C-212/94

JUDGMENT OF 8. 2. 1996 — CASE C-212/94

J U D G M E N T O F THE C O U R T (Sixth Chamber) 8 February 1996 *

In Case C-212/94,

R E F E R E N C E to the Court under Article 177 of the EC Treaty by the High C o u r t of Justice, Queen's Bench Division, for a preliminary ruling in the proceed- ings pending before that court between

F M C pic,

F M C (Meat) Ltd,

Ministry of Agriculture, Fisheries and Food,

* Language of the case: English.

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FMC AND OTHERS v INTERVENTION BOARD FOR AGRICULTURAL PRODUCE AND ANOTHER

on the validity and interpretation of Article 4(1) of Commission Regulation (EEC) N o 1633/84 of 8 June 1984 laying down detailed rules for applying the variable slaughter premium for sheep and repealing Regulation (EEC) N o 2661/80 (OJ 1984 L 154, p. 27), as amended by Article 1 of Commission Regulation (EEC) N o 1922/92 of 13 July 1992 amending Regulation (EEC) N o 1633/84, cited above, and determining the conditions for the reimbursement of the clawback following the judgment of the Court of Justice in Joined Cases C-38/90 and C-151/90 (OJ 1992 L 195, p. 10), the validity and interpretation of Article 2 of Regulation N o 1922/92, cited above, and the interpretation of paragraph 30 of the judgment of the Court of Justice in Joined Cases C-38/90 and C-151/90 Lomas and Others [1992] ECR 1-1781,

T H E C O U R T (Sixth Chamber),

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having regard to the Report for the Hearing,

after hearing the oral observations of the plaintiffs in the main proceedings, repre- sented by C. Quigley, the United Kingdom, represented by J. E. Collins and G. Barling, and the Commission, represented by T. Van Rijn and P. Watson, Barrister, at the hearing on 26 October 1995,

after hearing the Opinion of the Advocate General at the sitting on 7 December 1995,

gives the following

3 Council Regulation (EEC) N o 1837/80 of 27 June 1980 (OJ 1980 L 183, p. 1), as amended by Council Regulation (EEC) N o 871/84 of 31 March 1984 (OJ 1984 L 90, p. 35), established a common organization of the markets in sheepmeat and goatmeat, providing for various market support mechanisms.

4 However, that common organization was incomplete in that it established several regional markets in the sheepmeat sector, rather than a single market, and that one of the support measures, namely the variable slaughter premium for sheep, was reserved to British producers.

5 That premium could be paid where the market price was less than 85% of the basic price, the amount of the premium being fixed each week by the Commission. The animals in respect of which the premium had been granted were, within 21 days of first being placed on the market with a view to slaughter, either to be slaughtered in Great Britain or exported.

6 In order to prevent the application of the slaughter premium from disrupting trade, Article 9(3) of Regulation N o 1837/80 provided for the Commission to take the necessary measures to ensure that an amount equivalent to the premium actu- ally granted was charged on products in respect of which the premium had been granted when they left Great Britain. That amount, known as the clawback, was payable by the exporters.

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FMC AND OTHERS v INTERVENTION BOARD FOR AGRICULTURAL PRODUCE AND ANOTHER

that of the slaughter premium actually granted, the Commission exceeded the powers conferred on it by Article 9(3) of Regulation N o 1837/80. The premium was paid at the rate fixed for the week during which the animal was placed on the market, whereas the clawback was equal to the amount of the premium fixed for the week during which the product was exported. The animal for which the pre- mium had been paid could be exported up to 21 days after first being placed on the market. Article 4(2) of Regulation N o 1633/84, concerning the lodging of security, was declared invalid for the same reasons.

1 2 In that judgment, the Court also ruled that the declaration that Article 4(1) and (2) of Regulation N o 1633/84 was invalid could not be relied on with effect from a date prior to that of the judgment, except by traders or those entitled through them who initiated proceedings or made an equivalent complaint under the appli- cable national law before that date (paragraph 30 and point 2 of the operative part).

» Following that judgment, the Commission adopted Regulation No 1922/92 amending Regulation N o 1633/84 and determining the conditions for the reimbursement of the clawback.

M Article 1 of that regulation amends the detailed rules for calculating and charging the clawback in the following manner.

i7 O n c e again two options are available. Under the first, the competent national authorities are to reimburse, within the time-limits and according to the procedure laid d o w n in the relevant national law, the difference between the clawback paid and the amount of the premium actually granted for the same products to traders or their agents who had, before the date of the Lomas and Others judgment, ini- tiated proceedings or made an equivalent complaint, under the applicable national law, against the method of calculation declared invalid by that judgment. In sup- p o r t of their claim, traders were required, before 30 November 1992, to supply proof satisfactory to the competent United Kingdom authorities of the amount of the premium actually received for the products subject to clawback. The second option allows traders to claim reimbursement of the difference between the claw- back actually paid and the average amount of the premiums fixed for the week of departure of the products and the three previous weeks.

is Article 3 provides that the regulation applies to all situations where, on the date of the judgment in Lomas and Others, the clawback had not yet been paid, or where proceedings had been initiated or an equivalent complaint made under the appli- cable national law, as referred to in Article 2.

i9 F M C and Others are companies established in the United Kingdom which export sheep and sheepmeat from Great Britain.

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FMC AND OTHERS v INTERVENTION BOARD FOR AGRICULTURAL PRODUCE AND ANOTHER

20 In the United Kingdom, the Board and the Ministry are responsible for imple- menting at national level the common organization of the markets in sheepmeat and goatmeat.

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4 Since they considered Article 4(1) of Regulation N o 1633/84, as amended by Regulation N o 1922/92, to be invalid, those companies refused to pay the sums demanded and brought interlocutory proceedings in the United Kingdom to pre- vent the Board from calling on the security lodged until the clawback had been lawfully calculated in accordance with Article 24(5) of Regulation N o 3013/89. Their interim application was refused, whereupon, on 15 April 1994, the compa- nies paid over under protest a total of UKL 847 665.58. They now also seek recov- ery of that sum in proceedings before the High Court.

25 At the hearing before the Court on 26 October 1995, F M C and Others made it clear, however, that in their action before the national court they were claiming only repayment of the difference between the amount of the clawback actually paid and the sums that they would have had to pay in that respect if the relevant Community rules had been properly applied.

26 Considering that the dispute involved an assessment of the validity of the C o m - munity rules in question and raised issues concerning the interpretation of Com- munity law, the High Court of Justice, Queen's Bench Division, decided to stay proceedings and referred the following questions to the Court of Justice for a pre- liminary ruling:

'1. Is Article 4(1) of Commission Regulation (EEC) N o 1633/84 (as amended by Article 1 of Commission Regulation (EEC) N o 1922/92) invalid as being, inter alia, ultra vires Article 24(5) of Council Regulation (EEC) N o 3013/89 and/or in contravention of the principles of proportionality and legal certainty in so far as:

(a) only with regard to the charging of clawback in respect of periods subse- quent to the date of initiation of proceedings or the making of an equiva- lent complaint; or

(b) with regard also to the charging of clawback in respect of periods prior to the initiation of proceedings or the making of an equivalent complaint, subject to any applicable limitation period; or

(c) with regard to the charging of clawback in respect of some other period and, if so, which?

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4. Is Article 2 of Commission Regulation (EEC) N o 1922/92 invalid on the grounds, inter alia, of contravening the principles of proportionality and legal certainty in so far as:

FMC AND OTHERS v INTERVENTION BOARD FOR AGRICULTURAL PRODUCE AND ANOTHER

(b) is the national court entitled or obliged, as a matter of Community law, to take account of the following factors (and, if so, which), each of which may be capable as a matter of national law of diminishing or extinguishing the liability of the competent national authority:

(i) the principle that the plaintiff has the burden of proving as a matter of fact the existence and extent of the overpayment alleged;

(ii) the fact that the sums, except where they were paid under protest, were paid under a mistake of law;

(iii) the fact that repayment of the sums overpaid may constitute, wholly or partially, unjust enrichment of the operator;

(iv) the limitation periods contained in Articles 2(2) and 14 of Council Regulation (EEC) N o 1430/79 (as amended) and in any applicable national legislation?'

30 Consequently, as the Court stated in those cases, the incomplete state of the com- mon organization of the market in sheepmeat and goatmeat, which is due in par- ticular to the fact that one of the support measures, the variable slaughter pre- mium, is reserved for producers of a specific region and is liable to improve their competitive position, may call for corrective measures to restore equality between producers in all regions so far as their competitive position is concerned; in par- ticular, by charging clawback upon exportation outside the region concerned of products in respect of which the premium has been granted.

3i Since the purpose of charging clawback is to avoid disruption of intra-Community trade arising from the application of the variable slaughter premium, it must be charged in such a way that it neutralizes the effect of the premium on departure from the region concerned of the products which benefited from that support measure, without working to the advantage of producers in that region, as would be the case if the amount charged by way of clawback were lower than that of the

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premium granted, or affecting their competitive position, as would be the case if the clawback were higher than the premium.

32 The legality of Articles 1 and 2 of Regulation N o 1922/92 must be assessed in the light of the objective pursued by the clawback system.

bought the products on which he is required to pay the clawback, so that he is best placed to adduce the requisite proof. Moreover, where it is impossible for the exporter to adduce such proof, Regulation N o 1922/92 has provided for a different method of calculating the clawback.

i7 That second option, which is intended, as is apparent from the fifth recital in the preamble to Regulation N o 1922/92, to avoid the practical difficulties which trad- ers might encounter in adducing the proof required under the first calculation method, fixes the clawback at an amount equal to the average of the slaughter pre- miums fixed for the week of export of the products concerned and the three pre- vious weeks.

38 That system differs fundamentally from the method of calculation declared invalid in the judgment in Lomas and Others, according to which the clawback was equal to the amount of the premium fixed solely for the week of export of the products concerned.

39 Since the slaughter premium was paid at the rate fixed for the week during which the animal was first placed on the market, and the animal had to be exported within 21 days of that date, the old system gave rise to a situation in which the amount of the clawback was as a rule different from that of the premium where, as is generally the case, the animal was not placed on the market for the first time and exported in the same week. That being so, sudden fluctuations in the rate of the premium from one week to another were liable to lead to a substantial discrepancy between the premium paid and the clawback payable in respect of one and the same product.

43 Against that, it cannot be argued that the new system is incompatible with Regu- lations N o 1837/80 and N o 3013/89, which require an amount equivalent to that of the premium actually paid to be levied on departure from Great Britain of the products for which the variable slaughter premium had been granted. The word 'equivalent' cannot be understood as referring to an amount which is exactly the same for each transaction, especially in a situation such as that arising under the second option where the amount of a premium paid in the past can no longer be determined exactly; instead, that word must be understood, in accordance with the

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purpose of the legislation in question, as meaning that the result of levying the clawback should in fact be to neutralize the impact of the premium. As is clear from the foregoing considerations, that condition is satisfied by the new method of calculation laid down in Articles 1 and 2 of Regulation N o 1922/92.

44 Furthermore, when the plaintiffs in the main proceedings were questioned on that point at the hearing, they were unable to suggest an alternative system which, while consistent with the purpose of the clawback, would make it possible to fix it at a level more closely corresponding to that of the premium.

45 In the light of the foregoing considerations, the answer to be given to the national court must be that consideration of Questions 1 and 4 has disclosed no factor of such a kind as to affect the validity either of Article 4(1) of Regulation N o 1633/84, as amended by Article 1 of Regulation N o 1922/92, or of Article 2 of the latter regulation.

«s Similarly, as regards the reimbursement of clawback unduly paid, Article 2 of Regulation N o 1922/92 provides that traders who, prior to the judgment in Lomas and Others, had initiated proceedings or made an equivalent complaint under the applicable national law in relation to the method of calculation of the amount of the clawback declared invalid by that judgment and who intend to use the method of calculating clawback laid down under the first option are required, before 30 November 1992, to give the competent United Kingdom authorities a specifi- cation of the date at which their claim commences, the amount of the clawback paid from that date until 10 March 1992 (the date on which the judgment in Lomas and Others was delivered), and the amount of 'the premium actually granted' for the same products subject to clawback, and they are required to produce 'proof satisfactory to the competent United Kingdom authorities as far as the above ele- ments are concerned'.

49 It follows that, subject to certain rules concerning time-limits, Regulation N o 1922/92 merely provides that traders must supply proof to the satisfaction of the competent United Kingdom authorities of the amount of the premium actually granted for the products concerned.

w Moreover, Regulation N o 1922/92 leaves to those national authorities the task of deciding whether the proof supplied by traders is satisfactory.

si In the absence of any Community legislation on the matter, the United Kingdom authorities must base their decision on national law, subject to the limits imposed by Community law.

55 In principle, a judgment of the Court in proceedings for a preliminary ruling declaring a Community act to be invalid takes effect, like a judgment annulling an act, from the date on which the act entered into force, with all the consequences

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which that entails, in particular, for charges levied pursuant to the measure declared invalid.

56 The Court may, however, limit in the judgment itself the temporal effects of a pre- liminary ruling declaring a Community regulation invalid, where that is justified by overriding considerations of legal certainty. That power is inferred from an interpretation of Articles 173, 174 and 177 of the Treaty, taken together, the refer- ence for a preliminary ruling on the validity of an act and the action for annulment being the two mechanisms provided by the Treaty for reviewing the legality of leg- islation.

57 It is for the Court, where it exercises the power to limit the effect on past events of a declaration in preliminary ruling proceedings that a Community regulation is invalid, to decide whether an exception to that temporal limitation of the effect of its judgment is to be made in favour of the party to the main proceedings which brought an action before the national court against the national measure imple- menting the regulation, or whether, conversely, a declaration of invalidity applica- ble only to the future is an adequate remedy even for that party.

ei O n the other hand, the Court did not set any further limits on the initiation by the traders concerned of proceedings before the national court for the reimbursement of clawback unduly paid before delivery of the judgment in the preliminary ruling proceedings declaring Community legislation invalid, and in particular it did not set limits to the period of payment of the clawback in respect of which individuals may rely upon the Court's ruling on invalidity.

62 In those circumstances, if the traders concerned are not to be deprived of the right to effective judicial protection in the event of a breach of Community law by the institutions, they must be able to rely on the invalidity of Article 4(1) and (2) of Regulation N o 1633/84 in respect of periods not only subsequent to, but also prior to, the bringing of an action or the making of an equivalent complaint, in principle as from the date on which the provisions declared invalid by the Court entered into force.

63 In the absence of Community rules on the matter, claims for reimbursement of clawback unduly charged must be made in accordance with the detailed procedural rules laid down by national law, always provided, as the Court has consistently

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held, that such rules are not less favourable than those governing similar domestic claims and are not so framed as to render virtually impossible or excessively diffi- cult the exercise of rights conferred by the Community legal system (see, for example, the judgments in Case C-338/91 Steenhorst-Neerings v Bestuur van de Berijfsvereniging voor Detailhandel, Ambachten en Huisvrouwen [1993] E C R 1-5475, paragraph 15, in Case C-410/92 Johnson v Chief Adjudication Officer [1994] ECR 1-5483, paragraph 21, and in Peterbroeck, cited above, paragraph 12.)

Question 6

' The sixth question seeks essentially to ascertain whether or not there exist substan- tive or procedural rules of Community law which national courts must take into account when ruling on an application for repayment of clawback unduly charged and, if there are no such rules, whether Community law precludes the application of rules of national law under which: the burden of proving the existence and extent of the alleged overpayment rests on the plaintiff; reimbursement of undue payments made to a public authority is possible only if they were made under pro- test; recovery of sums overpaid must not lead to unjust enrichment of the plaintiff; and action for repayment is time-barred after a given period has elapsed.

.8 With regard to the reimbursement of clawback unduly charged, Article 2(1) and (2) of Regulation N o 1922/92 contains provisions concerning the traders who are entitled to bring an action for recovery of undue payments, the amount to be reimbursed and the information to be given within a certain period to the compe- tent national authorities. Those provisions are binding on the national courts.

S9 Furthermore, Article 2(1) of Regulation N o 1922/92 expressly refers to the time- limits and procedural rules laid down under the applicable national law. Similarly, it is apparent from Article 2(2) that, subject to the rule that the burden of proof rests on the plaintiff, the detailed rules of evidence are governed by national law.

70 Accordingly, in the light of the unambiguous wording of Article 2 of Regulation N o 1922/92, the view taken by the Commission and the United Kingdom that the three-year limitation period laid down by Articles 2(2) and 14 of Council Regu- lation (EEC) N o 1430/79 of 2 July 1979 on the repayment or remission of import

74 O n the other hand, the Court has consistently held that Community law does n o t prevent a national legal system from refusing to allow recovery of sums unduly

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charged where that would involve the unjust enrichment of those entitled (see, in particular, Case 68/79 Just v Ministry for Fiscal Affairs [1980] ECR 501).

s As regards any periods of limitation or prescription which may be laid down by the applicable national law, paragraphs 63 to 65 of this judgment apply.

6 Finally, with regard to the rules governing proof of undue payment, the principles referred to in paragraphs 51 and 52 of this judgment in relation to proof of the amount of the premium apply by analogy.

THE COURT (Sixth Chamber),

in answer to the questions referred to it by the High Court of Justice, Queen's Bench Division, by order of 1 July 1994, hereby rules:

1. Consideration of the questions raised has disclosed no factor of such a kind as to affect the validity either of Article 4(1) of Commission Regulation (EEC) N o 1633/84 of 8 June 1984 laying down detailed rules for applying the variable slaughter premium for sheep and repealing Regulation (EEC) N o 2661/80, as amended by Article 1 of Commission Regulation (EEC) N o 1922/92 of 13 July 1992 amending Regulation N o 1633/84, cited above, and determining the conditions for the reimbursement of the clawback following the judgment of the Court of Justice in Joined Cases C-38/90 and C-151/90, or of Article 2 of Regulation N o 1922/92.

2. The requirement of proof laid down in Article 4(1) of Regulation N o 1633/84, cited above, as amended by Article 1 of Regulation N o 1922/92, cited above, and in Article 2 of the latter regulation, is to be interpreted as meaning that traders are required to supply proof to the satisfaction of the competent United Kingdom authorities, in accordance with national law and within the period prescribed by Regulation N o 1922/92, of the amount of the premium actually granted for products subject to clawback, provided that the applicable national rules do not affect the scope or effectiveness of Community law.

3. As regards claims for repayment of clawback unduly paid prior to 10 March 1992, paragraph 30 of the judgment in Lomas and Others (Joined Cases C-38/90 and C-151/90) is to be interpreted as meaning that traders or those

Delivered in open court in Luxembourg on 8 February 1996.

R. Grass C. N . Kakouris

Registrar President of the Sixth Chamber

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