Joined Cases T-551/93, T-231/94, T-232/94, T-233/94 and T-234/94

Industrias Pesqueras Campos SA and Others

v

Commission of the European Communities

‛Community financial aid — Application for compensation in the event of non-payment — Application for annulment of decisions withdrawing aid’

Judgment of the Court of First Instance (Fourth Chamber), 24 April 1996   II-250

Summary of the Judgment

1. Community law — Principles — Protection of legitimate expectations — Legal certainty — Protection refused to person committing a manifest infringement of the rules in force — Primacy of the principle of legality over that of legal certainty justified by the need to maintain equal treatment — Financial aid granted for the construction of new fishing vessels withdrawn owing to irregularities committed by the recipients

   (Council Regulation No 4028/86)

2. Acts of the institutions — Statement of reasons — Obligation — Scope

   (EC Treaty, Art. 190)

3. Community law — Principles — Proportionality — Financial aid granted for the construction of new fishing vessels withdrawn owing to the recipients' non-compliance with the financial conditions for the investment Uid down in the decisions granting the aid — Infringement — None

   (Council Regulation No 4028/86, Art. 44(1))

4. Actions for annulment of measures — Pleas in law — Misuse of powers — Concept

1.  The principle of the protection of legitimate expectations cannot be relied upon by an undertaking which has committed a manifest infringement of the rules in force. Whilst it is important to ensure compliance with requirements of legal certainty which protect private interests, those requirements must be balanced against requirements of the principle of legality which protect public interests, and precedence must be accorded to the latter when the maintenance of irregularities would be likely to infringe the principle of equal treatment.

   Undertakings which have benefited from Community financial aid granted under Regulation No 4028/86 on Community measures to improve and adapt structures in the fisheries and aquaculture sector for the purpose of building new fishing vessels cannot therefore rely, in disputing the validity of Commission decisions ordering withdrawal of that aid and repayment of sums already paid, on infringement of an alleged legitimate expectation if they have quite knowingly committed flagrant breaches of the rules in force, consisting in particular in the repeated submission, both in application forms for aid and in certificates drawn up with a view to its payment, of declarations not reflecting the true position.

   Nor can they rely on an infringement of the principle of legal certainty based on the excessive duration of the verification procedure, since, even if the passage of a significant period of time during which the Commission takes no steps in relation to an undertaking and the adoption at the end of such a period of a measure affecting the position of that undertaking may be capable of infringing the principle of legal certainty, the consequences to be drawn depend on the context. In the case of undertakings which have deliberately adopted an attitude which contravenes the rules in force, the passage of a period of 16 months, or 23 months, during which the Commission took no external steps cannot be regarded as unreasonable.

   Furthermore, to maintain aids granted to the undertakings concerned, or already paid to them, when the granting and payment of those aids are tainted with flagrant irregularities, would undermine equality of treatment of all applications made to the Commission for Community subsidies of projects for the construction of new fishing vessels.

2.  The statement of reasons for a measure, required by Article 190 of the Treaty, must disclose clearly and unequivocally the reasoning of the Community authority which adopted it, so as to make the persons concerned aware of the reasons for the measure and thus enable them to defend their rights, and so as to enable the Community judicature to exercise its supervisory jurisdiction. The extent of the obligation to state reasons must be assessed in the light of its context.

3.  Given the very nature of financial aid granted by the Community, the obligation to comply with the financial conditions for the investment as indicated in the decision granting the aid constitutes one of the essential duties of the recipient, in the same way as the obligation actually to carry out the investment, and is therefore a condition for the award of Community aid.

   In the case, therefore, of undertakings which have received subsidies under Regulation No 4028/86 on Community measures to improve and adapt structures in the fisheries and aquaculture sector and which, in their application for payment of aid in particular, have declared an amount not reflecting the true position, it is not an infringement of the principle of proportionality for the Commission to choose the sanction of withdrawing the aid granted from amongst the sanctions provided for in Article 44(1) of that regulation in the event of non-compliance with the conditions imposed on recipients of Community financial aid.

   Given the seriousness of the recipients' failure to fulfil their obligations, it was reasonable for the Commission to consider that any other sanction would be likely to invite fraud, since intending recipients would be tempted to inflate the investment amount stated in their application for the granting of aid in order to obtain greater Community financial assistance, at the risk only of having that aid reduced by the amount of the overvaluation.

4.  The concept of misuse of powers has a precisely defined scope in Community law and refers to cases where an administrative authority has used its powers for a purpose other than that for which they were conferred on it. A decision may amount to a misuse of powers only if it appears, on the basis of objective, relevant and consistent evidence, to have been taken for purposes other than those stated.