Summary
Parties
Subject of the case
Grounds
Decision on costs
Operative part
Keywords
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1 . NON-CONTRACTUAL LIABILITY - MISCONDUCT - COUNCIL - RESOLUTION - INFORMATION FOR COMMERCIAL OPERATORS - OMISSION
( EEC TREATY, ARTICLE 215, SECOND PARAGRAPH )
2 . NON-CONTRACTUAL LIABILITY - MISCONDUCT - DAMAGE - CHAIN OF CAUSATION
( EEC TREATY, ARTICLE 215, SECOND PARAGRAPH )
Summary
1 . WHEN IN A RESOLUTION PASSED TO INFORM AND GUIDE COMMERCIAL OPERATORS ON THE SUBJECT OF THE CONTENTS OF A FUTURE REGULATION THE COUNCIL OMITS TO MAKE RESERVATIONS ON THE POSSIBLE APPLICATION OF A PROVISION OF THE TREATIES, KNOWLEDGE OF WHICH IS IMPORTANT FOR ACTION BY THOSE CONCERNED, IT DISTORTS THE TASK OF INFORMING WHICH IT HAS ASSUMED AND MAKES ITSELF LIABLE .
2 . THE EXISTENCE OF A CHAIN OF CAUSATION BETWEEN THE CONDUCT OF THE ADMINISTRATION AND THE ALLEGED DAMAGE PRESUPPOSES THAT THIS CONDUCT IS SUCH AS TO CAUSE ERROR IN THE MIND OF A PRUDENT PERSON .
Parties
IN CASE 169/73
COMPAGNIE CONTINENTALE FRANCE, PARIS, REPRESENTED BY P . DE FONT-REALUX, AVOCAT AT THE COURT AT PARIS, WITH AN ADDRESS FOR SERVICE IN LUXEMBOURG AT THE CHAMBERS OF GEORGES MARGUE, AVOCAT-AVOUE, 20 RUE PHILIPPE-II, APPLICANT,
V
COUNCIL OF THE EUROPEAN COMMUNITIES, REPRESENTED BY D . VIGNES, ADVISER IN THE LEGAL SERVICE OF THE COUNCIL, ACTING AS AGENT, ASSISTED BY J . BOULOUIS, ACTING AS COUNSEL, WITH AN ADDRESS FOR SERVICE IN LUXEMBOURG AT THE OFFICES OF J . N . VAN DEN HOUTEN, DIRECTOR OF THE LEGAL SERVICE OF THE EUROPEAN INVESTMENT BANK, 2 PLACE DE METZ, DEFENDANT,
Subject of the case
APPLICATION FOR DAMAGES UNDER THE SECOND PARAGRAPH OF ARTICLE 215 OF THE EEC TREATY,
Grounds
1 THE APPLICATION LODGED ON 28 SEPTEMBER 1973 SEEKS AN ORDER AGAINST THE EUROPEAN ECONOMIC COMMUNITY FOR THE PAYMENT OF FF 5 728 660.17 AS COMPENSATION FOR DAMAGE THE APPLICANT CLAIMS TO HAVE SUFFERED AS A RESULT OF THE SYSTEM OF COMPENSATORY AMOUNTS ESTABLISHED BY ARTICLE 55 OF THE ACT ANNEXED TO THE TREATY OF 22 JANUARY 1972 CONCERNING THE ACCESSION OF THE NEW MEMBER STATES TO THE COMMUNITIES .
2 ARTICLES 55 ( 1 ) ( A ) PROVIDES THAT IN TRADE IN CERTAIN AGRICULTURAL PRODUCTS COMPENSATORY AMOUNTS SHALL BE LEVIED BY THE IMPORTING STATE AND GRANTED BY THE EXPORTING STATE IN ORDER TO COMPENSATE THE DIFFERENCES IN PRICE LEVELS WHICH MAY EXIST UNTIL 1 JANUARY 1978 BETWEEN THE NEW MEMBER STATES AND THE COMMUNITY AS ORIGINALLY CONSTITUTED .
3 ARTICLE 56 ( 6 ), HOWEVER, PROVIDES THAT THE COMPENSATORY AMOUNT LEVIED OR GRANTED BY A MEMBER STATE MAY NOT EXCEED THE TOTAL AMOUNT LEVIED BY THAT MEMBER STATE ON IMPORTS FROM THIRD COUNTRIES, BUT AT THE SAME TIME THE SECOND PARAGRAPH GIVES THE COUNCIL THE POWER, ON A PROPOSAL FROM THE COMMISSION, TO DEROGATE FROM THIS RULE, IN PARTICULAR IN ORDER TO AVOID DEFLECTIONS OF TRADE AND DISTORTIONS OF COMPETITION .
4 IN VIEW OF THE FACT THAT THE COMMUNITY RULES IN AGRICULTURE WOULD APPLY TO THE NEW MEMBER STATES AS FROM 1 FEBRUARY 1973 AND THAT THE TRANSITIONAL MEASURES PROVIDED FOR THE ADAPTATION OF THESE STATES TO THE COMMUNITY RULES NECESSITATED IMPLEMENTING MEASURES, THE COUNCIL, BY RESOLUTION DATED 20 JULY 1972, AGREED ON A DRAFT REGULATION WHICH WAS TO BE FORMALLY ADOPTED IMMEDIATELY AFTER THE ENTRY INTO FORCE OF THE TREATY OF ACCESSION AND THE TEXT OF WHICH WAS ANNEXED TO THE RESOLUTION .
5 THE FOURTH RECITAL TO THE RESOLUTION STATED THAT IT WAS ESSENTIAL THAT PERSONS WITH AN ECONOMIC INTEREST SHOULD HAVE KNOWLEDGE OF THE CONTENT OF THE IMPLEMENTING PROVISIONS FORTHWITH IN ORDER TO ENABLE THE TRANSITION FROM THE NATIONAL SYSTEMS IN THE NEW MEMBER STATES TO THE COMMUNITY SYSTEM TO BE CARRIED OUT UNDER THE BEST POSSIBLE CONDITIONS .
6 FOR TRADE WITH THE UNITED KINGDOM THE DRAFT PROVIDED UNTIL 31 JULY 1973 A COMPENSATORY AMOUNT OF 42.33 U.A . PER METRIC TON FOR BARLEY, WHICH WAS ALSO THE AMOUNT APPLICABLE TO DENATURED COMMON WHEAT .
7 THE DRAFT CONTAINED NO PROVISION DEALING EXPRESSLY WITH THE SITUATION PROVIDED FOR IN ARTICLE 55 ( 6 ) OF THE ACT OF ACCESSION .
8 THE RESOLUTION, WITH THE DRAFT REGULATION ANNEXED, WAS PUBLISHED IN THE OFFICIAL JOURNAL OF THE EUROPEAN COMMUNITIES OF 10 AUGUST 1972 IN THE C SECTION UNDER THE HEADING 'INFORMATION '.
9 REGULATION NO 229/73 OF THE COUNCIL OF 31 JANUARY 1973 LAYING DOWN GENERAL RULES FOR THE SYSTEM OF COMPENSATORY AMOUNTS FOR CEREALS, WHILE FIXING THESE AMOUNTS AS PROVIDED FOR IN THE DRAFT ANNEXED TO THE RESOLUTION OF 20 JULY 1972, EXPRESSLY PROVIDED, IN ACCORDANCE WITH ARTICLE 55 ( 6 ) OF THE ACT OF ACCESSION, THAT IF THE LEVY IS LOWER THAN THE COMPENSATORY AMOUNT, THE COMMISSION SHOULD APPLY THE SCALE SET OUT IN THE ANNEX TO THE REGULATION TO DETERMINE THE AMOUNT APPLICABLE BY WAY OF COMPENSATORY AMOUNT .
10 ON THE BASIS OF THESE PROVISIONS AND FOLLOWING THE INCREASE IN PRICES ON THE WORLD MARKET SINCE THE SUMMER OF 1972 THE COMPENSATORY AMOUNTS ACTUALLY APPLIED SINCE 1 FEBRUARY 1973 WERE LOWER THAN THE AMOUNTS PROVIDED FOR BY THE DRAFT REGULATION ANNEXED TO THE RESOLUTION OF 20 JULY 1972 .
11 IN VIEW OF THE RESOLUTION OF 20 JULY 1972 THE APPLICANT CONCLUDED DURING SEPTEMBER 1972 CONTRACTS FOR EXPORT TO THE UNITED KINGDOM OF BARLEY AND DENATURED WHEAT, THE DELIVERY OF WHICH WAS TO TAKE PLACE BETWEEN FEBRUARY AND JUNE 1973 .
12 SINCE THE APPLICANT WAS NOT ABLE TO RECEIVE THE AMOUNTS EXPECTED, IT HAD TO PERFORM SOME OF THESE CONTRACTS AT A LOSS WHILE OTHERS HAD TO BE RESCINDED OR REVISED WITH THE AGREEMENT OF THE PURCHASER, WHICH LIKEWISE INVOLVED LOSSES FOR THE APPLICANT .
13 THE APPLICANT BEGINS WITH A GENERAL CRITICISM OF THE SYSTEM ESTABLISHED BY ARTICLE 55 OF THE ACT OF ACCESSION .
14 THIS CRITICISM RELATES IN PARTICULAR TO THE CONTRADICTION WHICH EXISTS BETWEEN PARAGRAPHS 1 AND 2 PROVIDING FIXED COMPENSATORY AMOUNTS ON THE ONE HAND, AND PARAGRAPH 6 ON THE OTHER HAND, WHICH INTRODUCES A FLEXIBLE FACTOR, AND THUS UNCERTAINTY, IN THAT IT PROVIDES THAT THE COMPENSATORY AMOUNTS SHOULD VARY ACCORDING TO THE LEVIES ON IMPORTS FROM THIRD COUNTRIES, WITHOUT IT BEING POSSIBLE TO ELIMINATE THIS UNCERTAINTY BY MEANS OF ADVANCE FIXING OF THE COMPENSATORY AMOUNTS IN THE MANNER OF THE SYSTEM OF ADVANCE FIXING OF THE REFUNDS APPLICABLE TO EXPORTS TO THIRD COUNTRIES .
15 FURTHER, THE SYSTEM OF VARIABLE COMPENSATORY AMOUNTS UNDER PARAGRAPH 6 HAS THE PRACTICAL EFFECT, IN THE NEW MEMBER STATES AND IN A RISING WORLD MARKET, OF FAVOURING IMPORTS OF CEREALS FROM THIRD COUNTRIES IN RELATION TO THOSE FROM THE ORIGINAL MEMBER STATES, WHICH CONFLICTS WITH THE PRINCIPLE OF COMMUNITY PREFERENCE WHICH IS AT THE BASIS OF THE COMMON ORGANIZATION OF THE AGRICULTURAL MARKETS .
16 SINCE, HOWEVER, THE POSSIBLE EFFECTS TO WHICH REFERENCE IS MADE RESULT NOT FROM THE CONDUCT OF THE COUNCIL BUT FROM THE ACT OF ACCESSION ITSELF, WHICH IS AN INTEGRAL PART OF THE TREATY CONCLUDED BETWEEN THE ORIGINAL AND THE NEW MEMBER STATES, THEY CANNOT GIVE RISE TO NON-CONTRACTUAL LIABILITY ON THE PART OF THE COMMUNITY .
17 THE APPLICANT COMPLAINS THAT THE COUNCIL ENCOURAGED IT, BY THE RESOLUTION OF 20 JULY 1972, TO CONCLUDE CONTRACTS WITHIN THE FRAMEWORK OF A SYSTEM INVOLVING FIXED COMPENSATORY AMOUNTS, AND THEN, BY REGULATION NO 229/73, ABANDONED THIS SYSTEM IN FAVOUR OF FLEXIBLE COMPENSATORY AMOUNTS .
18 IT IS RIGHT TO OBSERVE IN THIS RESPECT THAT THE FLEXIBILITY OF THE COMPENSATORY AMOUNTS RESULTS FROM THE FIRST PARAGRAPH OF ARTICLE 55 ( 6 ) OF THE ACT OF ACCESSION, ACCORDING TO WHICH THESE AMOUNTS COULD NOT EXCEED THE TOTAL AMOUNT LEVIED ON IMPORTS FROM THIRD COUNTRIES .
19 THIS PROVISION APPLIES AUTOMATICALLY, SO THAT IT IS NOT POSSIBLE, BY REASON OF THE FACT THAT THE RESOLUTION AND THE DRAFT REGULATION ANNEXED DID NOT MENTION IT, TO IMPUTE TO THE COUNCIL AN INTENTION NOT TO APPLY IT .
20 NEVERTHELESS, SINCE THE COUNCIL ADOPTED THE ABOVEMENTIONED RESOLUTION WITH THE OBJECT OF INFORMING AND GUIDING COMMERCIAL OPERATORS, IT OUGHT TO HAVE ISSUED A REMINDER AS TO THE PROVISION IN QUESTION AND EXPRESSED RESERVATIONS AS TO ITS POSSIBLE APPLICATION .
21 THE OMISSION TO MAKE THE RESOLUTION SUBJECT TO SUCH RESERVATIONS, WHILE EXPLICABLE BY THE SITUATION OF THE WORLD MARKET AT THE TIME, WHEN THE SUBSEQUENT INCREASE IN PRICES WAS NOT YET FORESEEABLE, WAS LIKELY TO DISTORT THE TASK OF INFORMING WHICH THE COUNCIL HAD ASSUMED AND WAS SUCH AS TO MAKE IT LIABLE .
22 IT IS RIGHT, HOWEVER, TO INQUIRE WHETHER THERE IS A CHAIN OF CAUSATION BETWEEN THE BEHAVIOUR OF THE COUNCIL AND THE ALLEGED DAMAGE .
23 ONE MUST ASK NOT ONLY WHETHER THE CONDUCT IN FACT CAUSED THE WRONG IMPRESSION ON THE APPLICANT'S PART THAT THE COMPENSATORY AMOUNTS WOULD REMAIN FIXED IN SPITE OF ARTICLE 55 ( 6 ), BUT ALSO WHETHER IT COULD AND SHOULD HAVE CAUSED SUCH AN ERROR IN THE MIND OF A PRUDENT PERSON .
24 IT MUST BE REMEMBERED THAT THE CONTRACTS IN QUESTION WERE CONCLUDED ON 22, 25 AND 26 SEPTEMBER 1972 .
25 FOLLOWING THE MOVEMENT OF PRICES ON THE WORLD MARKET THE LEVIES ON IMPORTS FROM THIRD COUNTRIES BEGAN TO BE REDUCED AT THE BEGINNING OF AUGUST 1972, AND REACHED, AT THE END OF THE MONTH, A FIGURE WHICH, AS REGARDS BARLEY, WAS LOWER THAN THE COMPENSATORY AMOUNT PROVIDED FOR TRADE WITH THE UNITED KINGDOM .
26 REGULATION NO 1847/72 OF THE COMMISSION OF 28 AUGUST 1972 ( OJ L 197 OF 29 . 8 . 1972, P . 1 ) FIXED THE LEVY AT 40.74 U.A . PER METRIC TON WHEREAS THE COMPENSATORY AMOUNT PROVIDED FOR BY THE DRAFT REGULATION ANNEXED TO THE RESOLUTION OF 20 JULY WAS 42.33 U.A . PER METRIC TON .
27 THE MOVEMENT IN PRICES MOREOVER LED THE COMMISSION TO ABOLISH, AS FROM 16 SEPTEMBER, REFUNDS FOR CEREALS EXPORTS TO THIRD COUNTRIES, INCLUDING AT THE TIME THE UNITED KINGDOM ( REGULATION NO 1984/72 OF THE COMMISSION OF 15 SEPTEMBER 1972, OJ L 213 OF 16 . 9 . 1972, P . 12 ).
28 THE APPLICANT, AS A PRUDENT EXPORTER, FULLY INFORMED OF THE CONDITIONS OF THE MARKET, WAS NOT UNAWARE AND IN ANY EVENT COULD NOT BE UNAWARE THAT SUCH WAS THE POSITION AT THE TIME THE CONTRACTS WERE CONCLUDED, AND OF THE CONSEQUENCES WHICH WOULD RESULT THEREFROM AS REGARDS THE COMPENSATORY AMOUNTS .
29 ITS SUBSEQUENT CORRESPONDENCE WITH THE OFFICE NATIONAL INTERPROFESSIONNEL DES CEREALES, MOREOVER, LEAVES NO DOUBT IN THIS RESPECT .
30 WITH REGARD TO THIS, MENTION MAY BE MADE IN PARTICULAR OF ITS LETTER OF 12 OCTOBER 1972, IN WHICH IT EXPRESSES ITSELF THUS : '... FOLLOWING A PRICE MOVEMENT WHICH WAS AS UNFORESEEABLE AS IT IS EXCEPTIONAL ... THE COMMUNITY LEVIES RISK BEING LOWER THAN THE COMPENSATORY AMOUNTS . THE LATTER ARE LIABLE TO BE REVISED SO THAT THEY DO NOT EXCEED THE LEVY IN FORCE; THIS FOLLOWS FROM ARTICLES 55 AND 56 OF THE ACT OF ACCESSION .'
31 THIS LETTER CONFIRMS THAT THE APPLICANT WAS EFFECTIVELY IN A POSITION TO APPRECIATE THE EFFECT WHICH AN ALTERATION IN THE CONDITIONS OF THE MARKET COULD HAVE ON THE APPLICATION OF THE ARTICLES REFERRED TO .
32 ACCORDINGLY THE DAMAGE ALLEGED HAS NOT BEEN CAUSED BY THE CONDUCT OF THE COUNCIL .
33 THE APPLICATION MUST THEREFORE BE DISMISSED .
Decision on costs
34 THE APPLICANT HAS FAILED IN ITS APPLICATION .
35 UNDER ARTICLE 69 ( 3 ) OF THE RULES OF PROCEDURE, WHERE THE CIRCUMSTANCES ARE EXCEPTIONAL, THE COURT MAY ORDER THAT THE PARTIES BEAR THEIR OWN COSTS .
36 IN THE PRESENT CASE THE COURT HAS FOUND THAT THE CONDUCT OF THE COUNCIL WAS SUCH AS TO MAKE THE COMMUNITY LIABLE .
37 IT IS PROPER IN THE CIRCUMSTANCES THAT THE PARTIES BEAR THEIR OWN COSTS .
ON THOSE GROUNDS,
Operative part
THE COURT
HEREBY :
1 . DISMISSES THE APPLICATION;
2 . ORDERS EACH PARTY TO BEAR ITS OWN COSTS .
Full & Egal Universal Law Academy