Report for the Hearing in Joined Cases C-258/90 and C-259/90
I — Facts and written procedure
(a) Legishtive framework
— Basic Regulation No 4028/86
1. Under Article 1 of Council Regulation (EEC) No 4028/86 of 18 December 1986 on Community measures to improve and adapt structures in the fisheries and aquaculture sector (OJ 1986 L 376, p. 7), the Commission may grant Community financial aid for certain measures including, in particular, the reorientation of fishing activities by means of exploratory fishing voyages. That aid is granted, upon the conditions laid down in Regulation No 4028/86, in order to facilitate structural change in the fisheries sector within the guidelines of the common fisheries policy.
2. Article 13 of Regulation No 4028/86 provides that:
3. Under Article 14(1) of Regulation No 4028/86, the Commission is to grant Community financial aid to projects for exploratory fishing voyages:
4. The financial aid referred to in Article 14 consists of an incentive premium equal to 20% of the eligible cost of the voyage with a compulsory contribution from the State authorities of the Member State concerned which is between 10% and 20% of such cost. Projects for exploratory fishing voyages are to be submitted to the Commission through the Member State(s) concerned, once the favourable opinion of the latter has been obtained.
5. Article 16(3) of Regulation No 4028/86 provides as follows:
6. For each voyage the beneficiaries of the incentive premiums are to forward to the Commission and to the national authorities of the Member State(s) concerned, pursuant to Article 17 of the Regulation, a report concerning
— Implementing Regulation No 1871/87
7. The rules for implementing Regulation No 4028/86 are laid down by Commission Regulation (EEC) No 1871/87 of 16 June 1987 laying down detailed rules for implementing Council Regulation (EEC) No 4028/86 as regards schemes to encourage exploratory fishing (OJ 1987 L 180, p. 1). Under Article 2(1) of Regulation No 1871/87, applications for Community financial aid must contain the particulars enabling the Commission to take a decision on those applications. Article 2(3) provides that:
(b) Facts
8. On 13 December 1989, two shipping companies, Pesquerías de Bermeo SA (Pesquerías) and Naviera Laida SA (Naviera), both incorporated under Spanish law and having their registered office in Las Arenas-Guecho (Spain), submitted applications to the General Secretariat for Sea Fisheries in Madrid in order to obtain the grant of Community financial aid for two projects for exploratory fishing voyages to be made by the vessels Ceres and Geminis in the international waters of the South-West Atlantic around the 49o Article of the EEC Treaty parallel south and the Burwood bank at 57o Article of the EEC Treaty south. The exploratory voyages were intended to evaluate the profitability of stable long-term fishing in the zone concerned.
9. On 7 February 1990 the national authorities informed Pesquerías and Navieras that, if the Commission of the European Communities were to adopt a favourable decision, the General Secretariat for Sea Fisheries would grant aid equivalent to 20% of the eligible costs for the conduct of the exploratory fishing voyages.
10. On 14 February 1990 Pesquerías and Naviera submitted to the Commission through the Spanish authorities two applications for incentive premiums for exploratory fishing voyages in the international waters of the South-West Atlantic Ocean. The acknowledgements of receipt, dated 7 March 1990, sent by the Commission to Pesquerías and Naviera, state that they do not presuppose in any way that the applications, which were given the numbers EXP/ES/2/90 and EXP/ES/1/90, complied with all the provisions of Regulation No 4028/86 and that the voyages in question may not begin before the date of receipt of the application by the Commission. The fishing vessels Ceres and Geminis commenced their exploratory fishing voyages on 22 February 1990 and 15 February 1990 respectively.
11. On 24 April 1990, at a meeting of the Standing Committee for the Fishing Industry (the Standing Committee), provided for by Article 16 of Regulation No 4028/86 the Commission representative made the following statement noted in the minutes under point 3.2:
12. On 25 April 1990 the Commission informed Pesquerías and Naviera that it considered that there were no grounds for continuing to finance exploratory fishing voyages to the South-West Atlantic and that consequently it could not envisage the grant of incentive premiums for voyages to that zone.
13. On 7 May 1990, the day after the receipt by Pesquerías and Naviera of the Commission's letters of 25 April 1990, they requested the Commission to reconsider its position and to grant the incentive premiums applied for because the exploratory fishing voyages of the vessels Ceres and Geminis had already commenced several weeks earlier with the support of the national authorities and because during that period they had made very considerable economic efforts.
14. On 6 June 1990 the Commission adopted Decisions EXP/ES/2/90 and EXP/ES/1/90 addressed to the Kingdom of Spain as well as to Pesquerías and Naviera finding in Article 1 that the projects for exploratory fishing voyages in the waters of the South-West Atlantic Ocean did not fulfil the conditions necessary for obtaining Community financial aid under Regulation No 4028/86.
15. Two judicial decisions of 25 June 1990 originating from the Spanish authorities record that Pesquerías and Naviera have suspended payments.
16. It is to be noted that on 7 November 1989 the Commission had granted incentive premiums for projects for exploratory fishing voyages submitted on 15 February 1989 by Pesquerías and Naviera. The 1989 voyages involved the same vessels, the Ceres and the Geminis, the same zones of the South-West Atlantic and the same species as those to which the projects for 1990 voyages related with regard to which the Commission adopted the contested decisions.
17. The end-of voyage reports for the exploratory fishing voyages with which these proceedings are concerned were submitted to the Spanish General Secretariat for Seafishing on 8 October 1990 for the Ceres and 5 October 1990 for the Geminis.
(c) Procedure
18. The applications of Pesquerías and Naviera were lodged at the Registry of the Court on 23 August 1990.
19. By order of 4 October 1991, the Court decided, in accordance with Article 43 of the Rules of Procedure, to join Cases C-258/90 and C-259/90 for the purposes of the oral procedure and the judgment.
20. 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.
21. The Court, by decision of 9 July 1991 taken pursuant to Article 95(1) and (2) of the Rules of Procedure, assigned the case to the Second Chamber.
II — Forms of order sought by the parties
(a) In Case C-2W90
22. Pesquerías claims that the Court should:
23. The Commission claims that the Court should:
(b) In Case C-259/90
24. Naviera claims that the Court should:
25. The Commission contends that the Court should:
III — Pleas in law and arguments of the parties
Admissibility
26. Pesquerías and Naviera consider first of all that they clearly have capacity to sue: they are the addressees of the contested decisions which are of direct and individual concern to them; their individual interest resides in the fact that the contested decisions affect only their addressees, known by name to the Commission; they are directly governed by those decisions.
27. The Commission does not contest the formal admissibility of the applications of Pesquerías and Naviera.
Substance
28. In their applications Pesquerías and Naviera make a number of claims of a different nature. The first of those claims, based on Article 173 of the EEC Treaty, concern the annulment of Decisions EXP/ES/2/90 and EXP/ES/1/90 of the Commission of 6 June 1990. The second seek a declaration that the Commission is obliged to adopt decisions stating that they are entitled to the incentive premiums sought. The third claims, made pursuant to Article 178 and 215 of the EEC Treaty, seek compensation for the damage which Pesquerías and Naviera allegedly suffered owing to the adoption by the Commission of the contested decisions of 6 June 1990.
The claims for the annulment of the Commission decisions of 6 June 1990
29. Pesquerías and Naviera support their claims for annulment by making two pleas in law alleging the breach of Council Regulation No 4028/86 and based on rules of Community law laid down in Articles 173, 174, 189 and 190 of the EEC Treaty.
30. Pursuant to the first of those pleas, Pesquerías and Naviera assert that the Commission's decisions of 6 June 1990 disregard the order of precedence of rules of law, are wrong in fact and in law and are insufficiently reasoned.
31. As regards the alleged breach of the principle of the order of precedence of rules of law, Pesquerías and Naviera observe that in Community law the legislative power is in the hands of the Council. Generally, the Commission only has power to adopt implementing regulations. The implementation of that Community law may also take the form of special acts of implementation, such as decisions. Just as it is a fundamental principle that an implementing regulation must not derogate from the basic regulation from which it is derived, the Commission's decisions of 6 June 1990 must not conflict with Regulation No 4028/86, that regulation being of higher rank since it was adopted by the Council. The grant of Community financial aid is subject to specific conditions laid down in Regulation No 4028/86 which the Commission must observe. Thus, under Article 16(3) of Regulation No 4028/86, the Commission must adopt its final decision within two months of the submission of a project. That time-limit was binding on the Commission. Citing the judgment of 8 April 1976 in Case 43/75 (Defrenne v Sabena [1976] ECR455), Pesquerías and Naviera argue that otherwise a breach of the law would be made into a rule of interpretation, a position which the Court could not adopt without acting in conflict with the task assigned to it by Article 164 of the Treaty. Whereas it is the case that where the Member States are bound by an obligation to achieve a specific result within a given period, the applicability of the provision imposing that obligation cannot be affected by the fact that the obligation imposed was not fulfilled, the situation should be the same where the Community institutions do not observe such an obligation. From the judgment in Case 39/72 {Commission v Italian Republic [1973] ECR 101), confirmed by the judgment in Case 128/78 (Commission v United Kingdom [1979] ECR 419), Pesquerías and Naviera deduce that just as it is not permissible for a Member State to apply the provisions of a regulation in a partial or selective manner, the Commission may not be permitted to leave Regulation No 4028/86 unapplied. That regulation has been infringed since the contested decisions were adopted after the expiry of the two-month period and because they denied Pesquerías and Naviera certain rights which that regulation gave them.
32. In the view of Pesquerías and Naviera, the contested decisions contain an error of fact and an error of law.
33. Pesquerías and Naviera point out that Article 190 of the Treaty requires decisions to contain a statement of reasons such as to allow the person concerned to ascertain whether the decision addressed to him is vitiated by a defect enabling its lawfulness to be challenged. The scope of that obligation to state reasons is to be assessed with regard to the circumstances of the case.
34. As their second plea in law, alleging a breach of rules of Community law, in particular Articles 173, 174, 189 and 190 of the EEC Treaty, Pesquerías and Naviera rely upon a breach of essential procedural requirements and a misuse of power.
35. The Commission points out first of all a contradiction in the arguments of Pesquerías and Naviera. Proceeding on the assumption that the contested decisions are unlawful because they were adopted after the expiry of the two-month period provided for in Article 16(3) of Regulation No 4028/86, Pesquerías and Naviera request the Commission, in their letters of May 1990, to adopt favourable decisions on the projects for exploratory fishing voyages. Thus, such favourable decisions would also have been adopted outside the two-month period in any event. Logically, such favourable decisions would be unlawful. However, Pesquerías and Naviera consider that favourable decisions adopted even after the expiry of the two-month period would be valid. Pesquerías and Naviera accordingly consider that the time-limit in question is not mandatory. The Commission also relies on the fact that the favourable decisions adopted in 1989, nine months after the submission of the applications for financial aid, have not been legally challenged by Pesquerías and Naviera in proceedings for annulment.
36. In the Commission's view, the only order of precedence of legislation that has been established by the Court of Justice makes implementing measures subordinate to parent measures with the latter measures being subordinate to the Treaty. That hierarchy is a substantive one and not organic according to the institution which adopted the measures. The contested decisions are not open to challenge because it was the Commission which adopted them. Regulation No 4028/86 established a difference in functions empowering the Commission to take decisions on incentive premiums as referred to in Article 15 of the regulations.
37. As regards the errors of fact and of law which it allegedly committed, the Commission points out that since the submission of the applications of 14 February 1990 and until the adoption of the contested decisions of 6 June 1990, the applicants Pesqueries and Naviera received various information and explanations indicating the decision which the Commission would take on the applications and suggesting that the Commission did not consider the period provided for in Article 16(3) of Regulation No 4028/86 to be indefinite.
38. In the Commission's view, the reasoning of the contested decisions is sufficient; several successive campaigns, as referred to Article 14(3) of Regulation No 4028/86, are not necessary in order to establish whether fishing is stable and profitable in the long-term as stipulated in paragraph 2(c) of that article. Article 14(3) has no other purpose than to allow a project for an exploratory voyage to relate to several successive voyages, to be made to the same fishing zone. Article 14(2)(c), however, provides for the case of a specific project which, in order to qualify for the incentive premium, must necessarily relate to fishing zones where, on the basis of an estimate of potential fishery resources, stable and profitable exploitation seems possible in the long term. Paragraphs (2) and (3) of Article 14 concern different cases. This is confirmed by Article 9 of Regulation No 1871/87. Therefore, it is not necessary, in order for a project to be able to satisfy Article 14(2)(c), for it to consist of several voyages as referred to in paragraph (3) of that article.
39. As regards the alleged misuse of power, the Commission denies that in adopting the decisions of 6 June 1990 it committed a misuse of power. In adopting the contested decision the Commission followed no other aims than those for which powers were conferred upon it by Regulation No 4028/86. After examining both the information already obtained by Community fishermen with regard to the marine potential of the zone of the South-West Atlantic and the results of the exploration of that zone, it considered quite simply that an exploratory fishing voyage to evaluate the profitability of regular and stable exploitation of the resources of that zone was not justified and that consequently the fishing voyage proposed by Pesquerías and Naviera did not fill the conditions for the granting of Community financial aid. The Commission considers that it could take that course because, besides the commercial aims pursued, any exploratory fishing voyage also has the aim of gathering information enabling the profitability of regular and stable exploitation of the resources of the zone concerned to be evaluated. The Commission is neither empowered nor obliged to grant financial aid for voyages whose aim is to obtain information and carry out evaluations in a zone which has already been sufficiently explored and evaluated pursuant to previous voyages. A voyage made in those conditions cannot be regarded as a project for a exploratory fishing voyage within the meaning of Regulation No 4028/86.
The claims for a declaration that Naviera and Pesquerías are entitled to the Community financial aid that has been refused
40. Pesquerías and Naviera consider it self-evident that the annulment of the decisions taken would require the Commission, in accordance with Article 176 of the Treaty, to adopt the measures that would be needed, in compliance with judgments of the Court, to grant the Community financial aid that was refused.
41. The Commission considers that this claim of Pesquerías and Naviera is inadmissible. The Court might declare the contested decisions null and void. However, it is for the Commission, pursuant to Article 176 of the EEC Treaty, to take the necessary measures to comply with the judgment of the Court.
The ctàrns for damages
42. Pesquerías and Naviera state that as a result of the refusal of their applications they were obliged to file petitions in bankruptcy. Consequently, citing the judgment in Case 5/71 (Zuckerfabrik Schöppenstadt v Council [1971] ECR 975), they claim damages for the injury caused by an institution in the exercise of its functions. The conditions to be satisfied in order for the Communities to incur liability (laid down by the Court in its judgment in Case 99/74 Grand Moulins des Antilles v Commission [1975] ECR 1531 and its judgment in Case 4/69 Liitticke v Commission [1971] ECR 325) are fulfilled in the present case. The damage suffered by the companies is certain, actual and considerable and has a direct effect on the life of the undertakings concerned. The damage arises directly from the unlawfulness of the conduct of the Commission which committed a sufficiently serious breach of a higher ranking rule of law for the protection of individuals. The causal link between the Commission's conduct and the damage relied upon is incontestable. The contested decisions were adopted at a time when the exploratory fishing voyages were already under way and were on the point of being completed, on 8 July 1990 in the case of the vessel Geminis and on 11 July 1990 in the case of the vessel Ceres. If Pesquerías and Naviera had known about the decisions in time they could have refrained from undertaking the exploratory voyages or reduced their extent. There is therefore a causal link within the meaning of the judgment in Case 310/81 (EISS v Commission [1984] ECR 1341) because the evidence capable in fact and in law of sustaining a causal link between the alleged damage and the specific wrongful acts imputable to the Community is thus present.
43. The Commission considers that the claims for damages submitted by Pesquerías and Naviera must be dismissed as inadmissible or unfounded.
1 Language of the case: Spanish.