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Action brought on 7 April 2009 - Commission v Galor

(Case T-136/09)

Language of the case: English

Parties

Applicant: Commission of the European Communities (represented by: A.­M. Rouchaud-Joët, F. Mirza, agents, assisted by B. Katan and M. van der Woude, lawyers)

Defendant: Benjamin Galor (Jupiter, United States of America)

Form of order sought

order Galor to pay the Community EUR 205 611, to be increased by the statutory interest pursuant to Article 6.119 DCC as of 1 March 2003 up to the date the Community will have received full payment;

order Galor to pay the Community the statutory interest pursuant to Article 6.119 DCC on EUR 9 231.25 as of 2 September 2003 (or, alternatively, as of 10 March 2007) up to the date the Community will have received full payment;

order Galor to pay the costs of the current proceedings, provisionally estimated at EUR 17 900, to be increased by the statutory interest pursuant to Article 6.119 DCC as of the date of judgment up to the date the Community will have received full payment.

Pleas in law and main arguments

On 23 December 1997 the European Community, represented by the Commission, entered into a contract IN/004/97 with Prof. Benjamin Galor and three companies for the implementation of the project " Self-Upgrading of Old-Design Gas Turbines in Land & Marine Industries by Energy-Saving Clean Jet-Engine Technologies " under the Community activities in the field of non-nuclear energy¹. Pursuant to the contract provision, the Commission made an advance payment of its contribution for the project to the contractors. The payment was received by the leader of the project, Prof. Benjamin Galor.

For reasons related to the difficulties for the contractors to find an associated contractor for the project and because no progress had been made in the implementation of the project, the Commission decided to terminate the contract. In its letter to the contractors, the Commission specified that the Community contribution could only be paid (or kept by the contractors) as far as it was related to the project and justified through the final technical and financial report.

The final report submitted by the contractors was not approved by the Commission and the Commission started the procedure for recovering the advance payment.

In its application, the Commission submits that the defendant did not reimburse the amount received, but instead demanded that the Commission pays him a foreseen contribution under the contract minus the advance payment. Furthermore, the defendant started legal proceedings before the Dutch courts to recover this amount. The jurisdiction of the Dutch courts was disputed by the Commission on the basis of the jurisdiction clause in the contract designating the Court of First Instance to decide on any disputes between the contracting parties.

In its application, the Commission seeks the recovery of the advance paid. The Commission claims that it was entitled to terminate the contract in application of the contract's provisions as the defendant acted in breach of his contractual obligations because, inter alia: there was an important delay in commencement of the project and the project showed no progress, the defendant was not able to engage technical means required for the research that the funding had been provided for and the technical and financial reports did not meet the contractual requirements.

Therefore, the Commission contends that it is entitled to demand reimbursement of the advance payment.

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¹ - Council Decision 94/806/EC of 23 November 1994 adopting a specific programme for research and technological development, including demonstration, in the field of non-nuclear energy (1994 to 1998) OJ 1994 L 334, p. 87