1.

By decision of 4 August 1992, the European Commission granted IPK International — World Tourism Marketing Consultants GmbH ( 2 ) financial assistance in the amount of ECU 530000 for a proposal concerning the creation of a databank. The first instalment of the financial assistance, in the amount of ECU 318000, was paid in January 1993.

2.

On the view that the way in which the financial assistance had been granted was irregular, the Commission annulled the award decision by decision of 13 May 2005 ( 3 ) and then adopted a recovery decision on 4 December 2006, pursuant to which, on 15 May 2007, IPK repaid the sum of EUR 318 000 plus default interest.

3.

IPK contested the decision of 13 May 2005 and, by the judgment in IPK International v Commission (T‑297/05, EU:T:2011:185), delivered on 15 April 2011, ( 4 ) the General Court of the European Union annulled that decision on account of the Commission’s failure to act within the period prescribed for legal proceedings of that nature.

4.

Pursuant to that judgment, the Commission, by letter of 14 October 2011, adopted and notified to IPK a decision ( 5 ) ordering repayment of the total sum of EUR 720 579.90. Of that total sum, EUR 530 000 corresponded to the principal amount of the financial assistance, EUR 31 961.63 represented default interest to be paid by IPK and EUR 158 618.27 corresponded to ‘compensatory’ interest, fixed by the Commission at a rate equal to that applied by the European Central Bank ( 6 ) and the European Monetary Institute (the ECB’s predecessor) for their main refinancing operations.

5.

By application lodged on 22 December 2011, IPK brought an action for annulment of the contested decision and, by its judgment in IPK International v Commission (T‑671/11, EU:T:2013:163), ( 7 ) the General Court annulled that decision to the extent that it limits the amount of interest to be paid to IPK to EUR 158 618.27.

6.

The Court is currently seised of the appeal brought by the Commission against that judgment. The appeal essentially raises the question of the nature, the rate and the term of the interest owed on the sums which the Commission must pay or repay to IPK following the annulment of the decision of 13 May 2005.

7.

In this Opinion, I will propose that the Court partially uphold the appeal.

8.

I will contend that, by ruling that default interest should be calculated on the basis of the principal amount of the debt plus such compensatory interest as has already accrued, the General Court erred in law since the interest that has already accrued is default interest, not compensatory interest, justifying the partial setting aside of the judgment under appeal.

9.

I will propose that the Court itself give final judgment in this matter, ruling that default interest must be calculated solely on the basis of the principal amount of the debt.

10.

In support of its action before the General Court, IPK relied on a single plea in law, alleging infringement of Article 266 TFEU. By that plea, it was submitted that the Commission had erred in law, first, in determining the rate of compensatory interest, which should have been calculated at a rate two percentage points higher than the ECB interest rate for its main refinancing operations and, second, in failing to calculate default interest, which should have been payable with effect from the delivery of the judgment of 15 April 2011 and calculated on the basis of the total amount of the debt plus compensatory interest.

11.

By the judgment under appeal, the General Court upheld that action, accepting both parts of the plea in law relied on by IPK.

12.

In that regard, the General Court pointed out, first of all, in paragraph 34 of the judgment under appeal, that the judgment of 15 April 2011 did not imply any obligation for the Commission to repay the financial assistance at issue to IPK since, in that judgment, the Court had confirmed the factual findings made in the decision of 13 May 2005 relating to irregularities committed by IPK which, in principle, justified the cancellation of that financial assistance, and annulled that decision simply because of the Commission’s failure to act within the relevant prescribed period. The Court concluded from those findings that the contested decision was ‘the sole legal basis for the principal financial claim at issue’.

13.

Second, with regard to compensatory interest, the General Court stated in paragraph 36 of the judgment under appeal that settled case-law ( 8 ) had recognised that, regardless of the precise name used to describe that interest, it must always be calculated on the basis of the interest rate applied by the ECB for its main refinancing operations plus two percentage points. The Court added that this standard increase was applicable to all sets of circumstances, there being no need to determine in the specific case whether or not that increase was justified in the light of the inflation, during the period at issue, in the Member State in which the creditor was established. The Court went on to state, in paragraph 38, that that standard increase had arisen from the need to avoid unjust enrichment in every possible situation.

14.

The General Court concluded, in paragraph 39 of the judgment under appeal, that the Commission had acted wrongly in not increasing the compensatory interest rate.

15.

Lastly, as regards default interest, the General Court recalled, in paragraph 41 of the judgment under appeal, ‘the established case-law which has recognised that the Commission is under an unconditional obligation to pay default interest — in particular, in cases where it has incurred the non-contractual liability of the European Union — for the period following delivery of the judgment making such a finding ..., as well as in the case of the repayment of an amount paid but not owed, following a judgment annulling a measure ...’. Then, having pointed out that none of the arguments put forward by the Commission justified a departure from that ‘basic obligation’ in the circumstances and having held that, on the contrary, the Commission had acknowledged at the hearing that it owed default interest payable as from delivery of the judgment of 15 April 2011 (a point which had been noted in the record of the hearing), the General Court concluded that default interest had to be paid on the principal amount payable, as acknowledged in the contested decision, given the common agreement of the parties in this regard, with effect from 15 April 2011‘irrespective of the fact that that decision is the sole legal basis for the principal financial claim at issue’.

16.

The General Court held in paragraph 42 of the judgment under appeal that default interest should be calculated on the basis of the principal amount payable plus such compensatory interest as has already accrued since, ‘even though the Court’s case-law does not, in principle, permit capitalisation either of compensatory interest accrued before, or of default interest accrued after, the delivery of a judgment recognising the existence of a debt, the Court nevertheless orders that default interest accruing until full payment be fixed on the basis of the principal amount of the debt plus such compensatory interest as has already accrued’. The Court added that ‘[t]hat approach therefore makes a distinction between pre-litigation compensatory interest and post-litigation default interest, since the latter must take into account the entirety of the accumulated financial loss, including loss owing to inflation’.

17.

The Commission claims that the Court should set aside the judgment under appeal and order IPK to pay the costs incurred by the Commission.

18.

IPK contends that the Court should dismiss the appeal and order the Commission to pay the costs.

19.

By its first ground of appeal, the Commission claims that the General Court failed to take account of the case-law of the Court of Justice according to which compensatory interest serves to compensate for inflation.

20.

According to the Commission, it is clear from Mulder and Others v Council and Commission (C‑104/89 and C‑37/90, EU:C:2000:38, paragraph 214) and the rulings of the General Court, in particular Agraz and Others v Commission (T‑285/03, EU:T:2008:526, paragraph 50), that compensatory interest is intended to make up for the losses suffered as a result of the fall in the value of money since the damage materialised, and should accordingly be equivalent to the rate of inflation actually recorded, for the period at issue, in the Member State in which the company concerned is established.

21.

IPK replies that the General Court made explicit reference to inflation, holding that it had to be offset by compensatory interest; that the annual rate of inflation recorded, for the period at issue, by Eurostat in the Member State where the creditor is established is taken into account only to ascertain the actual reality of a fall in the value of money; and that such a fall in the value of money does not constitute the only parameter for calculating compensatory interest.

22.

By its second ground of appeal, the Commission claims that the General Court contradicts the case-law of the Court of Justice by failing to make a distinction between compensatory interest and default interest. Whilst compensatory interest is intended solely to make up for the loss in value of the creditor’s assets on account of inflation, the objective of default interest is also to encourage the debtor to settle his debt as quickly as possible, with the result that it is generally higher than compensatory interest. Consequently, by fixing a standard rate for these two kinds of interest at the same level in the judgment under appeal, the General Court failed to take account of that distinction.

23.

IPK replies that this ground of appeal, in contradiction with the third ground of appeal, fails to recognise the material difference in the calculation of the two kinds of interest, as default interest is calculated not only on the basis of the principal debt but also on the basis of that sum plus compensatory interest accrued.

24.

By its third ground of appeal, the Commission submits that the General Court erred in law by capitalising the compensatory interest and by calculating default interest from 15 April 2011.

25.

In this regard, the Commission, which focuses its arguments on default interest, claims that the General Court was not able to order it retroactively to pay interest with effect from the date of delivery of the judgment of 15 April 2011, which did not include an order to pay such interest. In addition, it argues that the General Court acted inconsistently in ordering that default interest was payable from 15 April 2011 whilst ruling that the repayment obligation stemmed solely from the contested decision.

26.

IPK maintains that the sole purpose of the judgment of 15 April 2011 was to examine the lawfulness of the decision of 13 May 2005 and that the fact that the General Court did not examine the legal implications of its judgment does not relieve the Commission of its obligation to pay both default and compensatory interest. With regard to default interest more specifically, IPK claims that the Commission acknowledged in the contested decision that this obligation stemmed from Article 266 TFEU and, moreover, recognised at the hearing before the General Court that it was required to pay default interest with effect from 15 April 2011. According to IPK, default interest must be calculated on the basis of the amount of the principal debt plus compensatory interest.

27.

By its fourth ground of appeal, the Commission alleges that, in paragraphs 34 and 44 of the judgment under appeal, the General Court erred in law, misinterpreted the contested decision and the judgment in Case T‑297/05, and distorted the facts.

28.

In those paragraphs, the General Court held, inter alia, that the contested decision was the sole legal basis for the principal financial claim at issue and that it was therefore unnecessary to rule on the question whether the Commission had infringed Article 266 TFEU in failing to take due account of all that compliance with the judgment of 15 April 2011 entailed.

29.

According to the Commission, that reasoning is vitiated by an error in law as, following the annulment of the contested decision, the initial award decision was ‘revived’. In addition, it is contrary both to the contested decision, which was based expressly on Article 266 TFEU, and to the judgment of 15 April 2011, which annuls the contested decision on account of failure to act within the prescribed period, without declaring the initial award decision non-existent.

30.

Whilst acknowledging that the General Court was wrong not to base its findings on Article 266 TFEU, IPK considers that this error in law does not affect the calculation of interest in so far as, even though that provision constitutes the legal basis for the contested decision, it does not follow that, in calculating interest, the General Court should have taken account of the wrongful conduct of the creditor.

31.

By its fifth ground of appeal, the Commission submits that the reasons given in the judgment under appeal in relation to the rate of compensatory interest and the date from which default interest is payable are inadequate and contradictory. They are inadequate because the General Court failed to examine the Commission’s arguments. They are contradictory because the General Court found, on the one hand, that the contested decision was the sole legal basis for the payment and, on the other, that interest was payable from the judgment of 15 April 2011.

32.

IPK contends that the grounds stated for the judgment under appeal are clear and precise, that they do not entail any contradiction and that the General Court did examine the Commission’s arguments.

33.

By its sixth ground of appeal, the Commission submits that the General Court acted in breach of the principles governing unjust enrichment in so far as, since the European Union currently charges an interest rate of only 0.25% on sums collected provisionally, the application of the refinancing rate plus two percentage points exceeds the actual loss suffered by the creditor as a result of the fall in the value of money and the actual enrichment of the Commission. It adds that the General Court reversed the perspective by invoking the enrichment of the debtor rather than exploring whether the creditor had suffered loss. In its view, the approach adopted in the judgment under appeal effectively confers a financial advantage on a creditor who is nevertheless regarded as having acted in bad faith.

34.

IPK contends that the interest rate currently charged by the European Union on provisionally collected fines is irrelevant and that assuming that rate to be crucial, for the sake of argument, the Commission should have indicated what interest it had charged on average during the period at issue.

35.

The question of interest would seem, at first glance, to be a technical and relatively secondary problem which is not amenable to an overall analysis or any attempt at conceptualisation. It nevertheless has considerable practical importance in so far as the amount of interest, far from being purely symbolic, can sometimes be equal to or even exceed the amount of the principal financial claim. ( 9 ) Consequently, there may be much at stake.

36.

The absence, until recently, of rules on interest in EU law led the Court gradually to develop judge-made solutions which, although they seem to be well established as regards fundamental recognition of the right to interest, are nevertheless still somewhat mysterious with regard to the basis for that right and its implementation.

37.

The examination of the present appeal therefore gives the Court an opportunity to clarify its legal thinking on this point in the specific context of the measures necessary to comply with a judgment annulling a measure.

38.

In the judgment under appeal, the General Court took inspiration from the approaches identified in case-law for determining interest payable pursuant to a judgment cancelling or reducing a fine imposed on a undertaking for infringement of the EU rules on competition.

39.

The General Court also referred, however, to judgments delivered in actions for damages brought in the general context of the non-contractual liability of the European Union or in the specific context of EU civil service disputes. That is the area in which most of the judgments in which the Courts of the European Union have been required to rule on the calculation of interest are concentrated.

40.

By making indiscriminate reference to judgments delivered in these two different areas, the judgment under appeal thus attests to a mixed approach, the soundness of which will have to be questioned by examining whether or not there are irreconcilable differences making it inconceivable that these rules form part of a single regime.

41.

I will therefore begin by examining judgments delivered in actions for damages, which are more numerous, before considering decisions relating to interest payable pursuant to a judgment cancelling or reducing a fine; and I will then attempt, in the light of all those judgments, to draw a summary conclusion on the basis of which to examine the different grounds of appeal.

42.

From an analysis of judgments delivered in actions for damages, it is clear that the case-law has clearly taken a position on the distinction between compensatory interest and default interest and the main inferences to be drawn from this, but that there are still uncertainties that highlight possible doubts as to the reality of that distinction and the existence of a genuinely coherent system.

43.

I will trace these developments, first studying the actual principle of the distinction before examining the way in which compensatory interest, and then default interest, is treated by case-law.

44.

One of the first cases in which the distinction between compensatory interest and default interest fell to be drawn raised the question to what extent an official could obtain interest on allowances and grants to which he was entitled following annulment of the decision refusing his resignation. The negative response given in Campolongo v High Authority (27/59 and 39/59, EU:C:1960:35) draws a distinction between default interest, defined as being that which ‘constitutes a legal evaluation and determination of the loss suffered by reason of the delay in complying with an obligation subject to the pre-condition of prior notice having been given’, ( 10 ) and compensatory interest, which ‘arises … as damages for failure to fulfil an obligation without prior notice being given’ and whose ‘imposition is dependent on damage’. ( 11 ) According to that judgment, the claim for interest had to be refused, but for different reasons depending on whether it related to default interest or compensatory interest. In the former case, the refusal was necessary because there was ‘no provision for legal determination’ of default interest in Community law, ( 12 ) whilst in the latter case it was the absence of proof or even a mere allegation of damage that led to the refusal of the claim for compensatory interest.

45.

After delivering several judgments in which it drew the inferences, in terms of procedural consequences, from the distinction — in particular, with regard to the principle of the inadmissibility of new claims ( 13 ) in Commission v Brazzelli Lualdi and Others (C‑136/92 P, EU:C:1994:211), which concerned compensation for the damage suffered by officials or members of the staff of the European Union when their arrears of remuneration were calculated — the Court reaffirmed that distinction. In that regard, the Court noted that it had itself to distinguish between those two kinds of interest, holding inter alia that, because of matters of procedure peculiar to each of the cases brought before it, the claims for compensatory interest were inadmissible while those relating to default interest were admissible but unfounded. ( 14 ) It concluded that in those circumstances it was not possible to hold that the distinction had no basis in case-law. ( 15 )

46.

The judgment in Mulder and Others v Council and Commission (EU:C:2000:38), delivered in an action for damages, reaffirmed the now conventional rule that ‘a distinction must be drawn between default interest and compensatory interest’, ( 16 ) from which the Court inferred that a decision by the Court regarding default interest could not affect the decision to be made in respect of compensatory interest.

47.

The response given in those judgments has thus become established as a principle. Moreover, the definitions given in Campolongo v High Authority (EU:C:1960:35) and Mulder and Others v Council and Commission (EU:C:2000:38) have provided guidance on the distinction between compensatory interest and default interest.

48.

I will examine both kinds of interest in turn, beginning with compensatory interest.

49.

In actions for damages, compensatory interest is intended primarily to compensate for the damage caused by the fall in the value of money subsequent to the event causing the damage. Such interest therefore constitutes an instrument for re-evaluating damage which makes it possible to free the debtor’s obligation from currency fluctuations, establishing a parallel with a liability to make good. Its imposition translates the idea that, where damage is calculated on the basis of information relating to the time of the event causing the damage, its monetary expression must be updated to the date of judicial determination.

50.

It should be noted, however, that the ambit of compensatory interest actually embraces, more generally, all the adverse consequences resulting from the lapse of time between the occurrence of the event causing the damage and the date of its assessment by the court. The term may therefore also encompass the financial loss linked to the inability to make any profit from production ( 17 ) or the financial loss corresponding to the loss of interest incurred as a result of not being able to deposit the money due in a bank. ( 18 )

51.

As it represents a component of the damage, compensatory interest naturally has its basis in the principles governing compensation for damage within the framework of the non-contractual liability of the European Union. Under the principle that the damage suffered must be made good in its entirety, compensation ‘is intended so far as possible to provide restitution for the victim ... Accordingly, it is necessary to take account of inflation since the event occasioning loss’. ( 19 )

52.

Furthermore, the indemnifying function of compensatory interest has two main consequences.

53.

First, that function explains why the Court has made the grant of the interest subject to the conditions that must be met if the non-contractual liability of the European Union is to be incurred. Referring to settled case-law, the Court has stated that ‘in order for an applicant to be able to claim compensatory interest, he must establish non-contractual liability on the part of the defendant’. ( 20 ) It pointed out, however, that compensation for loss in the context of non-contractual liability ‘is intended so far as possible to provide restitution for the victim’ ( 21 ) and that, ‘[a]ccordingly, since the criteria giving rise to non-contractual liability are fulfilled, the adverse consequences resulting from the lapse of time between the occurrence of the event causing the damage and the date of payment of the compensation cannot be ignored ..., in so far as it is appropriate to take into account the fall in the value of money’. ( 22 )

54.

Second, that indemnifying function explains why compensatory interest is generally calculated with reference to the damage actually suffered by the applicant, thus taking account of the rate of inflation over the relevant period. This principle seems to be established even though the way in which it is applied in practice may vary.

55.

The relevant case-law of the Court shows that, as a general rule, ( 23 ) it calculates compensatory interest with reference to the rate of inflation even though that rate is regarded as a starting point from which the court seems to be able to depart within the scope of its discretion regarding the amount of damage. Thus, in the judgment in Mulder and Others v Council and Commission (EU:C:2000:38) delivered in Joined Cases C‑104/89 and C‑37/90, the Court held, in the first case, that the applicants were entitled to claim interest ‘corresponding to the rate of inflation in respect of the period from the date on which the damage arose to the date of delivery of the interlocutory judgment’ ( 24 ) and that, consequently, interest at the rate of 1.85% corresponding to data provided by Eurostat and the particulars given by the expert was payable on the compensation, after having also noted that such a rate seemed ‘reasonable and appropriate from a financial standpoint’. ( 25 ) It stated, in the second case, that, according to the expert’s report, the average rate of inflation during the relevant period was 1.2% and ruled that, in so far as it seemed ‘fair and reasonable’, the compensation payable should bear compensatory interest at the rate of 1.5%. ( 26 )

56.

The case-law of the General Court initially continued to follow those approaches.

57.

Accordingly, in Camar v Council and Commission (T‑260/97, EU:T:2005:283), the General Court took the view that the effects of inflation had to be taken into account for the purposes of calculating compensation due to a company established in Italy ‘using official data drawn up for [that State], by the competent national authority, from the date the damage occurred’. ( 27 )

58.

Agraz and Others v Commission (EU:T:2008:526) is another particularly relevant illustration of the principles based on case-law that govern the determination of compensatory interest. That case concerned the determination of the rate of compensatory interest payable by the Commission on damages equivalent to an increase in the amount of production aid, which had been incorrectly calculated. Whilst 84 applicant companies had reached an agreement with the Commission in that regard, setting the rate of compensatory interest on the basis of the rate fixed by the ECB for principal refinancing operations plus two percentage points, three other companies had not reached agreement with the Commission even though they requested the application of an identical interest rate. The General Court ultimately rejected their claim and ruled that the fall in the value of money was reflected in ‘the rate of annual inflation determined for the period in question by Eurostat ... in the Member State where [the companies concerned] are established’. ( 28 ) The grounds of the judgment that reject the plea alleging discriminatory treatment as between the companies which had reached agreement and the others are particularly informative. The General Court states that the former were in a different position from the latter, since there was nothing to show that they had suffered a loss in revenue because of being unable to invest the sums in question. ( 29 ) That judgment thus highlights the fact that setting the rate of compensatory interest at the rate fixed by the ECB for its main refinancing operations plus two percentage points would be justified only where the damage suffered is not limited to the loss in purchasing power connected with the fall in the value of money, but also includes an additional loss in revenue because it is not possible to invest the sums due.

59.

Whilst setting out the same principle, the judgment in Idromacchine and Others v Commission (EU:T:2011:641), which is extensively quoted in the judgment under appeal, nevertheless drew a different inference. After reaffirming the principle that inflationary effects ‘are reflected in the annual inflation rate for the period in question, as established by Eurostat ... in the Member State where the company is established’, ( 30 ) the General Court went on to conclude in the next paragraph, ( 31 ) seemingly by deductive reasoning, that the Commission must pay compensatory interest ‘at the rate fixed by the ECB for main refinancing operations, applicable during the period in question, increased by two percentage points’.

60.

The justification for such an approach is not inherently obvious. It must be stated that there is a missing link in the reasoning, namely the observation that the rate fixed by the ECB for its main refinancing operations, increased by two percentage points, reflected the rate of inflation in the Member State concerned for the period in question. It should be pointed out in this regard that the rate fixed by the ECB for its main refinancing operations constitutes an instrument of ECB monetary policy in so far as it permits that institution to influence the interest rate and the liquidity situation. It cannot, in any event, be seen as a reflection of the average rate of inflation in the European Union or in the euro zone.

61.

An analysis of the approaches identified in relation to the default interest regime reveals similar uncertainties.

62.

After initially refusing to grant default interest ‘as Community law makes no provision for legal determination of [such] interest’, ( 32 ) the Court subsequently affirmed the ‘admissible’ character of the ‘claim for interest’, ( 33 ) basing its approach not on legislation, but on the general principles common to the laws of the Member States, referred to expressly in the second paragraph of Article 215 of the EEC Treaty, which became the second paragraph of Article 288 EC and then the second paragraph of Article 340 TFEU. ( 34 )

63.

That principle, deduced from a comparative examination of the principles in force in the national legal orders, now has a basis in legislation, at least as regards European Union entitlements vis-à-vis any debtor, in Commission Regulation (EC, Euratom) No 2342/2002 of 23 December 2002 laying down detailed rules for the implementation of Council Regulation (EC, Euratom) No 1605/2002 on the Financial Regulation applicable to the general budget of the European Communities ( 35 ) and, more specifically, in Article 86 of that regulation, under which any amount receivable where the obligating event is not a public supply and service contract referred to in Title V of the regulation is to bear default interest at a rate corresponding to the rate applied by the ECB for its principal refinancing operations increased by 3.5 percentage points. ( 36 )

64.

It has consistently been held, on the basis of the idea that it is not possible to calculate default interest on a debt whose amount is not known, that the obligation to pay default interest can arise only where ‘the amount of the principal sum is certain or can at least be ascertained on the basis of established objective factors’. ( 37 )

65.

Accordingly, the amount of compensation due must be subject to default interest from the date of the judgment establishing the obligation to make good the damage. ( 38 )

66.

In most cases that date corresponds to the date of the document recording the creditor’s claim. Thus, a claim for default interest on costs can run only from the date of the order fixing those costs. ( 39 )

67.

Nevertheless, if the principal sum is neither certain nor ascertainable on the date of the judgment, default interest is payable only as from the date of delivery of the judgment regarding the payment of compensation. ( 40 )

68.

An important clarification should be made at this stage. The approach that I have just described, whereby interest is payable from the judgment establishing the obligation to make good the damage or regarding the payment of compensation, can be assumed to apply only to actions for damages, where the quantum of the principal claim is not ascertained in advance and is necessarily fixed by the court. In contrast, where the amount of the principal claim is ascertained in advance, the case-law generally rules that default interest is payable from the date on which the debtor was given formal notice to discharge his obligation. ( 41 ) Thus, in civil service disputes, default interest on sums owed under the rules laid down in the Staff Regulation is generally payable from the date of the complaint submitted under Article 90(2) of the Staff Regulations or, in the case of sums which become payable after that date, from the date on which they did so. ( 42 )

69.

As far as the rate of default interest is concerned, it is generally set, without any specific justification, at a fixed rate which, in the General Court’s recent case-law, is actually equivalent to the rate applied by the ECB for its main refinancing operations plus two percentage points. ( 43 )

70.

Several Advocates General, including Mr Mancini, ( 44 ) Sir Gordon Slynn, ( 45 ) Mr Van Gerven ( 46 ) and Mr Tesauro, ( 47 ) have attempted to provide guidance in this regard. They have put forward opposing solutions under which account is taken of a fixed rate, determined by the court with reference to ‘current financial realities’ ( 48 ) or, in contrast, of ‘the level of legal interest which is applied at the time when the Court gives its judgment in the Member State in which the applicants worked and in which they would therefore normally use or invest the compensation due to them’. ( 49 ) Whilst it is not necessary to examine this question any further, it must still be ascertained whether the approaches I have described above can be applied to interest payable on claims for repayment.

71.

The relevant case-law in this regard originates from the judgment of the General Court in Corus UK v Commission (EU:T:2001:249). That decision was delivered in a dispute following a judgment reducing the amount of a fine imposed by the Commission on an undertaking for infringement of the competition rules. The question raised concerned the amount of interest owed by the Commission on the sum that it had repaid, this being the difference between the amount of the fine paid and that set by the Court.

72.

The General Court held that, as it relates to one of the measures necessary to comply with the annulment decision, the obligation to repay all or part of the fine paid applied not only to the principal amount of the fine overpaid, but also to default interest on that amount as, it explained, ‘the payment of default interest [ ( 50 )] on the amount overpaid would seem to be an essential component of the Commission’s obligation to restore the applicant to his original position following a judgment of annulment, or a judgment exercising the Court’s unlimited jurisdiction, since complete reimbursement of a fine unduly paid cannot leave out of account factors, such as the effluxion of time, which may in fact reduce its value’. ( 51 )

73.

The General Court added that proper compliance with such a judgment therefore requires, in order fully to restore the creditor to the position in which it legally should have been, that account be taken that such restoration did not take place until after an appreciable lapse of time, during which the applicant did not have the use of the sums it had unduly paid.

74.

Regarding the rate of interest, the General Court pointed out, with reference to a principle generally accepted in the domestic law of the Member States prohibiting unjust enrichment, that it should in principle be equal to the ‘statutory or judicial rate of interest, without compounding’. ( 52 ) However, the General Court departed from that approach to take account of the circumstances of the case, in which the sum to be repaid had been invested by the Commission and had earned compound interest. ( 53 ) Lastly, taking account of both the enrichment of the Commission and the loss of the applicant undertaking, the General Court therefore awarded that undertaking a sum corresponding to the revenue collected by the Commission, together with default interest.

75.

The approach of recognising a right to default interest throughout the period during which the sums are not available has subsequently been followed again on a number of occasions. ( 54 )

76.

Even though there is still some uncertainty regarding the instruments available to EU law to combat the effects of time on the debt, I will draw from the abovementioned case-law two lessons which will be helpful in responding to the grounds of appeal.

77.

The first relates to the distinction between compensatory interest and default interest. Case-law unquestionably makes a very clear distinction between compensatory interest and default interest, but does not specify the criteria on the basis of which that distinction is made. The distinction is not self-evident, however, as interest always seems to play the same role in functional terms, that is, to make up for the loss suffered by the creditor, who has been deprived of the benefit of the amount owed. As we know, however, compensatory interest constitutes additional compensation for damages in so far as it compensates for the passing of time until the judicial assessment of the amount of damage, irrespective of any delay attributable to the debtor, whereas default interest offers a standard rate of compensation for the consequences of the delay in payment of the receivable by permitting the creditor to receive roughly what he would have obtained if he had invested the funds. It follows, in my view, that the distinction must necessarily have a limited scope and be reserved for actions for damages, in which it is justified by the need for the court to intervene to fix the amount of the principal claim which will bear interest.

78.

The second concerns the basis for the right to default interest following an annulment decision delivered by the Courts of the European Union. Case-law has established the principle that that right has its direct basis in the first paragraph of Article 266 TFEU and stems from the obligation for the defendant institution to take the necessary measures to reverse the effects of the annulled act and to restore the persons concerned to the position they were in beforehand.

79.

I infer from that case-law that the main concern of the Courts of the European Union in the case of an annulment must be to apply as strictly as possible the principle of restitutio in integrum, entailing a return to the status quo ante and ensuring that each party is restored to its original position without loss or gain.

80.

It must now be ascertained whether the judgment under appeal satisfies that requirement and whether it is consistent with the principles recalled above.

81.

The six grounds of appeal set out above are based on four sets of complaints, relating respectively to: (i) the basis for IPK’s financial claim; (ii) the distinction between compensatory interest and default interest; (iii) the grounds for the judgment; and (iv) the calculation of the interest.

82.

In paragraphs 34 and 41 of the judgment under appeal, the General Court stated that the contested decision was the sole legal basis for the principal financial claim at issue.

83.

It should be pointed out in that regard that it follows from the first paragraph of Article 264 TFEU, under which ‘[i]f the action is well founded, the Court of Justice ... shall declare the act concerned to be void’, that the annulment of an act by the Courts of the European Union leads that act to be eliminated from the legal order of the European Union. As the General Court has consistently put it, that elimination is ‘the very essence’ of the annulment. ( 55 ) In accordance with the general rule of the ex tunc effect of annulment, the effects of the act are in principle retrospectively rescinded unless the Court indicates, pursuant to the second paragraph of Article 264 TFEU, which of those effects are to be considered to be definitive.

84.

As the Commission rightly points out, because of its retrospective effect, the annulment of the decision of 13 May 2005 by the General Court revived the decision to award financial assistance and restored the parties to their position as it was at the time of that decision.

85.

Contrary to the arguments put forward by the General Court in paragraph 34 of the judgment under appeal, the fact that the reason for that annulment was the Commission’s failure to act within the relevant prescribed period does not limit the material scope of that annulment, which had retrospective effect. Consequently, by describing the contested decision as the sole legal basis for IPK’s claim, the General Court erred in law.

86.

However, it is settled law that complaints directed against grounds which are included purely for the sake of completeness, or grounds which do provide the necessary support for the operative part of the decision, cannot lead to the General Court’s judgment being set aside and are therefore ineffective ab initio. ( 56 )

87.

In the present case, it must be stated that the General Court’s reasoning in paragraph 34 of its judgment, which is merely a response to the pleas in law relating to bad faith, is included purely for the sake of completeness in relation to the reasoning in paragraph 33. As regards the reference to the legal basis for the principal financial claim at issue, made in paragraph 41 of the judgment under appeal, it does not ultimately provide the necessary support for the operative part of the judgment under appeal, pursuant to which default interest is payable as from 15 April 2011.

88.

Consequently, this first complaint should be rejected as ineffective ab initio.

89.

By the second ground of appeal, the Commission submits that the judgment under appeal fails to make a distinction between compensatory interest and default interest even though, according to the Commission, those two kinds of interest are very different in nature.

90.

This complaint does not seem to me to be well-founded. What is more, I believe that the judgment under appeal should, on the contrary, be criticised for distinguishing between the two kinds of interest, the General Court being wrong, to my mind, to characterise as ‘compensatory’ the interest that had already accrued before the judgment of 15 April 2011.

91.

In the circumstances of the present case, the annulment, by the judgment of 15 April 2011, of the decision of 13 May 2005 revived the decision awarding financial assistance and restored the parties to their position at the time when that decision was adopted.

92.

By virtue of the ex tunc effect of the annulment, the Commission was therefore required to pay a principal sum which was certain, ascertained and due and composed of the sums to be paid or repaid to IPK. IPK’s claim therefore attracted default interest payable, in relation to the sum to be paid, from the date of the claim made by IPK and, in relation to the sum to be repaid, from the date of its payment by IPK to the Commission.

93.

In that regard, I believe that although, in the case of the annulment of a decision withdrawing financial assistance, payment of default interest is nothing more than a necessary measure to ensure compliance with the judgment annulling a measure for the purposes of the first paragraph of Article 266 TFEU, the grant of compensatory interest falls outside the legal framework of the measure necessary to comply with the judgment and comes within the scope of the second paragraph of Article 266 TFEU, which refers to the general law on the non-contractual liability of the European Union. Although the General Court found that the Commission had acknowledged that, with effect from 15 April 2011, it owed a principal sum and compensatory interest, plus default interest, it is not apparent from the judgment under appeal that, by the contested decision, the Commission had recognised its liability and acknowledged that IPK was entitled to compensation.

94.

That being so, I take the view that the only complaint that can be raised against the General Court is that it did not reinstate in its proper category the interest already accrued prior to the judgment of 15 April 2011, without settling on the name used by the Commission. Consequently, the complaint concerning the lack of a distinction between compensatory interest and default interest must be rejected.

95.

By the third ground of appeal, the Commission submits that insufficient grounds are stated for the approach adopted by the General Court with regard to the standard increase in the rate of compensatory interest and the date from which default interest is payable.

96.

The response to this ground of appeal may give rise to uncertainty.

97.

The extent of the General Court’s obligation to state reasons must be assessed in the light of the content and the precision of the arguments relied on by the parties before it. It should be noted in this regard that, in its defence before the General Court, the Commission had asserted that the increase in the main refinancing rate by two percentage points was not justified in so far as it was contrary to case-law, involved the unjust enrichment of a claimant in bad faith and was therefore contrary to the principles of justice and equity.

98.

However, as can be seen from paragraphs 34, 36, 37 and 38 of the judgment under appeal, the General Court noted that such an increase was consistent with its case-law; that it should not depend on the actual rate of inflation; and that it arose from the need to prevent unjust enrichment, which would be contrary to the general principles of EU law.

99.

That reasoning responds point by point to the objections raised by the Commission and I am therefore inclined to suggest that the ground of appeal be rejected.

100.

There may nevertheless be some reluctance to recognise that the requirement to state reasons is satisfied by grounds in which reference is made to one or more previous decisions which do not themselves contain a statement of reasons. It should be pointed out that the judgments referred to by the General Court do not contain a specific explanation as to the reasons for which the rate of default interest was fixed at the interest rate applied by the ECB for its main refinancing operations plus two percentage points.

101.

In the event that the Court were to infer that the grounds for the judgment under appeal were inadequate, I would then be led to suggest that it substitute its own grounds in order to reject this ground of appeal.

102.

In my view, the logic of a standard rate for default interest means that a single interest rate should be set. The General Court’s choice regarding the fixing of that rate may be justified and approved in that it appears to reflect the average rate of statutory or judicial default interest applicable in the Member States. The question nevertheless arises as to whether in future it would be more consistent with the principle of equity and the requirements of legal certainty to align the rate of default interest on debts owed by the EU institutions with the rate of default interest applicable to debts in respect of which they are creditors, which, since the entry into force of Regulation No 2342/2002, is equivalent to the rate applied by the ECB for its main financing operations plus 3.5 percentage points.

103.

In any event, it would seem that the complaint relating to the grounds stated for the judgment under appeal must be rejected.

104.

The complaint concerning the default interest accrued after 15 April 2011 is raised as part of the third ground of appeal, which takes issue both with the very principle of the right to such interest and with the date from which it is payable.

105.

It should be noted that it has consistently been held that the jurisdiction of the Court of Justice in an appeal is confined to review of the findings of law on the pleas argued before the General Court, with the result that a plea put forward for the first time on appeal must be regarded as inadmissible. ( 57 )

106.

In this instance it must be stated that the Commission did not contest before the General Court IPK’s right to default interest and that it had even acknowledged at the hearing that it owed such interest from the date of delivery of the judgment of 15 April 2011.

107.

The complaints relating to the lack of a legal basis for the obligation to pay default interest and the error in law allegedly made in fixing the date from which that interest is payable are therefore new pleas and, as such, inadmissible.

108.

This complaint is expounded, from different perspectives, in the first and fifth grounds of appeal. The Commission submits that, by fixing a standard rate of compensatory interest at a rate equal to the interest rate applied by the ECB for its main refinancing operations plus two percentage points, the General Court failed to take account of the case-law of the Court of Justice, according to which such interest is designed to compensate for inflation, and acted in breach of the principles applicable in relation to unjust enrichment.

109.

For the reasons set out above, I believe that the interest that had already accrued before the judgment of 15 April 2011 was wrongly characterised as compensatory interest when, in fact, it constituted default interest.

110.

The complaint concerning the failure to take account of the case-law of the Court of Justice, according to which compensatory interest is designed to compensate for inflation, is therefore ineffective ab initio.

111.

The complaint alleging breach of the general prohibition of unjust enrichment does not appear to be well-founded.

112.

First, as I have already stated, I take the view that the right to default interest stems directly from the obligation to restore the applicant to his original position following the annulment and does not have its basis in unjust enrichment.

113.

Second, assuming that the principle of the prohibition of unjust enrichment may temper the automatic application of the right to default interest, I do not think that the Commission shows that the rate of interest adopted by the General Court would exceed the actual loss suffered by IPK and the actual enrichment of the Commission. As I have explained, the interest owed by the Commission is necessarily default interest and does not compensate for the loss in the value of the debt as a result of inflation, but offers a standard rate of compensation for loss of the benefit of that debt. I also cannot see why account should be taken of the interest rate applied to provisionally collected fines.

114.

I therefore propose that this complaint be rejected.

115.

By this complaint, set out in the third ground of appeal, the Commission submits that the judgment under appeal capitalised the interest by ordering that default interest accruing until full payment be fixed on the basis of the principal amount of the debt plus such compensatory interest as had already accrued.

116.

As I have already stated, I believe that the interest owed by the Commission is default interest, whether applied before or after the judgment of 15 April 2011.

117.

Such interest does not therefore constitute supplementary damage in addition to the principal debt which itself bears interest. The capitalisation of interest already accrued prior to 15 April 2011 and ordered by the General Court in the light of its purportedly compensatory nature would therefore appear to stem from an error in law.

118.

However, the question must be asked whether default interest can be capitalised. In this regard, I have doubts as to the validity of the claim that capitalisation of default interest cannot, in principle, be permitted. ( 58 ) According to the general principles common to the laws of the Member States, most systems accept capitalisation of interest, albeit with a wide variety of arrangements, provided that it has been requested. ( 59 )

119.

The question arises whether the Courts of the European Union should have a measure of discretion in this regard and be permitted to rule on the capitalisation of default interest where this seems consistent with the principle of equity.

120.

However, in the present case, I cannot see any specific justification for the capitalisation of interest to be granted to IPK.

121.

Accordingly, the complaint seems to be well founded.

122.

Under Article 61 of the Statute of the Court of Justice, ‘[i]f the appeal is well-founded, the Court of Justice shall quash the decision of the General Court’ and may ‘itself give final judgment in the matter, where the state of the proceedings so permits, or refer the case back to the General Court for judgment’.

123.

In the present case, the Court can readily give final judgment in the matter, ruling that default interest must be calculated solely on the basis of the principal amount of the debt.

124.

Under Article 184(2) of the Rules of Procedure of the Court of Justice, where the appeal is well-founded and the Court itself gives final judgment in the case, the Court is to make a decision as to costs. Under Article 138(1) of the Rules of Procedure, which applies to appeal proceedings pursuant to Article 184 of those Rules, the unsuccessful party is to be ordered to pay the costs if they have been applied for in the successful party’s pleadings. However, pursuant to Article 138(3), where each party succeeds on some and fails on other heads, the Court may order that the costs be shared or that the parties are to bear their own costs.

125.

In the present case, in view of the fact that both parties have failed to some extent, I consider it appropriate that each party be directed to bear its own costs in the present appeal proceedings.

126.

In the light of the foregoing, I suggest that the Court: