Court of Justice of the European Communities (including Court of First Instance Decisions)

JUDGMENT OF THE COURT

5 October 2000 (1)

(Appeal - Officials - Dispute between the Community and its servants - Appeal by an institution which did not intervene at first instance - Inadmissible)

In Case C-434/98 P,

Council of the European Union, represented by J.-P. Jacqué, Director in its Legal Service, and D. Canga Fano and T. Blanchet, of its Legal Service, acting as Agents, with an address for service in Luxembourg at the office of A. Morbilli, General Counsel, Legal Affairs Directorate of the European Investment Bank, 100 Boulevard Konrad Adenauer,

appellant,

supported by

Kingdom of Spain, represented by N. Díaz Abad, Abogado del Estado, acting as Agent, with an address for service in Luxembourg at the Spanish Embassy, 4-6 Boulevard Emmanuel Servais,

intervener on appeal,

APPEAL against the judgment of the Court of First Instance of the European Communities (Fifth Chamber) of 30 September 1998 in Case T-164/97 Busacca and Others v Court of Auditors [1998] ECR-SC I-A-565 and II-1699, seeking to have that judgment set aside,

the other parties to the proceedings being:

Silvio Busacca and Others, officials of the Court of Auditors of the European Communities, represented by G. Vandersanden and L. Levi, of the Brussels Bar, with an address for service in Luxembourg at Société de Gestion Fiduciaire, Boîte Postale 585,

applicants at first instance,

and

Court of Auditors of the European Communities, represented by P. Giusta, of its Legal Service, acting as Agent, with an address for service in Luxembourg at the seat of the Court of Auditors, 12 Rue Alcide de Gasperi, Kirchberg,

defendant at first instance,

THE COURT,

composed of: G.C. Rodríguez Iglesias, President, J.C. Moitinho de Almeida, D.A.O. Edward, L. Sevón and R. Schintgen (Presidents of Chambers), C. Gulmann, A. La Pergola, J.-P. Puissochet (Rapporteur), H. Ragnemalm, M. Wathelet and V. Skouris, Judges,

Advocate General: S. Alber,

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 11 April 2000,

after hearing the Opinion of the Advocate General at the sitting on 6 June 2000,

gives the following

Judgment

1. By application lodged at the Registry of the Court of Justice on 1 December 1998, the Council of the European Union brought an appeal pursuant to Article 49 of the EC Statute of the Court of Justice and the corresponding provisions of the ECSC and Euratom Statutes against the judgment of the Court of First Instance of the European Communities of 30 September 1998 in Case T-164/97 Busacca and Others v Court of Auditors [1998] ECR-SC I-A-565 and II-1699 ('the contested judgment), in which the Court of First Instance annulled the decisions of the Court of Auditors of 16 September 1996 rejecting the requests of certain members of staff that it enter their names on the list of persons having expressed an interest in being the subject of a measure terminating their service as provided for by Council Regulation (EC, Euratom, ECSC) No 2688/95 of 17 November 1995 introducing special measures to terminate the service of officials of the European Communities as a result of the accession of Austria, Finland and Sweden (OJ 1995 L 280, p. 1).

   The facts

2. On the occasion of the accession of the Republic of Austria, the Republic of Finland and the Kingdom of Sweden, the Commission, having on 21 June 1995 obtained a favourable opinion from the Staff Regulations Committee, presented a proposal on 7 July 1995 for a regulation introducing special measures to terminate the service of officials of the European Communities ('the initial proposal). That proposal, which fixed the number of officials who could be released by such measures at the Parliament, the Council, the Commission, the Court of Justice, the Court of Auditors and the Economic and Social Committee, was submitted to the institutions concerned for their opinion and met with a favourable opinion from the Parliament, the Court of Justice and the Court of Auditors.

3. After the Commission had split the initial proposal, the Council adopted Regulation No 2688/95 on 17 November 1995 authorising the Parliament, until 30 June 2000, to adopt measures terminating the service of officials who had reached the age of 55, with the exception of those in Grades A 1 and A 2.

4. By letters sent between 22 August and 2 September 1996 to the Secretary-General of the Court of Auditors in his capacity as appointing authority, Mr Busacca and Others, officials of the Court of Auditors, separately requested the inclusion of their names on the list of persons having expressed an interest in a measure terminating their service on the accession of the Republic of Austria, the Republic of Finland and the Kingdom of Sweden.

5. By letters dated 16 September 1996 the Secretary-General of the Court of Auditors replied that he was unable to react favourably to their requests, since, under RegulationNo 2688/95, termination-of-service measures were restricted to officials of the Parliament and there was no legal basis upon which the requests could be taken into consideration.

6. Between 21 October and 13 December 1996 Mr Busacca and Others separately lodged complaints against the decisions contained, according to them, in the replies of the appointing authorities. Those complaints were rejected by the Secretary-General of the Court of Auditors as inadmissible, on the ground that the requests for entry on the list of persons having expressed their interest in a measure terminating their service were for the adoption of a preparatory measure and, therefore, the rejection of those requests was itself merely a preparatory measure which could not be the subject-matter of a complaint. He added that, if the requests were to be interpreted as seeking to obtain termination-of-service measures, they should be rejected as unfounded, in the absence of a legal basis.

7. Following those rejections, which were notified on 28 February 1997, Mr Busacca and Others, by application lodged at the Registry of the Court of First Instance on 26 May 1997, brought an action for annulment of the decisions of the appointing authority rejecting their requests.

   The contested judgment

8. The Court of First Instance rejected the pleas that the application was inadmissible put forward by the Court of Auditors, the defendant at first instance.

9. It held that the decisions adopted by the appointing authority were not preparatory measures and that, by definitively refusing to take into consideration the requests submitted by Mr Busacca and Others, the decisions directly and immediately affected their legal situation and therefore prejudiced them.

10. As to the substance, the Court of First Instance, dealing with an objection that Regulation No 2688/95 was unlawful, found that that regulation constituted the legal basis for the decisions of the appointing authority and then held it unlawful for two reasons.

11. First, carrying out a review limited to manifest error and misuse of powers, it found that, in so far as Regulation No 2688/95 restricted the right to have recourse to measures for the release of staff to the Parliament alone, it imposed a distinction between entirely similar situations which was arbitrary, or manifestly inappropriate in relation to the objective pursued, and was as such contrary to the principle of equal treatment, a fundamental principle of Community law. The situation of the Court of Auditors was no different from that of the Parliament as regards the need to adjust the composition of the officials in their service on the accession of new Member States.

12. Second, the Court of First Instance held that Regulation No 2688/95 was vitiated by an infringement of an essential procedural requirement because the Parliament and the Staff Regulations Committee were not reconsulted when the Commission amended its initial proposal.

13. The amendment made went to the essence of the initial proposal since it reduced its scope considerably, and should therefore have been submitted to the Parliament, under Article 24 of the Treaty establishing a Single Council and a Single Commission of the European Communities, and to the Staff Regulations Committee, under the second sentence of the second paragraph of Article 10 of the Staff Regulations of Officials of the European Communities. However, that was not done.

14. On those grounds, the Court of First Instance annulled the decisions of the Court of Auditors addressed to Mr Busacca and Others refusing to enter their names on the list of persons having expressed an interest in a measure terminating their service as provided for by Regulation No 2688/95.

    The appeal

15. The Council claims that the Court should set aside the contested judgment. In support of its appeal, it puts forward four pleas in law, one of which relates to the admissibility of the action brought before the Court of First Instance and the others to the substance.

16. Mr Busacca and Others request the Court to declare the appeal inadmissible and to order the Council to pay the costs.

17. By order of the President of the Court of 19 April 1999, the Kingdom of Spain was granted leave to intervene in support of the form of order sought by the Council. It requests the Court to set aside the contested judgment.

    Admissibility of the appeal

18. Mr Busacca and Others contend that the case relates to a dispute between the Community and its servants and that the right to appeal granted by the third paragraph of Article 49 of the EC Statute of the Court of Justice to Member States and institutions which did not intervene before the Court of First Instance is therefore inapplicable, as expressly stated in that provision. Since the Council did not intervene at first instance in Case T-164/97, it cannot bring an admissible appeal before the Court.

19. The Council, supported by the Kingdom of Spain, submits, on the other hand, that the term 'disputes between the Community and its servants in the third paragraph of Article 49 of the EC Statute of the Court of Justice is not directed at disputes whichput in issue the legality of a measure of general application, a fortiori a regulation, but only those which relate to questions of an individual nature, for which it did not appear justified to confer the right of appeal to the Court on institutions or Member States which have not intervened before the Court of First Instance.

20. The Council also contends that, should the Court declare the present appeal inadmissible and declare well founded the two appeals brought by it against the judgments of the Court of First Instance in Case T-154/96 Chvatal and Others v Court of Justice [1998] ECR-SC I-A-527 and II-1579 and Case T-13/97 Losch v Court of Justice [1998] ECR-SC I-A-543 and II-1633, which are analogous, in their grounds and operative parts, to the contested judgment, legal clarity could suffer since that would result in an outcome held to be contrary to law by the Court in two cases nevertheless becoming definitive in a third.

21. It need only be observed that, as specifically stated in the third paragraph of Article 49 of the EC Statute of the Court of Justice and the corresponding provisions of the ECSC and Euratom Statutes, in the case of disputes between the Community and its servants the right to bring an appeal before the Court of Justice is not conferred on Member States and institutions which did not intervene before the Court of First Instance.

22. The nature of a dispute, on which the admissibility of an appeal consequently depends, must be assessed in the light of the subject-matter of the action and is not altered by the pleas and arguments which the applicants may put forward, in fact and in law, to substantiate their claims.

23. In the present case, Mr Busacca and Others have applied for annulment of the Court of Auditor's refusal to enter them on a list of persons having expressed their interest in a measure terminating their service. The fact that they plead the illegality of Regulation No 2688/95, which allows only the Parliament to adopt such measures, does not change the subject-matter of their application which, if granted, can lead only to the annulment of the individual decisions concerning them and not that of Regulation No 2688/95 itself, since the illegality of the latter has been raised only by way of an objection.

24. Thus, an objection that a measure of general application is unlawful does not prevent a case concerned with determining the rights and obligations of officials from being a dispute between the Community and its servants. If that were not so, the proviso laid down in the third paragraph of Article 49 of the EC Statute and the corresponding provisions of the ECSC and Euratom Statutes would be substantially negated. Furthermore, such an interpretation would create serious legal uncertainties, since the procedural rules applicable to staff cases would, as Mr Busacca and Others rightly state, depend on whether or not the parties raise the interpretation or validity of legislative or general provisions capable of applying to the case.

25. In the present case, therefore, since the Council did not intervene at first instance and the proceedings are confined to a dispute between the Community and officials whosesubject-matter is not the annulment of a measure which is legislative or of general application, the appeal is inadmissible.

26. As regards the difficulty which, according to the Council, would result from a judgment becoming definitive although it is similar to others which are annulled for error of law, it need only be pointed out that the inapplicability of a regulation, found indirectly pursuant to Article 184 of the EC Treaty (now Article 241 EC) in proceedings calling that regulation into question, is binding only between the parties to those proceedings.

27. The appeal brought by the Council must accordingly be dismissed.

    Costs

28. Under Article 69(2) of the Rules of Procedure of the Court of Justice, which applies to the appeal procedure by virtue of Article 118, the unsuccessful party is to be ordered to pay the costs if they have been applied for in the successful party's pleadings. Under Article 69(4), which also applies to the appeal procedure, Member States and institutions which intervene in the proceedings are to bear their own costs.

29. Since Mr Busacca and Others have applied for costs and the Council has been unsuccessful, the Council must be ordered to pay the costs, with the exception of those incurred by the Kingdom of Spain, which is to bear its own costs.

On those grounds,

THE COURT

hereby:

1. Dismisses the appeal as inadmissible;

2. Orders the Kingdom of Spain to bear its own costs;

3. Orders the Council of the European Union to pay the other costs.

Rodríguez IglesiasMoitinho de Almeida Edward Sevón Schintgen Gulmann La Pergola Puissochet Ragnemalm WatheletSkouris

Delivered in open court in Luxembourg on 5 October 2000.

R. Grass G.C. Rodríguez Iglesias

Registrar President

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1: Language of the case: French.