Keywords
Summary

Keywords

1 Social policy - European Social Fund - Financial assistance for vocational training - Decision to reduce aid initially granted - Reduction made for failure to observe conditions laid down in the decision of approval - Breach of the principle of the protection of legitimate expectations - None - Reduction greater than that made by a previous decision that was annulled for breach of an essential procedural requirement - Reduction prompted by the results of re-examination of the file - Breach of the prohibition of reformatio in pejus - None

(Council Regulation No 2950/83, Art. 6(1))

2 Actions for annulment - Judgment granting annulment - Effects - Adoption of implementing measures - Reasonable period for doing so - Replacement by a new decision of an annulled Commission decision reducing financial assistance from the European Social Fund granted for vocational training measures

(EC Treaty, Art. 176)

3 Procedure - Costs - Costs which the other party has unreasonably or vexatiously caused to incur - Lack of diligence on the part of the Commission in dealing with a case concerning the grant of aid from the European Social Fund

(Rules of Procedure of the Court of First Instance, second subpara. of Article 87(3))

Summary

4 It is clear from Article 6(1) of Regulation No 2950/83 that the grant of assistance from the European Social Fund is conditional upon compliance by the beneficiary with the conditions set out in the decision of approval. In the event of a breach of those conditions, the beneficiary cannot legitimately expect payment of the full amount awarded in the decision of approval by invoking the principle of the protection of legitimate expectations. 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, that principle being the corollary of the principle of legal certainty, which requires that legal rules be clear and precise and aims to ensure that situations and legal relationships governed by Community law remain foreseeable.

An undertaking cannot therefore invoke that principle, or that of the prohibition of reformatio in pejus, in order to contest the legality of a Commission decision adopted after the annulment of an earlier decision that concerned the same matter but was tainted by a significant formal defect, in that the Member State concerned was not given an opportunity to comment, which, in view of the finding, after re-examination of the file, that the approval conditions were contravened, reduces the assistance initially granted. The fact that the reduction ultimately made is greater than that imposed in the first decision is not in any way unlawful. The Commission was required, by virtue of the principles of sound administration, legality and equal treatment, to adopt, after the re-examination made necessary by the annulment, a decision which took account of all the information available to it at the time of its adoption, which might, in particular because it included the comments of the national authorities which were not available earlier, be different from that which led to the adoption of the decision that was annulled.

5 The obligation of a Community institution to give effect to a judgment of annulment delivered by the Community judicature, which derives from Article 176 of the Treaty, calls for the adoption of a number of administrative measures and is not normally possible immediately: the institution concerned is allowed a reasonable period within which to comply with the judgment. The question whether or not the period was reasonable depends on the nature of the measures to be taken and the attendant circumstances and in particular the various stages involved in the procedure for adoption of the decision. The relevant period for assessment of the propriety of a decision replacing an annulled decision is not, as in the case of a withdrawal of aid on the initiative of the institution, the lapse of time between the adoption of the first decision and that of the second but the period between delivery of the judgment of annulment and the date of adoption of the new decision.

A period of 38 months between delivery of a judgment annulling a Commission decision reducing assistance from the European Social Fund for vocational training measures and the adoption of the decision replacing it, although long, cannot be regarded as unreasonable since, as doubts had arisen as to whether the information used in the first decision was correct and sufficiently complete, it was necessary to reconstitute the file, a task which, in this case, involved organizing an inspection visit to the Member State, analysing the information obtained and consulting the national authorities on a number of occasions.

In any case, a delay in the process of complying with a judgment is not liable in itself to affect the validity of the measure at issue since, if the measure were annulled merely because it was belated, it would be impossible to adopt a valid measure: the measure intended to replace the annulled measure could not be less belated than the one it replaced.

6 It is appropriate to apply the second subparagraph of Article 87(3) of the Rules of Procedure of the Court of First Instance and to order the Commission, even though it was successful, to pay all the costs in circumstances where that institution must be regarded as having contributed by its conduct to the emergence of the dispute since, having been called on to adopt a decision concerning a final payment claim in respect of financial assistance from the European Social Fund, it initially adopted a decision reducing the aid without first satisfying itself that the information used was correct and sufficiently complete and without discharging its obligation to consult the national authorities and, then, at a later stage, after annulment of that decision by the Court, decided, after a long delay, to reduce that aid still further.