Judgments nº T-604/15 of Tribunal General de la Unión Europea, May 22, 2019

• Resolution Date: May 22, 2019
• Issuing Organization: Tribunal General de la Unión Europea
• Decision Number: T-604/15

(Seventh Framework Programme for research, technological development and demonstration activities - Recommendation 2003/361/EC - Decision of the Commission’s Validation Panel on qualification as a micro, small and medium-sized business - Request for review under sections 1.2.6 and 1.2.7 of the Annex to Decision 2012/838/EU, Euratom - No administrative appeal within the meaning of Article 22 of Regulation (EC) No 58/2003 - Rights of the defence - Principle of sound administration - Legal certainty - Legitimate expectations - Res judicata - Criteria for the definition of micro, small and medium-sized businesses in EU policies - Concept of an ‘enterprise’ - Concept of an ‘economic activity’ - Criterion of independence - Obligation to state reasons)

In Case T-604/15,

European Road Transport Telematics Implementation Coordination Organisation - Intelligent Transport Systems & Services Europe (Ertico - ITS Europe), established in Brussels (Belgium), represented by M. Wellinger and K. T’Syen, lawyers,

applicant,

v

European Commission, represented initially by R. Lyal and M. Clausen, and subsequently by R. Lyal and A. Kyratsou, acting as Agents,

defendant,

APPLICATION under Article 263 TFEU seeking annulment of the decision of the Validation Panel of 18 August 2015 provided for under section 1.2.7 of the Annex to Commission Decision 2012/838/EU, Euratom of 18 December 2012 on the adoption of the Rules to ensure consistent verification of the existence and legal status of participants, as well as their operational and financial capacities, in indirect actions supported through the form of a grant under the Seventh Framework Programme of the European Community for research, technological development and demonstration activities and under the Seventh Framework Programme of the European Atomic Energy Community for nuclear research and training activities (OJ 2012 L 359, p. 45), in so far as that decision concludes that the applicant does not qualify as a micro, small or medium-sized enterprise within the meaning of Commission Recommendation 2003/361/EC of 6 May 2003 concerning the definition of micro, small and medium-sized enterprises (OJ 2003 L 124, p. 36),

THE GENERAL COURT (Fourth Chamber),

composed of H. Kanninen, President, L. Calvo-Sotelo Ibáñez-Martín and I. Reine (Rapporteur), Judges,

Registrar: C. Heeren, Administrator,

having regard to the written procedure and further to the hearing on 4 October 2017,

gives the following

Judgment

Background to the dispute

1 The applicant, European Road Transport Telematics Implementation Coordination Organisation - Intelligent Transport Systems & Services Europe (Ertico - ITS Europe), established in 1991, is a cooperative limited liability company governed by Belgian law. It provides a multisectoral platform to both private and public stakeholders in the intelligent transport systems and services sector. Its statutes state that its objects are to encourage, promote and help to coordinate the implementation of advanced transport telematics in European transport infrastructure.

2 Since 31 December 2006, the applicant had been considered to be a micro, small or medium-sized enterprise (‘an SME’) within the meaning of Commission Recommendation 2003/361/EC of 6 May 2003 concerning the definition of micro, small and medium-sized enterprises (OJ 2003 L 124, p. 36). That status enabled the applicant to receive, for several years, additional subsidies from the European Union, in particular within the context of the Seventh Framework Programme of the European Community for research, technological development and demonstration services (2007-2013) (‘the FP7’).

3 In December 2013, in a review of the SME status of participants in existing research programmes, the Research Executive Agency (‘the REA’), in its capacity as the validation service for the SME status of participants, requested that the applicant provide information proving that it should still be entitled to SME status. Following a series of emails, the REA decided, on 27 January 2014, that the applicant could not be regarded as an SME.

4 By email of 7 February 2014, the applicant contested the REA’s position and attached two legal opinions prepared by independent, external lawyers.

5 By email of 24 February 2014, the REA informed the applicant that it could request a review of the decision of 27 January 2014 before the validation panel under sections 1.2.6 and 1.2.7 of the Annex to Commission Decision 2012/838/EU, Euratom of 18 December 2012 on the adoption of the Rules to ensure consistent verification of the existence and legal status of participants, as well as their operational and financial capacities, in indirect actions supported through the form of a grant under the Seventh Framework Programme of the European Community for research, technological development and demonstration activities and under the Seventh Framework Programme of the European Atomic Energy Community for nuclear research and training activities (OJ 2012 L 359, p. 45) (‘the Validation Panel’).

6 By email of 25 February 2014, the applicant requested that the REA refer the case for review by the Validation Panel.

7 On 15 April 2014, the REA informed the applicant of the decision of the Validation Panel confirming the decision of the REA of 27 January 2014 (‘the first negative decision’).

8 On 23 June 2014, the applicant brought an action against the first negative decision before the Court, registered as Case T-499/14. That action was brought against both the European Commission and the Validation Panel.

9 On 18 November 2014, the applicant was informed by the REA of the Validation Panel’s decision to withdraw the first negative decision pending the adoption of a new decision relating to the applicant’s SME status. That withdrawal was explained by the fact that the first negative decision had not explicitly addressed the arguments raised by the applicant in its email of 7 February 2014. Following that withdrawal, the Court found that the action in Case T-499/14 had become devoid of purpose and decided, by order of 30 April 2015, Ertico - ITS Europe v Commission (T-499/14, not published, EU:T:2015:285), that there was no longer any need to adjudicate on the action.

10 On 18 August 2015, the Validation Panel adopted a new decision (‘the contested decision’) in which it concluded, on the basis of an amended version of the argument adopted in the first negative decision, that the applicant was not entitled to SME status.

Procedure and forms of order sought

11 By application lodged at the Court Registry on 27 October 2015, the applicant brought the present action.

12 The Commission lodged its defence at the Court Registry on 5 February 2016.

13 The applicant lodged a reply at the Court Registry on 18 April 2016.

14 By decision of the President of the General Court of 15 June 2016, owing to the partial renewal of terms of office in the Court, the present case was assigned to a new Judge-Rapporteur.

15 The Commission lodged a rejoinder at the Court Registry on 15 June 2016.

16 As a result of changes in the composition of the Chambers of the General Court pursuant to Article 27(5) of the Rules of Procedure of the General Court, the Judge-Rapporteur was assigned to the Fourth Chamber, to which the present case was accordingly allocated.

17 Pursuant to Article 89 of the Rules of Procedure, the Court put written questions to the Commission on 30 November 2016 and 25 July 2017 by way of measures of organisation of procedure. The Commission replied to those questions within the prescribed time limit.

18 On 27 January 2017, the Court also put a written question to the applicant by way of a measure of organisation of procedure. The applicant replied to that question within the prescribed time limit.

19 By decision of 25 July 2017, the President of the Fourth Chamber of the Court decided to open the oral part of the procedure, despite none of the parties having requested that it do so.

20 At the hearing on 4 October 2017, the parties presented oral argument and replied to the questions put by the Court.

21 The applicant claims that the Court should:

- annul the contested decision;

- order the Commission to pay the costs.

22 The Commission contends that the Court should:

- dismiss the action as inadmissible;

- dismiss the action as unfounded;

- order the applicant to pay the costs.

Law

23 In support of its action, the applicant relies on eight pleas in law, alleging, first, infringement of the third subparagraph of Article 22(1) of Council Regulation (EC) No 58/2003 of 19 December 2002 laying down the statute for executive agencies to be entrusted with certain tasks in the management of Community programmes (OJ 2003 L 11, p. 1), second, infringement of Article 22 of that regulation and of the rights of the defence and breach of the principle of sound administration, third, breach of the principles of legal certainty, sound administration, the protection of legitimate expectations and res judicata, fourth, infringement of Recommendation 2003/361, fifth, infringement of Recommendation 2003/361 and breach of the principles of legal certainty and sound administration, including the requirement of impartiality, sixth, misapplication of Recommendation 2003/361, seventh, breach of the most favourable treatment principle and, eighth, a contradictory and inadequate statement of reasons in the contested decision.

24 It should be noted that the Commission asks the Court in its first head of claim to declare the action inadmissible. However, it is apparent from the defence that that first head of claim relates solely to the assessment of the applicant’s first plea in law seeking annulment of the contested decision. Accordingly, it is appropriate to rule on that question while analysing the first plea.

The first plea in law, alleging infringement of the third subparagraph of Article 22(1) of Regulation No 58/2003

Arguments of the parties

25 The applicant...