Orders nº T-132/20 of Tribunal General de la Unión Europea, March 04, 2021

• Resolution Date: March 04, 2021
• Issuing Organization: Tribunal General de la Unión Europea
• Decision Number: T-132/20

(Action for annulment - Framework Programme for Research and Innovation ‘Horizon 2020’ (2014-2020) - Grant agreement - Termination letter - Act coming within a purely contractual framework from which it is inseparable - Inadmissibility - Regulation (EU) No 1290/2013 - Loss of SME status)

In Case T-132/20,

NEC OncoImmunity AS, established in Oslo (Norway), represented by T. Nordby, R. Bråthen and O. Brouwer, lawyers,

applicant,

v

Executive Agency for Small and Medium-sized Enterprises (EASME), represented by G. Niddam and A. Galea, acting as Agents, and by D. Waelbroeck and A. Duron, lawyers,

defendant,

APPLICATION primarily based on Article 263 TFEU seeking annulment of the decision allegedly contained in EASME's letter No Ares (2019) 7905893 of 23 December 2019 terminating the grant agreement concluded under the 'Horizon 2020' framework programme for research and innovation (2014-2020) and, in the alternative, an application based on Article 272 TFEU seeking a declaration that the terms of that agreement were breached,

THE GENERAL COURT (Tenth Chamber),

composed of A. Kornezov, President, K. Kowalik-Bańczyk and G. Hesse (Rapporteur), Judges,

Registrar: E. Coulon,

gives the following

Order

Background to the dispute

1 The ‘Horizon 2020’ framework programme for research and innovation (2014-2020) (the ‘Horizon 2020 Framework Programme’) was established, on the basis of Articles 173 and 182 TFEU, by Regulation (EU) No 1291/2013 of the European Parliament and of the Council of 11 December 2013 establishing Horizon 2020 - the Framework Programme for Research and Innovation (2014-2020) and repealing Decision No 1982/2006/EC (OJ 2013 L 347, p. 104), and by Regulation (EU) No 1 290/2013 of the European Parliament and of the Council of 11 December 2013 laying down the rules for participation and dissemination in ‘Horizon 2020 - the Framework Programme for Research and Innovation (2014-2020)’ and repealing Regulation (EC) No 1906/2006 (OJ 2013 L 347, p. 81).

2 According to Article 53(1) and (2) of Regulation No 1290/2013, only small and medium-sized enterprises (SMEs) may apply for calls for proposals issued under the dedicated SME instrument referred to in Article 22 of Regulation No 1291/2013. They may cooperate with other companies, research institutes or universities. Under that provision, once an undertaking has been validated as an SME, that legal status shall be assumed to prevail for the entire duration of the project, even in cases where the undertaking later exceeds the ceilings of the SME definition due to its growth.

3 In that context, the applicant, NEC OncoImmunity AS, formerly OncoImmunity AS, a Norwegian undertaking specialising in bio-informatics, entered into grant agreement No 850078 - Medivac (the ‘grant agreement’) with the Executive Agency for Small and Medium-sized Enterprises (EASME) under the Horizon 2020 Framework Programme. The applicant signed the grant agreement on 16 March 2019 and, after it was signed by EASME, that agreement entered into force. The project started on the first day of the month following the entry into force of the grant agreement, namely on 1 May 2019, for a period of 30 months.

4 Under Article 50.3.1(b) of the grant agreement, ‘[EASME] may terminate the [grant agreement] if … a change to the beneficiary's legal, financial, technical, organisational or ownership situation is likely to substantially affect or delay the implementation of the action or calls into question the decision to award the grant’.

5 Article 55.2 of the grant agreement provides as follows:

‘The party seeking an amendment must submit a request for amendment signed in the electronic exchange system (see Article 52).

The request for amendment must include:

- the reasons behind the request;

- the appropriate supporting documents.

[EASME] may request additional information.

If the party receiving the request agrees, it must sign the amendment in the electronic exchange system within 45 days of receiving notification (or any supplementary information [EASME] has requested). If it does not agree, it must formally notify its disagreement within the same deadline. The deadline may be extended, if necessary for the assessment of the request. If no notification is received within the deadline, the request is considered to have been rejected.

An amendment enters into force on the day of the signature of the receiving party.

An amendment takes effect on the date agreed by the parties or, in the absence of such an agreement, on the date on which the amendment enters into force.’

6 In accordance with Article 57.1 of the grant agreement, the agreement is governed by the applicable EU law, supplemented, if necessary, by the law of Belgium.

7 Under Article 57.2 of the grant agreement, ‘if a dispute concerning the interpretation, application or validity of the [agreement] cannot be settled amicably, the competent Belgian courts have sole jurisdiction.’ According to that same provision, ‘if a dispute concerns administrative sanctions, offsetting or an enforceable decision under Article 299 TFEU (see Articles 44, 45 and 46), the beneficiary must bring [an] action before the General Court - or, on appeal, the Court of Justice of the European Union - under Article 263 TFEU. Actions against offsetting and enforceable decisions must be brought against the Commission (not against [EASME]).’

8 By email of 14 June 2019, the applicant notified EASME of its possible acquisition by the Japanese multinational NEC. By that email, the applicant also requested clarification as to whether the contemplated transaction would affect the grant which had been awarded to it.

9 By email of the same day, EASME responded to the applicant stating that, to assess the contemplated transaction and the change to the company structure, it had to provide EASME with certain information.

10 By letter of 20 June 2019, having analysed the information provided by the applicant, EASME informed the applicant of its view that a company’s legal status as an SME could be assumed to continue for the entire duration of the project, even after the applicant has exceeded the SME definition ceilings due to its growth, only in the case of ‘natural growth’ linked to economic developments or economic conjuncture and not as a result of mergers or acquisitions. EASME stated that, in the case of the applicant, it could terminate the grant agreement in accordance with Article 50.3.1(b) of that agreement by decision of the Responsible Authorising officer following a case-by-case analysis.

11 By email of 30 July 2019, the applicant notified EASME of the change of its ownership following its acquisition by NEC on 29 July 2019.

12 On both 1 and 31 October 2019, the applicant provided additional information to EASME regarding its ownership structure following requests to that effect.

13 By letter of 6 November 2019, EASME informed the applicant of its intention to terminate the grant agreement, on the basis of Article 50.3.1(b) of that agreement. According to EASME, the applicant had lost the SME status required to be party to the project in question and to proceed with it. The applicant was invited to submit observations within 30 days of receipt of that letter.

14 By letter of 4 December 2019, the applicant set out its observations regarding EASME’s intention to terminate the grant agreement. It claimed, in particular, that the intention expressed by EASME was based on an incorrect understanding of the Rules of Participation, of Article 50.3.1(b) of the grant agreement, and of EASME’s own practice concerning...