Report for the Hearing delivered in Case 20/88

I — Facts and procedure

1. Background to the dispute

In a resolution of 9 May 1971 the Council expressed its understanding for the widening by certain Member States of the margins of fluctuation of the rates of exchange of their currencies by comparison with their official parities in order to forestall speculative capital movements. However, in one Member State an appreciable difference between the actual rate of exchange and the official rate created difficulties in the functioning of the common agricultural market, for example because trade at the actual rates of exchange could be carried on at a price, in national currency, lower than the intervention or purchase price laid down by the Community rules on the basis of the official parity.

On 12 May 1971 the Council adopted Regulation (EEC) No 974/71 on certain measures of conjunctural policy to be taken in agriculture following the temporary widening of the margins of fluctuation for the currencies of certain Member States (Official Journal, English Special Edition 1971 (I), p. 257), which was amended by Regulation (EEC) No 509/73 (Official Journal 1973, L 50, p. 1). Regulation No 974/71, thus amended, provided for the following system: if a Member State allowed, for commercial transactions, a rate of exchange for its currency which exceeded the limit of fluctuation authorized by the international rules, that Member State received compensatory amounts in respect of certain imports of agricultural products and granted them in respect of certain exports. Transactions at less than the limit of fluctuation resulted in the grant on import and the charging on export of monetary compensatory amounts by the Member State whose currency was thus depreciated. Regulation No 974/71 concerned agricultural products for which intervention measures were envisaged and, in addition, those whose price was dependent upon the abovementioned products. The recitals in the preamble to Regulation No 974/71 stated that monetary compensatory amounts should be limited to the amounts strictly necessary to compensate for the incidence of the monetary measures on prices. Finally, Article 2(2) provided that for derived products the monetary compensatory amounts were to be equal to the incidence, on the prices of the products concerned, of the application of the monetary compensatory amounts to the basic product on which they depended.

The monetary compensatory amounts were fixed by Commission Regulation No 572/76 of 15 March 1976 (Official Journal 1976, L 68, p. 5); that regulation did not provide for monetary compensatory amounts for France. However, some days later, on 24 March 1976, the Commission adopted Regulation No 652/76 amending Regulation No 572/76 (Official Journal 1976, L 79, p. 4), whereby it introduced monetary compensatory amounts for France as well.

On 18 July 1988 the company Roquette frères summoned the Customs Administration of the French State to appear before the tribunal d'instance (District Court), Lille, in order to obtain repayment of sums overcharged by the French customs authorities in respect of monetary compensatory amounts as from 25 March 1976. Before the national court, the company challenged the calculation methods used by the Commission to fix the monetary compensatory amounts specified in Regulation No 652/76. Its action related in particular to the monetary compensatory amounts in respect of processed maize starch products, processed wheat starch products, potato starch, sorbitol and isoglucose.

By judgment of 29 June 1979, the tribunal d'instance, Lille, referred to the Court for a preliminary ruling under Article 177 of the EEC Treaty a number of questions relating, albeit indirectly, to the validity of the provisions whereby the Commission had determined the monetary compensatory amounts applicable to the products in question.

In its judgment of 15 October 1980 in Case 145/79 Roquette frères SA v French Customs Administration [1980] ECR 2917, the Court considered that the Commission had calculated the monetary compensatory amounts on an incorrect basis and that the result of its calculations did not reflect the incidence on the prices of derived products of the application of the monetary compensatory amounts to the basic products. According to the Court, the Commission had gone beyond the limits imposed upon it by Regulation No 974/71; in the case of certain products it had also infringed Article 40(3) of the Treaty. Consequently, Regulation No 652/76 was declared invalid in so far as it fixed the monetary compensatory amounts applicable to maize and wheat starch on a basis other than that of the intervention price for maize and wheat respectively, after deduction of the production refund on starch; in so far as it fixed the monetary compensatory amounts for all the different products obtained by the processing of a given quantity of the same basic product, such as maize or wheat, in a specified manufacturing process, at a figure appreciably higher than the monetary compensatory amount fixed for that given quantity of the basic product; and in so far as it fixed monetary compensatory amounts applicable to potato starch which exceeded those applicable to maize starch. That invalidity also extended to a number of Commission regulations fixing monetary compensatory amounts applicable to the same products for later periods.

In the same judgment, the Court applied the second paragraph of Article 174 of the EEC Treaty and limited the consequences of the invalidity of the regulations in question by stating that the charging and payment of the monetary compensatory amounts by the national authorities as regards the period prior to the date of this judgment could not be challenged. The judgment sets out the Court's reasoning. In the first place, the invalidity could give rise to the recovery of sums paid but not owed by undertakings in countries with depreciated currencies and by the national authorities in question in countries with hard currencies. The lack of uniformity of the relevant national legislation might be capable of causing considerable differences in treatment and, therefore, cause further distortion in competition. In the second place, it was impossible to appraise the economic disadvantages resulting from the invalidity without making assessments which the Commission alone was entitled to make under Regulation No 974/71, having regard to other relevant factors, such as the application of the green rate to the production refund.

The tribunal d'instance, Lille, gave effect to the Court's judgment only partially. It took note of the invalidity pronounced by the Court but did not observe the consequences of the limitation of the effects of that invalidity. That judgment was confirmed by the cour d'appel (Court of Appeal), Douai, on 19 January 1983. On 10 December 1985 the Cour de cassation (Court of Cassation) quashed that judgment on the ground that national courts are required to follow preliminary rulings in their entirety. Finally, the cour d'appel, Amiens, to which the Cour de cassation remitted the case, set aside the judgment of the tribunal d'instance, Lille, and found against Roquette frères.

By the present action, brought under the second paragraph of Article 215 of the EEC Treaty, Roquette frères seeks reparation of the damage allegedly suffered by it as a result of the obligation to pay excessive monetary compensatory amounts through the application of provisions declared invalid. It considers that the Commission has incurred non-contractual liability.

2. The applicant

Roquette frères manufactures starch and other products derived from cereals; it exports a considerable part of its production. It paid monetary compensatory amounts in respect of exports between 25 March 1976 and 15 October 1980. Some of the starch and derived products of French origin were exported by the applicant, Roquette frères, and also by Roquette national chimie, to the Federal Republic of Germany. The German customs authorities required them to pay monetary compensatory amounts in respect of the importation of the products concerned into the Federal Republic of Germany.

Roquette national chimie then brought an action against the imposition of monetary compensatory amounts before the Finanzgericht (Finance Court), Dusseldorf, but the proceedings were stayed pending the outcome of the present application. In the mean time Roquette national chimie has changed its name; first it became Roquette national, then Roquette techniques et dérivés. Finally, in 1987, Roquette frères took over Roquette techniques et derives by merger. The present action, brought in the name of Roquette frères alone, thus seeks compensation for the damage suffered by the old Roquette frères and by Roquette national chimie.

3. Procedure

The applicant company's application was received at the Court Registry on 19 January 1988.

The written procedure followed its normal course.

Upon hearing the report of the Judge-Rapporteur and the views of the Advocate General, the Court decided to open the oral procedure without any preparatory inquiry; however, it asked the parties to concentrate, at the hearing, on the issue of liability and to leave the calculation of any damage suffered to a later stage in the proceedings.

II — Conclusions of the parties

Roquette frères, the applicant, claims that the Court should:

The Commission, the defendant, claims that the Court should:

III — Submissions and arguments of the parties

Admissibility

The applicant observes that the period within which an action might be brought could not start running until notification of the judgment delivered on 1 June 1987 by the cour d'appel, Amiens. Accordingly, the action is not time-barred. This statement did not give rise to any comment from the Commission.

Substance

The applicant considers that the infringement by the Commission of the Council's calculation rules laid down in the abovementioned Regulation No 974/71 constitutes culpa grave such that the Commission has incurred non-contractual liability. The Commission's incorrect calculations caused serious distortions leading to discrimination as between traders.

The applicant then claims that the traders concerned form a very small group operating in the starch and meal industries which are established in countries with weak currencies; they exported products during the material period.

Finally, the applicant mentions the extent of the damage suffered through the application of the incorrect calculation method. On the one hand, the loss comprises sums unduly paid to the French and German authorities: FF 29639506.74, a sum acknowledged to be correct by the French courts, and DM 773465, a sum calculated by the applicant itself. On the other hand, the applicant also suffered damage in real terms, in particular because it was placed in a less favourable position than its competitors in other countries. Consequently, its loss of profit was considerable.

In that connection, the applicant states that, where monetary compensatory amounts are concerned, the effects of a difference are always twofold: when one trader pays too much another receives too much. It must also be remembered that the prices of goods subject to monetary compensatory amounts were unrestricted. Consequently, a French exporter could not pass on to his customers the negative effects of excessive monetary compensatory amounts without running the risk of losing its outlets.

The defendant contends that in this case there is no question of any sufficiently serious breach of a superior rule of law for the protection of individuals, as required by the Court in cases of non-contractual liability stemming from unlawful regulations. According to the Commission, its conduct did not verge on the arbitrary or constitute a manifest and serious infringement of such a kind as to give rise to non-contractual liability on the part of the Community (judgment of 5 December 1979 in Joined Cases 116 and 124/77 G. R.Amylum NV and Tunnel Refineries Limited v Council and Commission [1979] ECR 3497). Moreover, the applicant has not established that the damage which it allegedly suffered was so serious as to justify use of the term sufficiently serious breach. The Commission states that, according to the case-law of the Court, a trader may be required to accept, within reasonable limits, certain damage to his economic interests as a result of a legislative measure without being able to obtain compensation out of public funds, even if that measure has been declared void (judgment of 25 May 1978 in Joined Cases 83 and 94/76, 4, 15 and 40/77 Bayerische HNL Vermehrungsbetriebe GmbH & Co. KG and Others v Council and Commission [1978] ECR 1209).

The Commission then observes, with regard to the extent of the damage, that it can merely take note of the figure of FF 29639506.74 fixed by the French court. It does not accept the figure of DM 773465 since it was arrived at by a dubious calculation.

The extent of the invalidity ex nunc of Commission Regulation No 652/76

As regards the extent of the limitation ex nunc imposed by the Court regarding the consequences of the invalidity of Regulation No 652/76, the Commission considers that two lines of reasoning are conceivable:

The Court might rely on the fact that an action for damages is independent and, if it considers that all the preconditions for the Community to incur non-contractual liability of the Community are fulfilled, uphold the applicant's claim. However, the effect of such an approach would be that a dispute normally within the purview of the national courts, relating to the payment of monetary compensatory amounts to national authorities, would be transferred to the Court.

The second option would be to extend the ex nunc effect of the finding of invalidity to non-contractual liability. Such a solution would ensure coherence between the actions envisaged by the EEC Treaty and satisfy the requirements of legal certainty.

The applicant considers that it is difficult to see how the first solution proposed by the Commission can be described as the transfer of a dispute. It emphasizes that the action before the court is an action for damages, whereas the action previously brought before the French courts — of which the proceedings before the Court of Justice leading to the judgment of 15 October 1980 was a step — was an action for the recovery of sums unduly paid and thus had an entirely different legal basis. Moreover, Roquette considers that the limitation of the consequences of the invalidity of the regulation at issue relate only to the recovery of the sums unduly paid whereas the finding of illegality takes effect in connection with the non-contractual liability of the Community.

1 Language of the case French.