C-346/96

8. Article 16(2) provides that the successful * Original language: French. tenderer may not unilaterally cancel the 1 — Regulation laying down general rules for the mobilisation operation for which he has been awarded the ana supply of skimmed-milk powder, butter and buttcroil as food aid (OJ 1983 L 142, p. 1). contract. Article 16(4) requires the successful

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tenderer to provide the competent bodies 10. Article 26(5) and (6) of the Regulation concerned with the necessary information as provides: promptly as possible for immediate trans­ mission to the Commission.

'5. Where, for reasons attributable to the successful tenderer, the shipment period as specified in the notice of invitation to tender 9. Article 25 of the Regulation provides that: ... has not been observed, the body con­ cerned shall withhold, for each day's delay, in proportion to the quantities not shipped:

'1 . The successful tenderer shall bear all the financial consequences of a failure to supply — 1 % of the amount of the tendering secu­ some or all of the goods on the terms stipu­ rity in the case of goods purchased on the lated, if the recipient has made supply pos­ Community market or goods manufac­ sible on such terms. tured therefrom,

15. On 7 August 1987, Prolacto advised the Agency that it was unable to carry out the 12. Two Commission Regulations provided deliveries. for the supply by intervention bodies (in the case of Belgium, the Belgisch Interventie- en Restitutiebureau, hereinafter referred to as 'the Agency') of various lots of skimmed- 5 milk powder as food aid.

16. By registered letter of 20 August 1987, the Agency informed Prolacto that, as the result of the failure to supply, the tendering The first tendering procedure securities, amounting to BFR 573 330 and BFR 667 238, would be declared forfeit, unless Prolacto paid the corresponding amounts, which it did.

13. Prolacto NV, a company governed by Belgian law (hereinafter 'Prolacto' or 'the tendering company'), submitted tenders for The second tendering procedure two lots on the final date for submission of tenders, 23 February 1987, under Regulation No 345/87. The skimmed-milk powder was to be purchased by Prolacto on the Commu­ nity market.

17. Prolacto submitted tenders for four lots 4 — Decision fixing the overall quantities of food aid and estab- under Regulation No 1358/87 on the final lishing a list of products to be supplied as aid for 1987 (OJ date for submission of tenders, 20 May 1987. 1987 L 80, p. 32). 5 — Commission Regulations (EEC) No 345/87 of 3 February The skimmed-milk powder was to be 1987 and (EEC) No 1358/87 of 15 May 1987 on the supply purchased by Prolacto on the Community of various lots of skimmed-milk powder as food aid (OJ 1987 L 34, p. 8 and L 131, p. 1). market.

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22. Although the award for the lots was made to the tenderer submitting the lowest tender, the total additional costs amounted to BFR 50 781 099, being the difference 'In the context of a tender for the supply of between the total cost of the new tendering skimmed-milk powder as food aid on the procedures for the six lots which had not basis of Commission Regulations (EEC)

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Nos 345/87 and 1358/87, of 3 February 1987 successful tenderer is liable for both obliga­ and 15 May 1987 respectively, and the asso­ tions, it should be clarified whether the two ciated tendering securities lodged pursuant amounts have to be aggregated or whether to Article 12 of Commission Regulation the tendering security must be deducted (EEC) No 1354/83 of 17 May 1983, may a from the 'financial consequences' incumbent legal person who subsequently failed to fulfil upon the successful tenderer. its obligations and did not effect delivery be also the subject of a claim for payment of compensation on the part of the Belgisch Interventie- en Restitutiebureau pursuant to Article 25(1) of Regulation (EEC) No 1354/83 when all the tendering securities The coexistence of both obligations have been declared forfeit to that agency?'

26. The question of the national court is 29. The right to recover from the defaulting essentially whether the Regulation should be successful tenderer the sum representing the interpreted as meaning that a successful ten­ 'financial consequences' referred to in Article derer who fails to carry out the contract to 25(1) of the Regulation in addition to the supply goods awarded as food aid is still tendering securities declared forfeit is clear liable for all the financial consequences, pur­ from the wording. suant to Article 25(1) of the Regulation, when the tendering securities have been declared forfeit under Article 26(6) of the Regulation.

for payment where the failure to carry out the successful tenderer's being 'released from the operation is the result of force majeure. his obligations in accordance with the second subparagraph of Article 25(1)'. The primary obligation of the successful tenderer is to supply goods to the recipient, and accord­ ingly the obligation from which the success­ ful tenderer is released and which determines 32. In this case, however, such a possibility the outcome regarding the security is not, as was expressly ruled out by the national Prolacto would have it, the obligation to court, which declared that 'the defendant 8 assume the 'financial consequences' of the was not a victim of force majeure'. failure to supply referred to in Article 25(1). When the body responsible for payment finds that the delay of the successful tenderer has exceeded a reasonable period, set in this case at three months, it will abandon its 33. Prolacto argues that the effect of Article cooperation with that tenderer for the opera­ 25 and Article 26(6) of the Regulation read tion. New tendering procedures may thus be together is that when a successful tenderer initiated in order to remedy the omissions of who has defaulted is released from his obli­ the tenderer. That is when the security is for­ gations, only the tendering security is forfeit. feit; but the successful tenderer remains The tendering security is to be substituted liable to pay the financial consequences for the financial consequences of Article under Article 25(1), as both obligations arise 25(1). It operates as a type of penalty clause, from the failure to carry out the operation. the purpose of the substitution being to pro­ tect the position of the intervention bodies, which will be compensated without having 9 to show proof of the extent of the damage.

37. It should, moreover, be emphasised that 40. The costs in question may, in fact, prove the procedure in the second subparagraph of to be considerable, as in the present case Article 25(1) does not allow any margin of where variations in market rates and new discretion on the part of the body respon­ tendering procedures have given rise to an sible for payment, which must release the additional cost of BFR 50 781 099, whereas successful tenderer from his obligations as the tendering security was set at 3 % of the soon as a period of three months has elapsed, intervention price for skimmed-milk powder with the result that the security is forfeit applicable for the quantity to which the ten­ whenever there is a delay of that length. It is der related, namely BFR 5 400 000. therefore unclear whether the forfeiture of the security was to exclude compensation for the 'financial consequences' of the failure to supply, which would explain the existence of the first subparagraph of Article 25(1), which covers exclusively compensation for the financial consequences of delays of under 41. The two provisions are not mutually three months. exclusive and the forfeiture of the security appears to me to be compatible with liability for the additional costs arising from the fail­ ure to supply.

38. I note too that the compensation payable under the above legislation arises only where there is failure to supply goods on the terms The aggregation of the amounts stipulated, which signifies ultimate failure to supply, of the kind attributable to Prolacto, rather than short delays.

46. The securities which have been declared forfeit by the Agency can only be deducted from the amount of the claim made under Article 25(1) of the Regulation if they are

49. Above all, the security becomes a pen­ 13 — Paragraphs 60 to 67 of the Commission's observations. alty when the obligation which it guarantees 14 — See, in particular, Case 109/83 Eurico [1984] ECR 3581, paragraph 19, and Case C-142/91 Cebag v Commission [1993] ECR I-553, paragraphs 11 and 12). The judgment in the second case was based on regulations adopted after Regulation No 1354/83, but the factors enabling the Court 15 — See W. Alexander, 'Perte de la caution (ou acquisition de la to reach its finding as to the contractual nature of the rela- garantie) en droit agricole communautaire', Cahiers de droit tions between the Commission and tenderers is to be found européen, 1988, No 4, p. 384, I B. in the present relevant legislation. As in the first case cited, the determination of the supply price in terms of the ten- 16 — Case 288/95 Piange Kraftfutterwerke [1987] ECR 611, derer's tender and its acceptance by the Commission within paragraph 10. See also, for example, Case 11/70 Internatio- the meaning of Article 11(4)(e), Article 13(1) and Article nale Handebgesellschaft [1970] ECR 1125, paragraph 6, and 14(1) of the Regulation is consistent with contractual rela- Case 137/85 Maizena [1987] ECR 4587, paragraph 22. tions. 17 — Article 11(6)(b) of the Regulation.

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50. This characterisation is still more appar­ ent in the Maizena case, referred to earlier. 52. Consequently, Prolacto's qualification of The Court was asked for a ruling on the the security as a penalty clause, in particular validity of a Community regulation requir­ because it is a fixed sum of money by way of ing the provision of a fresh security in order indemnity, cannot be upheld. The fact that, to guarantee compliance with the obligation nevertheless, as in a penalty clause, the secu­ imposed on the holder of an export licence rity is fixed at a standard rate 24 indicates that to export products within the period of it is a penalty, a penalty being by definition a validity of the licence. Under the relevant sum bearing no relation to the extent of the system '... the security is released, at the damage. request of the person concerned, even though the obligation to export has not been fulfilled and thus continues to exist, [and] ... the fresh security must be provided, and is forfeited if it subsequently emerges that the obligation to export was not complied with during the period of validity of the export licence'. 21 53. On the contrary, the first subparagraph of Article 25(1) of the Regulation indicates the intention of the Community legislature to guarantee compensation for the whole of the damage suffered as the result of failure to deliver food aid. 51. The Court held that '... the provision of fresh security in the place of security which

22 — Paragraph 12. 23 — The application of this characterisation here is not affected 18 — See W. Alexander, cited above, III H. by the fact that the security was forfeited after fresh secu- rity had been provided, the situation where a fresh security 19 — See Case C-2/93 Exportslacbterijen van Oordegem [1994] is provided being no different from the situation where a ECR I-2283, paragraph 22. security has never been released. 20 — See in particular Case C-326/94 Maas [1996] ECR I-2643, 24 — It should be noted that the security is fixed and calculated paragraph 36. beforehand as a proportion of the intervention price of the 21 — Paragraph 11. goods in question.

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