JUDGMENT OF THE GENERAL COURT (Seventh Chamber)

11 July 2019 (*)

(Arbitration clause — Sixth and Seventh Framework Programmes for research, technological development and demonstration activities — Decision to recover by offsetting claims of the European Union arising from the performance of a contract — Effective judicial protection — Right to refer to the Ombudsman — Financial regulation — Debts which are certain — Legitimate expectations — Principle of non-discrimination — Principle of sound administration — Misuse of powers — Contractual liability — Audit report — Eligible costs)

In Case T‑805/16,

Instytut Podstawowych Problemów Techniki Polskiej Akademii Nauk (IPPT PAN), established in Warsaw (Poland), represented by M. Le Berre, lawyer,

applicant,

supported by

Republic of Poland, represented by B. Majczyna, acting as Agent,

intervener,

v

European Commission, represented initially by M. Siekierzyńska and P. Rosa Plaza, and subsequently by M. Siekierzyńska and F. van den Berghe, acting as Agents,

and

Research Executive Agency (REA), represented by S. Payan-Lagrou and V. Canetti, acting as Agents, and D. Waelbroeck and A. Duron, lawyers,

defendants,

ACTION, first, under Article 263 TFEU, seeking annulment of the Commission Decision of 6 September 2016 to recover alleged claims against the applicant under two contracts concluded in the context of the Sixth Framework Programme of the European Community for research, technological development and demonstration activities, by offsetting them against sums owing to the applicant by the Research Executive Agency (REA) under a grant agreement concluded in the context of the Seventh Framework Programme of the European Community for research, technological development and demonstration activities and, second, under Article 272 TFEU, seeking a declaration that the alleged claims of the Commission under the two contracts concluded in the context of the Sixth Framework Programme referred to above are invalid and an order directing the Commission and REA to pay the applicant the sum of EUR 69 623.94 in relation to the grant agreement concluded in the context of the Seventh Framework Programme referred to above plus default interest.

THE GENERAL COURT (Seventh Chamber),

composed of V. Tomljenović, President, E. Bieliūnas and A. Marcoulli (Rapporteur), Judges,

Registrar: E. Coulon,

gives the following

Judgment

 Background to the dispute

1        The applicant, Instytut Podstawowych Problemów Techniki Polskiej Akademii Nauk (IPPT PAN), is a public non-profit research institute founded in 1952 by the Polish Academy of Sciences.

2        In the context of Decision No 1513/2002/EC of the European Parliament and of the Council of 27 June 2002 concerning the sixth framework programme of the European Community for research, technological development and demonstration activities, contributing to the creation of the European Research Area and to innovation (2002 to 2006) (OJ 2002 L 232, p. 1), the applicant concluded two contracts with the Commission of the European Communities, acting on behalf of the European Community. Accordingly, on 12 November 2004, the applicant concluded, in its capacity as coordinator, contract No 502243 in relation to the project called ‘Knowledge-based Multicomponent Materials for Durable and Safe Performance’ (NMP3-CT‑2004-502243) (‘the KMM-NOE project’ or ‘the KMM-NOE contract’). On 7 May 2004, the applicant concluded, as a member of a consortium, contract No 510408 in relation to the project called ‘Boosting 4 ACC NCPs and their customers to advanced partnership, entrepreneurship and competitiveness for FP6 participation through expanded area of action by networking, training and coaching’ (INCO-CT‑2004-510408) (‘the Boosting Baltic project’ or ‘the Boosting Baltic contract).

3        Each of those two contracts includes six annexes that form an integral part of the contracts. In each case, the second annex relates to the general conditions applicable to the contract. Pursuant to Article 12 of each contract, the contracts are governed by Belgian law.

4        In addition, in the context of Decision 1982/2006/EC of the European Parliament and of the Council of 18 December 2006 concerning the Seventh Framework Programme of the European Community for research, technological development and demonstration activities (2007-2013) (OJ 2006 L 412, p. 1), on 9 December 2011 the applicant concluded with the Research Executive Agency (REA), acting under powers delegated by the Commission, grant agreement No 284995 in relation to the project called ‘Smart Technologies for Transport Safety — Innovation Cluster Nesting’ (PIAPP-GA-2011-284995) (‘the SMART-NEST project’ or ‘the SMART-NEST agreement’), in respect of which the applicant was the coordinator.

5        That agreement includes seven annexes that form an integral part of the agreement. The second annex relates to the general conditions applicable to the agreement. The first paragraph of Article 9 of the agreement provides that it is to be governed by the terms of that agreement, by EU acts relating to the Seventh Framework Programme, by the ‘Financial Regulation applicable to the general budget and its implementing rules’ and by other rules of EU law and, on a subsidiary basis, by Belgian law.

6        On 12 February 2010, the Commission initiated an audit of the applicant’s financial statements in relation to three projects, including the KMM-NOE and Boosting Baltic projects. The audit covered the entire period of performance of those contracts, namely from 1 November 2004 to 31 January 2009 in respect of the KMM-NOE project and from 1 June 2004 to 31 January 2007 in respect of the Boosting Baltic project. It resulted in the adoption of a final report, sent by the Commission to the applicant by letter of 26 August 2013. That report called into question the eligibility of certain subcontracting and personnel costs. As regards, in particular, the personnel costs, the auditors concluded that the additional remuneration paid in connection with the projects in question, in the form of ‘task bonuses’, was, pursuant to the applicant’s internal bonus rules and in practice, higher than that paid in connection with national projects. They also noted that the rates of ‘task bonuses’ was determined on a case-by-case basis, without any objective criteria.

7        On 9 April 2015, following an exchange of correspondence between the parties, the Commission informed the applicant that it would start implementing the audit findings.

8        On 23 June 2015, the applicant lodged a complaint with the European Ombudsman alleging maladministration by the Commission regarding the rejection of subcontracting and personnel costs.

9        On 28 July 2015, the Commission sent the applicant a preliminary information letter stating that it intended to recover the amount of EUR 154 704.24 in relation to the KMM-NOE and Boosting Baltic projects and that a debit note was going to be issued in that regard.

10      On 13 November 2015, following further exchanges of correspondence between the Commission and the applicant, debit note No 3241514040 for the amount of EUR 154 704.24 was issued.

11      On 17 December 2015, the Ombudsman informed the Commission that there were not sufficient grounds for investigating into the applicant’s complaint concerning the Commission’s rejection of certain personnel costs declared in the audited projects. Nevertheless, the Ombudsman decided to initiate an inquiry into alleged maladministration with regard to the Commission’s rejection of certain subcontracting costs.

12      On 26 May 2016, the Commission informed the applicant that it intended to waive recovery of the subcontracting costs. On 4 August 2016, the Commission issued credit note No 3233160082 for the amount of EUR 86 720.11.

13      By letter of 6 September 2016 (‘the contested decision’), the Commission’s accounting officer informed the applicant of its decision to offset, within a period of 2 weeks, in accordance with Article 80(1) of Regulation (EU, Euratom) No 966/2012 of the European Parliament and of the Council of 25 October 2012 on the financial rules applicable to the general budget of the Union and repealing Council Regulation (EC, Euratom) No 1605/2002 (OJ 2012 L 298, p. 1) (‘the Financial Regulation’), the sum to be paid to the applicant by the Commission in respect of the reimbursement of the guarantee fund, in connection with the SMART-NEST project, namely EUR 87 768.10, against the alleged claims of the Commission vis-à-vis the applicant in connection with the KMM-NOE and Boosting Baltic projects. According to the Commission, its claim, taking account of the credit note issued following its decision to waive recovery of the subcontracting costs plus default interest, amounted to EUR 69 623.94. The balance payable to the applicant was thus EUR 18 144.16. That sum was paid to the applicant on 7 December 2016.

 Procedure and forms of order sought

14      By application lodged at the Court Registry on 16 November 2016, the applicant brought the present action.

15      On 15 February 2017, the Commission lodged its defence at the Court Registry.

16      By separate document lodged at the Court Registry on 17 February 2017, REA raised a plea of inadmissibility under Article 130(1) of the Rules of Procedure of the General Court, in so far as the action was directed against it. The applicant lodged its observations on that plea on 7 April 2017.

17      The applicant lodged its reply to the Commission’s defence on 19 April 2017.

18      The Commission lodged its rejoinder on 31 May 2017.

19      By document of 23 June 2017, the applicant submitted further evidence, in relation to which the Commission and REA submitted observations.

20      By order of 25 September 2017, the Court decided to reserve its decision on the plea of inadmissibility for the final judgment.

21      On 7 November 2017, REA submitted its defence.

22      By decision of 7 November 2017, the President of the Seventh Chamber of the General Court granted the Republic of Poland leave to intervene in support of the form of order sought by the applicant.

23      On 5 January 2018, the applicant lodged its reply to REA’s defence.

24      The Republic of Poland’s statement in intervention was lodged on 8 January 2018.

25      REA and the Commission lodged observations on the Republic of Poland’s statement in intervention on 6 and 7 February 2018 respectively.

26      On 20 February 2018, REA lodged its rejoinder.

27      By way of a measure of organisation of procedure of 30 October 2018, adopted in accordance with Article 89(3) of the Rules of Procedure, the Court requested all the parties to provide replies to a series of questions. The parties replied within the prescribed period. In particular, in its reply of 19 November 2018, the Commission informed the Court that, on 21 February 2017, it had reimbursed to the applicant the sum of EUR 1 498.34, corresponding to the amount of liquidated damages exceeding the threshold of 10% of the allegedly unjustified financial contribution received by the applicant in relation to the KMM-NOE and Boosting Baltic contracts, plus the sum of EUR 1 639.81, corresponding to the default interest which had been applied.

28      By way of a measure of organisation of procedure of 25 January 2019, adopted in accordance with Article 89(3) of the Rules of Procedure, the parties were invited to submit their observations as to whether, in view of the reimbursement of the principal sum of EUR 1 498.34, referred to in paragraph 27 above, the proceedings were in part devoid of purpose. The parties replied within the prescribed period. In particular, the applicant furnished credit note No 3234170031 issued by the Commission on 15 February 2017 regarding the reimbursement of the sum of EUR 1 498.34 and amended the form of order sought.

29      The applicant, supported by the Republic of Poland, claims that the Court should:

–        declare the action admissible;

–        annul the contested decision;

–        declare that the Commission erred in issuing debit note No 3241514040 (as reduced by credit note No 3233160082) and that the corresponding amount of EUR 67 984.13 is not payable;

–        order the Commission and REA to pay the applicant, in relation to the SMART-NEST project, the amount of EUR 69 623.94, plus interest from the date of the contested decision;

–        declare that the applicant is not required to pay liquidated damages to the Commission with regard to the KMM-NOE and Boosting Baltic projects or that the amount of such damages must be reduced;

–        order the Commission to pay the costs.

30      In response to the measure of organisation of procedure of 25 January 2019, the applicant amended the third head of claim in the application by reducing the amount of the contested debit note. Thus, by that head of claim, the applicant asks the Court to declare that the Commission erred in issuing debit note No 3241514040 (as reduced by credit notes No 3233160082 and No 3234170031) and that the corresponding amount of EUR 66 485.79 is not payable.

31      The Commission contends that the Court should:

–        dismiss the action as inadmissible or unfounded;

–        order the applicant to pay the costs.

32      REA contends that the Court should:

–        dismiss the action;

–        order the applicant to pay the costs.

 Law

 Subject matter of the dispute

33      The applicant has brought an action expressly seeking, first, under Article 263 TFEU, annulment of the contested decision (second head of claim) and, second, under Article 272 TFEU, enforcement of the rights arising under the KMM-NOE and Boosting Baltic contracts, concluded with the Commission, and under the SMART-NEST agreement, concluded with REA, and, accordingly, an order that the Commission and REA be found liable in that regard (third to fifth heads of claim).

34      As regards the claim under Article 272 TFEU, it must be noted that, by its third and fifth heads of claim, requesting the Court to declare, respectively, that the Commission erred in issuing debit note No 3241514040 (as reduced by credit notes No 3233160082 and No 3234170031), since the corresponding amount of EUR 66 485.79 is not payable, and that the applicant is not required to pay liquidated damages to the Commission in relation to the KMM-NOE and Boosting Baltic projects or that the amount of such damages must be reduced, the applicant must be regarded as asking the Court to declare that the claim the Commission allegedly holds under the KMM-NOE and Boosting Baltic contracts is not valid.

35      Under its fourth head of claim, relating to the SMART-NEST agreement, the applicant asks the Court to order the Commission and REA to pay the applicant the sum allegedly due under that agreement. In that regard, it must be noted that, pursuant to Article 6 of that agreement and Article II.19 of its general conditions, the sum of EUR 87 768.10 was paid by the applicant, on behalf of the beneficiaries of the agreement, as a contribution to the guarantee fund. That sum was to be returned to the beneficiaries, with the applicant acting as intermediary, at the stage of the final payment after completion of the project. REA states that it initiated the final payment on 1 September 2016 and that reimbursement of the contribution to the guarantee fund was to be made by a separate payment. However, by the contested decision, the Commission’s accounting officer informed the applicant that the debt REA owed the applicant under the SMART-NEST agreement in connection with the reimbursement of sums paid towards the guarantee fund would be offset against the Commission’s claims vis-à-vis the applicant under the KMM-NOE and Boosting Baltic contracts.

36      It follows that REA does not dispute that the sum of EUR 87 768.10 was due to the applicant and that only a partial payment was actually made to the applicant since the balance was paid by way of offsetting.

37      In those circumstances, it must be noted that, in essence, as regards the SMART-NEST agreement, the dispute relates solely to whether the contested decision has duly extinguished the applicant’s claim against REA concerning the reimbursement of the guarantee fund. That question must be examined in the light of the specific pleas directed against the contested decision in the context of the action under Article 263 TFEU, and in the light of whether the Commission actually has valid claims under the KMM-NOE and Boosting Baltic contracts, which is challenged in the action under Article 272 TFEU.

38      Accordingly, it is for the Court to examine, first, the application based on Article 272 TFEU, in so far as it seeks to dispute the existence of the Commission’s claims under the KMM-NOE and Boosting Baltic contracts, and, second, the application based on Article 263 TFEU seeking annulment of the contested decision and then to draw the appropriate conclusions as regards the alleged claim arising under the SMART-NEST agreement.

 The action in so far as it is based on Article 272 TFEU and the KMM-NOE and Boosting Baltic contracts (third and fifth heads of claim)

39      The applicant relies on five pleas in law, essentially claiming: (i) that it fulfilled its obligations as laid down in Article II.19(1) of the general conditions of the KMM-NOE and Boosting Baltic contracts; (ii) that the facts alleged by the Commission to justify its claim that those terms were not complied with have not been established; (iii) that the Commission has failed to establish its claims; (iv) that the Commission failed to perform its contractual obligations in good faith; and (v) that the amount of liquidated damages claimed pursuant to the provisions of Article II.30 of the general conditions of those contracts is excessive and that that claim should be dismissed or the amount reduced in accordance with Article 1231 of the code civil belge (Belgian Civil Code).

40      It is appropriate to consider together the first and second pleas, which relate to the eligibility of the expenditure declared to the Commission in connection with the performance of the KMM-NOE and Boosting Baltic contracts. The applicant claims that the findings made by the Commission in the final audit report are unfounded and that the applicant has established the eligibility of the expenses incurred. Similarly, it is appropriate to consider together the third and fourth pleas, which relate to the conduct of the procedure leading to the adoption of the final audit report and the procedure following the delivery of that report.

 Preliminary observations

–       The jurisdiction of the General Court

41      As a preliminary point, it should be recalled that, in accordance with Article 272 TFEU, the Court of Justice of the European Union has jurisdiction to give judgment pursuant to any arbitration clause contained in a contract concluded by or on behalf of the European Union, whether that contract be governed by public or private law. In accordance with Article 256(1) TFEU, the General Court has jurisdiction to hear and determine at first instance all actions or proceedings referred to in Article 272 TFEU.

42      In the present case, the General Court has jurisdiction to determine the present action, in so far as it is brought under Article 272 TFEU, on the basis of the arbitration clause in Article 13 of the KMM-NOE and Boosting Baltic contracts, which provides that the General Court has jurisdiction to hear any dispute between the European Union and its contractors as regards the validity, application or interpretation of those contracts.

–       The law applicable to the action

43      It should be borne in mind that, where proceedings have been instituted pursuant to an arbitration clause under Article 272 TFEU, the Court must resolve the dispute on the basis of the substantive rules of the law applicable to the contract (judgment of 4 February 2016, Isotis v Commission, T‑562/13, not published, EU:T:2016:63, paragraph 51).

44      In the present case, it must be noted that, under Article 12 of the KMM-NOE and Boosting Baltic contracts, the applicable substantive law is Belgian law.

45      The third paragraph of Article 1134 of the Belgian Civil Code provides that ‘[agreements] must be executed in good faith’.

46      Article 1231 of the Belgian Civil Code provides:

‘1. The court may, of its own motion or at the request of the debtor, reduce a penalty in the form of the payment of a specific sum of money, if that sum manifestly exceeds the amount which the parties would have been able to determine as compensation for the damage arising as a result of non-execution of the agreement.

Where it conducts a review, the court may not make a ruling requiring the debtor to pay a lesser sum than would have been due in the absence of a penalty clause.

2. The penalty may be reduced by the court if the main obligation has been partially fulfilled.

3. Any clause which is contrary to the provisions of this article shall be deemed not to have been agreed in the contract.’

47      Under Article 1291(1) of the Belgian Civil Code, ‘offsetting may only take place between two claims where both relate to a sum of money, or a fixed quantity of fungibles of the same type and where both are due and payable’.

48      Article 1315 of the Belgian Civil Code states:

‘A party claiming performance of an obligation must prove that the obligation exists.

Conversely, a party claiming to be relieved of an obligation must prove that he has made the payment or performed the act which gave rise to the extinction of his obligation.’

 The first and second pleas in law, claiming that the personnel costs in question are eligible

49      In the first place, the applicant claims that it has fulfilled its obligations under Article II.19(1) of the general conditions of the KMM-NOE and Boosting Baltic contracts.

50      The applicant states that, during the years in question, it granted its staff additional remuneration using different legal instruments. Thus, staff working on EU-funded research projects, in this instance, on the KMM-NOE and Boosting Baltic projects, received ‘task bonuses’, while staff working on nationally funded projects worked under ‘contracts for specific tasks’, which, according to the applicant, constituted a flexible legal instrument limited to an outcome, a price and a deadline and therefore did not require time sheets.

51      The applicant states that those two types of additional remuneration relate to the same type of activity, namely research work. It adds that ‘contracts for specific tasks’ were performed in accordance with applicable national law, under which hourly rates could not be used, and that the use of such contracts was recommended by the Polish authorities. It also states that both types of remuneration were granted under the direct supervision of its director, following clear and transparent procedures, taking account in particular of the level of experience of researchers and the complexity of the work to be carried out.

52      On the basis of individual tables that the applicant has prepared and sent to the Commission, the applicant maintains that, in the course of the years in question, the level of additional remuneration paid to researchers working on national projects was generally higher than the level of additional remuneration paid to staff working on EU-funded projects. Moreover, it claims that a survey of 17 of its staff members working on the KMM-NOE project shows that such members earned the majority of their additional revenue working on national research projects. In that regard, the applicant submits that the Commission cannot hide behind the lack of hourly rates for ‘contracts for specific tasks’ in order to preclude any economic comparison between the remuneration paid in connection with EU-funded projects and that paid in connection with nationally funded projects, in so far as: (i) other comparative criteria, such as monthly rates, have been provided; (ii) the Commission displayed a certain degree of flexibility with the Polish authorities during the negotiations relating, inter alia, to those projects, as evidenced by the letter of 17 August 2006 from the Polish Minister for Science and Higher Education and the Commission’s letter of 13 November 2014; and (iii) the principle of equivalence between remuneration paid in relation to national projects and that paid in relation to EU-funded projects is an official policy that the Commission intends to apply retroactively, as evidenced by the statements of one of its members.

53      In that regard, the Republic of Poland points to the alleged manifest inconsistency in the Commission’s conduct in so far as it rejected the personnel costs as ineligible even though it considered the ‘contracts for specific tasks’ to be sufficient, as is apparent from the letter of 17 August 2006 referred to in paragraph 52 above, and such costs had been accepted in connection with projects covered by the Seventh Framework Programme of the European Community for research, technological development and demonstration activities. The Republic of Poland claims that such conduct breaches the principle of the protection of legitimate expectations and the principle of sincere cooperation between the Member States, and argues, relying on the Ombudsman’s decision of 22 June 2017, that the question of eligibility of staff costs should be dealt with in accordance with the principles of equity and justice.

54      The applicant also maintains that the rates of additional remuneration paid to its staff are consistent with local market levels, in particular the remuneration paid by other Central European institutions, and that the establishment of that fact is material for the purposes of establishing that its personnel costs are economic.

55      According to the applicant, the Commission’s objections do not call into question whether the additional remuneration at issue is economically rational, within the meaning of the judgment of 19 February 2016, Ludwig-Bölkow-Systemtechnik v Commission (T‑53/14, not published, EU:T:2016:88), but rather take issue with the use of ‘contracts for specific tasks’ by the applicant and other comparable institutions in Poland, even though such use has been accepted as regards other beneficiaries.

56      In the second place, the applicant claims that, in the light of the information submitted to the Commission, the Commission has failed to satisfy the evidential standard required to establish that personnel costs were higher in EU-funded projects. In that regard, the applicant criticises the Commission for failing to take account of the fact that, while it is true that the internal bonus rules imposed a 50% cap on additional remuneration for national projects, that cap was not applied in practice. It also criticises the Commission for taking a number of successive positions arguing, first, that the remuneration paid to staff working on EU-funded projects was not in line with market conditions and, second, that the comparison of the two bonus schemes was not relevant, or was even impossible.

57      The applicant also claims that the Commission applied a correction rate that was arbitrary since it was based on the incorrect cap of 50% and that, by the Commission’s own admission, the application of other rates might have been appropriate and was being considered.

58      The applicant also alleges that the Commission distorted some of the evidence that it provided. Thus, for the purposes of comparing the additional remuneration paid to staff working on EU-funded projects and that paid at national level, the Commission failed to take into account the sum of EUR 2 million paid by the applicant to its researchers working on national projects, by way of remuneration in respect of ‘contracts for specific tasks’. The Commission also failed to address the evidence adduced by the applicant which established that, during the period from 2005 to 2008, it did not pay any additional remuneration to staff working on national projects under its internal bonus scheme. The applicant thereby concludes that, by applying a correction which it knows to be arbitrary and unfounded, the Commission seeks to reverse the burden of proof.

59      The Commission contends that those pleas in law are unfounded.

60      As regards the first and second pleas, the applicant and the Commission essentially disagree on whether the Commission was entitled to exclude from the eligible expenditure the part of ‘task bonuses’ in excess of 50% of the basic monthly salary.

61      As a preliminary point, it must be recalled that the Commission is bound, in accordance with Article 317 TFEU, by an obligation of sound financial management of the resources of the European Union. The Commission is in particular obliged to check that the budgetary resources of the European Union are used for the purposes intended. Pursuant to that obligation, in the grant agreements that the Commission concludes in the name of and on behalf of the European Union, the Commission subjects the award of the grant to conditions which guarantee that the financial contribution of the Union is in fact used to fund the project for the implementation of which the contribution was granted. The award of the grant is therefore conditional on compliance with certain criteria that determine which costs are to qualify as eligible costs to be reimbursed in the context of the project concerned and on the compliance, by the beneficiary, with certain obligations relating to, inter alia, the financial justification of the costs declared to have been incurred for the implementation of that project or action. The beneficiary of the grant therefore acquires a definitive right to payment of the EU financial contribution only if all the conditions to which the award of the grant is subject are satisfied. Given the objective which they pursue, the conditions thus laid down are of fundamental importance in the structure of grant or financial aid agreements (see judgment of 8 September 2015, Amitié v Commission, T‑234/12, not published, EU:T:2015:601, paragraph 146 and the case-law cited).

62      In the present case, pursuant to Article II.19(1)(a) to (d) of the general conditions of the KMM-NOE and Boosting Baltic contracts, in order to be eligible, the costs incurred for the implementation of each project must, inter alia: (a) be genuine, economic and necessary for the implementation; (b) have been determined in accordance with the contractor’s usual accounting principles; (c) have been incurred during the lifetime of the project, subject to certain exceptions; and (d) have been recorded in the accounts of the contractor that incurred them, no later than at the date of the issue of the audit certificate referred to in Article II.26 of the general conditions, and the accounting procedures used in the recording of costs and receipts must comply with the accounting rules of the State in which the contractor is established and must permit a direct reconciliation of the costs incurred and receipts in connection with the implementation of the project and the overall statement of accounts relating to the overall business activity of the contractor.

63      As regards the categories of expenditure that may be incurred for the implementation of the projects, Articles II.20 and II.21 of the general conditions of the KMM-NOE and Boosting Baltic contracts specify the direct and indirect costs respectively. According to Article II.20(1) of the general conditions, direct costs are all those costs that are eligible, within the meaning of Article II.19(1) of the general conditions, that can be identified by the contractor in accordance with its accounting system and that can be attributed directly to the project. Under Article II.20(2) of the general conditions, direct personnel costs are to be limited to the actual costs of the personnel assigned to the project.

64      Moreover, under Article II.29(1) of the general conditions of the KMM-NOE and Boosting Baltic contracts, the Commission may, at any time during the lifetime of the contract in question and up to 5 years after its expiry, arrange for financial audits to be carried out by outside reviewers or auditors, by the Commission’s own departments, or by the European Anti-Fraud Office (OLAF). Any amounts due to the Commission as a result of the findings of any such audit may be recovered.

65      In that regard, it must be noted that, where a contract contains an arbitration clause within the meaning of Article 272 TFEU, it is for the party that has declared costs to the Commission for the grant of a financial contribution from the European Union to provide proof establishing that those costs were genuine costs that were in fact necessary and were incurred for the implementation of the project during the lifetime of the project. However, where the Commission seeks recovery of a claim following a financial audit, it is for the Commission to prove, provided that the applicant has produced the statements of costs and other relevant information, that performance of the contract is unsatisfactory or that the statements of costs are not correct or credible (see judgment of 26 January 2017, Diktyo Amyntikon Viomichanion Net v Commission, T‑703/14, not published, EU:T:2017:34, paragraph 84 and the case-law cited).

66      In the present case, it is apparent from the final audit report, which the Commission sent to the applicant by letter of 26 August 2013, that the personnel costs declared in connection with the KMM-NOE and Boosting Baltic contracts, namely EUR 850 228.43 in relation to the KMM-NOE contract and EUR 63 907.91 in relation to the Boosting Baltic contract, were regarded by the Commission as eligible costs only up to the amount of EUR 745 246.22 and EUR 46 823.33, respectively. The auditors concluded that a part of the bonuses paid by the applicant to its staff and declared in respect of the KMM-NOE and Boosting Baltic contracts constituted costs that were neither economic nor determined in accordance with the applicant’s usual accounting principles, within the meaning of Article II.19(1)(a) and (b) of the general conditions of those contracts.

67      In that regard, the auditors noted that, under the applicant’s internal bonus rules, its staff members could claim, in addition to the basic monthly salary, various bonuses, including a ‘task bonus’ on account of their participation in a particular project. They found that the amount of the ‘task bonus’ was calculated each month according to, first, the time actually spent working on the particular project by each member of staff and, secondly, the maximum theoretical amount of the bonus. For each member of staff, that amount was expressed as a percentage of their basic monthly salary. The auditors pointed out that ‘task bonuses’ calculated in that manner also depended on other factors, such as the budget available. They also noted that, under the internal bonus rules, the maximum theoretical amount of ‘task bonuses’ varied according to the origin of the project’s funding. Thus, in projects financed by the European Union or other international sources, ‘task bonuses’ could amount to up to 300% of the basic monthly salary. By contrast, for national projects, ‘task bonuses’ were capped at 50% of that salary.

68      The auditors then determined and compared the actual hourly rates of staff as regards the basic salary, the ‘task bonuses’ paid to staff working on the KMM-NOE and Boosting Baltic projects, and the ‘task bonuses’ paid to staff working on other projects. They concluded from this that the applicant’s staff that worked on the KMM-NOE and Boosting Baltic projects had been paid ‘task bonuses’ at an hourly rate that was significantly higher than the hourly rate of the basic salary and of the ‘task bonuses’ paid in relation to projects not financed by the European Union. The auditors also found that those bonuses were awarded on a case-by-case basis, depending on non-standardised criteria which were not objective.

69      The auditors therefore concluded that the personnel costs arising from the payment of ‘task bonuses’ were eligible only up to a cap of 50% of the basic monthly salary, which is the maximum rate laid down for staff not working on projects financed by the European Union or by other international sources.

–       The reference to a maximum of 50% of the basic monthly salary for ‘task bonuses’

70      The applicant claims, first, that Article 7(3)(b) of the internal bonus rules applicable from 1 January 2005 (‘the 2005 rules’), which introduced a cap of 50% of the basic monthly salary for certain ‘task bonuses’, ‘remained [in those rules] by mistake’ and should have been removed; second, that that provision was not applied during the period in question; third, that the amount of bonuses actually paid to staff in connection with national research projects exceeded the 50% cap laid down in that provision; and, fourth, that such a cap is arbitrary.

71      It is apparent from the documents before the Court that the applicant’s internal bonus rules that were adopted in 1993 (‘the 1993 rules’) provided that ‘task bonuses’ were to be capped, for all kinds of activity, without distinction, to two average remunerations in five sectors of the economy. Those rules were repealed and replaced by the 2005 rules.

72      The 2005 rules provide for the possibility of paying different types of bonuses to members of staff, including ‘task bonuses’, the grant of which, according to Article 4 of those rules, is linked to the performance of additional tasks. Article 7(1) of those rules states that ‘task bonuses’ may be granted in cases where the employee is assigned tasks that go beyond his duties or require work outside normal working hours. Article 7(3)(a) to (d) lays down the method for calculating the amount of that bonus. Thus, in essence, it is capped at 50% of the basic monthly salary of an employee when it relates to the performance of tasks linked to the applicant’s duties under his contract, to nationally funded work carried out by a researcher, or to certain other tasks. By contrast, the bonus may constitute up to 300% of the basic monthly salary of an employee when working on research projects related to the European Union’s framework programmes, structural funds or other programmes financed by foreign sources.

73      First, the applicant has failed to established that Article 7(3)(b) remained in the 2005 rules by mistake. The 1993 rules did not contain a similar provision which could have remained in the 2005 rules by mistake. Moreover, as stated in paragraph 71 above, under the 1993 rules, the amount of the bonuses granted did not vary according to the origin of the funding of the research projects. In addition, as the Commission noted in its letter of 9 April 2015, the applicant submitted the 2005 rules to the auditors without any proviso to the effect that the provision in Article 7(3)(b) of those rules was incorrect.

74      Second, the Commission does not dispute that, during the period in question, staff working on nationally funded projects received ‘additional remuneration’ only on the basis of ‘contracts for specific tasks’, rather than ‘task bonuses’. Nevertheless, as the Commission stated in its letter of 9 April 2015, the fact that Article 7(3)(b) of the 2005 rules was not applied does not affect its validity or even simply render irrelevant the Commission’s reference to that provision, inserted in the 2005 rules, which were adopted at the same time as the projects at issue were implemented.

75      Third, in so far as the applicant claims that, in practice, the amount of bonuses granted in connection with national projects, during the period concerned, exceeded by far the 50% cap, it must be noted that the applicant is referring to the sums paid under ‘contracts for specific tasks’, which are governed by a decree of the Polish Minister for Science and Information Technology of 4 August 2005 on criteria and procedures for the granting and financial reporting of funding for science, and that decree does not set any caps. Therefore, such an argument is not capable of establishing non-compliance, in practice, with the 50% cap laid down in Article 7(3)(b) of the 2005 rules.

76      Fourth, the fact that the Commission considered other correction rates for the personnel costs which, according to the Commission, would have resulted in higher adjustments to the detriment of the applicant, is not capable of establishing that the correction rate chosen by the Commission is arbitrary, given that it corresponds to the application of the 50% cap laid down in the 2005 rules and, as stated in paragraph 73 above, it has not been established that that cap remained in those rules by mistake.

77      It follows that the applicant is not justified in claiming that the Commission was wrong to refer to the 50% cap set in the 2005 rules.

–       The failure to take into account the remuneration paid under ‘contracts for specific tasks’

78      The applicant takes issue with the failure to take into account the remuneration paid under ‘contracts for specific tasks’ for the purposes of assessing the economic nature of ‘task bonuses’ paid under the KMM-NOE and Boosting Baltic contracts.

79      First of all, it should be noted that ‘task bonuses’ and the bonuses granted in the form of ‘contracts for specific tasks’ are governed by two different legal regimes.

80      It should be recalled that ‘task bonuses’ are provided for by the 2005 internal rules and are intended, according to Article 7(1) thereof, to pay remuneration for tasks that go beyond the duties of staff members or require work outside normal working hours. The amount of ‘task bonuses’ is determined by reference to the employee’s monthly salary. As explained in the audit report and acknowledged by the applicant, each month, the amount of the bonus to be paid is calculated on the basis of the reference amount for the monthly bonus, which is expressed as a percentage of the basic salary (KMM-NOE project) or an hourly rate (Boosting Baltic project), and the portion of time actually spent on those projects by the member of staff. The member of staff is required to complete time sheets recording the hours spent on projects in relation with which ‘task bonuses’ are awarded.

81      On the other hand, ‘contracts for specific tasks’ were introduced by a decree of the Polish Minister for Science and Information Technology of 4 August 2005 on criteria and procedures for the granting and financial reporting of funding for science. Such contracts provide for the payment of a set amount by way of remuneration for certain work that must be delivered by a particular date. Thus, the researcher does not complete time sheets but undertakes to deliver the project by a certain date. Any work subject to ‘contracts for specific tasks’ may not be carried out during working hours, as confirmed by the applicant itself in its reply of 20 July 2011 to an auditor’s question.

82      Next, as regards the comparison between remuneration paid under ‘contracts for specific tasks’ and that paid under ‘task bonuses’, the applicant relies on a number of tables on the basis of which it claims that the amount of remuneration paid under the KMM-NOE and Boosting Baltic contracts and that paid in relation to national projects is similar, or even that researchers working on national projects receive higher remuneration.

83      In that regard, the tables in Annex 27 to the application set out, in relation to each of the years in question, the basic annual salary of 83 researchers, as well as (i) the annual remuneration awarded to them in connection with national projects and the ratio between that remuneration and their basic salary and (ii) the annual remuneration paid in connection with EU-funded projects and the ratio between that remuneration and their basic salary. The tables in Annex 28 to the application extract data from the tables in Annex 27 relating to researchers who worked on the KMM-NOE and Boosting Baltic contracts.

84      Admittedly, those tables show that, during the period concerned, the annual remuneration awarded to the applicant’s staff working on national research projects on the basis of ‘contracts for specific tasks’, expressed as non-adjusted data or in relation to the basic salary of staff, was greater overall than that awarded annually in the form of ‘task bonuses’ paid in connection with EU-funded projects, in particular the KMM-NOE project. However, as argued by the Commission, given the lack of evidence regarding the amount of time spent by those members of staff on the different types of projects, such a finding does not enable any conclusion to be drawn regarding the comparability of the amounts paid under the two types of remuneration.

85      The tables in Annex 35 to the application show, for the years in question, the basic monthly salary of researchers and indicate, first, the monthly remuneration awarded to those researchers on the basis of ‘contracts for specific tasks’ and the ratio between that remuneration and their basic monthly salary and, second, the monthly remuneration awarded to researchers in connection with EU-funded projects and the ratio between that remuneration and their basic monthly salary.

86      In that regard, it must be noted that data regarding the deadline, expressed in months, for the delivery of work subject to ‘contracts for specific tasks’ does not provide any specific information regarding the time actually spent by the researchers on that work, which, as stated in paragraph 81 above, may be carried out only outside normal working hours. Accordingly, the duration, expressed in months, of ‘contracts for specific tasks’ cannot be compared with the duration, expressed in months, of work carried out in connection with EU-funded projects, which corresponds to the amount of hours worked by researchers, as recorded in their time sheets, transposed into months of work.

87      The comparison made by the applicant by means of the tables in Annexes 27, 28 and 35 to the application is also vitiated by the fact that, in view of the purpose of ‘task bonuses’, as stated in paragraph 80 above, remuneration is paid for work carried out in the context of the KMM-NOE and Boosting Baltic contracts, at least in part, by the basic salary, to which the ‘task bonus’ is added.

88      It follows that, on the basis of the tables relied on, the applicant has failed to establish that ‘task bonuses’ and the remuneration paid under ‘contracts for specific tasks’ are comparable.

89      Lastly, the fact that the ‘contracts for specific tasks’ were concluded in full compliance with national law, under which no time sheets are required, does not alter the obligation incumbent on the applicant, pursuant to the provisions of Article II.19(1)(a) and (b) of the general conditions of the KMM-NOE and Boosting Baltic contracts, to establish that, in practice, the remuneration paid to its staff under those contracts was not higher than that paid to employees who were not working on EU-funded projects. The same is true of the fact that the use of ‘contracts for specific tasks’ was recommended by the Polish authorities and that ‘task bonuses’ and bonuses paid under ‘contracts for specific tasks’ relate to work done in the same field of activity, namely research.

90      It follows from the foregoing that the applicant has failed to establish that the Commission was incorrect in failing to take into account the remuneration awarded under ‘contracts for specific tasks’ for the purposes of assessing the economic nature of ‘task bonuses’ paid under the KMM-NOE and Boosting Baltic contracts.

–       The Commission’s allegedly inconsistent refusal to take into account the remuneration paid under ‘contracts for specific tasks’

91      The applicant and the Republic of Poland claim that the Commission acted inconsistently by refusing to take into account the remuneration paid under ‘contracts for specific tasks’ when assessing the economic nature of ‘task bonuses’. The Republic of Poland argues that, in so doing, the Commission failed to have regard for the principles of the protection of legitimate expectations and of sincere cooperation between the Member States and the principles of equity and justice. The applicant also claims that the Commission took a number of successive positions in order to justify the refusal to take account of the remuneration paid under ‘contracts for specific tasks’.

92      First of all, in so far as the Republic of Poland alleges infringement of the principle of sincere cooperation between the Member States, it must be recalled that, pursuant to that principle, laid down in Article 4(3) TEU, the European Union and the Member States are required, in full mutual respect, to assist each other in carrying out tasks which flow from the Treaties.

93      However, it must be stated that, in connection with the claim based on Article 272 TFEU, the Court is hearing the present case as the court having jurisdiction over the contract and that, therefore, only infringements of the law applicable to the KMM-NOE and Boosting Baltic contracts, concluded between the applicant and the Commission, may be invoked. Accordingly, the complaint alleging infringement of the principle of sincere cooperation must be rejected as inadmissible.

94      Moreover, even if, by its complaint, the Republic of Poland must be regarded as claiming that it was not heard by the Commission before the latter made its decision finding the personnel costs in question ineligible, it is clear that such a procedure is not provided for in the KMM-NOE and Boosting Baltic contracts.

95      Next, it must be borne in mind that the principle of the protection of legitimate expectations governs the relationship of subordination between a citizen and the authorities and extends to any individual who is in a situation in which it is clear that the administration, by giving him precise assurances, led him to entertain justified expectations. That principle therefore falls within the scope of the review of legality, under Article 263 TFEU, which the General Court may conduct in respect of acts adopted by the institutions (judgments of 18 November 2015, Synergy Hellas v Commission, T‑106/13, EU:T:2015:860, paragraph 66, and of 5 October 2016, European Children’s Fashion Association and Instituto de Economía Pública v EACEA, T‑724/14, not published, EU:T:2016:600, paragraph 75).

96      Nevertheless, it cannot be ruled out that a form of legitimate expectations may be relied on in contract law where it forms part of the obligation on the parties to a contract to perform it in good faith (judgment of 5 October 2016, European Children’s Fashion Association and Instituto de Economía Pública v EACEA, T‑724/14, not published, EU:T:2016:600, paragraph 85).

97      In that regard, it should be noted that the Belgian Cour de Cassation (Court of Cassation) has ruled that the principle established by Article 1134 of the Belgian Civil Code, under which agreements must be performed in good faith, prohibited a party from abusing a right conferred on it by the agreement. An abuse of rights consists in exercising a right in a manner that manifestly exceeds the limits of the normal exercise of that right by a person exercising all due care (Cour de Cassation, 16 November 2007, AR nr C.06.0349.F.1). It is possible that it constitutes an abuse of rights where the holder of a right invokes it after having caused the other party to entertain the legitimate expectation that it would not exercise it by conduct which is objectively incompatible with the normal exercise of that right (judgment of 18 November 2015, Synergy Hellas v Commission, T‑106/13, EU:T:2015:860, paragraph 73).

98      In the present case, it is not apparent from the documents before the Court that, in the audit procedure and the subsequent exchanges, the Commission took a number of successive positions in order to call into question the eligibility of part of the ‘task bonuses’ paid to the applicant’s staff. In its replies to the applicant’s observations on the draft audit report, the Commission stated that, given the lack of data regarding the hourly rates of persons working under ‘contracts for specific tasks’, the bonuses paid in that regard could not be compared with the ‘task bonuses’ paid to researchers working under the KMM-NOE and Boosting Baltic contracts. In that regard, it must be noted that the Commission’s letters of 8 May and 19 December 2014, on which the applicant relies, state that it is not possible to compare the two types of bonuses paid.

99      Similarly, it is not apparent from the documents before the Court that the Commission agreed to take account of ‘contracts for specific tasks’ for the purposes of assessing the personnel costs. In particular, as noted by the Commission, the letter of 17 August 2006 of the Polish Minister for Education and Higher Education, addressed to university rectors and directors of research institutes following consultations with the Commission regarding the calculation of personnel costs in projects funded under the framework programmes, on which the applicant and the Republic of Poland rely, does not contain any reference to ‘contracts for specific tasks’. In that letter, the Minister states that the Commission will agree to take account of additional remuneration paid to researchers under certain conditions, in particular where such remuneration is determined on the basis of a reasonable hourly rate, laid down in internal rules. Likewise, the letter of 30 September 2015 of the Minister for Education and Higher Education merely draws attention to the letter of 17 August 2006 and to the widespread use of ‘contracts for specific tasks’ by research institutes in Poland. In addition, although the Republic of Poland maintains that the Commission agreed to take account of personnel costs connected with ‘contracts for specific tasks’ in connection with other projects, it has failed to establish that that claim is true. Lastly, in so far as the applicant and the Republic of Poland rely on the policy statements made by a Member of the Commission on 23 November 2016, it must be noted that the latter stated that he was in favour of equal remuneration for researchers participating in EU-funded projects and researchers working on national projects. Such statements cannot, in any event, be interpreted as authorising the taking into account of remuneration received under ‘contracts for specific tasks’, in connection with national projects, for the purposes of comparison with the personnel costs in the audited projects.

100    It follows that the applicant, supported by the Republic of Poland, is not justified in claiming that the Commission adopted a changing and inconsistent position regarding the taking into account of remuneration paid under ‘contracts for specific tasks’ in its assessment of the economic nature of the personnel costs, or that the Commission failed to have regard to the principle of the protection of legitimate expectations by failing to execute the contracts at issue in good faith.

101    Lastly, in so far as the Republic of Poland evokes ‘the principles of equity and justice in the performance of the contracts’, it must be noted that it merely asserts that those principles should also be applied when assessing the taking into account of remuneration paid under ‘contracts for specific tasks’, without providing any further details. Under Article 145(2)(b) of the Rules of Procedure, a statement in intervention must contain, inter alia, the pleas in law and arguments relied on by the intervener. In accordance with settled case-law in relation to an application initiating proceedings, applicable by analogy in relation to a statement in intervention (see judgment of 15 June 2005, Regione autonoma della Sardegna v Commission, T‑171/02, EU:T:2005:219, paragraph 186 and the case-law cited), the statement of the pleas in law and complaints must be sufficiently clear and precise to enable the defendant to prepare its defence and the Court to give judgment in the action without the need to seek further information (see judgment of 14 December 2005, Honeywell v Commission, T‑209/01, EU:T:2005:455, paragraph 55 and the case-law cited). Since the complaint submitted by the Republic of Poland does not satisfy those requirements, it must be rejected as inadmissible.

–       The procedure for granting ‘task bonuses’

102    The applicant submits that, contrary to the findings of the final audit report, ‘task bonuses’ were awarded following clear and transparent procedures and on the basis of objective criteria.

103    In that regard, it is apparent from the documents before the Court that ‘task bonuses’ were proposed by the project team, under the direction of the project coordinator, who estimated how much time would be needed to complete the work and proposed a reference bonus amount or hourly rate. That amount or that bonus rate was determined taking into account the complexity of the work, the level of expertise required and the available budget. It then had to be approved by the applicant’s director.

104    In response to a question from the Court concerning the objective criteria that, according to the applicant, were applied for the purposes of determining the amount of the ‘task bonuses’, the applicant stated that, in the case of the KMM-NOE project, the amount of the monthly reference bonus was set in the light of the basic monthly salary, including any increase granted for seniority, to which a multiplication factor was applied depending on the type and level of competence of each person and the tasks assigned (management, research, administrative support, etc.). The applicant confirmed that the reference amount for the ‘task bonus’ was used to determine the additional remuneration to be paid, calculated pro rata temporis on the basis of the working time actually spent on the project. It also stated that the amount of working time that could be spent on the project could be fixed.

105    It should be noted that there is not one single multiplication factor according to the type of duties carried out in connection with the KMM-NOE project. As is apparent from the applicant’s reply to one of the questions put by the Court, that multiplication factor varies, essentially, between 1 and 4 for employees responsible for managing the project and providing administrative support, and between 1 and 2 for employees conducting research activities. Accordingly, the applicant has failed to establish that the multiplication factor was determined on the basis of objective criteria.

106    Moreover, as regards the Boosting Baltic project, the applicant stated that the ‘task bonuses’ had been calculated by applying, to the hours actually spent on the project, an hourly rate defined according to the nature of the task entrusted to each employee. However, it must be noted that the hourly rates provided by the applicant vary, even for employees carrying out the same type of task, and that the applicant has not provided any further details in that regard.

107    In the light of the documents before the Court, it must be held that the applicant has failed to establish that either the reference amount for the ‘task bonus’ or its hourly rate were determined in the light of objective criteria. In that regard, as the Commission submits, the mere fact that the grant of the bonuses was subject to the decision of the applicant’s director does not compensate for the lack of such criteria.

–       Whether the rate of ‘task bonuses’ paid by the applicant was in line with local market levels

108    The applicant claims that the rates of additional remuneration paid to its staff are in line with local market levels.

109    Such a complaint is ineffective since, as stated in paragraph 68 above, the rates of ‘task bonuses’ paid to the staff working on the KMM-NOE and Boosting Baltic projects was found to be non-economic, following a comparison of those rates with the bonus rates applicable to staff working on national projects, not with local market levels. In that regard, it must be noted that, although the Commission stated in the draft audit report that the staff costs in question were higher than the remuneration paid for similar work in similar Polish institutions, it did not include that statement in the final audit report, contrary to the claims of the applicant.

110    It follows from all of the foregoing that the applicant has not adduced proof of the eligibility of the staff costs in question. Consequently, the first and second pleas must be rejected as unfounded.

 The third and fourth pleas in law, regarding, in essence, the conduct of the audit procedure and the procedure following the audit report

111    The applicant maintains, first, that the audit report was signed by an auditor who took over the audit procedure for the final review, even though the applicant was never informed that the auditor in charge of the report was to be changed and the Commission provided no explanation in that regard. It also submits that the Commission failed to justify the 2-year period between July 2011, when the auditor suggested that the final audit report would be delivered shortly, and August 2013, when the final report was signed. The applicant concludes from this that the initial auditor either prepared a different report, which was not accepted by the Commission, or that he refused to sign the final audit report that the Commission wanted to adopt. It therefore expresses doubts as to the compatibility of the audit report with the Code of ethics for professional accountants issued by the International Ethics Standards Board for Accountants (IESBA) of the International Federation of Accountants (IFAC) and, in particular, the principles of integrity and of objectivity underlying that code. In that regard, the applicant requests that the Court adopt certain measures of inquiry, including the hearing of the original auditor.

112    Second, the applicant alleges infringement of Article 135(4) of the Financial Regulation in so far as, by merely abiding by the findings of the audit report, the authorising officer clearly failed to assess the seriousness of the alleged error or the proportionality of the recovery.

113    Third, the applicant alleges that the conduct of the audit procedure gave rise to infringement of Article 1134 of the Belgian Civil Code, under which the parties must perform the contract in good faith. It claims that the Commission did not act fairly as it remained silent for over 2 years after the applicant’s reply to the draft audit report, which prevented the applicant from having discussions in that regard with the initial auditor. In addition, the Commission abruptly and unfairly terminated discussions and took the view, without any justification, that any discussion regarding the determination of comparative criteria for the personnel costs was nugatory. Lastly, the applicant maintains that the Commission abused its right to offset or, at the very least, that its use of that right was at odds with the standards of conduct in good faith between contractual partners.

114    The Commission contends that those pleas in law are unfounded.

115    It should be noted at the outset that, first, as regards grant agreements, the award of the grant is conditional upon the beneficiary complying with certain criteria and certain obligations relating, inter alia, to the financial justification of the costs declared to have been incurred for the implementation of the projects concerned. The beneficiary of the grant therefore acquires a definitive right to payment of the EU financial contribution only if all the conditions to which the award of the grant is subject are satisfied (see judgment of 8 September 2015, Amitié v Commission, T‑234/12, not published, EU:T:2015:601, paragraph 146 and the case-law cited). That consideration is applicable irrespective of the parties’ performance of the other obligations laid down in the grant agreement, in particular those relating to the conduct of audits.

116    In the present case, it must be recalled that the applicant accepted, under Article II.29(1) of the general conditions of the KMM-NOE and Boosting Baltic contracts, that, during performance of the contract and up to 5 years after the end of the project, audits could be carried out in order to verify that the project had been properly executed and that, if it were apparent from those audits that certain sums had been unduly paid to the contractor, the Commission would be entitled to issue recovery orders. That provision does not specify the technical and practical conditions in which the auditors must do their work. However, the auditors’ declaration annexed to the Commission’s letter of 26 August 2013 states that the audit was carried out in accordance with the international standards on auditing (ISA), as defined by IFAC, or other equivalent internationally accepted standards. There is, moreover, no regulatory provision or contractual term specifying the duration of the audit provided for in Article II.29(1) of the general conditions of the KMM-NOE and Boosting Baltic contracts.

117    Nevertheless, in determining of the obligations of the parties arising out of the implementation of grant agreements, account must be taken of the obligation on the parties to a contract to execute it in good faith.

118    In the present case, it must be noted that the draft audit report was sent to the applicant by email, on 18 March 2011, by the Commission official who was initially in charge of the audit. The applicant submitted its observations on that document by letter of 18 April 2011 and, following a request from that official on 8 July 2011, the applicant sent further information by email of 20 July 2011. The Commission sent the final version of the audit report by letter of 26 August 2013. That version was signed, inter alia, by another Commission official with the comment ‘took over for final review’ and stated that the Commission official who had initially been in charge of the audit had moved to another department of the Commission.

119    Contrary to the claims of the applicant, firstly, the audit report states the reason why another official took over the procedure, namely because the official who had initially been in charge of the audit had left the department. Secondly, there is nothing in the email of 8 July 2011 that could be interpreted as suggesting that the final version of the audit report would be delivered shortly.

120    Against that background, the mere fact that a period of over 2 years elapsed between delivery of the draft audit report and delivery of the final version does not constitute prima facie evidence that the official initially responsible for the audit prepared a different final audit report, which was not accepted by the Commission, or refused to sign the final audit report sent to the applicant, or that there were disagreements within the Commission regarding the approach taken by the auditors.

121    Moreover, the draft version of the audit report contains, in essence, the same conclusions as the final version of the audit report.

122    In that regard, it is for the Court to appraise whether measures of organisation of procedure and of measures of inquiry are appropriate (see, to that effect, judgment of 9 March 2015, Deutsche Börse v Commission, T‑175/12, not published, EU:T:2015:148, paragraph 417 and the case-law cited). In the present case, in the absence of prima facie evidence in support of the applicant’s assertions concerning the reasons for the time that elapsed between the draft and final versions of the audit report, the measure of organisation of procedure and the measure of inquiry requested by the applicant, that is, respectively the disclosure of relevant information concerning the manner in which the final audit report was prepared and approved between 2011 and 2013, and the hearing of the auditor responsible by the Court, would serve no purpose.

123    Moreover, as regards the period for delivering the final version of the audit report, the Commission was required, pursuant to the principle requiring that contracts be executed in good faith, to communicate the findings of the auditors to the applicant within a reasonable period in order to enable it to contest them effectively and, more generally, not to leave it in a state of uncertainty, which would be prejudicial to it.

124    In the present case, as stated in paragraph 120 above, a period of over 2 years elapsed between delivery of the draft audit report and the final version. While the Commission claims that that period was due to the organisation of internal consultations and informal contact with the applicant, it fails to establish as much. Moreover, such a period cannot be justified by the departure of the official who was initially in charge of the audit. In that context, it must be held that that period is unreasonable and, therefore, that the Commission failed to fulfil its contractual obligations, as interpreted in the light of the principle that contracts must be executed in good faith.

125    Nevertheless, it is not apparent from the documents before the Court that the unreasonable delay in communicating the final audit report to the applicant affected its ability to effectively contest the findings of that report, as it alleged.

126    In that regard, it must be borne in mind that, according to the Commission, the official who was initially in charge of the audit left his position in the directorate responsible for the audit on 31 August 2011, that is to say, a little more than a month after the Commission sent the applicant the information it requested following its observations on the draft audit report. In view of that sequence of events, it cannot be claimed that, if the final audit report had been communicated to the applicant within a reasonable period, the applicant could have discussed the report with the official who was initially in charge of the audit. Above all, it should be noted that, following delivery of the final audit report, discussions between the applicant and the Commission continued through numerous exchanges of correspondence and the organisation of at least two meetings on 10 October 2013 and 12 February 2015. The applicant was thus given an opportunity to effectively contest the findings of the report by submitting observations and supporting documents, which the Commission examined and replied to.

127    It should also be noted that, in addition to being signed by the official who took over from the official initially responsible for the audit, the final audit report was also signed by another Commission official who took part in the audit procedure from the beginning.

128    Therefore, notwithstanding the infringement found in paragraph 124 above, it is necessary to reject the complaints alleging, in essence, that the Commission did not carry out its contractual obligations in good faith as regards the conduct of the audit, without there being any need to order the measures requested by the applicant.

129    Second, as regards the procedure following the final audit report, the applicant alleges infringement of Article 135(4) of the Financial Regulation, according to which:

‘Where such errors, irregularities or fraud are attributable to the beneficiary, or should the beneficiary breach his or her obligations under a grant agreement or decision, the authorising officer responsible may, in addition, reduce the grant or recover amounts unduly paid under the grant agreement or decision, in proportion to the seriousness of the errors, irregularities or fraud or of the breach of obligations, provided that the beneficiary has been given the opportunity to make observations.’

130    It must be recalled that, in an action based on Article 272 TFEU, the Court must resolve the dispute on the basis of the substantive law applicable to the contract. Since the KMM-NOE and Boosting Baltic contracts are governed by Belgian law, the complaint alleging infringement of Article 135(4) of the Financial Regulation must be rejected as inadmissible.

131    In any event, the complaint alleging infringement of Article 135(4) of the Financial Regulation is unfounded, in so far as it alleges, in essence, that the authorising officer felt bound by the findings of the final audit report.

132    In that regard, it must be borne in mind that the findings of an audit report do not, as such, support the inference that the authority concerned will confirm the claims in a given instance, or the extent to which it will do so. Accordingly, an audit procedure is merely a preliminary and preparatory procedure, which is separate from a procedure that might potentially result in recovery. The latter is carried out by the operational services of the authority, which are not in any way bound by the findings of the audit report (order of 4 December 2014, Talanton v Commission, T‑165/13, not published, EU:T:2014:1027, paragraph 47, and judgment of 5 October 2016, European Children’s Fashion Association and Instituto de Economía Pública v EACEA, T‑724/14, not published, EU:T:2016:600, paragraph 66).

133    In the present case, it should be noted that the final audit report was sent to the applicant by the Commission directorate responsible for audits by letter of 26 August 2013. That letter stated that, for the purposes of implementing the audit findings, the final audit report was to be distributed to the competent Commission departments, which called into question the eligibility of certain personnel and subcontracting costs. It cannot be inferred from the wording of the letter that the Commission intended to implement the findings of the final audit report without any form of review. Furthermore, the procedure for determining the action to be taken in response to that audit report was suspended because of the examination, by the Commission, of further observations submitted by the applicant, in addition to other exchanges that continued until 9 April 2015, the date on which the Commission informed the applicant that that procedure was to be resumed. Moreover, by the pre-information letter of 28 July 2015, the Commission’s authorising officer invited the applicant to submit observations regarding the issue of a recovery order and replied to the observations that the applicant set out in its letters of 14 September and 13 November 2015. It must also be borne in mind that, by letter of 26 May 2016, the Commission waived recovery of the subcontracting costs and thus departed from the findings of the audit report.

134    Against that background, contrary to the assertions of the applicant, the documents before the Court do not permit a finding that the Commission’s authorising officer considered himself bound by the findings of the audit and merely confirmed those findings, automatically, without any review.

135    Third, it does not follow from the Commission’s letters of 3 September and 19 December 2014, or, moreover, from the Commission’s other replies to the observations submitted by the applicant, that, following delivery of the final audit report, the Commission changed its position or abruptly halted exchanges with the applicant. As stated in paragraph 98 above, the Commission was not opposed to a comparison between the amounts paid in connection with ‘contracts for specific tasks’ and with ‘task bonuses’, but nevertheless took the view that, in order to be relevant, such a comparison would have required the submission of time sheets relating to ‘contracts for specific tasks’.

136    Last, and fourth, the applicant’s allegation that the Commission infringed the principle that contracts must be executed in good faith by abusing its right to offset debts and claims has no bearing on the existence of the alleged contractual claims. Consequently, the argument must be rejected as ineffective.

137    It follows from the foregoing that the third and fourth pleas must be rejected.

 The fifth plea in law, alleging that the amount of liquidated damages claimed is excessive

138    In reliance on the judgment of 19 February 2016, Ludwig-Bölkow-Systemtechnik v Commission (T‑53/14, not published, EU:T:2016:88), the applicant challenges the amount of liquidated damages claimed from it by the Commission under the penalty clause contained in Article II.30 of the general conditions of the KMM-NOE and Boosting Baltic contracts. It claims that the Commission did not act in good faith, inter alia by abusing its right to offset debts and claims, which caused damage to the applicant. Consequently, the applicant claims that, since the Commission has suffered no loss and its claim has already been increased by the addition of default interest, the claim for liquidated damages under the penalty clause should, pursuant to Article 1231 of the Belgian Civil Code, be dismissed or, at the very least, be reduced to a symbolic amount or, in the alternative, be reduced to an amount significantly below 10% of the allegedly unjustified financial contribution received.

139    The Commission contends that that plea in law is unfounded.

140    Article II.30 of the general conditions of the KMM-NOE and Boosting Baltic contracts, entitled ‘Liquidated damages’, reads as follows:

‘Without prejudice to any other measures provided for in this contract, the contractors agree that the [European Union], with the aim of protecting its financial interests, is entitled to claim liquidated damages from a contractor who is found to have overstated expenditure and who has consequently received an unjustified financial contribution from the [European Union]. Liquidated damages are due in addition to the recovery of the unjustified financial contribution from the contractor.

1. Any amount of liquidated damages shall be proportionate to the overstated expenditure and unjustified portion of the [European Union] contribution. The following formula shall be used to calculate any possible liquidated damages:

Liquidated damages = unjustified financial contribution × (overstated expenditure/total claimed)

…’

141    It is clear from the provision referred to in paragraph 140 above that the contracting parties are liable to pay damages on the sole ground that, as a result of unjustified statements of expenditure, they received undue payments. Accordingly, since it has been established that the financial contribution received by the applicant in respect of the personnel costs in question was unjustified, (see paragraph 110 above), the Commission was entitled to require the applicant to pay liquidated damages. It follows that the applicant’s argument that it suffered damage on account of the Commission’s breach of the principle that contracts must be executed in good faith and its abuse of its right to offset debts and claims has no bearing on the Commission’s right to seek payment of liquidated damages.

142    In addition, in so far as the applicant argues that the claim for liquidated damages under Article II.30 of the general conditions of the KMM-NOE and Boosting Baltic contracts should be dismissed or that the amount should be reduced in accordance with Article 1231 of the Belgian Civil Code, it must be noted that the purpose of that provision is not to create a condition for the validity of a penalty clause, but to enable the court to reduce the sum claimed by the creditor where it is manifestly in excess of the amount that the parties were entitled to set to make good the harm resulting from non-performance of the agreement. Thus, first, only damage that the parties could reasonably have foreseen at the time the contract was concluded may be taken into account when applying Article 1231 of the Belgian Civil Code and, second, the court may only apply a reduction to manifestly excessive liquidated damages (judgment of 19 February 2016, Ludwig-Bölkow-Systemtechnik v Commission, T‑53/14, not published, EU:T:2016:88, paragraphs 90 and 91).

143    The applicant relies on the judgment of 19 February 2016, Ludwig-Bölkow-Systemtechnik v Commission (T‑53/14, not published, EU:T:2016:88), in which, after finding that the formula for calculating liquidated damages, as set out in Article II.30 of the general conditions of the Sixth Framework Programme of the European Community for research, technological development and demonstration activities, contributing to the creation of the European Research Area and to innovation, led to particularly high amounts, the Court reduced the amount of liquidated damages to 10% of the advances unduly received by one of the Commission’s contractors.

144    In the present case, as stated in paragraph 27 above, during the proceedings, the Commission reduced the amount of liquidated damages to 10% of the unjustified financial contribution received under the KMM-NOE and Boosting Baltic contracts and reimbursed the corresponding amount. The applicant has furnished no evidence capable of establishing that, on the basis of Article 1231 of the Belgian Civil Code, the claim for liquidated damages in question should be dismissed or that the amount should be reduced to less than 10% of the unjustified financial contribution received under those contracts.

145    It follows that the fifth plea in law must be rejected as unfounded.

146    Accordingly, the applicant is not entitled to dispute the validity of the Commission’s claims under the KMM-NOE and Boosting Baltic contracts. It follows that the third and fifth heads of claim of the action must be rejected.

 The action in so far as it is based on Article 263 TFEU (second head of claim)

147    In support of its application for annulment of the contested decision, the applicant relies on seven pleas in law, alleging (i) infringement of Articles 43 and 47 of the Charter of Fundamental Rights of the European Union (‘the Charter’); (ii) infringement of contractual provisions and of Belgian law; (iii) infringement of Article 80(1) and Article 135(4) of the Financial Regulation; (iv) infringement of the principle of the protection of legitimate expectations; (v) infringement of the principle of non-discrimination; (vi) infringement of the right to be heard and the obligation to state reasons; and (vii) misuse of powers.

148    As a preliminary point, it should be noted that it is clear from the contested decision that it is based on Article 80(1) of the Financial Regulation.

149    Article 80(1) of the Financial Regulation reads as follows:

‘The accounting officer shall act on recovery orders for amounts receivable duly established by the authorising officer responsible. The accounting officer shall exercise due diligence to ensure that the Union receives its revenue and shall ensure that the Union’s rights are safeguarded.

The accounting officer shall recover amounts by offsetting them against equivalent claims that the Union has on any debtor who in turn has a claim on the Union. Such claims shall be certain, of a fixed amount and due.’

150    Under Article 80(1) of Commission Delegated Regulation (EU) No 1268/2012 of 29 October 2012 on the rules of application of [the Financial Regulation] (OJ 2012 L 362, p. 1) (‘the Delegated Regulation’), the establishment by the authorising officer responsible of an amount receivable is to constitute recognition of the right of the Union in respect of a debtor and establishment of entitlement to demand that the debtor pay the debt. Pursuant to Article 80(2) of the Delegated Regulation, the recovery order is the operation by which the authorising officer instructs the accounting officer to recover the established amount receivable. Lastly, Article 80(3) of the Delegated Regulation provides that, by the debit note, the debtor is informed that (a) the European Union has established the amount receivable, (b) no default interest will be due if payment of the debt is made before the deadline, (c) and (d), failing reimbursement by that deadline, the debt will bear interest and the institution will effect recovery either by offsetting or by enforcement of any guarantee lodged in advance, and (f), if, after taking all those steps, the amount has not been recovered in full, the institution will effect recovery by enforcement of a decision secured either in accordance with Article 79(2) of the Financial Regulation or by legal action.

151    It must also be borne in mind that, under the first subparagraph of Article 87(1) of the Delegated Regulation, where the debtor has a claim on the European Union that is certain, of a fixed amount and due, relating to a sum established by a payment order, the accounting officer will, once the deadline specified in the debit note has passed, recover established amounts receivable by offsetting. The first subparagraph of Article 87(2) of the Delegated Regulation provides that, before proceeding with any recovery by offsetting, the accounting officer is to consult the authorising officer responsible and inform the debtors concerned. Pursuant to Article 87(3) of the Delegated Regulation, offsetting is to have the same effect as a payment and discharge the Union for the amount of the debt and, where appropriate, of the interest due.

 The first plea in law, alleging infringement of Articles 43 and 47 of the Charter

152    The applicant alleges infringement of Articles 43 and 47 of the Charter. First, it claims that the choice by the Commission to proceed with recovery by offsetting restricts the procedural rights available to it under Article 272 TFEU by making the legal protection that the applicant enjoys on that basis subject to an additional condition, or even creating a potentially permanent obstacle to that protection. It adds that, where a final offsetting decision has the effect of extinguishing the claim that was offset, the adoption of such a decision renders inevitable the initiation of legal action by the holder of the claim in order to challenge that decision. Secondly, the applicant submits that it was required, on account of the adoption of the contested decision, to initiate legal proceedings. As a consequence, the ongoing review of its complaint to the Ombudsman, of which the Commission was aware, was stopped, which resulted, inter alia, in it losing the opportunity to settle the dispute by means of mediation.

153    The Commission contends that that plea in law is unfounded.

154    In the first place, it should be noted that the principle of effective judicial protection is a general principle of EU law to which expression is now given by Article 47 of the Charter (judgment of 8 December 2011, Chalkor v Commission, C‑386/10 P, EU:C:2011:815, paragraph 52). That principle comprises various elements, in particular, the rights of the defence, the principle of equality of arms, the right of access to a tribunal and the right to be advised, defended and represented (judgment of 6 November 2012, Otis and Others, C‑199/11, EU:C:2012:684, paragraph 48).

155    With regard, in particular, to the right of access to a tribunal, it must be made clear that, for a ‘tribunal’ to be able to determine a dispute concerning rights and obligations arising under EU law in accordance with Article 47 of the Charter, it must have power to consider all the questions of fact and law that are relevant to the case before it (judgment of 6 November 2012, Otis and Others, C‑199/11, EU:C:2012:684, paragraph 49).

156    In the present case, in essence, the applicant submits that the adoption of the contested decision obliged it to initiate proceedings before the Court within the period allowed for bringing an action, in order to challenge the legality or merits of that decision and, therefore, to oppose definitive extinction of the debt and the offset claims. It claims that that obligation to bring legal proceedings amounts to an infringement of the procedural rights it has as a contractual party. However, it must be noted that the applicant has failed to adduce any evidence establishing in what way the obligation to bring proceedings before the Court on the basis of Article 263 TFEU restricts its rights of access to justice on the basis of Article 272 TFEU.

157    In that regard, it must be stated that, in the present action, the Court is required to examine both the legality of the contested decision and the merits of the Commission’s alleged contractual claims against the applicant, which underlie the adoption of that decision. To the extent that all the questions of fact and law that are relevant to the dispute at issue are being examined by the Court, it must be concluded that the present action constitutes an effective remedy within the meaning of Article 47 of the Charter.

158    In the second place, as regards the alleged infringement of the right to refer the matter to the Ombudsman, it must be noted that, recourse to the Ombudsman, in instances of alleged maladministration in the activities of the institutions, bodies, offices or agencies of the European Union, constitutes a right that is, inter alia, conferred on any legal person having its registered office in a Member State, as enshrined in Article 43 of the Charter.

159    Under Article 228(1) TFEU, the Ombudsman is empowered to receive, examine and report on complaints concerning instances of maladministration in the activities of the institutions, bodies, offices or agencies of the European Union. That provision states that, in accordance with his duties, the Ombudsman is to conduct inquiries for which he finds grounds either on his own initiative or on the basis of complaints submitted to him, and that, where he establishes an instance of maladministration, he is to refer the matter to the institution, body, office or agency concerned, which has a period of 3 months in which to inform him of its views, before he is then to forward a report to the Parliament and the institution, body, office or agency concerned and inform the person lodging the complaint of the outcome of such inquiries.

160    Article 228(4) TFEU provides that the Parliament is to lay down, inter alia, the general conditions governing the performance of the Ombudsman’s duties. Pursuant to Article 2(6) of Decision 94/262/ECSC, EC, Euratom of the European Parliament of 9 March 1994 on the regulations and general conditions governing the performance of the Ombudsman’s duties (OJ 1994 L 113, p. 15), as amended by Decision 2002/262/EC, ECSC, Euratom of the European Parliament of 14 March 2002 (OJ 2002 L 92, p. 13), complaints submitted to the Ombudsman are not to affect time limits for appeals in administrative or judicial proceedings. Under Article 2(7) of Decision 94/262, when the Ombudsman, because of legal proceedings in progress or concluded concerning the facts which have been put forward, has to declare a complaint inadmissible or terminate consideration of it, the outcome of any enquiries he has carried out up to that point are to be filed without further action.

161    In accordance with Article 3(3) of the Ombudsman’s decision of 8 July 2002 adopting implementing provisions for Decision 94/262, as most recently amended on 3 December 2008, the Ombudsman is to decide whether there are grounds to inquire into an admissible complaint. If the Ombudsman considers that there are no grounds to conduct an inquiry, he is to close the file on the complaint. Under Article 6(4) of that decision, where the Ombudsman becomes aware that a matter under his investigation has become the subject of legal proceedings, he is to close the inquiry and inform the complainant and the institution.

162    It is apparent from all those provisions that the applicant cannot claim a right to obtain a decision from the Ombudsman on the merits of the complaint brought before him. Thus, the fact that the adoption of the contested decision obliged the applicant to bring the present action, which led to the closure of the Ombudsman’s investigation, follows from the general conditions governing the performance of the Ombudsman’s duties and does not constitute an infringement of the right guaranteed by Article 43 of the Charter.

163    In addition, contrary to the applicant’s claims, it is not apparent from the documents before the Court that the Commission was informed that the applicant’s complaint before the Ombudsman concerning the personnel costs was still being considered on the date on which the contested decision was adopted. By email of 17 December 2015, the Commission was informed that the Ombudsman had concluded, following a preliminary analysis, that there were not sufficient grounds to justify an inquiry into the applicant’s complaint concerning the partial rejection of the personnel costs. In that regard, the applicant is not entitled to claim that that complaint ‘remained open’ since the Ombudsman’s analysis was ‘preliminary’. In accordance with the provisions referred to in paragraphs 159 to 161 above, the fact that the analysis is described as ‘preliminary’ means that the Ombudsman will not conduct an inquiry and not, as the applicant claims, that his analysis is to be continued. Furthermore, the fact that the applicant had sent the Ombudsman additional documents in support of its complaint concerning the personnel costs, of which the Commission was informed by the applicant by email of 6 June 2016, did not mean that the decision to close the examination of that complaint was withdrawn.

164    It follows that the plea alleging infringement of Articles 43 and 47 of the Charter must be rejected as unfounded.

 The second plea in law, alleging infringement of the provisions of the KMM-NOE, Boosting Baltic and SMART-NEST contracts and of Belgian law

165    The applicant claims that the contested decision could be based only on the provisions of the KMM-NOE, Boosting Baltic and SMART-NEST contracts relating to offsetting, which cannot, in its view, be regarded as referring to Article 80 of the Financial Regulation, and on Belgian law applicable to those contracts. In that regard, the applicant relies on Article 1291 of the Belgian Civil Code and submits that the Commission’s claim was neither certain, since it had been contested, nor due, since it had been the subject of a complaint before the Ombudsman. It adds that the challenge to the claim was serious.

166    In the alternative, the applicant submits that, in view of the payment made to the applicant on 1 July 2016, in respect of a claim relating to a different research project, which the Commission did not seek to offset against the claim at issue, the Commission must be regarded as having renounced its right to offset that claim.

167    In the further alternative, the applicant claims that the contested decision constitutes an abuse of rights for the purpose of Article 1134 of the Belgian Civil Code. Such an abuse of rights occurs where a party to a contract chooses to enforce its rights in the manner most damaging to the other party to the contract.

168    The Commission submits, in essence, that the plea alleging infringement of the law applicable to the contracts is ineffective and, in the alternative, unfounded.

169    In the first place, the applicant claims that the contested decision could be adopted only on the basis of the common provisions of the contracts, the subject of the claims and the offset debt. Since the contracts at issue all refer to Belgian law, the applicant infers that the contested decision could be adopted only on the basis of Belgian law.

170    Contrary to the claims of the applicant, it must be held that the contested decision was correctly based on the provisions of the Financial Regulation.

171    In that respect, it must be noted, first, that the second subparagraph of Article 80(1) of the Financial Regulation is in a chapter entitled ‘Revenue operations’, which is followed by a chapter entitled ‘Expenditure operations’, those two chapters not having been intended to apply in a particular field of action taken at EU level, but to all operations covered by its budget, which is evidenced by the fact that they are included within Title IV, entitled ‘Implementation of the budget’, which itself appears in the first part of the regulation, entitled ‘Common provisions’.

172    The provisions of Title IV of the Financial Regulation therefore also apply to contractual matters, which is also evidenced, inter alia, by the wording of Article 90 of that regulation, contained under that title, according to which ‘payment shall be made on production of proof that the relevant action is in accordance with the provisions of the basic act or the contract’.

173    Thus, the second subparagraph of Article 80(1) of the Financial Regulation allows the accounting officer to offset claims and debts without making any distinction according to whether the claims or debts in question are of a contractual or non-contractual nature. In that regard, it is clear from the case-law that, where offsetting simultaneously extinguishes two obligations between two persons, it may constitute both the payment of sums which an institution considers owed under a specific contract and the recovery of sums unrelated to that contract. It is therefore a legal transaction which, firstly, may extinguish debts and claims of any kind, contractual or non-contractual, and, secondly, is dissociable from a purely contractual framework (judgment of 8 October 2008, Helkon Media v Commission, T‑122/06, not published, EU:T:2008:418, paragraph 47, and order of 13 May 2016, CEVA v Commission, T‑601/15, not published, EU:T:2016:316, paragraph 25).

174    It follows that the Commission may adopt an offsetting decision on the basis of the second subparagraph of Article 80(1) of the Financial Regulation, notwithstanding the fact that the claims and debts offset by that decision are linked to the performance of contracts. Accordingly, the complaint alleging that the contested decision could be based only on the law applicable to the agreements, the subject of the debts and offset claims, must be rejected.

175    Moreover, it is clear that the offsetting forming the subject matter of the contested decision was effected between claims allegedly held by the Commission under two separate contracts and a debt owing to REA under a third agreement. It is therefore dissociable from the contractual relations between the Commission and the applicant.

176    Second, since the contested decision is based on the provisions of the Financial Regulation, the applicant correctly contested the decision on the basis of Article 263 TFEU. It must be recalled that, when adjudicating on an action on the basis of that article, the EU Courts must assess the lawfulness of the contested act in the light of the TFEU or of any rule of law relating to its application, and, thus, of EU law (judgment of 21 September 2017, Eurofast v Commission, T‑87/16, not published, EU:T:2017:641, paragraph 40). That is true, in particular, when a decision, such as the contested decision, is adopted for the purposes of recovering a debt stemming from a contract concluded by an institution.

177    By contrast, in an action brought on the basis of Article 263 TFEU, the applicant may not legitimately complain that the institution party to the contract infringed the contractual provisions or the law applicable to the contract.

178    It follows that the complaint alleging infringement of Article 1291 of the Belgian Civil Code and the complaint, put forward in the alternative, alleging infringement of Article 1134 of that code, must be dismissed as inadmissible (see, to that effect, judgment of 21 September 2017, Eurofast v Commission, T‑87/16, not published, EU:T:2017:641, paragraphs 74 and 75).

179    Third, in so far as the applicant claims that the Commission waived its right to offset, it must be noted that that argument appears to be based on a general principle of Belgian law to the effect that ‘the waiver of a right must be strictly interpreted and may be inferred only from facts not open to any other interpretation’.

180    Such a complaint, in so far as it is based on the interpretation and alleged infringement of a provision of national law applicable to the contracts at issue and not of a rule of EU law, is inadmissible in accordance with the principles referred to in paragraphs 176 and 177 above.

181    Assuming that the applicant seeks to rely on a waiver of the right to offset not based on Belgian law, the complaint is unfounded. First, it follows from Article 80(3)(d) and the first subparagraph of Article 87(1) of the Delegated Regulation, set out in paragraphs 150 and 151 above, that where the debtor has not complied voluntarily and the conditions for offsetting are satisfied, the Commission’s accounting officer is required to effect recovery by offsetting (see, to that effect, judgment of 21 September 2017, Eurofast v Commission, T‑87/16, not published, EU:T:2017:641, paragraphs 67 and 68 and the case-law cited). Therefore, where the European Union intends to recover a claim, the accounting officer may not refrain from using offsetting for the purpose of that recovery.

182    Second, it should be noted that the payment from the Commission on which the applicant relies was made on 1 July 2016, that is to say after the Commission informed the applicant, by letter of 26 May 2016, that it had decided to waive recovery of the sums paid in respect of the subcontracting costs and before the corresponding credit note was issued on 4 August 2016. It must therefore be concluded that, on 1 July 2016, the procedure for recovery of the sums covered by the debit note of 13 November 2015 was, in fact, suspended.

183    Therefore, in any event, the payment relied on by the applicant cannot be regarded as amounting to a waiver of the Commission’s right to offset.

184    It follows that the second plea must be rejected.

 The third plea in law, alleging infringement of Article 80(1) and Article 135(4) of the Financial Regulation

185    As regards, first, infringement of Article 80(1) of the Financial Regulation, the applicant claims that the conditions for offsetting laid down in that article were not satisfied. In its view, the claim alleged by the Commission was not certain as it had been contested. It adds that the Commission’s interpretation, to the effect that claims are certain where they are not subject to any condition, may lead to abuses in a contractual context. It also claims that the accounting officer did not exercise due care, in so far as he considered that the claims being offset were equivalent, even though he had been informed that the claim alleged by the Commission had been contested and referred to the Ombudsman. The applicant also maintains that the authorising officer cannot regard the claim at issue as being ‘duly established’. Firstly, the value of the final audit report is subject to confirmation since it was signed by only one of the two auditors and a period of 2 years elapsed between the last email from the auditor in charge and delivery of the final audit report. Secondly, the authorising officer did not carry out the checks required under Article 78 of the Financial Regulation and merely ‘gave effect’ or ‘implemented’ the audit report.

186    As regards, second, infringement of Article 135(4) of the Financial Regulation, the applicant submits that those provisions and those of Article 78 of the Financial Regulation required the authorising officer to evaluate the seriousness of the alleged breaches and whether the sums to be recovered were proportionate, which he failed to do in the present case. The applicant concludes therefrom that a debit note issued in breach of the provisions of Article 135(4) of the Financial Regulation cannot be considered a valid claim that may be offset.

187    The Commission contends that that plea is unfounded.

188    It must be stated at the outset that the authorising officer responsible informed the applicant of the existence of a claim on the part of the European Union by the debit note of 13 November 2015. That debit note clearly stated that, in the event of non-payment by the deadline of 28 December 2015, the Commission was entitled to effect recovery by offsetting. The applicant, which contested that debit note by letter of 30 November 2015, did not pay the sum claimed in that note within the time allowed. The European Union’s claim against the applicant was then reduced by the amount stated in the credit note issued on 4 August 2016. Consequently, the Commission’s accounting officer, noting that a recovery order had been made against the applicant, which, in turn, had a claim on the European Union under the SMART-NEST agreement, informed the applicant, in accordance with Article 87(2) of the Delegated Regulation, by means of the contested decision, that the Commission was going to effect recovery of that claim by offsetting.

189    Next, in the first place, as regards the alleged infringement of the second subparagraph of Article 80(1) of the Financial Regulation, it must, first, be noted that, as stated in paragraph 149 above, according to that article, the claims to be offset must be certain, of a fixed amount and due. Furthermore, as stated in paragraph 173 above, that article does not make any distinction according to whether the claims or debts in question are of a contractual or non-contractual nature.

190    According to Article 81(a) of the Delegated Regulation, the certainty of a claim is affected only by whether it is subject to any condition (see, to that effect, judgment of 15 April 2011, Czech Republic v Commission, T‑465/08, EU:T:2011:186, paragraphs 146 and 147). Thus, offsetting is not precluded where one of the debts is disputed by the other party to the contract (see judgment of 14 September 2017, Università del Salento v Commission, T‑393/15, not published, EU:T:2017:604, paragraph 93 and the case-law cited). Otherwise, the debtor could indefinitely delay the recovery of a debt (judgment of 17 January 2007 in Greece v Commission, T‑231/04, EU:T:2007:9, paragraph 118).

191    It follows that the applicant is not justified in claiming that, by applying the definition in Article 81(a) of the Delegated Regulation to the concept of a ‘certain’ claim, the Commission developed a questionable interpretation of that concept as regards claims of a contractual nature. Therefore, it is necessary to reject the argument that the claims at issue were not certain and, more generally, could not be recovered by offsetting on the ground that they had been challenged by the applicant.

192    In addition, in the present case, the claim at issue was not subject to any condition. Furthermore, the Court has found that a claim in favour of the European Union is certain, of a fixed amount and due after the time limit specified in a debit note has expired (see, to that effect, judgment of 8 November 2011, Walton v Commission, T‑37/08, EU:T:2011:640, paragraph 60). It is common ground that the contested decision, which is dated 6 September 2016, was adopted after expiry of the time limit for payment, which was specified to be 28 December 2015 in the debit note of 13 November 2015.

193    It follows that the applicant is not justified in asserting that the offset claims are not certain.

194    Second, the applicant maintains that the claim of the European Union was not duly established by the authorising officer, within the meaning of the first subparagraph of Article 80(1) of the Financial Regulation, as he did not carry out the checks required under Article 78(1) of that regulation. In that regard, firstly, it should be noted that the applicant alleges that the final audit report was irregular, on the basis of the fact that it was not signed by the auditor who was initially responsible for the audit and that a period of 2 years elapsed between the last email from that auditor and delivery of the final audit report.

195    Those alleged irregularities were examined in the context of the third and fourth pleas submitted in support of the application on the basis of Article 272 TFEU. The Court held, in paragraph 128 above, that those alleged irregularities did not affect the audit procedure. Accordingly, the applicant is not justified in challenging the establishment of the contested claims by the authorising officer on the ground that he relied on a report vitiated by irregularities.

196    Secondly, the applicant submits that the authorising officer did not carry out the checks required under Article 78(1) of the Financial Regulation, according to which the establishment of a claim is the act by which the authorising officer responsible verifies that the debt owed by the debtor exists, determines or verifies the reality and the amount of the debt and verifies the conditions according to which the debt is due. It submits in that regard that the authorising officer merely ‘gave effect to’ the audit report without verifying the existence and reality of the claims.

197    However, it was concluded in paragraph 134 above that the documents before the Court have not established that the Commission’s authorising officer considered himself bound by the findings of the audit.

198    The existence of the claims at issue was also established in paragraph 146 above. Accordingly, the applicant is not justified in claiming that the failure to take into account the evidence it had furnished with a view to establishing that those claims were non-existent is indicative of a failure on the part of the authorising officer to carry out his duty and conduct the checks required under Article 78(1) of the Financial Regulation.

199    Accordingly, the applicant has not established that the authorising officer infringed Article 78(1) of the Financial Regulation.

200    It follows that the complaint alleging infringement of Article 80(1) of the Financial Regulation must be rejected as unfounded.

201    In the second place, in so far as the applicant alleges that the Commission’s authorising officer infringed the provisions of Article 135(4) of the Financial Regulation, referred to in paragraph 129 above, it should be noted that, its line of argument is essentially that the Commission’s authorising officer felt bound by the findings of the final audit report. It has already been concluded that such a complaint is unfounded.

202    Consequently, the second complaint must be rejected as unfounded and, accordingly, the third plea must be rejected in its entirety.

 The fourth plea in law, alleging infringement of the principle of the protection of legitimate expectations

203    The applicant submits that the chronology of the procedure, and in particular the precise, consistent and unconditional assurances given by the Directorate-General for Budget, and the payment made in its favour on 1 July 2016 constituted clear and consistent assurances that the Commission would not effect recovery of the alleged claims, including by way of offsetting, prior to the outcome of the procedure before the Ombudsman and, should the case arise, any subsequent legal proceedings. The applicant adds, in its reply, that the fact that, between December 2015 and June 2016, the Commission’s accounting services took the view that no ‘active step’ for recovery would be taken, gave rise to a legitimate expectation on the part of the applicant that that situation would continue until the dispute had been resolved. It also argues that the assurances given are not contrary to the Financial Regulation.

204    The Commission contends that that plea is unfounded.

205    It must be borne in mind that, according to settled case-law, the right to rely on the principle of the protection of legitimate expectations extends to any person in a situation where an EU institution has caused him or her to have justified expectations (see judgment of 21 September 2017, Eurofast v Commission, T‑87/16, not published, EU:T:2017:641, paragraph 83 and the case-law cited).

206    Three cumulative conditions must be satisfied in order for a claim to entitlement to the protection of legitimate expectations to be well founded. First, precise, unconditional and consistent assurances originating from authorised and reliable sources must have been given to the person concerned by the EU administration. Second, those assurances must be such as to give rise to a legitimate expectation on the part of the person to whom they are addressed. Third, the assurances given must comply with the applicable rules (see judgment of 21 September 2017, Eurofast v Commission, T‑87/16, not published, EU:T:2017:641, paragraph 85 and the case-law cited).

207    As regards the first condition, precise, unconditional and consistent information, whatever form it is given in, from authorised and reliable sources, constitutes such assurances. However, a person may not plead breach of the principle of the protection of legitimate expectations unless he has been given precise assurances by the administration (see judgment of 21 September 2017, Eurofast v Commission, T‑87/16, not published, EU:T:2017:641, paragraph 86 and the case-law cited).

208    In the present case, the applicant relies on information given over the telephone by an official of the Directorate-General for Budget on 17 December 2015. Although the parties agree that that exchange took place, they disagree as to the information given on that occasion. The applicant claims that the official assured it that the recovery procedure would remain suspended pending the outcome of the Ombudsman’s investigation of the complaint and of any legal proceedings. On the other hand, according to the Commission, the official of the Directorate-General for Budget merely explained to the applicant that the recovery procedure would remain suspended during the reconsideration of the rejection of the subcontracting costs.

209    It follows that the applicant has failed to establish that the assurances relied on were in fact given. In any event, it should be noted that the issue of the debit note of 13 November 2015 relating to certain subcontracting and personnel costs refers to the possibility of effecting recovery by offsetting. That debit note was sent to the applicant after it had referred its complaint to the Ombudsman. Subsequently, the applicant was sent, on 25 January 2016, a reminder letter from the Commission’s accounting officer requesting payment of the claim covered by the abovementioned debit note, plus default interest, and stating that payment by offsetting could be effected at any time. Consequently, even if the official of the Directorate-General for Budget made the statements alleged by the applicant, those statements are not consistent with the conduct of the abovementioned procedure.

210    Moreover, the fact that, apart from the reminder letter of 25 January 2016, no recovery steps were taken by the Commission’s accounting officer between December 2015 and June 2016 does not constitute an assurance given to the applicant that the claims at issue would not be recovered until its dispute with the Commission had been resolved. During that period, the Commission was reviewing the rejection of the subcontracting costs incurred in connection with the KMM-NOE and Boosting Baltic contracts. As stated in paragraph 182 above, the procedure for recovery of the sums covered by the debit note of 13 November 2015 had, in fact, been suspended.

211    Likewise, the payment made on 1 July 2016 by the Commission’s accounting officer to the applicant does not constitute an assurance that recovery by offsetting would not be effected because of the suspension of the recovery procedure referred to in paragraph 210 above.

212    In those circumstances, the conduct of the procedure, in particular the information given by the official of the Directorate-General for Budget, the content of which is contested, and the payment of 1 July 2016 do not constitute precise, unconditional and consistent assurances within the meaning of the case-law cited in paragraph 206 above.

213    Consequently, the fourth plea must be rejected as unfounded.

 The fifth plea in law, alleging infringement of the principle of non-discrimination

214    The applicant claims that the practice of the Directorate-General for Budget is that no formal recovery procedure is initiated if claims are disputed. In its view, that was the case in the present instance, as was acknowledged by the Directorate-General for Budget, which did not initiate any recovery steps between 25 January 2016 and the date on which the contested decision was adopted. The applicant requests that the Court ask the Commission to adduce information on that practice. If such a practice were to be established, the contested decision would be vitiated by an infringement of the principle of equal treatment.

215    The Commission contends that that plea in law is unfounded.

216    Pursuant to settled case-law, the principle of non-discrimination or the principle of equal treatment, which constitutes a fundamental principle of law, prohibits comparable situations being treated differently or different situations being treated in the same way, unless such difference in treatment is objectively justified (see order of 13 September 2016, EDF Luminus v Parliament, T‑384/15, EU:T:2016:512, paragraph 53 and the case-law cited).

217    In the present case, the applicant has adduced no evidence capable of establishing that the practice of the Commission’s accounting officer is to take no steps to recover a claim where the claim is contested by the alleged debtor or is the subject of a complaint to the Ombudsman. Such a practice cannot be inferred from the fact that no recovery steps were taken between the reminder letter sent by the Commission’s accounting officer on 25 January 2016 and the date the contested decision was adopted, since, as pointed out in paragraph 182 above, the procedure for recovery of the sums covered by the debit note of 13 November 2015 was, in fact, suspended for at least part of that period.

218    In those circumstances, in the absence of prima facie evidence in support of the applicant’s claims, the fifth plea in law must be rejected as it lacks any factual basis, and there is no need to order the measure of organisation of procedure requested by the applicant.

 The sixth plea in law, alleging infringement of the right to be heard and failure to state adequate reasons in the contested decision

219    The applicant claims that it was unable to put forward its views effectively before adoption of the contested decision, in particular because of the lack of a contact person with whom to raise its objections. It also maintains that the contested decision is vitiated by an inadequate statement of reasons since it does not state, first, the reasons for proceeding with offsetting, in spite of the fact that the European Union’s claim had been contested and assurances had been given that recovery would not take place, or, second, the reasons for offsetting against the applicant’s claim under the SMART-NEST contract rather than any other claim. The applicant claims that that failure to state reasons is confirmed by the statement made by the Commission’s accounting officer that the offsetting would be corrected should the claim be subsequently amended.

220    The Commission contends that that plea is unfounded.

221    In the first place, as regards infringement of the right to be heard, it must be borne in mind that that right, which is a corollary of the rights of the defence, guarantees every person the opportunity to make known his views effectively during the administrative procedure and before the adoption of any decision liable to affect his interests adversely (see judgment of 27 April 2016, ANKO v Commission, T‑155/14, not published, EU:T:2016:245, paragraph 54 and the case-law cited). That right must be guaranteed even in the absence of any rules governing the procedure in question (see judgment of 22 April 2015, Planet v Commission, T‑320/09, EU:T:2015:223, paragraph 76 and the case-law cited).

222    In the present case, it must be noted that the contested decision, adopted on 6 September 2016, was preceded by a debit note of 13 November 2015, which stated that, in the event of non-payment within the given time limit, the Commission was entitled to effect recovery by offsetting. The letter of 25 January 2016 from the Commission’s accounting officer also refers to the possibility of recovery by offsetting. The applicant replied to both that note and that reminder letter by letters of 30 November 2015 and 8 February 2016, respectively.

223    It follows that the applicant was in a position to make its point of view known effectively and, therefore, to exercise its right to be heard before the adoption of the contested decision.

224    In the second place, as regards the lack of reasoning for the contested decision, it must be recalled that, in accordance with settled case-law, the scope of the obligation to state reasons must be appropriate to the measure concerned and the context in which the measure was adopted. The statement of reasons must disclose in a clear and unequivocal fashion the reasoning followed by the institution which adopted the measure, in such a way as to enable the EU Courts to carry out their review and to enable the persons concerned to ascertain the reasons for the measure so that they can defend their rights and ascertain whether the measure is well founded (see judgment of 6 October 2015, Technion and Technion Research & Development Foundation v Commission, T‑216/12, EU:T:2015:746, paragraph 96 and the case-law cited).

225    It is not necessary for the statement of reasons to specify all the relevant matters of fact and law, since the question whether the statement of reasons meets the requirements of Article 296 TFEU must be assessed with regard not only to its wording but also its context and to all the legal rules governing the matter in question. In particular, the reasons given for a measure adversely affecting a person are sufficient if it was adopted in circumstances known to that person which enable him to understand the scope of the measure concerning him (see judgment of 6 October 2015, Technion and Technion Research & Development Foundation v Commission, T‑216/12, EU:T:2015:746, paragraph 97 and the case-law cited).

226    The statement of reasons required for a decision to offset must be such as to allow precise identification of the claims to be offset, without there being any requirement for the initial reasons used in support of establishing each of these claims to be repeated in the act of offsetting (see judgment of 14 September 2017, Università del Salento v Commission, T‑393/15, not published, EU:T:2017:604, paragraph 112 and the case-law cited).

227    In the present case, it is common ground that the contested decision identifies precisely the claims to be offset, since it includes, as an annex, the debit note of 13 November 2015, which sets out the reduced amount following the credit note of 4 August 2016, and a document stating the origin and amount of the applicant’s claim against the European Union. It should also be noted that the contested decision identifies its legal basis by reference to Article 80(1) of the Financial Regulation.

228    Similarly, it is not disputed that the document establishing the European Union’s claim includes a detailed explanation of the reasons which led the Commission to claim from the applicant reimbursement of EUR 154 704.24, reduced to EUR 67 984.13, and subsequently to EUR 66 485.79.

229    Lastly, it is apparent from the documents before the Court that the contested decision was adopted in circumstances known to the applicant, which enabled it to understand the scope of the measure. In those circumstances, and given that, as stated in paragraph 190 above, offsetting is not precluded where a debt is disputed by the other party to the contract, the applicant is not entitled to claim that in the circumstances of the present case, the Commission was required, in accordance with its duty to state reasons, to state why it intended to effect recovery by offsetting in spite of the challenge to the European Union’s claim. Similarly, since there was no change in the Commission’s position regarding the possibility of offsetting the claims at issue, the applicant cannot criticise the Commission for not specifying the reasons for its change of position. Lastly, it must be recalled that, under the second subparagraph of Article 80(1) of the Financial Regulation, the accounting officer may recover amounts by offsetting them against equivalent claims that the European Union has on any debtor who in turn has a claim on the European Union. Therefore, contrary to the assertions of the applicant, the Commission was in no way required to state the reasons for its choice to offset the Commission’s claims in question against the applicant’s relevant claim against REA.

230    Accordingly, it must be held that the statement of reasons for the contested decision is adequate.

231    It follows that the sixth plea in law, alleging infringement of essential procedural requirements, must be rejected as unfounded.

 The seventh plea in law, alleging misuse of powers

232    The applicant claims that the Commission adopted the contested decision with the aim, first, of circumventing the contracts at issue, subject to Belgian law, under which recovery by offsetting of the claims at issue is not allowed since those claims had been challenged, and, second, to avoid adopting an enforceable instrument, to avoid legal proceedings and to terminate the Ombudsman’s inquiry. In that regard, it alleges that there was no serious examination of the evidence it had adduced concerning the invalidity of the alleged claims of the Commission, and that the authorising officer merely implemented the audit report. It also maintains that the Commission was unable to justify the reasons for offsetting the claims at issue against the sum due to it under the SMART-NEST agreement, rather than with the sum paid to it on 1 July 2016.

233    The Commission contends that that plea is unfounded.

234    Pursuant to settled case-law, the misuse of powers is the adoption by an institution of a measure with the exclusive or main purpose of achieving an end other than that stated or evading a procedure specifically prescribed by the treaties for dealing with the circumstances of the case (see judgment of 9 September 2015, Lito Maieftiko Gynaikologiko kai Cheirourgiko Kentro v Commission, C‑506/13 P, EU:C:2015:562, paragraph 94 and the case-law cited).

235    In the present case, as stated in paragraph 170 above, the contested decision is correctly based on the provisions of the Financial Regulation. Furthermore, as stated in paragraph 181 above, since the conditions for offsetting were satisfied, the Commission’s accounting officer was required to effect recovery by offsetting pursuant to Article 80(3)(d) and Article 87(1) of the Delegated Regulation. Accordingly, the applicant is not justified in claiming that the decision was adopted for a purpose other than that of recovering the claims at issue.

236    Moreover, in so far as the applicant essentially attempts to rely on the Commission’s authorising officer accepting the audit report, on the lack of any serious examination of the evidence it had adduced and on the payment made in its favour on 1 July 2016, it should be recalled that those arguments have already been examined and rejected by the Court in paragraphs 134, 90 and 182 above, respectively.

237    It follows that the applicant has failed to establish that the contested decision is vitiated by misuse of powers. Accordingly, the seventh plea in law must be rejected.

238    In the light of the foregoing, the Court rejects the second head of claim in the action for annulment of the contested decision, without it being necessary to adjudicate on the plea of inadmissibility put forward by REA, alleging that that head of claim is misdirected in so far as it is directed against it.

 The action in so far as it is based on Article 272 TFEU and the SMART-NEST agreement (fourth head of claim)

239    It should be noted at the outset that the General Court has jurisdiction to determine the present action in so far as it is based on Article 272 TFEU, pursuant to the arbitration clause in Article 9 of the SMART-NEST agreement, which provides that the General Court has jurisdiction to hear disputes between the European Union and beneficiaries concerning the interpretation, application or validity of that agreement.

240    It follows from all the foregoing that the applicant is not justified in claiming that it is the holder of a claim under the SMART-NEST agreement concluded with REA, since that claim was duly extinguished by offsetting against the debts it owed to the Commission under the KMM-NOE and Boosting Baltic contracts.

241    Consequently, the fourth head of claim in the action must be rejected, without it being necessary to consider the pleas of inadmissibility in that regard as raised by the Commission, alleging that that head of claim is misdirected in so far as it is directed against it and that its admissibility is linked to the annulment of the contested decision, and as raised by REA, alleging failure to comply with Article 76(d) of the Rules of Procedure and claiming, in essence, that the applicant has no vested and current interest in bringing proceedings and that that head of claim has no purpose, in so far as it is directed against it.

242    It follows from all the foregoing that the action must be dismissed in its entirety.

 Costs

243    Under Article 134(1) of the Rules of Procedure, the unsuccessful party is to be ordered to pay the costs if they have been applied for in the successful party’s pleadings. Since the applicant has been unsuccessful, it must be ordered to pay the costs incurred by REA, in accordance with the form of order sought by REA.

244    Under Article 135(2) of the Rules of Procedure, the General Court may order a party, even if successful, to pay some or all of the costs, if this appears justified by the conduct of that party, including before the proceedings were brought, especially if that party has made the opposite party incur costs which the Court holds to be unreasonable or vexatious.

245    In the present case, although the applicant has been unsuccessful, it must be borne in mind that, during the proceedings, the Commission reimbursed part of the liquidated damages payable by the applicant under the KMM-NOE and Boosting Baltic agreements, which the Court was informed of following a measure of organisation of procedure. That reimbursement led the applicant to amend the form of order sought, in so far as it reduced the amount of the claim at issue. Such circumstances justify an order to the effect that the Commission and the applicant are to share the costs incurred in the proceedings. The Court considers that a fair assessment of the circumstances of the case requires that the Commission be ordered to pay, in addition to its own costs, one third of the costs incurred by the applicant.

246    Article 138(1) of the Rules of Procedure provides that Member States which intervene in the proceedings are to bear their own costs. It follows that the Republic of Poland must bear its own costs.

On those grounds,

THE GENERAL COURT (Seventh Chamber)

hereby:

1.      Dismisses the action;

2.      Orders the Instytut Podstawowych Problemów Techniki Polskiej Akademii Nauk (IPPT PAN) to bear two thirds of its own costs and pay those incurred by the Research Executive Agency (REA);

3.      Orders the European Commission to bear its own costs and pay one third of the costs incurred by IPPT PAN;

4.      Orders the Republic of Poland to bear its own costs.

Tomljenović Bieliūnas Marcoulli

Delivered in open court in Luxembourg on 11 July 2019.

E. Coulon       V. Tomljenović

Registrar President

*      Language of the case: English.