JUDGMENT OF THE GENERAL COURT (First Chamber)

8 September 2015(*)

(Arbitration clause — Grant — Financial aid — Suspension of payment — Claim for reimbursement of the declared costs — Damages — Interest on late payment — Debit note — Contractual liability — Counterclaim)

In Case T‑234/12,

Amitié Srl, established in Bologna (Italy), represented by D. Bogaert, M. Picat and C. Siciliano, lawyers,

applicant,

v

European Commission, represented by F. Moro and S. Delaude, acting as Agents, and initially by R. Van der Hout and A. Krämer, and subsequently by R. Van der Hout and A. Köhler, lawyers,

defendant,

APPLICATION under Article 272 TFEU and the first paragraph of Article 340 TFEU for, in the first place, a declaration (i) that the amounts received by the applicant under a grant agreement and two financial aid agreements concluded between the applicant and the European Community, represented by the Commission, and also the financial penalty and interest on late payment, reimbursement or payment of which the Commission claims from the applicant on the basis of the final findings of a financial audit, are not payable or, at least, not payable in full; (ii) that the Commission’s right to extrapolate the final audit findings to another grant agreement is time-barred; and (iii) that the Commission engaged the contractual liability of the European Union by suspending, on the basis of the preliminary financial audit findings, payment of the amounts payable to the applicant under two other grant agreements; and, in the second place, an order that the Commission pay to the applicant (i) the amounts remaining payable to it under the grant agreements performance of which was suspended and under another financial aid agreement, together with late payment interest; and (ii) damages to make good the loss suffered by the applicant owing to the abusive exercise by the Commission of the rights which it derived from the financial aid or grant agreements subject to the financial audit and the grant agreements the performance of which was suspended, following that audit,

THE GENERAL COURT (First Chamber),

composed of H. Kanninen, President, I. Pelikánová (Rapporteur) and E. Buttigieg, Judges,

Registrar: L. Grzegorczyk, Administrator,

having regard to the written procedure and further to the hearing on 7 October 2014,

gives the following

Judgment

 Facts giving rise to the dispute

1        The applicant, Amitié Srl, is a limited liability company incorporated under Italian law, formed in 1995 with the objective of participating in projects or actions in the fields of education, training and culture and also the promotion of social integration and local development, which are funded at European, national or regional level.

2        The European Community, represented by the Commission of the European Communities, itself represented by the Director-General of the Directorate-General (DG) for the Information Society and the Media, entered into five grant or financial aid agreements to which the applicant, represented by its Director and President, Mr S., was party. Four financial aid agreements were concluded in the context of the eTEN (‘Trans-European Telecommunications Networks’) programme, which supports the creation and trans-European deployment of electronic services and applications, namely Agreement No C28018 relating to the BSOLE (Basic Skills Online in Europe) project (‘the BSOLE agreement’), signed on 28 January 2003; Agreement No C510733 relating to the Michael (Multilingual Inventory of Cultural Heritage in Europe) project (‘the Michael agreement’), signed on 14 September 2004; Agreement No C029254 relating to the Michael+ project (‘the Michael+ agreement’), signed on 25 August 2006, and Agreement No C046229 relating to the EuroMuse/EuroMuse.net project (‘the EuroMuse agreement’), signed on 13 December 2007. A grant agreement was concluded in the context of Decision 1513/2002/EC of the European Parliament and of the Council of 27 June 2002 relating to the Sixth Framework Programme for research, technological development and demonstration activities, contributing to the creation of the European Research Area and to innovation (2002 to 2006) (OJ 2002 L 232, p. 1; ‘FP6’), namely Agreement No C507083, relating to the Minervaplus (Ministerial network for valorising activities in digitalization plus) action (‘the Minervaplus agreement’), signed by the parties to these proceedings on 12 March and 22 April 2004 respectively.

3        Between 5 and 7 May 2008 the Commission carried out a financial audit with regard to the performance by M. of its role as coordinator of the Minervaplus action.

4        In the final report of that audit, dated 15 December 2008, it was found that M. had not complied with its obligations under Article 3.3 of the General Conditions applicable to grant agreements concluded in the framework of FP6, as set out in Annex II to the Minervaplus agreement (‘the FP6 General Conditions’), since it had de facto delegated its role as coordinator to the applicant and had transferred to the applicant the entire contribution paid under that agreement. The final audit report therefore found that there had been a serious breach by M. of its financial obligations under the Minervaplus agreement and that certain costs declared by M. relating to the performance of that agreement were non-eligible and not recoverable.

5        On 15 December 2008 a grant agreement was also signed, in the context of the eContentPlus programme, intended to make digital content more accessible, more usable and more exploitable (2005-2008), by the Community, represented by the Commission, itself represented by the Director-General of the DG for the Information Society and the Media and by third parties, including the applicant, represented by its Director and President, Mr S., namely Agreement No ECP-2007-DILI‑517005 relating to the Athena (Access to cultural heritage networks across Europe) action (‘the Athena agreement’).

6        By letter of 19 February 2009, the Commission informed the applicant that it would carry out an audit of the financial statements which the applicant had submitted between 2003 and 2008 for the performance of the Minervaplus agreement and the Michael and Michael+ agreements (together, ‘the audited agreements’), in accordance with Article 29.1 of the FP6 General Conditions and Article 17.1 of the general conditions applicable to grant agreements concluded within the framework of the eTEN programme, as set out in Annex II to the Michael and Michael+ agreements (and also in Annex II to the BSOLE and EuroMuse agreements) (‘the eTEN General Conditions’). In that letter, annexed to which was a list of the information which the Commission sought from the applicant as part of the financial audit, the following was stated:

‘Please note that the final results of the [financial] audit will be distributed to the relevant Commission services in order for these to make the necessary adjustments to the costs claimed. These adjustments, if in favour of the Commission, could affect future payments due on this contract, or result in the issuance of a recovery order for all amounts overpaid. We draw your specific attention to the following: any financial audit finding in the audit report, once finalised, may lead, if appropriate, to extrapolation of such finding to any other [financial aid for] research contract in which you are or have been participating.’

7        The financial audit relating to the applicant was carried out between 10 and 13 March 2009.

8        On 1 December 2009, the date of the entry into force of the Treaty on European Union (TEU), the European Union legally replaced and succeeded the European Community, in accordance with the third paragraph of Article 1 TEU.

9        On 11 December 2009 a further grant agreement was signed, in the context of the eContentPlus programme, by the Union, represented by the Commission, itself represented by the Director-General of the DG for the Information Society and the Media, and by third parties, including the applicant, represented by its Director and President, Mr S., namely the agreement ECP-2008-DILI‑538025, relating to the Judaica Europeana project (Jewish urban digital European integrated cultural archive) (‘the Judaica agreement’).

10      By letter of 3 February 2010, the Commission informed M., in its capacity as coordinator of the Michael project, that, in accordance with Article 17.4 of the eTEN General Conditions, it ‘[would], on the basis on the conclusions of the audit [concerning some of the other parties to the grant agreements] … take all appropriate measures which it consider[ed] necessary, including the issuing of a recovery order’.

11      By letter of 8 February 2010, the Commission informed the coordinator of the Judaica action that payment to the applicant of the first instalment of the pre-financing had been postponed ‘until the final audit results [were] known’.

12      On 31 March 2010 the coordinator of the Judaica action was informed by the Commission that payment to the applicant of the second instalment of the pre-financing was suspended.

13      By e-mail of 14 April 2010, the Commission officially informed the coordinator of the Michael project that it had decided to suspend any payment payable to the applicant under the Michael agreement, in accordance with Article 3.1.f of the eTEN General Conditions and Article 106 of Commission Regulation (EC, Euratom) No 2342/2002 of 23 December 2002 laying down detailed rules for the implementation of Council Regulation (EC, Euratom) No 1605/2002 on the Financial Regulation applicable to the general budget [of the European Union] (OJ 2002 L 357, p. 1; ‘the Implementing Rules’).

14      By e-mail of 17 May 2010, the Commission informed the coordinator of the EuroMuse project that it had decided to suspend any payment payable to the applicant under the EuroMuse agreement until the eligibility of the costs declared by the applicant had been verified.

15      By e-mail of 14 June 2010, the Commission informed the coordinator of the Athena project that it had decided to suspend any payment due to the applicant under the Athena agreement until the final results of the audit were known.

16      By letter of 5 July 2010, the applicant complained about the lack of progress in the situation and the lack of information from the Commission.

17      By letter of 13 August 2010, the Commission informed the applicant that the provisional audit report was in the process of being finalised and would be submitted to the applicant in the near future.

18      By letter of 26 October 2010, the Commission informed M. that it intended to recover an amount of EUR 22 121.37 under the MINERVAPLUS agreement. The corresponding debit note was issued on 15 December 2010.

19      By letter of 27 November 2010, the applicant again complained about the lack of progress in the situation and asked the Commission to make immediate payment to it of the amounts which remained payable under the Michael, EuroMuse, Athena and Judaica agreements.

20      By letter of 8 December 2010, the Commission sent the applicant the provisional audit report and invited it to submit its comments. That letter was received by the applicant on 15 December 2010.

21      By letter of 11 January 2011, the applicant sent the Commission its comments on the provisional audit report, the findings of which it disputed.

22      On 27 January 2011 the applicant lodged a complaint alleging maladministration with the European Ombudsman. On 5 August 2011 the Commission submitted its comments to the Ombudsman, who forwarded them to the applicant on 5 September 2011. Currently, no decision has been made by the Ombudsman.

23      On 21 March 2011 the Commission answered a question, with a request for a written answer, put by an Italian Member of the European Parliament concerning the duration of the financial audit procedure and the suspension of payments due to the applicant.

24      By letter of 10 June 2011, the Commission sent to the applicant the final findings of the audit and, in Annex I to that letter, the final financial audit report (together ‘the final audit findings’). According to the final audit findings, the following criticisms were made of the applicant:

–        first, the applicant had failed to provide sufficient and appropriate supporting documentation to justify the costs declared for the implementation of the audited agreements, in breach of Article 29.2 to 4 of the FP6 General Conditions and Articles 16 and 17.2 of the eTEN General Conditions, even though, by the letter of 19 February 2009 (paragraph 6 above), the applicant had been requested to ‘make sure that information on all EU contracts [was] available upon request’; more specifically, in spite of being asked to do so by the Commission, the applicant was ‘not … able to provide … underlying details and documentation of the costs claimed for the first period of the Minervaplus action’; furthermore, the applicant had not provided ‘underlying documentation … for all the costs claimed in the “other specific costs” for eTEN projects’; last, ‘in all three audited projects not all substantiating evidence [was] presented for the travel costs’;

–        second, the applicant had declared costs which had not been incurred or recorded in its accounts, in breach of Article 13.1 of the eTEN General Conditions; some of the personnel costs declared by the applicant under the eTEN agreements were not recorded in its accounts on the date of the establishment of the audit certificate;

–        third, the applicant had failed to account for each project or each action or to maintain adequate accounting procedures to permit the direct reconciliation of the costs recorded in the financial statements issued under each of the audited agreements with those recorded in its general accounting records, in breach of Article 19.1.d of the FP6 General Conditions; the applicant did not use in its accounts a specific module for each project or action or ‘minimum adequate accounting procedures’ for each project or action; given the numerous ‘material weaknesses [identified] in the system of internal controls relevant to the preparation and presentation of the financial statements’, it was apparent to the auditors that ‘the [applicant’s] system of internal controls [was] not adequate and sufficient to ensure that costs incurred by [the applicant] on [EU] funded projects [were] correctly allocated to those specific projects and recorded as such in the [applicant’s] accounting records’;

–        fourth, the applicant had no reliable working time recording system and no reliable working time records, in breach of the eligibility conditions laid down in Article 14.1.a of the eTEN General Conditions; the applicant did not put in place appropriate procedures and internal controls as regards the recording of working time; the Commission expressed very strong doubts that ‘the working time charged to the projects was recorded throughout the duration of the projects, as required by Article … 14.1.a of the eTEN [General Conditions] … or … Article 6.1.1 of the Guide to Financial Issues relating to Indirect Actions of the Sixth Framework Programme’ and was of the view that ‘[the applicant had] manipulated the time records in order to maximise the [EU] contributions’;

–        fifth, the applicant had declared excessive personnel costs for some individuals, in particular by making multiple claims for payment, by declaring individuals participating in the performance of other grant or financial aid agreements, individuals already employed full time by third parties or individuals performing general administrative activities not eligible as direct personnel costs, in breach of Article 1.11 of the FP6 General Conditions or Article 1.32 of the eTEN General Conditions;

–        sixth, external consultants’ costs claimed as personnel costs or as subcontracts were non-eligible; the applicant claimed, as personnel costs, the costs of external consultants, although the specific eligibility conditions of direct personnel costs set out in Article 6.1.1 of the Guide to Financial Issues relating to Indirect Actions of the FP6 (‘the FP6 Guide’) were not satisfied, since external consultants had to be regarded as subcontractors and costs relating to subcontractors did not satisfy the specific eligibility conditions of costs of subcontracting set out in Article 6 of the FP6 General Conditions or Article 5.2 of the eTEN General Conditions;

–        seventh, the non-eligibility of indirect costs; since the direct costs had been rejected, the applicant was not entitled to claim indirect costs, calculated at a flat rate on the basis of the direct costs, in accordance with Article 21 of the FP6 General Conditions and Article 15 of the eTEN General Conditions;

–        eighth, there were discrepancies between costs claimed and costs incurred for the performance of the work for which the applicant was responsible, in accordance with the technical annex/Annex I to the audited agreements; the applicant ‘carried out tasks that were not allocated to it in the technical annex/Annex I … [i]n particular, … tasks related to the management of the consortium which are deemed to be carried out by the coordinator and cannot be subcontracted’; more specifically, the coordinator of the Michael and Michael+ projects and the Minervaplus action, namely M., de facto subcontracted to the applicant all the tasks related to the management of the consortium, as evidenced by the agreements signed between M. and the applicant, in breach of Article 3.2 of the FP6 General Conditions and Article 2.2 of the eTEN General Conditions; furthermore, and as a subsidiary point, subcontracting is in principle prohibited between partners in the same project or the same action and only third parties may become subcontractors; last, most of the tasks related to the management of the consortium were further subcontracted by the applicant to a third party, namely a company called Z; however, none of that subcontracting was clearly provided for in the technical annex/Annex I to the audited agreements or explicitly accepted by the Commission, as laid down in Article 6 of the FP6 General Conditions and Article 5 of the eTEN General Conditions;

–        ninth, the applicant failed to declare financial transfers received from the coordinator of the Michael and Michael+ projects and the Minervaplus action, in breach of Articles 23 and 24.2 of the FP6 General Conditions and Article 13.1 of the eTEN General Conditions; the applicant concluded agreements with M. and, in return, received financial transfers of which the Commission was not informed and which were therefore not approved by it; the applicant made a profit in implementing those agreements, in so far as the financial transfers which it received exceeded the costs which it incurred;

–        tenth, the false declarations made to the Commission, in that the applicant signed the financial statements issued under the audited agreements and thereby certified that all the costs recorded therein were eligible and accompanied by sufficient and appropriate supporting documents; generally, it is apparent from the final audit findings that the applicant misrepresented the facts to the Commission.

25      In the letter of 10 June 2011, the Commission considered that, in accordance with the final audit findings, the costs claimed by the applicant and accepted under the audited agreements had been overestimated and that it would therefore make adjustments, to the amount of EUR 615 677.25 under the Michael agreement, EUR 411 266.20 under the Michael+ agreement and EUR 50 708.23 under the Minervaplus agreement, either by adjusting later payments due to the applicant under the audited agreements, or by issuing a recovery order corresponding to the amounts wrongly paid. The Commission also reminded the applicant that it could ask it to pay a financial penalty, under Article 30 of the FP6 General Conditions, and issue the corresponding recovery orders. Further, in so far as the serious financial irregularities found during the audit were of a systematic nature, the Commission assumed that the financial statements issued by the applicant for the implementation of the audited agreements for the periods not covered by the audit or for the implementation of other non-audited agreements entered into in the context of the eTEN programme, namely the EuroMuse and BSOLE agreements, suffered from the same irregularities and had also be corrected. The Commission therefore asked the applicant either to correct the financial statements issued for the implementation of the EuroMuse and BSOLE agreements, by following one of the three extrapolation methods proposed in its letter, or to provide reasons why the non-audited agreements were not affected by the systematic errors found by the financial audit. Last, the Commission reminded the applicant that, under Article 18 of the eTEN General Conditions, it could also ask the applicant to pay a penalty should it fail to correct the financial statements issued under the EuroMuse and BSOLE agreements and that, under Article 3.1 of the eTEN General Conditions, it could also suspend any payment that remained due under those agreements, until the correction had been made or the reasons why such correction need not be made had been provided.

26      By letter of 25 July 2011, the applicant challenged the final audit findings and stated that it had instructed an independent external auditor to verify that its accounts had been prepared in accordance with Italian law. The applicant also denied that the Commission could require it to correct the financial statements submitted under the BSOLE agreement, on the ground that the Commission’s right to initiate an financial audit in respect of that agreement was time-barred, in accordance with Article 17.1 of the eTEN General Conditions. Last, the applicant requested the Commission to make immediate payment of an amount of EUR 263 120 which remained payable under the Athena and Judaica agreements.

27      By letter of 29 July 2011, the Commission informed the applicant that it intended to recover an amount of EUR 359 637.28 paid to the applicant under the Michael agreement. That claim was challenged by the applicant, by letter of 10 August 2011.

28      By letter of 12 September 2011, the applicant sent to the Commission the audit report of the independent auditor which it had instructed, namely SP, a company incorporated under Italian law (‘the SP report’ and ‘SP’). That report contained, first, a correction of the financial statements issued under the EuroMuse agreement alone, which had been carried out in accordance with the first extrapolation method proposed by the Commission (real cost-by-cost correction) and the corresponding supporting documents. It contained, second, a further assessment of the audited agreements, which detected some minor errors that had led to an overestimate of declared costs to the amount of EUR 54 195.05, which was largely offset by costs actually incurred by the applicant for the implementation of the audited agreements but not declared to the Commission. The applicant therefore asked the Commission to withdraw its claims for reimbursement under the Michael, Michael+, Minervaplus, EuroMuse and BSOLE agreements and to pay the amounts remaining payable to the applicant under the Athena and Judaica agreements.

29      By letter of 6 October 2011, the Commission informed the applicant that the documents which it had sent to the Commission were incomplete and incorrect. It asked the applicant to make the necessary adjustments in the context of the EuroMuse and BSOLE agreements and then to send it the new corrected financial statements.

30      By letter of 18 October 2011 the Commission rejected the objections and requests for payment made by the applicant, in particular, in the letters of 25 July, 10 August and 12 September 2011.

31      By letter of 28 October 2011, the applicant sent to the Commission new financial statements and requests for payment under the EuroMuse agreement, which entailed adjustments amounting to EUR 4 014.40.

32      By letter of 8 November 2011, the applicant stated that it maintained all its objections and requests for payment.

33      By letter of 22 December 2011, the Commission rejected the objections and requests for payment reiterated by the applicant in, notably, its letters of 12 September, 28 October and 8 November 2011. The Commission also sent the applicant its comments on the SP report, as translated into English by its staff. The Commission maintained that that report could not entail an adjustment of the final audit findings, apart from a few minor corrections amounting to EUR 770.78. It informed the applicant that the documents provided in support of its new financial statements issued for the implementation of the EuroMuse agreement were not reliable. The Commission also reiterated its view that the final audit findings could be extrapolated to the BSOLE agreement.

34      By letter of 10 January 2012, the Commission informed the applicant that it intended to recover an amount of EUR 50 458.23 under the Minervaplus agreement. That letter was received by the applicant on 20 January 2012.

35      By letter of 2 February 2012, the applicant replied to the arguments set out in the Commission’s letter of 22 December 2011 and suggested that a meeting be held in order to attempt to settle the matter amicably. SP also replied to the Commission’s arguments. By letter of the same date, the applicant also disputed the claim of debt alleged by the Commission in its letter of 10 January 2012.

36      On 21 February 2012, in the light of the final audit findings, the Commission issued Debit Note No 3241201788 requiring reimbursement, by 5 April 2012 at the latest, of an amount of EUR 50 458.23 under the Minervaplus agreement.

37      By letter of 27 February 2012, the Commission replied to the arguments submitted by the applicant in its letter of 2 February 2012. It accepted the principle of a meeting; however, it requested the applicant to produce ‘new, conclusive and probative evidence’.

38      By e-mail of 5 March 2012, the applicant challenged Debit Note No 3241201788.

39      By letter of 8 March 2012, the Commission sent the applicant an updated version of its preliminary information letter of 29 July 2011 (paragraph 27 above), stating that it intended to recover an amount of only EUR 358 712.35 under the Michael agreement, since it accepted that an amount of EUR 770.78 should be considered eligible as ‘other direct costs’ (paragraph 33 above), and also the related indirect cost, calculated at a flat rate of 20%, or an additional amount of EUR 154.15.

40      By letter of 12 March 2012, the applicant challenged the claim of debt alleged by the Commission in its letter of 8 March 2012. The Commission replied to that challenge by letter of 19 March 2012.

41      By letter of 20 March 2012, the Commission asked the applicant to pay an amount of EUR 5 045.82 as a penalty for serious breach of the financial obligations under the Minervaplus agreement, in accordance with Article 30.6 of the FP6 General Conditions.

42      On 22 March 2012 the Commission issued Debit Note No 3241202744 concerning the reimbursement, by no later than 7 May 2012, of an amount of EUR 358 712.35 under the Michael agreement, in view of the final audit findings attesting to the fact that that financial aid was not justified, under Articles 17.4 and 19 of the eTEN General Conditions.

43      By letter of 30 March 2012 the applicant challenged the financial penalty claimed by the Commission in its letter of 20 March 2012.

44      In response to the applicant’s request (paragraph 35 above), a meeting was held between the parties on 19 April 2012. According to the minutes of that meeting, no agreement could be achieved.

 Facts subsequent to the bringing of the action

45      On 8 June 2012 the Commission issued Debit Note No 3241204876 concerning the reimbursement, by no later than 22 June 2012, of an amount of EUR 5 045.82 as a penalty for a grave breach, by the applicant, of its financial obligations under the Minervaplus agreement (paragraph 41 above).

46      By letter of 28 June 2012, the Commission informed the applicant that, on the basis of Debit Note No 3241201788, issued under the Minervaplus agreement (paragraph 36 above), it proposed to offset an amount of EUR 6 906.89 which remained payable to the applicant under the Judaica agreement.

47      By letter of 27 July 2012 the Commission informed the applicant that, on the basis of Debit Note No 3241201788, issued under the Minervaplus agreement (paragraph 36 above), it proposed to offset an amount of EUR 44 215.17 which remained payable to the applicant under the Athena agreement and, on the basis of Debit Note No 3241202744, issued under the Michael agreement (paragraph 42 above), it proposed to offset an amount of EUR 47 793.07 payable to the applicant under the Athena agreement, all the amounts offset in the context of that operation, including capital and late payment interest, thus amounting to EUR 92 008.24.

48      By e-mail of 8 August 2012, the applicant challenged the offsetting of which it had been informed by the letter of 27 July 2012.

49      By letter of 3 October 2012, the Commission informed the applicant that it intended to recover an amount of EUR 261 947.36 under the Michael+ agreement. That letter was challenged by the applicant on 18 October 2012.

50      On 12 November 2012 the Commission issued Debit Note No 3241212122 concerning the reimbursement, by no later than 27 December 2012, of a sum of EUR 261 947.36 under the Michael+ agreement, in the light of the final audit findings showing that that financial aid was not justified, under Articles 17.4 and 19 of the eTEN General Conditions. Notice of that debit note was sent to the applicant by letter of 14 November 2012.

51      By letter of 12 December 2012, the Commission informed the applicant that, on the basis of Debit Note No 3241202744, issued under the Michael agreement, it proposed to offset an amount of EUR 173 495.20 payable to the applicant under another financial aid agreement concluded in the framework of the Stencil (Science Teaching European Network for Creativity and Innovation in Learning) programme.

52      By letters of 27 December 2012 and 6 February 2013, the applicant challenged the offsetting thus made by the Commission.

53      On 9 January and 12 February 2013 the Commission sent the applicant updated versions of Debit Note No 3241212122, issued under the MICHAEL+ agreement, to take account of the late payment interest that had become due. The updated final amount claimed by the Commission came to EUR 263 838.40, including late payment interest of EUR 1 891.04.

54      By letter of 11 February 2013, the Commission informed the applicant that it was waiving the right to rely on the offsetting made on the basis of Debit Note No 3241202744, issued under the Michael+ agreement, and Debit Note No 3241201788, issued under the Minervaplus agreement. On 15 February 2013 the Commission therefore paid a total amount of EUR 272 410.33 to the coordinators concerned, namely a sum of EUR 6 906.89 to the coordinator of the Judaica action, a sum of EUR 92 008.24 to the coordinator of the Athena action and a sum of EUR 173 495.20 to the coordinator of the STENCIL project.

55      By letter of 15 February 2013, the applicant asked the Commission to pay the amounts of the contributions remaining payable to it under the EuroMuse, Judaica and Athena agreements.

56      By letter of 26 February 2013, the applicant challenged the late payment interest claimed by the Commission, most recently, on 12 February 2013.

57      By letter of 6 March 2013, the Commission replied that it would submit, within these proceedings, its comments on the claims of debt alleged by the applicant under the EuroMuse, Judaica and Athena agreements.

 Procedure and forms of order sought by the parties

58      By application lodged at the Court Registry on 1 June 2012, the applicant brought the present action.

59      On 21 September 2012, the Commission lodged its defence. As part of that defence, it submitted a counterclaim.

60      On 6 November 2012 the applicant lodged its reply. In that reply, it modified the form of order sought to take account of new facts which had come to light since these proceedings was brought, namely, first, the offsetting purportedly applied by the Commission on the basis of Debit Note No 3241202744, issued under the Michael agreement, and Debit Note No 3241201788, issued under the Minervaplus agreement (paragraphs 46 and 47 above), and, second, the Commission’s letter of 3 October 2012 setting out its intention to recover an amount of EUR 261 947.36 under the Michael+ agreement (paragraph 49 above). In its reply, the applicant also responded to the Commission’s counterclaim.

61      On 8 January 2013 the Commission lodged a rejoinder.

62      On 19 March 2013 the applicant lodged a pleading modifying the form of order sought, pursuant to Article 48(2) of the Rules of Procedure of the General Court of 2 May 1991, to take account of new facts which had come to light, namely, first, the issuing by the Commission, on 12 November 2012, of Debit Note No 3241212122, under the Michael+ agreement (paragraph 50 above), and, second, the Commission’s decision of 11 February 2013 that it was would no longer rely on the offsetting, previously applied, of certain amounts on the basis of Debit Note No 3241202744, issued under the Michael agreement, and Debit Note No 3241201788, issued under the Minervaplus agreement (paragraph 54 above).

63      On 29 April 2013 the Commission lodged its observations on the pleading modifying the form of order sought. In that context, it updated the total amount of its counterclaim to take account of the fact that it waived reliance on the offsetting previously applied, and complemented its previous claims.

64      The composition of the Chambers of the General Court having been altered as from 23 September 2013, the Judge-Rapporteur was assigned to the First Chamber, to which this case was therefore allocated.

65      On hearing the report of the Judge-Rapporteur, the Court decided to open the oral procedure and, by way of measures of organisation of procedure provided for under Article 64 of its Rules of Procedure of 2 May 1991, requested the parties to answer certain written questions and to produce certain documents. The applicant and the Commission complied with those requests within the period prescribed.

66      On the proposal of the Judge-Rapporteur, the Court, by way of measures of organisation of procedure provided for under Article 64 of its Rules of Procedure of 2 May 1991, asked the parties to answer, at the hearing, further written questions.

67      The applicant and the Commission presented oral argument and answered written and oral questions put by the Court at the hearing on 7 October 2014.

68      In the application, as amended, the applicant claims, in essence, that the Court should:

–        primarily:

–        declare that the amounts payment of which the Commission claimed under the audited agreements in the letter of 10 June 2011 and in Debit Notes No 3241201788, No 3241204876, No 3241202744 and No 324121122 are not payable;

–        declare that, in the light of the period of five years specified in Article 17 of the BSOLE agreement, the Commission’s right to require the applicant, as in the letter of 10 June 2011, to extrapolate the final audit findings to the BSOLE agreement was time-barred;

–        declare that the Commission was not entitled, under the law of Luxembourg, to suspend payment of a total amount of EUR 263 120, corresponding to the sums of EUR 116 000 and EUR 147 120 remaining payable to the applicant under the Athena and Judaica agreements (‘the suspension of payment at issue’) and take note of the fact that the Commission abandoned its claim for reimbursement of the amounts of which payment was thus suspended;

–        order the Commission to pay the applicant the sum of EUR 374 520.78, made up as follows:

–        as regards the EuroMuse agreement, first, a sum of EUR 77 236.72 corresponding to the balance of the financial aid remaining payable to the applicant and, second, an amount of EUR 6 642.48 by way of late payment interest, calculated in accordance with Article 3.h of the eTEN General Conditions, a total of EUR 83 879.20;

–        as regards the Judaica and Athena agreements, first, a sum of EUR 81 991.76 corresponding to the difference between the amount of the grant remaining payable to the applicant under the Athena agreement (EUR 290 000) and the amounts actually paid (EUR 116 000 and EUR 92 008.24); second, a sum of EUR 176 993.11 corresponding to the difference between the amount of the grant provided for under the Judaica agreement (EUR 183 900) and the amount actually paid (EUR 6 906.89); and, third, a sum of EUR 31 656.71 corresponding to late payment interest, linked to the delay in payment by the Commission of the amounts payable by way of compensation for the loss sustained owing to the suspension of payment at issue, calculated in accordance with Article 17.c of the general conditions applicable to the grant agreements concluded in the framework of the eContentPlus programme, as set out in Annex II to the Judaica and Athena agreements (‘the eContentPlus General Conditions’), a total of EUR 290 641.58;

–        order the Commission to pay the applicant the sum of EUR 46 044.17 by way of compensation for the loss sustained owing to the suspension of payment at issue, corresponding to the amount of interest paid on bank loans taken out in order to enable the applicant to continue to perform its obligations under the Athena and Judaica agreements, in spite of that suspension of payment;

–        order the Commission to pay the applicant a sum of EUR 138 396 to cover the fees of its lawyers and of SP;

–        order the Commission to reimburse the applicant for all the costs and expenses incurred in connection with the present proceedings, on the ground that the Commission’s conduct is the sole cause of the present dispute, such costs and expenses being provisionally estimated at EUR 50 000;

–        declare the forthcoming judgment enforceable notwithstanding any appeal;

–        in the alternative, if the applicant is required to reimburse a certain amount under the audited agreements:

–        declare that such amount may not exceed EUR 54 195.05;

–        declare the forthcoming judgment enforceable notwithstanding any appeal.

69      After updating its counterclaim and complementing its previous forms of order, the Commission contends, in essence, that the Court should:

–        reject as being inadmissible the claims in the action, first, that the Court should declare that the Commission’s right to require the applicant to extrapolate the final audit findings to the BSOLE agreement is time-barred and, second, that the Court should declare that the amount of EUR 5 045.82, payment of which the Commission claimed from the applicant by Debit Note No 324120876, under the Minervaplus agreement, is not payable;

–        reject as being inadmissible the claims in the action for payment of a sum of EUR 83 879.20, under the EuroMuse agreement;

–        reject as being inadmissible the claims in the action for payment of a sum of EUR 46 044.17, by way of compensation for the loss sustained by the applicant owing to the suspension of payment at issue, corresponding to the amount of interest paid on bank loans taken out in order to enable the applicant to perform its obligations under the Athena and Judaica agreements;

–        reject as being inadmissible the claim that the forthcoming judgment should be declared enforceable, notwithstanding any appeal;

–        declare the present action to be unfounded;

–        declare that Debit Notes No 3241201788, No 3241204876, No 3241202744 and No 324121122 were issued in accordance with the audited agreements and, more specifically, with Article 17.4 of the eTEN General Conditions and Article 31.1 of the FP6 General Conditions;

–        consequently, uphold the Commission’s counterclaim and order the applicant to pay to the Commission the sum of EUR 676 163.76, thus giving effect to Debit Notes No 3241201788 and No 3241204876, issued under the Minervaplus agreement, Debit Note No 3241202744, issued under the Michael agreement, and Debit Note No 324121122, issued under the Michael+ agreement, together with late payment interest as from the deadlines for payment laid down in those notes, namely 5 April, 22 June, 7 May and 27 December 2012 respectively;

–        order the applicant to pay the costs.

 Law

1.     The jurisdiction of the General Court

70      As correctly stated by the parties, the General Court has jurisdiction to hear this action, brought under Article 256(1) TFEU and Article 272 TFEU, pursuant to the arbitration clauses in Article 5(2) of the Michael, Michael+, BSOLE and EuroMuse agreements, Article 13 of the Minervaplus agreement and Article 10(2) of the Judaica and Athena agreements, which confer jurisdiction on the General Court to rule on any dispute concerning the validity, application or interpretation of those agreements.

71      It follows that the General Court also has jurisdiction to rule on the counterclaim submitted by the Commission. In accordance with the case-law, the jurisdiction of the General Court, on the date when the action is brought, to hear an action based on an arbitration clause necessarily implies jurisdiction to deal with a counterclaim made by an institution in the context of the same action which derives from the contractual relationship or the situation on which the main application is based or has a direct link with the obligations deriving therefrom (see judgment of 15 March 2005, GEF v Commission, T‑29/02, ECR, EU:T:2005:99, paragraph 73 and the case-law cited). Not only is the Commission a party to this action but the counterclaim submitted by it is based on the audited agreements.

2.     The applicable law

72      The applicant maintains that, under the applicable law clauses in Article 12 of the Minervaplus agreement, Article 5(1) of the Michael, Michael+, EuroMuse and BSOLE agreements and Article 10(1) of the Judaica and Athena agreements, and in accordance with the case-law (judgment of 18 December 1986, Commission v Zoubek, 426/85, ECR, EU:C:1986:501), the law of Luxembourg is applicable to the Minervaplus, Judaica and Athena agreements, and the law of Belgium to the Michael, Michael+, EuroMuse and BSOLE agreements. According to the applicant, no condition relating to the subsidiary nature of the application of national law is to be found in the audited agreements. In any event, reference to the subsidiary nature of the application of national law in the Judaica and Athena agreements does not preclude the application of the general principles and theories, such as abuse of rights, recognised both in national law and in EU law (judgment of 8 May 2007, Citymo v Commission, T‑271/04, EU:T:2007:128).

73      The Commission maintains that the Minervaplus, Michael, Michael+, EuroMuse, BSOLE, Judaica and Athena agreements are governed, primarily, by their own contract terms, including the general conditions in Annex II to each agreement (see, to that effect, judgment of 16 May 2001, Toditec v Commission, T‑68/99, ECR, EU:T:2001:138, paragraph 77, and judgment in GEF v Commission, paragraph 71 above, EU:T:2005:99, paragraph 108), and by the relevant provisions of EU law, namely, in this case, Council Regulation (EC, Euratom) No 1605/2002 of 25 June 2002 on the Financial Regulation applicable to the general budget [of the European Union] (OJ 2002 L 248, p. 1) and the Implementing Rules and, but solely on a subsidiary basis and in order to fill any gaps in the contractual terms or in the relevant provisions of EU law, by the national law specified in each agreement, namely, in this case, the law of Belgium and the law of Luxembourg. That subsidiary application of national law is expressly confirmed by Article 10.1 of the eContentPlus General Conditions. It is not contradicted by the case-law cited by the applicant (judgment in Commission v Zoubek, paragraph 72 above, EU:C:1986:501, paragraphs 6, 11 and 12). Last, it is consistent with the lex specialis principle, recognised in many national legal orders, under which contractual terms prevail over the general principles and the theory of the applicable national law. Furthermore, the Commission submits that in the present case there has been no abuse of rights on its part within the meaning of Citymo v Commission, paragraph 72 above (EU:T:2007:128).

74      Under Article 340 TFEU, ‘[t]he contractual liability of the Union shall be governed by the law applicable to the contract in question’. The law applicable to the contract is that which is expressly provided for in the contract, since contractual provisions expressing the common intention of the parties must take precedence over any other criterion which might be used only where the contract is silent (judgment of 26 November 1985, Commission v CO.DE.MI., 318/81, ECR, EU:C:1985:467, paragraphs 20 to 22).

 The legislation and law applicable to the Michael, Michael+, BSOLE and EuroMuse agreements

75      The financial contributions awarded by the Michael, Michael+, BSOLE and EuroMuse agreements constitute ‘Community aid to projects of common interest in the field of trans-European networks for transport, telecommunications and energy infrastructures under [formerly] Article 129c(1) of the [EC] Treaty’ within the meaning of Article 1 of Council Regulation (EC) No 2236/95 of 18 September 1995 laying down general rules for the granting of Community financial aid in the field of trans-European networks (OJ 1995 L 228, p. 1), as amended by Regulation (EC) No 1655/1999 of the European Parliament and of the Council of 19 July 1999 (OJ 1999 L 197, p. 1). Those financial contributions are therefore directly governed by Regulation No 2236/95, as amended by Regulation No 1655/1999, which are moreover expressly referred to in the recitals of the Michael, Michael+, BSOLE and EuroMuse agreements.

76      In the context of the Michael, Michael+, BSOLE and EuroMuse projects, the financial aid was awarded by means of agreements. Under the applicable law clause in Article 5(1) of the Michael, Michael+, BSOLE and EuroMuse agreements, those agreements are governed by the law of Belgium. In accordance with the first and second paragraphs of Article 1134 of the Belgian Civil Code, ‘lawfully constituted agreements are legally binding on the contracting parties’ and ‘can be revoked only by mutual consent’. Further, according to Article 1135 of the Belgian Civil Code, a contract is binding not only as regards its express terms but also as regards all consequences which flow from it, according to its nature, by virtue of equity, custom or legislation.

77      It follows from the foregoing that, in so far as this dispute relates to the implementation of the Michael, Michael+, BSOLE and EuroMuse agreements, the dispute must be resolved in the light of the actual provisions of those Community aid agreements and the consequences which, under Regulation No 2236/95, as amended by Regulation No 1655/1999, or, that failing, the law of Belgium, flow from such agreements according to their nature.

 The legislation and law applicable to the Judaica, Athena and Minervaplus agreements

78      The financial contributions awarded by the Athena, Judaica and Minervaplus agreements are grants, within the meaning of Article 108(1) of the Financial Regulation. Under that provision, grants are ‘direct financial contributions, by way of donation, from the budget [of the Union] in order to finance [inter alia] an action intended to help achieve an objective forming part of a European Union policy’. Those financial contributions are therefore directly governed by Title VI of Part One of the Financial Regulation and the Implementing Rules applicable to grants, as is expressly stated in Article 10(1) of the Athena and Judaica agreements.

79      Article 108(1), in fine, of the Financial Regulation, in the version applicable to this case, provides that grants are to be the subject of a ‘written agreement’. Article 164(1)(f) of the Implementing Rules, in the version applicable to this case, provides that the grant agreement must, in particular, lay down the general conditions applicable to all agreements of that type including, inter alia, the determination of the law applicable to the agreement and the court with jurisdiction to hear disputes. In the context of the Judaica, Athena and Minervaplus actions, the grants were awarded by means of agreements. Under the applicable law clause found in Article 10(1) of the Judaica and Athena agreements and in Article 12 of the Minervaplus agreement respectively, those agreements are governed by the law of Luxembourg. In accordance with the first and second paragraphs of Article 1134 of the Luxembourg Civil Code, lawfully constituted agreements are legally binding on the contracting parties and ‘can be revoked only by mutual consent’. Further, Article 1135 of the Luxembourg Civil Code provides that a contract is binding not only as regards its express terms but also as regards all consequences which flow from it, according to its nature, by virtue of equity, custom or legislation.

80      It follows from the foregoing that, in so far as this dispute relates to the implementation of the Judaica, Athena and Minervaplus agreements, the dispute must be resolved in the light of the actual provisions of those grant agreements and the consequences which, under Title VI of Part One of the Financial Regulation and the Implementing Rules, or, that failing, the law of Luxembourg, flow from such agreements according to their nature.

3.     Admissibility

81      In accordance with the generally accepted principle of law that any court should apply its own rules of procedure, the admissibility of the claims made by the applicants, in its action, and by the Commission, in its counterclaim, must be assessed solely on the basis of EU law (see, to that effect, judgment in Commission v Zoubek, paragraph 72 above, EU:C:1986:501, paragraph 10).

 The head of claim in the action seeking a declaration, first, that the Commission’s right to require the applicant to extrapolate the final audit findings to the BSOLE agreement is time-barred and, second, that the sum of EUR 5 045.82 claimed by the Commission from the applicant in the Debit Note No 3241204876, under the Minervaplus agreement, is not payable

82      The Commission contends that this head of claim should be rejected as being inadmissible, on the ground that it was made, for the first time, at the stage of the reply and is, consequently, out of time.

83      In its oral argument at the hearing, the applicant maintained that the Court should reject the objection of inadmissibility raised against its claims with respect to the BSOLE agreement. According to the applicant, Article 48(2) of the Rules of Procedure of 2 May 1991 permitted it to bring before the Court further claims where those were based on matters of fact and law which had come to light in the course of the written procedure. In its defence, lodged at the Court Registry on 21 September 2012, the Commission reintroduced the claim to extrapolate the final audit findings to the BSOLE agreement, a claim which it had previously waived at the meeting of 19 April 2012 (paragraph 44 above), as attested by the minutes of that meeting dated 3 May 2012. On the other hand, the applicant did not respond to the objection of inadmissibility raised against its claims with respect to the Minervaplus agreement.

84      Under Article 44(1) of the Rules of Procedure of 2 May 1991, an applicant was required to state in the initiating application the subject-matter of the proceedings and the form of order sought. Although Article 48(2) of those rules authorised, in certain circumstances, new pleas in law to be introduced in the course of proceedings, that provision could not in any circumstances be interpreted as authorising the applicant to bring new claims before the Court and thereby to modify the subject-matter of the proceedings (see judgment of 12 July 2001, T. Port v Council, T‑2/99, ECR, EU:T:2001:186, paragraph 34 and the case-law cited).

85      It follows also from the case-law that an amendment of the claims in the application in the course of proceedings was permissible only if that amendment was based on matters of fact and law which had come to light in the course of the written procedure (see judgment of 14 November 2006, Neirinck v Commission, T‑494/04, ECRFP, EU:T:2006:344, paragraph 30 and the case-law cited).

86      In this case, as regards, first, the claims with respect to the BSOLE agreement, it must be observed, as correctly stated by the Commission without contradiction by the applicant, that those claims were not made in the application, and consequently those represented new claims which modified, and extended, the subject-matter of the proceedings.

87      In so far as the applicant proposes to rely on new matters of fact and law to justify the bringing of those claims in the course of proceedings, it must be noted that, while, in its defence, the Commission made no claim on the extrapolation of the final audit findings to the BSOLE agreement, none the less, in the part of the defence relating to the presentation of the facts, the Commission denied that it had ever waived the claim for extrapolation made in its letter of 10 June 2011, specifying that, as stated in its letters of 6 October and 22 December 2011, that extrapolation could not be deemed to be the equivalent of a financial audit of the BSOLE agreement. It is apparent, moreover, from the meeting minutes dated 3 May 2012 that, at the meeting of 19 April 2012, the Commission did not waive its claim to extrapolate the final audit findings to the BSOLE agreement, as presented in its letter of 10 June 2011, but merely acknowledged that its right to carry out a financial audit of that agreement was time-barred. Consequently, there is no basis for the applicant’s claim that, after the lodging of this action, the Commission reintroduced a claim which it had previously abandoned. Accordingly, the argument put forward by the applicant, in order to justify introducing those claims with respect to the BSOLE agreement in the course of these proceedings, has no factual basis.

88      Consequently, the objection of inadmissibility raised by the Commission must be upheld and the Court must reject, as being inadmissible, the claims in the action seeking a declaration that the right of the Commission to impose on the applicant an extrapolation of the final audit findings to the BSOLE agreement is time-barred.

89      As regards, second, the claims with respect to the Minervaplus agreement, those must be understood as seeking the partial rejection of the counterclaim, in so far as the latter claims that the applicant should be ordered to pay the sum of EUR 5 045.82 claimed in Debit Note No 3241204876, under the Minervaplus agreement.

90      Since the counterclaim was made at the stage of the defence, the applicant could not seek its rejection, in whole or in part, before the stage of the reply, as occurred in this case. Those claims cannot therefore be regarded as having been brought out of time.

91      The Court must therefore reject, as being unfounded, the objection of inadmissibility raised by the Commission against the applicant’s claims seeking, in essence, rejection of the counterclaim in so far as it seeks payment of the sum of EUR 5 045.82 claimed by the Commission from the applicant in Debit Note No 3241204876, under the Minervaplus agreement.

 The head of claim in the action that the Commission should be ordered to pay to the applicant a sum of EUR 83 879.20, under the EuroMuse agreement

92      The Commission contends that this head of claim should be rejected as being inadmissible, on the ground that it is not based on any new matters, that it was raised, for the first time, at the stage of the pleading seeking modification of the forms of order, and that it is, consequently, out of time.

93      In its oral argument at the hearing, the applicant argued that the objection of inadmissibility raised by the Commission against that head of claim should be rejected, on the ground that it is not new because it was already to be found in the application.

94      The question of the admissibility of that head of claim must be assessed in the light of the case-law cited above in paragraphs 84 and 85.

95      In this case, as is correctly stated by the Commission, the application contains no head of claim requesting the Court to order the Commission to pay to the applicant a total of EUR 83 879.20, under the Euromuse agreement. Such a head of claim was brought only at the stage of the pleading on the modification of the forms of order sought. It is therefore a new head of claim which modifies, and extends, the subject-matter of the dispute.

96      The applicant has not referred to any new matter of fact or law to justify the introduction of that head of claim in the course of these proceedings.

97      Consequently, the Court must uphold the objection of inadmissibility raised by the Commission and reject, as being inadmissible, the head of claim in the action requesting that the Court order the Commission to pay to the applicant a sum of EUR 83 879.20, under the Euromuse agreement.

 The head of claim in the action that the Commission should be ordered to pay to the applicant a sum of EUR 46 044.17 as compensation for the loss suffered because of the suspension of the payment at issue and corresponding to the interest accrued on bank loans taken out by the applicant in order to implement the Athena and Judaica agreements

98      The Commission contends that that head of claim should be rejected as being inadmissible, on the ground that the applicant implicitly abandoned it, at the stage of the reply, and that the applicant cannot competently re-introduce it, at the stage of the pleading on modification of the forms of order sought.

99      In its oral argument at the hearing, the applicant stated that the objection of inadmissibility raised by the Commission against that head of claim should be rejected. The applicant states that it always maintained that head of claim in its written pleadings and that it did not abandon it at any time.

100    First, it must be observed, as correctly stated by the Commission, that the head of claim in the action that the Commission should be ordered to pay to the applicant a sum of EUR 46 044.17, as compensation for the loss suffered because of the suspension of the payment at issue, was in the application, but not in the reply. It was re-introduced, by the applicant, at the stage of the pleading on modification of the forms of order sought.

101    The question that arises from the Commission’s objection of inadmissibility is therefore whether that head of claim to be found in the pleading on modification of the forms of order sought, although previously present in the application, is none the less a new head of claim, which modifies, and extends, the subject-matter of the dispute, in so far as the applicant may have abandoned it at the stage of the reply, in which case it should be rejected as being inadmissible, in accordance with the case-law cited in paragraphs 84 and 85 above.

102    It is apparent from the case-law that, where an applicant abandons in the course of proceedings, clearly and unconditionally, a plea in law relied on in support of its heads of claim, the applicant cannot competently, at a later stage in the proceedings, re-introduce that plea, in so far as the abandonment of that plea has had the effect of reducing the scope of its initial heads of claim and the re-introduction of that plea would lead to an alteration of the subject-matter of the dispute before the court (see, to that effect, judgment of 9 September 2009, Diputación Foral de Álava and Others, T‑230/01 to T‑232/01 and T‑267/01 to T‑269/01, EU:T:2009:316, paragraphs 83 to 86). That case-law can be transposed, by analogy, to the head of claim in an action (see, to that effect, judgment in T. Port v Council, paragraph 84 above, EU:T:2001:186, paragraph 36).

103    In this case, the Court must therefore ascertain whether, at the stage of the reply, the applicant abandoned, clearly and unconditionally, that head of claim. While the applicant states, in paragraph 96 of the reply, that, ‘[a]s a consequence of the occurrence of the facts described under point 2 above, the reliefs sought [by the applicant] are updated as follows’ and while it does not then reproduce that head of claim, that cannot be treated, in the circumstances of this case, as the equivalent of express abandonment of that head of claim. The reason is that plainly the formal omission to reproduce that head of claim in the reply is due to a clerical error on the part of the applicant, when updating its heads of claim. First, the facts described in paragraph 2 of the reply, namely the payments by means of offsetting applied by the Commission in relation to the Judaica and Athena actions, did not concern the sum sought in the head of claim at issue here and were not, therefore, such as to justify the applicant abandoning that head of claim. Second, in paragraphs 91 and 92 of the reply, the applicant took the trouble to respond to the arguments made by the Commission against the head of claim at issue here, as it appears in the application, which was evidence of the applicant’s intention to maintain that head of claim.

104    In response to a written question from the Court (paragraph 65 above), the applicant confirmed that it had never intended to abandon the head of claim at issue here, even at the stage of the reply, as demonstrated by paragraph 91 of the reply.

105    In the light of all the foregoing, it must be held that the re-introduction of the head of claim at issue here in the pleading on modification of the forms of order sought is no more than the correction of a clerical error made at the stage of the reply. Consequently, however regrettable the lack of attention, on this matter, to the drafting of the reply, the re-introduction of the head of claim at issue here in the course of these proceedings cannot be regarded as the submission of new claims, within the meaning of the case-law (see, to that effect, judgment in T. Port v Council, paragraph 84 above, EU:T:2001:186, paragraph 36).

106    The Court must therefore reject, as being unfounded, the objection of inadmissibility raised against the head of claim in the action that the Commission should be ordered to pay to the applicant a sum of EUR 46 044.17 as compensation for the loss suffered because of the suspension of payment at issue.

 The head of claim in the action that the judgment to be delivered should be declared to be enforceable notwithstanding any appeal

107    The Commission contends that that head of claim should be rejected as being inadmissible, on the ground that it is of no relevance having regard to Article 278 TFEU.

108    In its oral argument at the hearing, the applicant stated that it was content to leave the matter to the discretion of the Court.

109    As correctly observed by the Commission, that head of claim is devoid of purpose in the light of Article 278 TFEU, which states that actions brought before the Court of Justice are not to have suspensory effect, and the first paragraph of Article 60 of the Statute of the Court of Justice, which provides that an appeal is not to have suspensory effect.

110    It follows that the head of claim in the action that the judgment to be delivered should be declared to be enforceable notwithstanding any appeal must be rejected as being inadmissible.

4.     Substance

 The head of claim in the action seeking, in essence, a declaration that the sums sought in Debit Notes No 3241201788, No 3241204876, No 3241202744 and No 324121122 together with interest thereon for late payment are not payable, or are payable only to a maximum amount of EUR 54 195.05, and the head of claim in the counterclaim seeking payment of the sums sought in those debit notes and late payment interest

111    The applicant primarily claims that the Court should declare that the sums sought by the Commission in Debit Notes No 3241201788, No 3241204876, No 3241202744 and No 324121122 under the audited agreements together with late payment interest thereon are not payable. Alternatively, the applicant claims that the Court should reduce those sums to a maximum of EUR 54 195.05.

112    The Commission contends in essence, by way of counterclaim, that the applicant should be ordered to pay it a total of EUR 676 163.76, corresponding to the total amount sought in Debit Notes No 3241201788, No 3241204876, No 3241202744 and No 324121122, together with interest thereon for late payment.

113    The head of claim at issue here concerns whether or not the applicant is subject to obligations to pay to the Commission, representing the Union, the sums sought in Debit Notes No 3241201788, No 3241204876, No 3241202744 and No 324121122 together with interest thereon for late payment (‘the obligations at issue’).

 The burden of proof

114    The parties disagree, in this case, on the question of who bears the burden of proof with respect to the obligations at issue.

115    In accordance with a generally accepted legal principle, any court should apply its own rules of procedure, including rules of jurisdiction (see, to that effect, judgment of 8 April 1992, Commission v Feilhauer, C‑209/90, ECR, EU:C:1992:172, paragraph 13). Rules intended to govern the burden of proof, the admissibility of evidence, the strength and probative value of evidence are none the less not covered by that principle since they are not inherently procedural but substantive, in the sense that those rules determine under which conditions individual rights exist and in what field they exist, and the grounds for their extinction. The choice of applicable law made in the audited agreements therefore also concerns the rules of evidence.

116    Article 1315 of the Belgian and Luxembourg Civil Codes states that the party who seeks the performance of an obligation must prove the obligation. Conversely, a party who claims to have been released from an obligation must prove that he has made the payment or performed the act which has brought about the extinction of his obligation.

117    In this case, it is for the Commission to prove the existence of the obligations at issue, performance of which is sought by it, but which are denied by the applicant.

118    Under the law of Belgium and the law of Luxembourg, while there are no restrictions on proof of facts, written evidence is required to prove a legal act the value of which exceeds EUR 750, according to Article 1341 of the Belgian Civil Code, or EUR 2 500, according to Article 1341 of the Luxembourg Civil Code.

119    Since the obligations at issue relate to sums which exceed those referred to in paragraph 118 above, it is for the Commission to adduce written evidence of those obligations.

 The nature and basis of the obligations at issue

120    The obligations at issue are different in nature and differ in their basis.

121    First, the obligations relate to the repayment of (i) the grant of a sum of EUR 50 458.23 paid to the applicant with respect to its participation in the Minervaplus action (Debit Note No 3241201788) and (ii) Community aid amounting to EUR 358 712.35 paid to the applicant under the Michael agreement (Debit Note No 3241202744) and Community aid amounting to EUR 261 947.36 paid to the applicant under the Michael+ agreement (Debit Note No 324121122), in the light of the final audit findings to the effect that that grant and that financial aid were not justified, in accordance with Article 17.4 of the eTEN General Conditions and Article 31.1 of the FP6 General Conditions.

122    Second, the obligations at issue relate to the payment of a sum of EUR 5 045.82, representing a financial penalty for a grave breach, by the applicant, of the financial obligations laid down in the Minervaplus agreement (Debit Note No 3241204876), in accordance with Article 30.6 of the FP6 General Conditions.

123    Third, the obligations at issue relate to the payment of late payment interest with respect to the delay in payment of each of the abovementioned amounts, calculated from the day following that fixed in the relevant debit note, namely 5 April 2012 as regards Debit Note No 3241201788, 22 June 2012 as regards Debit Note No 3241204876, 7 May 2012 as regards Debit Note No 3241202744 and 27 December 2012 as regards Debit Note No 3241212122, in accordance with Article 19.2 of the eTEN General Conditions and Article 31.2 of the FP6 General Conditions.

124    Given that these obligations differ in nature and in their basis, the Court must give distinct rulings with respect to the three kinds of obligations at issue, as identified in paragraphs 121 to 123 above.

 Repayment of the sums of grant and financial sought in Debit Notes No 3241201788, No 3241202744 and No 3241212122

125    The applicant declared costs amounting to EUR 50 708.23 for the implementation of the Minervaplus agreement, EUR 414 390.52 for the implementation of the Michael+ agreement and EUR 618 518.14 for the implementation of the Michael agreement. With respect to those amounts, the Commission, after adjustments, accepted the costs so declared to the sums of EUR 50 458.23 under the Minervaplus agreement, EUR 411 266.20 under the Michael+ agreement and EUR 615 677.25 under the Michael agreement. Before the costs thus accepted were ultimately rejected, in the light of the results of the audit, the Commission had already paid to the applicant, through the intermediary of the coordinator of the Michael and Michael+ projects and the Minervaplus action, namely M., first, a sum of EUR 50 458.23, under the Minervaplus agreement (the whole of the accepted amount), second, a sum of EUR 261 947.36, under the Michael+ agreement, and, third, a sum of EUR 359 637.28, under the Michael agreement.

126    The Commission maintains, in essence, that the basis of the obligations incumbent on the applicant to repay to it the amounts of grant and financial aid thus paid out, subject to a readjustment of the sum payable under the Michael agreement bringing that sum down to EUR 358 712.35, is (i) Article 17.4 and Article 19 of the eTEN General Conditions and Article 31.1 of the FP6 General Conditions, and (ii) the fact that the grant or financial aid was unduly paid, in this case, to the applicant.

127    Article 17.4 of the eTEN General Conditions provides that ‘on the basis of the conclusions [of an] audit, the Commission shall take all appropriate measures which it considers necessary, including the issue of a recovery order regarding all or part of the payments made by it’. Article 29.1, in fine, of the FP6 General Conditions provides that ‘any amounts due to the Commission as a result of the findings [of an] audit may be the subject of a recovery as mentioned in Article … 31 [of the FP6 General Conditions]’. Further, ‘if any amount is unduly paid to the contractor or if recovery is justified under the terms of the contract, the contractor undertakes to repay to the Commission the sum in question, on whatever terms and by whatever date it may specify’.

128    In accordance with Article 17.1 of the eTEN General Conditions and Article 29.1 of the FP6 General Conditions, the Commission could initiate a financial audit, up to five years, where appropriate, after final payment of the financial aid awarded under the Michael and Michael+ agreements or the end of the action covered by the grant made under the Minervaplus agreement. By signing the audited agreements, the applicant thereby accepted that it might be subject to financial audit by the Commission, provided that that audit was carried out, as in this case, within the period of five years specified in those agreements.

129    Moreover, it is apparent from Article 19.1 of the eTEN General Conditions and Article 31.1 of the FP6 General Conditions that, by signing the audited agreements, the applicant undertook to repay to the Commission any amount which was unduly paid or the recovery of which was justified under the terms of those agreements.

130    In accordance with the provisions referred to in paragraphs 127 to 129 above the Commission carried out, in this case, its financial audit and identified, following that audit, the existence of the obligations at issue.

131    The Commission maintains, in essence, that the grant and financial aid paid to the applicant in implementation of the audited agreements were unduly paid, since, in accordance with the final audit findings ‘all the costs declared by [the applicant] for the audited [action] and projects’, to be reimbursed from that grant and financial aid, are to be rejected, because of ‘serious irregularities established [in the final audit findings], within the meaning of Article [1.11 of the FP6 General Conditions] and Article [1.32 of the eTEN General Conditions]’.

132    Under Article 1.32 of the eTEN General Conditions and Article 1.11 of the FP6 General Conditions, the word ‘irregularity’ means ‘any infringement of a provision of Community law or any breach of a contractual obligation resulting from an act or omission by a beneficiary … which has, or would have the effect of prejudicing the general budget of the European Communities or budgets managed by it through unjustified expenditure’.

133    Since the Commission essentially relies on the final audit findings and since the applicant denies, in essence, that those findings can be taken into account, because, according to the applicant, those findings were not made following a procedure which complied with the rules governing financial audits, the Court must first rule on that issue.

–       Whether the final audit findings can be taken into account

134    According to the applicant, the final audit findings may not be taken into account, because they were not drawn up following a procedure which complied with the requirements of Italian legislation governing administrative reports drawn up by inspectors of the Italian authorities, applicable pursuant to Article 8(3) of Council Regulation (Euratom, EC) No 2185/96 of 11 November 1996 concerning on-the-spot checks and inspections carried out by the Commission in order to protect the European Communities’ financial interests against fraud and other irregularities (OJ 1996 L 292, p. 2). On the conclusion of the financial audit, the applicant maintains that no preliminary information was provided to it. Further, the applicant was not heard before the provisional audit report was drawn up. Again, none of its observations on that report were taken into account. The final audit findings were not drawn up with due regard to the adversarial principle, since the Commission relied on the statements of third parties which had not been sent to the applicant for its observations and which the Commission had even attempted to distort.

135    In that regard, first, it must be observed that, in the absence of any express provision to that effect in the audited agreements, the final audit findings cannot be regarded as the expression of a unilateral discretion reserved to the Commission (see, to that effect, judgment of 17 March 2005, Commission v AMI Semiconductor Belgium and Others, C‑294/02, ECR, EU:C:2005:172, paragraph 95, and the Opinion of Advocate General Kokott in Commission v AMI Semiconductor Belgium and Others, C‑294/02, ECR, EU:C:2004:549, points 167 to 171 and the case-law cited). Nor can those findings be regarded, in this case, as preparatory measures for an act of the Commission adversely affecting the applicant, covered by Article 288 TFEU, since no enforceable decision, within the meaning of Article 299 TFEU, was adopted by the Commission. Consequently, the final audit findings are not subject, in principle, to a requirement that they should comply with the same safeguards as apply to any procedure which leads to the adoption, by the Commission, of an adverse decision, such as due regard to the adversarial principle or the right to a prior hearing.

136    The financial audit was merely, in this case, a tool which enabled the Commission to gather evidence, with a view to possible action for breach of contract before the Court. The final audit findings and all the material on which they are based must therefore be analysed as evidence, submitted and relied on in support of the counterclaim.

137    To the extent, however, that the relevant legislation or contractual provisions applied specific rules to the evidence gathered in the course of the financial audit, those rules had to be observed.

138    In so far as the applicant refers to Article 8(3) of Regulation No 2185/96, governing reports drawn up by Commission inspectors, it must be recalled that that regulation relates only to on-the-spot checks and inspections carried out by the Commission and not to financial audits carried out by it. The distinction between those two kinds of tools is emphasised, for example, in Article 29 of the FP6 General Conditions, applicable to the Minervaplus agreement, paragraphs (6) and (7) of which deal specifically with on-the-spot checks and inspections, within the meaning of Regulation No 2185/96, carried out by the Commission. Further, the Commission clearly stated, in the letter of 19 February 2009, that the financial audit was based, in this case, on Article 17.1 of the eTEN General Conditions, as regards the Michael and Michael+ agreements, and on Article 29.1 of the FP6 General Conditions, as regards the Minervaplus agreement.

139    Next, as regards the applicant’s argument that, on the conclusion of the financial audit, no preliminary information was provided to it and that it was not heard before the drawing up of the provisional audit report, it must be observed, first, that the audited agreements do not provide either that preliminary information is to be provided, as soon as the financial audit is concluded, to the beneficiary of the financial aid or grant concerned, or that the beneficiary is to be heard before the provisional audit report is drawn up. Article 17 of the eTEN General Conditions, applicable to the Michael and Michael+ agreements, provides only that the provisional audit report is to be sent to the beneficiary of the financial aid, who may make observations thereon within one month of receiving it. Those formal contractual requirements were complied with in this case, and consequently no infringement of the audited agreements can be identified with regard to the procedure of drawing up the provisional audit report.

140    As regards, further, the applicant’s argument that none of its observations on the provisional audit report were taken into account, it must be observed that Article 31.1 of the FP6 General Conditions does not require the Commission to obtain observations from the beneficiary of the grant. On the other hand, Article 17.1 of the eTEN General Conditions, applicable to the Michael and Michael+ agreements, provides that the beneficiary of the financial aid must have the opportunity to submit its observations on the provisional audit report. In this case, the applicant submitted its observations on the provisional audit report (paragraphs 20 and 21 above). Further, it is apparent from Part 5 of the final audit report, relating to ‘Contractor comments’, that the Commission examined those observations, setting out the reasons why it considered no action needed to be taken on them, except very marginally (paragraph 125 above). Consequently, no breach of the audited agreements can be identified with regard to whether, in the final audit report, the observations of the applicant were taken into account.

141    Last, as regards the applicant’s argument that the final audit findings were not drawn up with due regard to the adversarial principle, since the Commission relied on statements from third parties which were never sent to the applicant for its observations, it must be noted that the contractual provisions with respect to financial audit do not provide that the Commission is obliged to supply the beneficiary of the financial aid or grant with copies of all the records of interviews conducted in the course of the financial audit. Further, as regards the argument that the statements of third parties were distorted, an argument which concerns, in practice, only the record of the interview with Ms V., lodged in the file, the formulation of that argument is too vague and lacking in detail for the General Court to be under an obligation to respond it. The applicant does not indicate what distortion of the comments of Ms V. was allegedly committed in that record and it is not for the General Court to investigate, on its own initiative, such a distortion. In any event, as correctly stated by the Commission, any such distortion could have had no impact on the reliability of the final audit findings, since, as the applicant itself acknowledged, it was corrected by Ms V., to whom the record was sent to read through and approve. By signing that record, Ms V. indicated her agreement with its content and, consequently, confirmed her answers (see, to that effect, judgment of 16 September 2013, GL2006 Europe v Commission, T‑435/09, ECR (Extracts), EU:T:2013:439, paragraph 93). The fact that the written record of the interview was thus read through and approved by the person interviewed strengthens, on the contrary, the reliability of that evidence. Consequently, no breach of the audited agreements and no unfair conduct on the part of the Commission can be identified as regards the taking into account, in the final audit report, of the statements of third parties.

142    It follows that the applicant has failed to demonstrate that the final audit findings were drawn up in a way which was contrary to the rules governing financial audits. Consequently, the final audit findings may be taken into account in the examination of the merits of the counterclaim.

143    Since the finding that costs declared by the applicant are not reimbursable is not a matter for the Commission’s discretion (paragraph 135 above) and since, moreover, the audited agreements do not expressly provide that the applicant is bound by the final audit findings, the general principles governing the burden of proof are applicable in this case (see, to that effect, judgment in Commission v AMI Semiconductor Belgium and Others, paragraph 135 above, EU:C:2005:172, paragraphs 95 and 97, and the Opinion of Advocate General Kokott in the case Commission v AMI Semiconductor Belgium and Others, paragraph 135 above, EU:C:2004:549, point 174). Pursuant to those principles, under the law of Belgium and the law of Luxembourg, it is, as a general rule, for the claimant, and therefore, in this case, for the Commission, to aver and prove the factors capable of demonstrating that its claim is well founded.

144    In addition to the general principles governing the burden of proof mentioned in paragraph 116 above, it must be noted that, in accordance with Articles 870 and 871 of the Belgian Judicial Code, each party has the burden of proving the facts which it avers and that, in accordance with Articles 58 to 60 of the new Luxembourg Code of Civil Procedure, it is the task of each party to prove by lawful means the facts necessary to the success of its claims.

145    In this case, it is therefore the task of the Commission to demonstrate, if the matter is disputed by the applicant, that the conditions, from legislation or contract, governing the provision of the grant or financial aid, laid down in the audited agreements, were not met (see, to that effect, the Opinion of Advocate General Kokott in Commission v AMI Semiconductor Belgium and Others, paragraph 135 above, EU:C:2004:549, points 175 to 178).

–       The conditions, from legislation or contract, for the provision of the grant or financial aid laid down in the audited agreements

146    First, it must be recalled that the Commission is bound, in accordance with Article 317 TFEU, by the obligation of sound financial management of the resources of the European Union (judgment of 22 May 2007, Commission v IIC, T‑500/04, ECR, EU:T:2007:146, paragraph 93). The Commission is in particular obliged to check that the budgetary resources of the European Union are used for the purposes intended. Pursuant to that obligation, in the grant or financial aid agreements which the Commission concludes in the name of and on behalf of the Community or the Union, the Commission subjects the award of a grant or financial aid to conditions which guarantee that the financial contribution of the Community or the Union is in fact used to fund the project or action for the performance of which the contribution was granted. The award of the grant or financial aid is therefore conditional on compliance with certain criteria which determine which costs are to qualify as eligible costs to be reimbursed as part of the project or action concerned and on the compliance, by the beneficiary, with certain obligations relating to, inter alia, the financial justification of the costs declared to have been incurred for the performance of that project or action (see, to that effect, judgment of 28 January 2004, Euroagri v Commission, T‑180/01, ECR, EU:T:2004:26, paragraphs 82 to 84). The beneficiary of the grant or financial aid therefore acquires a definitive right to payment of the Community or Union financial contribution only if all the conditions to which the award of the grant or financial aid is subject are satisfied (see, to that effect, judgment in Commission v IIC, paragraph 146 above, EU:T:2007:146, paragraphs 93 and 94, and the case-law cited). Given the objective which they pursue, the conditions thus laid down are of fundamental importance in the structure of grant or financial aid agreements (see, to that effect, judgment of 17 June 2010, CEVA v Commission, T‑428/07 and T‑455/07, ECR, EU:T:2010:240, paragraph 126 and the case-law cited).

147    In this case, the Commission claims that essential contractual conditions governing whether the costs declared by the applicant could be charged to the grant or financial aid awarded by the audited agreements were not satisfied. The Commission refers, in that regard, to the final audit findings which, themselves, refer, first, to Articles 6, 19, 20 to 25 and 27 of the FP6 General conditions and to Article 6.1.1 of the FP6 Guide and, second, as confirmed in response to a written question from the Court, to Articles 3, 5 and 13 to 16 of the eTEN General Conditions and to Article 7 of the specific conditions applicable to the Michael and Michael+ agreements.

148    Before examining the Commission’s arguments in that regard, it is appropriate to respond to the applicant’s argument that, in essence, taking into consideration the fact that the technical performance of the audited projects and action was good, the costs declared to correspond to that performance should be recognised automatically as being eligible and justified, in accordance with the approach taken by the Commission with regard to the personnel costs declared by M. for the implementation of the Minervaplus agreement.

–       The applicant’s argument on the basis of the good technical performance of the Michael and Michael+ projects and the Minervaplus action

149    The applicant claims, in essence, that, irrespective of whether certain financial obligations laid down in the audited agreements were infringed, it is necessary to take account, for the purposes of reimbursement of costs declared for the implementation of the audited agreements, of the fact that the projects and the action covered by those agreements were properly implemented in technical terms, as is apparent from material lodged in the court file. Moreover, it is contrary to the principle of equal treatment, as applicable to grants from the Community or the Union, under Article 109 of the Financial Regulation, that the Commission agreed, notwithstanding the breach of certain financial obligations laid down in the Minervaplus agreement, to reimburse to M. a proportion of the personnel costs which M. declared for the implementation of that agreement, in the light of the good technical implementation of the Minervaplus action, but refuses to do the same with regard to the applicant.

150    The Commission contends that the argument thus put forward by the applicant is unfounded and must be rejected.

151    In this case, it is undisputed that the Michael and Michael+ projects and the Minervaplus action were technically performed well and in compliance with the terms of the audited agreements.

152    However, the fact that the audited projects and action were technically well performed, and in compliance with the terms of the audited agreements, does not suffice for the applicant to have the right to the grant or financial aid provided for in those agreements. It is also necessary that the applicant has properly implemented the financial obligations which are incumbent on it under those agreements and which should make it possible for the Commission to verify, by a financial audit or otherwise, that the costs declared by the applicant for the implementation of those agreements are eligible and justified (see, to that effect, judgments in Euroagri v Commission, paragraph 146 above, EU:T:2004:26, paragraph 95, and Commission v IIC, paragraph 146 above, EU:T:2007:146, paragraph 94 and the case-law cited).

153    The fact that all the contracting parties supply sufficient services to ensure that their technical obligations under grant or financial aid agreements are well performed does not allow the conclusion that the costs declared for the implementation of those agreements correspond to costs which are eligible and justified, that is to say, in particular, costs which were in fact incurred for the performance of the project or action concerned, which were essential for that performance, and which were not previously declared and reimbursed pursuant to another grant or financial aid agreement (see, to that effect, judgment of 7 November 2002, Vela and Tecnagrind v Commission, T‑141/99, T‑142/99, T‑150/99 and T‑151/99, ECR, EU:T:2002:270, paragraph 201). Accordingly, strict compliance by the beneficiary of a grant or financial aid with the financial obligations to which the award of that grant or financial aid is subject is not a requirement which is purely a formality, but is the very prerequisite of the Commission being in a position to verify, by a financial audit or an on-site inspection or check, that the costs declared by the beneficiary properly correspond to costs which are eligible and justified (see, to that effect, judgment in Commission v IIC, paragraph 146 above, EU:T:2007:146, paragraphs 95 and 97).

154    It follows that, in the event that an applicant is in breach of the financial obligations laid down in the audited agreement, the applicant has not acquired any definitive right to the payment of the grant or financial aid provided for in those agreements and, accordingly, should repay to the Commission any sum already paid under those agreements, irrespective of whether the Michael and Michael+ projects and the Minervaplus action may have been properly implemented in technical terms.

155    As regards, further, the applicant’s argument that it is discriminatory for the Commission to have agreed to reimburse the personnel costs declared by M. under the Minervaplus agreement but to refuse do the same in this case, it must be observed that, in accordance with Article 109(1) of the Financial Regulation, in the version in force when the Minervaplus agreement was signed, ‘[t]he award of grants’ is subject to, inter alia, the principle of equal treatment. The principle of the consistent application of EU law entails the finding that such a principle is also applicable to the financial aid awarded by the Community or the Union in accordance with the provisions of Regulation No 2236/95, as amended by Regulation No 1655/1999. It follows from the foregoing that, even when exercising its rights under a grant or financial aid agreement, the Community or the Union, or the institution representing it, is obliged to respect the principle of equal treatment.

156    The principle of equal treatment is infringed where comparable situations are treated differently or different situations are treated in the same way, unless such difference of treatment is objectively justified (see judgment of 19 March 2003, CMA CGM and Others v Commission, T‑213/00, ECR, EU:T:2003:76, paragraph 406 and the case-law cited). It follows that, where the beneficiaries of a grant or financial aid are in comparable situations, the Community or the Union, or the institution representing it, cannot treat them differently when they exercise their contractual rights, a fortiori when the essential conditions for the award of the grant or financial aid concerned are at issue (see, to that effect, judgment of 30 September 2009, Lior v Commission and Commission v Lior, T‑192/01 and T‑245/04, EU:T:2009:365, paragraph 437).

157    In this case, it is apparent from the Commission’s letter to M. of 3 November 2010 that the Commission agreed, exceptionally, to regard as eligible personnel costs declared by M. for a sum corresponding to the monthly work of six individuals, as provided for in the technical annex/Annex I to the Minervaplus agreement, notwithstanding the failure of M. to supply reliable working time records during the financial audit, on the ground that the work and the objectives had been achieved in accordance with the specifications of the technical annex/Annex I.

158    None the less, having regard to the arguments submitted by the Commission to justify the treatment accorded to M., it must be observed that, even with respect to the Minervaplus agreement, M. was not in a situation which was comparable to that of the applicant. As correctly stated by the Commission, M. played the role of coordinator of the Minervaplus action and was obliged, in that capacity, as is apparent from Article 1.6 of the FP6 General Conditions, to perform specific tasks of coordination, laid down in the Minervaplus agreement, on behalf of the consortium responsible for the implementation of the action, including the applicant. Accordingly M. was in direct contact with the Commission, which directly witnessed the tasks carried out by the personnel whom M. used. In contrast, since the Commission had no direct contact with the applicant and since it did not witness the tasks carried out by the consultants recruited by the applicant, it had available to it no other means of auditing the accuracy of the personnel costs declared than those to be engendered by compliance, by the applicant, with the financial obligations laid down in the Minervaplus agreement.

159    For the reasons stated above, the Court must hold that the Commission was not obliged, in this case, to accord to the applicant, even with respect to the Minervaplus agreement, treatment comparable to that accorded by it to M. and the Court must, therefore, reject the applicant’s argument in relation to the good technical implementation of the Michael and Michael+ projects and the Minervaplus action.

160    The Court must therefore examine whether the Commission’s argument that the applicant was in serious breach of its financial obligations under the audited agreements is well founded, and begin by examining those obligations non-compliance with which would justify rejection of all the costs declared by the applicant for the implementation of the audited agreements. Those obligations relate, in this case, to the establishment of accounts pertaining to each project or to each action or adequate accounting procedures to permit direct reconciliation of the costs reported in the financial statements with those recorded in the general accounts.

–       The alleged absence of accounts pertaining to each project or to each action or of adequate accounting procedures to permit direct reconciliation of the costs reported in the financial statements with those recorded in the applicant’s general accounts

161    The Commission’s conclusion, on the basis of the final audit findings, is that there were no accounts pertaining to each project or to each action and no adequate accounting procedures to permit direct reconciliation of the costs reported in the financial statements issued for the implementation of each of the audited agreements with those recorded in the applicant’s general accounts. The accounting system used by the applicant was not equipped with an integrated project or action management module and no reliable alternative accounting procedure had been put in place to permit the direct and irrefutable reconciliation of declared costs with the costs recorded in the applicant’s general accounts, as is expected, as a matter of good practice, of a contractor engaged in so many different actions and projects, and as expressly required by Article 19.1.d of the FP6 General Conditions. The absence of such minimal procedures for each project and each action made it impossible for the applicant correctly to provide justification, on the basis of the data recorded in its accounts, that the declared costs were irrefutably linked to a specific project or action and for the Commission’s own staff to be satisfied that the same costs were not declared several times in different projects and actions.

162    In response to a written question from the Court (paragraph 65 above), the Commission explained that the final audit findings were also based on the breach, by the applicant, of the financial obligations laid down in Article 13.1, Article 16 and Article 17.2 of the eTEN General Conditions.

163    Under Article 19.1.d of the FP6 General Conditions, one of the conditions for the eligibility of the declared costs is that those costs should have been recorded in the accounts of the beneficiary of the grant and that the accounting procedures used by the beneficiary for that recording permit the direct reconciliation of the declared costs with those recorded in the overall statement of accounts relating to the overall business activity of the beneficiary. Further, Article 19.2.e of the FP6 General Conditions provides that costs declared, incurred or reimbursed in respect of other projects or actions co-financed by the Community or the Union are not eligible costs.

164    Further, it follows, first, from Article 13.1 of the eTEN General Conditions that one of the conditions of eligibility of declared costs is that those costs have been recorded in the accounts of the beneficiary of the financial aid and, second, from Article 16 of the eTEN General Conditions that the reimbursement of declared costs is subject to the justification of those costs by the beneficiary and that, for the purposes of that justification, the beneficiary must maintain, on a regular basis in accordance with the normal conventions of the State where he is established, accounts for the project.

165    It follows from the provisions referred to in paragraphs 163 and 164 above that, before the costs declared by the applicant can be held to be eligible and before the applicant can be reimbursed by the Commission, the applicant must have recorded the costs in an account pertaining to each project or each action or, at the least, have put in place an accounting procedure which permits the direct reconciliation of the declared costs with the costs recorded in the applicant’s general accounts. That assurance is all the more necessary, in this case, where, as is apparent from the final audit findings, which the applicant has not challenged on this point, the applicant directly participated, during the period covered by the financial audit, in almost 40 actions and projects co-financed by the Community and drew, on average, almost 80% of its annual income from that diverse funding (paragraph 189 above). In such a situation, in the absence of a segregation of costs in the applicant’s accounts or of a reliable accounting procedure to permit the equivalent to be achieved, the Commission has available to it no means of checking that the same costs are not declared several times, using the full costs model, with respect to a number of projects and actions co-financed by the Community.

166    In this case, there is no dispute between the parties that the applicant did not use the specific module incorporated in the Esatto software of ESA Software, which it uses for its accounting system, in order to assign costs incurred to ‘cost centres’ (in this case, the Michael and Michael+ projects and the Minervaplus action) and that, therefore, the applicant does not have accounts pertaining to each project or to each action.

167    The Commission, relying on the findings of the final audit report, claims, moreover, that the applicant did not put in place an accounting procedure which permitted the direct reconciliation of the declared costs with the costs recorded in the applicant’s general accounts.

168    The applicant challenges, on this point, the final audit findings, and claims that it used a specific software, based on the Microsoft Access software, enabling it to reconcile, irrefutably, the costs reported in the financial statements with those recorded in its general accounts. That system, allied to the recording in a Microsoft Office Excel file located on its internal server (‘the Excel file’) by the consultants or its administrative staff, on a monthly basis for each project and each action, of the working time of each consultant, made possible precise and full control of all the costs incurred. Further, the applicant claims that it carried out periodical reconciliations in order to check the reliability of the system and to ensure that the same cost could not be declared more than once. The applicant relies moreover on what is stated in the SP report, that ‘as far as the travel costs as well as the other costs are concerned, we have not found any registration which would exceed the costs [actually] incurred and recorded’.

169    The Commission, relying on the final audit findings, observes that there is no evidence, in this case, of the existence of the specific software, based on the Microsoft Access software, and of the periodical reconciliations relating thereto, relied on by the applicant. Further, the Commission received no information in that regard during the financial audit, even though it had explicitly asked the applicant, in its letter of 19 February 2009 bearing the reference D (2009)°106738, to supply to it ‘[a] detailed breakdown of costs supporting the Financial Statement (Form C) submitted to the Commission per cost categories, specifying the type of activity to which they relate and, where applicable, the resources provided by a third party’ and, within that letter, a note explained that ‘this breakdown should include the relevant accounting codes/reference numbers to allow for reconciliation between the [financial] statements sent to the Commission and the contractor’s financial records, as extracted from the accounting system’.

170    The applicant’s observations, as reproduced in the SP report, do not make it possible to establish that the applicant met, in this case, the obligation incumbent on it to put in place an accounting procedure to permit the direct reconciliation of the costs declared for the implementation of each of the audited agreements with those recorded in the applicant’s general accounts.

171    First, in general terms, it is apparent from the findings of the final audit report, which are not disputed, on this point, by the applicant, that the Commission was not informed, at the time of the financial audit, of the existence of the specific software, based on the Microsoft Access software, and of the periodic reconciliations relative thereto, and consequently the Commission was not in a position to check either the existence or, a fortiori, the effectiveness of the means of control alleged by the applicant and, in particular, that that those means of control permitted, as maintained by the applicant, a direct reconciliation of the costs declared under each of the audited agreements with the costs recorded in the applicant’s general accounts.

172    In the context of these proceedings, it must be held that the applicant has equally failed to provide evidence of the existence of the means of control which it claims to have put in place. The observations to be found, in that regard, in the SP report have no probative value, since they are based not on direct findings of fact made by SP, but on the statements of the applicant itself, to which SP did no more than refer.

173    Further, as regards the personnel costs declared for the implementation of each of the audited agreements, the applicant itself accepts that those costs cannot be checked, by one method or another, by directly tracing those costs in its general accounts, since it is also necessary, according to the applicant, to refer to the working time which will have been recorded in the Excel file. In that regard, the SP report refers to the applicant’s claims that the working time of each consultant was recorded in the Excel file and explains, in essence, that the personnel costs declared for the implementation of each of the audited agreements were calculated by taking into consideration the working time thus recorded in the Excel file and an hourly rate calculated on the basis of the overall personnel costs, as recorded in the general accounts and deriving from contracts entered into with the personnel concerned. SP thus recognises that the personnel costs recorded in the general accounts were overall costs, linked to the implementation of all the contracts entered into by the applicant and the personnel concerned, and not the specific costs linked to the implementation, by the personnel concerned, of each project and each action. It follows that the personnel costs were not recorded in the applicant’s general accounts following a procedure which made it possible to reconcile them directly with the costs declared to have actually been incurred for the implementation of each of the audited agreements. On the contrary, as stated in the SP report, any reconciliation of the declared personnel costs with those recorded in the general accounts could be done only indirectly and after considerable reprocessing of data, or adjustments.

174    Moreover, as is apparent from the final audit findings, which are not challenged, on this point, by the applicant, the Commission, notwithstanding its requests to that effect, was refused, during the financial audit, access to the Excel file to which the applicant refers, and consequently the Commission was not in a position to check whether there was a system which made it possible, even indirectly and after the reprocessing of data recorded in that file, to reconcile the personnel costs declared by the applicant with those recorded in its general accounts.

175    Further, as regards the personnel costs declared with respect to Mr H., Mrs P., Mr T. and Ms N., Ms U. and Ms A. for the implementation of the Michael project, the applicant has itself acknowledged, in its observations on the Commission’s provisional audit report, that it was willing to accept the Commission’s rejection of the eligibility of those costs, taking into consideration the large number of documents which it had to find and assemble in order to be able to determine clearly and to break down, for the individuals concerned, the work carried out for the implementation of the Michael agreement and that carried out, at the same time in Italy, for the implementation of other agreements pursuing the same objective. That demonstrates the lack of a procedure to make it possible, within the applicant company, automatically to reprocess data relating to all the personnel costs declared for the implementation of the audited agreements.

176    Accordingly, as regards the personnel costs declared, the applicant did not meet the financial obligation laid down in the audited agreements to put in place a procedure which would enable the Commission, in a financial audit, directly to reconcile the personnel costs declared for the implementation of each of the audited agreements with the costs recorded in its general accounts.

177    Further, as regards the other direct costs declared for the implementation of the audited agreements, the applicant relies essentially on the fact that the SP report found an absence of ‘errors’, in the sense of ‘excessive cost claims’. However, the mere fact that excessive claims were not identified, as regards the other direct costs declared, does not demonstrate that those costs could be directly traced in the applicant’s general accounts, since the applicant failed to put in place adequate means of control. The absence of such means of control might have had the consequence that any excessive cost claims could not be detected.

178    Accordingly, as regards the other declared direct costs, the applicant also failed to fulfil the financial obligation described in paragraph 176 above.

179    Consequently, the Commission’s claim that the applicant was in breach of a financial obligation laid down in Article 19.1.d of the FP6 General Conditions and Article 13.1 of the eTEN General Conditions, since the applicant failed to record the costs incurred for the implementation of each of the audited agreements in its general accounts in such a way as to permit the Commission, in the financial audit, to reconcile directly those costs with the declared costs.

180    Yet compliance with that condition was essential if the Commission was to be able to check, on the basis of the applicant’s accounting records, in the financial audit, that the declared costs corresponded to the incurred costs, that they did not exceed the latter and that they had not previously been declared for the implementation of another grant or financial aid agreement. It is apparent from the findings of the SP report that, on the basis of the applicant’s accounting records, there was no possibility of the abovementioned checks being achieved.

181    Non-compliance with that condition could be sufficient ground for the Court to find that all the costs declared by the applicant for the implementation of the audited agreements were non-eligible and not reimbursable. It is however appropriate, in this case, for the Court to continue the examination and to rule on whether there was any breach, by the applicant, of the financial obligations laid down in the audited agreements as regards the personnel costs declared.

–       The personnel costs declared

182    The applicant declared as personnel costs, first, a sum of EUR 38 463.86, for the implementation of the Minervaplus agreement, second, a sum of EUR 335 838.16, for the implementation of the Michael+ agreement and, third, a sum of EUR 503 243.81, for the implementation of the Michael agreement.

183    The Commission, relying on the final audit findings, concludes that all the personnel costs declared for the implementation of the audited agreements have to be rejected as being either non-eligible or non-reimbursable and that, therefore, the grant and the financial aid paid to the applicant for the implementation of those agreements ought to be repaid. The grounds for that rejection are set out, for each of the audited agreements and for each consultant involved in their implementation, in point 5.1.4 of the final audit report and, more specifically, in point 5.1.4.2 as regards the Minervaplus action, in point 5.1.4.3 as regards the Michael+ project, and in point 5.1.4.4 as regards the Michael project.

184    The applicant considers, in essence, that the payments made by the Commission were definitively acquired by it, since all the personnel costs declared for the implementation of the audited agreements do not exceed the personnel costs which the applicant in fact incurred for the implementation of the audited agreements. Alternatively, the applicant considers, relying on the findings of the SP report, that only a sum of EUR 54 195.05 could be rejected.

185    The applicant does not dispute the final audit findings that, in order to be reimbursable, the personnel costs declared must correspond to the cost of the hours actually worked on the Michael and Michael+ projects and on the Minervaplus action by the individuals directly responsible for the implementation of those projects and that action, as laid down in the technical annex/Annex I to the audited agreements.

186    Nor does the applicant dispute that, during the period covered by the financial audit, it had no employees and that the personnel assigned to the implementation of the Michael and Michael+ projects and the Minervaplus action were either ‘subordinate’ consultants, with whom it entered into project collaboration contracts under Italian law (continuous and coordinated contractual relationships and project collaboration projects) providing for a fixed monthly remuneration or annual or biennial remuneration, or independent consultants, paid for services rendered and invoiced.

187    The applicant also accepts that, during the period covered by the financial audit, it participated directly in almost 40 actions and projects co-financed by the Community, not to mention other actions and projects in which it was involved as a subcontractor of direct participants, and that it also participated during the same period in some 20 projects co-financed by the national or regional authorities.

188    The applicant does not dispute that, during the period covered by the financial audit, it was the parent company of Y., a company incorporated under Italian law which also was actively participating in a number of actions and projects co-financed by the Community or by national or regional authorities.

189    Last, the applicant does not dispute that, between 2004 and 2008, its business model was predominantly based on the provision of grants and financial aid drawn from the budget of the Community, since 80% of its annual income came, on average, from programmes co-financed by the Community.

190    On the other hand, the applicant disputes the final audit findings, to which in this case the Commission refers, to the effect that all the personnel costs declared for the implementation of the audited agreements have to be rejected since, in essence, the working time records produced are neither credible nor reliable and the reasonableness of the working time declared could not be confirmed by the other procedures used during the financial audit, as described in point 5.1.2 of the final audit report, because of a serious breach, by the applicant, of the financial obligations laid down in the audited agreements, as identified in point 5.1.4 of the final audit report.

191    The Commission refers to Articles 6, 19 and 20 of the FP6 General Conditions and Articles 5, 13, 14 and 16 of the eTEN General Conditions (paragraph 147 above) and to Article 6.1.1 of the FP6 Guide. According to the Commission, the applicant was in breach of the provisions of the audited agreements which govern the declared personnel costs, since the applicant did not put in place a reliable system for recording working time. According to the Commission, there was no evidence that the applicant had set up a procedure, to organise the correct recording of working time for each project and for each action and the approval of that record in good time, which made it possible to justify the personnel costs declared for each project and each action. In this case, it is therefore, according to the Commission, very much open to doubt that the working time declared was recorded throughout the duration of the projects and action concerned, as required by Article 14.1.a of the eTEN General Conditions and by Article 6.1.1 of the FP6 Guide. Further, the failure to ensure that the working time declared with respect to the Michael and Michael+ agreements was certified at least once a month by the person in charge of the work designated by the applicant or by the applicant’s duly authorised financial officer constitutes a breach of Article 14.1.a of the eTEN General Conditions. Last, the discrepancies detected in the documentation produced by the applicant in order to justify the personnel costs declared for the implementation of the Michael and Michael+ agreements and the excessive declarations of personnel costs by comparison with annual personnel costs actually incurred by the applicant is indicative of a manipulation of working time records, with the aim of maximising the corresponding financial aid, which constitutes an irregularity within the meaning of Article 1.32 of the eTEN General Conditions.

192    The Commission refers in its written pleadings to point 4.2 of the final audit report, where it is stated that the applicant did not have a reliable system for recording working time which enabled the Commission to be satisfied as to the working time actually spent by the consultants on the implementation of each of the audited agreements, taking into consideration:

–        the absence of any formal working time recording procedure;

–        refusal of access to the Excel file, in order to confirm the working hours of consultants with respect to the implementation of the audited agreements, as recorded in good time;

–        the absence of sufficient measures to guarantee the integrity of the Excel file and the absence of timely and regular certification, by the consultant concerned, of the working time recorded in that file;

–        the failure of the leader of the project or action to certify, in due time, data recorded in the Excel file;

–        the fact that summaries of regular activities were neither published or submitted for approval, by the consultant concerned, to the leader of the project or action, but initially produced by Mr S., shareholder, director and President of the applicant, then submitted for signature to the consultant concerned;

–        the fact that summaries of regular activities were only produced and signed for each period of implementation of the Michael and Michael+ projects and the Minervaplus action (essentially on an annual basis) and not regularly throughout the duration of those projects or that action;

–        the fact that the summaries of regular activities were produced only for the Michael and Michael+ projects and the Minervaplus action, but did not give a comprehensive view of the working time of the consultants with respect to other activities, and that the extracts from the Excel file, which could have provided such a comprehensive view, revealed various discrepancies when they were compared with the working time declared with respect to other projects and other actions;

–        the absence of detail other than the number of days worked per month;

–        the absence of signed summaries of regular activities for the projects and actions not covered by the financial audit;

–        discrepancies observed between the summaries of regular activities, sent in the course of the financial audit, and the declaration of hours employed on the Michael and Michael+ projects and on the Minervaplus action, produced in a previous audit of documents carried out by the Commission;

–        doubts concerning the validity of certain signatures which appeared to be forged;

–        the finding that excessive costs were declared for certain consultants, as set out in detail in point 5.1 of the final audit report.

193    Article 6.1.1 of the FP6 Guide, as produced by the Commission at the request of the Court (paragraph 67 above), states inter alia the following:

‘The person in charge of the work designated by the contractor should certify the records. A simple estimation of hours worked is not sufficient. There must be as system that allows the time of any person working on the [action] to be followed and audited.’

194    As maintained by the Commission, in response to a written question from the Court and at the hearing, without contradiction from the applicant, that text explains in detail the obligations which flow, for the applicant, from Articles 19 to 24 of the FP6 General Conditions. It is apparent from, in particular, Article 19.1.a and 19.1.c, and Article 20.1, of the FP6 General Conditions that the methods for the recording and certification of the working time used by the contractor must make it possible for the Commission to check that the costs were incurred during the implementation of the project and can be attributed directly to it.

195    Article 14.1.a, in fine, of the eTEN General Conditions provides that all the working time charged to the financial aid agreement must be recorded throughout the duration of the project and must be certified, at least once a month, by the person in charge of the work as designated by the participant, in accordance with Article 2.2.b of the eTEN General Conditions, or by a duly authorised financial officer of the participant. Article 2.2.b of the eTEN General Conditions states that the participant must designate one or more persons of those directly responsible for the managerial and technical work on the project to direct their work and ensure that tasks are correctly performed.

196    It is apparent from the abovementioned articles that the applicant, as a participant in the Michael and Michael+ projects and in the Minervaplus action, was obliged to put in place a system for the recording and certification of the working time relating to each of those projects and that action which permits that system to be followed and audited throughout the entire duration of those projects and that action and, in the case of the Michael and Michael+ agreements, at least monthly. Compliance, by the applicant, with that obligation to produce reliable working time records was essential if the Commission was to be in a position to check, in the financial audit, that the time declared corresponded to actual work by the consultants directly responsible for the implementation of the audited agreements.

197    In this case, the applicant considers that it has put in place a formal procedure for the recording of working time. The applicant states that it has the Excel file, in which the number of days actually worked by each consultant was recorded, project by project and action by action. In practice, according to the applicant, that data was entered in the file at the beginning of the month following that in which the work had been carried out. The applicant refers to working time records (‘time sheets’), drawn up using a template used in all the projects and actions in which it participates. On the other hand, the applicant accepts that it did not put in place a ‘formal’ internal system for the control of recorded working time, that control being ‘on a continuous basis and in an “informal” way’. The establishment of a formal procedure for the control of recorded working time was unnecessary, according to the applicant, given that it is a small company, which operates very flexibly, though in full compliance with the Italian legislation, and in each fiscal year enters into contracts with 12-15 consultants who are responsible for the implementation of the projects and actions in which it participates.

198    In general, it must be observed that the fact that the applicant is small, that it operates flexibly and that it complies with the financial obligations imposed on it by the Italian legislation cannot justify non-compliance with the financial obligations laid down in the audited agreements, namely, in this instance, the obligation actually to put in place, albeit informally, a reliable procedure for the recording and certification of working time to permit the Commission to check, in a financial audit, that the working time declared for the implementation of the audited agreements corresponds to time actually worked by the consultants concerned on the Michael or Michael+ projects or on the Minervaplus action.

199    It is common ground that, at the time of the financial audit, the applicant provided to the Commission, with respect to each of the Michael and Michael+ projects and for the Minervaplus action, summaries of activities, relating to each of those projects or that action, indicating the number of days worked by each consultant on the project or the action concerned (‘the summaries of regular activities’). The summaries of regular activities, which are in the Court file, were drawn up essentially on an annual basis and signed by the applicant’s director and President, Mr S., then countersigned by each of the consultants concerned. Further, the applicant provided the Commission with final balance sheets [‘tables of closing balance’] and summaries of payments made to each consultant for the years 2004 to 2008, available only at the time of the financial audit. The summaries of regular activities and the final balance sheet and summaries of payments for the years 2004 to 2008 were attached as Annexes 5 and 6 to the SP report.

200    Further, it is common ground that, after the financial audit, the applicant supplied to the Commission, as Annex 6 to the SP report, final balance sheets and summaries of payments made to each consultant for the years 2009 and 2010. The latter documents are, however, of no relevance to these proceedings, since they relate to periods which postdate the periods audited in relation to the Michael and Michael+ projects and the Minervaplus action.

201    In that regard, it must, first, be observed that the system for the recording of working time relied on by the applicant rests on the existence of the Excel file, on the basis of which the summaries of regular activities were drawn up.

202    Yet, as is apparent from the final audit findings, which are not challenged, on this point, by the applicant, the Commission was refused, at the time of the financial audit, access to that Excel file, and consequently the Commission was not in a position to check that the applicant had in fact put in place a procedure for the recording and approval of the actual working time of each consultant on the implementation of each of the audited agreements.

203    In these proceedings, the applicant has equally failed to provide evidence of the existence, on its internal server, of the Excel file on which it relies. Further, it is difficult to reconcile the applicant’s arguments with its acknowledgement that, in the case of a number of consultants, it was not able either to define clearly or to break down the work carried out for the implementation of the Michael agreement and work carried out, at the same time in Italy, for the implementation of other agreements pursuing the same objective (paragraph 175 above).

204    In this case, there is therefore no good reason to believe that the summaries of regular activities, essentially established on an annual basis, are based on working time records which were made in due time, namely during the entire duration of the Michael and Michael+ projects and the Minervaplus action and, in the case of the Michael and Michael+ agreements, at least monthly, and that casts doubt on the reliability of the working time reported therein.

205    The summaries of regular activities were countersigned by the consultants concerned. Admittedly, the final audit findings, to which the Commission refers, express doubts on ‘the validity of some signatures which seem to be falsified’ (paragraph 192 above). However, those doubts must be discounted, since they are too general and lacking in detail. The fact remains however that, as correctly observed by the Commission, the signatures of the consultants concerned cannot, in the context of this case, be regarded as reliable certification of the working time reported in the summaries of regular activities. First, as has been stated in paragraph 204 above, there is no good reason to believe that those summaries are based on working time records made in due time. Next, the summaries of regular activities were essentially drawn up on an annual basis and therefore, most often, long after the work concerned was done, and they contain only very general information on the total number of hours worked and the tasks carried out. Last, as stated by the Commission without contradiction, on this point, by the applicant, before being submitted for signature to the consultants concerned, the summaries of regular activities were drawn up and signed by Mr S., namely the person responsible for concluding their employment contracts and under whose authority they had to implement them. In the circumstances of this case, the fact that the consultants concerned countersigned the summaries of regular activities cannot therefore be sufficient evidence of the reliability of the working time recorded therein.

206    Further, while the final balance sheets and the summaries of payments made to each consultant for the years 2004 to 2008 are evidence of payments made to the consultants concerned, for the years in question, those documents contain no information on the actual working time of each consultant with respect to the implementation of each of the audited agreements, when, during the period covered by the financial audit, the applicant directly participated in almost 40 actions and projects co-financed by the Community. Those documents do not therefore constitute reliable working time records, capable of justifying the personnel costs declared with respect to the audited agreements.

207    Nor does the audit carried out by SP, on the basis of documents supplied by the applicant, provide any assurance as to the reliability of the working time reported in those documents, as is moreover confirmed by the reservations expressed, in the SP report, with respect to the reliability and completeness of the information and documents supplied by the applicant.

208    In this case, the Court must therefore hold that the obligation, laid down in the audited agreements, to produce, for a financial audit, reliable working time records, capable of justifying the personnel costs declared with respect to the audited agreements, was not complied with.

209    The applicant cannot successfully defend itself by arguing, in essence, that it has always proceeded in this way in implementing other projects and other actions co-financed by the Community, without ever being criticised for so doing, or by arguing that the Commission did not provide it with any template for the recording of working time. First, the applicant has not established that, in the context of other actions and other projects co-financed by the Community, it was subject to a financial audit by the Commission in the course of which the failure to segregate costs in its accounts was detected and accepted. Further, it is not stated in the audited agreements that the condition that the applicant should be able to produce reliable working time records in order to justify the declared personnel costs was dependent on the Commission supplying a specific template for the making of those records. The corresponding arguments of the applicant must therefore be rejected.

210    The Court must also reject, as being unfounded, for the reasons previously set out in paragraphs 155 to 159 above, the applicant’s arguments that it was discriminatory for the Commission to have agreed, notwithstanding the absence of reliable working time records, to reimburse a large part of the personnel costs declared by M., for the implementation of the Minervaplus agreement, taking into consideration the fact that the technical performance of that action was good, but refuse to do the same in its case. In this case, since the Commission did not directly witness the performance of its tasks by the applicant, it had available to it no other means, to check the accuracy of the personnel costs declared by the applicant, than those which should be engendered by, inter alia, the production of reliable working time records (see, to that effect, judgment in Commission v IIC, paragraph 146 above, EU:T:2007:146, paragraph 116).

211    The Commission’s claim that the applicant was in breach of a financial obligation laid down in the audited agreements, since it was not able to produce, at the financial audit, reliable working time records to justify the personnel costs declared, is therefore well founded. Non-compliance with that obligation is sufficient ground for the rejection of all those costs (see, to that effect, the judgments in Commission v IIC, paragraph 146 above, EU:T:2007:146, paragraphs 114 to 117, and of 9 July 2013, Lito Maieftiko Gynaikologiko kai Cheirourgiko Kentro v Commission, T‑552/11, EU:T:2013:349, paragraph 64).

212    Consequently, there is no need to give a ruling with respect to other infringements of the financial obligations laid down in the audited agreements which were detected in the final audit findings and to which the Commission also refers as justification for the rejection of certain personnel costs, and the Court must hold that the Commission was entitled to reject, as being non-eligible and non-reimbursable, all the personnel costs declared by the applicant for the implementation of the audited agreements.

–       The other direct costs declared

213    The applicant declared, as other direct costs, first, a sum of EUR 3 793, for the implementation of the Minervaplus agreement, second, a sum of EUR 18 732.46, for the implementation of the Michael+ agreement, and, third, a sum of EUR 13 338.63, for the implementation of the Michael agreement. Those other direct costs relate, in practice, to travel costs and costs for the production of audit certificates.

214    The Commission, relying on the final audit findings, concludes that all the other direct costs declared for the implementation of the audited agreements have to be rejected as being either non-eligible or non-reimbursable and that, therefore, the grant and the financial aid paid to the applicant for that purpose have to be repaid. The grounds for that rejection are set out, for each of the Michael and Michael+ projects and for the Minervaplus action, in point 5.3.3 of the final audit report. As regards travel costs, those were also rejected in their entirety on the ground that either all the supporting documents required by Article 29.3 of the FP6 General Conditions or by Article 16 and Article 17.2 of the eTEN General Conditions had not been supplied at the time of the financial audit, or that the travel costs concerned consultants for whom no working time had been declared in the periods concerned and that, in any event, the work carried out by the consultants concerned was administrative work and the costs relating thereto constituted therefore indirect and not direct costs, or that the travel costs concerned consultants with respect to whom all the declared personnel costs were rejected. As regards the costs of audit certificates, those were also rejected in their entirety on the ground that the audit certificate was not reliable, taking into consideration the breach of financial obligations laid down in the audited agreements found in the financial audit, and that, taking into consideration the fact that the auditor, Mr Q, was a customer, supplier, subcontractor and partner of the applicant in a number of other actions and projects co-financed by the Community and at national or regional level, it was questionable whether Mr Q. had the independence required by Article 26.2 of the FP6 General Conditions and by Article 4.2.c of the eTEN General Conditions.

215    The applicant considers, in essence, relying on the conclusions of the SP report, that the payments made by the Commission with respect to other direct costs had been definitively acquired by it, since all those costs meet the conditions for eligibility and reimbursement laid down in the audited agreements. As regards travel costs, the applicant also particularly relies on the fact that the documentation was complete and adequate to justify the costs recorded and declared for the implementation of the audited agreements, relying in particular on the SP report. The applicant also claimed, in its observations on the provisional audit report, that, ‘even though [some consultants whose travel costs had been declared] had not signed any employment contract specifically for the project or for the action concerned, their travel had been duly authorised’ and ‘the participation of [those consultants] in events [linked to either of the Michael or Michael+ projects or to the Minervaplus action], without remuneration, but only reimbursement of travel costs, represented added value to that project or action, by providing on a voluntary basis additional services (obviously not declared with respect to the implementation of that project or action) and making possible savings’. As regards the costs of audit certificates, the applicant claimed, in its observations on the provisional audit report, that the auditor who had issued them, Mr Q., was independent since he was not responsible for the management or review of its accounts.

216    As regards the travel costs, it must be noted that, as is apparent from the applicant’s observations on the provisional audit report, the applicant has accepted the rejection of travel costs in relation to the Michael project of which it was made aware in the final audit findings.

217    Further, it must be recalled that travel costs constitute, in terms of eligibility, costs which are purely ancillary, in the sense that only the travel costs of members of staff whose costs have been accepted as eligible and reimbursable for the implementation of the grant or financial aid agreements concerned can, themselves, be classified as eligible and reimbursable (see, to that effect, the judgment in Commission v IIC, paragraph 146 above, EU:T:2007:146, paragraph 138).

218    It follows that the Commission’s rejection of the travel costs concerning consultants for whom no working time had been declared during the periods in question was well founded. The arguments put forward by the applicant to justify the charging of travel costs of consultants for whom no personnel costs had been declared are irrelevant, since there can be taken into account only costs directly linked to individuals who were ‘directly hired by the participant in accordance with his national legislation’, as laid down in Article 14.1.a of the eTEN General Conditions, or who work ‘under the instructions’ of the participant, in accordance with Article 6.1.1 of the FP6 Guide. Yet in this case, as the applicant itself acknowledges, the consultants concerned were involved on a voluntary basis in the Michael or Michael+ projects or in the Minervaplus action and not within the framework of an employment contract with the applicant, whose instructions they followed.

219    In any event, to the extent that the Commission was justified in refusing all the personnel costs declared for the implementation of the audited agreements (paragraph 212 above), the Commission is also justified in rejecting, as being non-eligible or non-reimbursable, all the travel costs which are ancillary to those personnel costs. Further, the applicant itself accepts that the eligibility of costs directly or indirectly linked to the personnel costs is dependent on the recognition of the personnel costs as being eligible. The applicant claims however that the Commission was inconsistent, in that it accepted that some travel costs were eligible.

220    In fact, the Commission acknowledges that it accepted the eligibility of the sum of EUR 770.78. In its letter of 22 December 2011, the Commission agreed to accept, as costs incurred for the implementation of the Michael agreement, a sum of EUR 215.73, corresponding to the costs of images and restaurant costs, and a sum of EUR 555.05, with respect to the constitution of a bank guarantee, in the light of the supporting documents produced by the applicant after the financial audit. For the remainder, the Commission maintained its position that all the other direct costs had to be rejected on the basis of the final audit findings.

221    The reimbursement of the costs of images and the costs of constituting a bank guarantee are specific direct costs, reimbursement of which is expressly provided for in Article 14.8 of the eTEN General Conditions. Those expenses are not purely ancillary to the costs of personnel working on the project, but are linked to the project itself. Accordingly it is possible, on presentation of supporting documents, for those expenses to be accepted as eligible and reimbursable, even though, otherwise, all the personnel costs are rejected on the ground that they cannot be justified. On the other hand, the reimbursement of restaurant expenses, which are purely ancillary to the costs of personnel working on the project, is indeed inconsistent with the comprehensive rejection of the latter costs.

222    However, even though the acceptance, by the Commission, of the eligibility of a sum of restaurant expenses among other direct costs declared for the implementation of the Michael agreement appears inconsistent, having regard to the fact that those costs are purely ancillary in relation to the personnel costs and the fact that the latter were wholly rejected by the Commission, that does not call into question the right of the Union, and of the Commission which represents it, to obtain, under the audited agreements, repayment of all other sums paid with respect to declared travel costs, in the absence of any waiver, in whole or in part, by the Union of that right. On the assumption that it is lawful, such a waiver, in view of the production of some supporting documents, must be regarded as a gesture by the Commission towards the applicant, which is to its advantage, but which cannot have any effect beyond what the waiver expressly covers.

223    As regards the costs of audit certificates, it must be observed that, while Article 26.2 of the FP6 General Conditions and Article 4.2.c of the eTEN General Conditions permitted the applicant freely to choose its external auditor, one of the conditions was that the external auditor should be ‘independent’ of the applicant.

224    In this case, the applicant does not deny that, on many occasions, it has worked together with Mr Q. in a number of other actions and other projects co-financed by the Community and at national or regional level. As correctly stated by the Commission, such relationships were capable of affecting the freedom of judgment of Mr Q. vis-à-vis the applicant, which was also his partner, and, therefore of raising doubts that the audit certificates had been drawn up independently. Further, the breach of the financial obligations laid down in the audited agreements identified in paragraphs 179 and 211 above is sufficient ground for the finding that the audit certificates drawn up by Mr Q. are not reliable.

225    In the light of the foregoing, the Commission’s claim that the costs of the audit certificates must be rejected as being not reimbursable under the audited agreements is well founded.

226    Consequently, leaving aside the sum of EUR 770.78 the eligibility of which it accepted, the Commission was justified in rejecting, as being non-eligible and non-reimbursable, the other direct costs declared by the applicant for the implementation of the audited agreements.

–       The declared indirect costs

227    The applicant declared, as indirect costs, first, a sum of EUR 8 307.67, for the implementation of the Minervaplus agreement, second, a sum of EUR 100 751.45, for the implementation of the Michael+ agreement and, third, a sum of EUR 103 316.49, for the implementation of the Michael agreement. In relation to the Michael and Michael+ projects, those indirect costs were calculated by applying a flat rate of 20% to the declared direct costs, with the exception of the direct costs of subcontracting. In relation to the Minervaplus action, the indirect costs were calculated by applying a flat rate of 30% to the declared personnel costs.

228    The Commission refers to the final audit findings to the effect that the indirect costs declared for the implementation of the audited agreements cannot be charged to the Union, because of the rejection of the corresponding direct costs in their entirety.

229    The applicant itself accepts that the eligibility of the indirect costs is dependent on recognition of the eligibility of the direct costs.

230    Indeed, given that the calculation of the indirect costs used in this case is by means of a flat rate multiplier (paragraph 227 above), the declared indirect costs can be taken into account only to the extent that the personnel costs and, where appropriate, the other declared direct costs have been accepted. That is not the case here, with the exception of the sum of EUR 154.15, which was accepted by the Commission as an eligible cost for the implementation of the Michael agreement, as a consequence of the recognition of the eligibility of some other direct costs, amounting to EUR 770.28 (paragraph 33 above).

231    Consequently, the Commission was justified in rejecting, as being non-eligible, the indirect costs declared by the applicant for the implementation of the audited agreements, excluding the sum of EUR 154.15 mentioned in paragraph 230 above.

–       The costs declared by the applicant in the context of adjustments

232    The applicant sets out no specific argument concerning the adjustments to costs carried out in the final audit findings and on which the Commission also relied in order to determine the amounts of the grant or financial aid which had to be recovered from the applicant.

233    In the light of what is stated above to support the rejection of all the declared costs, and in the absence of specific challenges by the applicant on this point the Court must take note of the adjustments thus made by the Commission.

–       The receipts not declared

234    In the context of these proceedings, the Commission does not rely on the final audit findings which indicate that the applicant failed to declare some receipts which it had obtained in relation to the implementation of the audited agreements. Those receipts corresponded to financial transfers from the coordinator of the Michael and Michael+ projects and of the Minervaplus action, namely M., to the applicant, under commercial agreements whereby M. subcontracted to the applicant tasks for which it was responsible, in accordance with the technical annex/Annex I to the audited agreements. According to the findings of the final audit report, the receipts, which represent profits made by the applicant under the commercial agreements concerned, amount to the sum of EUR 168 489, in relation to the Minervaplus agreement, the sum of EUR 293 939, in relation to the Michael+ agreement, and the sum of EUR 208 106, in relation to the Michael agreement.

235    It is clear that the Commission does not rely on the final audit findings in support of its claim for repayment or even of the mere finding by the Court of an ‘irregularity’ within the meaning of Article 1.11 of the FP6 General Conditions and Article 1.31 of the eTEN General Conditions. Those undeclared transfers are only to be classified as a material breach, by the applicant, of its obligations under Article 23 and Article 24.2 of the FP6 General Conditions and Article 13.1 of the eTEN General Conditions.

236    In any event, the Commission’s only interest in relying on the amount of those receipts was to offset against those receipts the amount of the costs, declared and accepted, which remained payable to the applicant. It is however clear from the foregoing that those costs may, correctly, be rejected by the Commission, and consequently there is no need to offset them.

237    Consequently, there is no need to give a ruling on the applicant’s arguments directed against the final audit findings relating to the receipts allegedly obtained in the course of implementation of the audited agreements.

–       Claims concerning the obligation to repay the amounts of grant and financial aid sought in Debit Notes No 3241201788, No 3241202744 and No 3241212122, under the audited agreements

238    Contrary to what is claimed by the applicant, the obligation to repay the amounts of grant and financial aid sought in Debit Notes No 3241201788, No 3241202744 and No 3241212122 is not in breach of the principle that the audited agreements should be implemented in good faith, pursuant to the third paragraph of Article 1134 of the Belgian and Luxembourg Civil Codes, as interpreted by the case-law produced by the applicant in the course of these proceedings.

239    Having regard to the breach of the financial obligations laid down in the audited agreements, the repayment of the grant and financial aid paid to the applicant, under those agreements, is justified in the light of Article 31.1 of the FP6 General Conditions and Article 19.1 of the eTEN General Conditions, irrespective of whether the audited agreements were performed well in technical terms (paragraphs 151 to 159 above).

240    Further, that repayment corresponds to the Commission’s exercise of rights which the Union derives from the Minervaplus agreement, that being fully compatible with the requirements of sound financial management and protection of the financial interests of the Union. The applicant has been unable to establish malicious intent or even, merely, recklessness or negligence by the Commission in the exercise of those rights. In particular, the applicant has adduced no evidence to support a finding that the Commission discovered or was in a position to discover the breach of the financial obligations laid down in the audited agreements, as identified in paragraphs 179 and 211 above, before carrying out its financial audit, for example on the occasion of an audit of documents carried out during the period of implementation of the audited agreements.

241    In the light of all the foregoing findings, the counterclaim of the Commission must be upheld, in so far as the Commission requests that the applicant be ordered to repay to it the amounts of grant and financial aid sought in Debit Notes No 3241201788, No 3241202744 and No 3241212122, in accordance with Article 31.1 of the FP6 General Conditions and Article 19.1 of the eTEN General Conditions, namely a sum of EUR 50 458.23, corresponding to the grant paid under the Minervaplus agreement, a sum of EUR 261 947.36, corresponding to the financial aid paid under the Michael+ agreement, and a sum of EUR 358 712.35, corresponding to the financial aid paid under the Michael agreement.

242    Conversely, the Court must reject, as being unfounded, the claims in the action seeking, in essence, a declaration that the sums sought in Debit Notes No 3241201788, No 3241202744 and No 3241212122 are not payable and the claims in the action seeking, in the alternative, a reduction of those amounts to a sum not exceeding EUR 54 195.05.

 Payment of the financial penalty sought in Debit Note No 3241204876

243    The Commission claims that the applicant should be ordered to pay to it the sum of EUR 5 045.82, sought in Debit Note No 3241204876, as a financial penalty for grave breach of the financial obligations laid down in the Minervaplus agreement, in accordance with Article 30.6 of the FP6 General Conditions.

244    The applicant contends, in essence, that the financial penalty is not payable, in the absence of grave breach of the financial obligations laid down in the Minervaplus agreement, and argues, in any event, that the amount of that penalty is excessive.

245    It must be borne in mind that Article 30.6 of the FP6 General Conditions is worded as follows:

‘… as established by [the Financial Regulation and the Implementing Rules], any contractor declared to be in grave breach of its contractual obligations shall be liable to financial penalties of between 2% and 10% of the value of the Community financial contribution received by that contractor. …’

246    It follows from that provision that, in accordance with the provisions of the Financial Regulation and the Implementing Rules, the parties to the Minervaplus agreement determined the coercive measures intended to ensure, even in the absence of loss, that the contracting parties would perform their obligations. That provision must therefore be deemed to be a penalty clause.

247    As regards the insertion of penalty clauses in contracts, Article 1152 of the Luxembourg Civil Code reads as follows:

‘Where an agreement provides that a party which fails to perform its obligations is to pay a fixed sum as damages, the other party may not be awarded any greater or lesser sum.

Nonetheless, a court may reduce or increase the penalty which had been agreed, if the penalty is manifestly excessive or derisory. Any contractual provision to the contrary is to be deemed pro non scripto.’

248    It follows from the Luxembourg case-law that a penalty clause is an agreed and fixed assessment of contractual damages which is intended to avoid the difficulties a court may have in assessing damages by establishing a fixed sum which dispenses with any argument on the existence or extent of loss (Cour de cassation luxembourgeoise, 2 October 1996, 30, 145).

249    In this case, if a grave breach of the financial obligations laid down in the Minervaplus agreement can be identified, a financial penalty which may extend to up to 10% of the value of the grant received by the applicant may be claimed from the applicant by the Commission, on the basis of Article 30.6 of the FP6 General Conditions.

250    Yet it has already been stated, in paragraphs 179 and 211 above, that the applicant was in breach of the financial obligations laid down in the Minervaplus agreement, first, by omitting to put in place accounts specific to the Minervaplus action or, at the least, adequate accounting procedures which made it possible to reconcile directly the costs reported in the financial statements with those recorded in its general accounts and, second, by omitting to put in place a reliable procedure for the recording and certification of the working time of consultants with respect to the implementation of the Minervaplus action.

251    That breach, by the applicant, of the financial obligations laid down in the Minervaplus agreement can be classified as grave, since it precluded the Commission being able to check, at the time of the financial audit, whether the costs declared by the applicant were eligible and reimbursable, which is why, it may be added, the Commission was justified in rejecting those costs (paragraph 211 above). Further, that breach imposed work on the Commission and, therefore, significant costs, in particular by obliging the Commission, at the financial audit, to have recourse to other procedures in an attempt to verify the relevance of the costs declared by the applicant.

252    Consequently, there is no need to give a ruling on the other breaches of the financial obligations laid down in Minervaplus agreement relied on by the Commission by reference to the final audit findings, and the Court must hold that, in this case, the Commission’s claim that the applicant should pay a financial penalty, on the basis of Article 30.6 of the FP6 General Conditions, is well founded.

253    The sum of EUR 5 045.82 claimed by the Commission, as a financial penalty, does not exceed the maximum fixed in Article 30.6 of the FP6 General Conditions, corresponding to 10% of the value of the grant received by the applicant under the Minervaplus agreement.

254    Since the applicant submits that this sum is, in this case, excessive, it must be recalled that the question whether a penalty clause is or is not manifestly excessive, a matter which must be objectively assessed as at the date when the court gives a ruling, can be determined solely by a comparison of the loss actually suffered by the party to whom the obligation is owed and the sum of the indemnity agreed. If a court refuses the requested modification of the clause, no grounds need be given for the decision, for in so doing the court is purely and simply applying the agreement of the parties (Cour de cassation luxembourgeoise, 9 November 1993, 29, 293).

255    Contrary to what is claimed by the applicant, it is clear that the sum of EUR 5 045.82 sought by the Commission, as a financial penalty, cannot be classified as manifestly excessive, within the meaning of the case-law cited in paragraph 254 above.

256    Further, contrary to what is claimed by the applicant, the Commission’s claim is not in breach of the principle that the Minervaplus agreement should be implemented in good faith, pursuant to the third paragraph of Article 1134 of the Luxembourg Civil Code (paragraph 238 above). The claim represents the Commission’s exercise of rights which the Union derives from the Minervaplus agreement, that being fully compatible with the requirements of sound financial management and protection of the financial interests of the Union. The aim of the effective application of such a financial penalty is to deter those who enter into contracts with the Community or the Union from committing serious breaches of the financial obligations laid down in the grant agreements concluded with them. The applicant has been unable to establish malicious intent or even, merely, recklessness or negligence by the Commission in the exercise of those rights.

257    Consequently, the Court must uphold the counterclaim of the Commission, in so far as the Commission asks that the applicant should be ordered to pay it a sum of EUR 5 045.82, as a financial penalty, under Article 30.6 of the FP6 General Conditions.

258    Conversely, the Court must reject, as being unfounded, the claims in the action seeking, in essence, a declaration that the sum claimed in Debit Note No 3241204876 is not payable, or that it should be reduced as being excessive.

 The payment of interest on late payment

259    The Commission claims the payment of interest on late payment with respect to the sums claimed in Debit Notes No 3241201788, No 3241204876, No 3241202744 and No 3241212122, as from the deadlines for payment fixed in those notes, namely 5 April, 22 June, 7 May and 27 December 2012 respectively.

260    As regards the sums claimed in Debit Notes No 3241201788, No 3241202744 and No 3241212122, it must be recalled that, in accordance with Article 19.2 of the eTEN General Conditions and Article 31.2 of the FP6 General Conditions, sums not paid by the date fixed by the Commission are to bear interest on the terms stated in Article 3.6 of the eTEN General Conditions and in Article 28 of the FP6 General Conditions respectively.

261    Article 3.6 of the eTEN General Conditions and Article 28.7 of the FP6 General Conditions provide that in the event of late payment interest is to be calculated at the rate applied by the European Central Bank (ECB) to its principal refinancing operations (published in the C series of the Official Journal of the European Union) in force on the first calendar day of the month in which the sums at issue were payable, plus 3.5 percentage points.

262    It is apparent from a combined reading of Article 19.2 and Article 3.6 of the eTEN General Conditions, on the one hand, and Article 31.2 and Article 28.7 of the FP6 General Conditions, on the other, that the sums at issue bear interest as from the date fixed by the Commission for their payment.

263    The applicant must therefore be ordered to pay the interest provided for in the abovementioned articles on the sums referred to in paragraph 241 above, as from the dates fixed by the Commission for their payment in Debit Notes No 3241201788, No 3241202744 and No 3241212122, that is, from 6 April 2012, as regards the sum of EUR 50 458.23 to be repaid under the Minervaplus agreement, from 8 May 2012, as regards the sum of EUR 358 712.35 to be repaid under the Michael agreement, and from 28 December 2012, as regards the sum of EUR 261 947.36 to be repaid under the Michael+ agreement.

264    The rate applicable is 4.5%, as regards the sum of EUR 50 458.23 to be repaid under the Minervaplus agreement, which corresponds to the rate applied by the ECB to its principal refinancing operations on 1 April 2012, that is 1% (OJ 2012 C 101, p. 5), plus 3.5 percentage points; 4.25%, as regards the sum of EUR 261 947.36 to be repaid under the Michael+ agreement, which corresponds to the rate applied by the ECB to its principal refinancing operations on 1 December 2012, that is 0.75% (OJ 2012 C 374, p. 11), plus 3.5 percentage points, and 4.5%, as regards the sum of EUR 358 712.35 to be repaid under the Michael agreement, which corresponds to the rate applied by the ECB to its principal refinancing operations on 1 May 2012, that is 1% (OJ 2012 C 128, p. 7), plus 3.5 percentage points.

265    The interest calculated at the rates indicated in paragraph 264 above will be payable on the sums referred to in the same paragraph, until full payment of those sums.

266    As regards the sum claimed in Debit Note No 3241204876, it is also apparent from Article 31.2 and Article 28.7 of the FP6 General Conditions (paragraphs 260 to 262 above) that that sum is to bear interest at the rate applied by the ECB to its principal refinancing operations (published in the C series of the Official Journal) on the first day of the month in which that sum was payable, plus 3.5 percentage points.

267    The applicant must therefore be ordered to pay the late payment interest provided for in the abovementioned articles on the sum referred to in paragraph 257 above, as from the date fixed by the Commission for payment in Debit Note No 3241204876, namely from 23 June 2012.

268    The rate applicable is 4.5%, which corresponds to the rate applied by the ECB to its principal refinancing operations on 1 June 2012, that is 1% (OJ 2012 C 156, p. 9), plus 3.5 percentage points.

269    The late payment interest calculated at the rate indicated in paragraph 268 above will be payable on the sum referred to in paragraph 257 above, until full payment of that sum.

 The head of claim in the action requesting, in essence, that the Commission should be ordered to pay to the applicant, first, compensation for the loss suffered because of the suspension of payment at issue and, second, the sums which remain payable under the Athena and Judaica agreements, and that the Court take note of the fact that Commission has abandoned its challenge to those sums

270    The applicant asks the Court, in essence, to find that the Commission engaged the contractual liability of the European Union by effecting the suspension of payment at issue. Consequently, the applicant claims that the Commission should be ordered to pay to it a sum of EUR 46 044.17, as compensation for the loss which it suffered because of the suspension of payment at issue, which corresponds to the amount of interest paid on bank loans taken out by the applicant so that it could continue, notwithstanding that suspension, to perform its own obligations under the Athena and Judaica agreements.

271    Further, the applicant claims that the Commission should be ordered to pay to it (i) a sum of EUR 81 991.76, corresponding to the difference between the amount of the grant provided for in the Athena agreement, namely EUR 290 000, and the amounts of EUR 116 000 and EUR 92 008.24 which have in fact been paid to it, (ii) a sum of EUR 176 993.11, corresponding to the difference between the amount of the grant provided for in the Judaica agreement, namely EUR 183 900, and the sum of EUR 6 906.89 which has in fact been paid to it, and (iii) a sum of EUR 31 656.71, corresponding to interest on late payment due to the delay in payment by the Commission of the sums payable to the applicant following the suspension of payment at issue, calculated in accordance with the provisions of Article 17.c of the eContentPlus General Conditions, that is, a total of EUR 290 641.58.

272    Last, the applicant claims, in essence, that the General Court should take note of the fact that the Commission abandoned its challenge to the amounts still payable to the applicant under the Athena and Judaica agreements.

273    The Commission disputes the applicant’s arguments and contends that the abovementioned claims in the action should be rejected as being, in essence, unfounded.

 Payment of a sum of EUR 46 044.17, as compensation for the loss suffered by the applicant because of the suspension of payment at issue

274    The objective of this claim is essentially that the General Court should declare that the Commission failed to fulfil its obligations of payment, as the representative of the Community then of the Union, under the Athena and Judaica agreements, and that, accordingly, the Commission caused the Union to incur contractual liability, on the basis of Article 340 TFEU.

275    Article 1142 of the Luxembourg Civil Code, which is in Title III of Book III of that code, headed ‘Contracts or obligations arising from agreements in general’, provides that ‘[a]ny obligation to do or not do shall result in payment of damages, in the event of non-performance by the party on whom the obligation is imposed’.

276    Article 1147 of the Luxembourg Civil Code provides:

‘The party on whom an obligation is imposed shall be ordered, when appropriate, to pay damages, either by reason of the non-performance of the obligation, of because of delayed performance, whenever he cannot demonstrate that the cause of non-performance is external and cannot be attributed to him, and that there was no bad faith on his part’.

277    It follows from those provisions that the fact which determines contractual liability, according to the Luxembourg Civil Code, is the non-performance, total or partial, of the contract or obligation arising from an agreement, attributable to one of the contracting parties. In order to obtain compensation for loss suffered due to the non-performance of a contract or obligation arising from an agreement, whether or not relating to property, it is for the party claiming compensation to establish a causal link between the non-performance of the contractual obligations and the loss, as it has materialised.

278    In this case, the applicant claims that the effect of the non-performance, by the Commission, of the obligations of payment laid down in the Athena and Judaica agreements was to cause it to suffer loss, for which it claims compensation, since the applicant had to borrow money in order to continue to perform its own obligations under the Athena and Judaica agreements.

279    In its defence, the Commission argues that the non-payment of the sums still payable to the applicant under the Athena and Judaica agreements was not a wrongful non-performance of the obligations laid down in those agreements, but the simple consequence of the suspension of payment at issue, applied in accordance with Article 17.1.b of the eContentPlus General Conditions.

280    In a purely contractual context, the suspension by one of the parties of performance of its obligations arising from an agreement may, as a general rule, derive only from a right to that effect accorded by the agreement to the party which suspends the performance of its own obligations under the agreement or, in the absence of such a right, a plea of non-performance or exceptio non adimpleti contractus (see, to that effect, the judgment in Lior v Commission and Commission v Lior, paragraph 156 above, EU:T:2009:365, paragraphs 515 to 519). The Commission particularly relies, in this case, on the fact that Article 17.1.b of the eContentPlus General Conditions conferred on it the right to suspend the performance of its own obligations.

281    Article 17.1(b) of the eContentPlus General Conditions reads as follows:

‘The Commission may suspend any payment where the payment request does not comply with the provisions of this agreement, or where supporting documents have not been produced, or where additional checks are required or where it has been decided to hold a financial audit, pursuant to Article … 18 [of the eContentPlus General Conditions], or a technical review, pursuant to Article … 19 [of those General Conditions]. The Commission may also suspend its payments or instruct the coordinator not to make any payment to a beneficiary where it suspects fraud or serious financial irregularity on the part of the beneficiary. The Commission shall inform the beneficiary of any such suspension by registered letter with advice of delivery or equivalent. Suspension shall take effect on the date when notice is sent by the Commission. The remaining payment period shall start to run again from the date when a properly constituted request for payment is registered, when the supporting documents requested are received or at the end of the suspension period as notified by the Commission.’

282    In this case, it is not disputed that the Commission instructed the coordinator of the Athena and Judaica actions to carry out the suspension of payment at issue without even informing the applicant in advance, as required by Article 17.1.b of the eContentPlus General Conditions. The Commission cannot justifiably claim that the instruction given to the coordinator was the equivalent, in that regard, of informing the applicant, since the beneficiary of the sums concerned was the applicant and not the coordinator, who played, for that purpose, only a role of intermediary between the applicant and the Commission, which itself was acting in the name of and on behalf of the Community or the Union.

283    The Commission informed the applicant in its letter of 18 October 2011 that the suspension of payment at issue, which took place in 2010, was a precautionary measure taken in the light of the final audit findings and the financial audits carried out of other parties to the audited agreements. According to the Commission, having regard to the systematic nature of the financial irregularities described in the final audit findings, it was very probable that equally serious irregularities of the same kind had been committed in the implementation, by the applicant, of the Athena and Judaica agreements. The Commission added that the final audit findings had the implication that the applicant should undertake, by extrapolation, adjustments of the financial statements which it had issued for the implementation of Athena and Judaica agreements, as stated in its letter of 10 June 2011. Last, the Commission stated that, in so far as the challenges made by the applicant to the final audit findings had not become definitive and the adjustments implied by those findings had not been made, the payments could not be resumed.

284    It must be observed that, while, in the letter of 10 June 2011, the Commission did indeed state to the applicant that the implication of the final audit findings was that the applicant should undertake, by extrapolation, adjustments of the financial statements which it had issued for the implementation of other non-audited agreements, the Commission referred only to the other projects in the eTEN programme in which the applicant was a participant, namely the EuroMuse and BSOLE projects, and not to the Athena and Judaica actions.

285    Only in the letter of 18 October 2011, therefore, did the Commission inform the applicant, for the first time, of the reasons for the suspension of payment at issue, which had been instructed in 2010, namely the serious financial irregularities, of a systematic nature, described in the final audit findings, and of when that suspension would come to an end, namely when the applicant had sent to it, under the Athena and Judaica agreements, claims for payment incorporating the adjustments implied by those findings.

286    It follows that, for the entire period of implementation of the Athena action, from 1 November 2008 until 30 April 2011, and for almost the entire period of implementation of the Judaica action, from 1 January 2010 until 31 December 2011, the applicant was subject to the suspension of payment at issue without having been informed, by the Commission, of the reasons and terms of that suspension. The suspension of payment at issue, thus instructed, did not meet the conditions laid down in Article 17.1.b of the eContentPlus General Conditions and, consequently, could have no legal effect. The applicant is therefore, in this instance, correct to claim that the Commission failed to fulfil its contractual obligations by instructing the suspension of payment at issue before sending the letter of 18 October 2011. Accordingly, there is no need to take account of the Commission’s assertions that it could also rely on the unilateral power to suspend the performance of its obligations which it derives from Article 106(4) and Article 183 of the Implementing Rules.

287    Since it has been possible to identify a failure by the Commission to fulfil its contractual obligations, it remains therefore to be examined whether, in support of its claims for compensation, the applicant has demonstrated a loss which was caused by the suspension of payment at issue prior to the sending of the letter of 18 October 2011, that is to say during the entire period of implementation of the Athena action and almost that of the Judaica action.

288    The applicant claims that the suspension of payment at issue during the period in question caused loss, by exposing it to cash-flow difficulties, which themselves gave rise to certain financial costs. The applicant claims that it had to take out bank loans, amounting to EUR 223 113.98, in order to be able to remunerate the personnel working on the Athena and Judaica actions and to be able to continue to perform its own obligations under the Athena and Judaica agreements. The result was an additional cost, corresponding to the interest payable on the bank loans taken out, amounting to EUR 46 044.17.

289    In support of its claim, the applicant refers, in general terms and without any other form of analysis, to a set of ‘documents relating to the amount used … in order to pay the invoices [and] interests’. These are bank statements of accounts opened either with the bank P. or the bank S., the statements having been issued between 31 March 2009 and 1 October 2011.

290    Those documents are not however sufficient to prove that the applicant’s claim for compensation is well founded.

291    First, it must be observed that, as is acknowledged by the applicant itself, the Commission instructed the coordinator of the Judaica and Athena actions to carry out the suspension of payment at issue only on 8 February 2010 and 14 June 2010 respectively. Yet a number of the bank statements produced by the applicant predate 8 February 2010 and the debited interest reported therein cannot therefore correspond to bank loans taken out because of the suspension of payment at issue.

292    Next, the applicant has adduced no evidence of the remuneration which it claims to have paid, after 8 February 2010, to personnel working on the Judaica action and, after 14 June 2010, to personnel working on the Athena action, nor of the bank loans, amounting to EUR 223 113.98, which it claims to have taken out. Accordingly there is no evidence, in the court file, that those loans were taken out or, a fortiori, that the amounts of debited interest reported in the bank statements produced by the applicant relate to the implementation of those loans. Consequently, it is not possible to establish a causal link between (i) the suspension of payment at issue, for the entire period of implementation of the Athena action and for almost the entire period of implementation of the Judaica action, and (ii) the debited interest recorded in the bank statements produced by the applicant.

293    Last, it must be observed that, although the bank statements produced by the applicant are numerous and contain data of various kinds, the applicant has provided no indication of those which it has selected and aggregated in order to come to the amount of debited interest stated in the application, that is EUR 46 044.17. It is not the task of the Court to investigate how the data to be found in the bank statements produced by the applicant might make it possible to support the amount of debited interest calculated by the applicant.

294    For all the foregoing reasons, the Court must reject the claims in the action requesting that the Commission should be ordered to pay to the applicant a sum of EUR 46 044.17, as compensation for the loss suffered by the applicant because of the suspension of payment at issue.

 Payment of the amounts still payable to the applicant under the Athena and Judaica agreements

295    The applicant claims that the Commission still owes to it certain sums for the implementation of the Athena and Judaica agreements, those sums corresponding to the difference between the amount of the grant provided for in each of those agreements and the amounts which were actually paid to the applicant.

296    In response to a written question from the Court, the Commission disputed however that there are still certain sums payable to the applicant for the implementation of the Athena and Judaica agreements. All the sums corresponding to the costs declared in the final reports sent by the applicant, on 5 March and 5 July 2012 respectively, and accepted as being eligible have, according to the Commission, been paid, on 12 February 2013, by means of bank transfers to the coordinators of the projects concerned. The Commission refers, in that regard, to the evidence in the court file.

297    It is apparent from material in the file that all the sums corresponding to the costs declared by the applicant under the Athena and Judaica agreements and accepted as being eligible were indeed paid, on 12 February 2013, by means of bank transfers to the coordinators of the projects concerned. There is therefore no sum which remains payable to the applicant under those agreements.

298    Questioned on this point at the hearing, the applicant remained unable to support its claims which, having regard to their wording, appear to be based on the idea that it is entitled to the whole of its share of the maximum amount of the grant provided for in Article 5(2) of the Athena and Judaica agreements. Yet it is apparent from that provision, read together with Article 8 of the Athena and Judaica agreements and in the light of the case-law (paragraph 146 above), that the applicant is only entitled to reimbursement of a proportion of the costs declared and accepted as being eligible and reimbursable, subject to the extent of its share of the maximum amount of the grant provided for in those agreements.

299    The Court must therefore reject the claims in the action seeking payment of certain sums said to remain payable to the applicant under the Athena and Judaica agreements.

 The claims in the action requesting the Court to take note of the fact that the Commission abandoned its challenge to the amounts which continued to be payable to the applicant under the Athena and Judaica agreements

300    Since the Court has held that all the sums payable to the applicant under the Athena and Judaica agreements had been paid (paragraph 297 above), there is no need to give a ruling on these claims.

 The head of claim in the action that the Court should order the Commission to reimburse to the applicant the amount of the fees paid to its legal advisers and to SP

301    The applicant claims that the Commission should be ordered to reimburse to it a sum of EUR 138 396, corresponding to the fees which it paid to its legal advisers and to SP in order to prepare for this action. It bases its claim on Articles 1149 and 1151 of the Belgian Civil Code and the Luxembourg Civil Code and also on Belgian case-law, according to which the costs incurred in defending judicial proceedings may be taken into account in the calculation of damages (Cour de cassation belge, 28 April 1986, Pas. 1986, I, 1043).

302    The Commission contends that those claims should be rejected as being unfounded.

303    It must be recalled that the right to recover the costs of proceedings and the right to damages are, in principle, subject to different rules and are independent of each other (judgment of 28 June 2007, Internationaler Hilfsfonds v Commission, C‑331/05 P, ECR, EU:C:2007:390, paragraph 22).

304    Having regard to its wording, this head of claim must be understood as being a claim for compensation, based on the Union incurring contractual liability. Further, irrespective of this head of claim, the applicant has claimed that the Commission should be ordered to pay to it all costs and expenses which it has incurred in these proceedings.

305    The applicant considers, in essence, that the Commission should reimburse to it expenses which correspond to fees which it had to pay to its legal advisers and to SP in order to defend itself against the unfair, because in breach of good faith, exercise of rights which the Commission derives from the audited agreements and from the Judaica and Athena agreements.

306    Admittedly, the Commission did, in this case, exercise the rights which it derived from the Judaica and Athena agreements in a way which did not conform to that provided for in those agreements, by ordering the suspension of payment at issue for the period prior to the sending of the letter of 18 October 2011 (paragraph 286 above). Even if that breach of contract were to represent an unfair, because in breach of good faith, exercise of rights which the Commission derives from the audited agreements and from the Judaica and Athena agreements and, therefore, an infringement of the third paragraph of Article 1134 of the Luxembourg Civil Code, there is no reason why the Court should uphold the head of claim in the action that the Commission should be ordered to reimburse to the applicant the amount of the fees paid to its legal advisers and to SP. The breach of contract identified has no connection with the drawing up of the SP report. Consequently, that breach cannot be a ground for the Commission reimbursing to the applicant the costs incurred in that context.

307    The Court must therefore reject, as being unfounded, the head of claim in the action that the Commission should be ordered to reimburse to the applicant the amount of the fees paid to its legal advisers and to SP.

 The head of claim in the action that the Commission should be ordered to reimburse all the costs and expenses incurred by the applicant in connection with the present proceedings

308    The applicant claims that the Commission should be ordered to reimburse all the costs and expenses incurred by it in connection with the present proceedings, on the ground that the sole reason why the proceedings were brought was the unfair or improper conduct of the Commission. The applicant estimates, provisionally, that the amount of its fees and expenses is EUR 50 000.

309    The Commission submits that this head of claim should be rejected as being unfounded.

310    Having regard to its wording, this head of claim must be interpreted as seeking from the Court an order that the Commission should pay the costs of these proceedings.

 Costs

311    Under Article 134(1) of the Rules of Procedure of the General Court, the unsuccessful party is to be ordered to pay the costs if they have been applied for in the successful party’s pleadings. However, under Article 135(1) of the Rules of Procedure, exceptionally, if equity so requires, the Court may decide that an unsuccessful party is to pay only a proportion of the costs of the other party in addition to bearing its own. Further, under Article 135(2) of those rules, the Court may order a party, even if successful, to pay some or all of the costs, if this appears justified by the conduct of that party, including before the proceedings were brought.

312    In this case, while the applicant has been unsuccessful, it is apparent from paragraph 286 above that the Commission failed to fulfil some of its obligations towards the applicant, which might have induced the applicant to bring this action. That being the case, the Court considers that it is equitable and justified to order the applicant to pay, in addition to its own costs, four fifths of the Commission’s costs. The Commission shall therefore bear one fifth of its own costs.

On those grounds,

THE GENERAL COURT (First Chamber)

hereby:

1.      Declares that there is no need to give a ruling on the head of claim of Amitié Srl requesting the Court to take note of the fact that the European Commission abandoned its challenge to the amounts which remained payable to the applicant for the implementation of the grant agreements references ECP-2007-DILI‑517005, relating to the Athena (Access to cultural heritage networks across Europe) action, and ECP-2008-DILI‑538025, relating to the Judaica Europeana (Jewish urban digital European integrated cultural archive) action;

2.      Dismisses the action as to the remainder;

3.      Orders Amitié to pay to the Commission (i) a sum of EUR 50 458.23, with interest on late payment at the rate of 4.5% per annum from 6 April 2012 and until full payment of that sum, (ii) a sum of EUR 261 947.36, with interest on late payment at the rate of 4.25% per annum from 28 December 2012 and until full payment of that sum, (iii) a sum of EUR 358 712.35, with interest on late payment at the rate of 4.5% per annum from 8 May 2012 and until full payment of that sum, and (iv) a sum of EUR 5 045.82, with interest on late payment at the rate of 4.5% per annum from 23 June 2012 and until full payment of that sum;

4.      Orders Amitié to bear its own costs and to pay four fifths of the costs of the Commission;

5.      Orders the Commission to bear one fifth of its own costs.

Kanninen Pelikánová Buttigieg

Delivered in open court in Luxembourg on 8 September 2015.

[Signatures]

Table of contents

Facts giving rise to the dispute

Facts subsequent to the bringing of the action

Procedure and forms of order sought by the parties

Law

1. The jurisdiction of the General Court

2. The applicable law

The legislation and law applicable to the Michael, Michael+, BSOLE and EuroMuse agreements

The legislation and law applicable to the Judaica, Athena and Minervaplus agreements

3. Admissibility

The head of claim in the action seeking a declaration, first, that the Commission’s right to require the applicant to extrapolate the final audit findings to the BSOLE agreement is time-barred and, second, that the sum of EUR 5 045.82 claimed by the Commission from the applicant in the Debit Note No 3241204876, under the Minervaplus agreement, is not payable

The head of claim in the action that the Commission should be ordered to pay to the applicant a sum of EUR 83 879.20, under the EuroMuse agreement

The head of claim in the action that the Commission should be ordered to pay to the applicant a sum of EUR 46 044.17 as compensation for the loss suffered because of the suspension of the payment at issue and corresponding to the interest accrued on bank loans taken out by the applicant in order to implement the Athena and Judaica agreements

The head of claim in the action that the judgment to be delivered should be declared to be enforceable notwithstanding any appeal

4. Substance

The head of claim in the action seeking, in essence, a declaration that the sums sought in Debit Notes No 3241201788, No 3241204876, No 3241202744 and No 324121122 together with interest thereon for late payment are not payable, or are payable only to a maximum amount of EUR 54 195.05, and the head of claim in the counterclaim seeking payment of the sums sought in those debit notes and late payment interest

The burden of proof

The nature and basis of the obligations at issue

Repayment of the sums of grant and financial sought in Debit Notes No 3241201788, No 3241202744 and No 3241212122

– Whether the final audit findings can be taken into account

– The conditions, from legislation or contract, for the provision of the grant or financial aid laid down in the audited agreements

– The applicant’s argument on the basis of the good technical performance of the Michael and Michael+ projects and the Minervaplus action

– The alleged absence of accounts pertaining to each project or to each action or of adequate accounting procedures to permit direct reconciliation of the costs reported in the financial statements with those recorded in the applicant’s general accounts

– The personnel costs declared

– The other direct costs declared

– The declared indirect costs

– The costs declared by the applicant in the context of adjustments

– The receipts not declared

– Claims concerning the obligation to repay the amounts of grant and financial aid sought in Debit Notes No 3241201788, No 3241202744 and No 3241212122, under the audited agreements

Payment of the financial penalty sought in Debit Note No 3241204876

The payment of interest on late payment

The head of claim in the action requesting, in essence, that the Commission should be ordered to pay to the applicant, first, compensation for the loss suffered because of the suspension of payment at issue and, second, the sums which remain payable under the Athena and Judaica agreements, and that the Court take note of the fact that Commission has abandoned its challenge to those sums

Payment of a sum of EUR 46 044.17, as compensation for the loss suffered by the applicant because of the suspension of payment at issue

Payment of the amounts still payable to the applicant under the Athena and Judaica agreements

The claims in the action requesting the Court to take note of the fact that the Commission abandoned its challenge to the amounts which continued to be payable to the applicant under the Athena and Judaica agreements

The head of claim in the action that the Court should order the Commission to reimburse to the applicant the amount of the fees paid to its legal advisers and to SP

The head of claim in the action that the Commission should be ordered to reimburse all the costs and expenses incurred by the applicant in connection with the present proceedings

Costs

* Language of the case: English.