Green Source Poland v Commission (Action for annulment - ERDF : Judgment) [2017] EUECJ T-512/14 (04 May 2017)

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(Action for annulment — ERDF — Article 41(3) of Regulation (EC) No 1083/2006 — Refusal to grant a financial contribution to a major project — Undertaking responsible for project implementation — Lack of direct concern — Inadmissibility)

Green Source Poland sp. z o.o., established in Warsaw (Poland), represented by M. Merola and L. Armati, lawyers,

European Commission, represented initially by M. Clausen and B.-R. Killmann, and subsequently by B.-R. Killmann and R. Lyal, acting as Agents,

APPLICATION based on Article 263 TFEU seeking annulment of Commission Decision C(2014) 2289 final of 7 April 2014 refusing to make a financial contribution from the European Regional Development Fund (ERDF) to the major project ‘Purchase and implementation of innovative manufacturing technology of biocomponents to produce biofuels’ forming part of the operational programme ‘Innovative Economy’ for structural interventions under the ‘Convergence’ objective in Poland,

composed of M. van der Woude, President, I. Ulloa Rubio and A. Marcoulli (Rapporteur), Judges,

having regard to the written part of the procedure and further to the hearing on 24 November 2016,

1 On 1 October 2007, by Decision C(2007) 4562, the European Commission adopted the operational programme ‘Innovative Economy’ submitted by the Republic of Poland pursuant to Article 32 of Council Regulation (EC) No 1083/2006 of 11 July 2006 laying down general provisions on the European Regional Development Fund, the European Social Fund and the Cohesion Fund and repealing Regulation (EC) No 1260/1999 (OJ 2006 L 210, p. 25).

2 It is apparent from the application that, on 12 May 2008, following the adoption of national provisions implementing the operational programme ‘Innovative Economy’, the applicant, Green Source Poland sp. z o.o., a Polish company governed by private law incorporated in December 2004 with the sole purpose of building and operating a bioethanol production plant in Poland, submitted to the Polish authorities a grant application in respect of the project ‘Purchase and implementation of innovative manufacturing technology of biocomponents to produce biofuels’ (‘the project’), and that, on 25 April 2012, the Polish authorities and the applicant signed a contract relating to the award of a grant for the implementation of that project within the framework of the operational programme ‘Innovative Economy’ (‘the contract’).

3 It is clear from the contract that the grant was intended to finance part of the eligible expenditure of the project; 85% thereof was financed by the Republic of Poland in the form of a contribution from the European Regional Development Fund (ERDF) and 15% by way of State funds (see Article 1(4) of the contract). In addition, it was provided, in particular, that if the Commission refused to contribute to the funding pursuant to Article 41(3) of Regulation No 1083/2006, the contract would expire on the date of notification of the Commission’s decision to the beneficiary (see Article 5(24) of the contract) and that, in that case, the beneficiary would undertake to repay all or part of the funds already paid by the Polish authorities (see Article 5(26) of the contract).

4 On 10 September 2012, the Republic of Poland applied to the Commission, under Articles 39 to 41 of Regulation No 1083/2006, for a financial contribution from the ERDF in respect of the project. The application for a financial contribution submitted by the Republic of Poland in accordance with Annex XXII to Commission Regulation (EC) No 1828/2006 of 8 December 2006 setting out rules for the implementation of Regulation No 1083/2006 and of Regulation (EC) No 1080/2006 of the European Parliament and of the Council on the European Regional Development Fund (OJ 2006 L 371, p. 1) designates the Polish Ministry of Regional Development as the ‘authority responsible for the application’ and the applicant as the ‘organisation responsible for project implementation (beneficiary)’.

5 By letter of 27 November 2012 sent to the Republic of Poland, the Commission expressed doubts as to whether it would be able to confirm a contribution from the ERDF to the project in the light, in particular, of certain problems relating to the context of the revision of the regulatory framework concerning biofuels, the fact that the project lacked innovativeness, the lack of information in the feasibility study, and State aid. It invited the Republic of Poland to consider the possibility of withdrawing the project or, if appropriate, of submitting additional information.

6 By letter of 25 January 2013, the Republic of Poland replied to the Commission’s comments by forwarding, inter alia, a document containing the applicant’s answers to the questions raised by the Commission.

7 By letter of 6 May 2013 to the Republic of Poland, the Commission maintained its position as regards the fact that the project did not meet some of the requirements laid down in Article 40 of Regulation No 1083/2006, in the light of its lack of innovativeness, the doubts as to its economic viability and the fact that some information was missing from the Environmental Impact Assessment.

8 By letter of 5 July 2013, the Republic of Poland replied to the Commission’s comments by forwarding a document containing the applicant’s answers to the questions raised by the Commission.

9 On 17 July 2013, at the request of the applicant, a meeting was held in Brussels (Belgium) between the applicant’s representatives and the Commission’s staff.

10 By letter of 24 July 2013 sent to the Republic of Poland, the Commission confirmed its position that the project did not meet some of the requirements laid down in Article 40 of Regulation No 1083/2006, in the light of its lack of innovativeness, the doubts as to its economic viability, its environmental impact, and its consistency with EU environmental policies. The Commission invited the Republic of Poland to submit its observations and stated that, should its assessment be confirmed, it would adopt a negative decision in respect of the project.

11 By letter of 24 September 2013, the Republic of Poland replied to the Commission’s comments by forwarding a document containing the applicant’s answers to the questions raised by the Commission.

12 On 7 April 2014, on the basis of Article 41(3) of Regulation No 1083/2006, the Commission adopted Decision C(2014) 2289 final (‘the contested decision’), by which it refused to make a financial contribution to the project (Article 1). The contested decision states that any expenditure relating to the project set out in a statement of expenditure predating the decision must be rectified in the subsequent statement of expenditure (Article 2). The contested decision is addressed to the Republic of Poland (Article 3).

13 By application lodged at the Court Registry on 26 June 2014, the applicant brought the present action, claiming that the Court should:

14 By separate document lodged at the Court Registry on 2 October 2014, the Commission raised a plea of inadmissibility under Article 130(1) of the Rules of Procedure of the General Court, contending that the Court should:

15 The applicant lodged its observations regarding the plea of inadmissibility at the Court Registry on 21 November 2014, claiming that the Court should:

– set a time limit for the Commission to reply in respect of the substance of the case;

16 By order of the General Court (Fourth Chamber) of 25 March 2015, consideration of the plea of inadmissibility was reserved for the final judgment and the costs were reserved.

17 On 7 May 2015, the Commission lodged its defence at the Court Registry, contending that the Court should:

18 The applicant lodged its reply at the Court Registry on 3 July 2015 and the Commission filed its rejoinder with the Court Registry on 22 September 2015.

19 By document lodged at the Court Registry on 12 November 2015, the applicant requested a hearing.

20 By document lodged at the Court Registry on 14 December 2015, the Commission applied for the present case to be joined to Case T‑403/15, JYSK v Commission. The applicant lodged its observations regarding the application for joinder on 6 January 2016. By decision of 18 March 2016, the President of the Fourth Chamber of the General Court decided not to join the two cases at that stage of the procedure.

21 The parties presented oral argument and gave their replies to the Court’s questions at the hearing on 24 November 2016.

22 It must be borne in mind that, under the fourth paragraph of Article 263 TFEU, any natural or legal person may, under the conditions laid down in the first and second paragraphs of that article, institute proceedings against a decision addressed to that person or against a decision which, although in the form of a regulation or a decision addressed to another person, is of direct and individual concern to the former, and against a regulatory act which is of direct concern to him and does not entail implementing measures.

23 Furthermore, according to settled case-law of the Court of Justice, only measures which produce binding legal effects and are capable of affecting the interests of the applicant by bringing about a distinct change in his legal position constitute an act or a decision which may be the subject of an action for annulment (see, to that effect, judgments of 11 November 1981, IBM v Commission, 60/81, EU:C:1981:264, paragraph 9, and of 20 September 2016, Mallis and Others v Commission and ECB, C‑105/15 P to C109/15 P, EU:C:2016:702, paragraph 51 and the case-law cited).

24 In the present case, it is common ground, on the one hand, that the contested decision does not constitute a regulatory act not entailing implementing measures and, on the other, that the Commission gave notification of the decision to the Republic of Poland, as a result of which the applicant may not be considered to be the addressee of that decision within the meaning of the fourth paragraph of Article 263 TFEU.

25 In those circumstances, it is necessary to ascertain whether the applicant is entitled to bring an action for annulment of that decision on the ground that it is directly and individually concerned by it.

26 In its plea of inadmissibility, the Commission submits, in particular, that the applicant is not directly concerned by the contested decision. It submits, in essence, that the Member State concerned is the sole addressee of a decision granting, or refusing, as in the present case, a financial contribution from the ERDF to a major project and that that decision does not produce direct legal effects vis-à-vis the applicant.

28 In its application, the applicant submits that it is concerned by the contested decision because that decision identifies it as an ‘applicant’ and has the direct and immediate effect of depriving it of the financial resources needed to implement the project, thus preventing it from going ahead with the project and requiring it to bear the losses deriving from expenses already incurred. The applicant adds that the application for a financial contribution identifies it as ‘responsible for the project’s implementation and beneficiary’.

29 In the observations regarding the plea of inadmissibility, first, the applicant submits that the Commission’s arguments are based on an overly-formalistic reading of case-law and fail to take account of the economic and factual considerations of the case. In particular, the applicant claims that it is apparent from the documents in the case file that the project was not viable without EU funding and that the Republic of Poland was unwilling to provide further funding. The applicant also contests the Commission’s argument that the decision does not prevent it from looking for alternative funding, as this is at odds with the logic of the system of public support for regional development based on the incentive effect of grants.

30 Secondly, by referring to the case-law on development aid which acknowledges the existence of direct concern where the possibility for the addressees of a decision not to give effect to an EU measure is purely theoretical and their intention to act in conformity with it is in no doubt, the applicant submits that the Republic of Poland’s power not to give effect to the contested decision is purely theoretical. It claims that it is apparent from the documents in the case file that the Polish authorities, in statements indicating that they did not intend to provide further funding for the project and the termination clause included in the grant contract, passed on to the applicant the legal consequences of the contested decision, which produces immediate effects vis-à-vis the applicant and leaves no discretion to the Member State. The applicant further states that, since the Commission enjoys a wide discretion under Articles 39 to 41 of Regulation No 1083/2006, it would be immune from liability if the action of the beneficiary of the funds were inadmissible, because the Member State generally accepts the decision, abandons the project (in which it has no direct interest) and uses the resources for other projects.

31 Thirdly, the applicant claims that the present case differs from the cases referred to in the case-law concerning Commission decisions to reduce or cut assistance in the event of irregularities in the management of funds. According to the applicant, in the latter cases, responsibility for the selection, implementation and audit of interventions rests with the Member States, whilst major projects are subject to prior individual approval by the Commission. This rules out any liability as regards the choice or approval of projects on the part of the Member State, which acts as a mere intermediary and has no interest in challenging the Commission’s decision, given that it bears no legal risk vis-à-vis the beneficiary company. The latter is therefore unable to bring any claim against the Member State, because the refusal to make a contribution falls outside the Member State’s control and is an automatic consequence of the Commission’s decision, which is of direct concern to the beneficiary. The applicant concludes by stating that this approach was confirmed by the Court in the judgment of 19 May 1994, Consorzio gruppo di azione locale ‘Murgia Messapica’ v Commission (T‑465/93, EU:T:1994:56), the factual and legal circumstances of which correspond to the applicant’s situation.

32 It follows from settled case-law that in order to satisfy the requirement that the decision forming the subject matter of the proceedings must be of direct concern to a natural or legal person, two cumulative criteria must be met, namely, first, the contested Union measure must directly affect the legal situation of the individual and, second, it must leave no discretion to its addressees, who are entrusted with the task of implementing it, such implementation being purely automatic and resulting from EU rules without the application of other intermediate rules (see judgment of 10 September 2009, Commission v Ente per le Ville Vesuviane and Ente per le Ville Vesuviane v Commission, C‑445/07 P and C‑455/07 P, EU:C:2009:529, paragraph 45 and the case-law cited, and order of 9 July 2013, Regione Puglia v Commission, C‑586/11 P, not published, EU:C:2013:459, paragraph 31 and the case-law cited). The second criterion, relating to the lack of discretion of the Member State concerned, is also met where the possibility that it will not give effect to the measure concerned is purely theoretical and its intention to act in conformity with it is not in doubt (see judgments of 10 September 2009, Commission v Ente per le Ville Vesuviane and Ente per le Ville Vesuviane v Commission, C‑445/07 P and C‑455/07 P, EU:C:2009:529, paragraph 46 and the case-law cited, and of 3 March 2011, Caixa Geral de Depósitos v Commission, T‑401/07, not published, EU:T:2011:72, paragraph 61 and the case-law cited).

33 It is therefore necessary to ascertain whether those two cumulative criteria are met in the present case.

34 As regards the first criterion of direct concern referred to in paragraph 32 above, it should first be noted that, in accordance with Article 14(1) of Regulation No 1083/2006, the EU budget allocated to structural funds is implemented within the framework of shared management between Member States and the Commission. Article 59 of 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 (OJ 2012 L 298, p. 1) provides that where the Commission implements the budget under shared management, implementation tasks are to be delegated to Member States. In particular, as provided for in Article 180 of Regulation No 966/2012, the management, selection and audit of projects financed by funds under shared management are to be governed by the regulations concerning those funds, namely, in respect of ERDF, by Regulation (EC) No 1080/2006 of the European Parliament and of the Council of 5 July 2006 on the ERDF and repealing Regulation (EC) No 1783/1999 (OJ 2006 L 210, p.1) and by Regulation No 1083/2006.

35 Secondly, therefore, in order to determine the legal effects of the contested decision, account must be taken of the legal framework governing, in particular, the selection of projects, especially major projects, financed by the ERDF.

36 To that end, it is clear from the relevant provisions of Regulation No 1083/2006 that:

– the objectives of the structural funds are to be pursued in the framework of close cooperation, referred to as partnership, between the Commission and each Member State (see Article 11(1) of Regulation No 1083/2006);

– the funds are to provide assistance which complements national actions and their contributions are not to replace structural expenditure by a Member State (see Article 9(1) and Article 15(1) of Regulation No 1083/2006);

– each Member State is to present a national strategic reference framework which ensures that assistance from the funds is consistent with the EU strategic guidelines on cohesion and constitutes a reference instrument for preparing the programming of the funds (see Article 27(1) and (2) of Regulation No 1083/2006);

– in each Member State, the activities of the funds are to take the form of operational programmes drawn up by the Member States and submitted to the Commission for evaluation and adoption (see Article 32(1) to (5) of Regulation No 1083/2006);

– Member States are responsible for the management and control of operational programmes and, to that end, are to appoint, inter alia, a managing authority, a certifying authority, and may, if they so wish, appoint intermediate bodies to carry out some or all of their tasks, as well as an audit authority (see Article 58, Article 59(1) and (2), and Article 70(1) of Regulation No 1083/2006). The managing authority is responsible for managing and implementing the operational programme and, in particular, ‘ensuring that operations are selected for funding in accordance with the criteria applicable to the operational programme and that they comply with applicable [EU] and national rules for the whole of their implementation period’ (see Article 60(a) of Regulation No 1083/2006);

– for each operational programme, the Member States are to set up a monitoring committee, which is to satisfy itself as to the effectiveness and quality of the implementation of the operational programme, inter alia by considering and approving the criteria for selecting the operations financed (see Articles 63 and 65 of Regulation No 1083/2006);

– each operation, namely a project or group of projects intended to achieve the objectives of the operational programme, is selected by the managing authority according to criteria laid down by the monitoring committee (see Article 2(3) of Regulation No 1083/2006);

– where the Member State selects a major project, that is ‘expenditure comprising a series of works, activities or services intended in itself to accomplish an indivisible task of a precise economic or technical nature, which has clearly identified goals and whose total cost exceeds EUR [50] million’ (see Article 39 of Regulation No 1083/2006), and includes it in an operational programme for funding by the ERDF, it must be approved by the Commission, in order for its purpose and impact, as well as the arrangements for the planned use of EU resources, to be evaluated (see recital 49 of Regulation No 1083/2006):

– to that end, the major project is to be submitted to the Commission by the Member State or its managing authority, together with the information referred to in Article 40 of Regulation No 1083/2006 (see Article 41(1) of that regulation);

– the Member State or the managing authority are to submit the request for assistance in accordance with the application scheme (entitled ‘Major project request for confirmation of assistance under Articles 39 to 41 of Regulation … No 1083/2006’) provided for in Annexes XX to XXII to Regulation No 1828/2006 (see Article 40(2)(e) and (3) of that regulation);

– on the basis of the information contained in that application, the Commission is to appraise the consistency of the major project with the priorities of the operational programme or the relevant programmes, its contribution to achieving the goals of those priorities and its consistency with other EU policies (see Article 41(1) of Regulation No 1083/2006);

– provided that the application is submitted in accordance with Article 40 of Regulation No 1083/2006, the Commission is to adopt a decision as soon as possible but no later than three months after the submission of a major project (see Article 41(2) of Regulation No 1083/2006) ;

– the Commission’s decision, where positive, is to define the physical object, the amount to which the co-financing rate for the priority axis applies, and the fund’s contribution plan (see Article 41(2) of Regulation No 1083/2006);

– where the Commission refuses to make a financial contribution to a major project, it must notify the Member State of its reasons (see Article 41(3) of Regulation No 1083/2006) ;

– where the Commission refuses to contribute to a major project and the Member State has already included payments for the major project in a statement of expenditure submitted to the Commission, the statement of expenditure following the adoption of the decision must be adjusted accordingly (see Article 78(4) of Regulation No 1083/2006).

37 It follows from all of the above provisions that it is solely in the context of the relations between the Commission and the Member State that operations are conducted by which the Commission assesses and confirms whether or not a Member State is to receive a financial contribution from the ERDF for a major project, take place (see, by analogy, order of 6 March 2012, Northern Ireland Department of Agriculture and Rural Development v Commission, T‑453/10, not published, EU:T:2012:106, paragraph 46).

38 It is clear from the provisions set out in paragraph 36 above that it is the Member State that is responsible for selecting operations to be financed through the ERDF, including major projects; that it is equally the Member State which, after having selected a major project for ERDF funding under an operational programme, submits to the Commission a request for confirmation containing the relevant information and which, where necessary, supplements that information; that it is on the basis of that request that the Commission assesses the major project; that the result of the evaluation is sent by the Commission only to the Member State and that, where the Commission refuses to make a contribution to a major project, it is the responsibility of the Member State to rectify the statements of expenditure previously submitted to the Commission containing expenditure relating to the major project. It is therefore to the Member State concerned that the Commission grants a financial contribution from the ERDF for a major project or addresses its refusal to grant such a contribution. Accordingly, the Member State concerned is the holder of the right to the EU financial assistance in question (see, by analogy, order of 9 June 2016, IREPA v Commission and Court of Auditors, T‑825/14, not published, EU:T:2016:345, paragraph 38).

39 This is in line with the fact that, according to case-law, ERDF assistance is intended as a system between the Commission and the Member State (see, to that effect, judgment of 3 March 2011, Caixa General de Depósitos v Commission, T‑401/07, not published, EU:T:2011:72, paragraph 69).

40 Thirdly, it should be borne in mind that, according to settled case-law, in a decision granting EU financial assistance under the ERDF, the designation of an entity as the authority responsible for the implementation of the project does not mean that the entity itself is entitled to such assistance. Nor does the fact that an entity is mentioned as the authority responsible for the request for financial assistance place it in a direct relationship with the EU assistance. Similarly, the fact that an entity is designated as the beneficiary of the financial assistance does not mean that it is entitled to that assistance. It is the Member State, as the addressee of the decision granting ERDF financial assistance, which must be regarded as entitled to such assistance (see, to that effect, judgment of 10 September 2009, Commission v Ente per le Ville Vesuviane and Ente per le Ville Vesuviane v Commission, C‑445/07 P and C‑455/07 P, EU:C:2009:529, paragraphs 47 to 54 and the case-law cited, and order of 14 September 2011, Regione Puglia v Commission, T‑84/10, not published, EU:T:2011:468, paragraph 30 and the case-law cited; see also, by analogy, orders of 21 May 2015, APRAM v Commission, T‑403/13, not published, EU:T:2015:317, paragraphs 36 and 62 and the case-law cited, and of 9 June 2016, IREPA v Commission and Court of Auditors, T‑825/14, not published, EU:T:2016:345, paragraphs 38 to 40 and the case-law cited).

41 It follows from the case-law referred to in paragraph 40 above that, in the present case, it is the Republic of Poland, not the applicant, that must be regarded as entitled to ERDF assistance for the project.

42 Fourthly, it should be recalled that, in the present case, in accordance with the provisions set out in paragraph 36 above, it was indeed the Republic of Poland that submitted to the Commission a request for an ERDF contribution for the project on 10 September 2012 (see paragraph 4 above).

43 In addition, by the contested decision, the Commission addressed its refusal to make a financial contribution to the Republic of Poland (see paragraph 12 above). On the one hand, Article 3 of the contested decision designates the Republic of Poland as the sole addressee of that decision. On the other, the effect of Article 1 of the contested decision, as a result of its refusal to grant an ERDF contribution, is to prevent the Republic of Poland from being able to charge to the ERDF any expenditure it may have incurred in relation to the project. Consequently, Article 2 of the contested decision requires the Republic of Poland to rectify any expenditure relating to the project which was previously submitted to the Commission in a statement of expenditure prior to that decision.

44 Accordingly, under the contested decision, it is the Republic of Poland which has been denied a financial contribution from the ERDF to fund the project and which must rectify any expenditure relating to that project previously submitted to the Commission.

45 In those circumstances, it must be held that the contested decision does not have any effect on the applicant’s legal situation and that, consequently, the first criterion of direct concern is not fulfilled in the present case.

46 That conclusion is not called into question by the arguments put forward by the applicant.

47 First, the fact that the applicant assisted the Polish authorities in preparing their responses to the Commission’s letters and that it requested a meeting with the Commission staff in which it took part, does not demonstrate the existence of a direct link between the applicant and the contested decision, since the existence of such a link can be established only where the contested measure directly affects the applicant’s legal position without the application of other intermediate rules (see, to that effect, order of 5 October 2010, Provincie Groningen and Provincie Drenthe v Commission, T‑69/09, not published, EU:T:2010:423, paragraphs 51 and 52 and the case-law cited).

48 Secondly, the fact relied on by the applicant that the, admittedly unfortunate, wording of recitals 6, 15 and 17 of the contested decision refers to it as an ‘applicant’ and the application form submitted by the Republic of Poland designates it as the ‘organisation responsible for project implementation (beneficiary)’ (Section A.2.1 of the application form) and refers to it in the description of the project (Section B.1.2 of the application form), does not mean that it has a direct connection with ERDF financial assistance or that it is itself entitled to such assistance (see, by analogy, orders of 25 September 2008, Regione Siciliana v Commission, T‑363/03, not published, EU:T:2008:403, paragraph 25, and of 14 September 2011, Regione Puglia v Commission, T‑84/10, not published, EU:T:2011:468, paragraph 34).

49 Thirdly, the applicant submits that the case-law referred to in paragraph 40 above is not applicable in the present case on the ground that, in that case-law concerning cases of reduction, cancellation or termination of assistance, the responsibility for the selection, implementation and audit of the projects fell to the Member States, the Commission making no choice in that respect. It submits that, on the contrary, in the case of major projects, such as in the present case, the Member State acts as a ‘mere intermediary’ and is not responsible for the choice or approval of the projects, which is a matter only for the Commission. It may not therefore bring any claim against the Member State.

51 First of all, it should be noted that the case-law referred to in paragraph 40 above concerns both operations which do not constitute major projects and, specifically, major projects (judgment of 2 May 2006, Regione Siciliana v Commission, C‑417/04 P, EU:C:2006:282, paragraph 1; orders of 8 July 2004, Regione Siciliana v Commission, T‑341/02, EU:T:2004:228, paragraph 16, and of 25 September 2008, Regione Siciliana v Commission, T‑363/03, not published, EU:T:2008:403, paragraphs 1 and 4).

52 Next, contrary to what the applicant submits, it is apparent from the provisions of Regulation No 1083/2006 referred to in paragraph 36 above that it is the Member States which are responsible for the selection of operations, including major projects. The Commission is not involved in the selection of the major projects proposed to the national authorities by applicants, but merely, and only with respect to the Member States, assesses the consistency and contribution (within the meaning of Article 41(2) of the regulation) of the major projects which the national authorities have already selected and have submitted to the Commission in order to confirm whether or not a financial contribution under the ERDF will be made.

53 In that regard, the reasoning set out in the judgment of 19 May 1994, Consorzio gruppo di azione locale ‘Murgia Messapica’ v Commission (T‑465/93, EU:T:1994:56), relied on by the applicant, cannot be applied in the present case. First, it should be noted that, in paragraphs 25 and 26 of that judgment, the General Court concentrated its analysis on the condition of the applicant’s individual concern, merely indicating, in respect of direct concern, that the decision contested in that case had produced direct legal effects vis-à-vis the applicant without any other national or EU authorities intervening. Second, it is clear from paragraph 6 of the Notice to Member States laying down guidelines for integral global grants for which the Member States are invited to submit proposals in the framework of a Community initiative for rural development (OJ 1991 C 73, p. 33), which is applicable to the present case, that the ‘local groups’ which were intended recipients of the grant were ‘selected by the Commission and the Member States in collaboration on the basis of broader proposals made by the Member States’. It is clear from that judgment that the Italian authorities had submitted a number of projects to the Commission, which had selected some of them (judgment of 19 May 1994, Consorzio gruppo di azione locale ‘Murgia Messapica’ v Commission, T‑465/93, EU:T:1994:56, paragraphs 5 to 12). In the present case, as noted in paragraph 52 above, the selection of projects is not made by the Commission but is solely the responsibility of the national authorities.

54 Furthermore, since the case-law referred to in paragraph 40 above was developed in cases in which ERDF assistance was granted to the Member State and then reduced or even cancelled, it is all the more relevant where the ERDF assistance has not yet been granted to the Member State and, hence, where the relationship between the entity designated as responsible for the implementation of the project, which is responsible for the application or the beneficiary of the assistance, and FEDER assistance, is even more indirect.

55 Finally, with regard to the applicant’s argument that that case-law is not applicable in the present case, as it is not entitled to bring a claim against the Member State and should therefore be considered to be directly concerned by the contested decision, it should be borne in mind that, although individuals are entitled to effective judicial protection of the rights they derive from the Union legal order, invoking the right to such protection cannot, in any event, call into question the conditions laid down in the fourth paragraph of Article 263 TFEU. In accordance with settled case-law, the judicial protection of natural or legal persons who are unable, by reason of the conditions for admissibility provided for in the fourth paragraph of Article 263 TFEU, to directly challenge Union acts of the type at issue here must be guaranteed effectively by a right of action before national courts. In accordance with the principle of sincere cooperation enshrined in Article 4 TFEU, national courts are required to interpret and apply, as far as possible, the domestic procedural rules governing the exercise of rights of action in a manner which will enable those persons to challenge before the courts the legality of any decision or other national measure relating to the application to them of a Union act such as that in question, by pleading that the latter is invalid and by asking them to make a reference to the Court of Justice for a preliminary ruling on validity (see, to that effect, judgment of 10 September 2009, Commission v Ente per Ville Vesuviane and Ente per le Ville Vesuviane v Commission, C‑445/07 P and C‑455/07 P, EU:C:2009:529, paragraphs 65 and 66 and the case-law cited, and order of 9 June 2016, IREPA v Commission and Court of Auditors, T‑825/14, not published, EU:T:2016:345, paragraphs 48 and 49 and the case-law cited).

56 In the present case, in accordance with the applicable national law, the applicant could, inter alia, have objected, before the competent national court, to the termination of the contract or the reimbursement requested by the Polish authorities under that contract, by pleading that the contested decision triggering those requests is invalid. The applicant could have thus asked the national court to refer a question to the Court of Justice for a preliminary ruling on the validity of the contested decision.

57 In any event, it must be noted that the requirement of effective judicial protection cannot have the effect of setting aside the condition of direct concern laid down by the fourth paragraph of Article 263 TFEU (see order of 9 June 2016, IREPA v Commission and Court of Auditors, T‑825/14, not published, EU:T:2016:345, paragraph 50 and the case-law cited).

58 Fourthly, the alleged negative circumstances referred to by the applicant, namely deprivation of the resources necessary to implement the project, the impossibility of continuing with the project and the obligation to bear the losses resulting from the expenditure already incurred, assuming them to be established, do not follow either from the contested decision itself or from the provisions of EU law intended to govern its effects, but from the consequences which, within the framework of the contract, the Polish authorities and the applicant attributed to that decision.

59 It is Article 5(24) and (26) of the contract which provides for its termination in the event of a negative decision by the Commission in response to the request for confirmation and, in that case, imposes the obligation on the applicant to repay the funds already received from the Polish authorities, including those not from the ERDF. Accordingly, the consequences and obligations flowing from the contract are interposed between the applicant’s legal position and the contested decision (see, by analogy, order of 6 June 2002, SLIM Sicilia v Commission, T‑105/01, EU:T:2002:147, paragraph 53).

60 As regards the second criterion of direct concern referred to in paragraph 32 above, it should be recalled that there is no direct concern where the autonomous will of the addressee interposes itself between the decision and its effects on the applicant. Where the decision of the addressee is not legally required either by EU law or the specific Commission decision, but is based on an autonomous decision of the Member State, there is no direct connection between the Commission decision and the applicant (see order of 6 March 2012, Northern Ireland Department of Agriculture and Rural Development v Commission, T‑453/10, not published, EU:T:2012:106, paragraph 54 and the case-law cited).

61 It must be borne in mind that, in the present case, Article 1 of the contested decision has the effect of denying the Republic of Poland a contribution from the ERDF for the project. That provision therefore implies that any expenditure by the Republic of Poland relating to that project will not be covered by the ERDF.

62 Article 2 of the contested decision, in accordance with Article 78(4) of Regulation No 1083/2006, requires the Republic of Poland to rectify the statements of expenditure previously submitted to the Commission which contain expenditure relating to the project.

63 In those circumstances, the implementation of the contested decision by the Republic of Poland simply requires, on the one hand, that such expenditure should not be declared to the Commission and, on the other, that if that expenditure has already been declared to the Commission in a statement of expenditure prior to the contested decision, the following statement of expenditure should be adjusted accordingly.

64 It is therefore clear that the implementation of the contested decision by the Republic of Poland does not entail, either by virtue of the contested decision itself or of the provisions of EU law intended to govern its effect, any consequences for the applicant, its effects being confined to relations between the Union, in particular the ERDF, and the Republic of Poland.

65 Thus, the contested decision does not prevent the applicant from proceeding with the project or the Republic of Poland from funding it with financial resources other than those from the ERDF. Similarly, the contested decision does not require the Republic of Poland to terminate the contract or recover any sums which it might have paid to the applicant for the implementation of the project.

66 In paragraph 84 of the Opinion of Advocate General Ruiz-Jarabo Colomer in Regionale Siciliana v Commission (C‑417/04 P, EU:C:2006:28), in the absence of an ERDF contribution, it was noted that:

‘It is ... for the ... Member State concerned to determine the future of what is really its own project. It has several options: it can, for example, abandon the project, suspend it or transfer it; on the other hand, it can defray the financial cost out of its own budgets in order to ensure that the project is completed. Although the [refusal of a contribution is not without drawbacks], by [refusing the contribution], the Commission does not prejudge, pre-empt or recommend the direction which the Member State must take in determining the future of its plans for territorial development.’

67 In those circumstances, it must be held that there are no direct repercussions for the applicant as a result of the contested decision under EU law or of the decision itself and that, accordingly, the second criterion of direct concern is not fulfilled in the present case.

68 Those considerations are not called into question by the applicant’s arguments.

69 First, the fact mentioned by the applicant that the Polish authorities stated their intention not to subsidise the project further in the absence of an ERDF contribution, even if it were established, does not at all follow from the contested decision and, in any event, in the absence of obligations stemming in that regard from the contested decision or EU law, is an expression of autonomous will on the part of the authorities (see, by analogy, judgment of 10 September 2009, Commission v Ente per le Ville Vesuviane and Ente per le Ville Vesuviane v Commission, C‑445/07 P and C‑455/07 P, EU:C:2009:529, paragraph 56).

70 In accordance with settled case-law, the fact that the Republic of Poland no longer intends to finance the project is insufficient for the purpose of establishing the direct interest required by the fourth paragraph of Article 263 TFEU, because it is open to a Member State in those circumstances to decide whether or not the person concerned has standing before the courts of the European Union (see, to that effect, orders of 14 September 2011, Regione Puglia v Commission, T‑84/10, not published, EU:T:2011:468, paragraph 52, and of 21 May 2015, APRAM v Commission, T‑403/13, not published, EU:T:2015:317, paragraph 49).

71 Secondly, the fact that, as stated in paragraph 3 above, Article 5(24) of the contract provides for the termination of that contract in the event of the Commission’s refusal to grant the contribution does not make it possible to conclude that the Polish authorities do not have any discretion under the contested decision.

72 First of all, in so far as such an argument is based on the claim that it is the contract, rather than EU rules, that does not allow for any discretion, it is based on an erroneous reading of the case-law cited in paragraphs 32 and 60 above, according to which it is specifically EU law that must afford no discretion (see, to that effect, order of 14 September 2011, Regione Puglia v Commission, T‑84/10, not published, EU:T:2011:468, paragraph 50 and the case-law cited).

73 Next, by analogy with the observations made in paragraphs 69 and 70 above, it should be observed that the very fact that the Polish authorities and the applicant had decided to terminate the contract in the event that ERDF assistance was refused also constitutes an expression of the existence of their autonomous will, in the absence of any obligation arising in that respect under EU law. Finally, if the mere existence of such a clause was sufficient to establish the direct concern required by the fourth paragraph of Article 263 TFEU, that would be tantamount, on the one hand, to allowing the parties to such a contract to decide whether or not the person concerned had standing before the EU courts and, on the other, to assessing differently the situation of a person allegedly concerned by a Commission decision according to whether or not it had concluded such a contract with the national authorities, in accordance with the practices existing in each Member State.

74 Thirdly, the argument relied on by the applicant at the hearing, alleging that the Republic of Poland is not free to allocate other funds from the national budget to the project, even if that claim were established, is also based, in the light of the case-law referred to in paragraph 72 above, on an erroneous reading of EU law, in so far as it is based on the claim that it is national law, not EU rules, that does not afford any discretion.

75 Fourthly, the case-law relied on by the applicant in support of the argument that the Polish authorities lack discretion, namely the judgments of 23 November 1971, Bock v Commission (62/70, EU:C:1971:108), of 17 January 1985, Piraiki-Patraiki and Others v Commission (11/82, EU:C:1985:18), of 5 May 1998, Dreyfus v Commission (C‑386/96 P, EU:C:1998:193), of 5 May 1998, Compagnie Continentale (France) v Commission (C‑391/96 P, EU:C:1998:194), and of 5 May 1998, Glencore Grain v Commission (C‑403/96 P, EU:C:1998:195), is not applicable in the present case.

76 It must be borne in mind that the Court of Justice itself has held that the solution adopted in those judgments is of an exceptional nature, which may be explained by the specific situations in which it was reached and that this is apparent from the very terms of those judgments (see, to that effect, order of 6 March 2014, Northern Ireland Department of Agriculture and Rural Development v Commission, C‑248/12 P, not published, EU:C:2014:137, paragraphs 23 and 26). Thus, the Court stated that it was by way of exception that it had held that the applicant could be directly concerned, within the meaning of the fourth paragraph of Article 263 TFEU, since other factors, including a purely theoretical power to refrain from acting on the decision in question, made it possible to conclude that it was directly concerned (see, to that effect, judgment of 10 September 2009, Commission v Ente per le Ville Vesuviane and Ente per le Ville Vesuviane v Commission, C‑445/07 P and C‑455/07 P, EU:C:2009:529, paragraph 58, and order of 6 March 2014, Northern Ireland Department of Agriculture and Rural Development v Commission, C‑248/12 P, not published, EU:C:2014:137, paragraph 25).

77 In particular, in respect of the judgments of 5 May 1998, Dreyfus v Commission (C‑386/96 P, EU:C:1998:193), of 5 May 1998 in Compagnie Continentale (France) v Commission (C‑391/96 P, EU:C:1998:194), and of 5 May 1998, Glencore Grain v Commission (C‑403/96 P, EU:C:1998:195), it should be borne in mind that, in those judgments, the Court had relied on the socio-economic context in which the supply contract in question was concluded, characterised by the critical economic and financial situation which had to be met by the beneficiary, and the worsening of its food and medical situation and the fact that, in those circumstances, the cereals in question could therefore be supplied only by means of financial resources made available by the Union. Thus the inclusion of a suspensory clause in the supply contract merely reflected the fact that the supply contract in question was dependent, for objective financial reasons, on the financial resources made available by the Union (see, to that effect, judgment of 5 May 1998, Dreyfus v Commission, C‑386/96 P, EU:C:1998:193, paragraphs 50 and 51).

78 The present case is not characterised by a similar factual and economic context in which, without the ERDF contribution, the applicant would have no real possibility of proceeding with the project or of having the resources necessary for that purpose, since the ERDF contribution is far from being the only source of funding for the project and since, on the contrary, it is clear from the file before the Court that some 84% of it was financed by private funds and approximately 2% by other funds of the Member State concerned.

79 Similarly, as regards the cases which gave rise to the judgments of 17 January 1985, Piraiki-Patraiki and Others v Commission (11/82, EU:C:1985:18), and of 23 November 1971, Bock v Commission (62/70, EU:C:1971:108), it should be recalled that they concerned specific cases in which the Commission had authorised, at the request of a Member State, the adoption of safeguard measures. In those circumstances, the Court was entitled to consider that there was no doubt that the Member State which had requested those measures was going to act on them in order to give due effect to them (see, to that effect, order of 8 July 2004, Regione Siciliana v Commission, T‑341/02, EU:T:2004:228, paragraph 79). The same cannot be said in the present case since the Republic of Poland did not ask the Commission to adopt a decision allowing it to refuse a financial contribution to the project.

80 Fifthly, the applicant’s arguments that the project would not be viable without the contribution of the ERDF and that those funds would have had an ‘incentive effect’ are based on an incorrect understanding of ERDF assistance. ERDF assistance is directed at the Member State, which can use it to finance projects, even major projects, in the context of one or more operational programmes. On the other hand, the entity responsible for implementing the project is not entitled to that assistance and does not have a direct relationship with it. Thus, it is not directly the ERDF assistance which contributes to the viability of a project or which has an incentive effect for the applicant, but the possible subsidy which the Polish authorities might grant it from, inter alia, ERDF funds. The contested decision does not prevent the Republic of Poland from financing the project, but simply from allocating such aid to the EU budget under the ERDF.

81 In the light of the foregoing, since the two criteria mentioned in paragraph 32 above are not fulfilled, the applicant is not directly affected by the contested decision, which affects only legal relations between the Commission and the Republic of Poland.

82 It must therefore be concluded that the applicant does not satisfy one of the conditions of admissibility laid down in the fourth paragraph of Article 263 TFEU, namely that relating to direct concern, as a result of which it is not necessary to examine whether the applicant is individually concerned by the contested decision.

84 Under Article 134(1) of the Rules of Procedure, the unsuccessful party is to be ordered to pay the costs if they have been applied for in the successful party’s pleadings. Since the applicant has been unsuccessful, it must be ordered to pay the costs, in accordance with the form of order sought by the Commission.

2. Orders Green Source Poland sp. z o.o. to bear its own costs and to pay those incurred by the European Commission.

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You are here: BAILII >> Databases >> Court of Justice of the European Communities (including Court of First Instance Decisions) >> Green Source Poland v Commission (Action for annulment - ERDF : Judgment) [2017] EUECJ T-512/14 (04 May 2017) URL: http://www.bailii.org/eu/cases/EUECJ/2017/T51214.html Cite as: ECLI:EU:T:2017:299, [2017] EUECJ T-512/14, EU:T:2017:299

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