(Agriculture – Sugar – Production levies – Annulment and declaration of invalidity in part of Regulation (EC) No1193/2009

ORDER OF THE GENERAL COURT (Sixth Chamber)

9 April 2013 (*)

(Agriculture – Sugar – Production levies – Annulment and declaration of invalidity in part of Regulation (EC) No1193/2009 after bringing of the action – No need to adjudicate)

In Case T‑86/10,

British Sugar plc, established in London (United Kingdom), represented initially by K. Lasok QC, G. Facenna, Barrister, W.Robinson, P.Doris and D. Das, Solicitors, then by Lasok, Facenna, Robinson and Das,

applicant,

supported by

Kingdom of Spain, represented initially by F. Díez Moreno, then by A.Rubio González, abogados del Estado,

and by

Republic of Lithuania, represented by R. Janeckaitė and R.Krasuckaitė, acting as Agents,

interveners,

v

European Commission, represented by K. Banks and P. Rossi, acting as Agents,

defendant,

supported by

Republic of Latvia, represented by K. Drēviņa and K. Krasovska, acting as Agents,

and by

United Kingdom of Great Britain and Northern Ireland, represented initially by S. Behzadi-Spencer and S. Hathaway, and subsequently by Behzadi-Spencer and A. Robinson, acting as Agents,

interveners,

APPLICATION for annulment of Commission Regulation (EC) No1193/2009 of 3 November 2009 correcting Regulations (EC)No1762/2003, (EC)No1775/2004, (EC)No1686/2005, (EC)No164/2007 and fixing the production levies in the sugar sector for marketing years 2002/2003, 2003/2004, 2004/2005, 2005/2006 (OJ 2009 L321, p.1),

THE GENERAL COURT (Sixth Chamber),

composed of H. Kanninen (Rapporteur), President, S. Soldevila Fragoso and G.Berardis, Judges,

Registrar: E. Coulon,

makes the following

Order

Background to the dispute

1Council Regulation (EC) No1260/2001 of 19 June 2001 on the common organisation of the markets in the sugar sector (OJ 2001 L178, p.1), repealed by Council Regulation (EC) No318/2006 of 20February 2006 on the common organisation of the markets in the sugar sector (OJ 2006 L58, p.1), provided a self-financing system for the sugar sector by means of production levies.

2Pursuant to recital 11 in the preamble to Regulation No1260/2001, the common organisation of the markets in the sugar sector was based, first, on the principle that producers should bear full financial responsibility for the losses incurred each marketing year from disposing of that part of Community production under quota which is surplus to the Community’s internal consumption and, secondly, on a differentiation of price guarantees for disposal reflecting the production quota allocated to each undertaking.

3Under Articles 10 and 11 of Regulation No1260/2001, the system of quotas involved the setting, for each producing region in the European Community, of quantities to be produced, each Member State being obliged to allocate those quantities, in the form of production quotas (quota A and quota B), to the various producer undertakings established in its territory. Those quantities related to a specific marketing year, which began on 1 July of one year and expired on 30 June of the following year. The sugar produced by an undertaking under quotas A and B was called respectively ‘A sugar’ and ‘B sugar’.

4According to recital 13 in the preamble to Regulation No1260/2001, the principle of financial responsibility was to be assured by producers being charged a basic production levy on all production of A and B sugar, limited, however, to 2% of the intervention price for white sugar, and a B levy charged on the production of B sugar up to a limit of 37.5% of that price. Since capping the levies in that manner meant that in some marketing years sugar production was not fully self-financing, it was necessary, in those cases, to charge an additional levy.

5Recital 14 of the preamble to Regulation No1260/2001 stated that, in the interests of equal treatment, the additional levy was to be calculated for each undertaking on the basis of its share in the revenue generated by the production levies which it had paid for the marketing year in question.

6The procedure for the setting of levies, in particular the additional levy, was laid down by Regulation No1260/2001 and by Commission Regulation (EC) No314/2002 of 20 February 2002 laying down detailed rules for the application of the quota system in the sugar sector (OJ 2002 L50, p.40).

7Pursuant to Article 8 of Regulation No314/2002, the production levies were established:

–by Commission Regulation (EC) No1762/2003 of 7 October 2003 fixing the production levies in the sugar sector for the 2002/2003 marketing year (OJ 2003 L254, p.4);

–by Commission Regulation (EC) No1775/2004 of 14 October 2004 setting the production levies in the sugar sector for the 2003/2004 marketing year (OJ 2004 L316, p.64);

–by Commission Regulation (EC) No1686/2005 of 14 October 2005 setting the production levies and the coefficient for the additional levy in the sugar sector for the 2004/2005 marketing year (OJ 2005L271, p.12);

–by Commission Regulation (EC) No164/2007 of 19 February 2007 fixing the production levies in the sugar sector for the 2005/2006 marketing year (OJ 2007L51, p.17).

8By judgment of 8 May 2008 in Joined Cases C‑5/06 and C‑23/06 to C‑36/06 Zuckerfabrik Jülich and Others [2008] ECR I‑3231, the Court of Justice declared Regulations No1762/2003 and No1775/2004 to be invalid.

9By order of 6 October 2008 in Joined Cases C‑175/07 to C‑184/07 SAFBA, not published in the ECR, the Court of Justice declared Regulation No1686/2005 to be invalid.

10Following delivery of the judgment in Zuckerfabrik Jülich and Others and of the order in SAFBA, on 3 November 2009 the Commission of the European Communities adopted Regulation No1193/2009, correcting Regulation (EC) No1762/2003, Regulation (EC) No1775/2004, Regulation (EC) No1686/2005, and Regulation (EC) No164/2007, and setting the production levies in the sugar sector for the 2002/2003, 2003/2004, 2004/2005 and 2005/2006 marketing years (OJ 2009 L321, p.1; ‘the contested regulation’).

11By judgment of 29 September 2011 in Case T‑4/06 Poland v Commission the General Court annulled Article 2 of Regulation No1686/2005, as amended by Article 3 of Regulation No1193/2009.

12By judgment of 27 September 2012 in Joined Cases C‑113/10, C‑147/10 and C‑234/10 Zuckerfabrik Jülich and Others [2012] ECR I‑0000, the Court of Justice declared Regulation No1193/2009 to be invalid, with the exception of Article 3 thereof, already annulled as a result of the annulment of Article 2 of Regulation No1686/2005 ordered by the General Court in T‑4/06 Poland v Commission, cited above.

Procedure and forms of order sought by the parties

13By application lodged at the Registry of the General Court on 17 February 2010, the applicant, British Sugar plc, brought this action, in which it claims that the Court should:

–annul the contested regulation;

–order the Commission to pay the costs and other expenses.

14By a separate document lodged at the Registry of the Court on 12 May 2010, the Commission raised a plea of inadmissibility under Article 114 of the Rules of Procedure of the General Court. The Commission contends that the Court should:

–dismiss the action as being inadmissible;

–order the applicant to pay the costs.

15The Kingdom of Spain and the Republic of Lithuania sought leave to intervene, respectively on 25 May and 22 June 2010, in support of the applicant’s forms of order. Those requests for leave to intervene were notified to the parties, who lodged observations. The requests were granted by order of 29 September 2010 of the President of the Eighth Chamber of the Court.

16The Republic of Latvia and the United Kingdom of Great Britain and Northern Ireland sought leave to intervene, respectively on 9 and 21 June 2010, in support of the Commission’s forms of order. Those requests for leave to intervene were notified to the parties, who lodged observations. The requests were granted by order of 29 September 2010 of the President of the Eighth Chamber of the Court.

17The applicant and the Republic of Lithuania lodged their observations on the plea of inadmissibility by documents lodged at the Registry of the Court, respectively on 25 August and 18 November 2010. By letter dated 25 October 2010 the Kingdom of Spain waived the right to lodge observations. Neither the Republic of Latvia nor the United Kingdom lodged observations.

18On 15 March 2011, following the applicant’s request for the stay of proceedings, the President of the Eighth Chamber of the General Court, having heard the other parties, ordered that proceedings in this case be stayed until the Court of Justice delivered its final judgment in Cases C‑113/10 Zuckerfabrik Jülich, C‑147/10 British Sugar and C‑234/10 Tereos.

19The composition of the Chambers of the General Court having been changed, the Judge-Rapporteur was assigned to the Sixth Chamber, to which the present case was therefore allocated.

20Since the judgment pending which proceedings in this case were stayed was delivered by the Court of Justice on 27 September 2012 in Zuckerfabrik Jülich and Others, cited above, the parties were asked to express their views on the implications of that judgment for this case.

21By letter dated 25 October 2012 the applicant submitted, in essence, that, in view of the Court of Justice’s judgment of 27 September 2012 in Zuckerfabrik Jülich and Others, ‘the substance of the proceedings before the General Court’ in this action ‘has been fully addressed’ and that there was therefore no longer any need to adjudicate on the action. By letter lodged at the Registry of the General Court on the same date, the Commission also stated that the action was now devoid of purpose and that there was no longer any need to adjudicate on it.

22By letter of 23 October 2012 the United Kingdom expressed the view, in essence, that there was no longer any need to adjudicate on this action.

23By letters of 24 October and 19 December 2012 the Kingdom of Spain indicated its agreement to the applicant’s request for an order of no need to adjudicate.

24The Republic of Latvia and the Republic of Lithuania did not lodge observations within the period required.

Law

25Under Article 113 of the Rules of Procedure, the General Court may at any time, of its own motion, after hearing the parties, declare that the action has become devoid of purpose and that there is no need to adjudicate on it. Article 114(3) of those Rules provides that, unless the General Court decides otherwise, the remainder of the proceedings is to be oral.

26In the present case the Court considers itself sufficiently informed by the documents in the file to give a decision without taking further steps in the proceedings.

27The applicant submits that ‘the substance of the proceedings before the General Court’ in this action ‘has been fully addressed’ by the Court of Justice’s judgment of 27 September 2012 in Zuckerfabrik Jülich and Others, and consequently the action is now devoid of purpose, a position supported by the Commission.

28According to settled case-law, an applicant’s interest in bringing proceedings must, in the light of the purpose of the action, exist at the time at which the action is brought, failing which it will be inadmissible. That objective of the dispute must continue, like the interest in bringing proceedings, until the final decision, failing which there will be no need to adjudicate, which presupposes that the action must be liable, if successful, to procure an advantage to the party bringing it (see Case C‑362/05P Wunenburger v Commission [2007] ECR I‑4333, paragraph 42 and case-law cited).

29It must be recalled that, by this action, the objective of the applicant’s application for the annulment of the contested regulation is to ensure that it no longer produces any effects.

30On the one hand, the General Court, by its judgment in Poland v Commission, cited above, annulled Article 2 of Regulation No1686/2005, as amended by Article 3 of Regulation No1193/2009 and, on the other, the Court of Justice, by its judgment of 27 September 2012 in Zuckerfabrik Jülich and Others, declared Regulation No1193/2009 to be invalid, with the exception of Article 3 thereof, previously annulled as a result of the annulment of Article 2 of Regulation No1686/2005 ordered by the General Court in Poland v Commission.

31In accordance with settled case-law, measures of the European Union institutions produce legal effects until such time as they are withdrawn, annulled in an action for annulment or declared invalid following a reference for a preliminary ruling or a plea of illegality (see Case C‑475/01 Commission v Greece [2004] ECR I‑8923, paragraph 18 and case-law cited; and order of 14 February 2012 in Case T‑305/08 Italy v Commission, paragraph 22).

32In such circumstances, the Court must hold that a declaration of the invalidity of the contested regulation, with the exception of Article 3 thereof, produces, in this case, effects which are equivalent to the effect of a judgment ordering annulment, since those effects, as a general rule and unless there is a limitation expressly stated in the judgment declaring invalidity, apply retroactively as from the date on which the rule interpreted entered into force, in the same way as those of a judgment ordering annulment (see, to that effect, Case C‑228/92 Roquette Frères [1994] ECR I‑1445, paragraphs 17 and 19, and Case C‑2/06 Kempter [2008] ECR I‑411, paragraph 35). Accordingly, a judgment annulling that now invalid regulation, with the exception of Article 3 thereof, would not entail, having regard to the applicant’s objective in bringing its action for annulment, any additional legal consequences beyond the consequences of the declaration of invalidity.

33It follows from the foregoing, without there being any need to examine the Commission’s arguments on the inadmissibility of the action, that the action is now devoid of purpose and that there is no longer any need to adjudicate on it, as the applicant, the Commission, the United Kingdom and the Kingdom of Spain have themselves stated.

Costs

34Article 87(6) of the Rules of Procedure provides that, where a case does not proceed to judgment, the costs are to be in the discretion of the General Court.

35The applicant submits in essence that the Commission should be ordered to bear the costs, because the regulation which is contested by this action has been declared by the Court of Justice to be invalid.

36The Commission considers, on the other hand, that since the action is inadmissible the applicant should bear the costs.

37It must first be observed that, since the action is now devoid of purpose, the General Court need no longer give a ruling on the admissibility of the action. It must then be recalled that the reason why there is no need to adjudicate is the annulment of Article 2 of Regulation No1686/2005, as amended by Article 3 of Regulation No1193/2009, and the declaration of the invalidity of Regulation No1193/2009, with the exception of Article 3 thereof, previously annulled as a result of the annulment of Article 2 of Regulation No1686/2005. Further, irrespective of whether the action was or was not admissible, the fact that the action is now devoid of purpose is a direct consequence of the Commission having adopted a regulation the unlawfulness of which prompted the bringing of this action. It is therefore appropriate to order the Commission to bear the costs.

38Pursuant to Article 87(4) of the Rules of Procedure, the Kingdom of Spain, the Republic of Latvia, the Republic of Lithuania and the United Kingdom, as interveners, are to bear their own costs.

On those grounds,

THE GENERAL COURT (Sixth Chamber)

hereby orders:

1.There is no need to adjudicate on this action.

2.The European Commission shall bear its own costs and pay the costs of British Sugar plc.

3.The Kingdom of Spain, the Republic of Latvia, the Republic of Lithuania, and the United Kingdom of Great Britain and Northern Ireland shall bear their own costs.

Luxembourg, 9 April 2013.

* Language of the case: English.