C-104/97

ATLANTA V EUROPEAN COMMUNITY

OPINION OF ADVOCATE GENERAL MISCHO delivered on 6 May 1999 *

1. Atlanta AG (hereinafter 'the appellant') tion of the market in the banana sector is asks the Court to set aside the judgment of unlawful under Community law, on the the Court of First Instance in Case ground that the Dispute Settlement Body of T-521/93, 1in which that Court dismissed the World Trade Organisation (WTO) its claim for damages under Article 215 of found, in its decision of 25 September the Treaty. The appellant advanced before 1997, that Regulation No 404/93 was to the Court of First Instance a series of a great extent incompatible with WTO arguments on the basis of which it con- rules. sidered the Community to be under an obligation to compensate it for loss alleg- edly incurred by it as a result of the application of Council Regulation (EEC) No 404/93 of 13 February 1993 on the 4. In the view of the appellant, this deci- common organisation of the market in sion, which is binding on the Community, bananas. 2 means that the latter should suspend appli- cation of the common organisation of the market. It is, furthermore, a new fact on the strength of which the Court of Justice should set aside the contested judgment 2. The Court of First Instance having and refer the case back to the Court of First dismissed its action, the appellant has Instance. brought an appeal based on six pleas which I shall examine in turn.

5. The appellant does not reiterate, in the claims set out in its reply, the alleged Plea based on the decision of the Dispute obligation on the Community immediately Settlement Body of the World Trade Orga- to suspend application of Regulation nisation (WTO) No 404/93, but confines itself to repeating the claims contained in its application seeking to have the contested judgment set 3. In its reply the appellant contends, for aside and the case referred back to the the first time, that the common organisa- Court of First Instance.

11. For this to be the case, however, the appellant would still have had to raise such a plea in its notice of appeal, which it did not do. 7. As regards the appellant's claim for the contested judgment to be set aside on the grounds of the WTO decision, it must be pointed out first of all that it was made in the context of an appeal. 12. Nothing prevented the appellant from challenging, in its appeal, the finding of the Court of First Instance that Atlanta could not rely, in any way whatsoever, on provi­ sions of the General Agreement on Tariffs 8. Under Article 168a of the EC Treaty and Trade (hereinafter 'GATT'). (now Article 225 EC), appeals are limited to points of law. In the instant case, there­ fore, it is necessary to examine whether or not the Court of First Instance infringed Community law in not taking into con­ 13. It could have contended, inter alia, as sideration the binding nature of the WTO the Council explained at the hearing, that rules, as interpreted by the WTO decision the contested judgment should have taken of 25 September 1997. account of the implications of the replace­ ment of GATT by the WTO Agreement, and in particular of the strengthening of the provisions on the settlement of disputes.

9. As this decision arose after the contested judgment, the latter clearly cannot be found at fault for having not taken it into account. 14. Whatever view one takes, the WTO decision therefore has no relevance what­ soever to how the Court of Justice must assess the merits of the appeal.

10. The decision could however, even though it occurred after the contested judgment, be a further argument in support 15. Nor can the appellant rely on Arti­ of a plea now submitted that the Court of cle 42 of the Rules of Procedure of the First Instance erred in refusing to find that Court of Justice, which provides that no

19. The appellant stresses, however, that it is not basing its case on a possible breach of substantive GATT provisions or those of WTO. The plea raised is in its view of a different kind and much more limited; it is based on the fact that decisions of the 22. It is apparent from the foregoing that WTO Dispute Settlement Body are binding this plea is inadmissible.

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23. As a secondary point I would comment, therefore arise as to whether the decision in passing, that the plea would in any event were such as to afford to individuals the be unfounded. The appellant could not protection which the appellant is claiming. profitably set up the incompatibility of Regulation No 404/93 with the WTO Agreement to contest the reasoning of the Court of First Instance. The latter, basing itself on the judgment of the Court of Justice 3 in the action for annulment brought by the Federal Republic of Ger­ 26. Given the characteristics of the WTO many against the same regulation, held that dispute settlement regime, this question the appellant could not plead any breach of must be entered into, even without its GATT. It was not therefore required to being necessary to decide whether the determine whether there was such a breach case-law of the Court of Justice on the in the case before it and did not address the possibility of relying on GATT provisions issue. should be applied by extension to the WTO Agreement.

24. What is more, if even one were obliged, which one is not, to follow the appellant's interpretation and accept that the plea of failure to observe the decision of 25 Sep­ tember 1997 cannot be considered to 27. It is clear from the provisions of the amount in fact to a claim that Regulation WTO Understanding on Rules and Proce­ No 404/93 is incompatible with the WTO dure Governing the Settlement of Disputes Agreement as such and that it could not that a decision of the Appellate Body does have been raised before the decision of the not impose on the party whose legislation is Dispute Settlement Body, this would not found to be contrary to WTO provisions a assist the appellant's case. duty immediately to amend that legislation.

33. The appellant considers that the Court 29. Under Article 22 of the dispute settle- of First Instance wrongly dismissed as ment understanding, the market regula- inadmissible, on the grounds that it was tions in question could moreover be out of time, its plea of liability for a lawful retained for a longer period, provided the legislative act. parties to the dispute settlement enter into an agreement on compensation. Failing such an agreement, maintenance of the regulations is still not excluded, but it becomes a possible ground for retaliatory measures by the aggrieved party. 34. It points out, firstly, that it had already advanced this argument in its application in pleading that it was subject to exceptional burdens ('Sonderopfer'). This, it argues, was not therefore a new plea and should 30. Clearly, therefore, the rights which a have been considered by the Court of First decision of the Appellate Body would Instance. intend to confer on individuals have nowhere near the scope which the appel- lant seeks to give them.

37. This is particularly clear at paragraph 40. In the present case the appellant, not 372 of the application, to which the content with pleading a different ground of appellant and the French Government illegality, abandons all reference to the make reference. As pointed out by the concept of illegality in order to try to found latter, this is the only passage relating to the liability on a lawful act. Community's liability in the application which makes reference to the concept of 'Sonderopfer', and it is headed 'serious infringement of the law' in the chapter on the 'unlawful conduct of the Council and the Commission'. Furthermore, in that 41. Since the Court of Justice has held that passage the appellant stresses precisely the even raising a different ground of illegality fact that the damage caused, being in the falls within the prohibition on submitting nature of an exceptional burden, was new pleas, it is all the more evident that the unlawful, not the possibility that it could prohibition applies to an argument which constitute the basis for liability for a lawful changes the basis of the alleged liability and act. abandons all reference to possible illegality.

38. The appellant avers, further, that its submission cannot be held to be a 'new plea 42. The appellant argues, none the less, in law' as referred to in Article 48(2) of that liability for a lawful act and liability Rules of Procedure of the Court of First arising from an unlawful act are so similar Instance and Article 42(2) of the Rules of that it is not possible to speak of a new plea Procedure of the Court of Justice, but at the in law in this context. very most a new argument in support of a plea already raised, and that it is therefore admissible.

52. It maintains that this provision is intended, on the one hand, to prevent 47. Liability for a lawful act, on the other procedural time-limits from being circum- hand, arises solely from the fact that the act vented, and, on the other, to ensure that no has given rise to specific damage, and it is party's rights are jeopardised. In the present the nature of this damage which forms the case, however, no time-limit would, in the basis of the liability, no unlawful act being appellant's view, have been circumvented as required. it could still have brought a new action based on liability for a lawful act. Allowing it to submit this plea in these proceedings is therefore, in its view, not only possible but even desirable in terms of economy of procedure. 48. As the Commission has remarked, these two forms of liability are therefore mutually exclusive, and not complemen- tary, as the appellant suggests.

53. Nor, it claims, would the position of the defendants have been affected.

49. I would add that, as the Council has observed, the written submissions of the appellant itself shows that it does not always conceive the concept of a plea so 54. This line of argument amounts to broadly: it itself rightly describes as inde- justifying the introduction of a plea at the pendent pleas the various principles which reply stage on the ground that there are still it claims have been breached. the rejoinder and the hearing in which the

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61. I am not convinced by the appellant's line of argument. Plea of breach of the rights of the defence

57. The appellant's arguments on this point 62. The fourth paragraph of Article 173 of reveals that, just as it does not distinguish the EC Treaty (now, after amendment, between liability for an unlawful act and Article 230 EC), which it cites in support no-fault liability, it does not dwell on the of its contention, does not bolster its

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argument. That provision lays down the tion and the act in question becomes a principle that an individual can only insti- different one. Infringement of its rights is tute an action for annulment against an act no longer an individual infringement such of direct and individual concern to that as to enable the undertaking to be consid- individual. ered to be like a defendant in administra- tive proceedings and thus to enjoy the rights of the defence.

70. This plea also should therefore be 66. On the other hand, where an under- dismissed. taking is affected by a legislative act which affects all operators in the same category alike, the link between its individual situa- 6 — Not published in the ECR.

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Plea of breach of the principles of non­ 74. In any event, the Council is correct in discrimination and of freedom to pursue an pointing out that the reasoning set forth economic activity above amounts in practice to claiming no- fault liability on the part of the Commu­ nity: in both cases there would be a lawful legislative act which would none the less produce an obligation to pay compensa­ 71. The appellant maintains that the Court tion. In its view, this ensues, in one case, of First Instance should have found that, directly from the fact that the damage even if Regulation No 404/93 was, to use arises from its exceptional burden and, in the appellant's expression, valid in the the other, indirectly from that fact, since the abstract, application of the regulation to exceptionally onerous nature of the damage its specific circumstances was nevertheless would render application of Regulation unlawful because it infringed the principles No 404/93 to the appellant unlawful and of non-discrimination and of freedom to therefore entail liability on the part of the pursue an economic activity. legislature.

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whether the specific and individual appli- possible to ascertain in advance whether or cation of the contested provisions to the not the aforementioned provisions com- specific and individual circumstances of an plied with fundamental rights. individual is compatible with the funda- mental rights of that person.

82. It is inconceivable for a regulation to be valid in the abstract but not so when 78. As the Commission observes, it is applied to a specific context. correct to say that the protection of funda- mental rights can been seen as operating on two levels.

83. A finding by the Court of Justice that a regulation complies with a particular super- ior rule of law is not so abstract that the 79. First, fundamental rights bind on the same regulation could, when it comes to be legislature at the time of adoption of the applied, give rise to infringement of that legislative act. They then bind the autho- same rule. Were this to be the case, it is rities responsible for implementing the hard to see what sense there would be in legislation. the Court's finding which would be so abstract as to be in reality meaningless.

80. Even where its provisions comply with fundamental rights, it may still happen that 84. The principles invoked in the present individual acts applying the legislation case by the appellant are a perfect example taken by the authorities responsible for its of this. To take the principle of non- implementation contravene fundamental discrimination, for example, the Court of rights. It is against those acts that the Justice found that Regulation No 404/93 individual should take action to have them was not in breach of this principle. declared invalid.

92. In the present case, however, the appel­ lant has not put forward, nor is it able to Plea of breach of the principle of protection put forward, any evidence of such conduct of legitimate expectations by the legislature. On the contrary, the very wording of the 'Banana Protocol', annexed to the Implementing Convention on the Association of the Overseas Countries and Territories with the Community and an 89. The appellant's arguments concerning integral part of the Treaty, confirms the breach of the principle of protection of transitional nature of the Protocol. Nor legitimate expectations reveal an interpre­ could operators have ever been in any tation of the nature of that principle at doubt as to the fact that completion of odds with that discernible from the case- the internal market would necessarily entail law of the Court of Justice. the end of arrangements for the import of

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bananas differing from one Member State Plea of alleged unlawful delegation of the to another. Council's legislative power to the Commis- sion

95. In any event, as has been seen, it advances no argument enabling it to be 'As regards the plea of breach of the concluded that there was any conduct by provisions relating to the legislative proce- the legislature covered by any of those dure, the applicants maintain in substance expressions. that the Council did not respect the Com- mission's right of initiative and that the Parliament ought to have been consulted 7 — See the judgment in Case C-280/93 Germany v Council, again after the Commission's initial propo- cited above, paragraph 80. sal had been amended'.

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99. Quite clearly, even though this descrip­ all their pleas. They added, it is true, that tion is qualified by the term 'in substance', they were going to 'concentrate' on four of it cannot be found to contain any reference them. This likewise implies, at the same whatsoever to the plea raised by the time, that they were retaining the other appellant. pleas.

100. The Court of First Instance's consid­ 103. In my view, the Court of First Instance eration of this plea refers only, at paragraph was therefore wrong not to address the plea 77 of its judgment, to Case C-280/93 of alleged unlawful delegation of the Germany ν Council, paragraphs 27 to 43 Council's power to the Commission. The inclusive. These deal with three issues: contested judgment should therefore be set breach of the Commission's right of initia­ aside in so far as it concerns Atlanta, the tive, failure to give reasons and the fact that only one of the applicants to have lodged there should have been fresh consultation an appeal. of the Parliament.

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Community' and have 'marketed on their cial risk of marketing bananas and by the own account a minimum quantity of bana- necessity of avoiding disturbing normal nas of the above origins, to be determined'. trading relations between persons occupy- ing different points in the marketing chain'.

107. These origins derive in particular from 110. The Council has therefore complied the 13th recital in the preamble to Regula- with its obligations as legislature since it tion No 404/93 which provides that 'a did define the basic elements of the matter distinction must be made when administer- to be regulated, as it is bound to do ing the tariff quota between, on the one according to case-law. 9It merely conferred hand, operators who have previously mar- on the Commission power to implement keted third country bananas and non- the rules laid down by it, in accordance traditional ACP bananas and, on the other, with Article 145 of the EC Treaty (now operators who previously marketed bana- Article 202 EC). nas produced in the Community and tradi- tional ACP bananas while leaving a quan- tity available for new operators who have recently embarked on commercial activity or are about to embark on commercial 111. It must, therefore, be concluded that activity in this sector'. this plea cannot found the appellant's action either.

1 0 8 . A r t i c l e 15(5) of R e g u l a t i o n No 404/93, as in force at the time when the action was commenced, defines 'mar- The other conditions to be satisfied in order keting' as placing on the market, not for the Community to incur non-contrac- including making the product available to tual liability the final consumer.

119. I would add that the fact, put forward Facts adduced by the appellant by the appellant, that the interpénétration of the markets sought by the legislature has not occurred is not of itself such as to call into question the validity of Regulation 115. The appellant lays a degree of empha­ No 404/93, in the absence of any manifest sis on a number of facts which it considers error of assessment on the part of the to be specific to its situation. Whilst not legislature. Provided that the measures expressly basing a ground of appeal on adopted by the latter are not vitiated by them, it seems nevertheless to be criticising any such error, the fact that they did not the Court of First Instance for not taking have the desired effect does not affect their them into consideration. Validity.

116. I should point out here that, contrary to what is stated by the appellant, these 120. Finally, it should be noted that the facts are not undisputed. The French Gov­ appellant considers that part of the market ernment expressly contests both the very is closed to it owing to the existence of existence of damage and the fact that it is long-term delivery agreements. This con- specific to the applicants in the action sideration, likewise, cannot affect the valid- before the Court of First Instance, com­ ity of Regulation No 404/93, but may well, pared with all other importers of 'third on the other hand, fall within the scope of country' bananas, and, again, the causal application of the Treaty rules on competi- link with the adoption of Regulation tion, of which fact, it may be assumed, the No 404/93. appellant is aware.

— Atlanta AG is ordered to pay costs.

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