C-433/97

IPK V COMMISSION

OPINION OF ADVOCATE GENERAL MISCHO delivered on 11 March 1999 *

1. The present case concerns aid of ECU project and by 31 October 1993 at the 530 000 which the Commission granted to latest. The declaration stipulated that the support a project to create a database of latter date was a compulsory time-limit in information on ecological tourism in Eu- the context of the budgetary rules of the rope, known as 'Ecodata', proposed by the Communities. Finally, the declaration sta- appellant, the undertaking IPK-München ted that failure to observe the time-limits GmbH (hereinafter 'IPK'). laid down for the submission of reports and necessary documents would amount to a renunciation of the right to payment of the balance of the aid.

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report by 15 January 1993. In the same investigations concerning the matters for letter, the Commission also asked the which he had been responsible. The dis- appellant to submit two additional interim ciplinary procedure resulted in the dismis- reports by 15 April and 15 July 1993, sal of Mr Tzoanos. In contrast, no irregu- respectively. Lastly, it repeated that the larities were revealed by the internal inves- final report was to be presented by tigation concerning the administrative pro- 31 October 1993 at the latest. cedure which had resulted, in August 1992, in the grant of aid to the Ecodata project.

9. By letter of 30 November 1993 the Commission informed the appellant that it 6. A few days after the meeting on 19 Feb- considered that the final report showed that ruary 1993, the Ecodata project case was the work completed by 31 October 1993 withdrawn from Mr Tzoanos. A disciplin- did not satisfactorily correspond with what ary procedure was subsequently initiated was envisaged in the appellant's proposal of against Mr Tzoanos, together with internal 22 April 1992. The Commission therefore

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refused to pay the outstanding 40% of the 14. The appellant claims that the Court ECU 530 000 which it had proposed for the should: project.

(1) set aside the Court of First Instance's 10. Since it considered that it had suffered judgment of 15 October 1997 in Case serious loss as a result of the Commission's T-331/94 and annul the Commission's decision not to pay the second instalment decision of 3 August 1994 to refuse to of the aid which had been granted to it by pay the second instalment of the aid the letter of 4 August 1992, the appellant granted to the appellant by its letter of brought an action seeking to have the 4 August 1992; aforementioned decision set aside.

(2) in the alternative, set aside the afore­ 11. The appellant raised two pleas in law mentioned judgment of the Court of before the Court of First Instance. The first First Instance and refer the case back to alleged infringement of the principles of that court; legal certainty and the protection of legit­ imate expectations. The second plea alleged that the decision was based on inadequate reasoning. (3) order the Commission to pay the costs.

16. In support of its appeal the appellant relies on six pleas in law, of which I shall 'The proposal did not make clear where the examine initially the second, third and information for the network was to be fourth pleas. derived from, but the Commission would prefer that this information is drawn from all member states; the latter, however, was not a formal obligation.' In those circum- stances, the appellant holds the view that the Court of First Instance should have examined whether there had been infringe- ment of the principle of the protection of legitimate expectations or of the principle of estoppel. Thus, the appellant contends, The second plea since the Commission agreed to modifica- tion of the conditions for grant of the aid, those principles prevent it from now criti- cising the appellant for failing to comply with the initial conditions under which the aid was granted. 17. The second plea alleges 'infringement of the obligation to state reasons, and failure to take into consideration Mr Tzoa- nos' remarks of 19 February 1993'. 19. The Commission considers, first, that this plea is in fact raised against the finding of fact by the Court of First Instance that the project had been only partially com- pleted, and that it therefore, must be rejected as inadmissible.

18. The appellant contends that the Court of First Instance erred in failing to take into consideration remarks by Mr Tzoanos made in the course of a meeting attended 20. I do not share that view. The plea under by representatives of the Commission, the examination concerns in fact the issue four partners in the project and Studien­ whether the disputed remarks were capable kreis für Tourismus, to the effect that the of modifying the conditions under which Commission agreed that the project should the aid was granted. The question whether cover only four Member States instead of or not the conditions in question were 12. It considers these remarks to be satisfied, and in particular whether the evidence that the project had been mod- project was completed, given those condi-

27. The appellant can, indeed, reasonably deduce from this, as the only possible 23. The latter contends, moreover, that the implication, that the Court of First Instance remarks in question carry no legal weight rejected its argument that the conditions and merely suggest that the appellant under which the grant was made had been proposed partial performance which did not at all entitle it to the full amount of the financial assistance envisaged. 3 — Paragraph 41 of the contested judgment.

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modified, since the Court confined itself to ification of which it had previously examining whether the initial conditions accepted. were satisfied.

28. The words which the Court of First 32. I therefore consider the appellant's Instance used, however, do not afford the second plea to be well founded. appellant, nor, furthermore, the Court of Justice, called upon to exercise its review function, the slightest possibility of identi­ fying the grounds on which the Court of First Instance rejected the appellant's argu­ ment on this point. The third plea

29. It is true that the appellant explicitly set forth its argument based on Mr Tzoanos' 33. By its third plea, the appellant contends remarks only at the reply stage, in response that the Court of First Instance based itself to the Commission's defence. on inaccurate facts.

36. According to settled case-law, a finding granted until 13 March to settle the matter of fact by the Court of First Instance of the sharing of tasks. cannot, prima facie, be reopened on appeal. There is, however, an exception to this principle where the finding is vitiated by a manifest error of assessment. This occurs, in particular, where a finding of fact by the Court of First Instance is contradicted by 40. One could argue that, since it related to the case documents. 4 participation by a third party undertaking, this second meeting was not part of any negotiations 'with its [the appellant's] part­ ners', to use the Court of First Instance's own words. 37. So, it can be seen from those docu­ ments that, in November 1992 and Febru­ ary 1993, the appellant attended meetings held first and foremost to decide funda­ mental aspects concerning the distribution of tasks between the various participants in 41. It seems to me incontrovertible, how­ the project. ever, that, since negotiations on participa­ tion by a third party undertaking concerned the distribution of tasks relating to a specific project and, consequently, of funds which were themselves fixed, they necessa­ rily fall within the ambit of distribution 38. The first meeting thus addressed the between the original partners. distribution of tasks between the appellant and the Greek undertaking 01-Pliroforiki, and was followed by at least one commu­ nication in writing by the appellant in January, regarding the distribution of tasks. 42. The documents submitted to this Court therefore clearly show that there were negotiations on the distribution of tasks in the context of the project which involved 39. The purpose of the February meeting the appellant and which took place prior to was essentially to define the terms of March 1993, the date taken into account participation of an undertaking by the by the Court of First Instance. name of 'Ecotrans', which did not feature in the appellant's proposal, but which the Commission wished to have participate in the project. The minutes of the meeting stated, furthermore, that the appellant was 43. The fact that these meetings were convened, it would appear, at the initiative 4 — See, for example, the judgment of the Court of Justice in Case C-136/92 Ρ Commission ν Brazzelli Lualdi [1994] of the Commission and not of the appel­ ECR I-1981. lant, does not at all alter the fact that they

The fourth plea

52. I share the Commission's conclusion 47. IPK considers that the Court of First that, contrary to what the appellant asserts, Instance erred in law in taking 31 October one cannot deduce from the content of this 1993 as the deadline for delivery of the letter that the Commission had decided to final report. postpone the starting date of the project.

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That letter does not in fact refer to the to interference by the Commission. The 15 October date unconditionally, qualify- latter therefore, in the appellant's view, ing it as it does with the phrase 'for the infringed the principle of good faith and purposes of this exercise', namely, for committed an abuse of rights by requiring 'monitoring' purposes. the appellant to comply with a deadline which its own conduct rendered impossible to meet.

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the Court of First Instance rendered mean­ facie evidence that actions by the Commis­ ingless the limits, which the prohibition on sion, the occurrence of which was men­ the abuse of rights imposes on the Com­ tioned by that court, had a detrimental mission. effect on the running of the project.

64. According to generally accepted prin­ ciples on the subject, this prima facie 60. It is true that, by obliging the appellant evidence, far from being of no conse­ to prove the impossibility of any coopera­ quence, as the Court of First Instance tion with its partners, the Court of First appeared to believe, has the effect, on the Instance required it to prove a negative. contrary, of reversing the burden of proof.

65. Once the appellant produced evidence making it possible to think that the alleged 61. What seems to me more conclusive, conduct of members of the Commission however, is the fact that the Court of First staff may have impacted on the smooth Instance itself found that the appellant had running of the project, it fell to the provided evidence of interference by Com­ Commission, then, to bear the burden of mission officials in the management of the proving that, despite the conduct in ques­ project. What is more, it even went so far as tion, the appellant remained fully able to to describe as 'disturbing' the manner in manage the project in a satisfactory man­ which this interference occurred. ner.

66. This is indeed true since, apart from the 62. I consider, therefore, that it was incum­ evidence indicated by the Court of First bent on the Court of First Instance to draw Instance, the appellant also relies on the from this finding what seem to me to be the fact, which is not disputed, that, for a inevitable conclusions as regards the bur­ project which was supposed to last 15 den of proof. months and end in October 1993, the Commission did not pay the first instal­ ment of the aid at issue until January 1993.

73. The appellant relies on the following arguments to seek annulment of the con- 69. Since the Court of First Instance relied tested decision. on this finding, even if it did not state precisely why it considered it to be foun- ded, it must be concluded that the position of the appellant was altered and that the plea alleging infringement of the law relat- 74. It considers that the Commission con- ing to the burden of proof must be upheld. tracted an undertaking to pay to it the funds envisaged in the context of the decision to grant the aid and that none of the arguments advanced by the Commis- sion enable it to avoid this obligation. 70. It is therefore unnecessary to examine the appellant's arguments to the effect that the Court of First Instance infringed the rules on evidence and failed in its duty to investigate the matter by rejecting the 75. In particular, the appellant points out, appellant's request for production of docu- first, that the Commission's powers of ments by DG XXIII, whilst at the same control were confined merely to monitoring time finding against it in relation to the utilisation of the funds, and that the burden of proof. Commission's assertions as regards this utilisation, are, in its view, easily refuted.

71. Since these three pleas must, in my 76. Given the imperative restrictions on the view, be upheld, there is no need to Commission's powers of control under the examine the others. rules on aid, the Commission was not, to

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the appellant's understanding, entitled to fact that the project was incomplete as at refuse to make the payment on the ground 31 October 1993, and, according to the of material shortcomings affecting the Commission, that is the only relevant project. criterion to determine whether or not the balance of the aid is payable since, by signing the aid declaration, the appellant undertook to complete the project by that date, on pain of renouncing the right to 77. What is more, according to the appel­ that payment. lant, even on the assumption that the Commission could, in theory, have relied on such arguments, they are, in the present case, unfounded.

79. In support of its argument the appellant 83. The appellant signed and returned the asserts, in particular, that the delay in declaration on 23 September 1992 — not, implementing the project was caused by moreover, indicative of any great prompt­ the Commission's conduct which, it claims, ness on the part of an undertaking in 'greatly hindered and disrupted its work'. receipt of Community aid. As apparent from paragraph 19 of the Commission's rejoinder submitted to the Court of First Instance, the letter was registered in the incoming correspondence section of D G 80. The Commission is therefore not enti­ XXIII on 29 September 1992 and allocated tled, the appellant argues, to rely on the to Mr Tzoanas. Nothing then happened for 31 October 1993 deadline, which its own two months. The Commission explains in actions rendered impossible to meet, and it detail the reasons for this inaction, which it was legitimate for the appellant to believe attributes exclusively to the deliberate that the performance of the project and behaviour of the official concerned. In therefore the deadline had been postponed. November, the appellant contacted the Commission to enquire about payment of the first instalment. As from that moment, as the Commission continues to explain, the payment procedure was set in motion 81. The principal justification which the and the payment was made in January Commission gives for its decision lies in the 1993, on an unspecified date.

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IPK V COMMISSION

84. Three months had therefore already as has been seen, was in fact made only in elapsed since the date on which IPK January. returned its duly signed acceptance declara- tion, and the undertaking had not received the first instalment, which was, however, under the provisions of that declaration, to be paid as soon as the Commission received the signed declaration.

86. It is true that the call for proposals stipulated that the projects selected would last a year.5 The Commission did, none the less, accept the appellant's proposal, includ- ing the express reference to the 15-month project period. 89. In the specific context of the appellant's project, the meaning of this document is unclear. Given the fact that, as has been seen, the Commission agreed that the project would take fifteen months, should one understand therefore that this letter postponed the project starting date to 87. The declaration made perfect sense in 15 October 1992, in which case the com- August 1992, when it was sent to the pletion date should logically have been put appellant for acceptance. It no longer made back to 15 January 1994. Or should one sense, on the other hand, when the Com- lay emphasis on the last sentence and, mission eventually made the first payment accordingly, understand that the deadline due under that declaration. That payment, remained 31 October 1993, in which case the project should have been deemed to have started on 1 August 1992, that is, five 5 — OJ 1992 C 51, p. 15. months before payment of the aid and even

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before the appellant had returned the was in a position to take the work forward declaration ? regardless, using its own resources.

96. In those circumstances, the Commis- 93. In the present case, however, so much sion was not entitled to assume that the time elapsed that it ceased to be possible to undertaking would quite calmly use its own assume that the beneficiary undertaking resources in carrying out the project, nor

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IPK V COMMISSION

that it would be in a position to progress that sure that IPK would have worked more the work at the pace initially envisaged. quickly in any event.

97. Before the Court of First Instance, the Commission asserted that, even disregard- ing the issue of including Ecotrans, IPK The outcome of this is that we have had a failed, from the outset, to demonstrate the delay of some 5 months out of approxi- required degree of diligence. mately 14. In the circumstances I think it is most unlikely that the deadline of 31 October for completion of the contract can be achieved.

98. As to the merits of this argument, it is, however, discernible from the assessment made by the Commission director respon- sible, in an internal note of 25 February 1993 annexed to the appellant's reply, that he was aware of the fact that not all responsibility for the delay in the perfor- I would like if possible to be able to give mance of the project could be imputed to some indication before 13 March that we the appellant, and that the Commission can extend the date. Apparently, however, faced a veritable dilemma. After pointing if we do so we will loose the balance of the out that the first payment had been late, the subsidy (approximately 240 000 ECU) as director stated the following: we will not pay it in this year. This may however be preferable to forcing the part- ners to attempt to meet the deadlines which seem totally unrealistic.

99. My view is that the Commission should 102. Since the action seeks only annulment indeed have sought a solution of this kind. of the decision to refuse to pay the balance, it is not for me to examine the arguments raised in the context of a possible decision 6 — (French translation included here in the original tej requiring reimbursement.

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IPK V COMMISSION

Conclusion

103. It thus follows from the foregoing that, by considering that the project should be completed by 31 October 1993, whereas payment of the aid did not take place as soon as the acceptance declaration was received, and by continuing until as late as February 1993 to press for the list of participating enterprises to be changed, the Commission departed from its own decision to grant financial assistance. By doing so, it also infringed the principle patere legem quam ipse f ecisti and the principle of good faith. 7 Given that the Commission's defence has in my view been unsuccessful, I propose, also, that it be ordered to pay costs.

7 — Judgment in Joined Cases 43/59, 45/59 and 48/59 Von Lachmüller, Bernard Peuvrier and Roger Ehrhardt ν Commission of the European Communities [I960] ECR 463, and, especially, p. 474 et seq.