C-172/97

COMMISSION V SIVU AND HYDRO-RÉALISATIONS

JUDGMENT OF THE COURT (Third Chamber) 10 June 1999 *

In Case C-172/97,

Commission of the European Communities, represented initially by Richard B. Wainwright, Principal Legal Adviser, and Jean-Francis Pasquier, a national civil servant on secondment to the Legal Service, acting as Agents, assisted by Nicole Coutrelis and Stéphanie Ponsot, of the Paris Bar, and subsequently by Richard B. Wainwright and Olivier Couvert-Castéra, a national civil servant on secondment to the same service, acting as Agents, assisted by Nicole Coutrelis, with an address for service in Luxembourg at the office of Carlos Gómez de la Cruz, of the same service, Wagner Centre, Kirchberg,

applicant,

v

JUDGMENT OF 10. 6. 1999 — CASE C-172/97

APPLICATION by the Commission of the European Communities under Article 181 of the EC Treaty (now Article 238 EC) seeking recovery of an advance of ECU 83 928 paid by the Commission for completion of a project entitled 'Plan d'eau sur le Lot. Intégration d'une microcentrale hydroélectrique basse chute dans le seuil', (Stretch of water on the River Lot — Incorporation in the barrage weir of a small low-head hydro-electric power station), together with interest as agreed in the contract at the rate applied by the European Monetary Cooperation Fund for its transactions in ecus published on the first working day of each month as from 17 January 1991 and interest at the legal rate determined annually by decree published in the Journal Officiel de la République Française as from 28 February 1993,

THE COURT (Third Chamber),

composed of: J.-P. Puissochet (Rapporteur), President of the Chamber, J.C. Moitinho de Almeida and C. Gulmann, Judges,

Advocate General: S. Alber,

Registrar: R. Grass,

2 On 6 December 1990 the European Economic Community, represented by the Commission, entered into a contract (No HY 84/89 FR; 'the contract') with SIVU and Hydro-Réalisations acting jointly and severally ('the contractor') under which the Community was to provide financial support for the contractor in return for an undertaking to construct a weir with a small low-head hydro- electric power station on the River Lot.

3 The financial support was granted in accordance with Council Regulation (EEC) No 3640/85 of 20 December 1985 on the promotion, by financial support, of demonstration projects and industrial pilot projects in the energy field (OJ 1985 L 350, p. 29). I - 3377

JUDGMENT OF 10. 6. 1999 — CASE C-172/97

4 Under Clause 4.3.2 of the contract, the contractor was required, initially within three months of signature of the contract and thereafter every six months, to prepare interim progress reports containing statements of expenditure incurred.

5 Under the first paragraph of Clause 9 of the contract the latter 'may be terminated by any of the contracting parties subject to two months' notice if continuance of the work programme set out in Annex I has been deprived of its purpose, in particular where it becomes apparent that the work programme will become technically or economically unfeasible or if the estimated cost of the project is exceeded by an unreasonable amount'. In such a case, the third paragraph of Clause 9 of the contract stipulates that 'if verification of the amounts paid by the Commission reveals that the contractor has been overpaid, the latter shall reimburse the Commission immediately the excess, together with interest from the date of the completion or cessation of the works which are the subject of this contract'.

1 1 On 6 November 1992 SIVU informed the Commission that the project had been altered in order to take account of observations which had been made inter alia by environmental protection associations, and that the construction of the small hydro-electric station had been abandoned in favour of a spill-weir. In consequence it no longer required financial support from the Community and had decided to reimburse the advance it had already obtained.

12 By letter of 18 November 1992 the Commission informed SIVU that it was terminating the contract in accordance with Clause 9, and asked it to effect reimbursement of the ECU 83 928 advanced together with interest from the date on which that sum had been received. On 8 December 1992 it issued a debit note against SIVU for the amount of the advance, together with interest, payable by 28 February 1993.

13 Since SIVU did not comply with that request, or with subsequent requests to repay the advance sent to it by the Commission on 27 January 1994, 1 June 1994, 31 October 1994 and 12 October 1995, the Commission brought this action. I - 3379

JUDGMENT OF 10. 6. 1999 — CASE C-172/97

14 The Commission's application was duly notified to SIVU and to Hydro- Réalisations. SIVU did not reply; the court-appointed representative of Hydro- Réalisations informed the Court that the company had been placed in liquidation by judgment of the Tribunal de Commerce of Rodez of 13 February 1992 and that there was no hope of obtaining recovery of unsecured debts.

15 The Commission has asked the Court to give judgment by default in accordance with Article 94(1) of the Rules of Procedure of the Court of Justice on the ground that neither of the defendants submitted a defence within the time-limit.

19 The third paragraph of Clause 9 of the contract provides that in the event of termination, if verification of the amount paid by the Commission revealed that the contractor had been overpaid, the latter was to reimburse the Commission immediately.

20 From the information supplied by the Commission it appears that the contractor received on 17 January 1991 an advance of ECU 83 928 and that the work it completed related to stages I and II of the project, expenditure which was not eligible for Community financing, in accordance with Table 2 of Annex I to the contract. In its letter of 6 November 1992 informing the Commission that the project to construct a small hydro-electric power station was being abandoned, SIVU stated in any event that it had decided to reimburse the whole of the advance it had received.

21 Consequently, the Commission's claim for reimbursement of the advance must be upheld.

Interest

Contractual interest

22 Under the third paragraph of Clause 9 of the contract the contractor was to reimburse the Commission immediately for any overpayment, together with interest from the date of termination or cessation of the work which was the I-3381

26 Consequently, the Commission is entitled only to the interest provided for in the third paragraph of Clause 9 of the contract with effect from 31 May 1991.

I - 3382

COMMISSION V SIVU AND HYDRO-RÉALISATIONS

Legal interest

27 In addition to contractual interest, the Commission considers that it is entitled with effect from the date on which the debit note issued against SIVU fell due, 28 February 1993, to interest for late payment at the legal rate determined annually by decree published in the Journal Officiel de la République Française.

28 The first paragraph of Article 1153 of the Code Civil provides that 'where liability is limited to the payment of a certain sum, damages for late performance cannot exceed an order to pay interest at the legal rate, save for special rules pertaining to trade and sureties'. However, the parties to a contract may derogate from those provisions, for example by agreeing on a different rate of interest.

Costs

33 Under Article 69(2) of the Rules of Procedure the unsuccessful party is to be ordered to pay the costs if they have been applied for. Since the Commission has applied for costs against SIVU and Hydro-Réalisations and the latter have been unsuccessful in the main, they must be ordered to bear the costs jointly and severally.

On those grounds,

THE COURT (Third Chamber)

hereby:

1. Orders SIVU du plan d'eau de la Vallée du Lot, otherwise known as SIVU du pays d'accueil de la Vallée du Lot, and Hydro-Réalisations SARL jointly and severally to pay to the Commission of the European Communities the sum of I - 3384

R. Grass J.-P. Puissochet Registrar President of the Third Chamber

I - 3385