JUDGMENT OF THE COURT OF FIRST INSTANCE (Third Chamber,Extended Composition)

17 February 1998 (1)

(State aid — Action for failure to act — No need to adjudicate — Action fordamages — Claim for an order requiring a Member State to modify theconditions for the grant of aid already accorded — Factual circumstances —Commission's lack of competence)

In Case T-107/96,

Pantochim SA, a company incorporated under Belgian law, established at Feluy(Belgium), represented by Jacques Bourgeois, of the Brussels Bar, with an addressfor service in Luxembourg at the Chambers of Marc Loesch, 11 Rue Goethe,

applicant,

v

Commission of the European Communities, represented by Gérard Rozet, LegalAdviser, acting as Agent, assisted by Hervé Lehman, of the Paris Bar, with anaddress for service in Luxembourg at the office of Carlos Gómez de la Cruz, of theCommission's Legal Service, Wagner Centre, Kirchberg,

defendant,

supported by

French Republic, represented initially by Catherine de Salins, Assistant Director inthe Legal Affairs Directorate of the Ministry of Foreign Affairs, and FrédéricPascal, Special Adviser in the same directorate, subsequently by Kareen Rispal-Bellanger, Assistant Director in the same directorate, and Frédéric Pascal, actingas Agents, with an address for service in Luxembourg at the French Embassy,8B Boulevard Joseph II,

intervener,

APPLICATION for (i) a declaration that the Commission unlawfully failed to actin not deciding, under Article 93(2) of the Treaty, that France should modify theconditions for the grant of aid which it had accorded for biofuels and for (ii) anaward of compensation for the damage allegedly caused to the applicant by thatfailure to act,

THE COURT OF FIRST INSTANCE

OF THE EUROPEAN COMMUNITIES (Third Chamber, ExtendedComposition),

composed of: B. Vesterdorf, President, C.P. Briët, P. Lindh, A. Potocki, andJ.D. Cooke, Judges,

Registrar: J. Palacio González, Administrator,

having regard to the written procedure and further to the hearing on 7 October1997,

gives the following

Judgment

Facts

1.

    The applicant, Pantochim SA, whose registered office is at Feluy (Belgium), is asubsidiary of Società Italiana Serie Acetica Sintetica SpA (hereinafter 'SISAS‘),which is established in Milan (Italy). At Feluy, Pantochim has a plant for producingdiesel oil of vegetable origin, called Sisoil E. Sisoil E is a methyl ester of vegetableoil which may be used on its own or, mixed with classic diesel oils, as a fuel forinternal combustion engines and for domestic heating.

2.

    Article 32 of the 1992 French Finance Law (Law 91-1322 of 30 December 1991,published in the Journal Officiel de la République Française of 31 December 1991,at p. 17229) exempted, until 31 December 1996, from domestic consumption dutyesters of rape and sunflower oil and ethyl alcohol produced from cereals, Jerusalemartichokes, potatoes or beet and added to high-grade and regular-grade petrol, andthe derivatives of such alcohol (hereinafter 'biofuels‘). A decree of 27 March 1992,implementing Article 32, lays down the criteria to be fulfilled in order to obtainthat exemption. In particular, it requires that the products concerned should beused in an experimental project and be produced in pilot plants.

3.

    Article 30 of the amending French Finance Law for 1993 (published in JournalOfficiel de la République Française of 31 December 1993, p. 18526) also requiredthat the products subject to the exemption should be obtained from agricultural rawmaterials 'produced on parcels of set-aside land not used for food growing, withinthe meaning of Commission Regulation (EEC) No 334/93 of 15 February 1993‘.

4.

    Without a fiscal exemption of the kind described above, it would not beeconomically worthwhile to produce biofuels owing to the high costs of theirproduction.

5.

    In November 1992, SISAS indicated to the French authorities that it was interestedin obtaining approval for its Feluy refinery as a pilot plant and officially applied forthat approval in March 1993. However, no such approval has yet been granted toit by the French authorities. By letter of 14 June 1996, addressed to the Pantochimboard, the French Minister for Agriculture, Fisheries and Food pointed out that,according to an on-the-spot investigation, the Feluy refinery had a productioncapacity which was higher than the volume for which approval was sought. SinceCouncil Directive 92/81/EEC of 19 October 1992 on the harmonisation of thestructures of excise duties on mineral oils (OJ 1992 L 316, p. 12) authorisesMember States to apply exemptions from excise duty or full or partial reductionsof excise duty only in relation to pilot projects defined by production plant capacity,no approval could be granted for that refinery as a pilot plant. The minister alsostated that, since a procedure for determining whether the French legislation wascompatible with Community law was pending before the Commission (see below),it was impossible for the French authorities to grant any new approval.

6.

    On 7 December 1994 the Commission initiated the procedure provided for inArticle 93(2) of the Treaty in respect of the French legislation exempting biofuelsfrom domestic consumption duty. The French authorities were notified of this stepon 12 December 1994. A Commission communication 'pursuant to Article 93(2)of the EC Treaty ... concerning aid which France has decided to grant in thebiofuels sector‘ was published in the Official Journal of the European Communitieson 9 June 1995 (OJ 1995 C 143, p. 8).

7.

    In that administrative procedure SISAS submitted observations on 29 June 1995.It also requested the Commission, first, 'to find that, because those arrangementsare contrary to Article 95 of the Treaty establishing the European Community, theaid granted by France for the production of biodiesel [was] not compatible with thecommon market within the meaning of Article 92 of that Treaty‘, secondly 'todecide that France must amend that aid by allowing biodiesel produced in otherMember States and supplied in France to enjoy the same advantages‘ and thirdly,'to take the necessary provisional measures by requesting France to approveSISAS' Feluy refinery as a ”pilot plant” as soon as possible, provisionally for aquantity of 20 000 tonnes a year for 1995‘.

8.

    Not having received any response from the Commission, SISAS, by letter of 29March 1996, sent a letter to the Commission requesting it to act within a period oftwo months, in accordance with Article 175 of the Treaty, and repeating its requestscontained in its letter of 29 June 1995. It also stated that it reserved 'the right ofits subsidiary, Pantochim SA, to claim from the French State and from theEuropean Community reparation for the considerable economic damage whichPantochim [had] suffered as a result of its exclusion by law from the French marketin duty-free biodiesel since 1993‘.

9.

    By letter of 24 May 1996 addressed to the SISAS board, the Commission informedSISAS that its letter of 29 March 1996 had been recorded as a complaint aimed atthe initiation of infringement proceedings pursuant to Article 169 of the EC Treaty.

10.

    On 18 December 1996 the Commission adopted Decision 97/542/EC on taxexemptions for biofuels in France (OJ 1997 L 222, p. 26, hereinafter 'the Decisionof 18 December 1996‘), which was notified to the French authorities on 29 January1997. It provides: 'The aid granted in France in the form of a tax exemption forbiofuels of agricultural origin ... is illegal, having been granted in contravention ofthe procedural rules laid down in Article 93 (3) of the Treaty. This aid isincompatible with the common market within the meaning of Article 92 of theTreaty. France is required to discontinue the aid referred to in Article 2 within twomonths of notification of this Decision.‘

11.

    In the body of the Decision of 18 December 1996 the Commission explained:

'The exclusion of certain basic products from the benefits of tax exemption is astrong argument for asserting that this measure constitutes aid within the meaningof Article 92(1) of the Treaty, since it distorts competition by giving an advantageto certain agricultural products, and may, for the same reasons, affect tradebetween the Member States. ... no explanation has been given to justify the needto limit the measure to crops produced on set-aside land‘ (Part IV, point 5).

'As the tax exemption applied only to biofuels produced from certain basicproducts, the Commission takes the view that the measure discriminates againstother biofuels made from other basic products (other types of product, or the same

type grown on land other than set-aside land). Those other biofuels will be subjectin France to the normal rate of excise. The aid measure, in the form of taxexemption, therefore constitutes an infringement of Article 95 of the Treaty sinceit is restricted to biofuels produced from a limited number of basic products ... andbiofuels imported from other Member States and produced from other basicproducts will be subject to a higher tax‘ (Part V, point 4).

'... Therefore, any government aid in the field covered by Regulation (EEC) No1765/92 would be equivalent to State interference in the complete andcomprehensive system of the common organisations of markets.

This exemption, limited in certain cases, from 1994, to crops grown on set-asideland, thus constitutes an infringement of Regulation (EEC) No 1765/92‘ (Part VI,point 2).

'Consequently, indirect aid to the basic products contravenes the arrangements forcommon organisation of markets under Regulation (EEC) No 1765/92 and Article95 of the Treaty, ... and cannot therefore be eligible for any of the derogationsprovided for in Article 92(3) of the Treaty ...‘ (Part VI, point 4).

'... This leads to the conclusion that from the point of view of the broad structureof the system, the substantive effect of the aid bypassed the manufacturers,technically the direct recipients, and benefited the producers of the raw materials,who became the indirect recipients.

...

In view of the temporary nature of the advantage to the biofuel manufacturers andof the specific nature of the infringement at the level of farmers, who were theactual beneficiaries, it seems unnecessarily severe to require recovery of theamounts granted under this measure, which is basically in agreement withCommunity policy, and which (apart from the procedural aspects) is essentiallyunlawful only in terms of the excessively restrictive approach to the indirectrecipients of aid‘ (Part VII, point 3).

12.

    Consequently, no obligation to recover the aid was imposed on the FrenchRepublic.

Procedure

13.

    It is in that context that, by an application lodged at the Registry of the Court on12 July 1996, Pantochim brought this action.

14.

    By separate document lodged at the Registry of the Court on 19 July 1996 theapplicant made an application under Article 186 of the Treaty for an interim orderdirecting 'the Commission to require France, in the procedure under the firstsubparagraph of Article 93(2) of the Treaty, provisionally to grant [to it] ... therequested biodiesel quota to be exempt from the excise duty applicable‘.

15.

    By order of 21 October 1996 in Case T-107/96 R Pantochim v Commission [1996]ECR II-1361, the President of the Court of First Instance dismissed the applicationfor interim measures lodged by Pantochim and reserved costs.

16.

    By application lodged at the Registry of the Court on 18 November 1996 theFrench Republic sought leave to intervene in support of the defendant. By orderof 9 January 1997 the President of the Third Chamber, Extended Composition, ofthe Court granted the French Republic leave to intervene in the case.

17.

    Upon hearing the Report of the Judge-Rapporteur, the Court of First Instance(Third Chamber, Extended Composition) decided to open the oral procedure and,pursuant to Article 65 of the Rules of Procedure, requested production of certaindocuments. The Court also asked the parties to answer certain questions in writing,and orally at the hearing. The parties complied with those requests.

18.

    The parties presented oral argument and replied to the questions of the Court atthe hearing on 7 October 1997.

Forms of order sought by the parties

19.

    The applicant claims that the Court should:

—    declare that the Commission has infringed the Treaty by failing to decide,pursuant to the first subparagraph of Article 93(2) thereof, that France mustalter the conditions governing the grant of aid for biofuel so that theycomply with the rules of the Treaty;

—    find the Community liable for the harm resulting from the Commission'sfailure to act and order the Commission to make good that harm,provisionally assessed at FF 50 508 729;

—    order the Commission to pay the costs.

20.

    In its rejoinder, the Commission contends that the Court should:

—    declare that the action for failure to act has lost its purpose owing to theadoption of the Decision of 18 December 1996;

—    dismiss the claim for damages lodged by Pantochim;

—    order the applicant to pay the costs.

21.

    The French Government submits that the Court should:

—    declare the action for failure to act to have lost its purpose in so far as theCommission has adopted the Decision of 18 December 1996.

Failure to act

Arguments of the parties

22.

    The applicant states that, by letter of 29 March 1996, SISAS, pursuant to Article175 of the Treaty, requested the Commission on behalf of Pantochim to adopt aposition within two months and that after that period had expired, the Commissionhad still not adopted a position.

23.

    It charges the Commission with failing to adopt within a reasonable period, inaccordance with the first subparagraph of Article 93(2) of the Treaty, a decisionrequiring France 'to alter the conditions governing the grant of aid for biofuel sothat they comply with the rules of the Treaty‘. The Commission could only prohibitconditions for the grant of the aid concerned if they were in clear breach of Article95 of the Treaty.

24.

    It considers, finally, that apart from any other possibly illegal aspects of the aidconcerned, its claim for an order requiring the discriminatory conditions for thegrant of aid to be eliminated was justified in that it was 'perfectly separable fromthe aid scheme‘. In sheltering behind the other potential illegalities, theCommission failed to 'give first aid on the ground that it first had to carry out athorough diagnosis‘. Any decision requiring the French Government to abolish theaid in question would not, in any case, restore normal competition.

25.

    The Commission, in its rejoinder, and the French Government, in its writtenobservations, submit that, owing to the adoption of the Decision of 18 December1996, the action for failure to act has lost its purpose so that there is no furtherneed for the Court to adjudicate.

26.

    In its reply to the letter from the Court requesting it to adopt a position on thatsubmission, the applicant, pointing out that its action for failure to act is for a'declaration that the Commission ... has infringed the ... Treaty by failing to decide,pursuant to the first subparagraph of Article 93(2) thereof, that France must alterthe conditions governing the grant of aid for biofuels so that they comply with therules of the Treaty‘, argues essentially that, although finding in its decision that theaid measure in the form of an exemption constitutes an infringement of Article 95of the Treaty, the Commission has not adopted the decision for which the failure

to act is being prosecuted. Rather than requiring the French Republic to complywith Article 95 of the Treaty when granting aid, the Commission found that the aidin question fulfilled the conditions laid down in Article 92(1) of the Treaty withoutbeing eligible for any of the derogations provided for in paragraphs 2 and 3 ofthose articles and consequently declared it incompatible with the common market.

27.

    It also observes that the French Republic, whilst still maintaining the aid schemefound to be unlawful by the Commission, has still not granted it the benefit of theaid.

Findings of the Court

28.

    It must be observed first of all, that, according to settled case-law, the remedyprovided for in Article 175 of the Treaty is founded on the premiss that unlawfulinaction on the part of an institution enables an action to be brought before theCommunity judicature in order to obtain a declaration that the failure to act iscontrary to the Treaty, in so far as it has not been repaired by the institutionconcerned. The effect of that declaration, under Article 176 of the Treaty, is thatthe defendant institution is required to take the necessary measures to comply withthe judgment of the Community judicature, without prejudice to any actions toestablish non-contractual liability to which the aforesaid declaration may give rise(judgment of the Court of Justice in Joined Cases C-15/91 and C-108/91 Buckl andOthers v Commission [1992] ECR I-6061, paragraph 14; judgment of the Court ofFirst Instance in Case T-28/90 Asia Motor France and Others v Commission [1992]ECR II-2285, paragraph 36).

29.

    Where the act whose omission is the subject of proceedings was adopted after theywere brought but before pronouncement of judgment, a declaration of this Courtfinding the initial failure to act to be unlawful can no longer lead to theconsequences envisaged by Article 176 (judgment in Case T-212/95 Oficemen vCommission [1997] ECR II-1161, paragraphs 65 to 68). It follows that, in such acase, just as in the case where the defendant institution has responded to a requestto act within the two-month period, the action has lost its purpose.

30.

    It is also clear from settled case-law that Article 175 refers to a failure to act in thesense of failure to take a decision or to define a position, and not the adoption ofa measure different from that desired or considered necessary by the personsconcerned (Case 8/71 Deutscher Komponistenverband v Commission [1971] ECR705, paragraph 2, and Joined Cases 166/86 and 220/86 Irish Cement v Commission[1988] ECR 6473, paragraph 17). In the present case, it is undeniable that theadoption of the Decision of 18 December 1996 constitutes a definition of positionon the Commission's part, within the meaning of Article 175 of the Treaty inresponse to the request to act addressed to the Commission on 29 March 1996.

31.

    Consequently, the fact that the decision adopted by the Commission on 18December 1996 only declares that the aid concerned is unlawful and incompatiblewith the common market within the meaning of Article 92 of the Treaty andrequires the French Republic to abolish the aid concerned without, however,requiring it to alter the conditions for the grant of the aid so as to render itcompatible with the rules of the Treaty makes no difference in this regard.

32.

    The Court therefore concludes that there is no need to adjudicate on theapplication for a declaration of failure to act.

The claim for damages

Arguments of the parties

33.

    The applicant considers, essentially, that in omitting to take a decision in theprocedure initiated under Article 93(2) of the Treaty and in failing to require theFrench Republic to alter the conditions governing the grant of the exemptionconcerned, the Commission was guilty of unlawful inaction rendering theCommunity liable. In failing for such a long time to adopt a decision, theCommission denied it the act which it needed in order for it to be able to asserta right to damages against the French administration in relation to the past andfailed to prevent it from suffering future, but certain, damage resulting from itsexclusion from the French market in the new marketing year.

34.

    It considers that, in the present case, the Commission should have taken action toend the discriminatory conditions governing the grant of the exemption and that'faced with an accusation of failing to assist a person in danger, the defendantcannot escape its civil liability arising from this omission by claiming that thedamage was caused by the person causing the danger‘. It also points out that theCommission has not directed France to suspend payment of the aid.

35.

    It also states that the broad discretion which Article 92(3) of the Treaty confers onthe Commission cannot go so far as to allow a clear breach of the basic rules of theTreaty.

36.

    As regards the damage suffered, the applicant claims that it is double in that it hassuffered losses and loss of future profit. In November 1992 it had applied to supplythe French market by taking advantage of the abovementioned exemption and theFrench administration was on the point of fixing, for the following year, which wasto begin on 1 July 1996, the total quantity of biofuel to be exempt from duty anddividing quotas between beneficiaries. It calculates that, as a result, it has incurredlosses consisting of the 'contribution‘ margin and loss of profit, for the years 1993to 1997, which it provisionally estimates at FF 50 508 729.

37.

    It accepts that at the present stage it is difficult to estimate precisely the damagecaused by the Commission's inaction in that determination of the damage in thepast 'depends on an evaluation of damages which a French court would award ifthe Commission had decided ... that the conduct of the French administrationtowards the applicant [was] unlawful‘.

38.

    The applicant considers that the causal link between the damage and theCommission's inaction is evident from its probable inability to assert its right todamages against the French administration and from the lack of constraint on theFrench Republic to adopt different conduct for the marketing year starting on 1July 1996.

39.

    The Commission contends first of all that, since it cannot be accused of a failureto act, no unlawful conduct can be imputed to it and that, even if it were to befound guilty of inaction, the applicant has not demonstrated that it constituted abreach of a high-ranking rule of law for the protection of individuals or a seriousand manifest disregard of the limits on the exercise of its powers (judgment of theCourt of First Instance in Case T-120/89 Stahlwerke Peine-Salzgitter v Commission[1991] ECR II-279, paragraph 74).

40.

    It points out in this regard that Article 92(3) of the Treaty confers on it a broaddiscretion to decide whether or not to allow aid schemes or to impose alterations(judgment of the Court of Justice in Case C-39/94 SFEI and Others [1996] ECRI-3547, paragraph 36).

41.

    It also points out that it is not sufficient for failure to act to be found in order forthe Community to incur liability ipso facto, as is clear from the judgment of theCourt of First Instance in Case T-387/94 Asia Motor France and Others vCommission [1996] ECR II-961, paragraphs 107 and 108.

42.

    The Commission goes on to argue that, as far as the damage suffered is concerned,the request to act and any failure to act is, in any event, likely to affect only theyear 1996 to 1997 and not the years prior to the letter requesting action. To thatextent, the damage would depend on the attitude of the French administrationduring that period.

43.

    In any event, damage arising from the impossibility of receiving unlawful aid couldnot afford entitlement to compensation.

44.

    Finally, the Commission points out that, as far as a causal link is concerned, thesecond paragraph of Article 215 of the Treaty concerns only damage imputable toCommunity institutions or their servants, to the exclusion of any liability of theMember States (judgments of the Court of Justice in Case 101/78 Granaria [1979]ECR 623 and Case 109/83 Eurico v Commission [1984] ECR 3581).

45.

    In this regard, it disputes the fact that its alleged failure to act is an obstacle toassertion of a right to damages against the French administration since theapplicant had the possibility of asserting its rights before a national court byinvoking the direct effect of Article 93(3) of the Treaty on the ground that the aidscheme concerned had not been notified (judgment in SFEI, cited above) or thedirect effect of Article 95 of the Treaty, which prohibits discriminatory taxation.

46.

    It considers that it is clear from paragraph 36 of the Order of the President of theCourt of First Instance of 21 October 1996, cited above, that the Commission couldnot 'render first aid‘ in the way desired by the applicant. It considers that it couldadopt a provisional decision suspending the aid but that this was not what wasrequested by Pantochim.

47.

    It concludes that it did not have to address the question whether the conduct of theFrench administration towards Pantochim was unlawful and that its only task wasto decide whether the aid scheme concerned was, as a whole, compatible or notwith the common market.

Findings of the Court

48.

    According to well-established case-law, the Community can incur non-contractualliability only on fulfilment of a number of conditions as regards the unlawfulnessof the action alleged against the Community institution, actual damage and theexistence of a causal link between the wrongful act and the damage complained of(judgment of the Court of First Instance in Joined Cases T-481/93 and T-484/93Exporteurs in Levende Varkens and Others v Commission [1995] ECR II-2941,paragraph 80).

49.

    The Court considers that it is clear from a reading of the application, the requestto act as clarified by the letter from the applicant's parent company of 29 June1995 (see paragraphs 7 and 8 of this judgment), the various written pleadings of theapplicant and its statements at the hearing that this application for damagesessentially seeks a declaration that the Commission refrained, in breach of theTreaty, from deciding provisionally or definitively, in accordance with the firstsubparagraph of Article 93(2) of the Treaty, that the French Republic should alterthe aid by allowing biodiesel produced in other Member States and supplied inFrance to attract the same advantages as those granted to companies establishedin France that are active in the same sector and that the applicant should obtainfrom the competent French authorities tax exemption for biodiesel supplied inFrance and, consequently, hold the Community liable for the damage resulting fromthe Commission's failure to act.

50.

    The measures required by the applicant go beyond those which the Commission isempowered to adopt.

51.

    It is clear, first, from the case-law of the Court of Justice and the Court of FirstInstance that when, in a procedure under Article 93(2) of the Treaty, theCommission finds that aid has been introduced without being notified to it inadvance, as Article 93(3) of the Treaty requires, the only interim measure it cantake is to direct the Member State concerned to suspend payment of the aidimmediately — even if only partially, in accordance with the judgment of the Courtof Justice in Case 74/76 Iannelli & Volpi [1977] ECR 557, paragraphs 14 to 17 —and to provide it, within a period of time determined by the Commission, with allthe documents, information and data necessary for examining whether the aid iscompatible with the common market (see the judgment in Case C-39/94 SFEI vCommission, cited above, paragraph 45, and the order in Pantochim v Commission,cited above, paragraphs 35 and 36). However, the interim measure which theapplicant seeks from the Commission, which in effect requires it to direct Franceto exempt the applicant from domestic consumption tax, is clearly beyond thepowers conferred upon the defendant institution in the administrative procedureprovided for by Article 93(2) of the Treaty.

52.

    Secondly, it is clear from the wording of Article 93(2) of the Treaty that, confrontedwith incompatible aid, the Commission must direct the Member State concernedto 'abolish or alter‘ the aid within a period of time to be determined by theCommission. However, the two measures which the applicant seeks from theCommission, as explained above, lie outside the powers conferred on theCommission with a view to terminating the administrative procedure provided forby Article 93(2) of the Treaty, in so far as such a request, seeking to obtain aid,goes beyond ordering abolition or alteration of aid, as allowed by Article 93(2) ofthe Treaty.

53.

    Consequently, the Commission cannot be accused of unlawful conduct in refusing,by its Decision of 18 December 1996, to adopt the measures demanded by theapplicant.

54.

    It follows from the foregoing that the first condition to be fulfilled in order for theCommunity to incur non-contractual liability, namely the existence of unlawfulconduct on the Commission's part, is not fulfilled in this case.

55.

    Consequently, the action for damages must be dismissed.

Costs

56.

    Under Article 87(6) of the Rules of Procedure, where a case does not proceed tojudgment, costs are in the discretion of the Court. Under Article 87(2) of the Rulesof Procedure, the unsuccessful party is to be ordered to pay the costs if they havebeen applied for in the successful party's pleadings.

57.

    In the present case, the Court finds that, since grant of the measure demanded ofthe Commission by the applicant has been found, in the examination of the actionfor damages, to be legally impossible, the action for failure to act brought by theapplicant could not have been successful in any event. The applicant must thereforebe ordered to pay all the costs, including those relating to the interim proceedings.

58.

    Under Article 87(4) of the Rules of Procedure, the Government of the FrenchRepublic is to bear its own costs.

On those grounds,

THE COURT OF FIRST INSTANCE (Third Chamber, Extended Composition)

hereby:

1.    Declares that there is no need to adjudicate on the application for adeclaration of failure to act;

2.    Dismisses the action for damages as unfounded;

3.    Orders the applicant to pay the costs, including those relating to theinterim proceedings;

4.    Orders the Government of the French Republic to bear its own costs.

VesterdorfBriët Lindh Potocki Cooke

Delivered in open court in Luxembourg on 17 February 1998.

H. Jung

B. Vesterdorf

Registrar

President

1: Language of the case: French.

ECR