JUDGMENT OF 18.10.1984 — CASE 109/83 EURICO v COMMISSION
In Case 109/83 REFERENCE to the Court under Article 177 of the EEC Treaty by the First Civil Division of the Tribunale di Milano (District Court, Milan) for a preliminary ruling in the action pending before that court between
THE COURT (Fifth Chamber) composed of: O. Due, President of Chamber, C. Kakouris, U. Everling, Y. Galmot and R. Joliét, Judges, Advocate General: C. O. Lenz Registrar: H. A. Rühi, Principal Administrator
gives the following
JUDGMENT
Facts and Issues
I — Facts and written procedure
1. Facts
2. The proceedings before the Italian courts
3. The question submitted for a preliminary ruling
(a) The legal basis of the food-aid policy
(b) Details of the management of the food-aid policy
(c) The detailed rules for concluding and performing the contract the subject of the main proceedings
II — The Community regulations regarding food aid, as described by the Commission
III — Written observations submitted to the Court
A — Observations of the plaintiff company in the main proceedings
Preliminarily :
Preliminarily :
In reply to the question:
In the alternative:
B — The observations of the Commission
1. The fundamental principles of the Community rules on agriculture
2. The attribution of liability under Community law
(a) The liability of the European Community
(b) The liability of the Member States (and of their intervention agencies)
(c) The liability of the Italian State and of the ENR in this case
* The general theory of the agency contract
* Community law
* Italian law
3. Resolution of the present case in accordance with the principles of Community law
(a) The incurring of liability by the State under national law
(b) Relations between the Member State (ENR) and the European Community (Commission)
IV — Replies to the questions put by the Court
(1) The Commission gave the following answers to the various questions put to it by the Court.
(a) The legal basis of the food-aid policy
(b) Details of the management of the food-aid policy
(c) The detailed rules for concluding and performing the contract the subject of the main proceedings
(2) The Government of the Italian Republic and Eurico produced the documents requested by the Court.
V — Oral procedure
Decision
The jurisdiction of the Court to rule on the question
The reply to be given to the question
Costs
I —. Facts and written procedure
1. Facts
2. The proceedings before the Italian courts
(a). On 23 December 1977, Eurico summoned the ENR to appear before the Tribunale di Milano, seeking an order that that agency should pay it the sum of LIT 270000000 plus compensation for monetary depreciation and interest.
(b). The proceedings instituted by Eurico against the Commission before the Tribunale di Milano
3. The question submitted for a preliminary ruling
(a). The legal basis of the food-aid policy
1. The Commission is invited to produce a complete list of the regulations on the food-aid policy adopted since the conclusion of the Wheat Agreement and the 1981 Food-Aid Convention.
2. Does the Commission consider that at the present time the food-aid policy:
3. Would the answer to the previous question have been different under the law as in force on 10 September 1976, the date of the decision giving rise to the main proceedings? If so, give details of the changes which have occurred.
(b). Details of the management of the food-aid policy
4. As regards aid with respect to cereals, in the event of urgent need or non-availability on the Community market, how were those products obtained at the time of the material events?
5. If the management of the food-aid policy differs according to the products concerned (cereals, milk products, sugar, vegetable oils and other products), what is the basis of and justification for such differentiation?
(c). The detailed rules for concluding and performing the contract the subject of the main proceedings
6. The Commission is invited to produce all the correspondence and telex messages sent by it to the Italian Republic or to the Ente Nazionale Risi at every stage of the contract-conclusion, performance and payment.
7. Does the Commission agree with the description of the facts contained in the letter dated 12 May 1977 from the ENR to Eurico? (Annex 101 to Eurico's observations).
8. The Commission is invited to give details of how financing was arranged for the operation and to indicate in particular, in so far as Community credits were used for that operation, whether the payee was the Italian Republic or the Ente Nazionale Risi.
II —. The Community regulations regarding food aid, as described by the Commission
III —. Written observations submitted to the Court
A —. Observations of the plaintiff company in the main proceedings
(a). The existence of an authority to act as agent appears clearly from the document submitted on 21 February 1978 by the ENR during the first action brought against it by Eurico before the Tribunale di Milano.
(b). The existence of such an authority to act as agent is apparent from the very wording of the Commission Decision of 10 September 1976.
(c). It is also confirmed by the Commission's conduct during the performance of the contract.
(d). That analysis is confirmed by Commission Decision 76/748/EEC of 10 September 1976.
(a). It considers that the decisions of the Court cited by the Commission, and in particular the judgment of 10 June 1982 (Case 217/81 Interagra SA v Commission [1982] ECR 2233) is not significant, because the'Court was not dealing with a question relating to a contract entered into by an agent of the Commission, either with or without the authority to act in the name of its principal.
(b). Eurico considers that it is clear that the principles of Italian law apply in this case and therefore that it is immaterial whether or not the ENR, upon entering into the contract, was empowered to represent the Commission.
1. The Court is unable to give any ruling on the question referred to it by the Tribunale di Milano because the answer would involve a finding and an assessment of fact which is the responsibility of the Italian trial court.
2. In any case, the decision of the Commission of the European Economic Community of 17 September 1976 involved the effective grant of authority to the Ente Nazionale Risi to act as agent of the European Economic Community for the purpose of concluding the contract for the purchase by private contract of 3750 tonnes of husked long-grain intended for the Republic of the Niger.
3. In this case, for the purpose of deciding who is a proper defendant and as to the resultant contractual liability, it is immaterial whether the authority conferred upon the Ente Nazionale Risi by the Commission of the EEC was an authority to act as representative of the Commission of the EEC.
B —. The observations of the Commission
1. The fundamental principles of the Community rules on agriculture
2. The attribution of liability under Community law
(a). The liability of the European Community
(b). The liability of the Member States (and of their intervention agencies)
(c). The liability of the Italian State and of the ENR in this case
*. The general theory of the agency contract
*. Community law
*. Italian law
3. Resolution of the present case in accordance with the principles of Community law
(a). The incurring of liability by the State under national law
(b). Relations between the Member State (ENR) and the European Community (Commission)
IV —. Replies to the questions put by the Court
(1). The Commission gave the following answers to the various questions put to it by the Court.
(a). The legal basis of the food-aid policy
1. The Commission produced a list, broken down according to product, of the 1537 regulations on the food-aid policy adopted since 1971.
2. The present basis of the food-aid policy
3. However, the Commission makes clear that the situation was very different when the decision giving rise to the present proceedings was adopted (10 September 1976).
(b). Details of the management of the food-aid policy
4. In reply to the question on the detailed provisions for mobilization of cereals for the purposes of food aid at the time of the material events, in the event of urgent need or non-availability on the Community market, the Commission stated that it did not have recourse to the world market until 1978 to find the necessary cereals for food-aid action.
5. In reply to the question whether or not the management of the food-aid policy differs according to the products concerned, the Commission stated that the same indirect management system, that is to say one using the Member States as intermediary, has been adopted systematically from the very outset for aid in respect of milk products for which the legal justification is to be found in the basic regulations in that sector (Regulation No 1347/75 of the Council of 26.5.1975 (Official Journal L 138, p. 1) and Regulation No 1541/75 of the Council of 16.6.1975 (Official Journal L 157, p. 4)).
(c). The detailed rules for concluding and performing the contract the subject of the main proceedings
6. The Commission produced all the documents requested of it.
7. The Commission agrees with the statement of facts contained in the letter of 12 May 1977 from the ENR to Eurico, as regards the part concerning the correspondence between the ENR and the Commission.
8. In reply to the question regarding the arrangements for financing of the operation, the Commission stated as follows :
(2). The Government of the Italian Republic and Eurico produced the documents requested by the Court.
V —. Oral procedure
1. By order of 24 March 1983, which was received at the Court on 14 June 1983, the Tribunale di Milano [District Court, Milan] referred a question to the Court of Justice under Article 177 of the EEC Treaty for a preliminary ruling on the interpretation of the provisions of Community law regarding the Community's food-aid policy.
27. That question was raised in proceedings before the Tribunale di Milano, initially between Eurico srl and the Ente Nazionale Risi and later between Eurico srl and the Commission of the European Communities, in which the plaintiff company sought payment of the amount outstanding on a public contract which it had concluded with the Ente Nazionale Risi.
3. By Decision 76/748 of 10 September 1976 (Official Journal 1976, L 259, p. 22), addressed to the Italian Republic, the Commission decided that the Ente Nazionale Risi, an Italian intervention agency with particular responsibility for carrying out and supervising operations relating to food-aid [hereinafter referred to as the ENR], was to conclude a private contract for the purchase on the Community market of 3750 tonnes of rice and for the supply of the product to the Republic of the Niger.
4. Eurico was chosen by the ENR as the other contracting party and performed that contract, but the quality of the product supplied was criticized by the authorities in the country of destination. For that reason, the ENR, in compliance with telex messages received from the Commission and after initially suspending payment of the invoice issued to it by Eurico, made only a payment on account of LIT 1500000000, although the total amount of the invoice was LIT 1770000000. The main proceedings relate to the recovery by Eurico of the outstanding amount of LIT 270 million.
5. For that purpose, in December 1977, Eurico sued the ENR before the Tribunale di Milano which, by judgment of 19 June 1980, dismissed the plaintiff's claim on the ground that the ENR was not a proper defendant since it had acted as a duly authorized representative of the Commission and that the action should have been brought directly against the Commission of the European Communities.
6. Eurico therefore brought an action against the Commission before the same court for an order that it should pay the sum of LIT 283 million together with interest and a sum in respect of monetary depreciation. The Commission raised the preliminary objection that it was not a proper defendant and it contended that both the argument accepted by the Tribunale in its first judgment, referred to above, and the application itself, were without foundation.
7. The Tribunale di Milano considered that it had jurisdiction by virtue of the first paragraph of Article 215 of the EEC Treaty in conjunction with Article 183 thereof and that it was entitled to establish whether or not the ENR had acted as a duly authorized agent of the Commission in connection with the food-aid operation at issue. In the national court's view, the Commission and, therefore, pursuant to Article 211 of the Treaty, the European Economic Community, are bound to fulfil their contractual obligations in the capacity of party to the contract only if that question is answered in the affirmative. In order to resolve its doubts as to the reply to be given to that question, it stayed the proceedings and submitted the following question to the Court of Justice for a preliminary ruling :
8. It is apparent from the facts of the case as they have just been set out and from the grounds of the order for reference that the question submitted by the national court seeks, in reality, to etablish whether it is to the Commission or to the national intervention agency that any liability would attach, under the Community provisions regarding food aid which were in force at the date of the Commission Decision of 10 September 1976, vis-à-vis an undertaking which the national intervention agency had chosen as the other party to a contract and had instructed to carry out a food-aid operation decided on by the Commission.
9. According to the plaintiff in the main proceedings, a question of the kind submitted for a preliminary ruling in this case cannot fall within the jurisdiction of the Court of Justice since in order to reply to that question it would have to decide whether the ENR was to be regarded as the Commission's agent under the terms of the Italian Civil Code and would have to appraise facts which fell for consideration solely by the Italian court dealing with the substance of the case.
10. It is apparent from an examination of the actual purpose, as stated above, of the question referred to the Court for a preliminary ruling, that, contrary to the contention of the plaintiff in the main proceedings, that question is not of such a nature as to lead the Court of Justice to appraise the nature of the legal relationship between the ENR and the Commission under the terms of the Italian Civil Code, nor is it of such a nature as to entail an appraisal of facts which fall for consideration by the Italian court alone. Since food aid constitutes intervention by the Community, only an analysis of Community law is relevant to the reply to such a question.
11. The plaintiff company in the main proceedings considers that by concluding a contract such as the one at issue, the Ente Nazionale Risi acted, in the capacity of an authorized agent, on behalf of the Commission. In support of that view it relies upon the following arguments :
12. It is true that food aid constitutes a Community action, financed out of Community funds and that, from that point of view, the intervention of the Member States and their agencies in the implementation of a food-aid operation contributes to the achievement of Community objectives. That very general statement is, however, insufficient to provide a useful answer to the question raised. The way in which the relevant Community legislation provides for the organization and financing of food-aid must also be examined so as to determine the role and the powers of the national intervention agencies in that regard.
13. It should be noted in the first place, as the Commission emphasizes, that when the events which gave rise to the main proceedings took place, the rules governing the granting of food-aid were closely modelled on those governing the common agricultural policy.
14. As regards the general framework in which food-aid operations are carried out, the conditions under which obligations arising under agreements relating to food-aid are to be carried out and the conditions for determination of the criteria for the mobilization of goods intended for food-aid are laid down in Article 28 of Regulation No 2727/75 of the Council of 29 October 1975 on the common organization of the market in cereals (Official Journal 1975, L 281, p. 1) and Article 25 of Council Regulation No 1418/76 of 21 June 1976 on the common organization of the market in rice (Official Journal 1976, L 166, p. 1).
15. With regard, more particularly, to the way in which food-aid operations involving cereals are carried out, Regulation No 2750/75 of the Council of 29 October 1975 fixing criteria for the mobilization of cereals intended as food aid (Official Journal 1975, L 281, p. 89) establishes a close link between the common agricultural policy and food aid, in particular, by entrusting the task of mobilizing the products intended to be used as food aid to the intervention agencies set up within the framework of the common agricultural policy and by laying down the principle that the management of cereal contracts and withdrawals of cereals intended to be used as food aid should be coordinated.
16. It is essential to emphasize, in the second place, as the Commission has also pointed out, that when the events which gave rise to the main proceedings took place, the provisions in force regarding the financing of the food-aid policy, and in particular, Regulation No 2681/74 of the Council of 21/October 1974 on Community financing of expenditure incurred in respect of the supply of agricultural products as food aid (Official Journal L 288, p. 1), provided for machinery and a system of management which were practically identical to those established for intervention in the agricultural markets.
17. It is apparent from the analysis of the Community provisions that the rules in force when the events which gave rise to the main proceedings took place divided powers relating to food aid as betwwn the Community and the Member States in a manner identical to that laid down for the implementation of the common agricultural policy.
18. With regard to the common agricultural policy, the Court has already had occasion to rule on the scope of the relevant provisions concerning the powers of the Member States and their intervention agencies, as well as their non-contractual liability towards third parties. According to well-established case-law (judgment of 22.1.1976 in Case 60/75, Carmine Russo v AIMA, [1976] ECR 45; judgment of 13.2.1979 in Case 101/78, Granaria BV v Hoofdproduktschap voor Akkerbouwprodukten, [1979] ECR 623; judgment of 10.6.1982 in Case 217/81, Compagnie Interagra SA v Commission [1982] ECR 2233), the question of compensation by a national agency for damage caused to private individuals by the agencies and servants of Member States, either by reason of an infringement of Community law or by an act or omission contrary to national law, in the application of Community law, is entirely a matter for the Member State or for the agency acting on its behalf and must be determined by the national courts in accordance with the national law of the Member State concerned, without prejudice to the possibility of those courts submitting questions to the Court of Justice for a preliminary ruling under Article 177 of the EEC Treaty.
19. The same principles must be applied to contractual liability where the national intervention agencies conclude contracts for the purpose of giving effect to Community law regarding food aid. Consequently, according to the provisions in force during the period to which the main proceedings relate, only the intervention agency of the Member State concerned, to which implementation of the Commission's decision was entrusted, can incur liability towards private traders with whom it has concluded contracts, even though the financial burden of the food-aid operation must ultimately be borne by the Community.
20. In that context, the fact that the Commission intervened in a very active way during the performance of the contract at issue is without significance as regards the divisions of powers and liability as beween the Community and the Italian intervention agency. Even if it is accepted that the letters and telex messages sent to the Italian Republic or to its intervention agency by the Commission went beyond the powers of supervision granted to the Commission by Article 4 of the aforementioned Regulation No 2681/74 of the Council, and however ambiguously they may have been drafted, they did not bind the national authorities and had no legal effect other than to express the opinion of the Commission. As the Court has held on several occasions (judgment of 27.3.1980 in Case 133/79, Sucrimex.v Commission, [1980] ECR 1299; judgment of 10.6.1983 in Case 217/81, Interagra v Commission, cited above), the expression of those opinions forms part of the internal cooperation between the Commission and the national bodies responsible for applying Community rules in that field and that cooperation cannot make the Community liable to individuals.
21. Moreover, it should be noted that the Commission decision of 10 September 1976 was in fact addressed to the Italian Republic, as required by the provisions referred to above relating to the implementation of food aid. Although the Italian intervention agency was designated by name therein, that fact is accounted for by technical requirements relating in particular to the urgency with which the food-aid operation had to be carried out in that case and likewise cannot in any way affect the division óf powers and liability as between the Community and the national intervention agency.
22. The reply to the question submitted by the national court must therefore be that the effect of the provisions of Community law regarding food aid in force at the time of the Commission Decision of 10 September 1976 is that only the national intervention agency of the Member State concerned, which was responsible for carrying out and supervising food-aid operations decided on by the Commission, can be held liable to the undertaking to which it has, by contract, delegated the actual implementation of the operations for any damage suffered by the latter in the course of carrying out that food-aid operation.
23. As these proceedings are, in so far as the parties to the main proceedings are concerned, in the nature of a step in the action pending before the national court, the decision as to costs is a matter for that court.
On those grounds, THE COURT (Fifth Chamber) in answer to the question referred to it by the Tribunale di Milano by order of 24 March 1983, hereby rules: