Opinion of Advocate General Kokott delivered on 7 November 2019.

• Jurisdiction: European Union
• Court: Court of Justice (European Union)
• ECLI: ECLI:EU:C:2019:941
• Date: 07 November 2019

OPINION OF ADVOCATE GENERAL

KOKOTT

delivered on 7 November 2019 (1)

Case C‑584/17 P

ADR Center SpA

v

European Commission

(Appeal — Grant agreements between the Commission and beneficiaries of subsidies — Adoption of a decision which is enforceable within the meaning of Article 299 TFEU (enforcement decision) to recover subsidies awarded under a contract — Power of the Commission to adopt unilateral decisions to recover debts arising under a contract — Judicial review — Jurisdiction and power of review of the EU Courts)

Table of contents

I. Introduction

II. Legal framework

A. Treaty on the Functioning of the European Union

B. EU Financial Regulation

III. Background to the appeal proceedings

A. Grant agreements concluded

B. Recovery decision of the Commission

C. Procedure before the General Court

IV. Appeal proceedings and forms of order sought

V. Assessment

A. The second ground of appeal

1. The Commission’s power to adopt enforcement decisions in order to recover debts arising under a contract

(a) Article 299 TFEU

(b) Article 299 in conjunction with Article 263, Article 272 and Article 274 TFEU

(c) Article 79(2) of Financial Regulation No 966/2012

(d) Interim conclusion

2. Compatibility of the adoption of enforcement decisions to recover debts arising under a contract with EU fundamental rights

(a) Protection of legitimate expectations

(b) The right to an effective remedy

(1) Classification of enforcement decisions which are adopted to recover debts arising under a contract as acts which have to be challenged by an action for annulment under Article 263 TFEU

(2) Non-suspensory effect of actions for annulment brought against enforcement decisions which are adopted to recover debts arising under a contract

(3) The understanding of the distinction between actions for annulment under Article 263 TFEU and contractual actions under Article 272 TFEU in the General Court’s case-law

(i) Actions for annulment under Article 263 TFEU brought against enforcement decisions which are adopted to recover debts arising under a contract

– Relevance of the contract and of national law in an action for annulment brought against an enforcement decision

– EU law applicable to contracts concluded by the European Union

– Conclusion

(ii) The need to consider all relevant questions of fact and law in contractual actions under Article 272 TFEU

(c) Interim conclusion

3. Conclusion regarding the second ground of appeal

B. The first ground of appeal

C. The effects of the merits of the second ground of appeal on the continued validity of the judgment under appeal

VI. Costs

VII. Conclusion

I. Introduction

1. Can the European Commission recover from its co-contractors sums due under contracts by means of unilateral, enforceable decisions or is it required to have recourse to the court having jurisdiction to adjudicate on the contract in order to obtain an enforceable instrument?

2. This is the fundamental question in the present appeal. It arises in the light of the Commission’s practice over the last 15 years or so of increasingly asserting contractual claims, particularly vis-à-vis beneficiaries of subsidies, by means of unilaterally adopted decisions which are enforceable within the meaning of Article 299 TFEU (‘enforcement decisions’). (2)

3. The judicial handling of these decisions is complicated, particularly because of the division of jurisdiction between the EU Courts, which, in principle, have jurisdiction for actions for annulment brought against unilateral EU acts, and national courts, which, in principle, that is to say, in the absence of a corresponding arbitration clause, have jurisdiction for disputes relating to contracts concluded by EU institutions.

4. Against this background, the General Court has developed a complex and to some extent divergent case-law to distinguish between EU acts which are separable from a contract and purely contractual EU acts and between the corresponding actions for annulment and contractual actions.

5. In its landmark ruling of 20 July 2017, (3) the judgment under appeal in the present case, which was delivered in a Chamber with Extended Composition, the General Court attempted to establish a uniform solution based on previous case-law. That solution consists, in essence, in recognising the Commission’s power to adopt enforcement decisions vis-à-vis its co-contractors, but at the same time seeking to make such decisions and the underlying contractual claims amenable to as broad a judicial review as possible, without, however, abandoning the previous case-law on the strict distinction between actions for annulment and contractual actions. As a result, legal protection remains complicated even in the context of this solution.

6. In the present appeal, the Court is asked, for the first time, to rule on both the question whether the Commission has the power to adopt enforcement decisions to recover debts arising under a contract and the question of the legal remedy available to those to whom such decisions are addressed. The Court’s findings therefore have a high systemic relevance. This is illustrated not least by the fact that the General Court has currently stayed various proceedings pending the Court’s ruling in the present appeal. (4)

II. Legal framework

A. Treaty on the Functioning of the European Union

7. Articles 272, 274 and 299 TFEU provide:

‘Article 272

The Court of Justice of the European Union shall have jurisdiction to give judgment pursuant to any arbitration clause contained in a contract concluded by or on behalf of the Union, whether that contract be governed by public or private law.

Article 274

Save where jurisdiction is conferred on the Court of Justice of the European Union by the Treaties, disputes to which the Union is a party shall not on that ground be excluded from the jurisdiction of the courts or tribunals of the Member States.

Article 299

Acts of the Council, the Commission or the European Central Bank which impose a pecuniary obligation on persons other than States, shall be enforceable.

Enforcement shall be governed by the rules of civil procedure in force in the State in the territory of which it is carried out. …

…

Enforcement may be suspended only by a decision of the Court. …’

B. EU Financial Regulation

8. Article 79(2) of the relevant regulation in the present case, (5) Regulation (EU, Euratom) No 966/2012 of the European Parliament and of the Council of 25 October 2012 on the financial rules applicable to the general budget of the Union and repealing Council Regulation (EC, Euratom) No 1605/2002 (‘Financial Regulation No 966/2012’), (6) reads as follows:

‘Article 79 Authorisation of recovery

…

2. The institution may formally establish an amount as being receivable from persons other than Member States by means of a decision which shall be enforceable within the meaning of Article 299 TFEU.

…’

III. Background to the appeal proceedings

A. Grant agreements concluded

9. In December 2008, the Commission concluded with consortia, whose coordinator was the appellant ADR Center SpA (‘ADR’), three grant agreements to support studies on alternative dispute resolution and mediation in the context of civil justice. (7) The grant agreements comprised special conditions (Latin numeral I), general conditions (Latin numeral II) and annexes. (8)

10. Each of the grant agreements indicated the total eligible costs and the amount of the grant to be paid by the Commission, representing a certain percentage of the eligible costs. (9) Under Article I.5 of the grant agreements, the Commission was to make a pre-financing payment to the beneficiaries and the balance was to be paid only after completion of the supported actions, compliance with reporting obligations by the beneficiaries of the grants and approval of the reports by the Commission. (10)

11. Article I.9 of the grant agreements provided: (11)

‘The grant is governed by the terms of the agreement, the Community rules applicable and, on a subsidiary basis, by the law of Belgium relating to grants.

The beneficiaries may bring legal proceedings regarding decisions by the Commission concerning the application of the provisions of the agreement and the arrangements for implementing it before the Court of First Instance of the European Communities and, in the event of appeal, the Court of Justice of the European Communities.’

12. Article II.19.5 of the grant agreements stated: (12)

‘The beneficiaries understand that, under Article 256 of the Treaty establishing the European Community [now Article 299 TFEU], the Commission may adopt an enforceable decision formally establishing an amount as receivable from persons other than States. An action may be brought against such decision before the [General Court].’

13. Under Article II.20 of the grant agreements, the coordinator undertook to provide any information requested by the Commission or by any other outside body authorised by the Commission. Furthermore, the beneficiaries agreed to have an audit of the use made of the grant carried out either directly by the Commission’s own staff or by any other outside body authorised to do so on behalf of the Commission, and recognised the Commission’s power to make recovery decisions, where appropriate in the light of the audit findings. Lastly, the beneficiaries undertook to allow the Commission and outside personnel authorised by it the appropriate right of access to sites and premises where the action was carried out and to all the information, including information in electronic format, needed in order to conduct such audits. (13)

B. Recovery decision of the Commission

14. In 2009 and 2010 the Commission made pre-financing payments in respect of the three grant agreements concerned, received the corresponding final reports and paid the balances for two of the agreements, whilst it reclaimed a fraction of the pre-financing payment made for the third. (14)

15. In 2011 the Commission had an audit...