GL2006 Europe Ltd, v European Commission [2013] EUECJ T-435/09 (16 September 2013)

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(Arbitration clause – Contracts for financial assistance concluded in the context of the Fifth and Sixth Framework Programmes for Community activities in the field of research and technological development and in the context of the eTEN Programme – Highway, J WeB, Care Paths, Cocoon, Secure-Justice, Qualeg, Lensis, E-Pharm Up, Liric, Grace, Clinic and E2SP projects – Termination of contracts – Reimbursement of amounts paid – Debit notes – Counterclaim – Representation of the applicant)

GL2006 Europe Ltd, established in Birmingham (United Kingdom), represented by M. Gardenal and E. Bélinguier-Raiz, lawyers,

European Commission, represented initially by S. Delaude and N. Bambara, and subsequently by S. Delaude, acting as Agents, and by R. Van der Hout, lawyer,

ACTION brought by GL2006 Europe Ltd pursuant to Article 238 EC, on the basis of arbitration clauses, whereby the applicant disputes the checks carried out by OLAF at its premises in December 2008, the decision in the letter of 10 July 2009 whereby the Commission terminated the applicant’s participation in two research and technological development projects, and 12 debit notes issued by the Commission on 7 August 2009, seeking the reimbursement of the sums paid by the Commission to the applicant for its participation in 12 research and development projects, and a counterclaim for the reimbursement of those sums,

2 Between 2000 and 2006, the European Community, represented by the Commission of the European Communities, concluded 12 contracts with the applicant concerning its participation in research and development projects in exchange for a financial contribution from the Commission intended to cover certain costs incurred in the performance of the contracts at issue.

7 In November 2007 the European Anti-Fraud Office (OLAF) requested a meeting with the Commission’s Directorate-General (DG) for the Information Society and Media following suspicions of fraud allegedly committed by the applicant in carrying out the contracts in question. On the basis of an OLAF file note of 3 December 2007 concerning that meeting, the Commission decided to suspend the evaluation of the draft audit report in order to carry out additional checks.

16 On 10 July 2009 the Commission sent a letter to the applicant’s lawyers informing them that, first, it was finally terminating the applicant’s participation in the Qualeg and Cocoon projects, which were still running, and, secondly, that it would recover the sums paid to the applicant on the basis of its participation. The applicant disputed that decision by letter of 14 July 2009.

17 On 7 August 2009 the Commission sent the applicant 12 debit notes with the object of obtaining repayment of the sums which it had paid the applicant under the 12 contracts concluded with it, that is to say, a total of EUR 2 258 456.31.

18 By application lodged at the Registry of the Court on 22 October 2009, the applicant brought the present action.

19 By separate document lodged at the Court Registry on 3 November 2009, the applicant lodged an application for suspension of the execution of the decision in the Commission’s letter of 10 July 2009 and of the 12 debit notes issued on 7 August 2009. As the requirement of urgency was not fulfilled, the application was dismissed by order of the President of the Court of 15 March 2010 and the costs were reserved.

20 In its statement in defence, lodged at the Court Registry on 26 January 2010, the Commission made a counterclaim for the sums referred to in the debit notes.

– declare that the on-the-spot check carried out by OLAF from 8 to 12 December 2008, the subsequent draft audit report and the final audit report, the decision, in the letter of 10 July 2009, to terminate the contracts under which the applicant participated in the Qualeg and Cocoon projects, and the debit notes of 7 August 2009 are affected by irregularities and are, consequently, unlawful, null and void;

– declare that the decision to terminate the contracts under which the applicant participated in the Qualeg and Cocoon projects contained in the letter of 10 July 2009, and the debit notes of 7 August 2009, comply with the terms and conditions of the contracts in question;

– by way of counterclaim, order the applicant to reimburse the Commission for the sum of EUR 2 258 456.31, corresponding to the amount shown in the debit notes, to be increased by interest as from the deadline for payment fixed in the respective debit notes;

23 In the reply, the applicant essentially repeats the claims set out in the application and adds a claim that the Court should dismiss the Commission’s claims.

24 Under Article 113 of the Rules of Procedure, the Court may at any time, of its own motion, after hearing the parties, decide whether there exists any absolute bar to proceeding with an action or declare that there is no need to adjudicate on the action.

25 Article 19 of the Statute of the Court of Justice, which applies to the General Court under Article 53 of that Statute, provides that parties other than the Member States, the States which are parties to the Agreement on the European Economic Area (EEA), the EFTA Surveillance Authority, and the institutions of the European Union are to be represented by a lawyer authorised to practise before a court of a Member State or of another State which is a party to the EEA.

26 By letter of 6 March 2012, the lawyers authorised to represent the applicant informed the Court that they no longer wished to represent it, on the grounds that they could no longer contact it, that it was no longer registered in the registry of companies, and that it had not fulfilled its pecuniary obligations to them.

27 By letter of 26 March 2012, the Court Registrar informed those lawyers that, until the applicant appointed new representatives, all correspondence relating to the present case would continue to be sent to them.

28 By way of measure of organisation of procedure of 13 June 2012, the Court asked those lawyers to:

– request the applicant to appoint new representatives by 2 July 2012 at the latest;

– inform the applicant that in the absence of such appointment within the prescribed period, the General Court would be minded to declare of its own motion that the application has become devoid of purpose;

30 The period granted to the applicant to appoint a new representative expired at midnight on 2 July 2012, without it informing the Court of any such appointment.

31 By way of measure of organisation of procedure of 10 July 2012, the Court asked the parties to submit their observations on the possibility of the Court finding, of its own motion, that the action had become devoid of purpose and that there was no need to adjudicate on it, since, having failed to appoint a new representative within the period prescribed by the Court, the applicant was no longer represented by a lawyer.

32 The Commission submitted observations by letter of 25 July 2012. The applicant did not submit observations.

33 In view of the applicant’s silence following the measure of organisation of procedure of 13 June 2012, referred to in paragraph 28 above, the Court must declare, of its own motion, in accordance with Article 113 of the Rules of Procedure, that the action has become devoid of purpose and that there is no need to adjudicate on it (see, to that effect, order of 20 June 2008 in Case T-299/06 Leclercq v Commission, not published in the ECR, paragraph 15, order of 2 September 2010 in Case T-123/08 Spitzer v OHIM – Homeland Housewares (Magic Butler), not published in the ECR, paragraph 8, and order of 16 May 2012 in Case T-444/09 La City v OHIM – Bücheler and Ewert (citydogs), not published in the ECR, paragraph 12).

34 Consequently, there is no need to adjudicate on the Commission’s claim that the Court should declare the action inadmissible.

35 By letters of 2 and of 25 July 2012, the Commission requested the Court to adjudicate on its counterclaim even if it found that there was no need to adjudicate on the applicant’s action. In its counterclaim, the Commission claims that the Court should order the applicant to reimburse EUR 2 258 456.31 to the Commission, corresponding to the sum of the amounts paid to the applicant in the context of the performance of the 12 contracts concluded between them, to be increased by interest as from the deadline fixed in the debit notes issued on 7 August 2009.

36 Before examining whether the present decision that there is no need to adjudicate on the action brought by the applicant precludes the Court from adjudicating on the Commission’s counterclaim, it is necessary to determine whether the Court has jurisdiction to hear the present case.

37 Under Article 238 EC the Courts of the European Union have jurisdiction to give judgment pursuant to any arbitration clause contained in a contract concluded by or on behalf of the European Union, whether that contract be governed by public or private law.

38 According to the case-law, the jurisdiction of the Court, under an arbitration clause, to hear a case concerning a contract is to be assessed in the light of Article 238 EC and the terms of the clause itself (Case C-209/90 Commission v Feilhauer [1992] ECR I-2613, paragraph 13, and judgment of 9 February 2010 in Case T-340/07 Evropaïki Dynamiki v Commission, not published in the ECR, paragraph 76). That jurisdiction derogates from the ordinary rules of law and must therefore be given a restrictive interpretation (Case 426/85 Commission v Zoubek [1986] ECR 4057, paragraph 11, and judgment of 16 December 2010 in Case T-259/09 Commission v Arci Nuova associazione comitato di Cagliari and Gessa, not published in the ECR, paragraph 39). Thus, the Court can, first, adjudicate on a contractual dispute only if the parties have expressed their will to confer that jurisdiction on the Court (Commission v Arci Nuova associazione comitato di Cagliari and Gessa, paragraph 39) and, secondly, hear only claims arising from the contract which contains the arbitration clause or claims that are directly connected with the obligations arising from that contract (Commission v Zoubek, paragraph 11).

39 In the present case, it is undisputed that each of the 12 contracts concluded between the applicant and the Commission contains an arbitration clause conferring jurisdiction on the Court to hear disputes as regards the validity, the application or the interpretation of those contracts. Such a clause is contained in Article 13 of the contracts concluded in the context of the Sixth Framework Programme and in Article 5 of the contracts concluded in the context of the Fifth Framework Programme and that of the eTEN Programme.

40 Moreover, the Commission has, in its defence, referred to the contractual terms on which its counterclaim is based, namely Article 26(3) of the general conditions applicable to the contracts concluded in the context of the Fifth Framework Programme, Article 29(1), and Article 31(1) of the general conditions applicable to contracts concluded in the context of the Sixth Framework Programme and Article 17(4) of the general conditions applicable to the contracts concluded in the context of the eTEN Programme. Those terms authorise the Commission to request the reimbursement of amounts unduly paid.

41 The counterclaim is therefore based on the contracts at issue and the rights and obligations which arise therefrom, in accordance with the case-law referred to in paragraph 38 above.

42 Furthermore, according to the case-law, in the Community system of legal remedies, the jurisdiction to hear the main action implies the existence of a jurisdiction to hear any counterclaim made in the course of the procedure which is derived from the same act or circumstance that is the subject of the application. That jurisdiction is based on the interests of procedural economy and on the priority of the court first seised, considerations that are also recognised in the procedural systems of the Member States (see order of 27 May 2004 in Case C-517/03 Commission v IAMA Consulting, not published in the ECR, paragraph 17 and the case-law cited).

43 It follows that the Court has jurisdiction, in principle, to hear the counterclaim submitted by the Commission.

44 Moreover, since it is aimed at obtaining an order requiring the applicant to pay the sums referred to in the debit notes of 7 August 2009, the Commission’s counterclaim has a purpose distinct from the mere dismissal of the applicant’s claims, which seek inter alia the annulment of the debit notes.

45 The decision that there is no need to adjudicate on the action brought by the applicant is not capable of satisfying the Commission claim, since it does not entail an order requiring the applicant to pay the sums referred to in the debit notes.

46 It follows that, first, the Commission’s counterclaim still has a purpose, even though the applicant’s action does not, and, secondly, the Commission still has an interest in its counterclaim being upheld.

47 In addition, if the Court adjudicates on the Commission’s counterclaim, the Commission is not required to bring a new action, and, as it stated in its letter of 25 July 2012, the parties have in fact already exchanged all of the arguments on which they intended to rely in the present case. Such an approach is therefore justified by reasons of procedural economy.

48 Moreover, as the Commission rightly pointed out in the abovementioned letter, if the Court decides on the counterclaim, it would not infringe the applicant’s rights of the defence. At the time that the cause of the Court’s finding that that there is no longer any need to adjudicate on the action occurred, namely the failure to appoint new representatives in the prescribed period, the written procedure was closed. The applicant had therefore been in a position to submit, in the reply, arguments in response to the Commission’s counterclaim, which it did. Furthermore, the applicant was informed, through its representatives, of the opening of the oral procedure and the holding of a hearing on 13 December 2012.

49 It follows from the foregoing that it is necessary to adjudicate on the counterclaim submitted by the Commission.

50 In its counterclaim, the Commission claims that the Court should, first, order the applicant to reimburse all of the sums unduly received in the context of the 12 contracts it concluded with the Commission and, secondly, order the applicant to pay the Commission the interest which those amounts would have produced as from the deadline for payment fixed in the 7 August 2009 debit notes.

51 The details of the amounts referred to in the debit notes concerning each of the projects at issue are as follows:

148 Therefore, it is in accordance with the contracts concluded with the applicant that the Commission sought, by 12 debit notes sent to the applicant on 7 August 2009, the reimbursement of EUR 2 258 456.31, the sum of all of the amounts paid to the applicant under those contracts.

149 Furthermore, as the applicant does not contest the amounts referred to in the debit notes, the Commission’s claim that the Court should order the applicant to reimburse the unduly paid amount of EUR 2 258 456.31 to the Commission should be granted.

150 The Commission claims that the applicant should be ordered to pay the interest that the amounts referred to in the debit notes of 7 August 2009 would have produced as from the deadline for payment fixed in them.

155 It is necessary, therefore, to order the applicant to pay the interest provided for, in accordance with the contracts concerned, in the provisions referred to in paragraphs 152, 153 and 154 above, from the time-limits laid down in the corresponding debit notes.

1. Declares that there is no longer any need to adjudicate on the action brought by GL2006 Europe Ltd;

2. Orders GL2006 Europe to pay to the European Commission the sum of EUR 2 258 456.31, along with interest calculated from the time-limits set out in the debit notes of 7 August 2009;

1 – Only the paragraphs of the present judgment which the Court considers it appropriate to publish are reproduced here.

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You are here: BAILII >> Databases >> Court of Justice of the European Communities (including Court of First Instance Decisions) >> GL2006 Europe Ltd, v European Commission [2013] EUECJ T-435/09 (16 September 2013) URL: http://www.bailii.org/eu/cases/EUECJ/2013/T43509.html Cite as: [2013] EUECJ T-435/09, [2013] EUECJ T-435/9

Court of Justice of the European Communities (including Court of First Instance Decisions)