ORDER OF THE GENERAL COURT (First Chamber)
15 September 2010 (*)
(Procedure – Taxation of costs)
In Case T‑221/05 DEP,
Huvis Corp., established in Gangnam‑gu, Seoul (South Korea), represented by J.‑F. Bellis, F. Di Gianni and R. Antonini, lawyers,
applicant,
v
Council of the European Union, represented by J.‑P. Hix and B. Driessen, acting as Agents, and G. Berrisch, lawyer,
defendant,
supported by
European Commission, represented by E. Righini and K. Talabér-Ritz, acting as Agents,
intervener,
APPLICATION for taxation of costs lodged by Huvis Corp. following the judgment of the Court of First Instance (now ‘the General Court’) of 8 July 2008 in Case T-221/05 Huvis v Council, not published in the ECR,
THE GENERAL COURT (First Chamber),
composed, at the time of the deliberation, of I. Wiszniewska-Białecka, President, F. Dehousse and H. Kanninen (Rapporteur), Judges,
Registrar: E. Coulon,
makes the following
Order
Facts, procedure and forms of order sought
1 By application lodged at the Court Registry on 10 June 2005, the applicant, Huvis Corp. brought an action seeking, first, the annulment of Article 2 of Council Regulation (EC) No 428/2005 of 10 March 2005 imposing a definitive anti-dumping duty on imports of polyester staple fibres originating in the People's Republic of China and Saudi Arabia, amending Regulation (EC) No 2852/2000 imposing a definitive anti-dumping duty on imports of polyester staple fibres originating in the Republic of Korea and terminating the anti-dumping proceeding in respect of such imports originating in Taiwan (OJ 2005 L 71, p. 1) and, second, pursuant to Article 241 EC, a declaration that the provisions of Council Regulation (EC) No 384/96 of 22 December 1995 on protection against dumped imports from countries not members of the European Community (OJ 1996 L 56, p. 1) (‘the basic regulation’) are inapplicable in so far as they support the contested findings in Regulation No 428/2005.
2 By judgment of 8 July 2008 in Case T-221/05 Huvis v Council, not published in the ECR, the General Court annulled Article 2 of Regulation No 428/2005 to the extent to which the anti-dumping duty imposed on exports into the European Community of goods produced and exported by the applicant exceeded that which would have been applicable if the ‘input’ method, used in the initial investigation, had been used to calculate the adjustment to the normal value for import charges and indirect taxes. The action was dismissed as to the remainder. The Council was ordered to bear its own costs and to pay 70% of those incurred by the applicant. The Commission was ordered to bear its own costs.
3 By letter to the Council of 31 July 2008, the applicant stated that the total amount of costs incurred in the course of the proceedings was EUR 134 093.75. It requested reimbursement of EUR 94 265.62, including EUR 93 865.65 (70% of EUR 134 093.75) in respect of fees and EUR 400 for hotel expenses. That letter was accompanied by a breakdown of the costs. According to that breakdown, the fees corresponded to 368 working hours divided amongst three lawyers.
4 By letter of 18 September 2008, the Council informed the applicant that in its view the amounts claimed for fees were excessive and did not reflect costs which were objectively necessary. Furthermore, the applicant did not specify whether the EUR 400 claimed for hotel expenses represented 70% of the relevant disbursements. The Council took the view that EUR 50 000 would have been sufficient to defend the applicant’s interests and, therefore, that it was not prepared to pay more than EUR 35 000.
5 By letter of 13 October 2008, the applicant rejected the offer of EUR 35 000, referring to the factual and legal difficulties of the case, and repeated its request.
6 By letter of 28 November 2008, the Council refuted the argument that the case gave rise to particular difficulties, pointing out that the applicant had not addressed all its arguments concerning the excessive nature of the fees, and maintained its previous position.
7 In those circumstances, by document lodged at the Court Registry on 20 April 2009, the applicant asked the Court, pursuant to Article 92(1) of the Rules of Procedure, to fix the amount of recoverable costs at EUR 93 865.65.
8 In its observations lodged at the Court Registry on 23 June 2009, the Council asked the Court to refuse reimbursement of the applicant’s costs or, in the alternative, to declare that the amount of the costs to be paid to the applicant should not exceed EUR 35 000 (that is 70% of EUR 50 000).
Law
9 Under Article 92(1) of the Rules of Procedure, if there is a dispute concerning the costs to be recovered, the General Court hearing the case, on application by the party concerned and after hearing the opposite party, is to make an order, from which no appeal is to lie.
10 According to Article 91(b) of the Rules of Procedure, expenses necessarily incurred by the parties for the purpose of the proceedings, in particular the travel and subsistence expenses and the remuneration of agents, advisers or lawyers, are to be regarded as recoverable costs. It follows from that provision that recoverable costs are limited, first, to those incurred for the purpose of the proceedings before the Court and, second, to those which were necessary for that purpose (see order in Case T-342/99 DEP Airtours v Commission [2004] ECR I-1785, paragraph 13, and the case-law cited).
11 According to settled case-law, the General Court is not empowered to tax the fees payable by the parties to their own lawyers, but may determine the amount of those fees to be recovered from the party ordered to pay the costs. When ruling on an application for taxation of costs, the General Court is not obliged to take account of any national scale of lawyers’ fees or any agreement in that regard between the party concerned and his agents or advisers (see order in Airtours v Commission, paragraph 17, and the case-law cited).
12 It has also consistently been held that, in the absence of applicable Community provisions laying down fee-scales, the Court must make an unfettered assessment of 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 proceedings for the agents and advisers involved and the financial interests which the parties had in the proceedings (see order in Airtours v Commission, paragraph 18, and the case-law cited).
13 It is in accordance with those criteria that the amount of recoverable costs in this case must be determined.
14 As a preliminary point, as regards the Council’s argument that the applicant’s costs should not be reimbursed as the applicant has not provided evidence of the amount of expenses that it actually incurred, it is sufficient to note that, in support of its application for taxation of costs, the applicant provided a detailed breakdown of the fees for which it claims reimbursement. The fact that the invoice from the law firm representing the applicant both in the main proceedings and in respect of the present application for taxation of costs, annexed to the letter of 31 July 2008 and referred to in paragraph 3 above, is addressed to the Council not the applicant is irrelevant in that regard.
The purpose and nature of the proceedings and their significance from the point of view of Community law
15 The applicant submits that the case in the main proceedings involved several highly complex issues of Community law, including the impact of the different methodologies used by the Council, the interpretation of the requirement of ‘change in circumstances’ under Article 11(9) of the basic regulation, the scope of the Community institutions’ discretion in antidumping cases and the burden of proof. The applicant claims that the case will set a precedent.
16 The Council disputes the importance of the case from the point of view of Community law. The case does not raise the general issue of the discretion of the Community institutions when imposing measures to protect trade. Furthermore, the present case concerns exceptional circumstances that do not arise in all review investigations. Therefore, the impact of the ruling will not be as widespread as the applicant claims.
17 It must be recalled that the main issue in the dispute concerned the increase of anti-dumping duties imposed on imports of goods produced by the applicant, following an investigation carried out by way of interim review. That increase resulted from a change to the method used at the initial stage for calculating an adjustment for the drawback of import duties pursuant to Article 2(10) of the basic regulation. In accordance with Article 11(9) thereof, in a review investigation the institutions are required to apply the same methodology as in the initial investigation unless circumstances have changed.
18 Therefore, it was necessary, taking into consideration the facts of the case, to interpret the concept of ‘change of circumstances’ for the purposes of Article 11(9) of the basic regulation, and the conditions under which the institutions may apply a different method in a review even if circumstances have not changed.
19 Another issue concerned the alleged illegality of the rejection of the credit cost adjustment and, therefore, the alleged infringement of Article 2(10)(g) of the basic regulation as interpreted in the light of Article 2.4 of the Agreement on Implementation of Article VI of the General Agreement on Tariffs and Trade 1994 (OJ 1994 L 336, p. 103), which features in Annex 1A to the Agreement establishing the World Trade Organisation (WTO) (OJ 1994 L 336, p. 3).
20 It is true that the judgment was of some importance with respect to the interpretation of the provisions referred to in paragraphs 17 and 19 above. However, it cannot be regarded as particularly significant from the point of view of Community law.
The financial interests that the parties had in the proceedings
21 The applicant claims that bringing the action was of vital interest to it, since it exports to the Community large quantities of the product subject to anti-dumping duties and, therefore, importers had to bear significant and unjustified anti‑dumping duties during the period in question. Furthermore, its market share diminished considerably because the price paid by its customers in the Community was artificially raised by the anti-dumping duty.
22 The Council does not dispute that the applicant had a financial interest in bringing its annulment action.
23 In those circumstances, although the applicant has not put forward any figures, the fact that it has a not inconsiderable financial interest in the case is undeniable.
The difficulties presented by the case and the amount of work generated by the proceedings for the applicant’s lawyers
24 The applicant claims that, from a factual perspective, the proceedings required detailed explanations concerning the different methodologies used or proposed. From a legal perspective the proceedings required a complex and detailed analysis of Community law, the Community institutions’ practice as well as WTO law and practice. Furthermore, the Commission acknowledged the complexity of the judgment in a letter to one of the applicant’s clients concerning the delay encountered by the Commission in implementing the judgment.
25 According to the applicant, the complexity of the legal issues required, on its part, a substantial amount of research and study of case-law and academic writing in that area. Additionally, some of the legal issues essential to the outcome of the case had not been raised in previous proceedings and, therefore, the applicant’s lawyers had not had an opportunity to become familiar with them. The significance and complexity of the case called for the involvement of several lawyers. Finally, the time spent by the applicant in its preparation for the hearing was justified by that complexity, the analysis of the reply, and the anticipation of possible questions that could be raised by the Court.
26 The Council states that the explanations of the different methods were based largely on submissions prepared by the applicant during the anti-dumping investigation and presented to the Commission during a previous oral hearing and that, therefore, the alleged factual difficulties did not justify a substantial amount of additional legal expenses incurred for the purpose of the proceedings. As regards the analysis of Community law, it focussed on whether the change in the methodology used was fair by reference to general principles of Community law, and the meaning of change of circumstances under Article 11(9) of the basic regulation and resulted in a very limited examination of case-law. Furthermore, as regards the supposedly detailed analysis of past practice with respect to the calculation of the duty drawback adjustment, the applicant’s lawyers needed to look no further than the fourth edition of their own textbook on anti-dumping in order to make a simple reference to the fact that one method of calculation had been applied for over twenty years. Finally, WTO law was irrelevant to the dispute and the applicant’s arguments in that regard are based on submissions made during the investigation.
27 As regards the amount of the work, the Council submits that the issues in the case did not call for a substantial amount of research and study of case-law and academic writing, and that the annulment action was based, in large part, on arguments submitted during the investigation. Therefore, there was a significant degree of unnecessary duplication of the work carried out by the applicant’s three lawyers.
28 It should be observed that although anti-dumping cases usually concern complex economic issues and are often very technical, the degree of difficulty of the legal issues raised by the present case cannot be regarded as exceptional.
29 From a legal point of view, the case undoubtedly presented some difficulty.
30 It must be recalled, first of all, that while, in principle, the remuneration of only one lawyer is recoverable, it is possible that, depending on the individual circumstances, and most importantly, the complexity of each case, the fees of a number of lawyers may be considered necessary expenses. However, the primary consideration is the total number of hours of work which may appear to be objectively necessary for the purpose of the proceedings before the Court, irrespective of the number of lawyers who have provided the services in question (see order of 25 November 2009 in Case T-383/03 Hynix Semiconductor v Council, not published in the ECR, paragraphs 42 and 43, and the case-law cited).
31 It is clear from the detailed breakdown of costs annexed to the application for taxation of costs that the total number of hours of work for which the applicant seeks payment is 368 hours divided amongst three lawyers.
32 Having regard in particular to the length of the procedural documents in the main proceedings and even taking account of the difficulty of the case from a legal perspective, it must be held that the number of hours of work by the lawyers claimed by the applicant for the proceedings appears excessive.
33 In order to determine the number of hours of work necessary in the present case, it should also be borne in mind, first, that according to settled case-law lawyers’ fees for periods during which no procedural documents were notified must be excluded since they are not necessary to the proceedings (order in Case C-104/89 DEP Mulder and Others v Council and Commission [2004] ECR I-1, paragraph 47). Nor may lawyers’ fees relating to periods subsequent to the oral procedure before the Court be considered to be expenses necessarily incurred for the purposes of the proceedings (order in Mulder and Others v Council and Commission, paragraph 48).
34 It follows that the working time of a lawyer relating to the period between the lodging of the application and the lodging of the defence, that is one hour and 45 minutes, and that relating to the period between the lodging of the reply and the rejoinder, that is one hour and 15 minutes, together with the three hours relating to the period between the hearing and the delivery of the judgment cannot be considered to be recoverable.
35 Second, it must be observed that although the fact that the dispute was of some complexity justified the representation of the applicant by a number of lawyers, the division of the work of preparing the pleadings amongst three lawyers necessarily implies some duplication of effort, so that the Court cannot take cognisance of all the hours of work claimed (see, to that effect, order in Hynix Semiconductor v Council, paragraph 49, and the case-law cited).
36 Third, it must be observed that the applicant’s lawyers represented it during the administrative procedure which led to the adoption of the contested regulation, which allowed them to acquire in-depth knowledge of the file that they were therefore able to use during the procedure before the Court. Furthermore, in the course of the administrative procedure, the applicant had already put forward a large part of the arguments which it subsequently submitted to the General Court. That situation, in part, facilitated the lawyers’ work and reduced the time devoted to the preparation of the application (see, to that effect, order of 13 February 2008 in Case T-310/00 DEP Verizon Business Global v Commission, not published in the ECR, paragraph 42 and the case-law cited).
37 In those circumstances, it must be held that the hours supposedly spent drafting the 31-page application, namely 139 hours and 15 minutes, that is, for a lawyer working eights hours a day, over three weeks spent on that task including certain analyses, are well in excess of what could be considered necessary for the purposes of Article 91(b) of the Rules of Procedure. The Court considers that, in the present case, 100 hours spent on that task is the maximum which could be regarded as being necessary for those purposes.
38 Fourth, it should be noted that the hours of work claimed to be spent on drafting the reply including the analysis of the defence, namely 146 hours, appear most excessive for a 20-page document since the hours of work correspond to more than three and a half weeks of work for a lawyer working eight hours a day. The applicant has not given any specific justification for that large number of hours of work. The Court considers that, in the present case, 50 hours spent on that task is the maximum which could be considered necessary for that purpose.
39 Fifth, the time claimed to have been spent on reading the rejoinder and the report for the hearing, drafting the reply to the measure of organisation, reading the Council’s reply to the measure of organisation, preparation for and appearance at the hearing, namely 76 hours and 45 minutes, is also clearly excessive. It is appropriate to recognise a total of 40 hours of work as being necessary for those purposes.
40 As regards the hourly rates, it appears from the detailed breakdown of costs annexed to the application for taxation of costs that the 368 hours are divided as follows: 41 hours at an hourly rate of EUR 525, 115 hours and 45 minutes at an hourly rate of EUR 425, and 211 hours and 15 minutes at an hourly rate of EUR 300. Thus, the average weighted hourly rate was EUR 364 for 368 hours.
41 It must be observed that those hourly rates seem excessive in the present case and that even a lower rate of around EUR 285 per hour can be regarded as appropriate only as remuneration for the services of a professional with a particularly large amount of experience, able to work very efficiently and fast (see, to that effect, order in Verizon Business Global v Commission, paragraph 44, and the case-law cited).
42 Taking account of all of the foregoing considerations, it must be held in respect of the calculation of expenses necessarily incurred by the applicant for the purpose of the proceedings that the dispute objectively required a total of 190 hours of work by an experienced lawyer, for whom the remuneration should not exceed EUR 285. Therefore, the costs which may be recovered by the applicant from the Council can be assessed on an equitable basis at a total amount of EUR 54 150, which takes into consideration all the circumstances of the case up to the date on which this order is delivered.
43 In accordance with the operative part of the judgment in Huvis v Council, the Council must pay 70% of the costs incurred by the applicant.
44 It follows that the Council must pay 70% of EUR 54 150, that is the sum of EUR 37 905.
On those grounds,
THE GENERAL COURT (First Chamber)
hereby orders:
The total amount of costs to be paid by the Council of the European Union to Huvis Corp. is fixed at EUR 37 905.
Luxembourg, 15 September 2010.
E. Coulon | | I. Wiszniewska-Białecka |