ORDER OF THE COURT OF FIRST INSTANCE (Fifth Chamber)

17 September 1998 (1)

(Taxation of costs)

In Case T-271/94 (92),

Eugénio Branco Lda, a company incorporated under Portuguese law, having its registered office in Lisbon, represented by Bolota Belchior, of the Bar of Vila Nova de Gaia, with an address for service in Luxembourg at the Chambers of Jacques Schroeder, 6 Rue Heine,

applicant,

v

Commission of the European Communities, represented by Ana Maria Alves Vieira and Knut Simonsson, of its Legal Service, acting as Agents, with an address for service in Luxembourg at the office of Carlos Gómez de la Cruz, of its Legal Service, Wagner Centre, Kirchberg,

defendant,

APPLICATION for the taxation of costs following the judgment of the Court of First Instance of 11 July 1996 in Case T-271/94 Branco v Commission [1996] ECR II-749,

THE COURT OF FIRST INSTANCE

OF THE EUROPEAN COMMUNITIES (Fifth Chamber),

composed of: J. Azizi, President, R. García-Valdecasas and M. Jaeger, Judges,

Registrar: H. Jung,

makes the following

Order

Factual Background

1.

    By application of 22 July 1994, registered under number T-271/94, Eugénio Branco Lda ('Branco‘), a company incorporated under Portuguese law whose registered office is in Lisbon, brought an action for the annulment of an alleged Commission decision rejecting a claim for final payment made by the applicant in connection with financial assistance granted by the European Social Fund ('the ESF‘), reducing such assistance and seeking repayment of the advances previously paid by the ESF and the Portuguese State.

2.

    By judgment of 11 July 1996 in Case T-271/94 Branco v Commission [1996] ECR II-749, the Court of First Instance declared the action inadmissible but ordered the Commission to pay the costs.

3.

    By an undated letter, Branco requested the Commission to reimburse to it the expenses and lawyers' fees which it had incurred, amounting to ESC 2 633 319.

4.

    It reiterated its claim by letter of 18 April 1997.

5.

    The Commission did not reply to those letters.

Forms of order sought by the parties and procedure

6.

    By application lodged on 9 October 1997, Branco applied for the costs to be taxed under Article 92(1) of the Rules of Procedure, claiming that the Court should:

-    fix the amount of recoverable costs at ESC 2 633 319;

-    order the Commission to pay the costs relating to the present taxation proceedings.

7.

    On 11 December 1997, the Commission submitted its observations, contending that the Court should:

-    declare the application inadmissible;

-    order the applicant to pay the costs.

8.

    By letter of 18 February 1998, the Court asked the Commission to indicate whether it disputed the amount of costs which Branco seeks to recover and, if so, on what grounds.

9.

    By letter of 10 March 1998, the Commission replied that it disputed that amount on the ground that it was excessive. It argued first that there were similarities in the pleadings lodged in Case T-271/94 and in Case T-85/94, in which an application for taxation of costs had also been made, and secondly that the number of hours spent by the Commission's Agent on Case T-271/94 was approximately half that stated by Branco.

Admissibility

10.

    The Commission contends that the application for taxation is inadmissible since the costs claimed were not disputed prior to the application and there is no 'actual proof that they were disputed before the competent authority‘.

11.

    It points out that Branco submitted its claim for costs to the Directorate-General for Financial Control (DG XX). However, DG XX is not competent to undertake the payment of costs. Competence to do so in fact lies with the Legal Service's financial unit. Branco knows this from experience, as is evident from the correspondence exchanged in the course of the proceedings in Cases T-89/94 (92) and T-89/94 (122) (92).

12.

    The fact that the Commission did not reply to or approve the claims for costs must, in the light of its reply of 10 March 1998 to the Court's question of 18 February 1998, be deemed to constitute a dispute concerning the costs recoverable within the meaning of Article 92(1) of the Rules of Procedure.

13.

    The argument that the claim for reimbursement was not submitted to the competent department must be rejected. It was for the Commission department which had received the claim to forward it to the competent department, since the admissibility of an application for the taxation of costs cannot be dependent on the internal organisation of the institution ordered to pay them.

14.

    It follows that the plea of inadmissibility raised by the Commission must be rejected.

Substance

15.

    The applicant explains that the amount of ESC 2 633 319 which it claims includes the sums of ESC 293 319 in respect of travel and subsistence expenses, ESC 1 170 000 in respect of lawyers' fees and ESC 1 170 000 in respect of fees payable to an economist it engaged.

16.

    With regard to the travel and subsistence expenses, it points out that, because the hearing took place in the morning, its lawyer had to travel the day before and stay overnight in Luxembourg. It states that the most economical route between Oporto and Luxembourg was a flight from Oporto to Paris, followed by a train journey from Paris to Luxembourg. Moreover, the return journey necessitated an overnight stay at a hotel in Paris, since the train from Luxembourg did not arrive in Paris until 6 p.m. and the first flight from Paris to Oporto did not leave until 7 a.m. the following morning.

17.

    With regard to the lawyers' fees [ESC 1 000 000 plus value added tax ('VAT‘) at the statutory rate of 17%], the applicant states that its lawyer spent more than 70 hours on this case, not including time spent travelling. The amount claimed is justified in view, in particular, of the time invested, the difficulty of the case and the size of the sums in dispute. In particular, the applicant's lawyer had to study the two files concerning the training operations in question (some 100 volumes comprising thousands of pages), attend various meetings with the economists who had launched, developed, monitored and completed the training operations, compile and analyse the Community case-law and legal literature on the subject, draft the application, examine the defence, draw up the reply, study various applications made in the course of the proceedings and prepare for the hearing.

18.

    The work of the economist engaged was essential for the purpose of bringing the action for annulment. The corresponding fees are justified, having regard to the work done and the time spent on the matter.

19.

    It should be observed that under Article 91(b) of the Rules of Procedure 'expenses necessarily incurred by the parties for the purpose of the proceedings, in particular travel and subsistence expenses and the remuneration of agents, advisers or lawyers‘ are to be regarded as recoverable costs.

20.

    In the present case, the sum of ESC 293 319 covers the travel and subsistence expenses not only of the lawyer but also of Mr João Branco. However, the travel and subsistence expenses incurred by persons other than the applicant's lawyer are recoverable only if their presence is necessary for the purpose of the proceedings (order of the Court of Justice in Case 24/79 Oberthür v Commission [1981] ECR 2229, paragraph 2). Since Mr Branco's presence at the hearing was not necessary, his travel and subsistence expenses do not come under 'expenses necessarily incurred‘ within the meaning of Article 91(b) of the Rules of Procedure. As the expenses so incurred by Mr Branco account for half of the sum claimed, only half of that sum is recoverable in the present case, namely an amount of ESC 146 660, including VAT, rounded up to the nearest unit.

21.

    With regard to the fees of the economist engaged by the applicant, it is not evident from the documents before the Court that his services were essential. The corresponding fees do not therefore constitute 'expenses necessarily incurred‘ within the meaning of Article 91(b) of the Rules of Procedure.

22.

    As to the fees of the applicant's counsel, it should be observed that the Community judicature is not empowered to tax the fees payable by the parties to their own lawyers but it may determine the amount of those fees which may be recovered from the party ordered to pay the costs (order of the Court of Justice in Case 318/82 Leeuwarder Papierwarenfabriek v Commission [1985] ECR 3727, paragraph 2, and order of the Court of First Instance in Joined Cases T-18/89 DEP and T-24/89 DEP Tagaras v Court of Justice [1992] ECR II-153, paragraph 13). Since Community law does not contain any provisions laying down a scale of fees, the Court must consider all the facts of the case, taking into account the purpose and nature of the proceedings, their significance from the point of view of Community law, as well as the difficulties presented by the case, the amount of work generated by the dispute for the lawyers involved and the financial interest which the parties had in the proceedings (orders of the Court of Justice in Case C-294/90 DEP British Aerospace v Commission [1994] ECR I-5423, paragraph 13, and of the Court of First Instance in Case T-2/93 (92) Air France v Commission [1996] ECR II-235, paragraph 21).

23.

    In this instance, the case could not have presented any serious difficulties and its significance from the point of view of Community law was limited.

24.

    In order to determine the amount of the lawyers' fees which are recoverable, regard should be had to:

-    the time required for studying the matters of fact and of law raised in the case and drafting the pleadings, taking into account the repetitive nature of the arguments put forward in the reply as compared with those advanced in the observations on the objection of inadmissibility, and the lack of clarity of the defendant's arguments;

-    the work necessitated in preparing for the hearing;

-    the time spent by the lawyer in travelling to the hearing;

-    the financial interests involved.

25.

    In the light of those considerations, the lawyer's fees recoverable by way of costs in Case T-271/94 will be fixed at ESC 1 170 000, plus VAT at the rate of 17%.

26.

    Since that amount takes account of the circumstances of the case up to the time of this order, there is no need to give a separate ruling on the application for reimbursement of the expenses incurred by the parties for the purpose of the proceedings for the taxation of costs.

27.

    It follows from the foregoing that the recoverable costs amount to ESC 1 316 660, including VAT.

On those grounds,

THE COURT OF FIRST INSTANCE (Fifth Chamber)

hereby orders:

The total amount of the recoverable costs in Case T-271/94 is fixed at ESC 1 316 660, including VAT.

Luxembourg, 17 September 1998.

H. Jung

J. Azizi

Registrar

President

1: Language of the case: Portuguese.