ORDER OF THE GENERAL COURT (Fourth Chamber)
12 October 2011 (*)
(Actions for annulment – Debit note – Objection of inadmissibility – Contractual nature of the dispute – Nature of the action – Act open to challenge)
In Case T‑353/10,
Lito Maieftiko Gynaikologiko kai Cheirourgiko Kentro AE, established in Athens (Greece), represented by E. Tzannini, lawyer,
applicant,
v
European Commission, represented by D. Triantafyllou and A. Sauka, acting as Agents,
defendant,
APPLICATION for partial annulment of a debit note issued by the Commission on 22 July 2010 for recovery of the sum of EUR 109 415.20 paid to the applicant in the context of financial assistance in support of a medical research project,
THE GENERAL COURT (Fourth Chamber),
composed of I. Pelikánová (Rapporteur), President, K. Jürimäe and M. van der Woude, Judges,
Registrar: E. Coulon,
makes the following
Order
Background to the dispute
1 The applicant, the Lito Maieftiko Gynaikologiko kai Cheirourgiko Kentro AE, is a maternity hospital specialised in the fields of obstetrics, gynaecology and surgery. The applicant is a member of a consortium which, in December 2003, concluded a contract with the Commission of the European Communities on a medical research project, known as Dicoems, under which the Commission agreed to pay its financial contribution in several instalments (‘the contract’). The project at issue commenced on 1 January 2004 and was concluded on 30 June 2006, but the contract connected with it is still in force, as the Commission has not yet paid the third and final instalment.
2 Article 12 of the contract stipulates that it is governed by Belgian law. Furthermore, Article 13 thereof provides that the General Court or, depending on the circumstances in the specific case, the Court of Justice, has sole jurisdiction to adjudicate in any dispute between the European Union and the members of the consortium relating to the validity, application or interpretation of the contract.
3 By letter of 29 April 2009, the Commission informed the applicant that it would be subject to an investigation, in the form of a financial audit, on account of its participation in the Dicoems project. It is apparent from that letter that the applicant would be required, during that investigation, to submit the time sheets of the staff working on the project. At the time of the audit, which was performed from 3 to 6 August 2009, it was found that the applicant had not submitted the time sheets recording the hours worked by its staff for which it was requesting reimbursement.
4 In October 2009, the Commission sent the applicant the draft audit report, which stated that the time sheets were missing, and requested it to submit its observations. Since the Commission was not convinced by the observations submitted by the applicant by letter of 5 November 2009, it maintained, by letter of 23 December 2009, the findings which it had set out in the audit report.
5 On 27 April 2010, the Commission sent the applicant an information letter prior to a recovery procedure, requesting it to reimburse EUR 109 415.20 to the Commission. On 26 May 2010, the applicant requested the Commission to re-examine and approve the observations it had previously submitted.
6 Considering, however, that the applicant’s answer did not provide any new evidence, the Commission, on 22 July 2010, sent it a debit note in which it was requested to pay EUR 109 415.20 by 6 September 2010 (‘the debit note’).
7 In addition, under the heading ‘Conditions of payment’, the debit note stated as follows:
‘1. You are liable for all bank charges.
2. The Commission reserves the right, after obtaining information, to operate a set off in respect of mutual debts which are certain, of a fixed amount and due.
3. Where the Commission’s account has not been credited by the final date for payment, the debt determined by the Communities shall bear interest at the interest rate applied by the European Central Bank to its main refinancing operations as published in the Official Journal of the [European Union], C series, in force on the first calendar day of the month of the final date for payment, 09‑2010 + 3.5 percentage points.
4. Where the Commission’s account has not been credited by the final date for payment, the Commission reserves the right to:
– execute any financial guarantee previously provided
– proceed to enforcement in accordance with Article 299 TFEU
– record the failure to pay in a database accessible to the authorising officers of the budget of the European Union until the payment has been received in its entirety.’
Procedure and forms of order sought
8 By application lodged at the Registry of the General Court on 31 August 2010, the applicant brought the present action.
9 By a separate document lodged on 8 October 2010, the Commission raised an objection of inadmissibility.
10 The Commission contends that the Court should:
– dismiss the action as inadmissible;
– order the applicant to pay the costs.
11 The applicant claims in essence that the Court should:
– dismiss the objection of inadmissibility raised by the Commission;
– annul the debit note, in so far as the Commission is demanding that it pay a sum exceeding that which it itself admitted it owed the Commission, in its letter of 5 November 2009, and which it refuses to pay the Commission or to offset that latter sum against that owed to it by the Commission in respect of the third instalment of the contract;
– order the Commission to pay the costs.
Law
12 Under Article 114(1) of the Rules of Procedure, if a party so applies, the General Court may give a decision on admissibility without going to the substance of the case. Under Article 114(3), the remainder of the proceedings is to be oral, unless the Court decides otherwise. In the present case, the Court considers that it has sufficient information from the documents before it to rule on the application submitted by the Commission and that there is no need to open the oral procedure.
13 The Commission raises an objection of inadmissibility on the grounds, first, that the dispute between it and the applicant is of a contractual nature, which means that the Court is not competent to adjudicate on it in the context of an action for annulment brought under Article 263 TFEU, and, secondly, that the debit note sent to the applicant merely provides information and is not an act open to challenge for the purposes of Article 263 TFEU.
Arguments of the parties
14 The Commission submits, first, that the debit note was issued in the context of the contract, on account of the insufficient justification by the applicant of the expenditure committed to under its contractual obligations. The incomplete performance of a contract constitutes an issue of contractual liability, and the exchange of letters, letters of formal notice and related payments is not subject to the review of legality provided for by Article 263 TFEU. Were that not the case, the Court would extend its jurisdiction beyond the limits set by the TFEU, which allow it to hear and determine contractual disputes only on the basis of specific arbitration clauses, under Article 272 TFEU. This excludes the parallel application of other legal remedies.
15 The Commission submits, second, that the debit note is merely an informative preparatory measure which does not alter the applicant’s legal position. It refers, in this connection, to the provisions of the Financial Regulation and the detailed rules for the implementation of the Financial Regulation, and to Case T-260/04 Cestas v Commission [2008] ECR II-701, paragraph 76. According to the Commission, the applicant’s legal position can be altered only by a judicial decision determining the amount payable or, in the alternative, by a definitive, enforceable decision adopted by it under Article 299 TFEU.
16 The applicant submits, first, that the fact that a dispute is made subject to the General Court’s jurisdiction by means of an arbitration clause does not preclude it from having recourse to that court under Article 263 TFEU. Nor does it follow from the arbitration clause either that one of those legal means is subsidiary to the other. Furthermore, this dispute does not arise out of the interpretation or performance of the terms of the contract, but exclusively concerns the complete failure to state reasons in the debit note. The applicant also takes the view that, where an act is adopted by the Commission in the exercise of its own powers, the sole fact that that act forms part of a contractual procedure is not sufficient to conclude that an action for its annulment, brought by an individual concerned by that measure and to whom it is formally addressed, is inadmissible.
17 Second, the applicant submits that the Commission has failed to fulfil its obligation to distinguish clearly between an enforceable measure and a document merely providing information. Consequently, the debit note must be analysed according to its content. It submits that, applying that criterion, the debit note constitutes a definitive act producing enforceable effects, in accordance with the provisions of Article 299 TFEU. That is apparent from its actual wording, which contains a threat of enforcement in the event of non-payment and all the information needed for enforcement, such as the exact amount, the final date for payment, the date on which interest starts to be accrued and the threat of penalties. The applicant also takes the view that, in the context of the internal administrative and accounting audit, the acts definitively laying down the position of the Commission are acts which are open to challenge. That procedure was concluded with the adoption of the debit note and there were no further legal measures to be taken after that note was issued.
Findings of the Court
The nature of the present action, as brought by the applicant
18 As a preliminary point, it must be recalled that it is for the applicant to choose the legal basis of its action and not for the Courts of the European Union themselves to choose the most appropriate legal basis (Case C‑160/03 Spain v Eurojust [2005] ECR I-2077, paragraph 35; orders of 26 February 2007 in Case T-205/05 Evropaïki Dynamiki v Commission, not published in the ECR, paragraph 38, and 10 April 2008 in Case T‑97/07 Imelios v Commission, not published in the ECR, paragraph 19).
19 In the present case, although the application is not expressly founded on the provisions governing an action for annulment, it is apparent from the pleadings submitted by the applicant to the Court that the action, which seeks annulment of the debit note, is founded on Article 263 TFEU.
20 Thus, on the first page of its application, the applicant describes its action as ‘seeking the annulment of the debit note’. Likewise, in its claims submitted on page 22 of the application, it requests the Court, inter alia, to ‘annul the contested debit note’ and to ‘annul also that part of the contested decision in respect of which the third instalment [of the Commission’s payments] has not been paid’. In addition, in point 18 of its observations on the objection of inadmissibility, after having observed that ‘in an action for annulment, the court examin[ed] the legality of acts ... intended to produce binding legal effects with regard to third parties, by bringing about a significant change in their legal position’, the applicant points out that ‘[t]he debit note must be considered to be such an act’. Furthermore, also in point 18, the applicant states that ‘in any event, th[is] dispute does not arise from the interpretation or performance of the terms of the contract, but exclusively concerns the complete failure to state reasons in the debit note’.
21 Therefore, the present action must be examined as an action for annulment.
Admissibility of the present action as an action for annulment brought under Article 263 TFEU
22 Under Article 263 TFEU, the Courts of the European Union are to review the legality of acts of the institutions intended to produce legal effects vis-à-vis third parties by bringing about a distinct change in their legal position (Case 60/81 IBM v Commission [1981] ECR 2639, paragraph 9, and Joined Cases T‑377/00, T‑379/00, T‑380/00, T‑260/01 and T‑272/01 Phillip Morris International and Others v Commission [2003] ECR II-1, paragraph 81).
23 According to settled case-law, that jurisdiction concerns only the acts referred to by Article 288 TFEU, which the institutions must adopt under the conditions laid down by the Treaty in the exercise of their prerogatives as public authorities (see, to that effect, orders in Joined Cases T‑314/03 and T-378/03 Musée Grévin v Commission [2004] ECR II-1421, paragraphs 62, 63 and 81, and in Evropaïki Dynamiki v Commission, paragraph 39).
24 On the other hand, acts adopted by the institutions in a purely contractual context from which they are inseparable are, by their very nature, not among the measures covered by Article 288 TFEU, annulment of which may be sought pursuant to Article 263 TFEU (orders in Musée Grévin v Commission, paragraph 64; in Evropaïki Dynamiki v Commission, paragraph 40; in Imelios v Commission, paragraph 22; of 6 October 2008 in Case T-235/06 Austrian Relief Program v Commission, not published in the ECR, paragraph 35, and Joined Cases T-428/07 and T-455/07 CEVA v Commission [2010] ECR II-2431, paragraph 52).
25 The present action may therefore validly be brought before the Court on the basis of Article 263 TFEU only if the debit note is intended to produce binding legal effects which go beyond those stemming from the contract and which involve the exercise of the prerogatives of a public authority conferred on the Commission in its capacity as an administrative authority.
26 In this connection, it is apparent from the information in the file that the debit note forms part of the framework of the contract between the Commission and the applicant, in so far as its purpose is the recovery of a debt which is based on the terms of the contract.
27 First, a sum of EUR 117 306.85 was paid by the Commission to the applicant on the basis of the contract. Second, under Article II.31(1) of the general conditions included in Annex II to that contract, the Commission has the right to request a member of the consortium to reimburse any sum improperly received, or whose recovery is justified in accordance with the contract. It did this by letter of 27 April 2010, asking the applicant to reimburse EUR 109 415.20 (paragraph 5 above). Third, as set out in the debit note, which also refers to the Commission’s letters of 27 April and 13 July 2010, the Commission asked the applicant for the ‘reimbursement of EUR 109 415.20 in relation to the [applicant’s] participation in Project 507760 [Dicoems] and the implementation of the result of the audit [carried out at the applicant]’.
28 Although the legal relationship with which the proceedings are concerned forms part of a contractual framework, the applicant takes the view that the contested debit note is of an administrative nature. It correctly points out, in this connection, that an act adopted by an institution within a contractual framework must be regarded as severable from that framework if it was adopted by that institution in the exercise of its prerogatives as a public authority (see, to that effect, order in Imelios v Commission, paragraph 28).
29 However, in the present case, there is nothing to support the conclusion that the Commission acted in the exercise of its prerogatives as a public authority. As is apparent from paragraphs 26 and 27 above, the purpose of the debit note is to assert the rights which the Commission derives from the terms of the contract between it and the applicant. By contrast, it does not seek to produce legal effects vis-à-vis the applicant arising from the Commission’s exercise of the prerogatives of a public authority conferred upon it by European Union law. The debit note must therefore, in the present case, be regarded as inseparable from the contractual relationship between the Commission and the applicant.
30 As observed in paragraph 7 above, the debit note admittedly contains, under the heading ‘Conditions of payment’, information relating to the interest which will accrue on the debt established as receivable if it is not paid by the final date for payment, the possible recovery by offsetting or by execution of any previously provided guarantee and the possibility of enforcement and inclusion in a database accessible to the authorising officers of the Community budget. However, even if it is drafted in a way which could give the impression that it was a definitive act of the Commission, that information could, in any event and by its very nature, only be information provided in preparation for an act of the Commission related to the enforcement of the debt established as receivable, since in the debit note the Commission does not adopt a position as to the means which it intends to employ in order to recover that debt, increased by default interest accruing from the final date for payment fixed in the debit note (see, to that effect, Cestas v Commission, paragraphs 71 to 74).
31 It is apparent from the foregoing that, in accordance with the considerations set out in paragraph 25 above, by its very nature that debit note is not among the acts whose annulment may be sought from the European Union courts pursuant to Article 263 TFEU.
32 It follows that, in any event, the present action must be dismissed as inadmissible.
On the possibility of reclassifying the present action as an action under an arbitration clause, brought pursuant to Article 272 TFEU
33 Having regard to the arbitration clause provided for in Article 13 of the contract, which provides that the Courts of the European Union have jurisdiction to adjudicate in any dispute relating to the validity, application or interpretation of the contract, it is necessary to consider whether the present action can be reclassified as an action brought pursuant to Article 272 TFEU.
34 According to settled case-law, where an action for annulment or an action for damages is brought before the Court when the dispute is, in point of fact, contractual in nature, the Court reclassifies the action, provided that the conditions for such a reclassification are satisfied (Case T‑26/00 Lecureur v Commission [2001] ECR II‑2623, paragraph 38; orders in Musée Grévin v Commission, paragraph 88; and in Case T‑265/03 Helm Düngemittel v Commission [2005] ECR II‑2009, paragraph 54, and judgment in CEVA v Commission, paragraph 57).
35 Examination of the case‑law shows that, when faced with a dispute which is contractual in nature, the Court considers itself unable to reclassify an action for annulment either where the applicant’s express intention not to base his application on Article 272 TFEU precludes such a reclassification (see, to that effect, orders in Musée Grévin v Commission, paragraph 88; and of 2 April 2008 in Case T-100/03 Maison de l’Europe Avignon Méditerranée v Commission, not published in the ECR, paragraph 54, and judgment in CEVA v Commission, paragraph 59), or where the action is not based on any plea alleging infringement of the rules governing the contractual relationship in question, whether they be contractual clauses or provisions of the national law designated in the contract (see, to that effect, orders in Evropaïki Dynamiki v Commission, paragraph 57; and Imelios v Commission, paragraph 33, and judgment in CEVA v Commission, paragraph 59).
36 In the present case, in support of its application for annulment of the debit note the applicant puts forward four pleas alleging, respectively, a failure to state reasons in the debit note, a failure to take into consideration the time sheets compiled ex post by the applicant, a failure to take into consideration factual arguments put forward by the applicant and the infringement of the principle of legitimate expectations.
37 Those four pleas, which are founded exclusively on considerations of the administrative law, are characteristic of an action for annulment. In addition, in its observations on the objection of inadmissibility, the applicant does not request the reclassification of its action either expressly or impliedly. Lastly, contrary to Article 44(1)(c) of the Rules of Procedure, the applicant does not put forward, even briefly, any plea, argument or complaint alleging infringement of the provisions of the contract or of those of Belgian law, to which the contract is subject under Article 12 thereof.
38 Therefore, in accordance with the case-law cited in paragraph 35 above, it is not possible to reclassify the present action as an action brought under Article 272 TFEU.
39 It follows from the above that the objection of inadmissibility raised by the Commission must be upheld and consequently the present action must be dismissed as inadmissible.
Costs
40 Pursuant to Article 87(3) of the Rules of Procedure, where each party succeeds on some and fails on other heads or where the circumstances are exceptional, the Court may order that the costs be shared or that each party bear its own costs.
41 In the present case, although the applicant has been unsuccessful, the Court considers that the Commission did not use clear and unambiguous wording when it drafted the debit note. Certain information in the note and, in particular, the reference to the possible adoption of an enforceable decision under Article 299 TFEU, could give the applicant the impression that that note was a definitive act adopted by the Commission in the exercise of its own powers. In the light of that fact, the Court will make an equitable assessment of the case in ruling that the Commission is to bear its own costs and to pay those incurred by the applicant.
On those grounds,
THE GENERAL COURT (Fourth Chamber)
hereby orders:
1. The action is dismissed as inadmissible.
2. The European Commission shall bear its own costs and pay those incurred by the Lito Maieftiko Gynaikologiko kai Cheirourgiko Kentro AE.
Luxembourg, 12 October 2011.