JUDGMENT OF THE GENERAL COURT (Eighth Chamber)
24 November 2010 (*)
(Arbitration clause – Contract concluded in the framework of a specific programme for research and technological development, including demonstration, in the field of non-nuclear energy (1994 to 1998) – Non-performance of the contract – Reimbursement of the sums advanced – Late-payment interest – Procedure by default)
In Case T‑323/09,
European Commission, represented by A.-M. Rouchaud-Joët and F. Mirza, acting as Agents, and by U. O’Dwyer and A. Martin, Solicitors,
applicant,
v
Irish Electricity Generating Co. Ltd, established in Waterford (Ireland),
defendant,
APPLICATION under an arbitration clause seeking an order that Irish Electricity Generating Co. Ltd repay the sum of EUR 180 664.70 corresponding to part of the advances paid to it by the Commission under contract No WE/178/97/IE/GB, together with late-payment interest,
THE GENERAL COURT (Eighth Chamber),
composed, at the time of the deliberation, of M.E. Martins Ribeiro, President of the Chamber, N. Wahl and A. Dittrich (Rapporteur), Judges,
Registrar: E. Coulon,
having regard to the written procedure,
gives the following
Judgment
Contractual framework
1 On 2 March 1998, the European Community, represented by the Commission of the European Communities, entered into contract No WE/178/97/IE/GB with Irish Electricity Generating Co. Ltd (‘the coordinator’), represented by its director, and with Zond International Ltd, also represented by its director, (collectively referred to as ‘the contractors’), for the design and erection of two 750 kW wind turbines on cast in-situ steel reinforced concrete towers (‘the contract’).
2 The contract came within the framework of Council Decision 94/806/EC of 23 November 1994 adopting a specific programme for research and technological development, including demonstration, in the field of non-nuclear energy (1994 to 1998) (OJ 1994 L 334, p. 87).
3 Article 5 of Decision 94/806 required the Commission to draw up a work programme, in accordance with the objectives set out in Annex I thereto and to issue calls for proposals for projects on the basis of the work programme. Point 2.4 of Annex I to that decision concerned activities in the field of wind energy.
4 By virtue of its Article 10, the contract was governed by Irish law. Annex I to the contract described the work programme, while Annex II to the contract set out the general conditions. Under Article 11, the work programme and the general conditions constituted an integral part of the contract.
5 Under Article 1.1 of the contract, the contractors were required to carry out jointly and severally the work set out in the work programme for the design and erection of two 750 kW wind turbines on cast in-situ steel reinforced concrete towers (‘the project’).
6 Article 2.1 of the contract provided that the duration of the project was to be 36 months as from 1 January 1998. Pursuant to Article 2.2 of the contract, the project was due to end on 31 December 2000, in accordance with the schedule set out in Table 1 of Annex I to the work programme. According to this schedule, the ‘design’ phase was to take place from January 1998 to April 1998, the ‘manufacturing’ phase from April 1998 to July 1998, the ‘assembly, installation and erection’ phase from July 1998 to November 1998, the ‘commissioning’ phase from November 1998 to December 1998 and the ‘monitoring’ phase from January 1999 to December 2000.
7 Article 3.1 of the contract estimated the allowable costs of the project at ECU 1 531 697. According to Article 3.2 of the contract, the Commission was to cover up to 40% of those costs, up to a maximum amount of ECU 612 679.
8 Under Article 4 of the contract, the Commission was required to pay an advance of ECU 183 804 within the two months following the last signature of the contracting parties. Partial instalments were to be paid within the two months following the approval of the respective periodic progress reports and corresponding cost statements. The Commission was required to pay the balance of its total contribution within the two months following the approval of the last report, document or other project deliverables specified in the work programme and the cost statement for the final period as specified in Article 5.2 of the contract.
9 Under Article 5.1 of the contract, four signed cost statements were to be submitted through the coordinator. According to Article 5.2 of the contract, the cost statements for the final period, incorporating adjustments for previous periods, were to be submitted no later than three months after the approval of the last report, document or other project deliverables under the contract, following which no further costs were to be allowable for payments.
10 Under Article 6 of the contract, reports were to be submitted through the coordinator. That obligation was detailed in Article 10 of the general conditions. According to the latter, certain reports were to be submitted to the Commission, inter alia:
– financial and technical progress reports (every six months from 1 January 1998);
– a final report covering all the work, objectives, results and conclusions.
11 Pursuant to the second sentence of Article 10.3 of the general conditions, that final report was to be submitted within two months following the period of 36 months specified in Article 2.1 of the contract, or after completion of the work, if that date was earlier.
12 Article 8 of the contract stipulated that the contract could be modified only by written agreement by duly authorised representatives of the contracting parties.
13 In accordance with Article 2.1 of the general conditions, the coordinator was required to ensure the submission of all documents and the liaison between the contractors and the Commission. In addition, the coordinator was required to receive and distribute immediately all payments which were to be made to it in trust for the contractors.
14 Under Article 5.3(a)(i) of the general conditions, the Commission could immediately, by written notice, terminate the contract or end the participation of any contractor in the case where remedial action to rectify non-performance within a reasonable period of time (being not less than one month) specified in writing had been requested by the Commission and had not been taken in a satisfactory manner. Article 5.6 of the general conditions, however, specified that the provisions on the submission of reports and cost statements supporting costs relating to work up to termination and Articles 6 and 11 and Part C of the general conditions, that is to say, Articles 18 to 24, were to continue to apply despite termination.
15 Article 7 of the general conditions provided that the Court of First Instance of the European Communities and, in the case of appeal, the Court of Justice of the European Communities were to have exclusive jurisdiction in any dispute between the Commission and the contractors concerning the validity, application and interpretation of the contract.
16 Pursuant to the first sentence of Article 18.1 of the general conditions, allowable costs were the actual costs defined in Articles 19 and 20 which were necessary for the project, could be substantiated and were incurred during the period specified in Article 2.1 of the contract.
17 Article 23.2 and 23.3 of the general conditions, finally, specified that, subject to Article 24 of the general conditions, all payments were to be treated as advances until acceptance of the appropriate project deliverables or, if none were specified, until acceptance of the final report, and that, where the total financial contribution due for the project, including the result of any audit, was less than the payments made for the project, the contractors were immediately to reimburse the difference in ECU to the Commission.
Background to the dispute
18 On 6 April 1998, the Commission paid to the coordinator an advance of ECU 183 804, in accordance the first indent of Article 4 of the contract.
19 Following submission of the first financial and technical reports, the Commission made a second payment to the coordinator of ECU 4 628.16 on 16 December 1998, pursuant to the second indent of Article 4 of the contract, for the period from 1 January 1998 to 30 June 1998.
20 On 29 December 1999, following submission of the second and third financial and technical reports, the Commission made a third payment to the coordinator of EUR 5 806.64, in accordance with the second indent of Article 4 of the contract, in respect of the periods from 1 July 1998 to 31 December 1998 and from 1 January 1999 to 30 June 1999.
21 On 5 September 2000, following submission of the fourth financial and technical report, in accordance with the second indent of Article 4 of the contract, the Commission made a fourth payment to the coordinator of EUR 3 169.27 for the period from 1 July 1999 to 31 December 1999.
22 On 23 July 2001, following submission of the fifth financial and technical reports, the Commission, in accordance with the second indent of Article 4 of the contract, made the fifth payment to the coordinator of the sum of EUR 27 675.72 for the period from 1 January 2000 to 30 June 2000.
23 By letter of 17 December 2001, the Commission reminded the coordinator of its contractual obligation to submit a final technical report within the two months following 31 December 2000 or the end of the work, if that date was earlier, and of its obligation to submit a final financial report. The Commission called on it to do so by 30 January 2002 at the latest.
24 On 1 March 2002, the Commission notified the coordinator in writing that the contract would be terminated if it did not receive within one month the reports requested in its letter of 17 December 2001.
25 On 12 June 2002, the Commission sent a letter to the coordinator indicating to it, first, that, if the Commission did not receive the final reports at issue within one month of receipt of that letter, it would terminate the contract in accordance with Article 5.3 of the general conditions, and, second, that, if that contract were terminated, it could seek reimbursement in full or in part of payments made under that contract.
26 As it did not receive a reply from the coordinator, the Commission notified it, by letter of 13 December 2002, that, since it had not fulfilled its contractual obligations, the Commission was terminating the contract, in accordance with Article 5.3(a)(i) of the general conditions, from the date of that letter. The Commission also stated in that letter that it was currently reviewing the technical reports and cost statements already received and that it would shortly be informing the coordinator of the exact amount to be reimbursed to it.
27 By letter of 28 March 2003, the Commission informed the coordinator that it had started the procedure for the recovery of EUR 180 664.70, corresponding to the amount overpaid under that contract, and that this amount was subject to approval by the internal financial control of its Directorate-General (DG) ‘Transport and Energy’. The letter also stated that any disagreement with the proposed recovery procedure had to be notified to the Commission in writing within 15 days of its receipt. A table reflecting the financial situation of the project and the method used for the calculation of the amount to be recovered was also attached to that letter. According to that table, the amount to be repaid was the result of the Commission’s undertaking to finance 40% of the admissible costs. In total, EUR 225 083.79 had been paid to the coordinator under the contract. On the basis of the five cost statements submitted by the coordinator, only certain costs totalling EUR 111 047.74 had been accepted as allowable and eligible for funding. The amount of the contribution due from the Commission was therefore EUR 44 419.09 and the balance of EUR 180 664.70 had to be repaid.
28 On 25 June 2003, the coordinator submitted a final report containing a cost statement covering the period from the start of the work on 28 February 2001. It is apparent from that report that implementation of the project had been delayed due to difficulties encountered by the coordinator in finding a suitable site and obtaining the necessary planning permission for the erection of the wind turbines. According to that report, planning permission was refused for the site originally envisaged and for another site. Planning permission was granted for a third site on 20 June 2000. However, due to the cost of connection to the electricity grid on that site, a minimum of four wind turbines would have been necessary to ensure the economic viability of the project. According to the cost statement, the total cost of the project was EUR 327 074.
29 By fax of 25 June 2003, the coordinator indicated to the Commission that, in the course of the project, it had not transferred any of the payments received from the Commission to the other co-contractors.
30 On 4 July 2003, the internal financial control of the Commission’s DG ‘Transport and Energy’ confirmed that the amount to be recovered was EUR 180 664.70.
31 On 11 July 2003, the Commission sent the coordinator a debit note requesting reimbursement of EUR 180 664.70 by no later than 24 August 2003, specifying that, in the absence of reimbursement by the deadline set, interest would be payable at the rate applied by the European Central Bank (ECB) to its main refinancing operations, as published in the Official Journal of the European Communities, in force on the first calendar day of the month in which the due date fell, that is to say, August 2003, increased by three and a half percentage points.
32 By letter of 5 August 2003, the coordinator replied, explaining that it had spent the advance on cash flow related to the project and was not in a position to reimburse the Commission. It also proposed a settlement under which more capital would be injected into the coordinator’s company to allow it to complete the project. It stressed that it would, however, be impossible to realise the project and to satisfy all of its creditors at the same time, but that it could, by contrast, inject the capital necessary to satisfy 50% of the creditors, including the Commission.
33 On 23 September 2003, the Commission sent a first reminder letter to the coordinator.
34 By letter of 14 October 2003, the Commission rejected the settlement arrangement proposed by the coordinator in its letter of 5 August 2003.
35 On 22 October 2003, the Commission sent a second reminder letter to the coordinator.
36 By letter of 5 November 2003, the coordinator indicated to the Commission that the debit note reminder of 22 October 2003 was receiving consideration and it sought details on the interest charged. The Commission responded by e-mail dated 14 November 2003, referring, as regards the interest claimed, to Article 71(4) of Council Regulation (EC, Euratom) No 1605/2002 of 25 June 2002 on the Financial Regulation applicable to the general budget of the European Communities (OJ 2002 L 248, p. 1) and to Article 86(4) of Commission Regulation (EC, Euratom) No 2342/2002 of 23 December 2002 laying down detailed rules for the implementation of Regulation No 1605/2002 (OJ 2002 L 357, p. 1).
37 On 5 December 2003, the Commission sent a further reminder to the coordinator, warning, in particular, that it would initiate enforcement proceedings if payment were not made immediately.
38 By letter of 18 March 2009, the Commission’s solicitors wrote to the coordinator reminding it of the terms of the debit note of 11 July 2003 and requesting payment of the amount at issue by 15 April 2009 at the latest.
Procedure and form of order sought by the Commission
39 By application lodged at the Court Registry on 18 August 2009, the Commission brought the present action pursuant to Article 238 EC.
40 Since the coordinator had not lodged a defence within the period prescribed, the Commission, on 25 February 2010, applied to the Court for judgment by default, in accordance with Article 122(1) of the Rules of Procedure of the General Court.
41 In that regard, it must be observed that, although the application and the Commission’s request for a judgment by default had been duly notified to the coordinator, the latter did not lodge a defence. The Court must therefore give judgment by default. Since there is no doubt as to the admissibility of the action, it is incumbent on the Court, in accordance with Article 122(2) of the Rules of Procedure, to consider whether the form of order sought by the Commission appears to be well founded.
42 The Commission contends that the Court should:
– order the coordinator to pay to it EUR 237 384.31, comprising the principal amount of EUR 180 664.70 together with late-payment interest of EUR 56 719.61 calculated at the rate of 5.56% for the period from 25 August 2003 to 15 April 2009;
– order the coordinator to pay to it EUR 27.52 per day by way of interest for the period from 16 April 2009 until the date on which the debt is repaid in full; and
– order the coordinator to pay the costs.
Law
Repayment of part of the advance
The Commission’s arguments
43 The Commission maintains that it is claiming the principal sum of EUR 180 664.70, which represents the difference between the advance payment (EUR 225 083.79) which it had made and the amount, limited to 40% of the approved admissible cost, that the Commission had undertaken to finance in accordance with Article 3.2 of the contract (EUR 44 419.09).
44 The Commission maintains, first, that, in accordance with Article 23.3 of the general conditions, where the financial contribution due to the coordinator under the contract is less than the total amount of payments actually paid, the coordinator is obliged to reimburse the difference and, second, that, under Article 5.6 of the general conditions, that obligation remains in force after the contract has been terminated.
45 Referring to Article 71 of Regulation No 1605/2002 and to Article 78 of Regulation No 2342/2002, the Commission states that it followed the procedural steps established in the contract and in the Community Budget Rules to establish the amount of the debt and to notify the coordinator of the amount thereof. The Commission also states that it reminded the coordinator of its debt on a number of occasions after that debt had fallen due on 24 August 2003.
46 The Commission states that, since the coordinator had not reacted, it terminated the contract by letter of 13 December 2002, in accordance with Article 5.3(a)(i) of the general conditions.
47 The Commission argues that the coordinator never challenged the calculation of the debt, despite the fact that the Commission invited it to do so in its letter of 28 March 2003. Likewise, the comments made by the coordinator after the issue of the debit note do not challenge the accuracy of the calculation.
48 According to the Commission, its action is not time-barred under Irish law. Section 11(1) of the Statute of Limitations 1957 provides that actions founded on contract may be brought up to six years from the date on which the cause of action accrued. In the present case, the cause of the action for recovery of the amount overpaid arose on the date on which payment fell due, namely 24 August 2003, as prior to that date the debt was not certain and liquid.
Findings of the Court
49 Under Article 23.3 of the general conditions, where the total financial contribution due for the project, including the result of any audit, was less than the payments made for the project, the contractors were immediately to reimburse the difference to the Commission.
50 In the present case, it should be noted that the contract was terminated by the Commission with effect from 13 December 2002, pursuant to Article 5.3(a)(i) of the general conditions, since the coordinator had not submitted the final report on the project within the period laid down for that purpose, as provided for in Article 10.3 of the general conditions and as requested by the Commission in its letters of 17 December 2001, 1 March 2002 and 12 June 2002 (see paragraphs 23 to 25 above).
51 The termination of the contract does not, however, mean that Article 23.3 of the general conditions does not apply to the present case, since that provision, which features in Part C of the general conditions, continues to apply despite the termination of the contract, in accordance with Article 5.6 of the general conditions.
52 In its debit note of 11 July 2003, the Commission asked the coordinator to repay EUR 180 664.70. In the view of the Commission, that sum corresponds to the amount overpaid to the coordinator under the contract.
53 In that regard, it should be noted that the Commission paid the coordinator ECU 183 804 as an advance, in accordance with the first indent of Article 4 of the contract. Following submission of the first financial and technical reports, the Commission paid it ECU 4 628.16, in accordance with the second indent of Article 4 of the contract. In view of the submission of the subsequent financial and technical reports, the Commission paid to the coordinator EUR 36 651.63, in accordance with the second indent of Article 4 of the contract (see paragraphs 18 to 22 above).
54 Pursuant to Article 2(1) of Council Regulation (EC) No 1103/97 of 17 June 1997 on certain provisions relating to the introduction of the euro (OJ 1997 L 162, p. 1), references to the ecu must be replaced by references to the euro at a rate of one euro to one ecu.
55 The total amount of payments made by the Commission to the coordinator is therefore EUR 225 083.79.
56 It is clear from the Commission’s letter of 28 March 2003 that, on the basis of the five cost statements submitted by the coordinator, the Commission recognised that certain costs, totalling EUR 111 047.74, were eligible for funding.
57 With regard to the Commission’s obligation, pursuant to Article 3.2 of the contract, to cover up to 40% of the project’s admissible costs, the amount of the total contribution due from the Commission was, according to it, EUR 44 419.09 and the balance of EUR 180 664.70 was to be repaid by the coordinator.
58 Moreover, it does not appear from the documents before the Court that the coordinator challenged its obligation to reimburse the amount claimed in the Commission’s debit note and in the numerous subsequent reminders which the Commission sent to it. In its letter of 5 August 2003, the coordinator stated that it had spent the advance on cash flow related to the project and was not in a position to reimburse the Commission. It proposed, moreover, to inject the capital necessary to satisfy 50% of its creditors, including the Commission (see paragraph 32 above). In its letter of 5 November 2003, the coordinator merely stated that the debit note reminder was receiving consideration, without, however, contesting the calculation of the amount claimed by the Commission (see paragraph 36 above). It should also be noted in this regard that, by its letter of 28 March 2003, the Commission had already informed the coordinator of the amount to be reimbursed and of the method of calculation used. It had requested that any disagreement with the proposed recovery procedure be notified within 15 days following receipt of that letter, something which the coordinator, however, did not do.
59 The finding that the coordinator did not challenge the Commission’s debit note or the numerous subsequent reminders is not called into question by the cost statement covering the period from the date of the start of the work to 28 February 2001, submitted by the coordinator as part of its final report of 25 June 2003. It is true that, according to that cost statement, the total cost of the project came to EUR 327 074 (see paragraph 28 above). With regard to the Commission’s obligation to cover up to 40% of the admissible costs of the project, the total financial contribution due from the Commission for the project could therefore be fixed at EUR 130 829.60 instead of EUR 44 419.09. It should also be noted in that context that, under Article 5.6 of the general conditions, the provisions concerning the submission of reports and cost statements costs relating to work up to termination of the contract continued to apply despite the termination.
60 However, in this context, it should be recalled that the first sentence of Article 18.1 of the general conditions provides that the allowable costs are the actual costs which were necessary for the project, could be substantiated and were incurred during the period of the project. Therefore, under such a contract, it is for the coordinator to furnish proof that the costs which it declared to the Commission were actual costs which were in fact necessary and were incurred for implementation of the project and in the course thereof (see, to that effect, the judgment of 23 October 2007 in Case T‑138/05 Commission v Impetus, not published in the ECR, paragraph 97, and the judgment of 3 June 2009 in Case T‑179/06 Commission v Burie Onderzoek en advies, not published in the ECR, paragraph 100).
61 In that regard, it must be held that the cost statement submitted on 25 June 2003 does not of itself make it possible to establish that the costs set out are actual costs which were in fact necessary and were incurred for implementation of the project over its duration. Indeed, the cost statement at issue does not contain data which can demonstrate that the costs set out had actually been incurred through implementation of the project. In addition, the dates on which the costs were allegedly incurred are not indicated. Finally, the coordinator has not adduced any evidence to demonstrate that all of the costs which it sets out were in fact incurred.
62 It follows that, given that there is no evidence on file to demonstrate that the coordinator had already repaid the amount claimed in the debit note of 11 July 2003, the Court must conclude that the Commission is entitled to seek reimbursement of the overpayment in the amount of EUR 180 664.70.
63 As regards the question whether in the present case that right to reimbursement is time-barred under Irish law, it should be pointed out that, pursuant to section 11(1)(a) of the Statute of Limitations 1957, actions founded on contract may be brought up to six years from the date on which the cause of action accrued. According to Irish case-law, the cause of action arises on the date of the breach of contract and not on the date which the damage is caused, since the essence of an action for breach of contract is the breach itself and not the ensuing damage. The determination of the date of the breach of contract depends on the wording of the contract (see Brady, J.C., and Kerr, T., The Limitation of Actions, The Incorporated Law Society of Ireland, Dublin, 1994, pp. 46 and 47 and the case-law cited). The same applies if the applicant is not aware that he has suffered damage (judgment of the Supreme Court of Ireland of 8 February 1990 in Hegarty v O’Loughran (1990) IESC 2, paragraph 32; judgments of the High Court of Ireland of 4 May 1999 in Irish Equine Foundation Ltd v Robinson (1999) IEHC 150, paragraph 6, and of 22 October 2008 in Murphy & Anor v Mc Inerney Construction Ltd & Ors (2008) IEHC 323).
64 In the present case, the Commission stated that the cause of the action for the recovery of overpayments accrued on the due date for payment provided for in the debit note of 11 July 2003, namely 24 August 2003, the date before which the debt was not certain and liquid. In this respect, it should be observed that, even if the right to reimbursement were time-barred on the ground that the cause of action accrued on 31 December 2000, the date on which the coordinator failed to meet its obligation to complete the project (see paragraph 6 above), on 28 February 2001, the date on which it failed to meet its obligation to submit the final report (see paragraph 10 above), on 13 December 2002, the date on which the contract was terminated, or on 11 July 2003, the date on which the Commission sent the coordinator its debit note, the present action cannot be dismissed on the ground that the right to claim reimbursement is time-barred.
65 The restrictions imposed by the Statute of Limitations 1957 are procedural and do not concern the substance or the jurisdiction of the court. Under Irish law, an action brought after the expiry of the limitation period may be dismissed only if the coordinator invokes the Statute of Limitations 1957 in its defence (judgment of the Supreme Court of Ireland of 10 February 2009 in Murphy v Grealish, (2009) IESC 9; judgment of the High Court of Ireland of 18 March 2005 in Kinlon v Córas Iompair Éireann (2005) IEHC 95; see also Brady, J.C., and Kerr, T., The Limitation of Actions, The Incorporated Law Society of Ireland, Dublin, 1994, p. 5 and the case-law cited).
66 In the present case, since the coordinator did not claim before the Court that the right to reimbursement was time-barred, the Commission’s claim regarding reimbursement of the overpayment of EUR 180 664.70 must be upheld.
Interest
The Commission’s arguments
67 The Commission argues that, in the absence of a contractual prohibition of interest, Irish law sets a statutory rate for late-payment interest on money debts. It claims that, under section 22(1) of the Courts Act, 1981, a court may award interest on a sum, the payment of which had been ordered, at the rates specified in section 26 of the Debtors (Ireland) Act, 1840. That interest can apply to the whole or any part of the principal sum and may be in respect of the whole or any part of the period between the date on which the cause of action accrued and the date of the judgment. The rate fixed in section 26 of the Debtors (Ireland) Act 1840, as amended, in accordance with section 20 of the Courts Act, 1981, by regulation 3 of the Courts Act 1981 (Interest on Judgment Debts) Order 1989, was 8%. The interest rate applicable was properly notified to the coordinator by the debit note of 11 July 2003.
68 According to the Commission, since the rate which it applied (5.56%) was lower that 8%, it is permitted under Irish law from the payment deadline in the debit note up to the date of judgment.
69 The Commission states in this regard that it calculated the interest on the amount of EUR 180 664.70, in accordance with its debit note of 11 July 2003, on the basis of the rate applied by the ECB, increased by three and a half percentage points, that is to say, at a rate of 5.56%, for the period from the expiry date fixed in the debit note (24 August 2003) to 15 April 2009 (the expiry date fixed for the reimbursement in the last reminder sent on 18 March 2009). Interest on that sum, at that rate and for that period, amounts to EUR 56 719.61.
70 The Commission adds that it is also seeking payment of EUR 27.52 per day by way of interest for the period from 16 April 2009 to the date on which the debt is paid in full.
Findings of the Court
71 In the debit note of 11 July 2003, the Commission stated that the amount requested was payable by 24 August 2003 at the latest and that, after that date, late-payment interest would be due at the interest rate applied by the European Central Bank (ECB) to its main refinancing operations, as published in the Official Journal of the European Communities, in force on the first calendar day of the month in which the due date falls, namely August 2003, increased by three and a half percentage points. Since the rate at issue was 2.06% on 1 August 2003 (OJ 2003 C 183, p. 1), the Commission claimed late-payment interest at the rate of 5.56%.
72 However, it should be noted that Article 23.3 of the general conditions does not provide that the reimbursement by the coordinator to the Commission of the overpaid amount is to be increased by late-payment interest.
73 In the absence of an agreed rate of interest, and in so far as the contract is subject to Irish law, it is necessary to apply section 22(1) of the Courts Act, 1981, which provides that, where in any proceedings a court orders the payment by any person of a sum of money, the judge concerned may, if he thinks fit, also order the payment by the person of interest at the rate per annum standing specified for the time being in section 26 of the Debtors (Ireland) Act, 1840. That interest applies to the whole or any part of the principal sum and is in respect of the whole or any part of the period between the date on which the cause of action accrued and the date of judgment (see, to that effect, the judgment of 8 July 2004 in Case C‑127/03 Commission v Trendsoft, not published in the ECR, paragraph 31). In that regard, it should be noted that, according to section 26 of the Debtors (Ireland) Act 1840, as amended, in accordance with section 20 of the Courts Act, 1981, by regulation 3 of the Courts Act 1981 (Interest on Judgment Debts) Order 1989, every judgment debt due upon any judgment not confessed or recovered for any penal sum for securing principal and interest is to carry interest at the annual rate of 8% (see, to that effect, judgment of 17 December 2008 in Case T‑174/08, Commission v Cooperação e Desenvolvimento Regional, not published in the ECR, paragraph 53).
74 In the present case, the Commission seeks the sum of EUR 56 719.61 by way of late-payment interest for the period from 25 August 2003 to 15 April 2009 and the sum of EUR 27.52 by way of late-payment interest per day from 16 April 2009 until the date of full payment of the debt. Those sums correspond, respectively, to the application of an interest rate of 5.56% to the principal sum of EUR 180 664.70.
75 In so far as, for the entire period from 25 August 2003 to the date of the present judgment, the interest rates claimed by the Commission are lower that those calculated pursuant to the Courts Act, 1981, the Commission’s claims must be upheld on that point (see, to that effect, Commission v Trendsoft, cited in paragraph 73 above, paragraph 35, and the judgment of 24 February 2005 in Case C‑279/03 Commission v Implants, not published in the ECR, paragraph 34).
76 Finally, for the period from the date of the present judgment until the debt is paid in full, the coordinator must be ordered to pay to the Commission interest calculated in accordance with Irish law, currently section 26 of the Debtors (Ireland) Act, 1840, as amended, up to a rate of 5.56% per annum (see, to that effect, Commission v Trendsoft, cited in paragraph 73 above, paragraph 37; see also, to that effect, Commission v Cooperação e Desenvolvimento Regional, cited in paragraph 73 above, paragraph 58).
77 In the light of all of the foregoing considerations, the coordinator must be ordered to repay to the Commission the sum of EUR 180 664.70, together with late-payment interest:
– at the rate of 5.56% per annum from 25 August 2003 to the date of the present judgment;
– at the annual rate applied under Irish law, that is to say, currently section 26 of the Debtors (Ireland) Act, 1840, as amended, up to a rate of 5.56% per annum from the date of the present judgment until full clearance of the debt.
Costs
78 Under Article 87(2) of the Rules of Procedure, the unsuccessful party is to be ordered to pay the costs if they have been applied for in the successful party’s pleadings. Since the coordinator has been unsuccessful and the Commission has applied for costs, the coordinator must be ordered to pay the costs.
On those grounds,
THE GENERAL COURT (Eighth Chamber)
hereby:
1. Orders Irish Electricity Generating Co. Ltd to repay to the European Commission the sum of EUR 180 664.70, together with late-payment interest:
– at the rate of 5.56% per annum from 25 August 2003 to the date of the present judgment;
– at the annual rate applied under Irish law, that is to say, currently section 26 of the Debtors (Ireland) Act, 1840, as amended, up to a rate of 5.56% per annum from the date of the present judgment until full clearance of the debt;
2. Orders Irish Electricity Generating Co. Ltd to pay the costs.
Martins Ribeiro | Wahl | Dittrich |
Delivered in open court in Luxembourg on 24 November 2010.
[Signatures]