ORDER OF THE PRESIDENT OF THE COURT OF FIRST INSTANCE
28 April 2009 (*)
Application for interim relief – Directive 91/414/EEC – Decision concerning the non-inclusion of napropamide in Annex I to Directive 91/414 – Application for suspension of operation and for interim measures – Prima facie case – Urgency – Balance of interests)
In Case T‑95/09 R,
United Phosphorus Ltd, established in Warrington, Cheshire (United Kingdom), represented by C. Mereu and K. Van Maldegem, lawyers,
applicant,
v
Commission of the European Communities, represented by L. Parpala and N. Rasmussen, acting as Agents, assisted by J. Stuyck, lawyer,
defendant,
APPLICATION, first, for suspension of operation of Commission Decision 2008/902/EC of 7 November 2008 concerning the non-inclusion of napropamide in Annex I to Council Directive 91/414/EEC and the withdrawal of authorisations for plant protection products containing that substance (OJ 2008 L 326, p. 35), until delivery of the judgment in the main action, and, second, for interim relief,
THE PRESIDENT OF THE COURT OF FIRST INSTANCE
OF THE EUROPEAN COMMUNITIES
makes the following
Order
Background to the dispute
1 The present order for interim relief falls within a complex legal framework laid down by Council Directive 91/414/EEC of 15 July 1991 concerning the placing of plant protection products on the market (OJ 1991 L 230, p. 1; ‘the Directive’), by Commission Regulation (EC) No 451/2000 of 28 February 2000 laying down the detailed rules for the implementation of the second and third stages of the work programme referred to in Article 8(2) of the Directive (OJ 2000 L 55, p. 25), and by Commission Regulation (EC) No 1490/2002 of 14 August 2002 laying down further detailed rules for the implementation of the third stage of the programme of work referred to in Article 8(2) of the Directive and amending Regulation No 451/2000 (OJ 2002 L 224, p. 23) (for an exposition of the provisions concerned, see the order of the President of 17 December 2007 in Case T‑367/07 R Dow AgroSciences and Others v Commission, not published in the ECR, paragraphs 1 to 8 and 10 to 20).
2 The Directive seeks to harmonise the rules for the evaluation and approval of plant protection products and their active substances in the European Union. It provides that a plant protection product cannot be marketed in a Member State unless: (i) its active substance has first been evaluated at Community level on the basis of the criteria set out in the Directive and has then been included in Annex I to the Directive; and (ii) the plant protection product containing that active substance has subsequently been registered at national level.
3 In order to make possible a gradual evaluation of all ‘existing’ active substances, that is to say, substances which were already on the European Union market two years after the date of notification of the Directive, that is to say, on 25 July 1993, Article 8(2) of the Directive established a transitional regime during which the Commission was to commence a programme of work for the gradual examination of those active substances. Napropamide, the active substance which is the subject of the present proceedings, was notified and evaluated pursuant to those rules.
4 United Phosphorus Ltd, the applicant in the present case, is active in the development, manufacture and distribution of plant protection products. It is a wholly-owned subsidiary of United Phosphorus Limited (UPL), a company which has its registered office in Mumbai (India). The applicant sells napropamide and formulated products containing napropamide. Upstream, napropamide is manufactured in [confidential] (1) by UPL and transported to [confidential], where it is either used by the applicant in the manufacture of herbicides and sold essentially under the brand names ‘Devrinol’ and ‘Colzamid’ or processed and sold to an agro-industrial group [confidential] for use in the manufacture of a separate herbicide marketed by that group. The applicant sells its herbicides containing napropamide directly to consumers in all the countries of the European Union, with the exception of [confidential]. Napropamide is principally used in pre-emergence weed control in fields of oil seed rape.
5 With regard to the procedure for the assessment of napropamide, Denmark was designated as the Rapporteur Member State to carry out the evaluation on behalf of the Commission. The applicant (‘the notifier’) notified napropamide in May 2003 and submitted its dossiers to the Rapporteur Member State on 27 November 2003, that is to say, within the period laid down by Article 7(1) of Regulation No 1490/2002. A meeting was held in December 2003 to establish whether the dossier was complete and the Rapporteur Member State confirmed that it contained no substantial data gaps.
6 The European Food Safety Authority (EFSA) received the draft assessment report from the Rapporteur Member State on 6 September 2005 for the purposes of a peer review by the Member States and EFSA. On the basis of the available data, the Rapporteur Member State recommended that napropamide be included in Annex I to the Directive.
7 On 26 March 2008 – more than 18 months after the expiry of the period prescribed – EFSA concluded the peer review and submitted to the Commission its ‘conclusion regarding the peer review of the pesticide risk assessment of the active substance napropamide’. In that conclusion EFSA identified a number of matters of concern.
8 On 20 May 2008, the Commission published its final review report on napropamide. By letter of 8 July 2008, the applicant requested the Commission to review its submissions on the existence of safe uses for napropamide. No reply was received to that letter. The conclusions of EFSA were reviewed by the Member States and the Commission within the Standing Committee on the Food Chain and Animal Health and finalised, on 11 July 2008, in the format of the Commission review report for napropamide.
9 On 7 November 2008, after receiving observations from the notifier, the Commission, in accordance with the opinion of the Standing Committee on the Food Chain and Animal Health, adopted Decision 2008/902/EC concerning the non-inclusion of napropamide in Annex I to the Directive and the withdrawal of authorisations for plant protection products containing that substance (OJ 2008 L 326, p. 35; ‘the contested decision’), the operative part of which reads as follows:
‘Article 1
Napropamide shall not be included as [an] active substance in Annex I to [the Directive].
Article 2
Member States shall ensure that:
(a) authorisations for plant protection products containing napropamide are withdrawn by 7 May 2009;
(b) no authorisations for plant protection products containing napropamide are granted or renewed from the date of publication of this Decision.
Article 3
Any period of grace granted by Member States in accordance with the provisions of Article 4(6) of [the Directive] shall be as short as possible and shall expire on 7 May 2010 at the latest.
Article 4
This Decision is addressed to the Member States.’
10 The non-inclusion of napropamide as an active substance in Annex I to the Directive is justified in the contested decision by the fact that, during the evaluation of that active substance, a number of concerns were identified. Thus, the contested decision states that it was not possible, on the basis of the available data, to perform a reliable risk assessment for the leaching of the metabolite NOPA (Naphthyloxypropionic acid) to groundwater. Moreover, the available data did not demonstrate that the risks to aquatic organisms and fish-eating birds and mammals were acceptable. Consequently, it was not possible to conclude, on the basis of the information available, that napropamide met the criteria for inclusion in Annex I to the Directive (recital 5 in the preamble to the contested decision).
11 Notwithstanding the arguments put forward by the notifier, the Commission took the view that there were still matters of concern. It considered that the assessments made on the basis of the information submitted and evaluated during the EFSA expert meetings had not demonstrated that, under the proposed conditions of use, plant protection products containing napropamide satisfied in general the requirements laid down in the Directive (recital 6 in the preamble to the contested decision).
12 Following the adoption of the contested decision, the applicant, on 16 December 2008, resubmitted an application for assessment of napropamide pursuant to the accelerated procedure set out in Article 13 of Commission Regulation (EC) No 33/2008 of 17 January 2008 laying down detailed rules for the application of the Directive as regards a regular and an accelerated procedure for the assessment of active substances which were part of the programme of work referred to in Article 8(2) of that Directive but have not been included in its Annex I (OJ 2008 L 15, p. 5).
Procedure and forms of order sought by the parties
13 By application lodged at the Registry of the Court on 26 February 2009, the applicant brought an action seeking annulment of the contested decision.
14 By a separate document lodged at the Registry of the Court on 9 March 2009, the applicant brought the present application for interim relief, in which, in essence, it requests the President of the Court to:
– suspend the contested decision pursuant to Article 105(2) of the Court’s Rules of Procedure, without prejudice to the applicant’s resubmission of the application for assessment of napropamide pursuant to Regulation No 33/2008;
– in any event, suspend the contested decision, without prejudice to the aforementioned resubmission;
– order the Commission to instruct the Member States immediately to reinstate any authorisations that have been cancelled, withdrawn or refused as a result of the contested decision;
– grant any other interim measures as appropriate;
– order the Commission to pay the costs, including interest at 8%;
– order a hearing to be held.
15 In its written observations lodged at the Registry of the Court on 24 March 2009, the Commission submits that the President of the Court should:
– dismiss the application for interim measures;
– order the applicant to pay the costs.
16 After the Commission had lodged its observations, the applicant, by document of 1 April 2009, submitted a response. By document of 8 April 2009, the Commission set out its views on that response.
Law
17 Under the combined provisions of Articles 242 EC and 243 EC, on the one hand, and of Article 225(1) EC, on the other, the Court may, if it considers that circumstances so require, order that application of an act contested before it be suspended or prescribe any necessary interim measures.
18 Article 104(2) of the Rules of Procedure provides that an application for interim measures must state the subject-matter of the proceedings, the circumstances giving rise to urgency, and the pleas establishing a prima facie case for the interim measures applied for. Thus, the judge hearing the application may order suspension of operation of an act and 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 harm to the applicant’s interests, it must be made and produce its effects before a decision is reached in the main action. Where appropriate, the judge hearing such an application must also weigh up the interests involved (order of the President of the Court of Justice in Case C‑445/00 R Austria v Council [2001] ECR I-1461, paragraph 73 and the case-law cited).
19 In addition, in the context of that overall examination, the judge hearing the application has a wide 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 Community law imposing a pre-established scheme of analysis within which the need to order interim measures must be analysed and assessed (orders of the President of the Court of Justice in Case C‑149/95 P(R) Commission v Atlantic Container Line and Others [1995] ECR I‑2165, paragraph 23, and of 3 April 2007 in Case C‑459/06 P(R) Vischim v Commission, not published in the ECR, paragraph 25; order in Case T‑367/07 R Dow AgroSciences and Others v Commission, cited in paragraph 1 above, paragraph 37).
20 Having regard to the documents in the case, the President of the Court takes the view that he has all the material needed in order to rule on the present application for interim measures and that it is not expedient first to hear oral argument from the parties.
Prima facie case
21 In order to determine whether the condition for establishing a prima facie case is satisfied in the present case, it is necessary to carry out a prima facie examination of the substance of the pleas in law advanced by the applicant in support of the main action and therefore to ascertain whether at least one of them is so weighty that it cannot be discounted in the present proceedings for interim measures (see, to that effect, the order of the judge hearing the application for interim measures in Case T‑215/07 R Donnici v Parliament [2007] ECR II‑4673, paragraph 39 and the case-law cited).
Arguments of the parties
22 The applicant submits, first, that the contested decision is based on conclusions that are not justified scientifically. The claim that it was not possible, on the basis of the available data, to carry out a reliable assessment of the risks associated with leaching of the metabolite NOBA into groundwater is, it argues, incorrect. The scientific study submitted by the applicant demonstrates, in its view, that the presence of that metabolite did not exceed the thresholds set out in the Directive, a fact which was, moreover, confirmed by the Rapporteur Member State. So far as concerns the scientific study on which the Commission based itself, and which arrived at the opposite conclusion, the applicant submits that it was not in accordance with the criteria laid down by the Directive.
23 Even if one were to assume that the competent authorities were correct in their conclusion in relation to the metabolite NOPA, the applicant submits that it addressed all concerns expressed regarding groundwater exposure in relation to that metabolite and that it demonstrated a safe use for napropamide. The applicant also claims that it submitted the data required in agreement with the Rapporteur Member State and EFSA, and that it demonstrated clearly that leaching to groundwater was below the threshold fixed for safe use. In conclusion, the applicant submits that the Commission and EFSA raised new concerns in relation to NOPA only at a late stage in the process and did not allow the applicant to address those new concerns.
24 With regard to aquatic toxicity, the applicant argues that the conclusion that the available data did not demonstrate that the risk to aquatic organisms was acceptable was wrong by reason of the fact that it was based on an incomplete assessment of the data. The applicant states that it provided the required modelling for groundwater in its initial dossier, which was accepted by the Rapporteur Member State. The applicant submits that it provided the additional information requested by EFSA within the timeframe specified, and that this information was declared acceptable by the Rapporteur Member State. EFSA then required further modelling, which, although provided within the framework specified, was not taken into account. In those circumstances, the applicant takes the view that the contested decision is vitiated by a manifest error of appraisal and was adopted in violation of its rights of defence.
25 The Commission’s conclusion that the available data did not demonstrate that the risk to fish-eating birds and mammals was acceptable is also, the applicant argues, incorrect. The Rapporteur Member State concluded that there was no risk for those animals on the basis of ecologically relevant end points, while EFSA held that overall it could be concluded that the risk to birds and mammals was low for the uses in Northern Europe. However, the Commission departed completely from those scientific conclusions, without requiring one of its scientific committees to provide a new opinion, and without giving any reasons for that position. In those circumstances, as there was no scientific justification for the alleged concern in this regard, the contested decision is vitiated by a manifest error of appraisal and deficient reasoning.
26 The applicant then goes on to submit that the contested decision was adopted without all of the available scientific evidence having been taken into account, contrary to the combined provisions of Article 5(1) of the Directive and Article 11(2) of Regulation No 1490/2002. The applicant submits that it was specifically requested by the Rapporteur Member State and EFSA to provide new information on aquatic toxicity, which it provided as requested. EFSA and the Commission, however, formed the view that that information should not be taken into account. Thus, in adopting the contested decision, the Commission failed to take into account the latest developments in science and the current scientific and technical knowledge, in breach of the aforementioned provisions and contrary to the applicant’s rights of defence.
27 The applicant adds in this connection that it faced contradictory requests for data on the metabolite NOPA and aquatic toxicity, in view of which the competent authorities ought to have extended the relevant deadlines to allow it to generate the required data and to allow proper consideration thereof. By failing to do so, those authorities committed a manifest error of appraisal, failed to have regard for the applicant’s rights of defence and infringed the principle of proportionality.
28 Finally, in breach of an essential procedural requirement, the period laid down by Article 11(4) of Regulation No 1490/2002 for the competent authorities to assess active substances was not respected. In particular, EFSA sent its opinion to the Commission more than 18 months after the relevant period had expired. Had EFSA complied with that legal deadline, the Commission would very probably have adopted a different decision.
29 The Commission challenges each of the scientific and procedural arguments put forward by the applicant.
Findings of the President of the Court
30 For the purpose of examining whether the applicant has established the prima facie soundness of its main action, it must be stated that it alleges, in reliance on one scientific study and challenging the findings of another, that the Commission and EFSA committed several manifest errors of appraisal in the scientific assessment of napropamide, with regard to the leaching of the metabolite NOPA, aquatic toxicity and the ecologically relevant end points applicable to the evaluation of risks to fish-eating birds and mammals. The applicant also alleges that the Commission refused to take account of new information which the applicant had been expressly requested to submit by the Rapporteur Member State and EFSA, and, as a result, failed to take account of the present state of scientific and technical knowledge.
31 It follows from the foregoing that the action in the main proceedings raises complex, delicate and highly technical issues. Those issues call for a detailed examination, which cannot be carried out by the President within the context of an examination of the prima facie soundness of the main action, but must be the subject of the proceedings in the main action. Without in any way prejudging the position to be taken by the Court in the main action, the President cannot therefore, at the present stage, regard the heads of complaint invoked by the applicant as being prima facie manifestly lacking in any merit, a fortiori as the Rapporteur Member State had expressed itself in favour of the inclusion of napropamide in Annex I to the Directive. Consequently, the heads of complaint mentioned above appear, at first view, to be sufficiently relevant and serious as to constitute a prima facie case capable of justifying the grant of the interim measures requested (see, to that effect, order of the President of the Court of Justice in Case C‑296/93 R France v Commission [1993] ECR I‑4181, paragraph 17, and order in Case C‑120/94 R Commission v Greece [1994] ECR I‑3037, paragraphs 69 and 70; order of the President in Case T‑395/94 R Atlantic Container Line and Others v Commission [1995] ECR II‑595, paragraph 49, confirmed by order in Commission v Atlantic Container Line and Others, cited in paragraph 19 above, paragraphs 26 and 27; orders of the President in Cases T‑79/95 R and T‑80/95 R SNCF and British Railways Board v Commission [1995] ECR II‑1433, paragraph 35, and in Case T‑151/01 R Duales System Deutschland v Commission [2001] ECR II‑3295, paragraphs 185 and 186).
Urgency and balance of interests
32 According to established case-law, urgency must be assessed in relation to the necessity for an order granting interim relief in order to prevent serious and irreparable damage to the party requesting the relief. It does not have to be established with absolute certainty that the damage is imminent; it is sufficient that the damage, particularly when it depends on the occurrence of a number of factors, should be foreseeable with a sufficient degree of probability (see the order of the President in Case T-346/06 R IMS v Commission [2007] ECR II-1781, paragraphs 121 and 123, and the case-law cited). However, the party invoking damage is required to prove the facts forming the basis of its claim that serious and irreparable damage is likely (order of the President of the Court of Justice in Case C-335/99 P(R) HFB and Others v Commission [1999] ECR I‑8705, paragraph 67; order in Duales System Deutschland v Commission, cited above in paragraph 31, paragraph 188; and order of the President in Case T‑34/02 R B v Commission [2002] ECR II‑2803, paragraph 86).
33 It is also well-established case-law that damage of a purely financial nature cannot, save in exceptional circumstances, be regarded as irreparable or even as being reparable only with difficulty since normally it can be the subject of subsequent financial compensation (order of the President of the Court of Justice in Case C-471/00 P(R) Commission v Cambridge Healthcare Supplies [2001] ECR I‑2865, paragraph 113; order of the President in Case T‑339/00 R Bactria v Commission [2001] ECR II‑1721, paragraph 94).
34 On the assumption that such damage exists, the interim measure sought will be justified only if it appears that, without such a measure, the applicant would be in a position that could imperil its existence before final judgment is given in the main action (order of the President in Case T-181/02 R Neue Erba Lautex v Commission [2002] ECR II‑5081, paragraph 84). Since imminent disappearance from the market does indeed constitute damage that is both irremediable and serious, adoption of the interim measure sought appears justified in such a situation.
35 While account has also been taken of the fact that, if the measure sought were not granted, the applicant’s market share would be irremediably affected (orders of the President in Case T-13/99 R Pfizer Animal Health v Council [1999] ECR II‑1961, paragraph 138, and in Case T‑392/02 R Solvay Pharmaceuticals v Council [2003] ECR II‑1825, paragraph 107), it must be pointed out that this situation can be placed on an equal footing with that of the risk of disappearance from the market and justify adoption of the interim measure sought only if the irremediable effect on market share is also of a serious nature. It is therefore not sufficient that a market share may be irremediably lost by an undertaking; rather, it is necessary for that market share to be sufficiently large in the light of, in particular, the size of that undertaking, regard being had to the characteristics of the group to which it belongs through its shareholders (order of the President of 18 June 2008 in Case T‑475/07 R Dow AgroSciences and Others v Commission, not published in the ECR, paragraphs 77 to 82 and the case-law cited). An applicant who invokes the loss of such a market share must demonstrate, furthermore, that regaining a significant proportion of that share is impossible by reason of obstacles of a structural or legal nature (order of the President of the Court of Justice of 24 March 2009 in Case C‑60/08 P(R) Cheminova and Others v Commission, not published in the ECR, paragraph 64).
36 It is in the light of those considerations that it is necessary to examine the reasons put forward by the applicant to establish that it will suffer serious and irreparable damage if the interim measures requested are not granted.
Arguments of the parties
37 The applicant submits that the contested decision is likely to occasion it serious and irreparable damage in that Article 2(a) thereof obliges Member States to withdraw all authorisations for plant protection products containing napropamide by 7 May 2009, which means that it will be unable to market such products after that date. In this context, it is not arguing purely financial loss or danger to its very existence, but invokes, more specifically, the following losses and damage: adverse effect on its supply source in [confidential] and its formulation plant in [confidential]; loss of market share and customers; damage to its image and reputation, as well as to its napropamide and napropamide-based products and trade marks.
38 First, the applicant invokes the damage which may be caused to its supply source in [confidential]. The total production of that [confidential] plant in 2007/2008 was [confidential] tonnes, [confidential] of which were sent to the applicant’s plant, in which the applicant repackages the napropamide (for sale to the [confidential] agro-industrial group) and formulates napropamide-based products for sale within the European Union (see paragraph 4 above). The technical setting of the [confidential] plant is such that it cannot switch to the production of other substances. The plant in [confidential] is dependent on sales in the European Union ([confidential] out of a total of [confidential]) and implementation of the contested decision will inevitably lead to closure of that plant. The applicant further submits that if the napropamide business were to be excluded from its results, it would suffer an operating loss of [confidential]. Its plant in the United Kingdom has fixed costs of [confidential], and napropamide represents approximately [confidential] of its total production.
39 Second, the applicant invokes the damage which would be caused to its market position, inasmuch as the contested decision will result in napropamide and napropamide-based products having to be withdrawn mandatorily and entirely from the European Union market. As a direct result, the applicant claims that it will lose its entire ‘market in the EU for napropamide and napropamide-based products and all of its customers for those products’, initially during the period required for the Court to rule in the event of annulment of the contested decision (which the applicant calculates to be 18.2 months on average) and, subsequently, during the time which the Commission will require to adopt a directive to include napropamide in Annex I to the Directive, and during the time required for the renewal of national marketing authorisations and for the resumption of production and sales.
40 In that regard, the applicant provides the following figures: it had a turnover in 2007/08 of [confidential], of which [confidential] came from sales of napropamide (that is to say, [confidential] %) and [confidential] from sales of napropamide-based products (that is to say, [confidential] %). A loss of [confidential] % of turnover, amounting to [confidential], is, it submits, clearly ‘serious’.
41 The applicant adds that, in the 2007/2008 financial year, the global turnover of the group of companies to which it belongs was [confidential], of which turnover within the European Union accounted for [confidential]. It points out that sales within the European Union of napropamide and napropamide-based products accounted for [confidential], that is, [confidential] % of group turnover within the European Union and [confidential] % of global group turnover. A loss of [confidential] % of group turnover in the European Union, and a loss of [confidential] % of global group turnover, is, it submits, clearly ‘serious’.
42 To the extent to which the Commission insists on the fact that the applicant belongs to a large and wealthy group of companies that can compensate it for any damage incurred and by reference to which the overall loss sustained is minimal, the applicant refers to the revised market capitalisation of its group occasioned by the present economic and financial crisis. It points out that this capitalisation has lost [confidential] % of its value in comparison with the figures relied on by the Commission. In fact, the group to which the applicant belongs is worth less than observed by the Commission, in which case the overall loss to the applicant of its napropamide business as a result of the contested decision will be proportionately more significant.
43 The applicant also submits that, during the period for which napropamide will be absent from the market, its customers will inevitably have to find alternative substances to satisfy their oil seed rape plant protection product requirements, as the applicant will be unable to offer its customers replacement products. There are in fact directly substitutable competing products and key competitors already have authorisations for those substances in the key application for which napropamide-based products are used. Furthermore, during the period for which napropamide is off the market, the applicant’s competitors will be able to consolidate their position. In addition, the negative stigma that will attach to napropamide and napropamide-based products as a result of the contested decision will mean that any advertising campaigns conducted by the applicant are unlikely to be effective. In any event, the impact on and possible disappearance of the applicant’s [confidential] source of napropamide and the damage to its own manufacturing plant in [confidential] will make any return to the market very difficult, and certainly impossible in the short to medium term.
44 From this the applicant concludes that those circumstances are highly likely to cause irreversible market developments constituting irreparable damage.
45 Third, the applicant submits that, if allowed to stand, the contested decision will damage its reputation generally, the reputation of its napropamide-based products, the reputation of its other pesticide products, and the reputation of its brands and trademarks Devrinol and Colzamid.
46 Fourth, it invokes the ‘international dimension’ of its loss, setting this out under three aspects.
47 In the first place, a decision such as that under challenge in the present case is usually followed by the setting of new maximum residue levels (MRLs) for the active substance at issue, which means that products of plant origin may not be placed on the market in the European Union if they contain levels of that substance which exceed the limits set. This means that any crops that have been treated with napropamide outside the European Union will not be able to be imported into the European Union if the level of napropamide exceeds the MRL. Consequently, farmers outside the European Union who make, or intend to make, sales within the European Union will have to stop using napropamide and will therefore stop purchasing napropamide and napropamide-based products from the applicant.
48 In the second place, the Commission will almost certainly include napropamide in Annex I to Regulation (EC) No 689/2008 of the European Parliament and of the Council of 17 June 2008 concerning the export and import of dangerous chemicals (OJ 2008 L 204, p. 1), by which the Rotterdam Convention on the prior informed consent procedure for certain hazardous chemicals and pesticides in international trade was implemented at Community level. This means that before napropamide or napropamide-based products can be exported outside the European Union, any country into which such substance or products are being imported must expressly agree to receive each individual shipment of the substance or product. It follows that the contested decision will make exports of napropamide to countries not belonging to the European Union particularly difficult.
49 In any event, there is a real likelihood that a ban on napropamide within the European Union will lead other countries, outside the European Union, to adopt similar prohibitions. In developing markets, in particular, some countries, such as Egypt, tend to follow European Union decisions. If that happens, sales of napropamide and napropamide-based products in those countries are likely to be ‘lost’.
50 For the purpose of the balancing of interests, the applicant, while acknowledging that the protection of public health must normally take precedence over economic considerations, asserts, in essence, that napropamide does not present a known danger to public health. Napropamide has been in continuous and safe use by the global farming community since it was first introduced in the European Union around 1975. During that time napropamide has not caused any known harm to human health or the environment. Moreover, the Rapporteur Member State proposed, after an in-depth scientific assessment, inclusion of napropamide in Annex I to the Directive. The applicant submits that it is thus simply requesting that a situation be preserved that has existed for a number of years.
51 The Commission, by contrast, submits that the applicant belongs to a group with significant financial resources, with the result that any harm to it cannot be so serious as to justify the adoption of interim measures. UPL, the applicant’s parent company, is one of the top five companies in the world operating in the generic agrochemical domain. Within India, the company is the largest producer of crop protection products. As a fully-owned subsidiary of that company, the applicant produces and offers a comprehensive range of products. It follows that the temporary loss of a substance such as napropamide should not be detrimental to the applicant. At any rate, a loss of [confidential] % in the group’s global turnover does not amount to serious harm and is in any case not irreversible.
52 In so far as the applicant states that it has to face strong competitors offering competing products, to which its customers will turn if napropamide is banned, the Commission, without calling into question the principle of that argument, disputes the competitiveness, substitutability and availability of some of those products offered by competitors of the applicant on the [confidential] markets, as listed by the applicant.
53 So far as concerns the balance of the different interests in play, the Commission submits that the analysis by EFSA highlighted concerns as to the effects of napropamide on the environment, especially groundwater. The need to protect public health and the environment should outweigh the limited economic and financial impact on the applicant.
Findings of the President of the Court
54 It must be noted, first of all, that the applicant alleges five types of harm which it claims would be caused by immediate implementation of the contested decision: first; harm to its supply source in [confidential] and its formulation plant in [confidential]; second, loss of its market shares and customer base; third, damage to its reputation and to that of napropamide and its napropamide-based products and brands; fourth, harm to its trade marks and brand image; and, fifth, the ‘international dimension’ of its loss. According to the applicant, none of those forms of harm is purely financial in nature.
55 In that regard, a number of those alleged forms of harm must be discounted from the outset as being irrelevant for the purposes of examining the issue of urgency.
56 Thus, in so far as the applicant invokes the ‘international dimension’ of the harm which it will suffer in the form of a reduction in its sales in countries not belonging to the European Union as a consequence of the contested decision, by reason of the fact that some non-member countries are likely to follow the Community rules, it must be held that the applicant has not established that the interim measures sought, on the assumption that they will be granted, would prevent the authorities of the countries concerned from banning the marketing of napropamide within their territory. Consequently, the applicant has not demonstrated that suspension of operation of the contested decision would be liable to prevent the alleged harm from materialising. In any event, such a ban on the marketing of napropamide would be the direct consequence, not of the contested decision, but of a decision taken by the authorities of each non-member country in the exercise of their absolute discretion (see, to that effect, order of the President in Case T‑326/07 R Cheminova and Others v Commission [2007] ECR II‑4877, paragraphs 109 and 110).
57 The mere fact of invoking the Rotterdam Convention and Regulation No 689/2008 is also not capable of establishing to the required legal standard that the obligation owed by the Community under the system established by those rules to give notification and provide information may cause the applicant foreseeable and quantifiable damage in a given non-member country while the main proceedings are continuing. In particular, the applicant has not shown that the mechanism under the Rotterdam Convention would result directly and inevitably in losses of sales of napropamide-based products on the markets of specified non-member countries. Moreover, it is for the non-member countries alone to decide whether or not the products concerned should be imported (see, to that effect, order in Cheminova and Others v Commission, cited in paragraph 56 above, paragraph 111).
58 To the extent to which the applicant argues that a non-inclusion decision, such as the contested decision, is normally followed by the fixing of new MRLs for the substance in question in plant products, which, it claims, would effectively make it more difficult to market products treated with napropamide, suffice it to point out that, with reference to the alleged adverse effects of new MRLS on trade with non-member countries, it will be for the non-member countries concerned alone to decide whether or not to import napropamide-based products. Likewise, on the Community market, while the contested decision may in fact result in the setting of new MRLs for napropamide, the harm allegedly suffered by reason of those MRLs would not be a direct consequence of the contested decision. The Community procedure for setting MRLs is independent of the non-inclusion of napropamide in Annex I to the Directive. It follows that the applicant’s assertions concerning the problems posed by MRLs are irrelevant in the present context (see, to that effect, the order in Case T‑367/07 R Dow AgroSciences and Others v Commission, cited in paragraph 1 above, paragraphs 105 to 108).
59 With regard to the alleged adverse effect on the trade marks ‘Devrinol’ and ‘Colzamid’ used by the applicant, the latter has produced evidence which, far from providing an exact description of the trade marks in question, indicates only changes in the trade mark proprietor, for the most part in favour of ‘United Phosphorous Limited, incorporated in India’, that is to say UPL, the applicant’s parent company. That company is not, however, the notifier of napropamide (see paragraph 5 above), with the result that any harm which it may suffer cannot be taken into consideration in the examination of urgency, as this must be established in regard to the applicant alone. In any event, as a trade mark confers legal protection only on the products for which it had been registered, the applicant has not succeeded in establishing that the trade marks in question are ‘inextricably linked to the active substance napropamide and products containing that active substance’, in the sense that napropamide benefits, as such, from legal protection of that kind. On the contrary, it appears that any trader may, from the point of trade-mark rights, use and market napropamide on condition that it respects the applicant’s marks. Finally, there is nothing to prevent the applicant from continuing to use its trade marks after napropamide has been banned (see, to that effect, order in Case T‑475/07 R Dow AgroSciences and Others v Commission, cited in paragraph 35 above, paragraphs 36, 61, 62 and 91).
60 To the extent to which the applicant fears that the contested decision will compromise its reputation in general, the reputation of its napropamide-based products and that of its other pesticides by stigmatising napropamide, it is necessary to point out that the withdrawal of a plant protection product from the market will not necessarily have an adverse effect on the reputation of the entire undertaking concerned. In that regard, it is common knowledge that many undertakings operating on the market in question, such as Bayer, BASF, Syngenta, Cheminova, Dow AgroSciences, Du Pont de Nemours, FMC Chemical or Sumitomo Chemical, have already had their products withdrawn from the market without it being possible to say that those undertakings or their products were stigmatised as a result. The regulatory authorities and businesses in the sector concerned, which are familiar with the regulatory framework, tend, rather, to view a decision that a plant protection product should not be authorised as a normal part of a regulatory procedure. Such a decision may be regarded as being simply the result of scientific developments and improvement in research methods.
61 In any event, harm to the applicant’s reputation and to that of napropamide, assuming it to have been proved, would already have been caused by the contested decision and would last until such time as the contested decision is annulled by the judgment in the main action. Given that the contested decision was adopted following a complex administrative procedure lasting more than five years, in which scientific experts and professionals working in the sector concerned participated, a suspension of the operation of that decision ordered by the President of the Court on a purely interim basis and in summary proceedings would scarcely be such as to dispel doubts which may exist as to the correctness of the view that napropamide is not toxic. Finally, the applicant has not succeeded in establishing to the required legal standard that it would be impossible for it to recover its reputation in the event that the contested decision were to be annulled at the conclusion of the proceedings in the main action.
62 It follows that the alleged risks of harm which have just been examined cannot be taken into account for the purpose of establishing urgency in the present context.
63 With regard to the risk that it may lose market shares and customers, the applicant points out that, as the contested decision involves the total withdrawal of napropamide and napropamide-based products from the market in the European Union, it would lose its entire European market for the products and all of its customers who purchase them.
64 In that connection, it is necessary first to point out that, contrary to the submissions of the applicant, that category of damage is purely financial (see, to that effect, orders of the President of the Court of Justice in Cases C‑51/90 R and C‑59/90 R Comos-Tank and Others v Commission [1990] ECR I‑2167, paragraphs 30 and 31, and in Commission v Cambridge Healthcare Supplies, cited in paragraph 33 above, paragraphs 110 and 113). The market share held by a company indicates only the percentage of all the products present on the market in question which were sold by that company to customers over the course of a specified reference period. Consequently, the loss of that market share consists in the loss of the profits liable to be realised in the future on sales of the product in question. A market share can thus clearly be represented in financial terms, as the holder of that market share can benefit from it only in so far as it generates profit for him. This analysis is not brought into question by the fact that the undertaking in question has, of course, been obliged to make efforts and investments in order to establish its market position.
65 Furthermore, the applicant itself quantified the damage which the contested decision will, in its view, cause it on the market in the European Union, referring to its sales of napropamide and napropamide-based products amounting to [confidential] for the 2007/2008 financial year and adding that, for the same period, the global turnover of the group to which it belongs was [confidential]. It is thus complaining of a loss which represents approximately [confidential] % of that group’s worldwide turnover.
66 Moreover, in quantifying the alleged harm and placing it in relation to the worldwide turnover of the group to which it belongs, the applicant takes account of the case-law which states that the gravity of that harm depends on, inter alia, the scale, total turnover and characteristics of that group (see paragraph 35 above).
67 So far as concerns the figures presented by the applicant, the Commission does not contest the allegation, supported by accounting documents, that the harm on the Community market which the applicant invokes corresponds to [confidential] % of the global turnover of the UPL Group. Without its being necessary to determine whether that percentage, which is between 0% and 10%, is, in itself, sufficiently large to establish the gravity of that harm, it must be held that that harm is greater, in financial terms, than that which was classified as not serious in the orders recently made in Cases T‑326/07 R Cheminova and Others v Commission, T‑367/07 R Dow AgroSciences and Others v Commission, and T‑475/07 R Dow AgroSciences and Others v Commission (see paragraphs 56, 1 and 35 above).
68 Furthermore, that harm cannot be reduced by the sale of substitute plant protection products, as the applicant has established that it does not have such products for oil seed rape, a fact not disputed by the Commission. In addition, it is apparent from the documents submitted by the applicant that its sales of napropamide and napropamide-based products outside the European Union are not sufficient to be capable of offsetting, to any significant degree, the adverse effect suffered on the Community market.
69 It should be added that, in the evaluation of the seriousness of the harm, the judge hearing the application for interim relief cannot confine himself to having recourse, in a mechanical and rigid manner, solely to the relevant turnover – which, in this case, relates to the 2007/2008 financial year – but must also examine the circumstances of each case (order in Commission v Cambridge Healthcare Supplies, cited in paragraph 33 above, paragraph 114) and to bring them into relation, when taking his decision, with the harm occasioned in terms of turnover.
70 It is a matter of general knowledge that the world economy has, for several months, been suffering from a serious economic and financial crisis which has impacted on the value, in particular the share value, of numerous undertakings and their capacity to secure liquidity; this crisis has also now reached the Indian economy. It is obvious that an undertaking affected by this crisis will be more seriously affected by the loss of turnover achieved by a given product than will an undertaking the value of which, including its financing capacity, will not have decreased. In that connection, the applicant has stated, referring to data provided by the Mumbai stock exchange that the group to which it belongs had, at the end of March 2009, lost more than [confidential] of its value in terms of market capitalisation.
71 In those specific circumstances, the President of the Court is obliged to acknowledge that the applicant has established the gravity of the harm which it will suffer in the event of the total withdrawal of napropamide and napropamide-based products from the Community market if the interim measures sought are not granted.
72 To the extent to which the Commission take issue with the volatile and inappropriate nature of the market capitalisation criterion, suffice it to point out that it may at any time draw the attention of the President of the Court to developments in this matter and propose that he exercise the option conferred on him by Article 108 of the Rules of Procedure to vary or cancel at any time the order relating to interim measures on account of a change in circumstances (order of the President of the Court of Justice in Case C‑40/92 R Commission v United Kingdom [1992] ECR I‑3389, paragraph 33).
73 So far as concerns the irreparable nature of the financial harm invoked, that harm, in so far as it is not rectified solely by implementation of the judgment in the main action, may be made good by the means of redress provided for in Articles 235 EC and 288 EC (see order of the President in Case T-369/03 R Arizona Chemical and Others v Commission [2004] ECR II‑205, paragraph 75 and the case-law cited), given that the mere possibility of bringing an action for damages is sufficient to show that such financial harm is ‘in principle reparable’ (order of the President of the Court of Justice in Case C‑404/01 P(R) Commission v Euroalliages and Others [2001] ECR I‑10367, paragraphs 70 to 75; order of the President in Case T‑132/01 R Euroalliages and Others v Commission [2002] ECR II‑777, paragraph 52). The fact must not, however, be overlooked that such pecuniary reparation through judicial channels will be obtained only after several years, that is to say, at the conclusion of the proceedings in the main case here (followed, if appropriate, by appeal proceedings) and the proceedings in the subsequent dispute as to compensation (also followed, if appropriate, by appeal proceedings).
74 It must, however, be emphasised that the judge dealing with the application for interim measures must not apply mechanically and rigidly the condition relating to the irreparable nature of the financial harm pleaded, but must take account of the factual and legal circumstances specific to each case (order in HFB and Others v Commission, cited in paragraph 32 above, paragraph 57) and determine, in the light of those specific circumstances, the manner in which those conditions of urgency are to be examined (order in Commission v Atlantic Container Line and Others, cited in paragraph 19 above, paragraph 23).
75 Consequently, it is necessary to establish whether there are specific circumstances such as would justify the finding, notwithstanding the nature, ‘in principle reparable’, of the harm pleaded by the applicant, that there is urgency capable of justifying the granting of the interim measures sought, with a view to preventing that harm from actually arising.
76 In that regard, it should be recalled that, on 16 December 2008, the applicant resubmitted an application for assessment of napropamide pursuant to the accelerated procedure set out in Article 13 of Regulation No 33/2008 (see paragraph 12 above). In response to a question put by the President, the Commission indicated that the assessment procedure could last between 14 and 29 months at the most, but that this period could be significantly shortened if the parties and authorities involved required less time to carry out their tasks.
77 It follows that the resubmission procedure might be concluded only a few months after 7 May 2009, this date being the deadline which Article 2 of the contested decision imposes on Member States for the withdrawal of authorisations for plant protection products containing napropamide. Within the framework of that procedure, the applicant has been able to present all of the scientific data which, it claims, EFSA and the Commission improperly neglected to take into account in the procedure which led to the contested decision, thereby failing to have regard for the latest developments in science and the state of current scientific and technical knowledge (see paragraphs 23, 24 and 26 above). It cannot therefore be ruled out, at the stage of the interim-relief proceedings, that the applicant’s prospects of success will be greater, within the framework of the new, accelerated resubmission procedure, than they were in the preceding administrative procedure. It would be unreasonable to allow the prohibition of the marketing of a product in respect of which it is not improbable that its marketing will be authorised only a few months later.
78 It should be added that the applicant has established that napropamide was produced in [confidential], and that practically all of that production is used by the applicant in [confidential] (see paragraph 38 above). It follows that its supply source is heavily dependent on sales of napropamide on the Community market, to the extent that it appears sufficiently probable that the enormous fall in its production by reason of the banning of those sales would lead to the immobilisation of that plant for several years, or even to its complete closure.
79 Furthermore, the applicant has stated, without being contradicted by the Commission, that it would be impossible for it to offer substitute products to its customers during the entire period for which napropamide would be absent from the market. Finally, it demonstrated, to the required legal standard, that, in the event that that active substance were ultimately to be included in Annex I to the Directive, it would not be possible to market it immediately. With documentary evidence in support, it demonstrated that the period for obtaining the national authorisations necessary following that inclusion could exceed one year in certain Member States where it carried out the greater part of its sales. Without its being necessary to determine whether these are real (long-term) obstacles of a legal nature, it is in any event necessary to take them into account in the assessment of urgency, particularly in view of the fact that the abovementioned accelerated procedure is ongoing at the same time.
80 Furthermore, to the extent to which the Commission argues that the applicant has not demonstrated the degree of difficulty in resuming production of napropamide in the [confidential] plant and/or in obtaining that substance from other sources if it were to be included in Annex I to the Directive, the applicant cannot be required to adduce the negative evidence that, in that event, it would not be in a position to obtain napropamide from its present supply source or from other suppliers. It is sufficient in this regard to emphasise the significant role of its present Indian supply source, bearing in mind that the company [confidential], a competitor of the applicant, obtains the napropamide which it requires from the applicant and thus from the source in question (see paragraph 4 above).
81 It follows that a return of the applicant to the market in question – following annulment of the contested decision and the grant of national authorisations for the marketing of napropamide – appears problematic by reason of the fact that, at the crucial point in time, it would probably not have available to it any source for the supply of ready-to-use napropamide.
82 The conclusion must therefore be drawn that the present case is characterised by specific circumstances establishing the existence of urgency.
83 This solution is consistent with the balancing of the different interests involved, in the context of which the President of the Court must examine, inter alia, whether the applicant’s interest in obtaining the interim measures sought should or should not take precedence over the interest in immediate application of the contested decision (order of the President of the Court of Justice in Joined Cases C‑182/03 R and C‑217/03 R Belgium and Forum 187 v Commission [2003] ECR I‑6887, paragraph 142).
84 While it is true that the requirements of the protection of public health must, in principle, take precedence over economic considerations (see order of the President in Case T‑70/99 R Alpharma v Council [1999] ECR II‑2027, paragraph 152 and the case-law cited), the unavoidable conclusion is that several elements provided to the President in this case indicate that a stay on the implementation of the contested decision would not involve any serious risk to public health or to the environment.
85 Thus, first, it is in response to the head of complaint alleging a very significant failure on the part of EFSA to respect the deadline laid down in Article 11(4) of Regulation No 1490/2002 (see paragraph 28 above) that the Commission emphasised that the flexibility in the application of that deadline had allowed the applicant to benefit from close on two additional years for the purpose of marketing napropamide. It follows that the Commission does not itself see any specific and objective reason why napropamide must be withdrawn from the market as quickly as possible.
86 Second, the contested decision provides, in Article 3 and in recital 9 in its preamble, a period of grace of up to 7 May 2010 for the marketing and use of existing stocks of plant protection products containing napropamide. This constitutes a further indication that the use of the active substance in issue is hardly of such a kind as to involve serious risks to public health or to the environment.
87 Third, the same holds in regard to the fact that the Rapporteur Member State had recommended inclusion of napropamide in Annex I to the Directive. While a recommendation of this kind is conclusive neither for the proposal which EFSA is required to submit to the Commission nor for the final decision to be adopted by the Commission, the President is not prevented from taking it into account when balancing the different interests involved.
88 It follows that it is appropriate to suspend implementation of the contested decision until the conclusion of the accelerated procedure for the reintroduction of napropamide referred to in Article 13 of Regulation No 33/2008. As the date on which that procedure will be concluded cannot be predicted with precision, it appears appropriate to make the period of suspension of implementation coincide with the duration of the period of grace mentioned in paragraph 87 above, that is to say, up to 7 May 2010.
89 It is appropriate to add that the President will decide, after having received any written observations from the parties, to be lodged no later than 15 March 2010, and, if necessary, after having heard oral submissions of the parties, whether the maintenance of the suspension of implementation and the granting of additional interim measures in the present proceedings may be justified.
90 It is also appropriate to bear in mind Article 108 of the Rules of Procedure, under which the President may at any time vary or cancel the order relating to interim measures on account of a change in circumstances (see paragraph 72 above). It will therefore, if appropriate, be up to the parties to contact the Court in the event that, inter alia, the outcome of the abovementioned accelerated procedure were to have consequences for urgency in the present case (see, by way of analogy, the order of the President in Case T‑198/01 R Technische Glaswerke Ilmenau v Commission [2002] ECR II‑2153, paragraph 124).
91 Finally, Article 2 of the contested decision imposes an obligation on the national authorities to withdraw ‘by’ 7 May 2009 authorisations for plant protection products containing napropamide, which involves the risk, as the applicant has correctly pointed out, that some of those authorisations will already have been cancelled, withdrawn or refused before the present order is adopted. In that regard, it should be borne in mind that Article 243 EC, under which the judge hearing the application ‘may … prescribe any necessary interim measures’, is intended to grant sufficient powers to that judge to prescribe any measure which he deems necessary to guarantee the full effectiveness of the definitive future decision, in order to ensure that there is no lacuna in the legal protection (see, to that effect, the order of the President in Case T‑411/07 R Aer Lingus Group v Commission [2008] ECR II‑411, paragraph 56). The possibility cannot therefore be ruled out that the President may enjoin the Commission, in circumstances such as those obtaining in the present case, to take whatever steps may be necessary to ensure that his order in these interim proceedings is fully effective in regard to the Member States.
92 Accordingly, the Commission is ordered to take the measures which are necessary to ensure that the present order is fully effective in regard to those Member States which, prior to 7 May 2009, will already have cancelled, withdrawn or refused, pursuant to Article 2 of the contested decision, authorisations for plant protection products containing napropamide, in the event that the applicant should so request after encountering obstacles on the part of national authorities.
On those grounds,
THE PRESIDENT OF THE COURT OF FIRST INSTANCE
hereby orders:
1. The operation of Commission Decision 2008/902/EC of 7 November 2008 concerning the non-inclusion of napropamide in Annex I to Council Directive 91/414/EEC and the withdrawal of authorisations for plant protection products containing that substance is suspended up to 7 May 2010 – but at the latest up to the date on which the decision in the main action is delivered.
2. That suspension is subject to the condition that the parties lodge with the Registry of the Court, by no later than 15 March 2010, observations on the course of the accelerated procedure instituted, in regard to napropamide, pursuant to Article 13 of Commission Regulation (EC) No 33/2008 of 17 January 2008 laying down detailed rules for the application of Council Directive 91/414 as regards a regular and an accelerated procedure for the assessment of active substances which were part of the programme of work referred to in Article 8(2) of that Directive but have not been included in its Annex I.
3. The Commission is ordered to take, should the applicant so request, the measures necessary to ensure that the present order is fully effective in regard to those Member States which, prior to 7 May 2009, may already have cancelled, withdrawn or refused, pursuant to Article 2 of Decision 2008/902, authorisations for plant protection products containing napropamide.
4. Costs are reserved.
Luxembourg, 28 April 2009.