JUDGMENT OF THE COURT (Third Chamber)

9 September 1999 (1)

(Appeal — Action for compensation — Common organisation of the market inraw tobacco — Commission decisions rejecting bids in tendering procedures inrespect of tobacco held by intervention agencies — Inadequate statement ofreasons, principles of proportionality, equal treatment and the right to a fairhearing)

In Case C-64/98 P,

Odette Nicos Petrides Co. Inc., established in Kavala (Greece), represented byNikolaos Vassilakakis, Evangelos Vassilakakis, of the Thessaloniki Bar, andEvangelia Pallioudi, of the Kavala Bar, with an address for service in Luxembourgat the Chambers of Carlos Zeyen, 67 Rue Ermesinde,

appellant,

APPEAL against the judgment of the Court of First Instance of the EuropeanCommunities (Fourth Chamber) of 17 December 1997 in Case T-152/95 Petridesv Commission [1997] ECR II-2427, seeking to have that judgment set aside,

the other party to the proceedings being:

Commission of the European Communities, represented by Gérard Berscheid, ofits Legal Service, acting as Agent, with an address for service in Luxembourg at theoffice of Carlos Gómez de la Cruz, of its Legal Service, Wagner Centre, Kirchberg,

THE COURT (Third Chamber),

composed of: J.-P. Puissochet, President of the Chamber, J.C. Moitinho de Almeida(Rapporteur) and C. Gulmann, Judges,

Advocate General: D. Ruiz-Jarabo Colomer,

Registrar: R. Grass,

having regard to the report of the Judge-Rapporteur,

after hearing the Opinion of the Advocate General at the sitting on 23 February1999,

gives the following

Judgment

1.

    By application lodged at the Court Registry on 3 March 1998 Odette Nicos PetridesCo. Inc. brought an appeal under Article 49 of the EC Statute of the Court ofJustice against the judgment of the Court of First Instance of 17 December 1997in Case T-152/95 Petrides v Commission [1997] ECR II-2427 (hereinafter 'thecontested judgment‘) which dismissed its application for an order requiring theCommission to pay damages under Article 178 and the second paragraph of Article215 of the EC Treaty (now Articles 235 EC and 288 EC) as compensation for thedamage resulting from certain action taken by it in managing the commonorganisation of the market in raw tobacco in the period 1990 to 1991.

2.

    As stated in the contested judgment, the second subparagraph of Article 7(2) ofRegulation (EEC) No 727/70 of the Council of 21 April 1970 on the commonorganisation of the market in raw tobacco (OJ, English Special Edition 1970 (I), p.206) provides that tobacco purchased by other intervention agencies of the MemberStates is to be disposed of in such a way as to avoid any disturbance of the marketand to ensure equal access to goods and equal treatment of purchasers (paragraph1 of the contested judgment). According to Article 3 of Regulation (EEC) No327/71 of the Council of 15 February 1971 laying down certain general rulesrelating to contracts for first processing and market preparation, to storagecontracts and to disposal of tobacco held by intervention agencies (OJ, EnglishSpecial Edition 1971 (I), p. 78), the tobacco is to be disposed of on price termsdetermined case by case, on the basis of, inter alia, market trends and demand(paragraph 2 of the contested judgment).

3.

    Under Articles 1 and 6(1) of Regulation (EEC) No 3389/73 of the Commission of13 December 1973 laying down the procedure and conditions for the sale of

tobacco held by intervention agencies (OJ 1973 L 345, p. 47), such tobacco is to beoffered for sale in particular by means of tendering procedures, the Commissionbeing entitled to fix a minimum price for each lot or to award no contract(paragraphs 3 and 4 of the contested judgment). Each tenderer is to provide theintervention agency concerned with security in an amount of ECU 0.7 per kilogramof baled tobacco by virtue of a derogation from Article 5(1) of Regulation No3389/73 introduced by Commission Regulation (EEC) No 3040/91 of 15 October1991 amending Regulation (EEC) No 2436/91 opening an invitation to tender forthe sale of baled tobacco held by the German, Greek and Italian interventionagencies (OJ 1991 L 288, p. 18) (paragraphs 5 and 6 of the contested judgment).

4.

    During the period from April 1990 to the end of 1991, the appellant, a Greekcompany whose business is processing and dealing in tobacco in Greece andelsewhere, took part in four tendering procedures organised by the Commissionbetween those dates. During that period, the Commission also adopted Regulation(EEC) No 3040/91 increasing the amount of the security required to be lodged withthe intervention agency by each tenderer (paragraphs 7 and 8 of the contestedjudgment).

5.

    According to the contested judgment, the outcome of the four tendering procedureswas as follows:

'9.    The first tendering procedure at issue (hereinafter ”the first tenderingprocedure”) was organised by Commission Regulation (EEC) No 899/90 of5 April 1990 which opened an invitation to tender for the sale for export ofbaled tobacco held by the Greek intervention agency (OJ 1990 L 93, p. 7)and involved four lots of baled raw tobacco from the 1986 and the 1987harvests, divided by varieties and totalling 5 271 428 kg. The deadline fixedfor the Commission decision on the award of contract was 14 June 1990. The first lot comprised 1 805 903 kg of tobacco and was made up of thevarieties Mavra, Kaba Koulak Classic and Elassona, Kaba Koulak Non-Classic, Katerini, Burlay EL and Basmas. The second lot comprised1 519 836 kg of tobacco and was composed of the same varieties, with theexception of Basmas. The third lot comprised 1 519 991 kg of tobacco, andwas made up of the same varieties as the second lot. The fourth lotcomprised 425 698 kg of tobacco and was made up of the Mavra andBasmas varieties only. The applicant submitted a tender for the first andsecond lots (in the amounts of DR 76.11 and DR 63.11 per kilogramrespectively). However, on 14 June 1990 the Commission decided not toaccept any of the tenderers' bids on the ground that, in view of the pricesoffered, there was a risk that the market might be disturbed.

10    The second tendering procedure at issue (hereinafter ”the second tenderingprocedure”) was organised by Commission Regulation (EEC) No 1560/90of 8 June 1990 opening an invitation to tender for the sale for export of

baled tobacco held by the Greek intervention agency (OJ 1990 L 148, p. 7). It related to the same four lots of baled raw tobacco. The deadline fixedfor the Commission decision on the award of contract was 9 August 1990. The applicant submitted a bid for the first and fourth lots (in the amountsof DR 91.11 and DR 101.11 per kilogram respectively). On 7 August 1990the Commission accepted the bid from another tenderer for the second lot(of DR 102 per kilogram), but rejected all bids for the first, third and fourthlots, on grounds of risk of disturbance of the market.

11    The third tendering procedure at issue (hereinafter ”the third tenderingprocedure”) was organised for the three remaining lots by CommissionRegulation (EEC) No 2610/90 of 10 September 1990 opening an invitationto tender for the sale for export of baled tobacco held by the Greekintervention agency (OJ 1990 L 248, p. 5). The deadline fixed for theCommission decision on the award of contract was 12 November 1990. Theapplicant submitted a bid for all three lots (of DR 152.26, DR 132.26 andDR 121.26 per kilogram respectively). Its bid for the first lot was thehighest of those received. On 16 November 1990, the Commission decided,once again, not to accept the tenderers' bids on the ground that the pricesoffered were liable to give rise to abnormal developments on the market.

12    The fourth tendering procedure at issue (hereinafter ”the fourth tenderingprocedure”) was organised by Commission Regulation (EEC) No 2436/91of 7 August 1991 opening an invitation to tender for the sale of baledtobacco held by the German, Greek and Italian intervention agencies (OJ1991 L 222, p. 23). The total quantity of 105 486 276 kg was made up of11 lots, divided into four groups. Each group of lots could be put up forsale only when a contract for the previous group of lots had been awarded. The aim was to obtain bids for all the varieties of tobacco, and dealingswere to commence with the least popular varieties on the market. Each lotcomprised tobaccos of a given variety held by the various interventionagencies of the various Member States concerned. The applicant took partin a number of sales in that series. Its bids, which were for a quantity lowerthan that fixed for the lots in question, were rejected as not fulfilling thetendering conditions.‘

6.

    It was against that background that, by application lodged at the Registry of theCourt of First Instance on 24 July 1995, the appellant brought an action forcompensation under the second paragraph of Article 215 of the Treaty.

7.

    By the contested judgment, the Court of First Instance declared the actioninadmissible as regards the first tendering procedure and dismissed it as regards theother three tendering procedures.

8.

    In its appeal, the appellant contests the reasoning of the Court of First Instanceregarding the illegality of the Commission's conduct and puts forward the following

seven grounds of appeal: (1) inadequate statement of reasons regarding theexistence of a disturbance of the market in relation to the second and thirdtendering procedures; (2) incorrect assessment of the facts for the purpose ofapplying the principle of proportionality in relation to the second tenderingprocedure; (3) distortion of the clear sense of the evidence produced by theappellant in considering whether the principle of equal treatment had beenobserved in relation to the second tendering procedure; (4) infringement of Articles1 and 6 of Regulation No 3389/73 and 7(2) of Regulation No 727/70; (5) breachof the principle audi alteram partem and the principle of equality of arms; (6)incorrect assessment of the appellant's allegations concerning the principle of equaltreatment and the increase of the amount of the guarantee in relation to the fourthtendering procedure; and (7) infringement of Regulation No 3389/73.

Inadequacy of the statement of reasons regarding the existence of a disturbanceof the market in relation to the second and third tendering procedures

9.

    The appellant submits that the Court of First Instance failed to explain to whatextent the aim of avoiding disturbance of the market in relation to the second andthird tendering procedures had been attained. It submits that the Court of FirstInstance should have indicated the reasons for which the award of a lot to anothertenderer had not disturbed the tobacco market whereas the rejection of that bidwould also have led to a higher price being bid for that lot, the reason given forrejecting the appellant's bid. Such a statement of reasons is needed to enablecompliance with the principle or proportionality to be verified.

10.

    As regards the second tendering procedure, it is clear from paragraph 50 of thecontested judgment that the appellant maintained at first instance that the rejectionof its bid was motivated not by a concern not to disturb the market but byunawareness of market prices on the part of the Commission. The Court of FirstInstance observed in that regard that any such unawareness was irrelevant inconsidering application of the principle of proportionality (paragraph 51) and thatin any event that Commission decision had prompted the operators concerned totender, in the third procedure, prices which were higher than those tendered forthe same lots in the second tendering procedure (paragraph 52).

11.

    Moreover, in rejecting the plea that the Commission's refusal to accept theappellant's bid in the second tendering procedure was not motivated by the needto avoid disturbance of the market, the Court of First Instance did not have to takea view on the question whether the lot awarded in the same tendering procedurecould have secured a higher price in a new tendering procedure. That questionrelates either to the appellant's plea alleging breach of the principle of equaltreatment or to the validity of such a tendering procedure, which is not at issue inthese proceedings.

12.

    As regards the third tendering procedure, the Court of First Instance held, inparagraph 65, that 'the applicant has produced no evidence to show that, bydeciding on 16 November 1990 to reject all the tenders in order not to disturb themarket, the Commission failed to take account of market requirements‘.

13.

    That statement of reasons is clearly adequate.

14.

    The first ground of appeal cannot therefore be upheld.

Incorrect assessment of the facts for the purpose of applying the principle ofproportionality in relation to the second tendering procedure

15.

    The appellant maintains, first, that the Court of First Instance infringed theprinciple of proportionality in taking the view, in paragraphs 48 to 52 of thecontested judgment, that the Commission decision of 7 August 1990 wasappropriate to the aim of not disturbing the market since that decision embodiedtwo contradictory measures, namely acceptance of the bid for the second lot andrejection of the bid for the fourth lot: those measures could not therefore bepursuing the stated aim. Second, it submits that the Court of First Instance waswrong in saying that the Commission's refusal of the bids received in the secondtendering procedure prompted operators to tender higher prices in the nextprocedure in order to show that the decision rejecting the bids was appropriate tothe aim of not disturbing the market. The appropriateness of a measure must beassessed by reference not to its results but to the aims pursued when it wasadopted.

16.

    In that connection, it need merely be observed that, under Article 51 of the ECStatute of the Court of Justice, an appeal is to be limited to points of law and theCourt of Justice will review facts found by the Court of First Instance only if theyhave been distorted. The appellant does not allege any such distortion.

17.

    The appellant also submits that the rejection decision relating to the fourth lot iscontrary to the terms of the notice of invitation to tender and to Article 1(2) ofRegulation No 3389/73, which provides that, in an invitation to tender, the contractis to be awarded to the person making the best offer in accordance with theregulation.

18.

    It must be pointed out that this ground of appeal raises a separate issue and hasbeen put forward by the appellant for the first time in its appeal. According tosettled case-law, under Articles 113(2) and 116(1) of the Rules of Procedure of theCourt of Justice new pleas, not contained in the original application, cannot beraised in an appeal (see, in particular, Case C-153/96 P De Rijk v Commission[1997] ECR I-2901, paragraph 18).

19.

    It follows that the second ground of appeal is inadmissible.

Distortion of the clear sense of the evidence produced by the appellant inconsidering whether the principle of equal treatment had been observed in relationto the second tendering procedure

20.

    According to the appellant, the Court of First Instance distorted the clear sense ofthe information contained in the minutes of the Tobacco Management Committeeand in the Court of Auditors Special Report regarding the fact that its bid wassignificantly higher for the fourth lot than the successful bid in the procedure forthe second lot. It appears from those minutes that the first bid represented 75%of the value of the tobacco whereas the one accepted for the second lotrepresented only 23%. In the Court of Auditors Special Report it was indicated,in points 4.53 to 4.55, that the bid for the fourth lot was significantly better in thatthe latter lot contained a larger quantity of tobaccos of inferior quality, ascompared with the bid for the second lot, which contained a larger quality oftobacco of higher value. The distortion of the clear sense of the information inthose two documents meant that the Court of First Instance incorrectly held inparagraphs 54, 57 and 59 of the contested judgment that there had been no breachof the principle of equal treatment.

21.

    On this point, the Court of First Instance observed, in paragraph 55, that thesecond and fourth lots in the second tendering procedure were of a differentcomposition and that the tobacco qualities were different and, in paragraph 56,that, on the basis of the information in its possession at the time, the Commissionhad considered that the appellant's tender for the fourth lot was low, whereas thatsubmitted for the second lot was acceptable, particularly when compared with theprice tendered for the third lot, the composition of which was almost identical tothat of the second lot.

22.

    Finally, the Court of First Instance stated, in paragraph 57, that the Commissionhad taken the view that if the Mavra in the second and fourth lots, the quantity ofwhich was almost the same (306 491 kg in the second lot and 333 872 kg in thefourth), had been disregarded, it would have become apparent that the appellantwas tendering a lower price per kilogram for the Basmas variety in the fourth lotthan the price per kilogram tendered for the other tobacco varieties in the secondlot by the tenderer to which the contract for the latter was awarded, when theBasmas variety was more sought after than the other varieties in the second lot, afact not disputed by the appellant. The Court of First Instance went on to say that,in the proceedings before it, the appellant had not established in what respect thatassessment was manifestly incorrect but had merely cited an extract from theSpecial Report to the effect that the tender not accepted for the fourth lot wasbetter than that accepted for the second lot, without convincingly answering theCommission's arguments, which contradicted the conclusion reached in the extractcited from the Special Report.

23.

    In view of the foregoing and having regard to the latitude necessarily available tothe Commission in managing the common organisation of the market (paragraph58 of the contested judgment), the Court of First Instance found, in paragraph 59,that the appellant had failed to show that the Commission had treated twocomparable situations differently.

24.

    In support of this ground of appeal, the appellant merely contends that theabovementioned minutes of the Tobacco Management Committee and the Courtof Auditors Special Report are conclusive and that the Commission disregarded'the price adjustment mechanism after excluding the Mavra variety from a lot‘. However, those factors, of which the Court of First Instance took account, provideno basis for calling in question the assessment of the facts which it undertookwithout distorting the clear sense of the evidence produced.

25.

    The ground of appeal alleging that the facts were distorted when it was consideredwhether the principle of equal treatment had been infringed must therefore berejected.

Infringement of Articles 1 and 6 of Regulation No 3389/73 and 7(2) of RegulationNo 727/70

26.

    The appellant claims, in reliance on Articles 1 and 6 of Regulation no 3389/73 and7(2) of Regulation No 727/70, first, that, with regard to ordinary decisions formanagement of the agricultural sector concerned, such as those at issue here, theCommunity institutions should not be allowed the degree of latitude that they enjoywhen making choices of economic policy. Second, it claims that, when theCommission refuses to award a lot and, in such a case, chooses to fix a minimumprice for the lot not awarded, it is thereby making clear its view as to the needs ofthe market and the fact that the market is not subject to any disturbance, with theresult that it no longer enjoys any discretion. It undertakes to make an award inrespect of all bids in the next tendering procedure if they are of a level at leastequal to the minimum price set.

27.

    In that regard, it must be pointed out, as the Commission has done, that the Courtof Justice has held, in relation to the common organisation of the market in vinousalcohols (Case C-358/90 Compagnia Italiana Alcool v Commission [1992] ECRI-2457, paragraph 42), that, where the Commission decides not to make an awardbecause of the risk of disturbance of the market, it enjoys a wide power for theassessment of complex economic situations. The decision whether or not to accepta bid is not therefore a simple and mechanical administrative operation but callsfor the appraisal of a complex economic situation. The same applies to theprocedures for the making of awards in this case.

28.

    The Court of First Instance was therefore right, in reliance on the case-law of theCourt of Justice (Case 27/85 Vandelmoortele v Commission [1987] ECR 1129,paragraphs 31 to 34), to take the view in paragraph 58 of the contested judgment

that, in those circumstances, even decisions which may subsequently prove to beopen to criticism do not necessarily cause the Community to incur liability in theabsence of a manifest error of assessment on the part of the institution.

29.

    The allegation that the Commission infringed Articles 1 and 6 of Regulation No3389/73 and Article 7(2) of Regulation No 727/70, in that it no longer enjoys anylatitude when fixing a minimum price for a lot not awarded, constitutes a new pleawhich, for the same reasons as those set out in paragraph 18 of this judgment, isinadmissible.

30.

    The fourth ground of appeal must therefore be rejected.

Infringement of the principle audi alteram partem and the principle of equality ofarms

31.

    According to the appellant, the Court of First Instance should not have relied solelyon the documents cited by the Commission in its reply to the written questions putto it by that Court in rejecting the appellant's pleas alleging breach of theprinciple audi alteram partem and the principle of equality of arms in relation tothe fourth tendering procedure and the increase of the amount of the guarantee. The appellant observes that, in view of the timing of the production of thosedocuments and the complexity of the case, it had no opportunity of verifying theinformation they contained, so that the requirements of the principle audi alterampartem and the principle of equality of arms were not observed. Moreover, theCommission's answer was lodged at the Registry of the Court of First Instance on16 April 1997, whereas the date set was 15 April 1997.

32.

    It need merely be pointed out, as the Commission has done without beingcontradicted, that the appellant was entitled to put forward at the hearing anyobservations on those documents which it considered necessary or to request anadjournment of the hearing to enable it to analyse the Commission's reply, but didnot do so. In those circumstances, the appellant cannot, in an appeal, rely on aprocedural safeguard which it had already waived.

33.

    As regards the delay — which, it should be said, has not been established — in thelodging of the Commission's reply, nothing has been disclosed to show that it couldhave had any impact on the appellant's exercise of its rights in the course of theprocedure.

34.

    This plea must therefore also be rejected.

Incorrect assessment of the appellant's allegations concerning the principle ofequal treatment and the increase of the amount of the guarantee in relation to thefourth tendering procedure

35.

    As regards the fourth tendering procedure, the appellant submits that the Court ofFirst Instance should have examined its plea alleging breach of the principles ofproportionality and equal treatment by reviewing the legality of the acts for whichthe Commission was criticised separately rather than together.

36.

    It need merely be stated, on this point, that the Court of First Instance had to ruleon the various complaints made by the appellant and that none of the argumentsput forward by the latter justifies the view that the Court of First Instance failedto consider the Commission's conduct in its entirety when it held that the pleasalleging breach of the principles of proportionality and equal treatment wereunfounded.

37.

    This ground of appeal must therefore be rejected.

Infringement of Regulation No 3389/73

38.

    According to the appellant, the Court of First Instance was wrong in accepting, inparagraph 91 of the contested judgment, that the Commission was entitled toderogate from Article 3 of Regulation No 3389/73 and that the reduction from 45to 20 days of the period between the notice of invitation to tender and the datefixed by Regulation No 2436/91 for submitting tenders was lawful. It claims thatArticle 3(2) of Regulation No 3389/73, which ranks higher in the hierarchy ofnorms, does not allow any derogation from the period of 45 days except for lots oftobacco which are auctioned publicly. The Commission was therefore entitled toderogate from that period only for lots put up for public auction, namely those forwhich the third tendering procedure of the Greek and Italian intervention agencieswas annulled, involving a small quantity of tobacco — about eight tonnes.

39.

    It must be observed on this point that, in preparation for the fourth tenderingprocedure, Commission Regulation (EEC) No 395/90 of 15 February 1990amending Regulation (EEC) No 3389/73 laying down the procedure and conditionsfor the sale of tobacco held by intervention agencies (OJ 1990 L 42, p. 46) reducedto 20 days the period of 45 days provided for in Article 3 of Regulation No3389/73. As the Court of First Instance indicated in paragraph 91 of the contestedjudgment, that reduction was decided upon in the context of the considerablelatitude available to the Commission and the appellant has not proved that theCommission committed any manifest error. Moreover, the appellant has notindicated the extent to which the reduction might have favoured other economicoperators.

40.

    The appellant merely states that Regulation No 3389/73 is of a higher order thatRegulation No 395/90 in view of the fact that it is an essential measure adoptedunder Regulation No 727/70 of the Council.

41.

    That argument cannot be upheld. Both regulations are of the same rank and bothwere adopted on the same legal basis, namely Article 7(4) of Regulation No 727/70.

42.

    Consequently, this ground of appeal has no legal basis and must therefore berejected, and hence the appeal must be dismissed in its entirety.

Costs

43.

    Under Article 69(2) of the Rules of Procedure, the unsuccessful party is to beordered to pay the costs, if they have been applied for in the successful party'spleadings. Since the appellant has been unsuccessful, it must be ordered to pay thecosts.

On those grounds,

THE COURT (Third Chamber)

hereby:

1. Dismisses the appeal;

2. Orders Odette Nicos Petrides Co. Inc. to pay the costs.

Puissochet Moitinho de Almeida Gulmann

Delivered in open court in Luxembourg on 9 September 1999.

R. Grass

J.-P. Puissochet

Registrar

President of the Third Chamber

1: Language of the case: French.