JUDGMENT OF THE COURT OF FIRST INSTANCE (Fourth Chamber)
17 December 1997 (1)
(Common organization of the market in raw tobacco Management by the
Commission Action for compensation Time-bar Principle of proportionality
Principle of equal treatment)
In Case T-152/95,
Odette Nicos Petrides Co. Inc., a company governed by Greek law, established in
Kavala (Greece), represented by Edouard Didier and Joël Grangé, of the Paris
Bar, with an address for service in Luxembourg at the Chambers of Carlos Zeyen,
67 Rue Ermesinde,
v
Commission of the European Communities, represented by Gérard Berscheid, of
its Legal Service, acting as Agent, with an address for service in Luxembourg at the
office of Carlos Gómez de la Cruz, of its Legal Service, Wagner Centre, Kirchberg,
APPLICATION for an order requiring the Commission to pay damages under
Article 178 and the second paragraph of Article 215 of the EC Treaty as
compensation for the damage resulting from certain action taken by it in managing
the common organization of the market in raw tobacco in the period 1990 to 1991,
THE COURT OF FIRST INSTANCE
OF THE EUROPEAN COMMUNITIES (Fourth Chamber),
composed of: K. Lenaerts, President, P. Lindh and J.D. Cooke, Judges,
Registrar: J. Palacio González, Administrator,
having regard to the written procedure and further to the hearing on 2 May 1997,
gives the following
Judgment
Legislative background
- 1.
- On 21 April 1970 the Council adopted Regulation (EEC) No 727/70 on the
common organization of the market in raw tobacco (OJ, English Special Edition
1970 (I), p. 206). The principal mechanisms of that common market organization
(hereinafter 'CMO) include the obligation of the intervention agencies of the
Member States to purchase at the intervention price leaf tobacco harvested in the
Community and not disposed of through normal commercial channels. The tobacco
so purchased is to be disposed of in such a way as to avoid any disturbance of the
market and to ensure equal access to goods and equal treatment of purchasers
(second subparagraph of Article 7(2) of Regulation No 727/70).
- 2.
- Article 3 of Regulation (EEC) No 327/71 of the Council of 15 February 1971 laying
down certain general rules relating to contracts for first processing and market
preparation, to storage contracts and to disposal of tobacco held by intervention
agencies (OJ, English Special Edition 1971 (I), p. 78) provides that the tobacco is
to be disposed of on price terms determined case by case, on the basis of, inter alia,
market trends and demand.
- 3.
- Article 1 of Regulation (EEC) No 3389/73 of the Commission of 13 December
1973 laying down the procedure and conditions for the sale of tobacco held by
intervention agencies (OJ 1973 L 345, p. 47), a regulation which has been amended
several times, provides:
'1. Baled tobacco held by intervention agencies shall be remarketed by
invitation to tender or by sale by public auction.
2. Invitation to tender means a procedure whereby all prospective buyers
are invited to submit offers and the contract is awarded to the person
making the best offer being an offer in accordance with this regulation.
- 4.
- Article 6(1) provides with regard to the conduct of tendering procedures:
'Within 15 days following the closing date for submission of tenders, a decision
shall be taken, on the basis of the tenders received and under the procedure laid
down in Article 17 of Regulation (EEC) No 727/70, either fixing a minimum selling
price for each lot or awarding no contract.
- 5.
- Originally, Article 5(1) provided:
'Every tenderer shall provide the intervention agency concerned with security in
an amount of 0.28 unit of account per kilogramme of raw tobacco.
- 6.
- The amount of the security was raised to ECU 0.339 per kilogramme by
Commission Regulation (EEC) No 3263/85 of 21 November 1985 amending
Regulation No 3389/73 (OJ 1985 L 311, p. 22). By way of derogation from Article
5(1) of Regulation No 3389/73, it was raised to ECU 0.7 per kilogramme of baled
tobacco by Commission Regulation (EEC) No 3040/91 of 15 October 1991
amending Regulation (EEC) No 2436/91 opening an invitation to tender for the
sale of baled tobacco held by the German, Greek and Italian intervention agencies
(OJ 1991 L 288, p. 18).
Facts
- 7.
- The applicant is a Greek company whose main business is processing and dealing
in tobacco in Greece and elsewhere. At the material time, it had a tobacco
processing and storage centre and an additional storage unit. Depending on its
needs, it also rented various small factories and offices. It worked with
intermediaries and other agents in Greece and abroad.
- 8.
- The period to which these proceedings relate extends from April 1990 to the end
of 1991. During that period, the Commission organized three tendering procedures
for tobacco held by the Greek intervention agency and a fourth procedure for
tobacco held by three intervention agencies of Member States, including the Greek
intervention agency. On 15 October 1991, it also adopted Regulation No 3040/91
increasing the amount of the security which each tenderer was required to lodge
with the intervention agency concerned.
- 9.
- The first tendering procedure at issue (hereinafter 'the first tendering procedure)
was organized by Commission Regulation (EEC) No 899/90 of 5 April 1990 which
opened an invitation to tender for the sale for export of baled tobacco held by the
Greek intervention agency (OJ 1990 L 93, p. 7) and involved four lots of baled raw
tobacco from the 1986 and the 1987 harvests, divided by varieties and totalling
5 271 428 kg. The deadline fixed for the Commission decision on the award of
contract was 14 June 1990. The first lot comprised 1 805 903 kg of tobacco and
was made up of the varieties Mavra, Kaba Koulak Classic and Elassona, Kaba
Koulak Non-Classic, Katerini, Burlay EL and Basmas. The second lot comprised
1 519 836 kg of tobacco and was composed of the same varieties, with the
exception of Basmas. The third lot comprised 1 519 991 kg of tobacco, and was
made up of the same varieties as the second lot. The fourth lot comprised 425 698
kg of tobacco and was made up of the Mavra and Basmas varieties only. The
applicant submitted a tender for the first and second lots (in the amounts of DR
76.11 and DR 63.11 per kilogramme respectively). However, on 14 June 1990 the
Commission decided not to accept any of the tenderers' bids on the ground that,
in view of the prices offered, there was a risk that the market might be disturbed.
- 10.
- The second tendering procedure at issue (hereinafter 'the second tendering
procedure) was organized by Commission Regulation (EEC) No 1560/90 of 8 June
1990 opening an invitation to tender for the sale for export of baled tobacco held
by the Greek intervention agency (OJ 1990 L 148, p. 7). It related to the same
four lots of baled raw tobacco. The deadline fixed for the Commission decision on
the award of contract was 9 August 1990. The applicant submitted a bid for the
first and fourth lots (in the amounts of DR 91.11 and DR 101.11 per kilogramme
respectively). On 7 August 1990 the Commission accepted the bid from another
tenderer for the second lot (of DR 102 per kilogramme), but rejected all bids for
the first, third and fourth lots, on grounds of risk of disturbance of the market.
- 11.
- The third tendering procedure at issue (hereinafter 'the third tendering
procedure) was organized for the three remaining lots by Commission Regulation
(EEC) No 2610/90 of 10 November 1990 opening an invitation to tender for the
sale for export of baled tobacco held by the Greek intervention agency (OJ 1990
L 248, p. 5). The deadline fixed for the Commission decision on the award of
contract was 12 November 1990. The applicant submitted a bid for all three lots
(of DR 152.26, DR 132.26 and DR 121.26 per kilogramme respectively). Its bid
for the first lot was the highest of those received. On 16 November 1990, the
Commission decided, once again, not to accept the tenderers' bids on the ground
that the prices offered were liable to give rise to abnormal developments on the
market.
- 12.
- The fourth tendering procedure at issue (hereinafter 'the fourth tendering
procedure) was organized by Commission Regulation (EEC) No 2436/91 of
7 August 1991 opening an invitation to tender for the sale of baled tobacco held
by the German, Greek and Italian intervention agencies (OJ 1991 L 222, p. 23).
The total quantity of 105 486 276 kg was made up of 11 lots, divided into four
groups. Each group of lots could be put up for sale only when a contract for the
previous group of lots had been awarded. The aim was to obtain bids for all the
varieties of tobacco, and dealings were to commence with the least popular
varieties on the market. Each lot comprised tobaccos of a given variety held by the
various intervention agencies of the various Member States concerned. The
applicant took part in a number of sales in that series. Its bids, which were for a
quantity lower than that fixed for the lots in question, were rejected as not fulfilling
the tendering conditions.
- 13.
- After writing, on 13 September 1991, to the Member of the Commission
responsible for agricultural matters, seeking suspension of Regulation No 2436/91
but without receiving what it regarded as a satisfactory response, the applicant
brought an action before the Court of Justice for the annulment of that regulation
and of Notice of invitation to tender No 91/C/213/04 issued by the Commission
under that regulation (Case C-232/91). It also applied, by way of interim measure,
for suspension of the operation of the contested regulation (Case C-232/91 R).
Since the applicant was not individually concerned by the contested measures, its
main application was declared inadmissible by order of 14 November 1991 in
Joined Cases C-232/91 and C-233/91 Petridi and Kapnemporon Makedonias v
Commission [1991] ECR I-5351. Its application for interim measures was also
rejected, by order of 10 January 1992 (Joined Cases C-232/91 R and C-233/91 R,
not published in the Reports of Cases before the Court).
- 14.
- By Commission Regulation (EEC) No 162/92 of 24 January 1992, amending
Regulation No 2436/91 (OJ 1992 L 18, p. 16), the Commission divided into ten lots
the three last lots of the fourth tendering procedure, on the ground that a
distinction based on the harvest year would enhance the value.
Procedure and forms of order sought
- 15.
- By application lodged at the Registry of the Court of First Instance on 24 July
1995, the applicant brought proceedings against the Commission for compensation
under the second paragraph of Article 215 of the EC Treaty.
- 16.
- Upon hearing the Report of the Judge-Rapporteur, the Court of First Instance
(Fourth Chamber) decided to open the oral procedure without any preparatory
inquiries. However, it invited the parties to reply in writing to a number of
questions and they did so.
- 17.
- The parties presented oral argument at the public hearing on 2 May 1997.
- 18.
- The applicant claims that the Court of First Instance should:
find that the defendant has incurred liability under the second paragraph of
Article 215 of the Treaty;
order the defendant to redress the damage suffered by the applicant and
pay it the sum of ECU 20 403 788;
order the defendant to pay the costs.
- 19.
- In its reply, it also asks that the Court of First Instance should order the defendant
to produce the following documents:
the reports of the Management Committee meetings of 25 July 1990 to 30
January 1992;
all studies, internal memoranda, documents concerning analysis of market
requirements and management of tobacco intervention stocks during the
relevant period;
all internal documents concerning the plan to sell tobacco to Russia, all
correspondence between the Commission and Agrointorg and all supporting
documents concerning Mr Ballot's role as intermediary;
- 20.
- It adds that it does not object to the appointment of an expert, to be paid for by
the defendant, to assess the damage suffered by the applicant.
- 21.
- The Commission contends that the Court of First Instance should:
declare the application for compensation inadmissible to the extent that it
relates to facts and to acts of the defendant prior to 23 July 1990;
declare inadmissible, for the purposes of these proceedings, the evidence
and information concerning the proceedings of the Tobacco Management
Committee;
for the rest, dismiss the application as unfounded;
order the applicant to pay the costs.
- 22.
- In its rejoinder, it also contends that the Court of First Instance should declare
inadmissible, or otherwise dismiss, the new claims concerning disclosure of
documents and advance payment of the costs of any expert's report.
Time-bar as regards Commission action taken before 24 July 1990
Arguments of the parties
- 23.
- The Commission contends that the application is inadmissible to the extent that it
relates to action taken by it before 23 July 1990, given that the application was
lodged on 24 July 1995. It observes that actions for compensation based on the
second paragraph of Article 215 of the Treaty are time-barred five years after the
occurrence of the material event. The limitation period starts to run when all the
conditions triggering the obligation to make reparation are fulfilled. As regards the
first tendering procedure, it observes that the decision not to award a contract
dates from 14 June 1990. The alleged damage suffered by the applicant had thus
sufficiently materialized by 23 July 1990. Accordingly, the application is time-barred at least as regards the first tendering procedure.
- 24.
- The applicant replies that this case is concerned with the subsequent circumstances
in which its tenders were refused, and with the suspension of the procedure for the
award of contracts and the conditions under which the tendering procedures were
resumed. The various wrongful acts committed by the Commission all occurred
after 23 July 1990. The damage had not crystallized at the time when its tender
was rejected by the Commission on 14 June 1990.
Findings of the Court
- 25.
- Pursuant to Article 43 of the EC Statute of the Court of Justice, which is applicable
to the Court of First Instance by virtue of Article 46 thereof, proceedings against
the Community in matters arising from non-contractual liability are barred after five
years from the occurrence of the event giving rise thereto.
- 26.
- In this case, the applicant has not sought to demonstrate in its pleadings how the
rejection decision adopted on 14 June 1990 in connection with the first tendering
procedure constituted unlawful conduct on the part of the Commission. All its
submissions relate to other action taken by the Commission to which it objects.
- 27.
- Furthermore, contrary to its assertion regarding the admissibility of its application,
it has not sought to demonstrate the existence of any link between the decision of
14 June 1990 and the other action taken by the Commission to which it objects.
Nor has it alleged any causal link between the decision of 14 June 1990 and the
damage for which it seeks compensation.
- 28.
- Finally, the calculation on which it relies in order to determine the amount of
damages claimed (see the expert's report appended as Annex No 121 to the
application) does not take account of the first tendering procedure as such.
- 29.
- Accordingly, it is not entitled to rely on the case-law to the effect that the limitation
period does not start to run before the damage to be made good has materialized
(Joined Cases 256/80, 257/80, 265/80, 267/80 and 5/81 Birra Wührer and Others v
Council and Commission [1982] ECR 85, paragraph 10) without giving more details
of the circumstances of this case which justify such reliance.
- 30.
- For the purposes of assessing the admissibility of the application, it is therefore
inappropriate to treat the decision of 14 June 1990 as being inseparable from more
general unlawful conduct on the part of the Commission.
- 31.
- It follows that the application must be declared inadmissible in so far as it relates
to the first tendering procedure.
Substance
- 32.
- According to settled case-law of the Court of Justice and the Court of First
Instance, the Communities' non-contractual liability is dependent on a series of
conditions being satisfied as regards the unlawfulness of the acts alleged against the
Community institution concerned, the fact of damage and the existence of a causal
link between the wrongful act and the damage complained of (Joined Cases
T-481/93 and T-484/93 Exporteurs in Levende Varkens and Others v Commission
[1995] ECR II-2941, paragraph 80).
- 33.
- Before adjudicating on the question whether the Commission acted unlawfully, it
is necessary to decide what treatment to accord the information concerning the
proceedings of the Tobacco Management Committee, on which the applicant seeks
to rely in this case.
The applicant's right to use certain information
Arguments of the parties
- 34.
- The Commission considers that the applicant is not entitled to use information
concerning the proceedings of the Tobacco Management Committee, since Article
10 of the Rules of Procedure of that committee provides that its proceedings are
confidential. Moreover, under Article 214 of the Treaty, the members of
committees are required not to disclose information covered by the obligation of
professional secrecy. The applicant is thus entitled neither to obtain the
information in question nor, a fortiori, to use it for the purposes of this action.
Article 214 of the Treaty has direct effect, unlimited in time, and the applicant's
possession of the minutes, whether obtained in good or bad faith, is irrelevant. The
applicant must have known that they were not public and were not therefore
intended to be disclosed.
- 35.
- The applicant denies any knowledge of the Rules of Procedure of the Tobacco
Management Committee, since they were not published. Those rules cannot
therefore be invoked against it. Moreover, it did not unlawfully obtain the minutes
of the management committee meetings drawn up by the Greek authorities. The
Greek Association of Tobacco Industries distributes those minutes regularly to its
members, without informing them of the confidential nature thereof. The applicant
is therefore entitled to produce those documents. Moreover, there is no sound
reason for preserving such confidentiality more than four years after the event.
Findings of the Court
- 36.
- In this case, the only information contained in the proceedings of the Tobacco
Management Committee which is relevant to the decision to be given in this case
concerns the tenders submitted for the first, second and fourth lots in the second
tendering procedure and the first lot in the third tendering procedure.
- 37.
- It should be noted, however, that the information referred to by the applicant
regarding those tenders derives from other sources. The Commission itself
confirmed in its reply to a written question from the Court that the applicant's
tenders for the first lots in the second and third tendering procedures were the
highest received for those lots. The amount of the tender accepted for the second
lot in the second tendering procedure was disclosed by the Commission to the
applicant in its decision of 7 August 1990. The fact that the applicant's tender for
the fourth lot in the second tendering procedure was the highest received was
confirmed by the Court of Auditors in its Special Report No 8/93 concerning the
common organization of the market in raw tobacco (OJ 1994 C 65, p. 1, hereinafter
'the Special Report). Finally, the second and fourth lots in the second tendering
procedure are discussed in detail in points 4.53 to 4.55 of that report.
- 38.
- All that information is thus available regardless of any action by Greek bodies or
authorities.
- 39.
- The question whether the applicant was entitled to rely on the proceedings of the
management committee is therefore irrelevant.
The illegality of the Commission's conduct
- 40.
- The applicant appears to consider that the unlawful conduct alleged against the
Commission comprises a number of measures taken after various tendering
procedures. It nevertheless considers each aspect of such conduct separately. It
is therefore necessary to examine separately the alleged illegality of the various
aspects of such conduct, with the exception of the decision of 14 June 1990 (see
paragraphs 25 to 31 above). It will also be necessary to examine the applicant's
complaints concerning the time which elapsed between the third and fourth
tendering procedures and the increase in the amount of the security imposed by the
Commission.
The second tendering procedure
Arguments of the parties
- 41.
- The applicant claims that by rejecting, on 7 August 1990, its tenders in the second
tendering procedure, the Commission infringed the principles of proportionality and
equal treatment.
- 42.
- First of all, contrary to the Commission's assertion, rejection of the tenders was not,
in the applicant's view, justified by any risk of disturbance of the market. The
means employed by the Commission were not suitable for the purpose of achieving
the objective pursued and went beyond what was necessary to achieve it, contrary
to the requirements of the principle of proportionality laid down by the case-law
(Case C-256/90 Mignini [1992] ECR I-2651, paragraph 16).
- 43.
- Rejection of the applicant's tenders was neither appropriate nor necessary and
could not therefore be in conformity with the principle of proportionality.
- 44.
- The applicant states that its tender for the first lot was rejected despite being the
highest. It also claims that, even if one accepted the argument put forward by the
Commission in its reply to the Special Report to the effect that the values of the
second and fourth lots were the same, the rejection of its tender for the fourth lot
was ridiculous because the difference between the prices tendered was less than
one drachma. In its view, on the contrary, its tender for the fourth lot was
considerably better (by a factor of three) than that accepted for the second lot. In
that connection, it cites the Special Report (point 4.55): '... the tender not accepted
for the inferior quality lot [the fourth lot] represented a relatively better offer than
that accepted for the higher quality lot [the second lot]. It points out that the
fourth lot was of only 425 tonnes and claims that the sale of such a quantity could
not have provoked any disturbance of the market.
- 45.
- Secondly, the applicant alleges that, by rejecting its tender for the fourth lot and
accepting another tenderer's offer for the second lot, the Commission manifestly
infringed the principle of equal treatment, which is applicable to this case by virtue
of Article 40(3) of the Treaty, Community case-law and Article 7(2) of Regulation
No 727/70.
- 46.
- The Commission contends, in the first place, that it sought to make it clear to
economic operators that it was prepared to resume the award of contracts when
prices had increased sufficiently. Moreover, the prices finally received in other
tendering procedures for the two varieties contained in the fourth lot fully justified
its hesitation. On the other hand, the tender for the second lot was acceptable in
view of its composition and the average prices of the varieties of which it was made
up, and in comparison with the price tendered for the third lot, which was
practically of the same composition as the second lot.
- 47.
- Second, the Commission replies that the applicant refers without distinction to the
tobacco varieties in general without taking account of their respective prices. There
was thus no breach of the principle of equal treatment as a result of rejection of
the applicant's tender for the fourth lot, accompanied by acceptance of the tender
of a different tenderer for the second lot.
Findings of the Court
- 48.
- The principle of proportionality has been recognized in settled case-law as one of
the general principles of Community law. According to that principle, measures
imposed by Community legislation must be appropriate for achieving the objective
pursued and must not go beyond what is necessary to that end. Moreover, where
there is a choice between several appropriate measures, recourse must be had to
the least restrictive one and the disadvantages it entails must not be
disproportionate to the aims pursued (see Exporteurs in Levende Varkens and Others
v Commission, cited above, paragraph 119).
- 49.
- In this case, the applicant alleges that the Commission's decision to reject its
tenders for the first and fourth lots was pointless and inappropriate, but it does not
specify the objective in relation to which that decision displayed those
characteristics, nor does it produce any evidence of those characteristics.
- 50.
- It maintains that the Commission decision of 7 August 1990, based on the right
conferred on it by Article 6(1) of Regulation No 3389/73 not to award a contract
(see paragraph 4 above), was motivated not by a concern not to disturb the market,
in the light of the level of prices tendered, but by its ignorance of market prices,
as evidenced by its decision not to award a contract for the fourth lot but to accept
the lower offer of another tenderer for the second lot.
- 51.
- However, even if it were accepted that the Commission was in fact unaware of the
market prices when adopting the contested decision, having regard to its decision
to make up lots comprising different varieties of tobacco, as the applicant
maintains, that inconsistency is of no relevance whatsoever in assessing whether the
institution infringed the principle of proportionality on that occasion.
- 52.
- In any event, one of the main objectives pursued by the applicable legislation is to
avoid disturbance of the market concerned (see the second subparagraph of Article
7(2) of Regulation No 727/70). It is common ground that the Commission's
decision prompted the operators concerned to tender, in the third procedure, prices
which were higher than those tendered for the same lots in the second tendering
procedure (see paragraphs 10 and 11 above). The applicant cannot therefore
allege ignorance of prices on the part of the Commission in support of the
assertion that the decision of 7 August 1990 is not consonant with the objective of
not disturbing the market.
- 53.
- It follows from the foregoing that the plea alleging breach of the principle ofproportionality is unfounded.
- 54.
- As regards the principle of equal treatment, which is also alleged to have been
infringed, it must be borne in mind that, according to settled case-law, it too is one
of the fundamental principles of Community law and requires that comparable
situations are not treated in a different manner unless the difference in treatment
is objectively justified (see Case C-280/93 Germany v Council [1994] ECR I-4973,
paragraph 67).
- 55.
- In this case, the second and fourth lots, as compared by the applicant, did not
contain the same tobacco varieties. As indicated in Regulation No 1560/90, the
second lot comprised Mavra, Kaba Koulak Classic and Elassona, Kaba Koulak Non
Classic, Katerini and Burley EL, whereas the fourth lot comprised Mavra and
Basmas, the only tobacco variety common to both lots thus being Mavra.
Moreover, the quantities concerned differed considerably: the second contained
1 519 836 kg of tobacco whereas the fourth contained only 425 698 kg.
- 56.
- Furthermore, on the basis of the information in its possession at the time, the
Commission considered that the applicant's tender for the fourth lot was low,
whereas that submitted for the second lot was acceptable, particularly when
compared with the price tendered for the third lot, the composition of which was
almost identical to that of the second lot, as regards both the tobacco varieties
included and their respective weights.
- 57.
- Finally, the Commission took the view that if the Mavra in the second and fourth
lots, the quantity of which was almost the same (306 491 kg in the second lot and
333 872 kg in the fourth), was disregarded, it became apparent that the applicant
was tendering a lower price per kilogramme for the Basmas variety in the fourth
lot than the price per kilogramme tendered for the other tobacco varieties in the
second lot by the tenderer to which the contract for the latter was awarded, when
the Basmas variety was more sought after than the other varieties in the second lot,
a fact not disputed by the applicant. In these proceedings, the applicant has not
established in what respect that assessment is manifestly incorrect but has merely
cited an extract from the Special Report to the effect that the tender not accepted
for the fourth lot was better than that accepted for the second lot (see paragraph
44 above) without convincingly answering the Commission's arguments set out
above, which contradict the conclusion reached in the extract cited from the Special
Report.
- 58.
- In that connection, it must be emphasized that, in managing the CMO for tobacco,
the Commission is required to adopt a commercial approach. It must decide
whether or not to accept tenders for lots offered for sale by tender, having regard
to all the information in its possession when it makes its decision. It is settled case-law that it enjoys considerable latitude in that regard since the decisions concerned
must balance various factors, such as the prices tendered for the various lots and
the costs of storing unsold lots. In those circumstances, even decisions which may
subsequently prove to be open to criticism do not necessarily cause the Commission
to incur liability in the absence of a manifest error of assessment on its part (see,
to that effect, Case 27/85 Vandemoortele v Commission [1987] ECR 1129,
paragraphs 31 to 34).
- 59.
- In short, having failed to show that the Commission treated two comparable
situations differently, the applicant has no grounds for alleging any breach of the
principle of equal treatment in this case.
- 60.
- It follows from all the foregoing that the Commission's decision of 7 August 1990
rejecting the applicant's tenders for the first and fourth lots in the second tendering
procedure is not unlawful in any way. The Community cannot therefore, as a result
of that decision, have incurred non-contractual liability vis-à-vis the applicant.
The third tendering procedure
Arguments of the parties
- 61.
- Alleging breach of the principle of proportionality in relation to the third tendering
procedure, the applicant also claims that the Commission's rejection, on
16 November 1990, of the tenders submitted, again purportedly justified by risks
of disturbing the market, contributed to an abnormal increase in prices, gave rise
to additional storage expenses and deprived the Community of substantial
resources. It considers that the increase in the tenders was neither abnormal nor
excessive having regard to the export sales price, contrary to the Commission's
contention. On the contrary, it was a logical consequence of the rejection of the
tenders in the previous tendering procedure.
- 62.
- The Commission replies that it rejected all the tenders in that procedure, first in
order to sell all the stocks at once and, second, with a view to organizing sales of
separate varieties at a later stage in order to determine their actual commercial
value. Furthermore, since the market was uncertain at that time, it preferred to
reject all the tenders in order to draw up new proposals.
Findings of the Court
- 63.
- As in the case of the second tendering procedure, whilst the applicant maintains
in support of its plea as to breach of the principle of proportionality that the
Commission decision of 16 November 1990 was pointless and inappropriate, it does
not clearly specify the objective in relation to which that decision displayed those
characteristics, referring either in general terms 'to the objectives laid down for
tendering procedures for the sale of tobacco or to the fact that 'tendering
procedures must take account of market requirements.
- 64.
- Even if the Commission was in fact unaware of market prices when adopting its
decision of 16 November 1990, as the applicant again alleges, that fact is of no
relevance whatsoever in assessing whether the institution infringed the principle of
proportionality on that occasion (see paragraphs 50 and 51 above).
- 65.
- Moreover, the applicant has produced no evidence to show that by deciding on
16 November 1990 to reject all the tenders in order not to disturb the market, the
Commission failed to take account of market requirements, in spite of being
required to do so by Article 3(c) of Regulation No 327/71. Unless proof to the
contrary is produced, the fact that the Commission sought not to disturb the market
indicates that it took account of changes in market requirements, at least as it saw
them at the time.
- 66.
- In any event, it must be borne in mind that the concern not to disturb the market
is one of the objectives laid down in the applicable legislation (see paragraph 52
above) and that, pursuant to Article 6(1) of Regulation No 3389/73, the
Commission was entitled not to accept the applicant's tender for the first lot, even
if it was the highest, or any other tender received by it.
- 67.
- The plea as to breach of the principle of proportionality is thus unfounded.
- 68.
- Furthermore, it is of little importance that the decision of 16 November 1990 was
taken outside the period of 15 days laid down by Article 6(1) of Regulation No
3389/73 for the adoption of a decision regarding the award of a contract. Since no
sanction is imposed for failure to comply with that time-limit, it cannot be regarded
as mandatory and failure to comply with it does not, according to the case-law,
cause the Commission to incur liability unless it is the outcome of negligence on its
part (Case C-55/91 Italy v Commission [1993] ECR I-4813, paragraph 69).
However, in this case the applicant does not even allege that the Commission was
guilty of any such negligence, but merely refers to failure to observe that time-limit,
and even then only in its reply to written questions put to it by the Court.
- 69.
- It follows from all the foregoing that the Commission decision of 16 November
1990 rejecting the applicant's tenders for the three lots in the third tendering
procedure is not unlawful in any respect. It cannot therefore cause the Community
to incur non-contractual liability vis-à-vis the applicant.
The delay between the third and fourth tendering procedures
Arguments of the parties
- 70.
- The applicant claims that the delay between the third and fourth tendering
procedures was not reasonable since it caused stocks to accumulate and therefore
seriously disturbed the market. It asserts that, by trying to set up a deal with the
USSR in breach of the rules laid down in Article 7 of Regulation No 727/70 and
in disregard of the market requirements referred to in Article 3(c) of Regulation
No 327/71, the Commission infringed the principle of proportionality as that
operation was neither necessary nor appropriate. It rejects the various arguments
put forward by the Commission to justify the delay complained of.
- 71.
- The Commission states that the period which elapsed between the third and fourth
tendering procedures was attributable to several causes, in particular enormous
price fluctuations as between the third tendering procedure and the earlier
procedures, discussions held by the Commission and the former USSR to consider
the possibility of selling all the stocks to the latter, and the Commission's wish to
dispose of all the intervention stocks in order to give the new CMO a fresh start,
having stabilized the situation with regard to intervention.
Findings of the Court
- 72.
- Omissions by the Community institutions can give rise to liability on the part of the
Community only when the institutions have failed to comply with a legal obligation
to act imposed by a provision of Community law (see Case C-146/91 KYDEP v
Council and Commission [1994] ECR I-4199, paragraph 58).
- 73.
- In this case, no applicable legislative provision required the Commission to award
a contract within a specified period, nor has the applicant claimed that such was
the case.
- 74.
- In those circumstances, without any need to examine the merits of the
Commission's explanations, the Court holds that the period of 11 months between
the third and fourth tendering procedures was not unlawful. The Community did
not therefore incur non-contractual liability vis-à-vis the applicant.
The fourth tendering procedure
Arguments of the parties
- 75.
- In the first place, the applicant considers that the manner in which the Commission
organized the fourth tendering procedure manifestly and blatantly infringed the
principle of proportionality because it de facto excluded small and medium-sized
undertakings. The lots of tobacco offered in the fourth tendering procedure were
held by intervention agencies in several Member States and represented such a
large volume that the procedure was accessible only to multi-national groups with
sufficient facilities to export from each of the Member States holding part of the
stocks put up for sale in that tendering procedure. The Commission implicitly
recognized that state of affairs by dividing the three last lots not to have been
awarded in the fourth tendering procedure into 10 new lots for the fifth tendering
procedure decided upon on 24 January 1992 (see paragraph 14 above).
- 76.
- Similarly, the requirement that security be lodged in accordance with the conditions
laid down by several intervention agencies made the tendering procedure
inaccessible to small and medium-sized undertakings. The purchase of such large
quantities would also have given rise to storage costs incompatible with the size of
such undertakings, including the applicant. The volume of tobacco put up for sale
in the fourth tendering procedure represented one year's production in Greece and
one-third of annual Community production.
- 77.
- The applicant complains that the regulation organizing the fourth tendering
procedure set a period of 20 days between the date of publication of the notice of
invitation to tender and the date for submission of tenders, instead of the normal
period of 45 days laid down in Article 3 of Regulation No 3389/73, as amended by
Commission Regulation (EEC) No 1344/75 of 27 May 1975 (OJ 1975 L 137, p. 20).
That reduction made matters even worse for small and medium-sized undertakings.
- 78.
- The applicant rejects the Commission's suggestion that it could have joined other
tenderers to submit a joint bid. It states that, in its Special Report, the Court of
Auditors emphasized that group action by several operators laid the Commission
open to the risk that cartels might be established.
- 79.
- Second, it claims that the manner in which the Commission organized the fourth
tendering procedure also manifestly and blatantly infringed the principle of equal
treatment, and more particularly Article 7(2) of Regulation No 727/70, because it
de facto excluded small and medium-sized undertakings.
- 80.
- In the first place, the Commission considers that it did not in any way infringe the
principle of proportionality since its approach was appropriate and necessary for
sound management of the CMO. The composition of the lots reflected specific
requirements given the state of the market at the time. The Commission questions
the need to have facilities in the various Member States for the purposes of the
submission of a single tender, as alleged by the applicant. Nevertheless, it is of
course easier to export from the country where the product is stored and it is
rational to make such a choice in order to minimize management costs. The fact
of having to lodge security with various intervention agencies is not, on the other
hand, an obstacle for an undertaking experienced in international trade. Moreover,
certain medium-sized undertakings did take part in the tendering procedures and
some of them were successful.
- 81.
- The Commission contends that it was entitled to reduce the period from 45 to 20
days: the derogation from Regulation No 3389/73 in Regulation No 2436/91 was
valid since both measures were based on Article 7(4) of Regulation No 727/70,
which empowers the Commission to lay down procedures and conditions for sales
by intervention agencies.
- 82.
- Moreover, there is a difference between a lawful grouping of traders temporarily
cooperating to submit a joint bid and an illegal cartel. It is common for
undertakings to form groups in order to bid jointly for a lot which none of them,
individually, could cope with.
- 83.
- Finally, there are several reasons justifying the new approach adopted for the
fourth tendering procedure.
- 84.
- First, there was strong demand from the USSR for lower-quality tobacco products,
which made it possible to make up homogeneous lots, whereas at an earlier stage
the prevailing surplus on the world tobacco market made it necessary to sell lots
made up of different varieties. The conduct of the operations necessitated the
submission of tenders for all lots, and it was only possible to achieve that aim
satisfactorily by offering substantial lots for sale.
- 85.
- Moreover, the imminence of the reform of the CMO for tobacco played an
important part, particularly the plan to abolish intervention, which entailed the
disposal of stocks still held by the intervention agencies. A rapid clearance sale by
tender was necessary owing to the favourable market conditions at the time. A
homogeneous product was easier to evaluate and dispose of since it was suitable
for specific types of purchasers and outlets.
- 86.
- Second, the Commission considers that, for the same reasons, it did not infringe the
principle of equal treatment in organizing the fourth tendering procedure.
Findings of the Court
- 87.
- The applicant relies on the same arguments in support of its pleas alleging breach
of the principle of proportionality and breach of the principle of equal treatment.
- 88.
- None of the those arguments can be upheld.
- 89.
- In the first place, the applicant cannot claim that the volume of tobacco offered for
sale in the various lots in the fourth tendering procedure prevented small and
medium-sized undertakings from participating therein. It is clear from the
Commission's answers to written questions from the Court that several medium-sized undertakings submitted tenders, and some were accepted by the Commission.
Moreover, it is clear from those answers that 20 admissible tenders were submitted
for the first sale in the procedure, 11 for the second, 14 for the third and 25 for the
fourth.
- 90.
- Nor can the applicant claim that the geographical dispersion of the tobacco making
up the lots prevented small and medium-sized undertakings from participating in
the fourth tendering procedure. It is clear from Regulation No 2436/91 that six of
the eleven lots of tobacco were held by a single intervention agency, four of the
eleven were held by two different intervention agencies, and only one of the eleven
lots was spread among three different intervention agencies: the practical
difficulties arising from geographical dispersion of the tobacco put up for sale were
not therefore of the magnitude alleged by the applicant.
- 91.
- Finally, there is no basis for the applicant's allegation that the reduction from 45
to 20 days of the period between the notice of invitation to tender and the date for
submitting tenders was in any way illegal. The Commission was entitled to
derogate from Article 3 of Regulation No 3389/73, as amended, in the exercise of
the wide discretion granted to it in relation to the Common Agricultural Policy
(Joined Cases C-104/89 and C-37/90 Mulder and Others v Council and Commission
[1992] ECR I-3061, paragraph 12). The applicant has neither alleged nor
demonstrated that the Commission committed a manifest error of assessment in
taking the view that it was necessary to reduce the applicable period in order to sell
lots expediously before the introduction of the new CMO. Moreover, the reduction
of the time-limit affected all traders concerned, regardless of size. Furthermore,
the applicant does not state to what extent the reduction might have favoured
traders of a particular size as compared with others.
- 92.
- Since the Commission has shown that medium-sized undertakings participated in
the tendering procedure, it is unnecessary to decide on the lawfulness of any joint
tender by several traders for a single lot.
- 93.
- In any event, the measures chosen by the Commission for the fourth tendering
procedure in order to dispose of the tobacco held by the intervention agencies were
suitable for the purpose of attaining the aim pursued and did not go further than
was necessary to achieve it (Vandemoortele v Commission, cited above, paragraph
34), since the stocks held by intervention agencies between 1991 and 1992
decreased appreciably and, for certain varieties at least, the prices obtained in the
fourth tendering procedure were considerably higher than those tendered in the
earlier procedures. In those circumstances, the Commission did not exceed the
limits of its discretion in giving effect to the CMO for raw tobacco.
- 94.
- Furthermore, the fourth tendering procedure was open to all undertakings in the
sector under the same conditions and in accordance with the same rules, and it was
permissible for it to be organized differently from the earlier procedures, there
being no limitation on the Commission's freedom to adjust its policy in step with
changes in data reflecting the state of the market and with the objectives pursued
(see in that connection Joined Cases 197/80 to 200/80, 243/80, 245/80 and 247/80
Ludwigshafener Walzmühle and Others v Council and Commission [1981] ECR 3211,
paragraph 40).
- 95.
- It follows that the pleas alleging breach of the principle of proportionality and
breach of the principle of equal treatment are unfounded.
- 96.
- It is clear from the foregoing that Regulation No 2436/91 is not vitiated by any
illegality such as to cause the Community to incur non-contractual liability vis-à-vis
the applicant.
The increase in the amount of the security
Arguments of the parties
- 97.
- The applicant claims that by increasing the amount of the security, the Commission
infringed the principle of proportionality: the increase was justified neither by
market developments nor by the export refunds. The purpose of the security is to
ensure that tenderers fulfil the obligations which they assume by participating in the
tendering procedure and, in particular, that the goods are actually exported. By
fixing the security at a uniform amount regardless of the tobacco variety and
therefore regardless of its value, the Commission showed that the increase was not
linked to market developments.
- 98.
- The applicant also considers that the purpose of the increase was to exclude certain
potential buyers, which also demonstrates that the principle of equal treatment was
infringed.
- 99.
- By way of reply, the Commission states that the amount of the security was not at
all excessive and was needed to cover the difference between the export sale price
and the Community market price and, at the very least, the effect of export
refunds.
- 100.
- It also points out that the applicant took part in a fifth tendering procedure for
which a security of ECU 0.7 was required: this shows that it was in no way excluded
from intervention sales.
- 101.
- On that point, the applicant's reply is that its participation in a tendering procedure
for which the amount of the security had been set at ECU 0.7 per kilogramme is
accounted for by the fact that the tendering procedure was for a much smaller
quantity of tobacco.
Findings of the Court
- 102.
- In the first recital in the preamble to Regulation No 3040/91, the Commission
stated that the increase in the amount of the security was justified by the need to
take account of the trend on the market and in export refunds in the past. In these
proceedings, the Commission has made it clear that the increase was justified by
the need to satisfy itself that tenderers would fulfil the obligations assumed by them
through their participation in a tendering procedure and, in the case of a tendering
procedure for export, to satisfy itself that the goods would actually be exported
outside the Community.
- 103.
- It is also clear from the Commission's reply to a written question from the Court
that, even after the increase in the amount of the security, the sum of the security
and the sale price obtained in the tendering procedures organized by the
Commission was lower than the purchase price paid by the intervention agencies
concerned for the tobacco in question, a fact not disputed by the applicant at the
hearing.
- 104.
- In those circumstances, the increase in the amount of the security by Regulation
No 3040/91 cannot be regarded as excessive.
- 105.
- Finally, it is necessary to emphasize that in its management of the CMO for
tobacco the Commission is required in particular to ensure that disposal of tobacco
does not disturb the market. The Commission's insistence on strict guarantees is
in principle indicative of the fact that it is properly fulfilling its duty. Guarantee
conditions of the kind laid down by Regulation No 3040/91 necessarily mean that
undertakings not in a position to meet them are shut out. Such an effect, which
is inherent in any guarantee condition, does not therefore constitute a breach of the
principle of equal treatment (see Case C-358/90 Compagnia Italiana Alcool v
Commission [1992] ECR I-2457, paragraph 54). In any event, since the successful
tenderers in the fourth tendering procedure included small and medium-sized
undertakings, the guarantee conditions did not in practice have the effect of
preventing such undertakings from participating in that procedure.
- 106.
- It follows that the pleas alleging breach of the principle of proportionality and
breach of the principle of equal treatment are unfounded.
- 107.
- It is clear from the foregoing that Regulation No 3040/91 is not, as a result of
increasing the amount of the security, vitiated by any illegality such as to cause the
Community to incur non-contractual liability vis-à-vis the applicant.
- 108.
- The request made by the applicant in its reply that an expert should be appointed
and the Commission called on to produce further documents cannot be upheld.
In the first place, the documents in question are not necessary in order to resolve
the dispute and, secondly, it would serve no purpose to appoint an expert to assess
the alleged damage in this case since the applicant has not established that the
Commission's conduct of which it complained was illegal.
- 109.
- It follows from all the foregoing that the application must be dismissed in its
entirety, and it is unnecessary to consider whether the other conditions of
Community non-contractual liability are fulfilled, namely the fact of damage and
the existence of a causal link between the Commission's conduct and the damage
alleged.
Costs
- 110.
- Under Article 87(2) of the Rules of Procedure, the unsuccessful party is to be
ordered to pay the costs if they have been applied for in the successful party's
pleadings. Since the applicant has been unsuccessful and the Commission has
applied for costs, the applicant must be ordered to pay the costs.
On those grounds,
THE COURT OF FIRST INSTANCE (Fourth Chamber)
hereby:
1. Dismisses the application;
2. Orders the applicant to pay the costs.
Delivered in open court in Luxembourg on 17 December 1997.
H. Jung
P. Lindh
Registrar
President