JUDGMENT OF THE COURT OF FIRST INSTANCE (Third Chamber)

7 November 1997(1)

(Agriculture — Fisheries — Aquaculture and establishment of protected marineareas — Community financial aid — Declaration of ineligibility of certainexpenditure — Action for annulment — Action for damages)

In Case T-218/95,

Azienda Agricola 'Le Canne‘ Srl, a company incorporated under Italian law,established in Porto Viro, Italy, represented by Giulio Schiller, Giuseppe Carraroand Francesca Mazzonetto, of the Padua Bar, and by Guy Arendt, of theLuxembourg Bar, with an address for service in Luxembourg at the latter'sChambers, 62 Avenue Guillaume,

applicant,

v

Commission of the European Communities, represented by Eugenio de March,Legal Adviser, and Hubertus Van Vliet, of the Legal Service, acting as Agents,assisted by Alberto Dal Ferro, of the Vicenza Bar, with an address for service inLuxembourg at the office of Carlos Gómez de la Cruz, of the Legal Service,Wagner Centre, Kirchberg,

defendant,

APPLICATION, first, for annulment of the decision by the Commission to reduceCommunity financial aid originally granted and, secondly, for compensation for thedamage suffered by the applicant as a result of that reduction,

THE COURT OF FIRST INSTANCE

OF THE EUROPEAN COMMUNITIES (Third Chamber),

composed of: B. Vesterdorf, President, C.P. Briët and A. Potocki, Judges,

Registrar: J. Palacio González, Administrator,

having regard to the written procedure and further to the hearing on 5 June 1997,

gives the following

Judgment

Legal framework

1. Article 1(1)(b) of Council Regulation (EEC) No 4028/86 of 18 December 1986 onCommunity measures to improve and adapt structures in the fisheries andaquaculture sector (OJ 1986 L 376, p. 7, hereinafter 'Regulation No 4028/86‘)provides that the Commission may grant Community financial aid for thedevelopment of aquaculture and the establishment of protected marine areas witha view to improved management of inshore fishing grounds.
   
   
2. Under Article 12 of Regulation No 4028/86 and Annex III thereto, Communityfinancial aid provided for aquaculture amounts for the region of Veneto to 40% ofeligible expenditure, Italy's contribution representing a percentage of between 10and 30%.
   
   
3. Article 44 of Regulation No 4028/86 provides:
   
   '1.    Throughout the period for which aid is granted by the Community, theauthority or agency appointed for the purpose by the Member State shall send tothe Commission on request all supporting documents and all documents showingthat the financial or other conditions imposed for each project are satisfied. TheCommission may decide to suspend, reduce or discontinue aid, in accordance withthe procedure laid down in Article 47:
   
   
   • if the project is not carried out as specified, or

   (...)
   
   Decisions shall be notified to the Member State concerned and to the beneficiary.
   
   The Commission shall take steps to recover any sums unduly paid.
   
   2.    Detailed rules for applying this article shall be adopted by the Commissionin accordance with the procedure laid down in Article 47.‘
   
   

4. Article 47 provides:
   
   '1.    Where the procedure laid down in this article is to be followed, matters shallbe referred to the Standing Committee for the Fishing Industry, by its chairman,either on his own initiative or at the request of the representative of the MemberState.
   
   2.    The representative of the Commission shall submit a draft of the measuresto be taken. The Committee shall deliver its opinion within a time-limit to be setby the chairman according to the urgency of the matter. Opinions shall be adoptedby a majority of 54 votes, the votes of the Member States being weighted as laiddown in Article 148(2) of the Treaty. The chairman shall not vote.
   
   3.    The Commission shall adopt the measures which shall apply immediately.However, if these measures are not in accordance with the opinion of theCommittee, the Commission shall forthwith communicate them to the Council. Inthat event the Commission may defer their application for not more than onemonth from the date of such communication. The Council, acting by a qualifiedmajority, may adopt different measures within one month.‘
   
   
5. By Commission Regulation (EEC) No 1116/88 of 20 April 1988 (OJ 1988 L 112,p. 1, hereinafter 'Regulation No 1116/88‘), the Commission adopted detailed rulesfor the application of decisions granting aid for projects concerning Communitymeasures to improve and adapt structures in the fisheries and aquaculture sectorand in structural works in coastal waters.
   
   
6. According to the sixth recital in the preamble to Regulation No 1116/88 'theprocedure for suspending, reducing or terminating aid should not be initiatedwithout the Member State concerned first having been asked for its views and thebeneficiaries having been given the opportunity to submit their comments.‘
   
   
7. In that connection Article 7 of Regulation No 1116/88 provides:
   
   'Before initiating a procedure for suspending, reducing or terminating aid inaccordance with Article 44(1) of Regulation (EEC) No 4028/86, the Commissionshall:
   
   
   • inform the Member State on whose territory the project was to be carriedout, so that it may express its views on the matter,
     
     
   • consult the competent authority responsible for forwarding supportingdocuments,
     
     
   • ask the beneficiary to provide, through the authority or agency, anexplanation for the failure to comply with the conditions laid down.‘

   Facts of the dispute
   
   

8. By Decision C (90) 1923/99 of 30 October 1990 the Commission granted theapplicant financial aid of LIT 1 103 646 181, that is to say 40% of the eligibleexpenditure of LIT 2 759 115 453, in respect of modernization works and theestablishment of fish-farming installations (project I/16/90). Financial aid of 30%of the eligible expenditure, namely LIT 827 734 635, was to be borne by the ItalianState.
   
   
9. That decision stated that 'the amount of aid that the Commission will actuallyapply to a completed project depends on the nature of the works carried out inrelation to those provided for in the project‘. The decision also stipulated that 'inconformity with the statement appearing in Part B of the application for assistancesubmitted by the recipient, the works provided for may not be altered or changedwithout the prior agreement of the national administration and of the Commission. Important changes made without the Commission's agreement may lead to areduction or withdrawal of the assistance if they are deemed unacceptable by thenational administration or the Commission. If appropriate, the nationaladministration shall indicate to each beneficiary the procedure to be followed.‘
   
   
10. On 23 June 1993 the Commission paid to the applicant a first instalment of LIT343 117 600.
    
    
11. Following an on-the-spot verification of the project as finally completed, the PublicWorks Department, in a letter dated 7 April 1994, advised the applicant that,subject to certain modifications to the project in the extent of masonry work andsimilar items, as well as excavation works, it was of the opinion that the workscompleted could be regarded as being in conformity with the approved projectfrom a technical and financial point of view.
    
    
12. By Decision C (94) 1531/99 of 27 July 1994 the Commission acceded to a secondrequest by the applicant for the grant of aid in connection with the completion ofmodernization works and installations (project I/100/94).
    
    
13. By letter dated 12 December 1994 addressed to the Italian Ministry of Agriculture(hereinafter 'the Ministry‘) and to the Commission, the applicant pointed out that,owing to circumstances beyond its control which had arisen since the project wassent to the Ministry, certain modifications to the works provided for in the contextof project I/16/90 had become essential. The applicant stated that its belief thatit had complied with the proposed objectives and chosen the correct options,together with its desire speedily to achieve the results envisaged, had unfortunatelyled it to overlook the obligation to give prior notification to the Ministry of themodifications made, and this presented a major obstacle to finalizing the matter. However, the applicant did not consider that project I/16/90 had, overall,undergone any substantial changes, apart from a difference in the location andconfiguration of the intensive rearing ponds.
    
    
14. Thus, whilst stating that it had become aware, but only since completion of theworks, that it had not observed the formality of prior notification of themodifications, the applicant requested the Ministry and, if appropriate, theCommission itself, to conduct a technical examination of the changes made in orderto establish that they were well founded, and that the choices made were necessaryand opportune. In that connection the applicant pointed out that all themodifications referred to had been disclosed and approved in the course ofapproval of the supplementary structural works project (I/100/94) accepted forCommunity financial aid by Decision C (94) 1531/99.
    
    
15. After verification of the completed works the Ministry forwarded to the applicanton 3 June 1995 the certificate of verification of completion of works (hereinafter'the certificate‘) drawn up on 24 May 1995. In the Ministry's view, the applicanthad made changes additional to those already noted by the Public WorksDepartment:
    
    (a)    failure to build 16 ponds, a hydraulic installation and a heating station, allreplaced by projected rearing ponds to be built in the context of thecompletion project approved by the Commission in Decision C (94) 1531/99;
    
    (b)    failure to acquire a series of machines;
    
    (c)    failure to build new store and rearing ponds external to the hangar.
    
    The Ministry concluded that the applicant should have requested priorauthorization under the applicable Community provisions to carry out thosemodifications.
    
    
16. The Ministry reduced to LIT 1 049 556 101 the amount of eligible expenditure onthe final stage of the project. The Ministry concluded that, regard being had to theexpenditure already recognized as eligible at the stage of the first phase of theworks in the amount of LIT 857 794 000, the total amount of expenditure deemedeligible was LIT 1 907 350 101, about 69.13% of the eligible expenditure of theproject originally approved by the Commission.
    
    
17. By final payment order issued on 5 July 1995, the Commission paid the applicanta balance of LIT 419 822 440, thus reducing from LIT 1 103 646 181 to LIT762 940 040 the total amount of Community aid payable in respect of the worksdeemed by the Commission, on the basis of the certificate, to be in conformity withthe project originally approved.
    
    
18. On 28 July and 3 August respectively, the Ministry and the Commission receiveda series of written observations from the applicant claiming that there was no basisfor the certificate and asking for it to be re-examined.
    
    
19. In reply to a request by the national authorities, the Commission sent them itsobservations by telex No 12 497 of 27 October 1995. The Commission consideredthat on the information available it was not necessary to review the procedurefollowed by the Ministry in finalizing project I/16/90 on the ground that:
    
    (1)    major changes had been made to the project without prior notification tothe national administration;
    
        the grant of assistance in connection with the second project I/100/94 didnot imply acceptance by the Commission of the previous changes;
    
    (2)    works provided for under the following project I/100/94 had been carriedout under project I/16/90 and were thus not eligible for assistance grantedunder project I/16/90.
    
    (3)    Article 7 of Regulation No 1116/88, to which counsel for the applicantreferred, was not applicable to the situation adumbrated by him.
    
    (4)    From information provided by the Ministry the observations formulated atpage 18 of the statement submitted by counsel for the applicant appearedto be erroneous, in so far as they referred to deductions of expenditureoccurring on account of their being imputed to heads of expenditure notprovided for.
    
    
20. By letter of 14 November 1995 the Ministry rejected the request for re-examinationmade by the applicant on the same grounds as those set out in telex No 12 457from the Commission of 27 October 1995.
    
    Contentious procedure
    
    
21. It was in those circumstances that, by application lodged at the Registry of theCourt of First instance on 1 December 1995, the applicant brought, on the onehand, an action for the annulment of telex No 12 497 from the Commission of 27October 1995 and, on the other, a claim for compensation for the loss which italleged it had suffered as a result of the adoption of that measure.
    
    
22. Upon hearing the views of the Judge Rapporteur, the Court of First Instance(Third Chamber) decided to open the oral procedure and requested the parties toreply to certain written questions before the hearing. The parties complied withthat request.
    
    
23. At the hearing on 5 June 1997 the parties presented oral argument and replied toquestions put by the Court.
    
    Forms of order sought by the parties
    
    
24. The applicant claims that the Court should:
    
    
    • declare Commission document No 12 497 of 27 October 1995, against whichthese proceedings are brought, null and void;
      
      
    • order the Commission to pay restitution for damage suffered in the amountset out in the application;
      
      
    • order the Commission to pay the costs.

    
    
    

25. The Commission contends that the Court should:
    
    
    • dismiss the action under Article 173 of the EC Treaty as inadmissible and,in the alternative, as unfounded;
      
      
    • dismiss the claims under Articles 178 and 215 of the Treaty;
      
      
    • in any event, order the applicant to pay the costs.

    The claim for annulment
    
    1. Admissibility
    
    Arguments of the parties
    
    

26. In the Commission's view, the contested document of 27 October 1995 is notcapable of producing mandatory effects in regard to the applicant and, in anyevent, does not concern him directly. In that document, the Commission in factmerely assessed the conduct of the national authorities in the context of theprocedure for co-financing of the project laid down in Regulation No 4028/86.
    
    
27. The applicant objects, on the one hand, that the Member State concerned merelyfunctions as an 'agent‘ of the Community, acting on behalf of the Commissionwhich retains full decision-making power, and on the other hand, that the mereformal existence of the national measure adopted in implementation of theCommunity measure is not sufficient to negate the fact that the Communitymeasure concerns the applicant directly.
    
    Findings of the Court
    
    
28. It is sufficient to note that telex No 12 497 of 27 October 1995, read in conjunctionwith the order for payment of the balance of the Community financial aid issuedby the Commission on 5 July 1995, had the effect of reducing the amount ofCommunity financial aid originally granted by Commission Decision C (90) 1923/99.
    
    
29. Inasmuch as the contested telex thus deprives the applicant of the full amount ofthe assistance originally granted to it, without the Member State concerned havingany margin of discretion of its own in the matter, the contested telex constitutes,in regard to the applicant, an individual decision which produces binding legaleffects such as to affect its interests by bringing about a distinct change in its legalposition (Case 60/81 IBM v Commission [1981] ECR 2639, paragraph 9, Case C-291/89 Interhotel v Commission [1991] ECR I-2257, paragraphs 12 and 13, Case C-304/89 Oliveira v Commission [1991] ECR I-2283, paragraphs 12 and 13, and CaseC-189/90 Cipeke v Commission [1992] ECR I-3573, paragraphs 11 and 12).
    
    
30. The objection of inadmissibility raised by the Commission must therefore berejected.
    
    2. Substance
    
    
31. In support of its action for annulment the applicant raises five pleas in law, namelyfailure to notify the contested decision, infringements of the principle of collegiality,of the rules of procedure, of the obligation to provide a statement of reasons and,finally, misuse of powers.
    
    The first plea: failure to notify the contested decision
    
    
32. The applicant points out that the contested decision was never notified to it andwas brought to its notice only accidentally, in the form of a copy which it obtainedat its request.
    
    
33. The Commission makes no observations on this point.
    
    
34. The Court finds that the applicant was in fact able to apprise itself properly of thecontent of the contested decision and to initiate these proceedings within theappropriate time-limit for legal actions. In those circumstances there is no need torule on the question whether that measure was formally notified to it.
    
    The second plea: infringement of the principle of collegiality
    
    
35. The applicant alleges that the Commission did not observe the principle ofcollegiality. It is, it says, impossible to deduce from the contested decision, whichmerely appears to emanate from the 'acting head of unit‘, whether and, if so,when the members of the Commission, who are subject to collective responsibilityfor it, deliberated on it together.
    
    
36. The Commission replies in the first place that delegation of signature is the normalway in which the Commission exercises its powers and in the second that thecontested decision was adopted in the context of the management of the EuropeanAgricultural Guidance and Guarantee Fund (EAGGF), Guidance Section, whichcomes under the Directorate General for Fisheries (DG XIV).
    
    
37. The Court notes that, as is clear from the Commission's Rules of Procedure, theinstitution's officials may be empowered to take, in the name of the Commissionand subject to its control, clearly defined measures of management oradministration, such as the measure at issue, and delegation of signature is thenormal means whereby the Commission exercises its powers (Case C-200/89 Funocv Commission [1990] ECR I-3669, paragraphs 13 and 14).
    
    
38. In the present case the applicant has not adduced any evidence to show that theCommunity administration failed to comply with the relevant rules in this case. Onthe contrary, it is to be noted that the acting head of unit who signed the contesteddecision is a member of staff of the directorate general responsible for fisheries(DG XIV), which is the economic sector in receipt of the Community financial aidunder Regulation No 4028/86.
    
    
39. The second plea must therefore be rejected.
    
    The third plea: infringement of the Rules of Procedure
    
    Arguments of the parties
    
    
40. The applicant first criticizes the Commission for reducing the Community financialaid originally granted without first implementing the procedure for reductionprovided for in Article 44(1) of Regulation No 4028/86 and, above all, withoutobserving the obligations imposed on the Commission by Article 7 of RegulationNo 1116/88, in particular the obligation to request the recipient to provide, throughthe authority or agency of the Member State concerned, an explanation for thefailure to comply with the conditions laid down.
    
    
41. Secondly, the applicant points out that where it is decided to reduce aid, the firstindent of Article 44(1) of Regulation No 4028/86 provides that the procedure laiddown in Article 47 thereof is to apply.
    
    
42. The Commission contends that the contested decision cannot be regarded asrequiring recourse to be had to the procedure provided for in Article 44 ofRegulation No 4028/86. That provision concerns situations in which Community aidis reduced where, following fresh appraisal entailing modifications, the project nolonger corresponds to the original project.
    
    
43. Such a situation, it maintains, does not cover the case where, as in the present case,Community aid remains unchanged but only the eligible expenditure is reducedbecause the project is not carried out as specified. It is no longer a case of areduction in aid within the meaning of Article 44 of Regulation No 4028/86, butmerely a refusal to allow certain expenditure, entailing an adjustment in absoluteterms of the amount paid by the Community. That is merely a determination ofthe eligible expenditure, which involves no fresh legal and economic assessment, butsolely considerations of a technical nature.
    
    
44. In the present case, it argues, the applicant never sought revision of the projectsubmitted and approved in Decision C (90) 1923/99. In the absence of anycommunication from the applicant concerning a modification of the project, theMinistry stated in the certificate, first, that certain expenditure did not accord withthe project approved and was thus not eligible and, secondly, that the otherexpenditure was eligible. The Commission thus paid the expenses deemed eligible,which did not necessitate any subsequent re-appraisal of the project.
    
    
45. In such a situation, to convene the Standing Committee on the Fishing Industry inaccordance with the procedure laid down in Article 47 of Regulation No 4028/86would only distort the purpose of the committee, by requiring it to deliver anopinion, not on projects, but on the ineligibility of the various items of expenditurecommitted.
    
    
46. The Commission notes that, in any event, the applicant was able to submit itsobservations in its correspondence with the national authorities which forwardedthem to the Commission. The Commission expressed its opinion in the contestedmeasure, which expressly mentions the letter from the applicant's counsel receivedin DG XIV on 3 August 1995. It is clear from the exchange of documentation thatit was specifically as a result of certain observations made by the applicant that thecontested measure was adopted.
    
    Findings of the Court
    
    
47. The reasoning adopted by the applicant indicates that its plea in fact consists oftwo limbs, the first alleging an infringement of the principle of the right to beheard, the second, the failure to consult the committee. In fact, since Article 47of Regulation No 4028/86 lays down the detailed rules for consultation of that body,the Court infers that by arguing that the first indent of Article 44(1) of RegulationNo 4028/86 requires the Article 47 procedure to be applied, the applicant soughtat the same time to plead, in addition to the alleged infringement of the principleof the right to be heard, an alleged failure to consult the committee.
    
    
    • The first limb of the third plea

    
    
    

48. The Court recalls that observance of the right to be heard is, in all proceedingsinitiated against a person which are liable to culminate in a measure adverselyaffecting that person, a fundamental principle of Community law which must beguaranteed even in the absence of any rules governing the proceedings in question.That principle requires that addressees of decisions which significantly affect theirinterests should be placed in a position in which they may effectively make knowntheir views (Case C-32/95 P Commission v Lisrestal [1996] ECR I-5373, paragraph21).
    
    
49. None the less, it is clear from point 5 of the application that the applicantchallenged the basis on which the certificate was founded and requested its re-examination in the written observations which reached the Ministry on 28 July 1995and the Commission on 3 August 1995, that is to say before the Commissiondefinitively adopted its decision by telex No 12 497 of 27 October 1995.
    
    
50. The Court notes that the applicant itself states, also at point 5 of its application,that the Commission decided, by telegram dated 7 August 1995, to initiate theprocedure for payment of the Community aid, determined on the basis of theestimates given in the certificate.
    
    
51. It follows that the applicant was in a position to explain, prior to adoption of thecontested measure, the reasons for the failure to comply with the conditions laiddown, and that the requirements stipulated in that regard in Article 7 of RegulationNo 1116/88 were essentially observed by the Commission.
    
    
52. In those circumstances the first limb of the third plea must be rejected.
    
    
    • The second limb of the third plea

    
    
    

53. It is common ground that the applicant, as it itself acknowledged, carried outmodifications to the project without observing the requirement of prior notificationto the Community and national authorities which, on the applicant's own admission,constituted a major obstacle to finalizing the matter (see paragraph 13, above).
    
    
54. However, the decision to grant aid expressly stipulated in that connection that 'theworks provided for (could) not undergo any alteration or change without the prioragreement of the national administration and possibly of the Commission‘.
    
    
55. Under those conditions, the Commission was entitled, after an examination, to limititself to finding that, in light of the certificate drawn up by the nationaladministration, the expenditure deemed ineligible could not be taken intoconsideration, since it did not come within the terms of the project as approved.
    
    
56. The Court therefore considers that the contested measure does not constitute adecision to reduce, for the purposes of Article 44(1) of Regulation No 4028/86, theaid originally granted to the applicant, but in actual fact merely notes that a partof the expenditure for which the applicant claims payment does not relate to theproject as originally accepted.
    
    
57. The second limb of the third plea must therefore be rejected.
    
    
58. It follows that the third plea must be dismissed in its entirety.
    
    The fourth plea: infringement of the obligation to provide a statement of reasons
    
    Arguments of the parties
    
    
59. The applicant divides this plea in law into two limbs. First, it observes that, with theexception of an entirely general reference to Regulation No 4028/86, the contestedmeasure omits to state the legal basis on which it is founded.
    
    
60. The Commission replies that the subject-matter of the contested measure isexpressly based on Regulation No 4028/86 and that the document itself mentionsthat regulation and Regulation No 1116/88.
    
    
61. Secondly, the applicant maintains that the statement of the reasons on which themeasure is based does not enable it to know the reasons for the refusal to granta part of the aid originally granted, or the Court to exercise its judicial review. Inparticular, the Commission does not explain, in its observations on the imputationof expenses arising under headings not provided for, what error the applicant issupposed to have committed, or the correct reading to be made of that technicaland accounting information.
    
    
62. The Commission replies that it can be ascertained by reading the contesteddocument that the reasons for its adoption are to be found in the documents towhich that measure refers and which were supplied by the national authorities tothe Commission, in particular the certificate.
    
    Findings by the Court
    
    
    • The first limb of the fourth plea

    
    
    

63. The Court finds that the contested decision expressly mentions Regulations Nos4028/86 and 1116/88, which are applicable in this case. In light of the context of thecase and, in particular, of the arguments put forward by it in support of its thirdplea in law, the applicant could not have mistaken the scope of those tworeferences and cannot therefore be regarded as having been left uncertain as to thelegal basis of the contested decision (Case 45/86 Commission v Council [1987] ECR1493, paragraph 9).
    
    
64. The first limb of this plea must therefore be rejected.
    
    
    • The second limb of the fourth plea

    
    
    

65. The Court has consistently held that the statement of reasons required by Article190 of the Treaty must be appropriate to the legal nature of the measure inquestion, and the reasoning of the institution which adopted the measure must bestated clearly and unequivocally, so as to inform the persons concerned of thejustification for the measure adopted and to enable the Court to exercise its powerof review. However, the statement of reasons for a measure is not required todetail every relevant point of fact and law, since the question whether thestatement of reasons is sufficient must be considered with reference not only to itswording but also to its context and the whole body of legal rules governing thematter in question (Case C-466/93 Atlanta Fruchthandelsgesellschaft (II) vBundesamt für Ernährung und Forstwirtschaft [1995] ECR I-3799, paragraph 16).
    
    
66. In the present case it is apparent from the background to the case, from thecorrespondence exchanged by the applicant with the national administration andthe Commission, as well as from the contested decision, that the grounds relied onby the Commission in support of that decision appear with sufficient clarity toenable the applicant to assert its rights before the Community judicature and forthe latter to review the lawfulness of that decision.
    
    
67. In the first place, in the letter of 12 December 1994 which it addressed to theMinistry and the Commission the applicant acknowledged, on the one hand, thatafter submission of the project, certain conditions underwent substantialmodifications which necessitated adjustments and, on the other, stated that it wasaware that it had complied with the requirement of prior notification of themodifications which, on the applicant's own admission, constituted a major obstacleto finalizing the matter (see paragraph 13, above).
    
    
68. Secondly, the detailed explanations given in the certificate in support of thedeclaration of ineligibility of expenditure under the various items in questiondisclose with sufficient clarity the grounds justifying the contested decision, asrequired by the relevant case-law (Cipeke v Commission, cited above, paragraphs18 to 22).
    
    
69. Thirdly, the contested decision sets out, succinctly but clearly, the grounds reliedon by the Commission, on the one hand, in replying to certain of the arguments putforward by the applicant in its observations which reached the Commission on 3August 1995 and, on the other, in referring to the explanations given by theMinistry in its certificate. In view of the system of close collaboration between theCommission and the Member States on which the grant of financial aid rests (CaseT-85/94 Branco v Commission [1995] ECR II-45, paragraph 36), it was correct forthe contested decision to refer also to those explanations.
    
    
70. In such circumstances, it appears that the statement of reasons for the contesteddecision gave the applicant sufficient indication of the principal points of fact andlaw on which the reasoning was based, irrespective of the substantive accuracy ofthose reasons and of the amount of expenditure declared ineligible, which was notraised by the applicant before the Court and which goes to the substantive meritsof the decision (Case 2/56 Geitling v High Authority [1957 and 1958] ECR 3, at p.16, Case 8/65 Acciaierie e Ferriere Pugliesi v High Authority [1966] ECR 1, at p. 7,and Case T-356/94 Vecchi v Commission [1996] ECR-SC II-1251, paragraph 82).
    
    
71. The second limb of the plea must therefore be rejected.
    
    
72. It follows that the fourth plea must be dismissed in its entirety.
    
    The fifth plea: misuse of powers
    
    
73. The applicant maintains that the Commission, which has exclusive competence inthe matter of the grant and reduction of aid, circumvented the procedure forreduction provided for in Article 44 of Regulation No 4028/86 and Article 7 ofRegulation No 1116/88 by issuing a document which was formally presented as anopinion. By asserting that to reduce aid by means of a decision adopted after priorconsultation of the Standing Committee for the Fishing Industry would overburdenthe committee, the Commission revealed that the real purpose of the contestedmeasure was to achieve the practical effect of a reduction in the assistance withouthaving to resort to the appropriate procedure.
    
    
74. The Commission contends that the applicant is wrong to attribute to the contestedmeasure mandatory effect as regards the national authorities.
    
    
75. The Court finds that the applicant has adduced no objective, relevant and coherentevidence to show that the contested decision was adopted with the exclusive or, atleast, the main purpose of achieving an end other than that stated or evading aprocedure specifically prescribed by the Treaty for dealing with the circumstancesof the case (Case C-156/93 Parliament v Commission [1995] ECR I-2019, paragraph31).
    
    
76. On the contrary, it is apparent from the foregoing that the Commission's action wasprompted by the modifications made by the applicant to project I/16/90.
    
    
77. The fifth plea must therefore be rejected.
    
    
78. It follows that the action for annulment must be dismissed in its entirety.
    
    The claim for compensation
    
    Substance
    
    
79. The applicant claims that the Commission is liable to compensate it for the damagewhich it alleges it suffered as a result of the reduction of a substantial part of thefinancial aid granted by both the Community and the national authorities.
    
    
80. The applicant relies on the Court to make an equitable assessment of the damage,but the amount to be awarded should not be less than compensatory interest or,at the very least, interest for late payment of the contested amount, to run as fromthe formal notice of action received by the Commission on 3 August 1995.
    
    
81. The Commission contends that there is no direct causal link between the contestedmeasure and the applicant's alleged loss; at the same time, it takes the view thatthe two other requirements to be met in order for the Community to incur non-contractual liability are certainly not met, namely that the conduct criticized isunlawful and that the alleged damage has actually occurred.
    
    
82. The Court recalls that the Community incurs non-contractual liability only if aseries of conditions are met as regards the unlawfulness of the acts alleged againstthe Community institution, the actual fact of damage and the existence of a causallink between the wrongful act and the damage complained of (Joined Cases 197/80to 200/80, 243/80, 245/80 and 247/80 Ludwigshafener Walzmühle and Others vCouncil and Commission [1981] ECR 3211, paragraph 18, Case T-575/93 Koelmanv Commission [1996] ECR II-1, paragraph 89, and Case T-108/94 Candiotte vCouncil [1996] ECR II-87, paragraph 54).
    
    
83. Examination of the pleas in annulment reveals that the applicant has adduced noevidence of any defect affecting the legality of the contested decision. Accordingly,it has not been established that the Commission's conduct was unlawful and theclaim for compensation for the alleged damage must therefore be rejected.
    
    
84. It follows that the claim for compensation must be dismissed.
    
    
85. It follows from all the foregoing that the action must be dismissed in its entirety.
    
    Costs
    
    
86. Under Article 87(2) of the Rules of Procedure, the unsuccessful party is to beordered to pay the costs if they have been applied for in the successful party'spleadings. Since the applicant has been unsuccessful and the Commission asked foran order as to costs against the applicant, it must be ordered to pay the costs.
    
    On those grounds,

    THE COURT OF FIRST INSTANCE (Third Chamber)

    hereby:

    1. Dismisses the action;
       
       
    2. Orders the applicant to pay the costs.
       

    
    
    

VesterdorfBriët Potocki

Delivered in open court in Luxembourg on 7 November 1997.

H. Jung

B. Vesterdorf

Registrar

President

1: Language of the case: Italian.

ECR