The judgment of the General Court of 13 May 2014 in Joined Cases T-458/10 to T-467/10 and T-471/10 Peter McBride and others v Commission EU:T:2014:249 illustrates a basic point: the EU institutions need an express legal base in order to adopt a measure. No legal base, no competence. That’s called the principle of conferral. It is laid down in Article 13 (2) TFEU.

By its judgment, the General Court annulled a series of Commission decisions because they lacked a legal base. The case has quite a story…..

The applicants are owners of fishing trawlers in Ireland. They made safety improvements to their vessels and in 2001 requested  the Commission via the Irish authorities to increase the fishing capacity of the Irish fleet. That way they could fish more fish under the rules of the Common Fisheries Policy.

In 2003 the Commission rejected the request by a decision. The legal basis for that decision was Article 4 (2) of Decision 97/413/EC. There’s no need to worry about the details of that provision: the important thing is that it existed !

The trawler owners sought and obtained the annulment of the 2003 decision rejecting their request in Joined Cases T-218/03 to T-240/03 Boyle and Others EU:T:2006:159. The General Court held that the Commission had exceeded its powers. Then, on appeal, the Court of Justice in Joined Cases C-373/06 P, C-379/06 P and C-382/06 P Flaherty and Others v Commission EU:C:2008:230 annulled the decision for the same resin as concerns vessels owned by other vessel owners.

Then, the Commission looked at the applications again and once more rejected the requests to increase the capacity of the fleet. To do so, it adopted a series of decisions on 13 July 2010. There was kind of a problem, however…. Article 4(2) of Decision 97/413 (the legal base of the previous rejections) had been repealed by Council Decision 2002/70/EC. The legal base had vanished.

The Commission stated that it was compelled to adopt an ad hoc decision applying the substantive rules in force at the time of the original request (in 2001).

The General Court disagreed with the Commission and annulled the rejection decisions.

The Court held in the EU legal order, the institutions have conferred powers only, as laid down in Article 13 (2) TFEU: EU measures refer in their preamble to the legal basis which enables the institution concerned to act in the field in question. The choice of the appropriate legal basis has constitutional significance (Case C‑370/07 Commission v Council EU:C:2009:590, paragraph 47; Joined Cases T‑27/03, T‑46/03, T‑58/03, T‑79/03, T‑80/03, T‑97/03 and T‑98/03 SP and Others v Commission EU:T:2007:317, paragraph 71; and Case T‑24/07 ThyssenKrupp Stainless v Commission EU:T:2009:236, paragraph 64).

Further, the requirement of legal certainty implies that the binding nature of any act intended to have legal effects must be derived from a provision of EU law which prescribes the legal form to be taken by that act and which must be expressly indicated  as its legal basis (Case 45/86 Commission v Council  EU:C:1987:163, paragraph 9, and Case C‑370/07 Commission v Council, paragraph 39).

The provision which forms the legal basis of an act and empowers the EU institution to adopt the act in question must be in force at the time when the act is adopted (Joined Cases C‑201/09 P and C‑216/09 P ArcelorMittal Luxembourg v Commissionand Commission v ArcelorMittal Luxembourg EU:C:2011:190, paragraph 75, and SP and Others v Commission, paragraph 118).

Moreover, the question of whether the author of the contested act is competent is a matter of public policy and must therefore be raised by the Union judicature even though none of the parties has asked it to do so (Case C‑210/98 P Salzgitter v Commission EU:C:2000:397, paragraph 56).

In this case, the General Court held that there was no legal basis in force at the time the contested decisions were adopted and thus the Commission had no competence empowering it to take them.

The General Court added an interesting little twist. It found that the EU legislature did not provide for any transitional arrangements which would have permitted the Commission to examine and decide on the requests for increase in capacity which it had received before the expiry or deletion of the provisions granting it that power. Such an absence of  transitional arrangements is unsatisfactory for individuals. However, that finding cannot have the effect of setting aside the principle of conferral of powers, which is expressly laid down in the Treaty. The Court would otherwise go beyond the powers conferred on it by the Treaty (Case C‑263/02 P Commission v Jégo-Quéré  EU:C:2004:210, paragraph 36).

Finally, the General Court added that whilst Article 266 TFEU creates an obligation on the institution concerned to act, it is not a source of competence for that institution. Any other interpretation would be contrary to the principle of conferral of powers laid down in Article 13(2) TFEU. Although the obligation to act may be distinguished from the competence of the institution, those two notions are not contradictory. In the present case, the Commission was required, under Article 266 TFEU, to take the necessary measures to comply with the judgments in Boyle and Others and Flaherty and Others, but did not, however, have the competence to do so. In such a situation, it is for the Commission to dismiss the applicants’ request on the ground of lack of competence.

Oh, and just one more thing. It is kind of irritating that the General Court did not use the ECLI citation form in its judgment….