JUDGMENT OF 13. 6. 1978 — CASE 146/77 BRITISH BEEF COMPANY v INTERVENTION BOARD FOR AGRICULTURAL PRODUCE

In Case 146/77 REFERENCE to the Court under Article 177 of the EEC Treaty by the High Court of Justice, Queen's Bench Division, Commercial Court, for a preliminary ruling in the action pending before that Court between

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: F. Capotorti Registrar: A. Van Houtte

gives the following

JUDGMENT

Facts and Issues

I — Facts and procedure

II — Written observations submitted to the Court

A — Written observations submitted by British Beef Company Ltd, the plaintiff in the main action

B — Written observations submitted by the Intervention Board for Agricultural Produce, the defendant in the main action

C — Written observations submitted by the Commission of the European Communities

III — Oral procedure

Decision

The first question

Second question

Costs

I —. Facts and procedure

1. From the middle of September 1976 onwards the British pound lost value as against the snake currencies. Consequently the Commission was obliged to increase the monetary compensatory amounts (hereinafter referred to as MCAs) to be granted on imports into and charged on exports from the United Kingdom — already at a high level. Because the Commission found this situation unsatisfactory it proposed to the Council the adoption of a regulation for a devaluation of the representative rate for the pound sterling (document COM (76)531 final of 4 October 1976). This regulation was intended to enter into force on 11 October 1976. While waiting for the Council to decide on its proposal the Commission adopted Regulation (EEC) No 2405/76 of 1 October 1976 altering the monetary compensatory amounts (Official Journal L 271, p. 1) which entered into force on Monday, 4 October 1976, maintaining unchanged from the previous week the level of the MCAs for the pound sterling and the Irish pound.

2. British Beef Company Ltd (hereinafter referred to as British Beef), the plaintiff in the main action, carries on the export of beef from the United Kingdom to other Member States.

3. As the level of MCAs which it had to pay on its exports had been increased by Regulation No 2424/76 British Beef brought an action against the intervention Board before the High Court of Justice, Queen's Bench Division, Commercial Court. It claims that on its true construction the said regulation does not apply to exports made by it in execution of contracts entered into force before the promulgation of the regulation. Alternatively it submits that the regulation is invalid in so far as it purports to apply to the aforesaid exports and that the Intervention Board is not entitled to implement the same in respect of the said exports.

4. Before deciding further, the High Court of Justice by order of 15 November 1977 stayed the proceedings and requested the Court of Justice, pursuant to Article 177 of the EEC Treaty, to give a preliminary ruling on the following questions:

5. The order of the High Court of Justice was received at the Court Registry on 2 December 1977.

II —. Written observations submitted to the Court

A —. Written observations submitted by British Beef Company Ltd, the plaintiff in the main action

(1). Commission Regulation (EEC) No 2424/76 of 5 October 1976 is to be interpreted as not applying to exports effected in execution of contracts concluded prior to the date on which it was promulgated; further or in the alternative;

(2). The aforesaid regulation is invalid in so far as it purports to apply to such exports.

B —. Written observations submitted by the Intervention Board for Agricultural Produce, the defendant in the main action

C —. Written observations submitted by the Commission of the European Communities

(1). Regulation (EEC) No 2424/76 applies to exports effected during the period 6 to 10 October 1976 in execution of contracts concluded prior to the date on which it was promulgated.

(2). Examination of the questions raised has not revealed any factor capable of affecting the validity of the aforesaid regulation.

III —. Oral procedure

1. By order of 15 November 1977 which reached the Court on 2 December 1977 the High Court of Justice, Queen's Bench Division, Commercial Court, referred to the Court of Justice in pursuance of Article 177 of the EEC Treaty two questions relating to the interpretation and validity of Commission Regulation (EEC) No 2424/76 of 5 October 1976 altering the monetary compensatory amounts (Official Journal L 275, p. 1).

2. These questions were raised in the course of an action between a United Kingdom trader carrying out the export of beef to other Member States, the plaintiff in the main action, and the British Intervention Board for Agricultural Produce, the defendant in the main action, regarding the levying of monetary compensatory amounts fixed by Regulation No 2424/76 on the occasion of the execution of export contracts concluded before the entry into force of the regulation.

3. In spite of the trend noted in the exchange rate of the pound sterling the Commission, by Regulation (EEC) No 2405/76 of 1 October 1976 altering the monetary compensatory amounts (Official Journal L 271, p. 1), which entered into force on Monday 4 October 1976, maintained unchanged for the United Kingdom the amounts fixed for the previous week.

4. In the words of the fourth recital in the preamble to the regulation that measure was adopted as a precautionary measure and pending an urgent decision on the matter by the Council.

5. As the proposal made by the Commission relating to a depreciation of the representative rate of the pound sterling was not adopted by the Council, the Commission adopted Regulation (EEC) No 2424/76 which entered into force on Wednesday 6 October, under which the monetary compensatory amounts applicable for the United Kingdom were increased so as to adjust them to the decline in value of the pound.

6. The first question inquires whether Regulation No 2424/76 must be interpreted as meaning that it did not apply to exports effected in execution of contracts concluded prior to the date on which it was promulgated.

7. It should be noted on this subject that the actual right to receive a monetary compensatory amount and the charge resulting from the levying of such an amount are only created by the performance of the import or export transaction as the case may be and only from the moment when that transaction takes places.

8. It follows that in the absence of an express provision to the contrary the amounts to be paid or levied are those fixed by the rules in force at the moment of the import or export whatever may be the date on which the contract relating to the transaction in question was concluded.

9. Although Article 2 of Regulation No 2424/76 fixed the date of entry into force of the regulation as 6 October 1976 and provided that it might be applied, at the request of any party concerned, with effect from 4 October 1976, there was no provision making it possible to exempt contracts in progress from the charges resulting from the regulation.

10. The answer to be given to the first question should therefore be that Regulation No 2424/76 was applicable to exports effected in execution of contracts concluded prior to the date of its promulgation.

11. In the second question the Court is asked whether Regulation No 2424/76 is valid in so far as it purports to apply to exports effected in execution of contracts in progress.

12. The plaintiff in the main action has pointed out in this respect that the regulation frustrated its legitimate expectation of the maintenance unchanged for the whole of the week in question of the monetary compensatory amounts fixed for the previous week and renewed by Regulation No 2405/76.

13. However, having regard to the recitals to and the provisions of the regulation and to the special circumstances existing at the time of its adoption it could not arouse in the minds of persons concerned a legitimate expectation, which the Commission was required to protect, of its maintenance for the whole of the week in question.

14. Indeed it may be seen from the statement of the grounds on which the regulation was based that it had been adopted as a precautionary measure and pending an urgent decision on the matter by the Council.

15. The persons concerned could not be unaware of the uncertainties which were typical of the situation and in particular of the possibility that the proposal of the Commission for an alteration of the representative rate of the pound sterling might not be adopted by the Council; nor could they fail to recognize that as soon as the proposal was shown to be impracticable the Commission had no further ground for not fixing new monetary compensatory amounts on the basis of the rates of exchange recorded, in accordance with the provisions of the basic regulation applicable in the matter.

16. Even certain communications sent out by a private organization on which the applicant in the main action based its claims reflected the uncertainty which was typical of the situation.

17. The reply should therefore be that consideration of the question raised has disclosed no factor of such a kind as to affect the validity of Regulation No 2424/77.

18. The costs incurred by the Commission of the European Communities which has submitted its observations to the Court are not reimbursable.

19. As these proceedings are, in so far as the parties to the main action are concerned, in the nature of a step in the action pending before the national court the decision on costs is a matter for that court.

On those grounds, THE COURT, in answer to the questions referred to it by the High Court of Justice by order of 15 November 1977, hereby rules:

1 Commission Regulation (EEC) No 2424/76 of 5 October 1976 was applicable to exports effected in execution of contracts concluded prior to the date of its promulgation.

2 Consideration of the question raised has disclosed no factor of such a kind as to affect the validity of that regulation.