1

By its action based on Article 272 TFEU, the European Commission seeks, in essence, determination of the amount of the debt owed to it corresponding to the reimbursement of the grants paid under the financing contract concluded with the Centre d’étude et de valorisation des algues SA (Centre for the Study and Exploitation of Algae SA) (CEVA) for the implementation of a project in the context of the specific programme for research and development entitled ‘Quality of Life and Management of Living Resources’.

2

On 17 January 2001, the Commission concluded a contract with CEVA for the implementation of a project in the context of the specific programme for research and development entitled ‘Quality of Life and Management of Living Resources’ (‘the Seapura project’) and providing for the payment of a grant of EUR 123735 (‘the Seapura contract’).

3

In 2006, the European Anti-Fraud Office (OLAF) opened an investigation following suspicions of fraud in relation to several projects implemented by CEVA, including the project covered by the Seapura contract.

4

On 11 December 2007, OLAF adopted its final report (‘the OLAF report’), in which it found, in the context of the performance of the Seapura contract, irregularities consisting of, inter alia, falsifications of the time sheets of CEVA staff.

5

By letter of 29 October 2008, the Commission informed CEVA that, in view of the serious financial irregularities established in the OLAF report, it intended to issue debit notes to CEVA in the amount of EUR 123735, plus interest, for the purposes of reimbursement of the grant paid under the Seapura contract, while inviting CEVA to submit its observations.

6

On 13 March 2009, the Commission sent CEVA four debit notes for a total amount of EUR 168 220.16 (‘the debit notes’).

7

On 11 May 2009, as CEVA had failed to act on the debit notes, the Commission sent it four reminder letters (‘the reminder letters’).

8

On 12 June 2009, in the absence of payment by CEVA, the Commission sent it four letters of formal notice.

9

By application lodged at the Registry of the General Court on 17 July 2009, CEVA brought an action, registered as Case T‑285/09, seeking annulment of the reminder letters.

10

By judgment of 15 September 2011, CEVA v Commission (T‑285/09, not published, EU:T:2011:479), the Court dismissed the action as inadmissible, on the ground that, by their very nature, the reminder letters were not administrative decisions the annulment of which could be sought under Article 263 TFEU.

11

By judgment of the tribunal correctionnel de Rennes (Criminal Court, Rennes, France) of 26 April 2011, CEVA and its former director were found guilty of fraud and misappropriation of public funds and sentenced, respectively, to a fine of EUR 80000 and to an 18-month suspended prison sentence.

12

Ruling on the civil action brought by the Commission, the tribunal correctionnel de Rennes (Criminal Court, Rennes) ordered the accused parties, in part on a joint and several basis, to pay to the Commission the sum of EUR 303631 as compensation for the material damage suffered, inter alia as a result of the financial irregularities in the implementation of the Seapura contract.

13

By judgment of 1 April 2014, the cour d’appel de Rennes (Court of Appeal, Rennes, France) acquitted CEVA and its former director of all the charges and dismissed the Commission’s civil action.

14

By judgment of 12 November 2015, the Criminal Chamber of the Cour de cassation (Court of Cassation, France), on referral by the Public Prosecutor at the cour d’appel de Rennes (Court of Appeal, Rennes), set aside the judgment of that court of 1 April 2014 in respect solely of its provisions ordering that the accused parties be acquitted of the charge of misappropriation of public funds and to that extent referred the case to the cour d’appel de Caen (Court of Appeal, Caen, France).

15

By judgment of 22 June 2016, the tribunal de commerce de Saint-Brieuc (Commercial Court, Saint-Brieuc, France) opened a financial recovery procedure concerning CEVA and appointed SELARL TCA as the court-appointed representative (‘TCA’).

16

On 15 September 2016, the Commission, in the course of that procedure, declared to TCA that it had a claim corresponding to the total amount of the debit notes issued with a view to securing reimbursement of the subsidies paid under, inter alia, the Seapura contract, for a principal amount of EUR 289 012.95, plus default interest; making a total of EUR 431 002.18.

17

On 6 December 2016, TCA challenged the Commission’s claim.

18

By judgment of 21 July 2017, the tribunal de commerce de Saint-Brieuc (Commercial Court, Saint-Brieuc) adopted the financial recovery plan for CEVA and appointed SELARL AJIRE as the administrator for the implementation of that plan (‘AJIRE’).

19

By judgment of 23 August 2017, which has become final, the cour d’appel de Caen (Court of Appeal, Caen), ruling after the case had been referred to it following the setting aide of the judgment by the Cour de cassation (Court of Cassation), acquitted CEVA of the charge of misappropriation of public funds and sentenced its former director to a one-year suspended prison sentence and to a fine of EUR 20000 for misappropriation of public funds.

20

By order of 11 September 2017, the Juge-Commissaire (judge responsible for supervising the financial recovery procedure) rejected the Commission’s claim in its entirety (‘the order of the Juge-Commissaire’).

21

The Commission appealed against the order of the Juge-Commissaire.

22

By judgment of 24 November 2020, the cour d’appel de Rennes (Court of Appeal, Rennes) set aside the order of the Juge-Commissaire and found that there were two serious challenges concerning the limitation period and the validity of the debit notes, taking the view that those challenges had to be resolved by the competent court, before which the Commission had to bring the matter.

23

The Commission contends that the Court should:

24

CEVA claims that the Court should:

25

As TCA and AJIRE did not lodge a defence within the period laid down in Article 81 of the Rules of Procedure of the General Court, the Commission applied to the Court, pursuant to Article 123(1) of the Rules of Procedure, for judgment by default in so far as its application was directed against TCA and AJIRE.

26

In the application initiating proceedings, the Commission stated that, pursuant to Articles L.622‑22 and L.626‑25, second paragraph, of the Code de commerce (French Commercial Code), it was for the Commission to include in the proceedings the court-appointed representative and the administrator for the implementation of the financial recovery plan for CEVA, namely TCA and AJIRE, and that this was the reason why it had designated those companies as defendants alongside CEVA.

27

At the hearing on 11 November 2022, the Commission stated, in response to a question from the Court, that it was not seeking an order against the defendant but, rather, the determination of the amount of its claim, formal note of which was taken in the minutes of the hearing. It also stated that, by its request, it was not referring to TCA and AJIRE and, consequently, that it was not asking the General Court to find that the latter were required to reimburse the amounts paid in the performance of the Seapura contract.

28

Pursuant to Article 272 TFEU, the Court of Justice of the European Union has 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. In accordance with Article 256(1) TFEU, the General Court has jurisdiction to hear and determine at first instance actions or proceedings referred to in Article 272 TFEU.

29

In the present case, it should be noted that Article 5(2) of the Seapura contract contains an arbitration clause under which all disputes concerning that agreement must be submitted to the Court of Justice of the European Union. The General Court therefore has jurisdiction to hear the present action.

30

In its defence, CEVA submits that the action is inadmissible on the ground that the action brought by the Commission is time-barred under both Belgian and EU law.

31

The Commission claims, first, that the plea of inadmissibility raised by CEVA is inadmissible on the ground that the plea of limitation does not relate to admissibility, but goes to the substance of the case, and, second, that the limitation period has not yet expired, either under Belgian law or under EU law.

32

In the present case, Article 5(1) of the Seapura contract stipulates that ‘the contract shall be governed by Belgian law’.

33

However, the Commission submits, in its reply to a written question put by the Court, which it confirmed at the hearing, that Council Regulation (EC, Euratom) No 1605/2002 of 25 June 2002 on the Financial Regulation applicable to the general budget of the European Communities (OJ 2002 L 248, p. 1), as amended by Council Regulation (EC, Euratom) No 1995/2006 of 13 December 2006 (OJ 2006 L 390, p. 1), was applicable on the day on which the debit notes were issued, namely 13 March 2009.

34

CEVA maintains that the financial regulations relied on by the Commission cannot apply to a situation prior to their entry into force.

35

CEVA explains that, on the date on which the Seapura contract was signed, namely 17 January 2001, the applicable version of the Financial Regulation was the Financial Regulation of 21 December 1977 applicable to the general budget of the European Communities (OJ 1977 L 356, p. 1), as amended by Council Regulation (EC, ECSC, Euratom) No 2548/98 of 23 November 1998 (OJ 1998 L 320, p. 1) (‘Financial Regulation No 2548/98’), and that that version of the Financial Regulation did not contain rules on limitation periods.

36

With regard to the version of the Financial Regulation applicable to the facts of the present case, it should be noted that, on the date on which the Seapura contract was concluded, the applicable version of the Financial Regulation, namely Financial Regulation No 2548/98, did not contain any specific provisions on the limitation period or on the means by which the limitation period could be interrupted.

37

Consequently, the rules on limitation periods applicable in the present case are those laid down by the law governing the contract, namely Belgian law.

38

Under Belgian law, Article 2262bis(1) of the Belgian Civil Code, which applies to contractual actions, provides that ‘the limitation period for all personal actions shall be 10 years’.

39

In addition, it should be noted that, in accordance with Article 2257 of the Belgian Civil Code, the limitation period for personal actions begins to run from the day following the date on which the debt becomes due.

40

First, it is common ground that the present dispute is contractual in nature. It should be noted that Article 3(5) of Annex II to the Seapura contract provides that ‘after the date of completion of the contract, or the termination of the contract or the end of the participation of a contractor, the Commission may or shall, as the case may be, claim from the contractor, in the event of fraud or serious financial irregularities discovered in the course of an audit, reimbursement of the whole of the EU contribution paid to it’.

41

It is apparent from the wording of that provision that the parties to the Seapura contract agreed that the reimbursement in full of the EU contribution paid to CEVA following fraud or serious financial irregularities established in the course of an audit is subject to a prior request for reimbursement made by the Commission.

42

To that end, on 13 March 2009, the Commission sent CEVA four debit notes intended to secure recovery of its debt. The view must therefore be taken that it was on that date that the Commission sought reimbursement of the amounts that CEVA had received under the Seapura contract.

43

In those circumstances, in accordance with Article 3(5) of Annex II to the Seapura contract, the amount receivable by the Commission became payable on 13 March 2009.

44

Secondly, it should be noted that CEVA has not put forward any specific argument which would make it possible to establish that the claim had become due prior to 13 March 2009.

45

Thus, the 10-year period during which the Commission could bring its action against CEVA began to run on the day following that on which the obligation became payable, namely 14 March 2009, in accordance with Article 2257 of the Belgian Civil Code referred to in paragraph 39 above.

46

Consequently, it must be held that the limitation period expired, in principle, on 14 March 2019.

47

In the present case, the Commission submits that the limitation period was interrupted twice: first, when it was joined as a civil party before the tribunal correctionnel de Rennes (Criminal Court, Rennes) on 26 April 2011 and, secondly, when it lodged its declaration of claim, regularised on 15 September 2016, in the context of the financial recovery procedure concerning CEVA.

48

In that regard, it is appropriate to confine matters to an examination of whether the limitation period could have been validly interrupted by the declaration of claim submitted by the Commission in the financial recovery procedure concerning CEVA, without it being necessary also to examine the effects of the Commission being joined as a civil party before the tribunal correctionnel de Rennes (Criminal Court, Rennes).

49

The Commission submits that its claim was declared before TCA on 15 September 2016 and that, according to the case-law of the Cour de cassation (Court of Cassation, Belgium), a declaration of claim interrupts the limitation period until the insolvency proceedings have concluded.

50

The Commission adds that it is justified in relying on the French proceedings in order to plead the ‘suspension’ of the limitation period on the basis of Belgian law.

51

CEVA disputes the Commission’s arguments, contending that the financial recovery procedure opened in France is independent of the contractual relations in question, since the Commission’s claim is disputed and has not been judicially recognised.

52

In the present case, it must be borne in mind that, on 22 June 2016, the tribunal de commerce de Saint-Brieuc (Commercial Court, Saint-Brieuc) opened a financial recovery procedure concerning CEVA. On 15 September 2016, in the context of that procedure, the Commission declared its claim to TCA.

53

It is clear from Article L.622‑24 of the French Commercial Code that, from the date of publication of the judgment initiating the financial recovery procedure, all creditors whose claims arose prior to that initiating judgment, with the exception of employees, must send the declaration of their claims to the court-appointed representative. It was therefore on the basis of that provision that the Commission, in the context of the financial recovery procedure initiated in respect of CEVA, declared its claim to TCA.

54

In addition, Article L.622-25‑1 of the French Commercial Code provides: ‘The declaration of a claim shall interrupt the limitation period until the conclusion of the proceedings; it dispenses with any formal notice and is equivalent to an act in pursuance of the proceedings.’

55

In that regard, it must first of all be noted that, as the Commission submitted in response to a question put in the context of measures of organisation of procedure, the opening of the financial recovery procedure in France entails the direct applicability of Council Regulation (EC) No 1346/2000 of 29 May 2000 on insolvency proceedings (OJ 2000 L 160, p. 1), which was then in force, and that the latter designated French law as the lex concursus.

56

It should be noted that, according to Article 4(2)(f) of Regulation No 1346/2000, ‘the law of the State of the opening of proceedings shall determine the conditions for the opening of those proceedings, their conduct and their closure’ and ‘it shall determine in particular: … the effects of the insolvency proceedings on proceedings brought by individual creditors’. Furthermore, Article 16(1) of that regulation provides that ‘any judgment opening insolvency proceedings handed down by a court of a Member State which has jurisdiction pursuant to Article 3 shall be recognised in all the other Member States from the time that it becomes effective in the State of the opening of proceedings’. Moreover, Article 17(1) of Regulation No 1346/2000 states that ‘the judgment opening the proceedings referred to in Article 3(1) shall, with no further formalities, produce the same effects in any other Member State as under this law of the State of the opening of proceedings, unless this Regulation provides otherwise and as long as no proceedings referred to in Article 3(2) are opened in that other Member State’.

57

It follows, on the basis of the foregoing provisions, that it must be held that the initiation, in France, of the financial recovery procedure with regard to CEVA and the subsequent declaration made by the Commission in the context of that financial recovery procedure produced, pursuant to French law and in particular Article L.622-25‑1 of the French Commercial Code, effects in Belgian law and, more specifically, that it interrupted the 10-year limitation period provided for by that law. The effects of the initiation of the financial recovery procedure initiated in respect of CEVA would be disregarded if the declaration of a claim made in France by the Commission on 15 September 2016 did not have the effect of interrupting the limitation period under Belgian law.

58

In those circumstances, since the present application was brought on 19 December 2020, it must be held that the limitation period has not expired in the present case.

59

Accordingly, the plea of limitation raised by CEVA must be rejected.

60

In support of its claim, the Commission seeks reimbursement in full of the sums paid to CEVA under the Seapura contract, together with default interest.

61

In that regard, it should be recalled that, in so far as proceedings have been brought before it pursuant to an arbitration clause under Article 272 TFEU, the Court must resolve the dispute on the basis of the substantive law applicable to the contract (judgment of 1 March 2017, Universiteit Antwerpen v REA, T‑208/15, not published, EU:T:2017:136, paragraph 53).

62

In the present case, it should be recalled that, under Article 5(1) of the Seapura contract, the substantive law applicable to that contract is Belgian law.

63

As regards the rules governing the performance and interpretation of contracts under Belgian law, the third paragraph of Article 1134 of the Belgian Civil Code; as then in force, provides that ‘[agreements lawfully entered into] must be performed in good faith’.

64

Under Article 1147 of the Belgian Civil Code, as then in force, the debtor is to be ordered, where appropriate, to pay damages, either because of the non-performance of the obligation or because of delay in performance, whenever the debtor does not prove that the non-performance was due to an external factor which cannot be attributed to him or her, even though there was no bad faith on his or her part.

65

It is in the light of those provisions that it is necessary to examine whether CEVA committed procedural irregularities in the performance of the Seapura contract, as the Commission claims.

66

The Commission bases its claim on the provisions of Article 1147 of the Belgian Civil Code, as then in force, and on those of Article 3(5) of Annex II to the Seapura contract referred to in paragraph 40 above.

67

The Commission claims that the OLAF report found serious financial irregularities on the part of CEVA in the performance of the Seapura contract.

68

Thus, on the basis of Article 3(5) of Annex II to the Seapura contract, the Commission claims that it is entitled to request reimbursement of the full amount of the grant which it paid to CEVA.

69

CEVA disputes that argument and contends, first, that the OLAF investigation did not relate to the Seapura contract project and, second, that the OLAF report did not link the irregularities identified to the Seapura contract.

70

In that regard, it should be noted, first of all, as the Commission rightly points out, that OLAF’s investigation concerning CEVA concerned two aspects, the first relating to direct expenditure and the second to the structural funds.

71

Next, it should be pointed out that OLAF’s investigation related mainly to two types of conduct which gave rise to suspicions, namely, first, falsification of staff time sheets and, second, plagiarism of scientific documents in a number of different CEVA projects.

72

In the present case, the OLAF report explicitly concludes that there were serious financial irregularities concerning all CEVA projects, including the Seapura contract. As the Commission also correctly points out, the horizontal nature of the field of OLAF’s investigation necessarily included the Seapura contract.

73

Consequently, CEVA’s argument that the OLAF investigation and report did not relate to the Seapura project cannot succeed.

74

As regards, lastly, the serious financial irregularities found in the OLAF report, it should be noted that, as CEVA maintains, since it failed to identify the allegedly plagiarised documents, the OLAF report did not establish the allegation of plagiarism of scientific documents concerning the Seapura project.

75

By contrast, with regard to the allegation of falsification of the time sheets of staff members, the OLAF report shows that CEVA had drawn up several versions of time management sheets for the projects in respect of which it had an obligation to justify the costs, thus showing manipulation of the working time of its staff, in particular for European projects, in order to secure release of the maximum amount of funds allocated to each project.

76

Furthermore, as the Commission maintains, the OLAF report identifies anomalies not only in the time-accounting system, but also in the breakdown of those hours across the various projects, including the Seapura project. It is apparent from that report that the investigators cross-examined the documents originating from the various projects and corresponding to the same period in order to secure an overall assessment, which enabled them to determine the accuracy of the time sheets for all ongoing projects. In particular, it should be noted, in that regard, that the OLAF report refers several times to the Seapura project for the purpose of examining all the hours worked by each member of staff.

77

In those circumstances, the investigators formed the view that all the staff costs declared over the period between 2001 and 2005 were unreliable. As a result, they considered that the serious financial irregularities in the declaration of CEVA staff’s time sheets concerned all of the projects, including the Seapura project.

78

Furthermore, it is apparent from the findings and assessments contained in the OLAF report that CEVA’s human resources were insufficient for it to fulfil its contractual obligations in respect of all the projects that it had secured and that there were up to eight different versions of time management, for the same employee, on the same project and over the same year, something which confirmed that the time sheets had been manipulated on all the projects and necessarily on the Seapura project. OLAF also concluded that, due to the actions of CEVA’s former director, such falsifications had been produced deliberately and systematically.

79

Therefore, CEVA’s argument that the irregularities found were not linked to the Seapura project cannot succeed.

80

In so far as the OLAF report found serious financial irregularities within the meaning of Article 3(5) of Annex II to the Seapura contract, the Commission acted correctly in law in asking CEVA to reimburse all the sums paid to it in the context of the performance of the Seapura contract.

81

CEVA argues that the Commission cannot base its claim on the allegedly fraudulent nature of the management of the grant paid to it when, before the French criminal courts, it was ultimately acquitted of all the charges brought against it.

82

Moreover, CEVA submits, by its judgment of 1 April 2014, the cour d’appel de Rennes (Court of Appeal, Rennes) emphasised the propriety of the management and the fact that the implementation of the projects in question had never given rise to any scientific concerns on the part of the EU institutions. Thus, CEVA submits that the Court cannot uphold the Commission’s claims on the basis of the allegedly fraudulent nature of the acts committed.

83

The Commission disputes CEVA’s arguments and contends that, in accordance with the principle of the binding nature of a contract, laid down in Article 1134 of the Belgian Civil Code, as then in force, Article 3(5) of Annex II to the Seapura contract is binding on the parties, with the result that reimbursement of the sums paid is not conditional on CEVA being convicted by a national criminal court, but on proof of fraud or serious financial irregularities established through a financial audit.

84

The Commission adds that CEVA cannot add a condition to a contractual clause which leaves no room for interpretation.

85

In that regard, the view must be taken that, in the context of a contract such as that at issue in the present case, the mere finding of the existence of fraud or serious financial irregularities established in the course of an audit is sufficient to justify the Commission’s right to demand reimbursement of the sums which it has granted (see, by analogy, judgment of 3 May 2018, Sigma Orionis v Commission, T‑48/16, EU:T:2018:245, paragraphs 121 to 125).

86

In the present case, as has been pointed out in paragraphs 78 and 80 above, the falsification of staff time sheets constitutes, at the very least, a serious financial irregularity within the meaning of Article 3(5) of Annex II to the Seapura contract.

87

Article 3(5) of Annex II to the Seapura contract makes reimbursement of the Community contribution at issue conditional simply on a finding of the existence of fraud or serious financial irregularities in the context of an audit, without making such reimbursement dependent on a criminal conviction or criminal classification of the facts in question.

88

In those circumstances, it must be held that the acquittal, by a criminal court, in respect of charges of fraud or misappropriation of public funds has no bearing on the application of Article 3(5) of Annex II to the Seapura contract.

89

CEVA submits that, by virtue of the principle of procedural autonomy, enshrined in the case-law of the Court of Justice, in the absence of harmonisation of the law at European level, the laws and procedures of the Member States are limited to national legal systems, with the result that individuals cannot rely on the law of one Member State before the courts of another Member State.

90

In the present case, according to CEVA, the Commission cannot rely on proceedings initiated in France on the basis of French law, when the Seapura contract is governed by Belgian law and confers jurisdiction on the General Court to hear the present dispute.

91

The Commission disputes that argument.

92

In that regard, it must be stated that, in the present case, irrespective of whether or not there are rules of EU law governing the contract at issue, the Commission brought an action before the Court on the basis of Article 272 TFEU.

93

It should be borne in mind that it follows from the case-law cited in paragraph 61 above that, where proceedings have been brought before it pursuant to an arbitration clause on the basis of Article 272 TFEU, the Court must resolve the dispute on the basis of the substantive law applicable to the contract. It is apparent from the grounds set out in paragraphs 52 to 57 above that, although Belgian law is applicable to the contract, this is without prejudice to the direct applicability of Regulation No 1346/2000, under which certain provisions of the French Commercial Code are to take effect in Belgian law. It follows, contrary to what CEVA contends, that the Commission was justified, without being accused of an infringement of the principle of procedural autonomy, in relying, on the basis of Regulation No 1346/2000, on the effects, under Belgian law, of the proceedings brought in France.

94

For that reason, CEVA’s argument alleging infringement of the principle of procedural autonomy must be rejected.

95

Accordingly, the Commission’s application must be upheld and it must be held that the Commission’s claim against CEVA amounts to the principal sum of EUR 168 220.16, plus interest due pursuant to Article 3(5) of Annex II to the contract.

96

In its observations of 14 June 2021 on the subsequent stages of the proceedings, the Commission applied to the Court for judgment by default concerning TCA and AJIRE, pursuant to Article 123(1) of the Rules of Procedure.

97

It should be noted that, in accordance with the form of order sought, as amended at the hearing, the Commission no longer refers to TCA and AJIRE and therefore, implicitly but necessarily, it is no longer seeking a declaration from the Court that TCA and AJIRE are required to reimburse the sums paid in the context of the performance of the Seapura contract.

98

It follows from paragraphs 60 to 95 above that, in so far as the OLAF report found serious financial irregularities within the meaning of Article 3(5) of Annex II to the Seapura contract, the Commission acted correctly in law in requesting CEVA to reimburse all of the sums paid to it in the performance of the Seapura contract.

99

Since the form of order sought by the Commission, which relates exclusively to CEVA, has been upheld in its entirety, there is no need to rule on the Commission’s request that the Court give judgment by default with regard to TCA and AJIRE.

100

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.

101

Since CEVA has been unsuccessful, it must be ordered to pay the costs, in accordance with the form of order sought by the Commission.

On those grounds,

THE GENERAL COURT (Seventh Chamber)

hereby: