, inter alia, whether the Community framework was introduced on the basis of framework should be extended or repealed, Article 93(1) of the EEC Treaty. the definition of the motor vehicle industry extended and the assessment criteria reviewed in order further to reinforce legal certainty.

I - 1655

O P I N I O N O F MR L E N Z — CASE C-135/93

extended for an indeterminate period by the tition of 3 February 1993, determining first extension. not to modify the Community frame- work on State aid to the motor vehicle industry and to extend its validity until the next review is carried out by the Commission and, in so far as that 11. That decision of the Commission was decision is based thereon, the modifica- also published in the Official Journal. 5 In tion of that framework effected by this case, too, the Commission states that the Decision 91/C 81/05 7 ; 8 Community framework was adopted on the basis of Article 93(1) of the EEC Treaty. Later in the document, the following is expressly stated: 'In December 1990, the Commission decided to renew the frame- work without setting a time-limit on its application ...'. 6 The Commission reported (ii) Order the Commission to pay the costs. as the conclusion of the meeting held to examine the Community framework that the majority of Member States had expressed their satisfaction with the Community framework and that they had decided that 13. O n 12 May 1993, the Commission the framework would 'not be modified'. As entered an objection of inadmissibility and far as the future was concerned, that frame- claimed that the Court should: work would 'remain valid until a next review to be organized by the Commission'.

12. O n 5 April 1993, Spain brought an (i) Declare the action for annulment action in the Court of Justice in which it brought by the Kingdom of Spain inad- claimed that the Court should: missible;

18. It should therefore first be examined whether the 1992 decision produced legal effects and if so what effects. This turns, on the one hand, on what effects the first exten- 15. In so far as the Commission's sion had on the period of validity of the 1992 decision extending the Community Community framework. The applicant framework for an indeterminate 'period is would like that question to be deferred until contested, the defendant argues that that the examination of the substance, since, in its decision constitutes an act which merely view, the 1992 decision had legal effects in confirmed a preceding decision. The Com- any event. In its opinion, the Commission munity framework had already been opted for one of several possible decisions extended by the first extension for an inde- open to it and consequently took a decision terminate time and remained valid without a and produced legal effects. Yet that opinion new Commission decision being necessary. must first be examined. Since the admissibil- The 1992 decision simply confirmed this existing legal situation. To that extent, it had no legal effects and cannot be contested 9 — Judgment of 31 March 1971 in Case 22/70 Commission v under Article 173 of the EEC Treaty. Council [1971] ECR 263, paragraphs 38 to 42.

I-1657

OPINION OF MR LENZ — CASE C-135/93

ity of the application turns on the outcome 20. If regard is had only to the wording of of that examination, consideration of this the fifth section of the first extension, there question cannot be deferred until the exami- is something to be said in favour of the nation of the substance. Community framework having unlimited duration.

I - 1658

SPAIN v COMMISSION

23. The applicant's doubts about the clarity 24. In any event, it appears from the word- of the wording of the first extension of the ing of section 2.5 of the original Community Community framework are justified. The framework that a new instrument had to be fifth section of that extension cannot be adopted no later than two years after its regarded in isolation, but must be read in entry into force. However, if the new instru- conjunction with the preceding section, ment contains no express provision with which reads as follows: regard to the duration of its validity or to a repeal of the old two-year time limit, but in contrast expressly provides for the frame- work to continue to apply in its present form or mentions as the only modification the extension of its geographical scope, the two-year time Umit remains in existence.

'In view of these considerations the Com- mission believes it necessary to renew the framework on State aid to the motor vehicle industry in its present form. l° The only mod- ification " which the Commission has decided extends the prior notification obliga- tion for the Federal Republic of Germany to 25. The Member States may possibly have Berlin (West) and the territory of the former decided differently at the meeting at which GDR.' ' 2 the extension was prepared. But that would not alter the continuance of the two-year time limit, since what counts is the objective interpretation of the wording. 13

27. Spain does not contest this, but argues their conduct. Since it appears neither from that it accepted the first extension as a two- the wording of the extension or from the year extension and not as an extension for an Commission's letter of 31 December unlimited time. The Member States did not 1990 that the Community framework was to have to reckon on such a radical change. It is be extended for an indeterminate period, the at odds with legal certainty and the Member Member States could have obtained no States' legitimate expectations. In any event, explanation of this. Consequently, as far as the fact that Spain continued to notify pro- any extension of the Community framework posed aid cannot be regarded as signifying its for an indeterminate time was concerned, the agreement to an extension for more than two Member States were silent. That silence is years. even less apt to be construed as consent than the Member States' silence in the CIRFS case, since in that case, even though they were aware of all the circumstances, the Member States were given no explanation. Consequently, the Member States' agreement in this case cannot be construed as agreement to an extension for an indeterminate period. 28. Spain refers in this connection to my Opinion in Case C-313/90 CIRFS.14 That case was concerned with whether the scope of a 'discipline' on aid laid down by the Commission could be limited by a Commis- sion decision. The decision was notified t o all the Member States, none of which con- tested it. In my view, that silence on the part 30. It remains to be considered whether the of the Member States in the CIRFS case Commission may have been entitled to could not be taken to signify their consent, extend the Community framework for an since they were not aware of the significance indeterminate period by a unilateral act. In of their silence; in other words, the discipline order to do this, it will be necessary to inves- on aid could not be altered by a unilateral act tigate the nature of the Community frame- on the part of the Commission. work somewhat more precisely.

32. Moreover, the parties do not dispute the need for the approval of the Member States. The Commission itself refers several times to the fact that the Community framework did not become valid until it was approved by the Member States. 34. As a result, it is clear that the first exten- sion prolonged the Community framework for only two years. Consequendy, the sec- ond extension could not have been — as the 33. The position cannot be otherwise as defendant maintains — simply a confirma- regards the first extension of the Community tion of the first extension, since its validity framework, since the extension conferred expired after two years. Consequendy, the validity on it for a further period (two years, second extension could very well have been as has been shown above). As far as its valid- intended to have legal effects, since it states ity ratione temporis is concerned, the instru- that the Community framework is to remain ment first extending the Community frame- valid until the next review, which conflicts work does not differ at all from the first with the actual legal position, as it has been instrument. Indeed, nothing else was determined above. intended, since according to the wording of the first extension the intention was to extend the Community framework in its form at that time. Accordingly, the first extension had to be accepted by the Member States in order to become binding. This is borne out, inter alia, by the fact that the text again refers to Article 93(1) of the EEC (b) Legal effects of the 1992 decision on the Treaty, according to which the Member basis of the presumption that Community States must approve the measures proposed acts are legally valid by the Commission. Moreover, it is expressly stated in the fourth section of the first extension of the Community framework

Community framework for a indeterminate the Official Journal, can be regarded as time by a unilateral legal act — and hence exhibiting an intention on the part of the unlawfully. Whether such significance can be Commission to furnish the Community attributed to that decision is questionable framework with validity for an indetermi- having regard to that which the Commission nate time. In the first section, it is stated that actually wished to attain by means of its the Community framework had already decision. It did not in fact intend to act with obtained unlimited duration as a result of the binding effect, since in its view the Commu- first extension. It could be concluded from nity framework has had unlimited validity this that the decision at issue was not ratione temporis since the first extension. It intended to extend the Community frame- sought by its decision to confirm once again work, precisely because it was unnecessary that existing legal situation. This is possible to do so. By concluding by stating that it had by means of a declarative decision which decided not to modify the Community re-confirms the binding nature of the exist- framework, at the same time it expressed the ing legal position but itself effects no legal intention to allow the Community frame- change. ' 7 work to remain in force unmodified. Although in the Commission's view this had no legal effects, it does, however, create the impression that the Community framework continues to remain valid. There is nothing in the wording of the second extension to suggest that the Commission is mistaken in considering that the Community framework had already attained unlimited validity as a result of the first extension. Since acts of the 36. O n grounds of legal certainty and pro- Community institutions are in principle pre- tection of legitimate expectations, the view of sumed to be lawful, they accordingly pro- the members of the institution when a legal duce legal effects even if they are tainted by act was adopted cannot be relied upon in irregularities. 19 What that means in this case order to assess that act. Instead, what is is that the Member States are still under a determinative is whether there is an objec- duty to effect the prior notification of pro- tively determinable intention to take a posed aid to the Commission and to draw up decision. l s an annual report on all aid granted. Accord- ingly, the legal act of the Commission under consideration produces the same legal effects as an express extension of the Community framework for an indeterminate time. It must therefore be treated in an action from annulment as such a decision effecting an extension, since for reasons of legal certainty and the protection of legitimate expectations it must be possible for Member States to 37. It must now be considered whether, on eliminate an act of the Commission whose an objective view, the second extension of substance contradicts the true legal position. the Community framework, as published in

42. Next, it must be considered whether, as the applicant maintains, the 1992 decision has legal effects in any event, because it embodies a choice made between several possible measures. The Commission had the 40. The applicant argues that the Commis- sion's decision should be regarded as being non-existent. It maintains that this is contin- gent on the act's being tainted by especially 20 — Judgment in Case C-137/92 P Commission v BASF and Others, cited above, paragraph 49 at 1-2647. grave and obvious irregularities. If this is so, 21 — Judgment in Case 15/85 Consorzio Cooperative d'Abruzzo it cannot be tolerated by the Community v Commission [1987] ECR 1036, paragraph 10. 22 — Consorzio Cooperative d'Abruzzo v Commission, cited in legal order and cannot have any legal effects footnote 21, paragraph 10 et seq.

I -1663

OPINION OF MR LENZ — CASE C-135/93

possibility of abolishing the Community view that the decision of December 1992 had framework, modifying it, extended it for an legal effects in any event, on the ground that indefinite period or setting a new time-limit. it constituted a choice between various pos- Inter alia because it decided to leave the sible measures, cannot therefore be upheld. Community framework in being unmodi- fied, it made a choice between different pos- sibilities and hence produced legal effects.23

I - 1664

SPAIN v COMMISSION

(a) Anicie 184 of the EEC Treaty bringing proceedings against the first exten- sion of the Community framework.

49. It was even requested to agree to the first 46. The applicant argues that the application extension and, by refusing its consent, could is still admissible after the expiry of the have prevented the decision from becoming period prescribed for bringing an action. binding. There is therefore no need to con- Since this case turns on the validity of the test the extension after the expiry of the lim- first extension, its nullity can be asserted itation period. 2 6 Consequently, the com- under Article 184. plaint brought against the first decision extending the framework is inadmissible for being out of time.

47. Article 184 mentions that possibility (b) Non-existence of the decision only for regulations. Its significance lies in the fact that a party which is not entitled under Article 173 to bring court proceedings against a regulation is protected against the application of an unlawful regulation. 24 N o t only regulations may be challenged under 50. Again, the applicant argues that the act is Article 184, but also ?cts of Community non-existent. However, since the first exten- institutions which have the same effects as a sion does not exhibit any grave, obvious regulation. 25 Since Article 184 may never be irregularity, it cannot be taken that the act is used to circumvent the limitation period laid non-existent. down in Article 173, it merely enables a party to take proceedings against acts which would otherwise not be open to challenge under Article 173.

lenge the first extension only if it authorized 54. As has already been examined in discuss- the Commission to extend the Community ing the question of admissibility, the decision framework indefinitely by a unilateral act. of December 1992 is to be regarded as an However, this does not emerge from the extension for an indeterminate period. application. There it is simply stated that the Whether the Commission was competent to first extension is contested in so far as it con- take such a decision by means of a unilateral stitutes the basis for the 1992 decision. The act is questionable. In any event, the Mem- first extension is, however, the basis for the ber States did not consent thereto. Since the 1992 decision. To that extent, it cannot be decision was intended only to constitute a inferred from the application that it is sought confirmation of the first extension, no provi- to contest the 1990 decision only in certain sion was made for confirmation by the circumstances. Member States. In other words, the exten- sion can be valid only if it was possible for the Commission to effectuate the extension without the Member States' consent. A pos- sible legal form for this is a decision under Article 155 of the EEC Treaty. 52. Consequently, it can be held as a result of the appraisal of admissibility that the application brought by the Kingdom of Spain is inadmissible in so far as it seeks t o have the Commission's 1992 decision declared non-existent and is therefore 1. Lack of competence on the part of the directed against the first extension of the Commission Community framework.

57. In any event, the wording does not pre- 58. The term 'modifications' is to be con- clude this measure's being categorized as a strued as including temporal changes and, a decision within the meaning of Article 155 of fortiori, the extension of a Community the EEC Treaty. In the last section, the Com- framework from one which was originally of mission states that it has 'decided' not to limited duration to one which is valid for an make any modification. There is no longer indeterminate time. any question of the Member States' having been consulted or given their agreement prior to the decision. The basis for the act was the first extension of the Community framework. There it is provided that the Commission is first to review the frame- work. If no modification is necessary, there 59. The Commission submits that it is pos- is no need for the Member States' consent. sible that the decision as to the duration of The Commission is to examine whether the Community framework was delegated to modifications are needed. If it should be of it. However, such a decision does not the opinion that a modification is necessary, become effective until the Member States it will consult the Member States before tak- have consented thereto. ing any decision. Otherwise, it is entitled to decide that no modification will be made. But in the 1992 decision it decided much more. It extended the Community frame- work for an indefinite period. It is question- able whether the Commission was entitled to take such a far-reaching decision. In order to clarify this, it is necessary once again to con- 60. The question is whether the consultation sider the wording of the first extension of of the Member States provided for in the text the Community framework, which was is to be categorized as a prior enquiry or as a accepted by the Member States, and hence requirement for prior consent.

(a) Article 93(1) of the EEC Treaty

62. Such consent could have been given, however, during the prior meeting of the 64. Consequendy, as the applicant main- Member States. This cannot be assumed, tains, the procedure laid down in Article since both parties were of the opinion that 93(1) of the EEC Treaty was not complied subsequent consent was necessary. Conse- with as required. However, contrary to that quently, it is certain that none of the pro- which Spain maintains, the act was not made nouncements made at the prior meeting were non-existent as a result. As has already been intended to constitute consent to the exten- considered with regard to the question of sion of the Community framework and can- admissibility, the act was not tainted by any

I - 1668

SPAIN v COMMISSION

obvious, grave irregularity. Nevertheless, a 67. The applicant further submits that Arti- further ground for bringing proceedings cle 190 of the EEC Treaty has been infringed under Article 173, namely infringement of in so far as the Commission decision does essential procedural requirements, is present. not adequately state the reasons on which it is based.

(b) Article 190 of the EEC Treaty

66. What is important, however, is that the decision mentions a legal basis. Conse- quently, the decision 'states the reasons on which it is based' 27 and satisfies the require- 70. The text of the decision published in the ments of Article 190 as far as mentioning the Official Journal sets out quite briefly the legal basis is concerned. If this is based on an background to the Community framework erroneous legal view on the part of the Com- and enumerates the provisions of the first mission, it does not have any adverse effect extension. Mention is also made of the meet- in this resoect. 28 ing held in December 1992 to consider the Community framework and of the outcome of that meeting. It also is made clear that the 27 — Article 190 of the EEC Treaty. Commission decision was the result of that 28 — Grabitz, in Grabitz (loc cit.), Article 190, section 6; judg- examination. In the Court's view, the ment in Case 2/56 Geitlang v High Authority [1957 and 1958] ECR 1, at 15 and 16. requirement to state reasons is satisfied if the

I -1669

OPINION OF MR LENZ — CASE C-135/93

principal issues of law and fact are set out. 29 (c) First paragraph of Article 12 of the The reasoning which led to the adoption of Commission's Rules of Procedure the act must be able to be logically recon- structed.

29 — Judgment in Case 24/62 Germany v Commission (case on 75. The first paragraph of Article 12 of the wine for distillation) [1963] ECR 63, at 69. 30 — Schmidt, in Von der Groeben/Thiesing/Ehlermann: Kom- Commission's Rules of Procedure, which the mentar zum EWG-Vertrag, 4th edition 1991, Vol. 4, Article applicant invokes, provides for the authenti- 190, section 12, and judgment in Case 13/72 Netherlands v Commission [1973] ECR 27, paragraphs 11 and 12. cation of acts. In the version applicable at the

I - 1670

SPAIN v COMMISSION

Costs

76. In the instant case, there is no evidence whatsoever from the Commission's letter or from the decision published in the Official Journal to suggest that the published text Since the applicant has been successful in the does not correspond to the text adopted by major part of its submissions, the defendant the Commission. Yet the applicant must should be ordered to pay the costs under the adduce such evidence in order to be able to first subparagraph of Article 69(2) of the allege that there has been an infringement of Rules of Procedure.

31 — Judgment in Case C-137/92 P Commission v BASF and 32 — Judgment in Case C-137/92 P Commission v BASF and Others, cited in footnote 19, paragraphs 74 and 76. Others, cited in footnote 19, paragraphs 57 and 77 et seq.

I - 1671

OPINION OF MR LENZ — CASE C-135/93

C — Conclusion