Case T‑29/11

Technische Universität Dresden

v

European Commission

(Arbitration clause — Programme of Community action in the field of public health — Contract for the funding of a project — Action for annulment — Debit note — Contractual nature of the dispute — Act not amenable to review — Inadmissibility — Reclassification of the action — Eligible costs)

Summary — Judgment of the General Court (Second Chamber), 24 October 2014

1.      Judicial proceedings — Legal basis of an action — Choice for the applicant and not the EU judicature

2.      Actions for annulment — Action relating in reality to a contractual dispute — Annulment of a debit note issued by the Commission — Inadmissibility

(Art. 263 TFEU)

3.      Actions for annulment — Action relating in reality to a contractual dispute — Reclassification of the action — Conditions

(Art. 272 TFEU; Rules of Procedure of the General Court, Art. 44(1)(c))

4.      Judicial proceedings — Referral to the General Court under an arbitration clause — Arbitration clause — Concept

(Art. 272 TFEU)

5.      EU budget — EU financial assistance — Obligation of the beneficiary to comply with the conditions for grant of the aid

(Art. 317 TFEU)

6.      Judicial proceedings — Referral to the General Court under an arbitration clause — Jurisdiction of the General Court to hear a counterclaim for payment — Application in the context of repayment of excessive subsidies paid by the Commission — Requirement that the observations and evidence be set out with sufficient clarity to enable the General Court to assess whether they are well founded — Failure to comply — Inadmissibility

(Rules of Procedure of the General Court, Art. 46(1)(c))

7.      Actions for annulment —Grounds — Infringement of essential procedural requirements — Obligation to state reasons applying only to unilateral means of action — No obligation to state reasons in the context of a grant agreement

(Arts 272 TFEU and 296 TFEU)

1.      See the text of the decision.

(see para. 24)

2.      See the text of the decision.

(see paras 29, 38, 39)

3.      Reclassification of an action for annulment or compensation as an action brought on the basis of Article 272 TFEU (arbitration clause) is subject to two cumulative conditions, namely that the express intention of the applicant does not preclude it and that at least one plea alleging infringement of the rules governing the contractual relationship in question is put forward in the application pursuant to the provisions of Article 44(1)(c) of the Rules of Procedure.

(see paras 42, 44)

4.      As the Treaty does not lay down any particular wording to be used in an arbitration clause, any wording which indicates that the parties intend to remove any dispute between them from the purview of the national courts and to submit them to the European Union courts must be regarded as sufficient to give the latter jurisdiction under Article 272 TFEU.

A clause in a grant agreement headed ‘Law applicable and competent court’, whereby ‘the beneficiaries may bring legal proceedings regarding decisions by the Commission concerning the application of the provisions of the said agreement and arrangements for implementing it, before the [General Court] and, in the event of appeal, the Court of Justice of the European Communities’ constitutes an arbitration clause.

Whilst the unusual formulation of such a clause and its terminology, particularly the use of the terms ‘decision’ and ‘beneficiaries’ evoke the review of legality via an action for annulment instituted in Article 263 TFEU, that does not prevent that clause from being classified as an arbitration clause.

In so far as the said clause is capable of applying in particular to decisions taken by the Commission on the basis of contractual stipulations and which are inseparable from the contractual relationship — such decisions not falling, in accordance with the case-law, within the scope of an action for annulment under Article 263 TFEU — an interpretation of that clause regarding it as merely a reminder about actions for annulment would entail an extension, via contractual means, of the conditions governing the admissibility of actions for annulment enshrined in Article 263 TFEU, whereas those conditions are a matter of public policy and cannot therefore be left to the discretion of the parties.

Nor, having regard to its wording, can the scope of that clause be limited to actions against decisions that may be taken by the Commission on the basis of Article 299 TFEU.

(see paras 52, 53, 55, 56, 60, 61, 63, 64, 66)

5.      According to a fundamental principle of European Union financial aid, the Union can subsidise only expenses which have actually been incurred. Accordingly, in order for the Union to be able to carry out checks, the beneficiaries of such aid must show that the costs attributed to subsidised projects are genuine, as the provision by those beneficiaries of reliable information is indispensable for the successful operation of the system of control and evidence established in order to check whether the conditions for the grant of aid are satisfied. It is not sufficient, therefore, to show that a project has been carried out for the allocation of a specific subsidy to be justified. The beneficiary of the aid must, in addition, produce evidence that he has incurred the expenses declared in accordance with the conditions laid down for the grant of the aid concerned, with only those expenses which are properly justified being capable of being regarded as eligible. His obligation to satisfy the prescribed financial commitments is even one of his essential commitments and accordingly determines the allocation of European Union financial aid.

(see para. 71)

6.      Even supposing that the Commission sought to bring a counterclaim before the General Court and, despite the wording of the arbitration clause, the General Court had jurisdiction to hear that counterclaim, in view of case-law stating that, in the European Union system of legal remedies, the jurisdiction to hear the main action implies the existence of a jurisdiction to hear any counterclaim made in the course of the procedure which is derived from the same act or circumstance that is the subject of the application, that counterclaim would in any event be inadmissible due to the requirements of Article 46(1)(c) of the Rules of Procedure. Such a claim is not made out with the required clarity either in the Commission’s documents or in the observations presented by the Commission at the hearing and is not substantiated by arguments or evidence enabling the General Court to assess its merits or the applicant to prepare its defence.

(see para. 116)

7.      The obligation to state reasons which the applicant claims has been infringed is imposed on the Commission by virtue of the second paragraph of Article 296 TFEU. It applies, however, only to unilateral means of action by the Commission. It does not, therefore, apply to the Commission by virtue of the grant agreement. Therefore, the plea alleging a failure to state reasons is ineffective in the context of an action brought on the basis of Article 272 TFEU, since any potential breach of that obligation would have no bearing on the obligations imposed on the Commission by virtue of the agreement at issue. That conclusion is not invalidated by the applicant’s argument that, according to case-law, since a decision reducing the amount of European Union financial assistance has serious consequences for the recipient of the assistance, that decision must clearly show the grounds which justify the reduction in the assistance initially authorised.

(see paras 120-122)