Keywords
Summary

Keywords

1. Commission — Powers — Implementation of the Community budget — Decision to effect set-off between a debt owed to the Commission and sums payable by way of Community contributions — Preliminary obligation of the Commission to ascertain that the Community funds will be used for the purposes prescribed and that the activities which justified the granting of the funds will be completed in spite of the proposed set-off — None

2. Community law — General principles of law — Set-off — Out-of-court set-off between claims governed by separate legal orders — Obligation to satisfy the requirements of both legal orders concerned — Decision to effect set-off between a debt owed to the Commission and sums payable by way of Community contributions — Failure to satisfy the requirements of the legal order governing one of the claims concerned — Illegality

Summary

1. On the assumption that it is actually authorised by Community law on certain conditions, out-of-court set-off, as a procedure for payment and a mechanism effecting the simultaneous extinction of two mutual claims, cannot be subject to a prior obligation on the part of the Commission, in the context of the implementation of the Community budget, to ascertain that the use of Community funds for the purposes prescribed and the completion of the activities which justified the granting of the funds concerned will remain assured in spite of the proposed set-off. Accordingly, a Commission decision to effect set-off between a debt owed to it and sums payable by way of Community contributions cannot be annulled on the ground that the Commission ignored that prior obligation.

see paras 29, 33

2. The Community rules may give rise, as between an authority and a trader, to reciprocal claims which are an appropriate subject for set-off. In so far as it extinguishes two obligations simultaneously, an out-of-court set-off between claims governed by two separate legal orders can take effect only in so far as it satisfies the requirements of both legal orders concerned. More specifically, any set-off of that nature makes it necessary to ensure, as regards each of the claims concerned, that the conditions relating to set-off provided for in the relevant legal order are not disregarded. In that regard, it is immaterial that one of the legal orders concerned is the Community legal order and the other the legal order of one of the Member States. In particular, the fact that both legal orders are equally competent to govern any set-off cannot be called in question on the basis of considerations linked with the primacy of Community law.

Accordingly, a Commission decision to effect a set-off between a debt owed to it and sums payable by way of Community contributions, which was adopted even though the rules of the legal order governing one of the claims concerned clearly precluded the extinction of that claim by way of the set-off effected, must be annulled as being legally unfounded, without there being any need to examine it from the aspect of the rules governing the other claim.

see paras 56, 61-62, 64