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You are here: BAILII >> Databases >> Court of Justice of the European Communities (including Court of First Instance Decisions) >> Glencore Grain v Commission (Law governing the institutions) [1998] EUECJ C-404/96P (05 May 1998)
URL: http://www.bailii.org/eu/cases/EUECJ/1998/C40496P.html
Cite as: [1998] EUECJ C-404/96P, ECLI:EU:C:1998:196, EU:C:1998:196, [1998] ECR I-2435
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IMPORTANT LEGAL NOTICE - The source of this judgment is the web site of the Court of Justice of the European Communities. The information in this database has been provided free of charge and is subject to a Court of Justice of the European Communities disclaimer and a copyright notice. This electronic version is not authentic and is subject to amendment.

JUDGMENT OF THE COURT

5 May 1998 (1)

(Emergency assistance given by the Community to the States of the former Soviet Union - Loan - Documentary credit - Action for annulment - Admissibility - 'Directly concerned')

In Case C-404/96 P,

Glencore Grain Ltd, formerly trading as Richco Commodities Ltd, a company incorporated under Bermudian law, established at Hamilton (Bermuda), represented by M.M. Slotboom, P.V.F. Bos and J.G.A. van Zuuren, of the Rotterdam Bar, with an address for service in Luxembourg at the Chambers of Marc Loesch, 11 Rue Goethe,

appellant,

APPEAL against the judgment of the Court of First Instance of the European Communities (Third Chamber) of 24 September 1996 in Case T-509/93 Richco v Commission [1996] ECR II-1181, seeking to have that judgment set aside

the other party to the proceedings being:

Commission of the European Communities, represented by B.J. Drijber and N. Khan, of its Legal Service, acting as Agents, with an address for service in

Luxembourg at the office of Carlos Gómez de la Cruz, of its Legal Service, Wagner Centre, Kirchberg,

THE COURT,

composed of: G.C. Rodríguez Iglesias, President, C. Gulmann, H. Ragnemalm, M. Wathelet (Rapporteur) and R. Schintgen (Presidents of Chambers), G.F. Mancini, J.C. Moitinho de Almeida, P.J.G. Kapteyn, J.L. Murray, D.A.O. Edward, J.-P. Puissochet, G. Hirsch, P. Jann, L. Sevón and K.M. Ioannou, Judges,

Advocate General: A. La Pergola,


Registrar: D. Louterman-Hubeau, Principal Administrator,

having regard to the Report for the Hearing,

after hearing oral argument from the parties at the hearing on 8 October 1997,

after hearing the Opinion of the Advocate General at the sitting on 16 December 1997,

gives the following

Judgment

  1. By application lodged at the Registry of the Court of Justice on 23 December 1996, Glencore Grain Ltd, formerly trading as Richco Commodities Ltd (hereinafter 'Glencore' or 'the appellant') brought an appeal under Article 49 of the EC Statute of the Court of Justice against the judgment of the Court of First Instance in Case T-509/93 Richco v Commission [1996] ECR II-1181, (hereinafter 'the contested judgment'), dismissing as inadmissible its action for the annulment of the Commission's decision of 12 July 1993 addressed to the State Export-Import Bank of Ukraine.

    Legal background

  2. On 16 December 1991, the Council adopted Decision 91/658/EEC granting a medium-term loan to the Soviet Union and its constituent Republics (OJ 1991 L 362, p. 89).

  3. Article 1(1) thereof provides:

    'The Community shall grant to the USSR and its constituent Republics a medium-term loan of not more than ECU 1 250 million in principal, in three successive instalments and for a maximum duration of three years, in order to enable agricultural and food products and medical supplies ... to be imported.'

  4. Article 2 of Decision 91/658 provides that for those purposes:

    '... the Commission is hereby empowered to borrow, on behalf of the European Economic Community, the necessary resources that will be placed at the disposal of the USSR and its constituent Republics in the form of a loan'.

  5. Article 3 provides:

    'The loan referred to in Article 2 shall be managed by the Commission.'

  6. Article 4 further provides:

    '1. The Commission is hereby empowered to finalise, in concert with the authorities of the USSR and its constituent Republics ..., the economic and financial conditions to be attached to the loan, the rules governing the provision of funds and the necessary guarantees to ensure loan repayment.

    ...

    3. Imports of products financed by the loan shall be effected at world market prices. Free competition shall be guaranteed for the purchase and supply of products, which shall meet internationally recognised standards of quality.'

  7. On 9 July 1992 the Commission adopted Regulation (EEC) No 1897/92 laying down detailed rules for the implementation of a medium-term loan to the Soviet Union and its constituent Republics [in accordance with] Council Decision 91/658/EEC (OJ 1992 L 191, p. 22).

  8. Under Article 2 of that regulation:

    'The loans shall be concluded on the basis of agreements entered into between the Republics and the Commission which shall include, as conditions for disbursement of the loan, the requirements set out in Articles 3 to 7.'

  9. Article 4 of Regulation No 1897/92 states that:

    '1. The loans shall only finance the purchase and supply under contracts that have been recognised by the Commission as complying with the provisions of Decision 91/658/EEC and with the provisions of the agreements referred to in Article 2.

    2. Contracts shall be submitted to the Commission for recognition by the Republics or their designated financial agents.'

  10. Article 5 sets out the conditions of recognition pursuant to Article 4. These include the two following conditions:

    '(1) The contract was awarded following a procedure guaranteeing free competition ...

    (2) The contract offers the most favourable terms of purchase in relation to the price normally obtained on the international markets.'

  11. On 13 July 1992 the European Economic Community and the Ukraine, as successor in title to the USSR, signed a Memorandum of Understanding under Regulation No 1897/92, on the basis of which an agreement was to be set up under which the European Community was to grant to the Ukraine the loan provided for in Decision 91/658. It was provided that the EEC as lender would grant to the Ukraine, as borrower, through the intermediary of its financial agent, the State Export-Import Bank of Ukraine ('the SEIB'), a medium-term loan of the principal sum of ECU 130 million for a maximum term of three years.

  12. Paragraph 6 of the Memorandum provides:

    'The proceeds of the loan, less commissions and costs incurred by the EEC, shall be disbursed to the borrower and applied, according to the terms and conditions of the Loan Agreement, exclusively to cover irrevocable documentary credits issued by the borrower in international standard form pursuant to delivery contracts provided that such contracts and documentary credits have been approved by the Commission of the European Communities as complying with the Council decision of 16 December 1991 and the present Memorandum of Understanding.'

  13. Paragraph 7 sets out the conditions to which recognition of the conformity of the contract is subject. It states in particular that the Ukrainian organisations, when choosing suppliers in the Community, should obtain at least three offers from undertakings which are independent of one another.

  14. On 13 July 1992 the Commission and the SEIB signed the loan agreement provided for in Regulation No 1897/92 and the Memorandum of Understanding (hereinafter 'the loan agreement'). That agreement sets out in precise terms the machinery for the disbursement of the loan. It establishes a facility to which recourse may be had during the drawing period (20 August 1992 to 20 April 1993), with a view to the advance of sums authorised for payment of goods supplied.

    15. Facts and procedure before the Court of First Instance

  15. In the contested judgment the Court of First Instance made the following findings:

    '7 In response to an informal invitation to tender issued in May 1993 for the purchase of wheat, Ukrimpex, an organization acting on behalf of Ukraine, received seven tenders, including that of the applicant. Ukrimpex accepted that tender, which was the only one guaranteeing delivery of the wheat by 15 June 1993, even though it was not the most advantageous in terms of price. Under the contract, which was concluded on 26 May 1993, the applicant undertook to supply 40 424 tonnes of wheat at a price of ECU 137.47 per tonne, CIF free out one safe Ukrainian Black Sea port, with guaranteed shipment by 15 June 1993.

    8 Following notification of the contract by the SEIB to the Commission for approval by the latter, and after the personal intervention of Mr Demianov, Vice-Prime Minister of Ukraine, who requested approval of the contract with the minimum of delay, the Commission stated in a letter of 10 June 1993 addressed to Mr Demianov that it was unable to approve the contract submitted to it by the SEIB. The Commission considered that that contract did not offer the best purchase terms, particularly as regards the price, which was regarded as exceeding the acceptable level. The Commission stated in the same letter that it was prepared, in view of the seriousness of the food situation, to open the Community stocks for immediate delivery to Ukraine of 50 000 tonnes of wheat at a price which could be as much as US $30 per tonne lower than that proposed by the applicant. That delivery formed the subject of a fresh invitation to tender in which the applicant's tender was accepted.

    9 On 11 June 1993 Ukrimpex informed the applicant of the Commission's refusal decision and requested it to defer the transportation of the goods. The applicant replied that it had already chartered a vessel. Thus nearly 40 000 tonnes of grain were in fact delivered.

    10 By letter of 12 July 1993 addressed to the SEIB and signed by the Commissioner, Mr R. Steichen, the Commission officially informed the SEIB of its refusal to approve the contract which had been submitted to it. Mr Steichen stated in that regard: "The Commission can only recognise delivery contracts if such contracts fulfil all the criteria listed in Council Decision 658/91, Commission Regulation 1897/92 and the Memorandum of Understanding. Furthermore, Clause 5.1(b) of the Loan Agreement concluded with Ukraine on 13 July 1992 provides that the Commission shall issue Notices of Confirmation at its 'absolute discretion'." He continued as follows: "The Commission concluded that the contract submitted with your Approval Request of 31 May did not satisfy all criteria stipulated and that it must, therefore, decline to exercise its discretion to issue a Notice of Confirmation." He stated that the reason for that refusal was that the price

    agreed was well above the level that the Commission regarded as acceptable and that this was one of the conditions for the credit operation laid down in Article 4(3) of Decision 91/658 and Article 5(2) of Regulation No 1897/92. He concluded from this: "In these circumstances, although I appreciate that Ukraine's requirements are urgent, the Commission, taking all the circumstances into account, cannot accept that the contract submitted offers the most favourable terms of purchase ..."

    ...

    11 It was in those circumstances that, by application lodged at the Registry of the Court of First Instance on 10 September 1993, the applicant brought the present action.

    12 By document lodged at the Registry on 30 November 1993 the Commission raised an objection of inadmissibility.'

  16. The contested judgment indicates that the applicant requested the Court to:

    '- annul the decision, or at least the act, of 12 July 1993 addressed by the Commission to the SEIB;

    - order the Commission to pay the costs' (paragraph 15 of the contested judgment).

  17. The Commission raised an objection of inadmissibility, in which it contended that the Court should:

    '- dismiss the action as inadmissible;

    - order the applicant to pay the costs' (paragraph 16 of the contested judgment).

    The contested judgment

    The objection concerning the absence of an actionable measure

  18. The Court of First Instance dismissed the objection of inadmissibility in so far as it was based on the absence of an actionable measure for the purposes of the fourth paragraph of Article 173 of the Treaty on the following grounds:

    '25 It is settled case-law that an action for annulment may be brought against all measures adopted by the institutions, whatever their nature or form, which are intended to have legal effects (judgment of the Court of Justice in Case 22/70 Commission v Council [1971] ECR 263).

    26 The Court finds in the present case that, as is apparent from the loan agreement, to which the SEIB is a party, where the Commission issues a notice of confirmation, the SEIB, to whom it is addressed, is entitled to issue a disbursement request. Conversely, the SEIB does not have that right if the Commission refuses to issue a notice of confirmation.

    27 Consequently, an act by which the Commission refuses to recognise a contract as being in conformity with the Community financing conditions must be regarded as producing legal effects in relation to the SEIB. It therefore constitutes an actionable measure within the meaning of the first paragraph of Article 173 of the Treaty.'

    The objection that the act which the applicant is seeking to have annulled is not of direct concern to it

  19. The Court of First Instance considered that the decision sent on 12 July 1993 by the Commission to SEIB (hereinafter the 'contested decision') was not of direct concern to the applicant within the meaning of the fourth paragraph of Article 173 of the Treaty and that, consequently, the application for annulment of the contested decision must be declared inadmissible on the following grounds:

    '39 According to the fourth paragraph of Article 173 of the Treaty, any natural or legal person may institute proceedings against a decision which, although in the form of a decision addressed to another person, is of direct and individual concern to the former.

    20. 40 In the present case, inasmuch as the contested measure takes the form of a letter addressed by the Commission to the SEIB on 12 July 1993, it is necessary to determine whether that measure is of direct and individual concern to the applicant.

    41 First of all, the Commission has not denied that the applicant is individually concerned. Having regard to the circumstances of the case, the Court considers that only the question whether the contested decision is of direct concern to the applicant need be examined.

    42 The Community rules and the agreements concluded between the Community, Ukraine and the SEIB provide for a division of powers between the Commission and the agent appointed by Ukraine to arrange the purchase of wheat. It is for that agent - in the present case, Ukrimpex - to select the other contracting party by means of an invitation to tender and to negotiate and conclude the contract. The Commission's role is merely to verify that the conditions for Community financing are fulfilled and, where necessary, to acknowledge, for the purposes of disbursement of the loan, that such contracts are in conformity with the provisions of

    Decision 91/658 and with the agreements concluded with Ukraine and the SEIB. It is not for the Commission, therefore, to assess the commercial contract with reference to any other criteria.

    43 It follows that the undertaking to which a contract is awarded has a legal relationship only with the party with whom it contracts, namely Ukrimpex, which is authorised by Ukraine to conclude contracts for the purchase of wheat. The Commission, for its part, has legal relations only with the borrower and its financial agent, the SEIB, which notifies it of commercial contracts so that their conformity can be recognised, and which is the addressee of the Commission's decision in that regard.

    44 The action of the Commission does not therefore affect the legal validity of the commercial contract concluded between the applicant and Ukrimpex; nor does it modify the terms of the contract, such as the prices agreed by the parties. Thus, irrespective of the Commission's decision not to recognise the agreements as being in conformity with the applicable provisions, the contract of 26 May 1993 remains validly concluded on the terms agreed between the parties.

    45 The fact that the Commission was in contact with the applicant or with Ukrimpex cannot affect that assessment of the legal rights and obligations which each of the parties involved has under the applicable legislation and contractual agreements. Moreover, as regards the admissibility of the application for annulment, the exchanges alleged by the applicant do not show that the Commission went beyond its proper role, which is to recognise, or to decline to recognise, the conformity of the contract. This is a fortiori the position as regards the alleged contacts between the Commission and subsidiaries of the applicant in relation to contracts which are distinct from the contract with which the present case is concerned.

    46 Whilst it is true that, on receiving from the Commission a decision finding that the contract is not in conformity with the applicable provisions, the SEIB cannot issue a documentary credit capable of being covered by the Community guarantee, nevertheless, as stated above, the decision affects neither the validity nor the terms of the contract concluded between the applicant and Ukrimpex. The Commission's decision does not take the place of a decision taken by the Ukrainian national authorities, since the Commission may only examine the conformity of contracts for the purposes of Community financing.

    47 Furthermore, as regards the direct applicability of Regulation No 1897/92, on which the applicant relies, the Court observes that Article 5 of that regulation lists on a non-exhaustive basis - as is apparent from the use of the adverbial phrase "in particular" - the conditions which contracts must fulfil in order to qualify for Community financing; in addition, Article 4(1)

    of the regulation expressly refers to the provisions of the agreements concluded between the Ukraine and the Commission. As regards the loan agreement, which sets out in precise terms the detailed rules pursuant to which Community financing is granted, Article 5.1 thereof refers to the absolute discretion of the Commission. In those circumstances, the applicant's argument does not appear to be well founded.

    48 Lastly, in order to establish that the contested decision is of direct concern to it, the applicant cannot rely on the presence in the commercial contracts of a suspensory clause making the performance of the contract and payment of the contract price subject to acknowledgement by the Commission that the criteria for disbursement of the Community loan are fulfilled. Such a clause is a link which the contracting parties decide to make between the contract concluded by them and a contingent future event: their agreement will be binding only if the latter occurs. The admissibility of an application under the fourth paragraph of Article 173 of the Treaty cannot, however, be made dependent on the intention of the parties. The applicant's argument must therefore be rejected.'

  20. In the light of those considerations, the Court of First Instance dismissed the action as inadmissible and ordered the applicant to pay the costs.

    The appeal

  21. In support of its appeal, Glencore raises two pleas: infringement of the fourth paragraph of Article 173 of the Treaty and contradictory reasoning vitiating the judgment.

    The first plea

  22. The first plea is divided into two limbs.

  23. In the first limb the appellant criticises the Court of First Instance for departing from the settled case-law of the Court of Justice, and of the Court of First Instance itself, in holding that the applicant was not directly concerned by the contested decision.

  24. In the first place, it submits that the Court of First Instance erred in its view that the contested decision did not take the place of a decision taken by the Ukrainian authorities (paragraph 46 of the contested judgment). It refers in that regard to Article 4 of Regulation No 1897/92 and to the terms of the supply contract entered into by it with Ukrimpex which provided for a method of payment based on the Community loan, forthcoming only if the Commission approved the contract; and those terms were justified by the deplorable financial situation in which the

    Ukrainian authorities found themselves which would not have enabled them to honour their payment obligations in the absence of Community financing.

  25. Thus, under the contract, it is for Ukrimpex 'to obtain all necessary agreements such as approval of the relevant contract by the Commission of the European Communities' and 'payment [is] to be effected for each shipment of the goods in accordance with the terms of an EEC loan agreement ...'.

  26. In order to honour their undertakings to Glencore, the Ukrainian authorities were therefore entirely dependent, in fact and in law, on recognition by the Commission for the purposes of Community financing. Accordingly, when the Commission in its letter of 10 June 1993 refused to recognise the conformity of the contract entered into on 26 May 1993, its decision, it is submitted, took the place of that of the Ukrainian authorities to pay the agreed price.

  27. Secondly, the Court of First Instance failed to take account of the fact that in the absence of Community financing the Ukrainian authorities had no margin of discretion available to them as regards their obligation to pay Glencore (see Joined Cases 41/70 to 44/70 International Fruit Company and Others v Commission [1971] ECR 411, Case 62/70 Bock v Commission [1971] ECR 897, and Case 11/82 Piraiki-Patraiki and Others v Commission [1985] ECR 207).

  28. Thirdly, the Court of First Instance departed from the case-law of the Court of Justice and the Court of First Instance on the admissibility of actions brought by a 'potential recipient of the aid' against Commission decisions on State aid.

  29. It observes in that connection that, in the same way as a Member State which is contemplating the grant of aid may agree with a potential recipient that it should be granted only if the Commission approves the aid notified, the Ukrainian authorities were contractually bound to pay to Glencore the new price if the Commission approved that price for the purposes of Community financing. Similarly, the position of Glencore, which during the recognition procedure by the Commission was in continuous contact with the latter, is analogous to the situation of a potential recipient of aid. The Court of First Instance erred in attaching no importance to this fact at paragraph 45 of the contested judgment.

  30. In the second limb of its plea the appellant submits that the Court of First Instance erred in deciding that the existence of the suspensory clause affecting performance of the contract and payment of the price did not mean that Glencore was directly affected by the contested decision (paragraph 48 of the contested judgment). On the contrary, the fact that the contract between Glencore and Ukrimpex had to be approved by the Commission in order to be eligible for Community financing and that its performance was therefore dependent, in fact and in law, on that approval was the very reason for including the suspensory clause.

  31. The Commission challenges the admissibility of the appeal on the ground that nearly all the arguments put forward merely reproduce arguments developed by the appellant before the Court of First Instance. It has consistently been held that an appeal which merely repeats or reproduces verbatim pleas and arguments already raised at first instance does not satisfy the requirements of Article 51 of the EC Statute of the Court of Justice and of Article 112(1)(c) of its Rules of Procedure.

  32. As regards the substance, the Commission notes that the appellant relies on the fact that the supply contract entered into with Ukrimpex contains a suspensory clause. Irrespective of the differing interpretations to which that clause could give rise, however, a refusal on the part of the Commission to approve Community financing could not mean that the financial obligations under the supply contract should not be complied with.

  33. Furthermore, the Commission considers that an individual's right of action against an act of a Community institution cannot be made to depend on private-law arrangements entered into by that individual with a third party or by action taken by one of the parties or by both parties in connection with the performance of the contract.

  34. The Commission goes on to observe that the Ukrainian authorities were not exercising prerogatives of public law under the aegis of a Community policy. Far from implementing a Community act, their decision to enter into the supply contract, and then to refuse to pay the price difference subsequently agreed, only has effects in private law in the legal relationship between Ukrimpex and the appellant. That, it is contended, is a major difference in relation to the situation in International Fruit Company, cited above. In the latter case, the national implementing body, to which the Commission's contested decision had been addressed, was merely an intermediary between the Commission and the claimant, and had no room for manoeuvre.

  35. As to the case-law on State aid relied on by the appellant, the Commission observes that, where it declares aid granted to an undertaking to be incompatible with the common market, that undertaking is always directly concerned by such a decision, irrespective of any provision which may have been inserted into the contract entered into with it at the behest of the Member State.

  36. As regards the objection of inadmissibility raised by the Commission, the appeal clearly states which aspects of the contested judgment are criticised and the legal arguments which specifically support the appeal (see, in particular, the order of 26 April 1993 in Case C-244/92 P Kupka-Floridi v Economic and Social Committee [1993] ECR I-2041, paragraph 9). Accordingly, the fact that those arguments were also raised at first instance cannot entail their inadmissibility.

  37. The objection of inadmissibility must therefore be dismissed.

  38. Under the fourth paragraph of 173 of the Treaty, any natural or legal person may institute proceedings for the annulment of a decision addressed to that person or of a decision which, although in the form of a decision addressed to another person, is of direct and individual concern to the former.

  39. In the present case the contested decision was formally addressed to the SEIB.

  40. The Court of First Instance dealt only with the question whether the applicant was directly concerned by the contested decision, since the Commission had not denied that the applicant was individually concerned.

  41. The Court's case-law shows that, for a person to be directly concerned by a Community measure, the latter must directly affect the legal situation of the individual and leave no discretion to the addressees of that measure who are entrusted with the task of implementing it, such implementation being purely automatic and resulting from Community rules without the application of other intermediate rules (see to that effect, in particular, International Fruit Company, cited above, paragraphs 23 to 29, Case 92/78 Simmenthal v Commission [1979] ECR 777, paragraphs 25 and 26, Case 113/77 NTN Toyo Bearing Company and Others v Council [1979] ECR 1185, paragraphs 11 and 12, Case 118/77 ISO v Council [1979] ECR 1277, paragraph 26, Case 119/77 Nippon Seiko and Others v Council and Commission [1979] ECR 1303, paragraph 14, Case 120/77 Koyo Seiko and Others v Council and Commission [1979] ECR 1337, paragraph 25, Case 121/77 Nachi Fujikoshi and Others v Council [1979] ECR 1363, paragraph 11, Joined Cases 87/77, 130/77, 22/83, 9/84 and 10/84 Salerno and Others v Commission and Council [1985] ECR 2523, paragraph 31, Case 333/85 Mannesmann-Röhrenwerke and Benteler v Council [1987] ECR 1381, paragraph 14, Case 55/86 Arposol v Council [1988] ECR 13, paragraphs 11 to 13, Case 207/86 Apesco v Commission [1988] ECR 2151, paragraph 12, and Case C-152/88 Sofrimport v Commission [1990] ECR I-2477, paragraph 9).

  42. The same applies where the possibility for addressees not to give effect to the Community measure is purely theoretical and their intention to act in conformity with it is not in doubt (see to that effect Case 62/70 Bock v Commission [1971] ECR 897, paragraphs 6 to 8, Case 11/82 Piraiki-Patraiki and Others v Commission [1985] ECR 207, paragraphs 8 to 10, and Joined Cases C-68/94 and C-30/95 France and Others v Commission [1998] ECR 0000, paragraph 51).

  43. The Court of First Instance should therefore have determined whether the contested decision alone affected the appellant's legal situation, since the competent Ukrainian authorities had no discretion to forgo Community financing and have the contract performed in accordance with the conditions agreed between the parties in the addendum but repudiated by the Commission.

  44. The Court of First Instance merely found that the decision of the Commission, 'which may only examine the conformity of contracts for the purposes of

    Community financing', had not affected 'the legal validity of the commercial contract concluded between the applicant and Ukrimpex' and did not modify 'the terms of the contract, such as the prices agreed by the parties', and that the 'the contract which the parties signed on 26 May 1993 [remained therefore] validly concluded on the terms agreed between them' (paragraphs 44 and 46). It added that the presence in the contract of a 'suspensory clause making performance of the contract and payment of the contract price subject to acknowledgment by the Commission that the criteria for disbursement of the Community loan are fulfilled' resulted from the intention of the parties themselves, on which the admissibility of an action under the fourth paragraph of Article 173 could not be made to depend (paragraph 48).

  45. However, the findings of the Court of First Instance contain objective, relevant and consistent grounds for concluding that the appellant was directly concerned by the contested decision.

  46. The contested judgment indicates that the SEIB, acting as financial agent for the Ukraine, participated, in accordance with the Memorandum of Understanding and the loan agreement which binds it to the Commission, in the implementation of the Community financing of imports into the Ukraine of agricultural and food products and medical supplies, as provided for in Decision 91/658.

  47. Moreover, it appears that the validity of the supply contract at issue was subject to the suspensory condition of recognition by the Commission of conformity of the contract with the conditions for disbursement of the Community loan and no payment could be made if the bank designated in the contract did not receive a due undertaking for reimbursement issued by the Commission.

  48. That detail is corroborated by the socio-economic context in which the supply contract was concluded: as stated in the third and fourth recitals in the preamble to Council Decision 91/658, the economic and financial situation of the recipient republic was critical, and the food and medical situation was deteriorating. In those circumstances it was legitimate to take the view that the supply contract was entered into only subject to the obligations assumed by the Community, in its capacity as lender, in regard to the SEIB, once the commercial contracts had been recognised as being in conformity with Community rules.

  49. In those circumstances the insertion into the contract of that suspensory clause, which was certainly the intention of the parties, merely reflected, as was emphasised by the Advocate General in point 69 of his Opinion, the fact that the supply contract was subject for financial reasons to the conclusion of the loan agreement between the Community and the republic in question, since payment for supplies of cereals could be made only from financial resources made available to the purchasers by the Community by means of the opening of irrevocable documentary credits.

  50. Ukrimpex's option to perform the supply contracts in accordance with the price conditions repudiated by the Commission and thus to forgo Community financing was purely theoretical and, in the light of the facts found by the Court of First Instance, was therefore not sufficient to prevent the appellant from being directly concerned by the contested decision.

  51. It is thus clear that the contested decision whereby the Commission, in the exercise of its powers, refused to approve the addendum to the supply contract between Ukrimpex and Glencore deprived the latter of any real possibility of performing the contract awarded to it, or of obtaining payment for supplies made thereunder.

  52. Consequently, although the contested decision was addressed to the SEIB, as financial agent of the Ukraine, it directly affected the appellant's legal situation.

  53. The Court of First Instance therefore erred in law in taking the view, in the light of the facts as found by it, that the appellant was not directly concerned, within the meaning of the fourth paragraph of Article 173 of the Treaty, by the contested decision.

  54. The appeal is therefore well founded in so far as it relates to the dismissal as inadmissible of the action for annulment by the contested judgment.

    The second plea

  55. In view of the foregoing there is no need to examine the second plea.

    56. Referral back of the case to the Court of First Instance

  56. Under the first paragraph of Article 54 of the EC Statute of the Court of Justice, 'if the appeal is well founded, the Court of Justice shall quash the decision of the Court of First Instance. It may itself give final judgment in the matter, where the state of the proceedings so permits, or refer the case back to the Court of First Instance for judgment.'

  57. In the present case, the Court is of the view that it is not in a position to give judgment in the present state of the proceedings and that the case must therefore be referred back to the Court of First Instance for judgment on the substance.

    58. On those grounds,

    THE COURT

    hereby:

    1. Annuls the judgment of the Court of First Instance of 24 September 1996 in Case T-509/93 Richco v Commission inasmuch as it dismisses as inadmissible the action for annulment brought by Glencore Grain Ltd, formerly trading as Richco Commodities Ltd.

    2. Refers the case back to the Court of First Instance for judgment on the substance.

    3. Reserves costs.

    Rodríguez Iglesias
    Gulmann
    Ragnemalm

    Wathelet

    Schintgen
    Mancini

    Moitinho de Almeida

    Kapteyn
    Murray

    Edward

    Puissochet
    Hirsch

    Jann

    Sevón
    Ioannou

    Delivered in open court in Luxembourg on 5 May 1998.

    R. Grass G.C. Rodríguez Iglesias

    Registrar President

    1: Language of the case: Dutch.

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