Case T‑776/20
Robert Stockdale
v
Council of the European Union and Others
Judgment of the General Court (Seventh Chamber, Extended Composition), 26 July 2023
(Action for annulment and compensation – International contracted staff with the European Union Special Representative in Bosnia and Herzegovina – Common foreign and security policy – Termination of the employment contract following the withdrawal of the United Kingdom from the European Union – Jurisdiction of the EU Courts – Contractual nature of the dispute – Absence of arbitration clause and jurisdiction clause – Articles 263, 268, 272 and 274 TFEU – Regulation (EU) No 1215/2012 – Admissibility – Identification of the defendants – Concept of ‘body, office or agency of the Union’ – Partial lack of competence and inadmissibility)
1. Action for annulment – Actionable measures – Concept – Measures producing binding legal effects – Action where there is a contract binding the applicant to an institution, body, office or agency of the Union – Admissibility – Conditions – Binding legal effects outside the contractual relationship and involving the exercise of prerogatives of a public authority
(Art. 263 TFEU)
(see paragraph 31)
2. Action for damages – Jurisdiction of the EU judicature – Limits – Character of the liability pleaded – Verification by the court – Criteria for assessment
(Art. 340 TFEU)
(see paragraph 32)
3. EU institutions – Court of Justice of the European Union – Jurisdiction – Contractual disputes – Conditions – Referral on the basis of an arbitration clause – No arbitration clause – Consequence – Ordinary jurisdiction of national courts
(Arts 272 and 274 TFEU)
(see paragraph 40)
4. Judicial proceedings – Action for annulment and for damages concerning in fact a contractual dispute – Annulment of a measure which is part of a purely contractual context – Lack of jurisdiction of the EU judicature under Articles 263 and 268 TFEU – Inadmissibility – Exception – Need to safeguard the coherence of the judicial system of the European Union and to ensure effective judicial review by the courts of the Member States or the EU judicature
(Arts 263, 268, 272 and 274 TFEU)
(see paragraphs 48, 49, 76)
5. Judicial cooperation in civil matters – Jurisdiction and the enforcement of judgments in civil and commercial matters – Regulation No 1215/2012 – Jurisdiction over individual contracts of employment – Concept of individual contract of employment – Independent interpretation – Condition – Existence of a hierarchical relationship between the employer and employee – Criteria
(European Parliament and Council Regulation No 1215/2012, Art. 21)
(see paragraph 61)
6. Action for damages – Jurisdiction of the EU judicature – European Union to be ordered to pay compensation for damage in accordance with general principles common to the laws of the Member States on non-contractual liability – Compensation in kind in the form of an injunction to do or not to do something – Whether permissible – Conditions – Special case of loss or harm that cannot be entirely remedied by damages and requiring an injunction on account of its specific characteristics
(Arts 268 and 340, second para., TFEU)
(see paragraphs 81, 82)
7. Judicial proceedings – Action for annulment and for damages – Application for declaratory relief – Manifest lack of jurisdiction
(Arts 263 and 268 TFEU)
(see paragraph 85)
8. Judicial proceedings – Action for annulment and for damages – Subject matter – Application for annulment of a measure or for damages – Concept of institutions, bodies, offices and agencies – Criteria for assessment – Legal capacity – Mandate intrinsically linked to the functioning of the European Union – Entity legally distinct from existing institutions, bodies, offices and agencies of the European Union – Inclusion – European Union Special Representative in Bosnia and Herzegovina – Whether permissible
(Arts 263 and 268 TFEU)
(see paragraphs 130, 131, 134, 139)
9. Common foreign and security policy – Operational actions of the European Union – Adoption of decisions setting out the objectives, their scope, the means to be made available to the European Union, the conditions relating to their implementation and their duration – Jurisdiction – Council of the European Union – Scope – International civilian staff – Adoption of a legal regime applicable to contract staff – Inclusion – Imputation to the Council of a failure to adopt such a regime – Whether permissible
(Arts 26 and 28(1), first para., TEU)
(see paragraphs 148, 152, 154, 157, 158, 162)
Résumé
The applicant, a national of the United Kingdom of Great Britain and Northern Ireland, held the position of Head of Finance and Administration with the European Union Special Representative (‘the EUSR’) in Bosnia and Herzegovina between 2006 and 31 December 2020 and, as such, had concluded 17 fixed-term employment contracts with the EUSR. Following the Agreement on the withdrawal of the United Kingdom from the European Union and Euratom, (1) which entered into force on 1 February 2020 and provided for a transition period ending on 31 December 2020, the EUSR in Bosnia and Herzegovina took the decision to terminate the applicant’s last employment contract as of that date.
In an action for annulment and for damages brought against the Council of the European Union, the European Commission, the European External Action Service (EEAS) and the EUSR in Bosnia and Herzegovina, the applicant sought, primarily, the annulment of the termination decision, together with compensation for the damage he allegedly suffered as a result of that decision. The applicant also claimed that his contractual relationship should be reclassified as a permanent contract and sought compensation for the damage he allegedly suffered as a result of the failure to adopt a clear status applicable to him. In the alternative, the applicant claimed that the non-contractual liability of the European Union should be incurred in the event that his principal claims were dismissed.
Examining the pleas of lack of jurisdiction and inadmissibility raised by the defendants, the General Court rules on those applications – which it upholds in part – before going to the substance of the case. In that respect, the Court rules on a number of issues which have not previously been addressed. First, it establishes that, where a contractual dispute involving the European Union is brought before the Court, when the contract at issue does not contain an arbitration clause in its favour, it retains jurisdiction to review the legality of acts adopted by EU entities (2) and to rule on the liability of the European Union, (3) if no competent national court can be identified on the basis of the contract or the Brussels Ia Regulation. (4) It then identifies the EUSR in Bosnia and Herzegovina as the EU body that adopted the termination decision. Lastly, with regard to the compensation claim in respect of damage allegedly caused by the absence of a general legal regime applicable to common foreign and security policy (CFSP) staff, the Court considers that it is for the Council to adopt such a regime, where appropriate.
Findings of the Court
In the first place, the Court examines its jurisdiction to rule on the heads of claim relating to the termination decision and the succession of fixed-term contracts, respectively.
As a preliminary point, it notes that the applicant’s claims made under those heads of claim are contractual in nature. First, the termination decision has a direct link with the contract at issue. Second, the claims that the employment relationship should be reclassified as a permanent contract stem from the successive fixed-term contracts concluded between the applicant and the EUSR in Bosnia and Herzegovina. Since the fixed-term contracts do not contain an arbitration clause, the Court declares that it has no jurisdiction to rule under Article 272 TFEU, such that, in accordance with Article 274 TFEU, those heads of claim fall, in principle, within the jurisdiction of the national courts.
Nevertheless, the Court recalls that, when, in the context of a contractual dispute, the EU judicature declines the jurisdiction conferred on it by Articles 263 and 268 TFEU, it is to ensure that those provisions are interpreted consistently with Articles 272 and 274 TFEU and, accordingly, to preserve the coherence of the judicial system of the European Union, which is a complete system of legal remedies and procedures designed to ensure, respectively, review of the legality of acts of the institutions, bodies, offices and agencies of the European Union, and the compensation of the damage caused by the European Union. Therefore, in the context of a contractual dispute, the EU judicature may not decline the jurisdiction conferred on it by the FEU Treaty when this has the effect of excluding from any judicial review, either by the EU Courts or the national courts, the acts of the European Union or a claim for compensation for damage caused by the European Union.
In those circumstances, despite the contractual nature of the heads of claim put forward in the present case, the Court assesses whether the applicant may bring such claims before a court of a Member State in order to ensure that an effective judicial review exists. That is the reason why, from the outset, it rejects the defendants’ argument that those heads of claim could fall within the jurisdiction of the Bosnian courts. Similarly, it rejects the argument that the applicant had the option of referring the matter to the arbitration body provided for in the contract at issue, since such a body cannot be considered to have jurisdiction to the exclusion of the courts of the European Union or the courts of the Member States.
In addition, since the content of the contract at issue does not make it possible to identify a court of a Member State with jurisdiction to rule on the heads of claim in question, the Court points out that the EU legislature adopted the Brussels Ia Regulation, which applies in the present case. Indeed, the termination decision does not constitute an act of a public authority, (5) but has its basis in the contract at issue. Accordingly, the heads of claim in question relate to civil and commercial matters and – since they concern a dispute of a contractual nature which is intended to fall within the general jurisdiction of the national courts – the Court examines whether the provisions of the Brussels Ia Regulation make it possible to identify a court of a Member State with jurisdiction to rule on those heads of claim.
The Court notes that the applicant’s employer was the EUSR in Bosnia and Herzegovina, and that since no court of a Member State has jurisdiction to rule on the heads of claim in question, relating to the contract, the general provision of the Brussels Ia Regulation, according to which, ‘if the defendant is not domiciled in a Member State, the jurisdiction of the courts of each Member State shall … be determined by the law of that Member State’ (6) should in principle apply.
However, the Court points out that the application of that provision would imply that the jurisdiction of a national court is random, to the extent that it is the law of each Member State that determines whether the courts of that Member State may hear the dispute, with the possible consequence that, ultimately, no court of a Member State has jurisdiction. It considers that such an outcome is particularly likely in the present case since – like the EUSR in Bosnia and Herzegovina – the applicant is domiciled in a third country, and it is not obvious that the present dispute has a connection with a Member State.
Since the Court may not, in the context of a contractual dispute involving the European Union, decline the jurisdiction conferred on it by Articles 263 and 268 TFEU, when this leads to the exclusion from any judicial review of acts of the European Union or of a claim for compensation of the damage caused by the European Union, it examines whether the claims made in the heads of claim in question come within the scope of the jurisdiction it derives from those provisions.
First, under the first head of claim, the Court has jurisdiction to rule (i) on the basis of Article 263 TFEU, on the application for a review of the legality of the termination decision, which is a decision adopted by an EU entity established under the Treaties, namely the EUSR in Bosnia and Herzegovina, and (ii) on the basis of Article 268 TFEU, on the claim for financial compensation for the psychological and material damage allegedly suffered as a result of that decision.
Conversely, regarding the applicant’s claim that the Court should order his reinstatement as a member of staff of the EUSR in Bosnia and Herzegovina, the Court declines jurisdiction, since the EU judicature cannot, in principle – even in the context of an action for damages – issue directions to an institution, body, office or agency of the European Union without encroaching on the prerogatives of the administrative authority. Although the provisions of the FEU Treaty relating to the non-contractual liability of the European Union allow, under certain conditions, the granting of a compensation in kind which may take the form of an injunction to do or not to do something, causing the defendant institution to act in a certain way, such a scenario can be envisaged only in certain cases, where the applicant is alleging damage that cannot be entirely remedied by damages, and whose specific characteristics require an injunction to do or not to do something, particularly if that injunction is intended to address the root cause of damage where the effects are ongoing, which is not the case here.
Second, the Court dismisses the second head of claim in its entirety, on the ground that it lacks jurisdiction. The Court lacks jurisdiction to rule on the application to issue directions to the EUSR in Bosnia and Herzegovina, as the applicant’s employer, seeking the reclassification of his employment contract as a permanent contract. In addition, since the claim that the Court should find that the defendants were in breach of their contractual obligations was not put forward in support of a claim for annulment or for damages, it must be regarded as seeking only that the Court take a position by means of a general declaration or statement of principle, which does not fall within the jurisdiction conferred on it by the Treaties.
In the second place, on the pleas of inadmissibility relating to the identification of the defendant(s), the Court recalls, as regards the first head of claim, to the extent that it has jurisdiction to examine that claim in so far as it seeks the annulment of the termination decision and financial compensation for the psychological and material damage allegedly caused by that decision, first that actions for annulment must be brought against the institution, body, office or agency of the European Union that adopted the act in question and, second, that in matters of non-contractual liability of the European Union, it has jurisdiction to hear disputes relating to compensation for damage caused by the latter, represented before the Court by the institution, body, office or agency against which the matter giving rise to liability is alleged.
In the present case, since the first head of claim relates to the termination decision, which is imputable to the EUSR in Bosnia and Herzegovina, the Court examines whether the EUSR can be classified as a body, office or agency of the European Union capable of being a defendant in the actions for annulment and for non-contractual liability at issue in the present case.
In that regard, it recalls that an entity or structure coming under or working within the European Union’s organisational framework may be regarded as an office or agency of the European Union if, in the light of the provisions governing its status, it has sufficient legal capacity in order to be regarded as an independent body of the European Union and to be recognised as having legal capacity to be a defendant. In particular, it must be classified as an office or agency of the European Union when, on the one hand, it has a mandate intrinsically linked to the functioning of the European Union and, on the other hand, it is legally distinct from the existing institutions, bodies, offices and agencies of the European Union.
The EUSR in Bosnia and Herzegovina has such a mandate, since, first of all, he was appointed by the Council to exercise a ‘mandate in relation to particular policy issues’. (7) In addition, although the EUSR is responsible for executing his mandate and acts on the authority of the High Representative of the European Union for Foreign Affairs and Security Policy, that authority does not extend to administrative management in connection with that mandate, particularly as regards his staff. Furthermore, the EUSR is legally distinct from the other institutions, bodies, offices or agencies of the European Union in so far as he or she has the legal capacity to award contracts and to purchase goods, to conclude a contract with the Commission for the management of his or her expenditure and to employ staff seconded by EU institutions or by the EEAS. Lastly, as regards the management of his or her contract staff, the EUSR has the legal capacity to act independently and, as such, is responsible for constituting a team. He or she may also conclude contracts to recruit international staff, whom he or she may choose without requiring the approval of the other institutions, bodies, offices or agencies of the European Union, since such staff come under his or her direct authority.
The Court concludes that, for the purposes of the present case, concerning matters relating to the management of staff of the EUSR in Bosnia and Herzegovina, the EUSR must be regarded as having the same status as the bodies, offices and agencies of the European Union, capable of being the defendants in an action for annulment or for non-contractual liability, and that the first head of claim is admissible in respect of the EUSR.
Second, with regard to the head of claim seeking compensation for the damage allegedly suffered by the applicant as a result of the failure to adopt a clear status applicable to him, the Court considers that any failure to adopt a general regime applicable to CFSP contract staff in general or to the contract staff of the EUSR in Bosnia and Herzegovina in particular must be imputed to the Council, such that this head of claim is admissible in respect of the latter.
Indeed, the Council is responsible for framing the CFSP and for taking the decisions necessary for defining and implementing it on the basis of the general guidelines and strategic lines defined by the European Council. The adoption, where appropriate, of a legal regime applicable to contract staff recruited under the CFSP falls within the implementation of that policy and is therefore a matter for the Council. Moreover, the Court observes that in 2012, the Commission had suggested that the Council apply the Conditions of Employment of Other Servants of the European Union to contract staff of CFSP missions and of the EUSRs. The Court notes that the adoption of a legal regime applicable to contract staff recruited under the CFSP, which is applicable to the international contracted staff of the EUSR in Bosnia and Herzegovina, falls within the competence of the Council and is at its discretion and that if that recommendation was not followed up, it is because the Member State delegations were unable to reach an agreement within the Council.