Case T‑48/16

Sigma Orionis SA

v

European Commission

(Arbitration clause — Seventh Framework Programme for research, technological development and demonstration activities (2007-2013) and ‘Horizon 2020 — the Framework Programme for Research and Innovation’ — Suspension of payments and termination of grant contracts following a financial audit — Action seeking to obtain payment of the amounts owed by the Commission in the context of the implementation of the grant contracts — Non-contractual liability)

Summary — Judgment of the General Court (First Chamber), 3 May 2018

1. Judicial proceedings — General Court seised under an arbitration clause — Contracts concluded under a specific research, technological development and demonstration programme — Action of a beneficiary seeking to obtain payment of the amounts owed by the Commission — Lack of a decision by the Commission to terminate the applicant’s participation in the programme — No legal interest in bringing proceedings — Inadmissibility

   (Art. 272 TFEU)

2. Judicial proceedings — Absolute bar to proceeding — To be considered of the Court's own motion

   (Rules of Procedure of the General Court, Art. 129)

3. Judicial proceedings — Application initiating proceedings — Formal requirements — Identification of the subject-matter of the dispute — Brief summary of the pleas in law on which the application is based — Unambiguous wording of the form of order sought by the applicant

   (Rules of Procedure of the General Court, Art. 76(d))

4. European Anti-Fraud Office (OLAF) — Investigations — Final investigation report and recommendations — Presumption of validity in the absence of a decision of the EU courts to the contrary — Declaration of invalidity of the report by a national court — Irrelevant

   (Art. 272 TFEU; European Parliament and Council Regulation No 883/2013, Art. 3)

5. European Anti-Fraud Office (OLAF) — Investigations — On-the-spot checks and inspections — Respect of the rules and practices of the Member State concerned — Reservation in favour of the application of EU law

   (European Parliament and Council Regulation No 883/2013, Art. 3(3); Council Regulation No 2185/96, Art. 6(1), third para.)

6. European Anti-Fraud Office (OLAF) — Investigations — On-the-spot checks and inspections — Obligation for OLAF’s investigators to be accompanied by national police officers — Scope — No right of the persons concerned by an investigation to resist those operations and to be informed of that right

   (Council Regulation No 2185/96, Arts 4 and 9)

7. European Anti-Fraud Office (OLAF) — Investigations — Obligation to respect fundamental rights — Scope

   (European Parliament and Council Regulation No 883/2013, Recital 51; Council Regulation No 2185/96, Recital 12)

8. Fundamental rights — Charter of Fundamental Rights of the European Union — Level of protection — Fundamental rights guaranteed by the constitution of a Member State — Possibility for a Member State to rely on those rights against the application of an EU measure in conformity with the Charter — Not included

   (Charter of Fundamental Rights of the European Union, Art. 53)

9. EU law — Principles — Proportionality — Scope — Compliance by the EU institutions in connection with measures forming part of a contractual context — Obligation of the parties to a contract to perform it in good faith

   (Art. 5(4) TEU)

10. EU budget — EU financial assistance — Obligation on the beneficiary to comply with the conditions for grant of the assistance — Financing covering only expenses actually incurred — No demonstration that the expenses actually incurred — Ineligible expenses

    (Art. 317 TFEU)

11. Judicial proceedings — Measures of inquiry — Expert's report — Discretion of the General Court

    (Rules of Procedure of the General Court, Arts 88 and 91(e))

12. Non-contractual liability — Conditions — Unlawfulness — Injury — Causal link — One of the conditions not satisfied — Claim for compensation dismissed in its entirety

    (Art. 340, second para. TFEU)

13. Non-contractual liability — Conditions — Unlawfulness — Infringement of a contractual provision — Not included — Exception — Coexisting applications to establish contractual and non-contractual liability

    (Art. 340, second para. TFEU)

1.  See the text of the decision.

   (see paras 47, 51, 52)

2.  See the text of the decision.

   (see para. 48)

3.  See the text of the decision.

   (see para. 54)

4.  The EU courts alone have jurisdiction to determine that an act of the European Union is invalid. Therefore, a report by the European Anti-Fraud Office (OLAF) continues to be lawful in the EU legal order in so far as it has not been invalidated by the EU judicature, irrespective of the fact that a national court held such a report to be invalid in criminal proceedings brought in the Member State concerned against an undertaking that received grant funding from the European Union.

   Accordingly, although, pursuant to the judgment of that national court, OLAF’s report cannot be used in criminal proceedings brought in that Member State, the fact remains that in administrative proceedings under EU law circumscribed by contractual provisions, the Commission is entitled to rely on that report in order to take the measures terminating the agreements concluded with the undertaking and suspending payments, in so far as it had not been invalidated by the EU judicature. Moreover, the proceedings before the national court cannot have any bearing on an action brought by that undertaking before the EU courts, since, in so far as that action concerns the compatibility of measures taken by the Commission with grant agreements and the rules made applicable by them, it falls within the exclusive jurisdiction of the Court under Article 272 TFEU read in conjunction with the arbitration clause set out in those agreements.

   (see paras 62, 63, 66, 70)

5.  According to Article 3(3) of Regulation No 883/2013 concerning investigations conducted by the European Anti-Fraud Office (OLAF), and the third subparagraph of Article 6(1) of Regulation No 2185/96 concerning on-the-spot checks and inspections carried out by the Commission in order to protect the European Communities’ financial interests against fraud and other irregularities, on-the-spot checks and inspections are carried out by OLAF in accordance with the rules and practices applicable in the Member State concerned, subject to the EU law in force. It follows from those provisions that the backdrop to the on-the-spot checks and inspections carried out by OLAF is characterised by the application of national law. However, national law must, on any view, yield to EU law whenever required by Regulation No 883/2013 or Regulation No 2185/96.

   (see paras 78, 79)

6.  The presence of national officials when on-the-spot checks and inspections are conducted by the European Anti-Fraud Office (OLAF0 is governed by Regulation No 2185/96 concerning on-the-spot checks and inspections carried out by the Commission in order to protect the European Communities’ financial interests against fraud and other irregularities, and is required under that regulation in two circumstances. First, their presence is necessary where an operator resists a check or inspection by OLAF. Secondly, the presence of national officials must be accepted if those officials ask to be present.

   Moreover, it is true that Regulation No 2185/96 envisages in Article 9 the situation where an economic operator resists on-the-spot checks and inspections by OLAF and, in those circumstances, states that the assistance of the national authorities might be required and that the operations they conduct must be in accordance with national law. However, that provision does not give economic operators the right to resist OLAF’s planned operations and, a fortiori, be informed about the existence of such a right; it merely states that, in the event of resistance, they may be forced to accept those operations and that national law enforcement authorities may be called upon for that purpose under the conditions laid down by national law.

   (see paras 86, 94, 95, 110)

7.  Fundamental rights are designed to preside over the exercise of the powers conferred on the EU institutions, including in contractual matters, in the same way as they apply to measures taken by the Member States within the scope of EU law. The result of that general application of fundamental rights is that the Commission may not, on the basis of information gathered by OLAF in breach of fundamental rights, suspend payments due to an economic operator or terminate the agreements linking it to such an operator. Under Regulation No 883/2013 concerning investigations conducted by the European Anti-Fraud Office (OLAF), investigations carried out by OLAF must comply with fundamental rights. That obligation follows from recital 51 of that regulation. Regulation No 2185/96 concerning on-the-spot checks and inspections carried out by the Commission in order to protect the European Communities’ financial interests against fraud and other irregularities states, in recital 12, that on-the-spot checks and inspections are carried out with due regard to the fundamental rights of the persons concerned.

   (see paras 102, 103, 105, 106)

8.  See the text of the decision.

   (see paras 115, 116)

9.  As enshrined in Article 5(4) TEU, the principle of proportionality is a general principle of Union law under which the EU institutions may not exceed the limits of what is appropriate and necessary for attaining the objective pursued in the actions they undertake. That principle is intended to regulate all the means of action used by the European Union, whether contractual or non-contractual. In the context of the performance of contractual obligations, respect for that principle contributes to the more general obligation of the parties to a contract to perform it in good faith.

   (see paras 127, 128)

10.  See the text of the decision.

    (see paras 138, 139, 154)

11.  See the text of the decision.

    (see para. 155)

12.  See the text of the decision.

    (see paras 160, 161)

13.  The infringement of a contractual provision by an institution cannot in itself establish the non-contractual liability of that institution with regard to one of the parties with which it concluded the contract containing that provision. In such a case, the unlawful conduct attributable to the institution is purely contractual in nature and stems from its undertaking as a contracting party and not from any other status, such as its capacity as an administrative authority. Consequently, in those circumstances, the claim of infringement of a contractual provision in support of an application to establish non-contractual liability must be declared ineffective.

    However, it cannot be ruled out that the contractual and the non-contractual liability of an EU institution may coexist in respect of one of the parties with which it has concluded a contract. The nature of unlawful conduct attributable to an institution which causes damage and may be the subject of a claim seeking compensation for non-contractual damage is not predefined. Assuming that such coexisting liability for the institutions exists, it would be possible only if the unlawful conduct attributed to the institution in question constitutes a breach of not only a contractual obligation, but also of a general obligation incumbent on it, and that unlawful conduct in respect of the general obligation has caused damage other than damage stemming from the improper performance of the contract.

    (see paras 162-164)