Action brought on 16 May 2011 - Zinātnes, inovāciju un testēšānas centrs v European Commission
(Case T-259/11)
Language of the case: Latvian
Parties
Applicant: Zinātnes, inovāciju un testēšānas centrs (represented by: E. Darapolskis, lawyer)
Defendant: European Commission
Form of order sought
Annulment of the decision of the European Commission concerning contract 2003/004-979-06-03/1/0027 'Būvmateriālu inivāciju un testēšānas centra izveide' concluded in the framework of the 2003 Latvian national PHARE programme, and a declaration that there are no grounds for the recovery of the financing for the PHARE programme in the amount of EUR 1 576 010.80.
Pleas in law and main arguments
By the decision of the European Commission ('Commission') concerning contract 2003/004-979-06-03/1/0027 'Būvmateriālu inivāciju un testēšānas centra izveide' concluded in the framework of the 2003 Latvian national PHARE programme ('the contested decision') it was decided to recover financial aid granted by the European Union amounting to EUR 1 474 200.
The applicant considers that, by adopting the contested decision, the Commission has disregarded the financial protocol adopted on 19 September 2003 by the European Community and the Republic of Latvia, concerning the financing of the 2003 Latvian national PHARE programme ('financial protocol'), on the basis of which a contract regarding the grant of financing was concluded with the applicant on 23 August 2005 and aid under PHARE was granted in the amount of EUR 1 576 010.80. In addition, the applicant maintains that the Commission failed to comply with Council Regulation (EC, Euratom) No 1605/2002 of 25 June 2002 on the Financial Regulation applicable to the general budget of the European Communities
1 ('Financial Regulation') and Commission Regulation (EC, Euratom) No 2342/2002 of 23 December 2002 laying down detailed rules for the implementation of Council Regulation (EC, Euratom) No 1605/2002 on the Financial Regulation applicable to the general budget of the European Communities
2 ('implementing regulation').
In support of its action, the applicant relies on the following pleas in law.
First, the applicant claims that the Commission adopted the contested decision without having carried out a careful examination of the circumstances of the matter and an assessment of the facts, basing its decision solely on statements by officials of the Republic of Latvia, which, in turn, were not based on reports or decisions of the competent authorities. The applicant considers that, before beginning the procedure for recovery, the Commission was required to prove the infringements mentioned in the statements by those officials of the Republic of Latvia and obtain all the necessary evidence, which the Commission did not do, limiting itself to examining formally the previous correspondence. In its opinion, the result was that in the present case important facts were overlooked and the financing of the PHARE programme which had been paid was reclaimed without grounds.
Second, the applicant claims that the Commission did not make use of the options which the financial protocol, the Financial Regulation and the implementing regulation allow it. On that point, the applicant asserts that, in pointing to the existence of infringements, the Commission must first have calculated the financial impact on the Community budget; subsequently if it had observed that the infringements could have significant financial consequences it should have allowed the Republic of Latvia a period of time to remedy them. It asserts that, in the present case, the Commission did not make use of those options and as a result the contested decision breached the financial protocol, Article 71 of the Financial Regulation and Articles 79 and 80 of the implementing regulation.
Third, the applicant asserts that the contested decision is disproportionate and was adopted in breach of the procedure for adoption of decisions laid down not only in the financial protocol, but also in the Financial Regulation and the implementing regulation. In addition, it alleges that the contested decision was not published, it did not give a date of adoption and the applicant learned of the decision only after 9 March 2011 in the context of judicial proceedings brought in Latvia.
Fourth, the applicant maintains that the contested decision had serious consequences for it and caused it to suffer losses, given that it is the cause of judicial proceedings brought against it and prevents it from continuing to receive financing from the PHARE programme.
Fifthly and finally, the applicant considers that the contested decision seriously damaged its reputation, given that, because of the unlawful actions of the Commission, the participation of new partners in the project has been jeopardised and the confidence of investors in the applicant as a safe and stable financial partner has greatly decreased.
____________1 - OJ L 248, 16. 9.2002, p. 1.2 - OJ L 357, 31.12.2002, p.1.