Case C-611/12 P and Joined Cases C-12/13 P and C-13/13 P: Damages and no fault liability

Every now and again, the idea pops up that the EU Institutions should be liable in damages for their legislative activities on a no fault basis. The Court of Justice handed down two judgments in October 2014 one of which expressly deals with that issue. The judgments in Case C-611/12 P Giordano v Commission, EU:C:2014:2282, and in Joined Cases C-12/13 P and C-13/13 P Buono and others v Commission, EU:C:2014:2284, are interesting not just for that reason but because they address several issues:

  • Whether the EU institutions could be liable to pay damages because of measures they had adopted that were legal and thus be liable without fault;
  • Whether the fishing ban could result in “actual and certain” harm;
  • Whether a judgment of the Court of Justice constituted a new element of law, and
  • Whether the oral proceedings should be reopened after the Advocate general had delivered his opinion.

Let’s look at each of those aspects of the case in turn. But first, here’s what happened.

The French authorities granted special fishing licences in 2008 to the Appellants, Mr Jean-François Giordano, Mr Jean-Luc Buono and to other fishermen authorising them to catch, within the limits of the individual quotas set, bluefin tuna in the Mediterranean and the Atlantic. On 12 June 2008, the Commission took emergency measures by Regulation 530/2008 to prohibit French fishermen from fishing bluefin tuna in the Mediterranean and in the Atlantic ocean as from 16 June 2008. The French authorities therefore revoked the fishing licences from that date, so that the fishermen were no longer able to carry out their activity between 16 and 30 June 2008 (date of the end of validity of the licences).

The Appellants then brought an action for damages seeking to establish the non-contractual liability of the Commission and claimed that they had suffered harm because of that prohibition. The General Court rejected their claims and dismissed the action by judgments of 7 November 2012: Giordano v Commission Case T-114/11, EU:T:2012:585 and Syndicat des Thoniers méditerranéens and Others, T-574/08,  EU:T:2012:583. The General Court held that one of the three cumulative conditions for liability of the EU to be incurred was not satisfied in particular because the harm they alleged was not “actual and certain”. The General Court held that the quotas did not confer any guarantee to the fishermen of being able to fish the full quota which had been allocated to them so that it cannot be excluded that, even if they had been able to fish up to the deadline of the initial fishing licence, the fishermen might not have reached their quota. Therefore, according to the General Court, the harm could not be considered to be real and certain.

They then appealed to the Court of Justice and asked it to set aside the judgments of the
General Court.

The Court of Justice dismissed the appeals in Cases C-12/13 P C-13/13 P and in Case C-611/12 P, while it set aside the judgment of the General Court it then proceeded to dismiss the action for damages.

No fault liability

In Cases C-12/13 P and C-13/13 P the Court of Justice dismissed the idea that there could be no fault liability of the EU Institutions. It held that it is undisputed that, as EU law currently stands, a comparative examination of the Member States’ legal systems does not permit the affirmation of a regime providing for non-contractual liability of the EU for the lawful pursuit by it of its activities falling within the legislative sphere (FIAMM and Others v Council and Commission, C‑120/06 P and C‑121/06 P, EU:C:2008:476, paragraphs 175 and 179).

Actual and certain harm”

The Court of Justice held in Case C-611/12 P that the General Court was wrong to find that the damage for which compensation was claimed was not “actual and certain” and set aside the judgment under appeal on that ground.

It recalled its settled case law which holds that the EU’s  non-contractual liability under Article 340 (2) TFEU is subject to the satisfaction of a number of conditions:

  1. the unlawfulness of the conduct alleged against the EU institution must be established,
  2. the damage must be certain
  3. and the existence of a causal link between the conduct of the institution and the damage complained of must be shown ( Agraz and Others v Commission, C‑243/05 P, EU:C:2006:708, paragraph 26 and case-law cited).

The appellant must be able to show that the damage for which compensation is sought be actual and certain (judgment in Agraz and Others v Commission, C‑243/05 P, EU:C:2006:708, paragraph 27 and case-law cited).

The Court of Justice found that in this case, the General Court held, in paragraphs 17 to 19 of the judgment under appeal, that the damage alleged by the appellant, consisting of the unfished and unsold part of its individual quota because of the prohibition on bluefin tuna fishing from 16 June 2008, reflected only a hypothetical situation and could not be regarded as actual and certain. Thus, according to the General Court, the allocation of quotas gave the appellant no guarantee of being able to fish all of its individual quota: that quota was a theoretical limit of a maximum catch and, that in any event, it could not be excluded that even if the appellant had been able to fish until 30 June 2008, he would not have reached his quota for reasons beyond his control.

The Court of Justice held that such a conclusion was clearly wrong in law. By simply referring to the fallacy of the premiss that the appellant had a right to fish and would necessarily have exhausted his quota, the General Court erred in law in considering the condition relating to harm. The existence of a right conferred on individuals by a rule of law does not relate to the actual nature of the harm alleged but constitutes a condition for a finding of a sufficiently serious breach of such a rule by an EU institution, in order that the non-contractual liability of the European Union be incurred. Moreover, the rejection by the General Court of the appellant’s argument that he would have exhausted his quota is solely relevant for assessing the extent of the harm alleged, but not the very existence of such harm, the certainty of which is not called into question by uncertainty as to its precise extent (judgment in Agraz and Others v Commission, EU:C:2006:708, paragraph 36).

New element in law

Under Article 48(2) of the Rules of Procedure of the General Court, no new plea in law may be introduced in the course of proceedings unless it is based on matters of law or of fact which come to light in the course of the procedure.

In the present case, the Court had ruled previously, in the judgment in AJD Tuna C-221/09 (EU:C:2011:153), that Regulation No 530/2008 was invalid, the General Court asked the parties to the dispute to submit written comments on the inferences to be drawn from that judgment. In their reply, the applicants at first instance, appellants in Case C‑12/13 P, raised a plea of non-contractual liability of the EU for an unlawful act. In particular, they claimed that the permission granted to purse seiners flying the flag of Spain to fish until 23 June 2008, while purse seiners flying the flag of Greece, France, Italy, Cyprus and Malta had to bring their fishing to an end on 16 June 2008, caused them harm of an actual and certain nature and which consists of the unfished and unsold part of their quota for 2008.

The General Court held, in the judgment under appeal, that the applicants at first instance, appellants in Case C‑12/13 P, had raised a plea in law which had not been raised in the originating application and which, consequently, constituted a new plea in law, within the meaning of Article 48(2) of the Rules of Procedure of the General Court.

In that regard, with respect to the admissibility of that plea in law, the General Court held that the judgment in AJD Tuna (EU:C:2011:153), delivered by the Court of Justice on a date after that when the action was brought, had to be considered to be a factor allowing a new plea in law to be raised, since that judgment has changed the legal situation which existed at the time that the application was lodged.

The Court of Justice disagrees with the reading of the General Court of the judgment in AJD Tuna (EU:C:2011:153).  Contrary to the assessment made by the General Court, the Court of Justice held that its judgment did not invalidate Regulation No 530/2008 in its entirety but only partially. It annulled the Regulation only to the extent that it granted more favourable treatment to purse seiners flying the flag of Spain: the prohibition on fishing enacted for purse seiners flying the flag of Greece, France, Italy, Cyprus and Malta remained valid. Consequently, the adoption of the judgment in AJD Tuna (EU:C:2011:153) did not constitute a new element of law which arose during the proceedings before the General Court because it only confirmed a legal situation of which the applicants at first instance, appellants in Case C‑12/13 P, were aware when they brought their action.

Thus, the General Court erred in law in holding that the delivery of the judgment in AJD Tuna (EU:C:2011:153) constituted a new element of law which allowed a new plea in law to be raised in the proceedings.

Nevertheless, the Court of Justice found that the error committed by the General Court as regards the admissibility of the new plea did not lead to its judgment being quashed as the General Court had dismissed the new plea on its merits in any case.  The Court of Justice recalled that if the grounds of a judgment of the General Court disclose an infringement of EU law but the operative part is shown to be well founded on other legal grounds, such an infringement is not capable of bringing about the setting aside of that judgment (see, to that effect, judgments in FIAMM and Others v Council and Commission, EU:C:2008:476, paragraph 187, and Diputación Foral de Vizcaya v Commission, C‑465/09 P to C‑470/09 P, EU:C:2011:372, paragraph 171).

Reopening of the oral part of the procedure

After the oral part of the procedure was closed following the presentation of the Advocate General’s Opinion, the appellants in Case C‑13/13 P wrote to the Court to request the reopening of the oral part of the procedure.

The appellants claimed, first, that the opinion of the Advocate General are based on an argument that has not been sufficiently debated between the parties, namely the legality or otherwise of Regulation No 530/2008, and, secondly, that there is a new fact, likely to have a decisive influence on the decision of the Court, linked to the fact that the Commission took no action and did not take measures to address the discrimination resulting in the invalidity of Regulation No 530/2008.

The Court of Justice rejected that request and refused to reopen the oral part of the procedure.

It recalled that, under Article 83 of the Rules of Procedure, the Court may at any time, after hearing the Advocate General, order the reopening of the oral part of the procedure, in particular if it considers that it lacks sufficient information or where a party has, after the close of that part of the procedure, submitted a new fact which is of such a nature as to be a decisive factor for the decision of the Court or the case must be decided on the basis of an argument which has not been debated between the parties or the persons referred to in Article 23 of the Statute of the Court of Justice (judgments in Pohotovosť, C‑470/12, EU:C:2014:101, paragraph 21, and Emerging Markets Series of the DFA Investment Trust Company, C‑190/12, EU:C:2014:249, paragraph 20).

The Court also recalled that, pursuant to Article 252 (2) TFEU, it is the duty of the Advocate General, acting with complete impartiality and independence, to make, in open court, reasoned submissions on cases which, in accordance with the Statute of the Court of Justice, require the Advocate General’s involvement. The Court is not bound either by the Advocate General’s Opinion or by the reasoning on which it is based (judgment in Commission and Others Kadi, C‑584/10 P, C‑593/10 P and C‑595/10 P, EU:C:2013:518, paragraph 57 and the case-law cited).

In the present case, the Court considered, after hearing the Advocate General, that it has sufficient information to give a ruling, that these cases do not need to be decided on the basis of arguments which have not been debated between the parties and that the new fact mentioned by the appellants is not such as to have a decisive influence on the decision of the Court.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s