JUDGMENT OF THE COURT OF FIRST INSTANCE (Second Chamber)
14 December 2005 (*)
(Compliance with a judgment of the Court of First Instance – Reduction of the fine imposed on the applicant – Failure then refusal of the Commission to pay interest on the sum refunded – Action for annulment – Principle of legal certainty)
In Case T-135/02,
Greencore Group plc, established in Dublin (Ireland), represented by A. Böhlke, lawyer,
applicant,
v
Commission of the European Communities, represented initially by K. Wiedner, subsequently by P. Oliver and A. Nijenhuis, and finally by A. Nijenhuis and M. Wilderspin, acting as Agents, with an address for service in Luxembourg,
defendant,
APPLICATION for annulment of the decision of 11 February 2002 by which the Commission refused to grant the applicant’s request for default interest to be paid to its subsidiary Irish Sugar plc on the principal sum repaid to the latter to comply with a judgment of the Court of First Instance,
THE COURT OF FIRST INSTANCE
OF THE EUROPEAN COMMUNITIES (Second Chamber),
composed of J. Pirrung, President, N.J. Forwood and S. Papasavvas, Judges,
Registrar: K. Andová, Administrator,
having regard to the written procedure and further to the hearing on 20 September 2005,
gives the following
Judgment
Facts
1 By Decision 97/624/EC of 14 May 1997 relating to a proceeding pursuant to Article 86 of the EC Treaty (IV/34.621, 35.059/F-3 – Irish Sugar plc) (OJ 1997 L 258, p. 1) the Commission imposed a fine of ECU 8 800 000 on Irish Sugar plc, a subsidiary of Greencore Group plc (‘Greencore’ or ‘the applicant’). Irish Sugar paid the fine on 22 August 1997.
2 On 4 August 1997 Irish Sugar brought an action before the Court of First Instance for annulment of that decision.
3 By judgment of 7 October 1999 in Case T-228/97 Irish Sugar v Commission [1999] ECR II-2969 (‘the Irish Sugar judgment’), the Court of First Instance reduced the fine to EUR 7 883 326 and dismissed the remainder of the action.
4 On 2 October 1999 notice of an action brought by British Steel plc against the Commission in Case T-171/99 was given in Official Journal C 281.
5 The application shows that in the month of October 1999 an official of the Commission made contact by telephone with Irish Sugar’s lawyer, who is also Greencore’s lawyer, in order to prepare reimbursement of that part of the fine that had been annulled in the Irish Sugar judgment. According to Greencore, during that telephone conversation the matter of interest on the sum to be refunded was discussed on the initiative of Irish Sugar’s lawyer, and it appeared unlikely that the Commission would pay interest on the sum it owed to the company, since it had never done so in previous cases.
6 Greencore has also acknowledged that both Irish Sugar’s lawyer and the Commission’s official were aware that the issue of whether or not the Commission was obliged to pay interest when reimbursing a principal sum was pending at the time before the Court of First Instance in the context of Case T‑171/99 Corus UK v Commission [2001] ECR II-2967 (‘the Corus judgment’).
7 On 26 October 1999 Greencore’s lawyer sent a fax to his client informing it of his conversation with the official of the Commission, of the unlikelihood of the Commission’s paying interest and of the action brought by British Steel in Case T-171/99, cited above. In addition, he advised that interest ought not to be renounced but rather that it should be claimed expressly.
8 By fax of 27 October 1999 Greencore sent the Commission details of Irish Sugar’s bank account into which the principal sum of EUR 916 674 payable pursuant to the Irish Sugar judgment was to be repaid. As regards the payment of interest on that sum it stated as follows:
‘Please also confirm that you will pay interest on the sum refunded for the period from its payment to you by Irish Sugar … until the date of refund. Please advise the amount of interest.’
9 On 21 December 1999 Irish Sugar appealed to the Court of Justice against the Irish Sugar judgment.
10 On 4 January 2000 the Commission transferred the sum of EUR 916 674 to Irish Sugar’s account without paying any interest.
11 In its application Greencore acknowledged that the payment made by the Commission on 4 January 2000 was the only reply to its fax of 27 October 1999 and that it had not subsequently pressed for an answer on the matter of interest, preferring to await the outcome of the appeal against the Irish Sugar judgment and of the proceedings in Case T-171/99, cited above, before returning to the Commission on that point.
12 By order of 10 July 2001 in Case C-497/99 P Irish Sugar v Commission [2001] ECR I-5333, the Court dismissed Irish Sugar’s appeal against the Irish Sugar judgment.
13 The Corus judgment was delivered on 10 October 2001. In paragraphs 52 and 53 of that judgment the Court of First Instance held that, in the case of a judgment annulling or reducing a fine imposed on an undertaking for infringement of the competition rules of the ECSC Treaty, the Commission is obliged to repay not only the principal amount of the fine overpaid but also default interest on that amount.
14 By registered letter of 1 November 2001, referring to the Corus judgment, Greencore requested the Commission to pay to Irish Sugar the sum of EUR 154 892, corresponding to interest at 7.13% on the principal sum of EUR 916 674 for the period from 22 August 1997 to 4 January 2000.
15 By letter of 11 February 2002 (‘the contested decision’) the Commission rejected that request on the following grounds:
‘The payment of the principal sum without interest on 4 January 2000 meant that the Commission refused to pay any interest. You have not attacked this decision not to pay interest within the two months laid down in Art. 230 EC (former Art. 173). Instead you chose to await the outcome of the Corus judgment before you came back on this issue.
As the [Court of Justice] held in numerous cases, the purpose of time-limits for bringing proceedings is to ensure legal certainty by preventing Community measures which produce legal effects from being called in question indefinitely as well as on the requirements of good administration of justice and procedural economy (see for example judgment in Case C-310/97 [ P Commission v AssiDomän Kraft Products and Others [1999] ECR I-5363, paragraph] 61). As the [Court of Justice] made it also clear in this judgment, a decision which has not been challenged within the required time limits by the addressee becomes definitive as against him and he cannot benefit from a judgment in favour of another addressee of the decision.
In this respect, it should not matter whether one tries to benefit from a judgment obtained by the co-addressee of the same decision, as was the case in AssiDomän, or from the addressee of a separate decision of the same content, as is the case here.
You are therefore precluded from taking advantage of the Corus judgment after having originally accepted the payment of the principal sum without interest.’
Procedure before the Court and forms of order sought
16 By application lodged at the Registry of the Court of First Instance on 25 April 2002, the applicant brought the present action in which it claimed that the Court should annul the contested decision and order the Commission to pay the costs.
17 By separate document, lodged at the Registry of the Court of First Instance on 19 June 2002, the Commission raised an objection of inadmissibility pursuant to Article 114(1) of the Court’s Rules of Procedure, contending that the Court should, first, dismiss the action as manifestly inadmissible and, second, order the applicant to pay the costs.
18 In its written pleadings the Commission denied that the contested decision constituted a measure against which an action for annulment might lie, since it did not in any way change the applicant’s legal position, the Commission having already refused to pay interest.
19 In that connection the Commission maintained that since the applicant had by its fax of 27 October 1999 supplied the Commission with the details of its bank account with a view to the reimbursement of the sum overpaid and had requested confirmation that interest would be paid, it was the Commission’s reimbursement of the principal without interest on 4 January 2000 that constituted the decision not to pay interest, which was not challenged by the applicant within the period prescribed by Article 230 EC.
20 According to the Commission, the contested ‘decision’ in no way constitutes a decision and did no more than inform the applicant that, by not having challenged the earlier refusal to pay interest, it had accepted that decision and could not return to the matter of interest once another undertaking had succeeded before the Court of First Instance after contesting the Commission’s refusal to pay interest.
21 In its observations on the objection of inadmissibility, lodged at the Registry of the Court of First Instance on 1 August 2002, the applicant contended that the objection of inadmissibility should be dismissed and stood by the other claims in its application.
22 By order of 7 January 2003 in Case T-135/02 Greencore Group v Commission, not published in the ECR (‘the Greencore order’), the Court of First Instance (Second Chamber) dismissed the objection of inadmissibility raised by the Commission and ordered the further conduct of the action.
23 In paragraph 14 of that order, the Court of First Instance found that it was apparent from the very terms in which the contested decision was couched that it did not merely impart information but clearly expressed the Commission’s refusal to pay the default interest requested by the applicant in favour of its subsidiary, and that the reason for that refusal was that the applicant had forfeited its right to request the payment of interest since it had not raised the matter when the principal sum paid by way of fine was refunded on 4 January 2000.
24 By application lodged at the Registry of the Court of Justice on 19 March 2003, the Commission brought an appeal against the Greencore order pursuant to Article 56 of the Statute of the Court of Justice.
25 By order of the President of the Second Chamber of the Court of First Instance of 10 June 2003, the proceedings before the Court of First Instance were stayed until judgment had been delivered on that appeal.
26 In the context of its appeal, the Commission claimed that the Court of First Instance had infringed Article 230 EC by declaring admissible an action for annulment of an act that was not open to such challenge.
27 In that respect, citing the Court’s case-law according to which a letter that merely confirms an initial decision does not constitute a decision against which an action for annulment may be brought, for it does not bring about a distinct change in its addressee’s position (see, inter alia, Case C-199/91 Foyer culturel du Sart-Tilman v Commission [1993] ECR I-2667, paragraph 23), the Commission argued that that was the case with regard to the contested decision, which did not re-examine the merits of the case and contained nothing capable of bringing about a distinct alteration in the applicant’s legal position.
28 The Commission maintained that it was the fact that it refunded the principal sum alone to the applicant’s subsidiary, while refraining from any pronouncement on the payment of interest, that constituted the original decision rejecting the applicant’s request for the payment of interest.
29 According to the Commission, it was when it refunded the principal sum alone to the applicant that the latter ought to have brought an action for annulment of the refusal to pay interest, as other undertakings did. Instead, the applicant preferred to await the outcome of Case T-171/99, cited above, deciding that it would act only if Corus UK Ltd. were held to be entitled to the payment of interest.
30 Furthermore, the Commission argued that, if the applicant considered that refunding the principal sum without interest did not constitute a decision refusing to pay interest, it ought, in accordance with the procedure for failure to act laid down in Article 232 EC, to have called upon the Commission to act within a reasonable period. As its application before the Court of First Instance makes clear, the applicant chose not to bring an action of that kind.
31 By judgment of 9 December 2004 in Case C-123/03 P Commission v Greencore [2004] ECR I-11647 (‘the Greencore judgment’), the Court of Justice, first, set aside the Greencore order and, second, rejected the objection of inadmissibility raised by the Commission, the costs being reserved.
32 In paragraph 40 of the Greencore judgment the Court stated that, in its assessment of the admissibility of the applicant’s action, the Court of First Instance did not examine the Commission’s plea in law, since it did not consider whether payment of the principal without interest amounted to an implied refusal to pay such interest which might be classified as an actionable decision for the purposes of Article 230 EC.
33 The Court held (paragraph 41 of the Greencore judgment) that, by failing to examine that plea, the Court of First Instance committed an error of law which warranted setting aside the Greencore order.
34 Giving final judgment itself on the objection of inadmissibility, the Court noted first (paragraph 44 of the Greencore judgment) that any measure which produces binding legal effects such as to affect the interests of an applicant by bringing about a distinct change in his legal position is an act or decision which may be the subject of an action under Article 230 EC for a declaration that it is void (Case 60/81 IBM v Commission [1981] ECR 2639, paragraph 9, and Joined Cases C‑68/94 and C-30/95 France and Others v Commission [1998] ECR I-1375, paragraph 62).
35 The Court then observed (paragraph 45 of the Greencore judgment) that, as a rule, mere silence on the part of an institution cannot be placed on the same footing as an implied refusal, except where that result is expressly provided for by a provision of Community law. While not excluding that in certain particular circumstances that principle may not be applicable, so that an institution’s silence or inaction may exceptionally be considered to constitute an implied refusal, the Court considered that, in the circumstances of the case, the Commission’s paying of the principal sum only without explicitly taking a position on the request for payment of interest did not amount to an implied decision rejecting that request. Indeed, no such exceptional circumstances had been invoked or had arisen in the case.
36 Finally, the Court held (paragraph 46 of the Greencore judgment) that the fact that the applicant had not used the procedure provided for by Article 232 EC in order to oblige the Commission to pay interest had no bearing on the admissibility of the action for annulment that it had brought after the Corus judgment had been given.
37 In so far as the Court rejected the Commission’s plea that the contested decision did no more than confirm a decision previously made containing an implied refusal, it held (paragraph 47 of the Greencore judgment) that that letter, in which the applicant was refused the right to claim payment of interest on the sum refunded, contained a refusal to pay interest and accordingly constituted an actionable measure for the purposes of Article 230 EC.
38 In consequence, the Court rejected the objection of inadmissibility raised by the Commission as unfounded.
39 The procedure before the Court of First Instance (Second Chamber) resumed on 9 December 2004 at the stage which it had reached before the Greencore judgment was delivered, pursuant to Article 119(2) of the Rules of Procedure.
40 In its rejoinder, lodged at the Registry of the Court of First Instance on 8 April 2005, the Commission asks the Court of First Instance to dismiss the action in its entirety and to order the applicant to pay the costs.
41 The applicant did not ask to be allowed to lodge a supplementary statement of written observations pursuant to Article 119(3) of the Rules of Procedure.
42 Upon hearing the report of the Judge-Rapporteur the Court of First Instance decided to open the oral proceedings.
43 The parties presented oral argument and answered the questions put by the Court at the hearing on 20 September 2005.
44 On that occasion, the applicant restated its heads of claim and asked that the Commission be ordered to pay all the costs, including those relating to the appeal proceedings before the Court of Justice.
Law
Arguments of the parties
45 In support of its action the applicant puts forward a single plea, namely infringement of Article 233 EC, interpreted in the light of paragraphs 52 and 53 of the Corus judgment.
46 As for the grounds given by the Commission in the contested decision for not applying the principle laid down in paragraphs 52 and 53 of the Corus judgment to the present case, the applicant regards them as already having been rejected, first, by the Court of First Instance in the Greencore order, and then by the Court of Justice in the Greencore judgment. It follows that the contested decision is based on erroneous reasoning, founded essentially on the alleged existence of a prior decision. Moreover, the Commission is not permitted to change its reasoning ex post facto. The current action cannot but be considered well founded.
47 Contrary to what the Commission states in the last paragraph of the contested decision, the applicant never ‘accepted the payment of the principal sum without interest’. It in fact only accepted payment of the principal sum. The very purpose of the initial request of 27 October 1999 concerning interest was to counter any argument of the sort that accepting payment of the principal sum without concurrently claiming interest could be construed as agreeing to forgo interest.
48 The argument that the applicant forfeited its right to request the payment of interest since it did not raise the matter when the principal sum was refunded cannot be upheld either, since there was no earlier decision to challenge and hence no forfeiture.
49 In its application the applicant concedes that the Commission’s silence as regards its initial request of 27 October 1999 opened the way for the legal remedy for failure to act as laid down in Article 232 EC, but it chose not to make use of that remedy.
50 In its reply the applicant adds, in that respect, that it had no legal obligation to call upon the Commission to act following its failure to pay interest. There was no need to precipitate matters at that time, since both the applicant and the Commission knew that the issue was already sub judice in Case T-171/99, cited above, and would be decided in due course. The applicant points out that notice of the action brought in that case was given in the Official Journal on 2 October 1999. Moreover, appeal proceedings in Case C-497/99 P were pending until 10 July 2001, and the matter of the Commission’s costs in that case remained open until after the contested decision.
51 Without calling the principle laid out in paragraphs 52 and 53 of the Corus judgment into question, and without challenging further the admissibility of the current action, the Commission submits, in its rejoinder, that it would be manifestly contrary to the principle of legal certainty to uphold the claim.
52 The Commission observes that nearly two years passed between the refund of the principal sum of the fine on 4 January 2000 and the applicant’s request for payment of the interest on 1 November 2001. Having regard to the circumstances of the case, that delay was unreasonable and the applicant has not advanced any valid justification for it.
53 The Commission considers, in particular, that the applicant’s decision to await delivery of the judgment of the Court of First Instance in Case T-171/99, cited above, was wholly unwarranted. By its very nature, that judgment could not affect the rights of third parties such as the applicant. The Commission pleads, in this respect, that it is settled case-law that a judgment given by the Court of Justice or by the Court of First Instance annulling a measure can constitute a new fact causing time to run again only with regard to the parties to the proceedings and to other persons directly affected by the measure which was annulled (see Commission v AssiDomän Kraft Products and Others, paragraph 15 above, paragraph 62, and the case-law cited). The applicant should not therefore be allowed to benefit from a judgment in a different case brought by an addressee of a separate decision with the same content.
54 The Commission submits that nothing in the Greencore judgment undermines the force of its argument. First of all, the Court of Justice did not rule on the substance of the case in that judgment. Second, even if the Commission’s act of 4 January 2000 did not constitute a decision to refuse payment of interest, the fact remains that the Commission did not accede to the claim to interest contained in the applicant’s fax of 27 October 1999, and it was incumbent on that company to pursue that claim within a reasonable time, by way of an action for failure to act, if it chose to do so at all. At the hearing the Commission relied, in support of this, on Case 59/70 Netherlands v Commission [1971] ECR 639.
Findings of the Court
55 In the light of the Greencore judgment, the contested decision by which the Commission refused the applicant the right to claim payment of default interest on the principal amount of the fine refunded (see the Greencore judgment, paragraph 47) cannot but be annulled.
56 The reasoning of that decision is essentially and solely based on the premiss that Greencore had not brought an action for annulment against an alleged implied decision to refuse to pay interest that had been taken at an earlier stage and had become definitive (see paragraph 15 above).
57 According to the Court of Justice (paragraph 45 of the Greencore judgment), the Commission’s refund of the principal sum only without explicitly taking a position on the request for payment of interest did not amount to such an implied decision rejecting that request. The Court therefore rejected as incorrect the premiss on which the entire reasoning of the contested decision was based. That decision therefore appears to be vitiated by an error of law.
58 That conclusion may not be called in question by the new arguments put forward by the Commission in its rejoinder. To the extent that those arguments depart appreciably from the grounds set out in the contested decision, those arguments cannot be taken into consideration by the Court of First Instance (see, to that effect, Case 195/80 Michel v Parliament [1981] ECR 2861, paragraph 22; Joined Cases C-329/93, C-62/95 and C-63/95 Germany and Others v Commission [1996] ECR I-5151, paragraphs 47 and 48; Joined Cases C-189/02 P, C-202/02 P to C‑205/02 P, C-208/02 P and C-213/02 P Dansk Rørindustri and Others v Commission [2005] ECR I-0000, paragraphs 462 and 463; Case T-93/02 Confédération nationale du Crédit mutuel v Commission [2005] ECR II-0000, paragraphs 124 to 126).
59 For the sake of completeness, the Court of First Instance notes that, although it is presented as a substantive argument, the main argument in the rejoinder, relating to the requirements of legal certainty and to the allegedly unreasonable and unwarranted amount of time which passed between the refund of the principal sum of the fine on 4 January 2000 and the new request for payment of interest on 1 November 2001, is identical, in essence, to the plea of inadmissibility raised by the Commission during the appeal proceedings before the Court of Justice and summarised in paragraph 30 above (see paragraph 19 of the appeal lodged by the Commission, and the Greencore judgment, paragraph 29). The Commission claimed in essence that the applicant was barred from bringing an action for annulment since it had not brought proceedings for failure to act within a reasonable period after 4 January 2000. According to the Commission, to accept that the action for annulment brought by Greencore was admissible would amount to allowing Greencore to circumvent the requirements for bringing an action for failure to act.
60 However, as indicated above, the Court of Justice has already rejected that argument in paragraph 46 of the Greencore judgment.
61 The Court of First Instance could therefore accept the Commission’s arguments only by calling in question the point of law decided by the Court of Justice in paragraph 46 of the Greencore judgment. The fact that the Court was ruling there on admissibility and not on the substance of the case is irrelevant in this respect, since the Commission’s argument specifically concerns a question of admissibility rather than substance; that is confirmed by its reference to the requirements of legal certainty and to the issue whether time can start running again after the time‑limits for bringing an action have expired, and by its reference, at the hearing, to the judgment in Netherlands v Commission, paragraph 54 above, in which the Court of Justice dismissed the action of the Netherlands as inadmissible on the basis of those same requirements.
62 However, the Court of First Instance is precluded from calling in question that point of law by the second paragraph of Article 61 of the Statute of the Court of Justice, according to which, in the context of a judgment referred back to the Court of First Instance after being quashed, that Court is bound by the decision of the Court of Justice on points of law.
63 In any event, the Court of First Instance considers that the period of 22 months which passed between the payment of the principal sum without interest on 4 January 2000 and the request addressed to the Commission by registered letter of 1 November 2001 was reasonable and justified in the specific circumstances of the case, which were noted by the Court of Justice of its own motion in paragraphs 5 to 7 and 10 of the Greencore judgment and recalled in paragraphs 5 to 7 and 11 above. Those facts distinguish this case from Netherlands v Commission, paragraph 54 above.
64 The inaction on the part of the applicant can be reasonably justified by the fact that it was awaiting the outcome of the proceedings in Case T-171/99 before returning to the Commission regarding payment of interest. It should be noted, in this regard, that the applicant was clearly aware of those proceedings (see the fax from its lawyer of 26 October 1999) and that it renewed contact with the Commission on 1 November 2001, that is approximately only 20 days after the Corus judgment was delivered.
65 Admittedly, the applicant’s awareness of the action brought by British Steel in Case T-171/99 did not relieve it of the need to safeguard its own interests and, as the Commission points out, the applicant could either have pursued an action for failure to act immediately or, at least, have obtained formal agreement from the Commission that the question of payment of interest to Irish Sugar would be left open until the Corus judgment was delivered.
66 However, in this case, account must also be taken of the fact that Irish Sugar had lodged an appeal against the Irish Sugar judgment before the Court of Justice on 21 December 1999, that is even before the refund of the principal sum. The applicant was thus entitled to consider that the amount which the Commission owed to its subsidiary, both as regards the principal sum and interest, related expenses and costs, could be definitively established only after the Court had delivered its judgment in the appeal proceedings, or indeed after the outcome of the proceedings referred back to the Court of First Instance in the event that the Irish Sugar judgment were set aside. In those circumstances, it was not unreasonable for the applicant to prefer to await the outcome of those proceedings before returning to the Commission as regards the default interest to which it considered itself to be entitled on the principal sum which had already been refunded.
67 Irish Sugar’s appeal was dismissed by order of the Court of 10 July 2001. The Corus judgment, in deliberation since the hearing of 15 November 2000, was delivered exactly three months later and, as already indicated above, the applicant requested the Commission to act only 20 days later, by letter of 1 November 2001.
68 Moreover, the fact that the Commission had not expressly taken a position on the applicant’s request of 27 October 1999 distinguishes this case from that giving rise to the judgment in Commission v AssiDomän Kraft Products and Others, paragraph 15 above, in which there was indeed an explicit decision against which the undertaking concerned could – and should – have brought an action and in which, consequently, the question arose as to whether time could start running again after the time-limits for bringing an action had expired.
69 In those circumstances, the Court considers that the requirements of legal certainty do not preclude this action for annulment being granted.
Costs
70 Under Article 87(2) 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 Commission has been unsuccessful, it must be ordered to pay the costs, including those relating to the appeal proceedings before the Court of Justice, in accordance with the form of order sought by the applicant.
On those grounds,
THE COURT OF FIRST INSTANCE (Second Chamber)
hereby:
1. Annuls the decision of 11 February 2002, by which the Commission refused to grant the applicant’s request for default interest to be paid to its subsidiary Irish Sugar plc on the principal sum repaid to the latter to comply with a judgment of the Court of First Instance;
2. Orders the Commission to pay the costs, including those relating to the appeal proceedings before the Court of Justice.
Delivered in open court in Luxembourg on 14 December 2005.