ORDER OF THE PRESIDENT OF THE GENERAL COURT
7 April 2016 (*)
(Application for interim measures — Arbitration clause — Agreements concluded for the purpose of carrying out projects subsidised by the European Union within the framework of the ‘Civil Justice’ programme — Enforceable decision of the Commission to recover the sums paid — Application for suspension of operation of a measure — Lack of urgency)
In Case T‑364/15 R,
ADR Center Srl, established in Rome (Italy), represented by L. Tantalo, lawyer,
applicant,
v
European Commission, represented by L. Cappelletti and J. Estrada de Solà, acting as Agents,
defendant,
APPLICATION to suspend the enforcement of Commission Decision C(2015) 3117 final of 4 May 2015 concerning the recovery of a sum of EUR 432 637.97, plus interest, owed by ADR Center Srl with reference to debit notes Nos 3241408192 and 3241409206 relating to EUR 155 507.97 and EUR 277 130 respectively,
THE PRESIDENT OF THE GENERAL COURT
makes the following
Order
Background to the dispute
1 In the course of 2011, the European Commission concluded two grant agreements with the applicant, ADR Center Srl. The first of those grant agreements related to an action to improve the online resources and training of judges to encourage them to consider more use of mediation and alternative dispute resolution for disputes in the European Union (‘the Judges project’). That project commenced on 12 September 2011 and was to last 24 months. The second agreement related, in essence, to the training of lawyers, with a view to making them mediators in both national and cross-border contexts, and to the establishment of the necessary material for future programmes for training in mediation (‘the Guidelines project’). That project commenced on 9 May 2011 and was to last 24 months.
2 As regards the financial aspects of the Judges project, the total amount of the eligible costs was estimated at EUR 363 000, 78.51% of which the Commission agreed to co-finance, for a maximum amount of EUR 285 000. By way of pre-financing, the Commission paid the applicant an amount of EUR 199 500. Concerning the Guidelines project, the total amount of the eligible costs was estimated at EUR 496 400, 79.75% of which the Commission agreed to co-finance, for a maximum amount of EUR 395 900. By way of pre-financing, the Commission paid the applicant an amount of EUR 277 130.
The Judges project
3 On 10 July 2013, the applicant sent the Commission a letter requesting from it the termination of the agreement relating to the Judges project on grounds of force majeure. It explained that, following the unforeseeable crisis which affected the mediation sector in Italy at the end of 2012, it had seen its revenue drop dramatically and was no longer able to carry out its normal activities or implement the project in question fully. The Commission refused the force majeure termination but agreed to terminate the agreement as from 11 September 2013.
4 The applicant sent the Commission the final narrative report and the final financial report relating to the Judges project on 11 November 2013 and 4 February 2014 respectively. Following an analysis of those reports, the Commission informed the applicant, by letter of 24 March 2014, that some of the costs declared would not be accepted and that, consequently, it would draw up a recovery order for an amount of EUR 155 507.97. That letter included a table setting out the costs rejected by the Commission and the underlying reasons for the rejection of the costs in question. In addition, the applicant was requested to provide additional information in case of disagreement with the Commission’s conclusions.
5 Not having received additional observations from the applicant, the Commission sent, on 8 July 2014, debit note No 3241408192 relating to the recovery of an amount of EUR 155 507.97, together with a request for payment of that amount by 22 August 2014 at the latest. That debit note was followed by two reminder letters dated 2 September and 6 October 2014.
The Guidelines project
6 On 8 April 2013, that is to say, one month before the end of the Guidelines project, the applicant sent the Commission a request for the suspension of that project for a duration of four months and an extension request for the same four-month period. It justified that request by referring to the crisis in the mediation sector in Italy which prevented it from implementing the project in question fully (see paragraph 3 above). On 11 April 2013, the Commission refused to suspend the implementation of the project on the ground that the project was expiring a month later. The Commission confirmed its position on 25 April and 5 June 2013, relying on the lack of exceptional circumstances that would have justified the suspension/extension of the project.
7 On 12 September 2013, the applicant submitted to the Commission the final narrative report of the Guidelines project. On 6 January 2014, it sent the Commission the final financial statement, in which the applicant declared eligible costs amounting to EUR 146 905.44 for the implementation of that project. Following an analysis of those reports, the Commission informed the applicant, by letter of 7 May 2014, that no cost would be accepted and that, consequently, it would draw up a recovery order for the whole of the pre-financing, that is to say, for an amount of EUR 277 130. That letter included a table stating the reasons for rejecting each cost item. In addition, the applicant was requested to provide additional information in case of disagreement with the Commission’s conclusions.
8 Not having received additional observations from the applicant, the Commission sent, on 8 August 2014, debit note No 3241409206 relating to the recovery of an amount of EUR 277 130, together with a request for payment by 22 September 2014 at the latest. That debit note was followed by two reminder letters dated 6 and 30 October 2014.
9 On 4 May 2015, the Commission adopted Decision C(2015) 3117 final concerning the recovery of a sum of EUR 432 637.97, plus interest, owed by ADR Center Srl with reference to debit notes Nos 3241408192 and 3241409206 relating to EUR 155 507.97 and EUR 277 130 respectively (‘the contested decision’).
Procedure and forms of order sought
10 By application lodged at the General Court Registry on 4 July 2015, the applicant brought an action for annulment of the contested decision or, in the alternative, seeking a declaration of the eligibility of all the costs classified by the Commission as ineligible.
11 In December 2015, the Commission began the enforcement of the contested decision and that of another decision, dated 27 June 2014 and relating to the recovery of a sum of EUR 194 275.34, plus interest, payment of which it also claimed from the applicant by reason of the ineligibility of the costs which the applicant had declared in connection with other projects co-financed by the Commission. It was in that context that on 15 December 2015 the applicant received notification, in Italy, of a measure seeking the enforcement of the contested decision and the other abovementioned decision. As set out in the enforcement order appearing in that measure, if payment of the total amount of EUR 663 288.64 was not made within 10 days of notification, the competent authority would have those decisions enforced by, for example, seizing the applicant’s bank accounts. In order to prevent such a seizure, the applicant brought proceedings before the national Italian courts.
12 In those circumstances, by separate document lodged at the Court Registry on 21 January 2016, the applicant made the present application for interim measures, in which it claims that the President of the Court should suspend the enforcement of the contested decision.
13 By order of 22 January 2016, the President of the Court granted, pursuant to Article 157(2) of the Rules of Procedure of the General Court, the suspension of operation requested until the order bringing the present proceedings for interim measures to an end should have been taken.
14 In its comments on the application for interim measures, lodged at the Court Registry on 5 February 2016, the Commission essentially contended that the Court should:
– dismiss that application as unfounded;
– in the alternative, should suspension of operation be granted,
– make that suspension subject to the provision, by the applicant, of security;
– order the applicant to submit to the Court quarterly reports on the development of its economic and financial situation and, before its adoption, any decision liable to affect its economic situation or seeking to modify its legal status and, in any event, a copy of the decisions of its general assembly;
– reserve the costs.
15 The applicant answered the Commission’s comments by document of 17 February 2016, in the light of which the Commission took a definitive position by document of 29 February 2016.
16 Moreover, the Commission decision of 27 June 2014 relating to the recovery of a sum of EUR 194 275.34 (see paragraph 11 above) is also the subject of an action for annulment, coupled with an application for interim measures (Cases T‑644/14 and T‑644/14 R, ADR Center v Commission).
Law
General considerations
17 Under the combined provisions of Articles 278 TFEU, 279 TFEU and the fourth paragraph of Article 299 TFEU, on the one hand, and Article 256(1) TFEU, on the other, the judge hearing the application for interim relief may, if he considers that the circumstances so require, order suspension of operation of an act challenged before the Court or prescribe any necessary interim measures. However, any grant of a suspension of operation of that act must at the same time provisionally prevent its enforcement (see order of 3 December 2007 in Dimos Peramatos v Commission, T‑312/07 RII, EU:T:2007:363, paragraph 15 and the case-law cited). Nevertheless, Article 278 TFEU establishes the principle that actions do not have suspensory effect, acts adopted by the institutions of the Union enjoying a presumption of legality. It is therefore only exceptionally that the judge hearing an application for interim relief may order the suspension of operation of an act challenged before the Court or prescribe any interim measures (see, to that effect, order of 11 November 2013 in CSF v Commission, T‑337/13 R, EU:T:2013:599, paragraph 21 and the case-law cited).
18 In addition, Article 156(3) and Article 161(1) of the Rules of Procedure provide that applications for interim measures must state the subject-matter of the proceedings, the circumstances giving rise to urgency and the pleas of fact and law establishing a prima facie case for the interim measures applied for. It is thus open to the judge hearing an application to order the suspension of the operation of an act, or other interim measures, if it is established that such an order is justified, prima facie, in fact and in law and that it is urgent in so far as, in order to avoid serious and irreparable damage to the interests of the party seeking those measures, it must be made and produce its effects before a decision is reached in the main action. Those conditions are cumulative, so that interim measures must be dismissed if any one of them is not satisfied (see, to that effect, order in CSF v Commission, cited in paragraph 17 above, EU:T:2013:599, paragraph 22 and the case-law cited).
19 In the context of that overall examination, the judge hearing the application has broad discretion and is free to determine, having regard to the specific circumstances of the case, the manner and order in which those various conditions are to be examined, there being no rule of law imposing a pre-established scheme of analysis within which the necessity of ordering interim measures must be assessed. Where appropriate, the judge hearing such an application must also weigh up the interests involved (see order in CSF v Commission, cited in paragraph 17 above, EU:T:2013:599, paragraph 23 and the case-law cited).
20 Having regard to the material in the case-file, the judge hearing the application considers that he has all the information needed to rule on the present application for interim measures without there being any need first to hear oral argument from the parties.
21 In the circumstances of the present case, it is appropriate to examine first whether the condition relating to urgency is satisfied.
Urgency
22 The applicant fears that it will suffer serious and irreparable damage if the application for interim measures is rejected. It submits that it does not have sufficient financial resources to pay the Commission the sum of EUR 663 288.64 (see paragraph 11 above) without becoming bankrupt, since that amount represents 50% of its annual turnover. It adds that its cash flows amounted, in 2014, only to EUR 184 385 in total. Thus, it would currently need, all other things being equal, more than three and a half years to generate sufficient positive cash flows to pay the amount of EUR 663 288.64.
23 The applicant states that, on 30 November 2015, its total assets amounted to EUR 1 027 058, its liabilities amounted to EUR 947 094 and its own capital amounted to EUR 79 964. The amount of capital required represents 65% of the total assets of the company on 30 November 2015. In so far as its debts amounted to EUR 751 290 on that date, the request for EUR 663 288.64 corresponds to 88% of its total debt and to more than 110% of the total current liabilities. In view of the credit lines provided (for EUR 50 000 with bank U.) and the availability of liquid assets on 30 November 2015, representing EUR 158 041, the applicant would be quite unable to meet the payment required, in any case within the time limits set out in the enforcement measure, and would find itself in a position of irreversible insolvency.
24 By contrast, the Commission takes the view that the financial ability of an undertaking to honour its financial obligations does not correspond to its mere liquid assets, but rather to its ability to pay, which goes beyond the liquid assets and assets available at short notice. However, in the present case, an analysis of the applicant’s accounts on 30 November 2015, annexed to the application for interim relief, shows that, vis-à-vis its shareholders, the undertaking has untapped credit amounting to EUR 263 241, which would be sufficient to cover approximately 42% of its total debt, without in any way jeopardising its liquid assets. In addition, the applicant’s profits amounted, on that date, to EUR 73 331. Thus, even after deduction of the accumulated losses of earlier years, its net profit would nevertheless be EUR 16 030, which would cover an additional proportion of approximately 3% of the total debt. In other words, it would appear that the applicant has sufficient resources to pay around 45% of the outstanding debt without jeopardising its current activities, since that payment would have no impact on its liquid assets, amounting to EUR 158 041, or on its credit line of EUR 50 000, and to establish a payment plan for the repayment of the outstanding debt (55% of the amount of the debt) in the course of the coming years.
25 The applicant contends that those arguments in no way alter the harsh reality, which is that it does not currently have sufficient resources to cover the amount of the debt allegedly owed. Seeking to deprive it of its working capital would serve only to force it towards bankruptcy and to preclude any possibility of reaching a possible settlement with the Commission. In addition, the shareholders would not have the material and financial means of integrating the initial share capital, namely: the amount corresponding to the credit of EUR 263 241 mentioned by the Commission.
26 In that regard, it should be borne in mind that, according to settled case-law, the urgency of an application for interim measures must be assessed in relation to the need of interim measures in order to avoid serious and irreparable damage being caused to the party seeking interim relief. It is for that party to adduce solid evidence that it cannot wait for the outcome of the main proceedings without having personally to suffer harm of that kind. Although it is not necessary for the imminence of the alleged harm to be demonstrated with absolute certainty, its occurrence must nevertheless be foreseeable with a sufficient degree of probability (see order of 17 December 2015 in Lysoform Dr. Hans Rosemann and Others v ECHA, T‑543/15 R, EU:T:2015:1008, paragraph 29 and the case-law cited).
27 In so far as the applicant fears that it will suffer serious and irreparable financial damage, it is settled case-law that such damage is not normally irreparable if it can ultimately be the subject of financial compensation, unless it appears that, without such measures, the party seeking interim measures would be in a position that could imperil its existence before final judgment is given in the main action, or that its market share would be substantially affected in the light of the size and turnover of its undertaking and the characteristics of the group to which it is directly or indirectly connected by its shareholders (see, to that effect, orders of 7 March 2013 in EDF v Commission, C‑551/12 P(R), ECR, EU:C:2013:157, paragraph 54; 19 December 2013 in Lito Maieftiko Gynaikologiko kai Cheirourgiko Kentro v Commission, C‑506/13 P-R, EU:C:2013:882, paragraph 20; and 7 December 2015 in POA v Commission, T‑584/15 R, EU:T:2015:946, paragraph 25 and the case-law cited).
28 Thus, the fact that the judge hearing the application for interim relief took account of the resources available, as a whole, to the group to which the company seeking interim measures belongs may lead him to hold that the condition concerning urgency has not been fulfilled, in spite of the foreseeable insolvency of that company, taken individually. It therefore falls to be determined whether the alleged harm may be classified as serious and irreparable in the light of the characteristics of the group to which that company belongs (see, to that effect, orders of 10 June 2011 in Eurallumina v Commission, T‑207/07 R, EU:T:2011:265, paragraph 32 and the case-law cited, and 6 May 2014 in Frucona Košice v Commission, T‑103/14 R, EU:T:2014:255, paragraph 53 and the case-law cited).
29 In order to determine whether those conditions are satisfied, the judge hearing the application for interim measures must, according to settled case-law, have actual and specific information, supported by detailed, certified documentary evidence showing the situation in which the party seeking interim measures finds itself and enabling an assessment to be made of the likely consequences if the measures sought are not granted. It follows that that party must produce, with supporting documentation, an accurate overall picture of its financial situation (see, to that effect, order in POA v Commission, cited in paragraph 27 above, EU:T:2015:946, paragraph 23 and the case-law cited).
30 In addition, the essential elements of fact and law enabling the judge hearing the application for interim measures to construct such a picture must be apparent from the text of the application for interim measures; that text must in itself enable the defendant to prepare its observations and the judge hearing the application for interim measures to rule on it, where necessary, without other supporting information. In the light of the speed which characterises, by its nature, the proceedings for interim measures, the party seeking the interim measures may reasonably be required to submit, save in exceptional cases, as soon as its application is submitted, all the available evidence in support of that application, so that the judge hearing the application for interim measures can assess, on that basis, the merits of that application (see order of 20 April 2012 in Fapricela v Commission, C‑507/11 P(R), EU:C:2012:231, paragraphs 52 to 54 and the case-law cited).
31 In the present case, for the purpose of assessing the financial strength of the applicant company, it should be borne in mind that that company takes the legal form of a ‘Srl’ under Italian law, that is to say, a company with limited liability. As the Commission observed, without being contradicted by the applicant, all the shares in the applicant company are held by Mr U., Mr P. and Ms B., who are also its directors. It is thus apparent that the judge hearing the application for interim measures is confronted with a group composed of the applicant as a company with limited liability and of Mr U., Mr P. and Ms B., those natural persons being members of the group in the capacity of partners.
32 Accordingly, the conditions governing the applicant company’s membership of that group and the characteristics of the group, in particular the financial capacity which the group has as a whole, constitute essential elements for the purpose of assessing the urgency of the application for interim measures. Consequently, those elements had to be put forward by the applicant in that application, even with regard to Mr U., Mr P. and Ms B. The case-law relating to the group concept applies not only to legal persons, but also to natural persons who form part of a group in the capacity of shareholders or partners, without themselves being undertakings (see, to that effect, orders of 7 December 2010 in ArcelorMittal Wire France and Others v Commission, T‑385/10 R, EU:T:2010:502, paragraph 53; 21 June 2011 in MB System v Commission, T‑209/11 R, EU:T:2011:297, paragraph 32 and the case-law cited; and 10 June 2014 in Stahlwerk Bous v Commission, T‑172/14 R, EU:T:2014:558, paragraphs 20 and 33).
33 However, if the application for interim measures and its annexes contain indications as to the financial situation of the applicant company, the fact remains that they contain no information regarding the financial situation of Mr U., Mr P. and Ms B., although the financial position of those persons ought to have been subject to the assessment of the judge hearing the application for interim measures.
34 However much the applicant’s silence would appear to express the opinion that its partners are not subject, with regard to it, to any obligation to assume joint and several liability in accordance with its articles of association, specifically because of its status as a company with limited liability, it must be stated that the taking into account of the financial strength of the group to which the applicant company belongs is based on the idea that the objective interests of that company are not independent of those of the legal or natural persons who direct it or who are members of the same group. The serious and irreparable nature of the alleged harm must therefore be assessed at the level of the group made up of those persons. That coincidence of interests justifies the applicant company’s interest in continuing its activity not being assessed independently of the interest which those who direct it or are members of the same group attach to its permanence. In addition, the crucial issue concerning the assessment of a financial situation is whether the company claiming to have suffered serious and irreparable damage has other possible sources of income that could help it to contain that damage. If this is the case, the judge hearing the application for interim measures must take this into account, having regard to the fact that interim measures may be allowed only in strictly exceptional cases (see paragraph 17 above), whether it is income that can be derived from specific economic activities that is involved or assistance provided by other persons (see, to that effect, order in Eurallumina v Commission, cited in paragraph 28 above, EU:T:2011:265, paragraphs 33 and 38 and the case-law cited).
35 Accordingly, a distinction should be made between, on the one hand, the legal obligation to pay imposed on a legal or natural person and, on the other, the financial strength which that person has in order to perform his duty of payment. Consequently, if the other members of the group to which the applicant belongs are not legally obliged jointly and severally to repay the amount which the Commission intends to recover from the applicant, the judge hearing the application for interim measures is called upon to ascertain, in application of the group concept, whether those members have both the financial means necessary to support the applicant and the objective interest in granting such support (see, to that effect, order in Frucona Košice v Commission, cited in paragraph 28 above, EU:T:2014:255, paragraph 57 and the case-law cited).
36 To the extent that the silence of the applicant must be interpreted as meaning that the partners U., P. and B. refuse to support it, it should be borne in mind that the unilateral refusal by a group to provide financial support to a company in the group cannot be sufficient to exclude from consideration the financial situation of the whole group. The extent of the alleged harm of an individual company belonging to a group cannot, where its interests and the interests of its partners or other companies of the same group objectively overlap, depend on the unilateral intention of the latter (see, to that effect, order of 30 April 2010 in Ziegler v Commission, C‑113/09 P(R), EU:C:2010:242, paragraph 46). In that regard, the only relevant question that arises is whether legal obstacles, in particular obstacles of bankruptcy or commercial law, preclude the grant, by U., P. and B., of the financial support at issue (see, to that effect, orders of 14 December 1999 in DSR-Senator Lines v Commission, C‑364/99 P(R), EU:C:1999:609, paragraphs 52 to 54, and 14 December 2011 in Alcoa Trasformazioni v Commission, C‑446/10 P(R), EU:C:2011:829, paragraphs 34 and 35; see also, by analogy, order of 14 June 2012 in Qualitest FZE v Council, C‑644/11 P(R), EU:C:2012:354, paragraph 42).
37 However, in the present case, the applicant has not challenged the identical nature of the objective interests pursued within the group to which it belongs. Consequently, there is nothing that argues that they are not identical. Moreover, the applicant has not put forward any evidence to establish the existence of a legal obstacle that would preclude the grant of financial assistance in its favour.
38 If the applicant submits that ‘the shareholders do not have the material and financial means to integrate the original nominal capital’, this is a mere assertion that is not substantiated by any evidence. Article 156(3) of the Rules of Procedure provides that an application for interim measures must contain all the evidence and offers of evidence available to justify the grant of the interim measures sought. That provision reflects the case-law according to which, first, it is for the party seeking an interim measure to support its assertions with detailed and certified documentary evidence enabling an assessment of the truth of those assertions and, secondly, having regard to the importance of the probative value of the documentary evidence produced for the assessment of the merits of an application for interim measures, the requirement for that evidence to provide guarantees of authenticity cannot be considered to be disproportionate (see order of 25 October 2012 in Hassan v Council, C‑168/12 P(R), EU:C:2012:674, paragraphs 33 and 37 and the case-law cited; see, to that effect, order of 8 May 2012 in Investigación y Desarrollo en Soluciones y Servicios IT v Commission, T‑134/12 R, EU:T:2012:225, paragraph 16 and the case-law cited).
39 Because the argument put forward by the applicant must be classified as an unsubstantiated assertion, the judge hearing the application for interim measures cannot, in view of the exceptional nature of the grant of interim measures, accept that urgency exists, merely on the basis of such an assertion, particularly as the Commission challenged it with specific and precise arguments (see paragraph 24 above). Consequently, the judge hearing the application for interim measures is not in a position to assign to the applicant’s unsubstantiated assertion more value than that assigned to the specific and precise arguments to the contrary submitted by the Commission (see, to that effect, order of 16 October 2013 in Spain v Commission, T‑461/13 R, EU:T:2013:545, paragraph 39).
40 It follows that the applicant has not established urgency, in the light of the case-law relating to the taking into account of the characteristics of the group to which it belongs.
41 For want of information about the financial situation of Mr U., Mr P. and Ms B., the judge hearing the application for interim measures cannot, in particular, consider it impossible that those persons should be in a position to provide financial support for the applicant, whether by lending it the necessary funds or by providing it with a corresponding mortgage loan, so that it could repay the amount whose recovery is required by the Commission, without running the risk of bankruptcy.
42 It follows from all the foregoing that the application for interim measures must be dismissed for want of urgency and there is no need to examine the condition relating to establishing a prima facie case or to weigh up the interests involved.
On those grounds,
THE PRESIDENT OF THE GENERAL COURT
hereby orders:
1. The application for interim measures is dismissed.
2. The order of 22 January 2016 is cancelled in so far as it relates to Case T‑364/15 R.
3.
4. The costs are reserved.
Done at Luxembourg, 7 April 2016.