JUDGMENT OF 3. 5. 1978 — CASE 112/77 TOPFER v COMMISSION
In Case 112/77
THE COURT composed of: H. Kutscher, President, M. Sørensen and G. Bosco (Presidents of Chambers), A. M. Donner, J. Mertens de Wilmars, P. Pescatore, Lord Mackenzie Stuart, A. O'Keeffe and A. Touffait, Judges, Advocate General: H. Mayras Registrar: A. Van Houtte
gives the following
JUDGMENT
Facts and Issues
I — Facts and procedure
(a) The regulations
(b) Facts
(c) Procedure
II — Conclusions of the parties
III — Submissions and arguments of the parties
Admissibilty
Illegality
Certainty of legal relationships and protection of legitimate expectation
The alternative claim
IV — Oral procedure
Decision
Admissibility
The breach of the basic agricultural rules
Breach of the principle of the protection of legitimate expectation
The claim for compensation
Costs
I —. Facts and procedure
(a). The regulations
(a). amounts which have been fixed in advance for a transaction or part of a transaction still to be carried out after the alteration of that parity relationship;
(b). amounts appearing in agreements concluded between a private individual and an intervention agency for a transaction or pan of a transaction still to be carried out after the alteration of that parity relationship.
(b). Facts
(c). Procedure
II —. Conclusions of the parties
III —. Submissions and arguments of the parties
IV —. Oral procedure
1. By an application lodged at the Court on 15 September 1977 the applicant requested the Court to annul Commission Regulation (EEC) No 1583/77 of 14 July 1977 amending Regulation (EEC) No 937/77 as regards sugar exported under certain tendering arrangements (Official Journal 1977, No 175, p. 17) and, alternatively, to declare that the Commission is liable for the damage which the applicant alleges it has suffered as a result of that regulation.
2. The dispute relates to the application of the Community rules governing the consequences of the alterations in the value of the unit of account used for the common agricultural policy as far as concerns export licences involving the advance fixing of amounts to be paid or refunded.
3. Article 4 (1) of Regulation (EEC) No 1134/68 of the Council of 30 July 1968 laying down rules for the implementation of Regulation (EEC) No 653/68 on conditions for alterations to the value of the unit of account used for the common agricultural policy (Official Journal, English Special Edition 1968 (II), p. 396) provides that in the case of an alteration of the relationship between the parity of the currency of a Member State and the value of the unit of account, the amounts which have been fixed in advance for a transaction or part of a transaction still to be carried out after that alteration shall be adjusted by using the new parity relationship.
4. Council Regulation (EEC) No 557/76 of 15 March 1976 on the exchange rates to be applied in agriculture and repealing Regulation (EEC) No 475/75 (Official Journal 1976, No L 67, p. 1) declares that the provisions of Regulation No 1134/68 are applicable, but Article 5 (2) of Regulation (EEC) No 557/76 makes the reservation: However Article 4 (1), second subparagraph of Regulation (EEC) No 1134/68 shall apply only if the application of the new representative rates is disadvantageous for the party concerned.
5. Pursuant to Article 5 of Regulation No 557/76 as thus amended the Commission provided in Regulation No 1579/76 of 30 June 1976 laying down special detailed rules of application for sugar (Official Journal 1976, No L 172, p. 59) that the compensation referred to in that article was to be granted for those quantities of white sugar for which customs export formalities were completed on or after 1 July 1976 and for which an export licence was issued before 15 March 1976; at the same time the Commission fixed the amount of the compensation for the different Member States in an annex thereto.
6. The above-mentioned provisions of Council Regulations (EEC) Nos 557/76 and 1451/76 have been replaced by Article 4 of Council Regulation (EEC) No 878/77 of 26 April 1977 on the exchange rates to be applied in agriculture (Official Journal 1977, No L 106, p. 27) which reads as follows:
7. Those rules have been amended by Regulation No 1583/77, the measure challenged by this action, which stated in a recital in its preamble that with effect from 1 July 1977, the compensatory amounts in the sugar sector have been calculated on the basis of the intervention price plus the amount of the levy charged on sugar of Community origin under the system for compensating storage costs and as a result of this new method of calculation, it is necessary to adjust the amount of the compensation fixed by Article 2 of Regulation (EEC) No 937/77 and proceeded in Article 1 to replace the amount of DM 2.33 in respect of compensation by DM 1.87.
8. At the relevant time the applicant had in its possession a large number of export licences which gave it the right if it proceeded to export to the compensation in question.
9. The Commission does not challenge the admissibility of the application. Indeed Article 2 (as amended) of Regulation No 937/77 was already a measure open to challenge within the meaning of the second paragraph of Article 173 because it was of direct and individual concern to holders of export licences issued in connexion with awards made before 26 April 1977 under partial invitations to tender.
10. The application is therefore admissible.
11. It is true that the general system governing the consequences of changes in the exchange rates, as introduced by the basic regulations, namely Regulation (EEC) No 653/68 of the Council of 30 May 1968 on conditions for alterations to the value of the unit of account used for the common agricultural policy (Official Journal, English Special Edition, 1968 (I), p. 121) and Regulation (EEC) No 1134/68 of the Council laying down rules for its implementation, provides in general that in the case of an alteration of the parities of national currencies as against the unit of account the holders of import or export licences and similar documents in respect of which there has been advance fixing may apply for their cancellation.
12. The applicant's arguments amount to the proposition that, as far as concerns white sugar, the opportunity afforded by Regulation No 1451/76 to replace the option for traders to have their licences cancelled by the option for the Community to indemnify the parties concerned for the disadvantage by paying appropriate compensation was itself a disadvantage for the traders affected.
13. This argument cannot be accepted as the system for the payment of compensation is not by itself less favourable to the parties concerned than that of the right to cancel.
14. The complaint that Regulations No 653/68 and No 1134/68 have been infringed cannot be upheld.
15. The applicant also relies on the second subparagraph of Article 4 (2) of Council Regulation No 878/77 which provides that the decision to offset the disadvantage must be taken before the date of application of the new rate in order to show that the regulation at issue, which was adopted after that date, is illegal.
16. However, the decision to offset this disadvantage by an appropriate measure was adopted by Regulation No 937/77 and the amendment by the regulation at issue does not relate to the application of the system of compensation but merely to the amount of compensation.
17. Consequently this submission cannot succeed.
18. The applicant also claims that the regulation at issue constitutes a breach of the principle of the protection of legitimate expectation.
19. The submission that there has been a breach of this principle is admissible in the context of proceedings instituted under Article 173, since the principle in question forms part of the Community legal order with the result that any failure to comply with it is an infringement of this Treaty or of any rule of law relating to its application within the meaning of the article quoted.
20. Nevertheless the submission has not been substantiated, since the fact that the Commission, as far as previous exports comparable to those contemplated by the applicant are concerned, had calculated the compensation on bases which were admittedly more favourable but went beyond the objective of Regulations Nos 557/76 and 878/77 cannot give the applicant the right to the continuance of these incorrect calculations.
21. The applicant has requested the Court in the alternative to declare that the Commission is liable for the damage which the applicant has suffered as a result of the application of Regulation No 1583/77.
22. It is clear from the foregoing that in this case everything which the Commission did was in accordance with the rules in question and that the rules must be regarded as valid.
23. The claim is therefore unfounded and the application must be dismissed in its entirety.
24. Under Article 69 (2) of the Rules of Procedure the unsuccessful party shall be ordered to pay the costs.
On those grounds THE COURT hereby:
1 Dismisses the application;
1 Orders the applicant to pay the costs.