Case T‑748/20

European Commission

v

Centre d’étude et de valorisation des algues SA (CEVA) and Others

Judgment of the General Court (Seventh Chamber), 6 September 2023

(Arbitration clause – Specific programme for research and development in the field of ‘Quality of Life and Management of Living Resources’ – Grant agreement – OLAF investigation report finding financial irregularities – Reimbursement of the sums paid – Applicable law – Limitation period – Impact of the OLAF report)

1. Judicial proceedings – General Court seised under an arbitration clause – Grant agreement concluded in the context of a specific programme for research and development – Contract governed by the law of a Member State – Investigation report by the European Anti-Fraud Office (OLAF) finding that financial irregularities had been committed by the contractor – Request for reimbursement of subsidies paid following the discovery of those irregularities – Financial recovery procedure initiated against that contractor in another Member State – Consequence – Applicability of Regulation No 1346/2000 – Declaration of claim made by the creditor in the Member State in which the procedure is initiated – Effects – Interruption of the limitation period provided for under the law of the first Member State

   (Art. 272 TFEU; Council Regulation (EC) No 1346/2000, Arts 3(1), 4(2)(f), 16(1) and 17(1))

   (see paragraphs 37-57)

2. Judicial proceedings – General Court seised under an arbitration clause – Contract subject to national law – Applicability of national substantive law

   (Art. 272 TFEU)

   (see paragraphs 61, 93)

Résumé

On 17 January 2001, the European Commission concluded a contract with Centre d’étude et de valorisation des algues SA (CEVA) for the implementation of a project in the context of the specific programme for research and development and providing for the payment of a grant (‘the Seapura contract’). That contract is governed by Belgian law. ( 1 )

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. In December 2007, OLAF adopted its final report, in which it found, in the context of the performance of the Seapura contract, financial irregularities. In 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 for the purposes of reimbursement of the grant paid under the Seapura contract. Thus, on 13 March 2009, the Commission sent CEVA four debit notes, then, on 11 May 2009, four reminder letters, and finally, on 12 June 2009, in the absence of payment by CEVA, the Commission sent it four letters of formal notice.

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 and to a prison sentence. 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 compensate the Commission for the material damage suffered, inter alia as a result of the financial irregularities in the implementation of the Seapura contract. 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. On 12 November 2015, on referral by the Public Prosecutor at the cour d’appel de Rennes (Court of Appeal, Rennes), the Criminal Chamber of the Cour de cassation (Court of Cassation, France) set aside the judgment of the Court of Appeal 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).

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 a court-appointed representative. On 15 September 2016, the Commission, in the course of that procedure, declared to that court-appointed representative 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. On 6 December 2016, that court-appointed representative challenged the Commission’s claim.

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 an administrator for the implementation of that plan.

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 aside of the judgment, acquitted CEVA of the charge of misappropriation of public funds and sentenced its former director to a suspended prison sentence and to a fine for misappropriation of public funds.

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 Commission appealed against that order. By judgment of 24 November 2020, the cour d’appel de Rennes (Court of Appeal, Rennes) set aside that order 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.

In that context, by its action based on Article 272 TFEU, ( 2 ) the Commission has asked the General Court to determine the amount of the debt owed to it corresponding to the reimbursement of the grants paid under the Seapura contract.

By its judgment, the Court upholds the Commission’s claim and sets the amount of its claim against CEVA pursuant to Article 3(5) of Annex II to the Seapura contract.

Findings of the Court

After confirming its jurisdiction to hear the Commission’s action under an arbitration clause in the Seapura contract, ( 3 ) the Court first examines the objection raised by CEVA, namely that the Commission’s claim was time-barred.

With regard to the version of the Financial Regulation applicable to the facts of the present case, the Court notes that, on the date on which the Seapura contract was concluded, 17 January 2001, Financial Regulation No 2548/98 ( 4 ) did not contain any specific provisions on the limitation period or on the means by which the limitation period could be interrupted. Consequently, the rules on limitation periods applicable in the present case are those laid down by the law governing the contract, namely Belgian law.

Thus, the Court observes that, 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’. The Court adds 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.

First, the Court states that the present dispute is contractual in nature. 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’. 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 would be subject to a prior request for reimbursement made by the Commission. To that end, on 13 March 2009, the Commission sent CEVA four debit notes intended to secure recovery of its debt. The Court therefore takes the view that it was on that date that the Commission sought reimbursement of the amounts that CEVA had received under the Seapura contract. 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.

Secondly, the Court notes 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. 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 above. Consequently, the Court holds that the limitation period expired, in principle, on 14 March 2019.

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. In that regard, the Court confines itself 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). The Commission submits that its claim was declared before the court-appointed representative 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. 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.

In the present case, the Court recalls 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 the court-appointed representative. 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 the designated court-appointed representative. 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.’

In that regard, the Court notes that the opening of the financial recovery procedure in France entails the direct applicability of Regulation No 1346/2000 on insolvency proceedings, ( 5 ) which was then in force, and that the latter designated French law as the lex concursus. It also notes 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 that same regulation 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’.

It follows, on the basis of the foregoing provisions, 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 Court points out that 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.

In those circumstances, since the Commission’s application was brought on 19 December 2020, the Court considers that the limitation period has not expired in the present case, and, accordingly, rejects the plea of limitation raised by CEVA, before upholding the Commission’s application and determining the Commission’s claim against CEVA.

( 1 ) Article 5(1) of the Seapura contract.

( 2 ) Under 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.

( 3 ) Article 5(2) of the Seapura contract.

( 4 ) Council Regulation (EC, ECSC, Euratom) No 2548/98 of 23 November 1998 amending the Financial Regulation of 21 December 1977 applicable to the general budget of the European Communities (OJ 1998 L 320, p. 1).

( 5 ) Council Regulation (EC) No 1346/2000 of 29 May 2000 on insolvency proceedings (OJ 2000 L 160, p. 1).