Summary
Parties
Subject of the case
Grounds
Decision on costs
Operative part
Keywords
NON-CONTRACTUAL LIABILITY - DAMAGE - COMPENSATION - CLAIM FOR INTEREST - PERMISSIBILITY
( EEC TREATY , SECOND PARA . OF ART . 215 )
Summary
A CLAIM FOR INTEREST SUBMITTED IN RELATION TO THE NON-CONTRACTUAL LIABILITY OF THE COMMUNITY UNDER THE SECOND PARAGRAPH OF ARTICLE 215 OF THE TREATY MUST BE CONSIDERED IN THE LIGHT OF THE PRINCIPLES COMMON TO THE LEGAL SYSTEMS OF THE MEMBER STATES TO WHICH THAT PROVISION REFERS . SUCH A CLAIM IS THEREFORE , AS A GENERAL RULE , PERMISSIBLE .
Parties
IN CASE 256/81
PAULS AGRICULTURE LIMITED , OF 47 KEY STREET , IPSWICH , REPRESENTED BY PETER LANGDON-DAVIES , BARRISTER OF THE INNER TEMPLE , LONDON , ASSISTED BY W . E . M . GODFREY OF MESSRS SIMMONS & SIMMONS , SOLICITORS , 14 DOMINION STREET , LONDON EC2M 2RJ , WITH AN ADDRESS FOR SERVICE IN LUXEMBOURG AT THE CHAMBERS OF MESSRS ELVINGER & HOSS , 15 COTE D ' EICH , BOITE POSTALE 425 ,
APPLICANT ,
V
COUNCIL OF THE EUROPEAN COMMUNITIES , REPRESENTED BY DANIEL VIGNES , DIRECTOR IN THE LEGAL DEPARTMENT OF THE COUNCIL OF THE EUROPEAN COMMUNITIES , ASSISTED BY ARTHUR BRAUTIGAM , ADMINISTRATOR IN THAT DEPARTMENT , WITH AN ADDRESS FOR SERVICE IN LUXEMBOURG AT THE OFFICE OF H . J . PABBRUWE , DIRECTOR OF THE DIRECTORATE FOR LEGAL AFFAIRS OF THE EUROPEAN INVESTMENT BANK , 100 BOULEVARD KONRAD-ADENAUER ,
AND
COMMISSION OF THE EUROPEAN COMMUNITIES , REPRESENTED BY RICHARD WAINWRIGHT , ACTING AS AGENT , ASSISTED BY GUIDO BERARDIS , BOTH MEMBERS OF ITS LEGAL DEPARTMENT , WITH AN ADDRESS FOR SERVICE IN LUXEMBOURG AT THE OFFICE OF ORESTE MONTALTO , JEAN MONNET BUILDING , KIRCHBERG ,
DEFENDANTS ,
Subject of the case
APPLICATION UNDER ARTICLE 173 OF THE EEC TREATY FOR A DECLARATION THAT A DECISION COMMUNICATED BY LETTER OF 17 JULY 1981 , WHEREBY THE COUNCIL REFUSED TO PAY THE SUM CLAIMED IN RESPECT OF REFUNDS FOR THE PRODUCTION OF MAIZE GRITZ INTENDED FOR USE IN THE BREWING INDUSTRY , IS VOID , ALTERNATIVELY UNDER ARTICLE 215 OF THE EEC TREATY AGAINST THE COUNCIL AND COMMISSION FOR DAMAGES IN A LIKE SUM ,
Grounds
1 BY APPLICATION LODGED AT THE COURT REGISTRY ON 21 SEPTEMBER 1981 , PAULS AGRICULTURE LIMITED BROUGHT AN ACTION PURSUANT TO THE FIRST PARAGRAPH OF ARTICLE 173 OF THE EEC TREATY FOR A DECLARATION THAT THE DECISION OF 17 JULY 1981 , WHEREBY THE COUNCIL REFUSED TO PAY IT A SUM OF UKL 32 874.65 CLAIMED IN RESPECT OF REFUNDS FOR THE PRODUCTION OF MAIZE GRITZ INTENDED FOR USE IN THE BREWING INDUSTRY , WAS VOID . IN THE ALTERNATIVE , THE APPLICANT CLAIMS , PURSUANT TO ARTICLE 178 AND THE SECOND PARAGRAPH OF ARTICLE 215 OF THE EEC TREATY , AN IDENTICAL SUM BY WAY OF COMPENSATION FOR DAMAGE SUSTAINED AS A RESULT OF THE REFUSAL TO PAY THE ABOVE AMOUNT .
2 IT SHOULD FIRST BE NOTED THAT IN ITS JUDGMENT OF 19 OCTOBER 1977 IN JOINED CASES 124/76 AND 20/77 ( SA MOULINS ET HUILERIES DE PONT-A-MOUSSON AND OTHERS , ( 1977 ) ECR 1795 ) THE COURT HELD THAT BY ABOLISHING THE REFUNDS FOR MAIZE GRITZ , WHILE RETAINING THE REFUNDS FOR A COMPETING PRODUCT , MAIZE STARCH , THE COUNCIL HAD COMMITTED A BREACH OF THE PRINCIPLE OF EQUALITY OF TREATMENT , TO THE DETRIMENT OF THE PRODUCERS OF MAIZE GRITZ .
3 FOLLOWING THAT JUDGMENT , THE DISPUTED REFUNDS WERE RE-INTRODUCED BY COUNCIL REGULATIONS ( EEC ) NOS 1125/78 AND 1127/78 OF 22 MAY 1978 ( OFFICIAL JOURNAL 1978 , L 142 , P . 21 AND P . 24 ) WITH EFFECT FROM THE DATE OF THE JUDGMENT OF THE COURT , NAMELY 19 OCTOBER 1977 .
4 IN ITS JUDGMENTS OF 4 OCTOBER 1979 ( JOINED CASES 241 , 242 , 245 TO 250/78 , DGV-DEUTSCHE GETREIDEVERWERTUNG UND RHEINISCHE KRAFTFUTTERWERKE GMBH AND OTHERS ( 1979 ) ECR 3017 , AND JOINED CASES 64 AND 113/76 , 167 AND 239/78 , 27 , 28 AND 45/79 , P . DUMORTIER FRERES SA AND OTHERS ( 1979 ) ECR 3091 ), THE COURT HELD THAT BY ABOLISHING THE DISPUTED REFUNDS , THE COMMUNITY HAD INCURRED NON-CONTRACTUAL LIABILITY .
5 THE APPLICANT , A MANUFACTURER OF MAIZE GRITZ USED IN THE BREWING INDUSTRY , MAINTAINED THAT ON THE BASIS OF THOSE DECISIONS OF THE COURT IT WAS ENTITLED TO RECEIVE DAMAGES IN A SUM EQUIVALENT TO THE AMOUNT OF REFUNDS WHICH IT OUGHT TO HAVE RECEIVED BETWEEN 1 AUGUST AND 19 OCTOBER 1977 AND , BY LETTER OF 3 JULY 1981 , IT REQUESTED THE COUNCIL TO PAY TO IT THE SUM OF UKL 32 874.65 . BY LETTER OF 17 JULY 1981 , THE COUNCIL REJECTED THAT REQUEST ON THE GROUND THAT IT WAS OUT OF TIME INASMUCH AS IT WAS MADE AFTER THE EXPIRY OF THE FIVE-YEAR PERIOD OF LIMITATION LAID DOWN IN ARTICLE 43 OF THE PROTOCOL ON THE STATUTE OF THE COURT OF JUSTICE OF THE EEC . THE APPLICANT THEREFORE BROUGHT ITS ACTION PRIMARILY AGAINST THE LETTER OF 17 JULY 1981 WHICH IT SOUGHT TO HAVE DECLARED VOID IN SO FAR AS IT MUST BE REGARDED AS A DECISION WITHIN THE MEANING OF ARTICLE 173 OF THE EEC TREATY .
6 HOWEVER , FOLLOWING THE JUDGMENT OF THE COURT OF 27 JANUARY 1982 ( JOINED CASES 256 , 257 , 265 AND 267/80 AND 5/81 , BIRRA WUHRER AND OTHERS ( 1982 ) ECR 85 ), IN THE COURSE OF THE PROCEEDINGS BEFORE THE COURT , THE COUNCIL WITHDREW ITS OBJECTION , FOUNDED ON THE FIVE-YEAR PERIOD OF LIMITATION , TO THE ADMISSIBILITY OF THE APPLICANT ' S CLAIM . IN CONSEQUENCE , IN THE COURSE OF ITS ORAL ARGUMENT , THE APPLICANT WITHDREW ITS CLAIM FOR A DECLARATION THAT THE LETTER OF 17 JULY WAS VOID AND LIMITED ITS ACTION TO A CLAIM FOR COMPENSATION FOR THE LOSS WHICH IT ESTIMATED AT THE SUM EQUIVALENT TO THE AMOUNT OF REFUNDS WHICH IT SHOULD HAVE RECEIVED , CONVERTED INTO NATIONAL CURRENCY AT THE EXCHANGE RATE APPLICABLE AT THE TIME OF THE OPERATIONS OR ALTERNATIVELY AT THE RATE PREVAILING ON THE DATE OF THE JUDGMENT OF THE COURT , TOGETHER WITH INTEREST FIXED AT THE APPROPRIATE COMMERCIAL RATES IN SUCH A WAY AS TO TAKE ACCOUNT OF THE LAPSE OF TIME BETWEEN THE DATES ON WHICH THE REFUNDS SHOULD HAVE BEEN PAID TO IT AND THE DATE OF THE JUDGMENT .
THE LIABILITY OF THE COMMUNITY
7 THE COURT HAS ALREADY STATED IN ITS ABOVE-MENTIONED JUDGMENTS OF 4 OCTOBER 1979 , AS WELL AS IN OTHER SIMILAR CASES , THAT THE COMMUNITY HAD INCURRED LIABILITY FOR ABOLISHING THE REFUNDS FOR MAIZE GRITZ UNDER REGULATION NO 665/75 OF THE COUNCIL WHILST RETAINING THEM FOR MAIZE STARCH , IN BREACH OF THE PRINCIPLE OF EQUALITY OF TREATMENT FOR THE VARIOUS CATEGORIES OF PRODUCERS CONCERNED . FOR THE SAME REASONS , THE COMMUNITY HAS ALSO INCURRED LIABILITY IN RESPECT OF THE APPLICANT IN THIS CASE .
THE DAMAGE
8 AGAINST THE CLAIM FOR DAMAGES CALCULATED ON THE BASIS OF THE REFUND ABOLISHED FOR MAIZE GRITZ DURING THE PERIOD IN QUESTION , THE COUNCIL AND THE COMMISSION , WHILST NOT DISPUTING THAT THE COMMUNITY HAS INCURRED LIABILITY , HAVE RAISED THE OBJECTION THAT THE APPLICANT WAS OR SHOULD HAVE BEEN ABLE TO ELIMINATE THE DAMAGE BY PASSING ON THE LOSS WHICH RESULTED FROM THE ABOLITION OF THE REFUNDS IN ITS SELLING PRICES . THEY CONTEND THAT IT IS FOR THE APPLICANT TO PROVE THE CONTRARY .
9 THE APPLICANT , FOR ITS PART , DENIES THAT IT WAS POSSIBLE TO PASS ON THE LOSS IN THAT WAY . IT MAINTAINS THAT , IN THE FACE OF THE COMPETITION OF STARCH PRODUCERS WHO WERE IN RECEIPT OF THE REFUNDS , IT WAS NOT IN A POSITION TO PASS ON TO ITS CUSTOMERS , IN THE SELLING PRICES OF ITS PRODUCTS , THE LOSS SUSTAINED AS A RESULT OF THE FAILURE TO PAY THE REFUNDS .
10 MOREOVER , THE APPLICANT HAS SUBMITTED CERTAIN STATISTICS IN SUPPORT OF ITS ASSERTIONS IN ORDER TO SHOW THAT IT DID NOT PASS ON , IN ITS SELLING PRICES , THE LOSS RESULTING FROM THE NON-PAYMENT OF THE REFUNDS WHICH HAD BEEN ABOLISHED . THE DEFENDANT INSTITUTIONS HAVE NOT PRODUCED ANY EVIDENCE WHICH CASTS DOUBT ON THOSE FIGURES AND THE CONCLUSIONS WHICH THE APPLICANT DRAWS FROM THEM . THEIR OBJECTION CANNOT THEREFORE BE UPHELD .
11 IN ADDITION THE COMMISSION MAINTAINS THAT , TO QUALIFY FOR THE COMPENSATION WHICH IT CLAIMS , THE APPLICANT MUST ESTABLISH THAT IT SATISFIED THE CONDITION RELATING TO THE SIZE OF THE GRANULES OF THE GRITZ WHICH IT PRODUCED . ACCORDING TO THE COMMISSION , UNDER REGULATION ( EEC ) NO 2727/75 OF THE COUNCIL OF 29 OCTOBER 1975 ON THE COMMON ORGANIZATION OF THE MARKET IN CEREALS ( OFFICIAL JOURNAL 1975 , L 281 , P . 1 ), PRODUCTION REFUNDS ARE PAYABLE ONLY IN RESPECT OF GRANULES OF MAIZE GROATS COMING UNDER SUBHEADING 11.02 A OF THE COMMON CUSTOMS TARIFF AND , IN ACCORDANCE WITH ADDITIONAL NOTE 1 TO CHAPTER 11 OF THE COMMON CUSTOMS TARIFF , THAT SUBHEADING CONCERNS ONLY MAIZE GROATS AND MEAL OF WHICH AT LEAST 95% BY WEIGHT CAN PASS THROUGH A SIEVE WITH 2 MM MESH .
12 IN THAT RESPECT , IT MUST BE STATED THAT , ACCORDING TO CORRESPONDENCE EXCHANGED BETWEEN THE COMMISSION ' S OFFICERS AND THE BRITISH AUTHORITIES AND PRODUCED BY THE COMMISSION , THOSE AUTHORITIES PAID THE REFUNDS DURING THE PERIODS CONCERNED AND UNTIL 1980 WITHOUT TAKING INTO CONSIDERATION THE SIZE OF THE GRANULES OF GRITZ . THUS , IRRESPECTIVE OF THE QUESTION WHETHER THAT PRACTICE WAS IN CONFORMITY WITH THE COMMUNITY PROVISIONS , IT MUST BE CONCLUDED THAT THE APPLICANT WOULD HAVE RECEIVED THE REFUNDS NOTWITHSTANDING THE SIZE OF THE GRANULES OF THE GRITZ WHICH IT PRODUCED AND THAT IT THEREFORE SUSTAINED DAMAGE AS A RESULT OF THE ABOLITION OF THE REFUNDS .
13 IT FOLLOWS THAT THE LOSS FOR WHICH THE APPLICANT MUST BE COMPENSATED MUST BE CALCULATED ON THE BASIS THAT IT IS EQUIVALENT TO THE REFUNDS WHICH WOULD HAVE BEEN PAID TO IT IF , DURING THE PERIOD FROM 1 AUGUST TO 19 OCTOBER 1977 , THE USE OF MAIZE FOR THE MANUFACTURE OF GRITZ USED BY THE BREWING INDUSTRY CONFERRED AN ENTITLEMENT TO THE SAME REFUNDS AS THE USE OF MAIZE FOR THE MANUFACTURE OF STARCH .
14 AS REGARDS THE CONVERSION BY THE DEFENDANT INSTITUTIONS OF THE AMOUNT OF THE DAMAGES INTO THE APPLICANT ' S NATIONAL CURRENCY , THE COURT DECIDED IN ITS JUDGMENT OF 19 MAY 1982 ( CASE 64/76 , DUMORTIER FRERES AND OTHERS , ( 1982 ) ECR 1733 ) THAT THE RATE TO BE APPLIED WAS THAT PREVAILING AT THE DATE OF THE JUDGMENT IN WHICH IT WAS HELD THAT THERE WAS AN OBLIGATION TO MAKE GOOD THE DAMAGE .
15 AS REGARDS THE AMOUNT OF THE COMPENSATION CLAIMED BY THE APPLICANT , THE LATTER HAS SUBMITTED TO THE COURT A NUMBER OF DOCUMENTS AS PROOF OF THE QUANTITIES OF GRITZ FOR WHICH IT CLAIMS TO BE ENTITLED TO COMPENSATION AND OF THE AMOUNTS OF THE REFUNDS NOT PAID IN RESPECT OF THOSE QUANTITIES . THE DEFENDANT INSTITUTIONS ACCEPT THE ACCURACY OF THOSE DOCUMENTS ONLY ON CONDITION THAT THEY BE VERIFIED BY THE COMPETENT AUTHORITIES . THE COURT IS NOT IN A POSITION AT THIS STAGE OF THE PROCEDURE TO GIVE A DECISION ON THE ACCURACY OF THESE DATA . IT IS THEREFORE NECESSARY TO LAY DOWN BY INTERLOCUTORY JUDGMENT THE CRITERIA WHEREBY THE COURT CONSIDERS THAT THE APPLICANT MUST BE COMPENSATED , LEAVING THE AMOUNTS OF THE COMPENSATION TO BE DETERMINED EITHER BY AGREEMENT BETWEEN THE PARTIES OR BY THE COURT IN THE ABSENCE OF SUCH AGREEMENT .
Decision on costs
THE CLAIM FOR INTEREST
16 THE APPLICANT HAS REQUESTED , IN ADDITION THAT THE COMMUNITY BE ORDERED TO PAY INTEREST , AS FROM THE DATES ON WHICH THE MONTHLY PAYMENT OF THE REFUNDS FELL DUE , AT THE APPROPRIATE COMMERCIAL RATES FIXED IN SUCH A WAY AS TO TAKE INTO ACCOUNT THE LAPSE OF TIME BETWEEN THOSE DATES AND THE DATE ON WHICH IT ACTUALLY RECEIVES THE COMPENSATION FOR THE DAMAGE SUFFERED BY IT .
17 AS THE CLAIM RELATES TO THE NON-CONTRACTUAL LIABILITY OF THE COMMUNITY UNDER THE SECOND PARAGRAPH OF ARTICLE 215 , IT MUST BE CONSIDERED IN THE LIGHT OF THE PRINCIPLES COMMON TO THE LEGAL SYSTEMS OF THE MEMBER STATES TO WHICH THAT PROVISION REFERS . IT FOLLOWS THAT A CLAIM FOR INTEREST IS , AS A GENERAL RULE , PERMISSIBLE . ON THE BASIS OF THE CRITERIA ADOPTED BY THE COURT ON NUMEROUS OCCASIONS , THE OBLIGATION TO PAY INTEREST ARISES ON THE DATE OF THIS JUDGMENT , INASMUCH AS IT ESTABLISHES THE OBLIGATION TO MAKE GOOD THE DAMAGE . THE RATE OF INTEREST WHICH IT IS PROPER TO APPLY IS 6% .
Operative part
ON THOSE GROUNDS ,
THE COURT ( FIFTH CHAMBER )
AS AN INTERLOCUTORY DECISION , HEREBY :
1 . ORDERS THE EUROPEAN ECONOMIC COMMUNITY TO PAY TO PAULS AGRICULTURE LIMITED THE AMOUNTS EQUIVALENT TO THE PRODUCTION REFUNDS ON MAIZE GRITZ USED BY THE BREWING INDUSTRY WHICH THAT UNDERTAKING WOULD HAVE RECEIVED IF , DURING THE PERIOD FROM 1 AUGUST TO 19 OCTOBER 1977 , THE USE OF MAIZE FOR THE PRODUCTION OF GRITZ HAD CONFERRED AN ENTITLEMENT TO THE SAME REFUNDS AS THE USE OF MAIZE FOR THE MANUFACTURE OF STARCH ;
2 . ORDERS THAT INTEREST AT THE RATE OF 6% SHALL BE PAID ON THE ABOVE-MENTIONED AMOUNTS AS FROM THE DATE OF THIS JUDGMENT , WHICH IS ALSO THE DATE TO BE TAKEN INTO CONSIDERATION FOR THE CONVERSION OF THOSE AMOUNTS INTO NATIONAL CURRENCY ;
3 . ORDERS THE PARTIES TO INFORM THE COURT WITHIN THREE MONTHS FROM THE DELIVERY OF THIS JUDGMENT OF THE AMOUNTS OF COMPENSATION ARRIVED AT BY AGREEMENT ;
4 . ORDERS THAT IN THE ABSENCE OF AGREEMENT THE PARTIES SHALL TRANSMIT TO THE COURT WITHIN THE SAME PERIOD A STATEMENT OF THEIR VIEWS WITH SUPPORTING FIGURES ;
5 . RESERVES THE COSTS .
Full & Egal Universal Law Academy