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

Provisional text

ORDER OF THE PRESIDENT OF THE GENERAL COURT

4 July 2017 (*)

(Interim proceedings - Institutional law - European Parliament - Decision awarding a grant to a political foundation - Suspension of prefinancing - Obligation to provide a bank guarantee - Application for interim measures - No urgency)

In Case T-118/17 R,

Institute for Direct Democracy in Europe ASBL (IDDE), established in Brussels (Belgium), represented by E. Plasschaert and É. Montens, lawyers,

applicant,

v

European Parliament, represented by C. Burgos and S. Alves, acting as Agents,

defendant,

APPLICATION pursuant to Articles 278 and 279 TFEU for the grant of interim measures, seeking, first, the suspension of operation of Parliament Decision FINS-2017-28 of 15 December 2016 concerning the funding allocated to the applicant in so far as it suspends payment of prefinancing, second, exemption from the requirement to provide a bank guarantee as a condition for prefinancing and, third, an order that the Parliament pay to the applicant the prefinancing amount,

THE PRESIDENT OF THE GENERAL COURT

makes the following

Order

 Background to the dispute, procedure and forms of order sought

1        The applicant, Institute for Direct Democracy in Europe ASBL (IDDE), is a not-for-profit association governed by Belgian law.

2        In response to the applicant’s application, the European Parliament awarded it a maximum grant from the general budget of the European Union for 2015 of EUR 730 053.

3        On 7 April 2016, the auditors Ernst & Young delivered a report concluding, in essence, that the applicant had generally complied with the obligations arising from the decision awarding the grant for 2015 and with the applicable regulatory requirements, but that a ‘conflict of interest’, within the meaning of Article II.2 of that decision, with one supplier had been identified in respect of the sum of EUR 12 100.

4        Subsequently, the Parliament carried out further checks.

5        On 30 September 2016, the applicant applied for a grant for 2017.

6        By letter of 24 October 2016, the Parliament informed the applicant that certain expenditure relating to 2015 could be reclassified as ineligible for funding by the Parliament for that year.

7        By letter of 21 November 2016, the Parliament informed the applicant of the decision it had made the same day that an amount of EUR 33 863.50 had been classified as ineligible and that the balance for 2015, namely EUR 88 924.58, would be paid to it.

8        By letter of 30 November 2016, the Parliament informed the applicant that certain press articles called into question the collection of donations and the conclusion of contracts with donors or persons connected to the donors and that it had carried out additional checks. In the light of the outcome of those checks, the Parliament indicated that it might have to suspend payment of the final balance for 2015 and invited the applicant to submit its comments, which the latter did by letter of 6 December 2016.

9        By letter of 2 December 2016, the Parliament notified the applicant of its intention to suspend, in view of the alleged irregularities, payment of the grant for 2017 and invited it to submit its observations by 8 December 2016. The applicant replied by letter of 8 December 2016.

10      On 12 December 2016, the Parliament decided to suspend payment of the final balance for 2015.

11      By letter of 15 December 2016, the Parliament notified the applicant of Decision FINS-2017-28 of the same date (‘the contested decision’). By that decision, a maximum grant of EUR 670 654.76 was awarded to the applicant for 2017, of which EUR 221 316.07 could be allocated by way of prefinancing. However, the prefinancing payment was suspended pending a decision by the Parliament to the effect that the alleged irregularities were not proven. The contested decision added that, if necessary, payment of the prefinancing would be conditional upon presentation by the applicant of a first demand bank guarantee.

12      On 20 December 2016, the Parliament referred the matter to the European Anti-Fraud Office (OLAF) so that it could investigate the alleged irregularities.

13      By application lodged at the Registry of the General Court on 24 February 2017, the applicant brought an action seeking, in essence, the annulment of the contested decision in so far as it suspends payment of the grant for 2017, including the prefinancing payment, limits the prefinancing to 33% of the maximum grant and makes payment of the prefinancing amount subject to the provisions of a first demand bank guarantee.

14      By separate document lodged at the Court Registry on 24 February 2017, the applicant submitted the present application for interim measures, in which it claims, in essence, that the President of the Court should:

-        suspend operation of the contested decision in so far as it suspends payment of the grant for 2017, including payment of the prefinancing;

-        exempt it from the requirement to provide a first demand bank guarantee as a condition for payment of the prefinancing of the grant for 2017;

-        order the Parliament to pay provisionally to the applicant the prefinancing amount, namely EUR 221 316.07.

15      In its observations on the application for interim measures, lodged at the Court Registry on 10 March 2017, the Parliament contends that the President of the Court should:

-        dismiss the application for interim measures;

-        reserve the costs.

16      In response to a question put by the President of the Court, the Parliament indicated on 18 May 2017 that it had not yet taken a decision as the existence or otherwise of irregularities in connection with the grant paid for 2015. As OLAF’s investigation was still ongoing, the Parliament stated that it would have to wait until OLAF had concluded its investigation and drawn up a report before taking its decision.

 Law

 General observations

17      It is apparent from a reading of Articles 278 and 279 TFEU, in conjunction with Article 256(1) TFEU, that the judge hearing an application for interim measures may, if he considers that the circumstances so require, order the suspension of operation of a contested measure or prescribe any necessary interim measures, pursuant to Article 156 of the Rules of Procedure of the General Court. Nevertheless, Article 278 TFEU lays down the principle that actions do not have suspensory effect, since measures adopted by the EU institutions are presumed to be lawful. It is therefore only exceptionally that the judge hearing the application for interim measures may order suspension of operation of a measure challenged before the General Court or other interim relief (order of 19 July 2016, Belgium v Commission, EU:T:2016:427, paragraph 12).

18      The first sentence of Article 156(4) of the Rules of Procedure provides that an application for interim measures must state ‘the subject matter of the proceedings, the circumstances giving rise to urgency and the pleas of fact and law establishing a prima facie case for the interim measures applied for’.

19      Accordingly, the judge hearing an application for interim measures may order suspension of operation of an act, or other interim relief, if it is established that such an order is justified, prima facie, in fact and in law and that it is urgent in so far as, in order to avoid serious and irreparable harm to the interests of the party applying for relief, the order must be made and produce its effects before a decision is reached in the main action. Those conditions are cumulative, which means that an application for interim measures must be dismissed if any one of them is not met. Where appropriate, the judge hearing the application must also weigh up the interests involved (see order of 2 March 2016, Evonik Degussa v Commission, C-162/15 P-R, EU:C:2016:142, paragraph 21 and the case-law cited).

20      In the context of that overall examination, the judge hearing the application for interim relief has a broad discretion and is free to determine, having regard to the specific circumstances of the case, the manner and order in which those various conditions are to be examined, there being no rule of law imposing a pre-established scheme of analysis within which the need to order interim measures must be assessed (see order of 19 July 2012, Akhras v Council, C-110/12 P(R), not published, EU:C:2012:507, paragraph 23 and the case-law cited).

21      Having regard to the material in the file, the President of the General Court considers that he has all the material necessary to rule on the present application for interim measures without there being any need first to hear oral arguments from the parties.

Scope of the contested decision

22      First, it is necessary, for the purpose of examining the present application for interim relief, to clarify the scope of the contested decision.

23      It is apparent from the letter of 15 December 2016, by which the Parliament communicated the contested decision, that its Bureau decided to suspend ‘payment of the 2017 grant including the prefinancing amount’.

24      The form of order sought by the applicant includes, inter alia, suspension of operation of the contested decision in so far as it suspends payment of the grant for 2017, including payment of the prefinancing.

25      However, it is not apparent from the provisions of the contested decision concerning the ‘payment arrangements’ that payment of the grant for 2017 was suspended in its entirety. Indeed, Article I.4.1 of the decision, headed ‘Prefinancing’, states that the ‘Bureau [of the Parliament] decided to suspend the payment of any prefinancing’.

26      Moreover, it is also apparent from Article I.4.1 of the contested decision that, if the suspension of payment of the prefinancing were to be lifted, payment of the prefinancing would be subject to the provision by the applicant of a first demand bank guarantee.

27      In any event, according to Article I.4.2 of the contested decision, the balance of the grant awarded for 2017 would be paid out only in 2018.

28      In those circumstances, it is appropriate, for the purpose of the examination of the present application for interim measures and without prejudice to the examination of the scope of the contested decision in the substantive proceedings, to start from the premiss that, by the contested decision, the Parliament suspended payment of the prefinancing, not payment of the grant in its entirety.

29      In the circumstances of the present case, it is necessary to examine first of all whether the condition relating to urgency is satisfied.

 Urgency

30      In order to determine whether the interim measures sought are urgent, it should be borne in mind that the purpose of the procedure for interim relief is to guarantee the full effectiveness of the future final decision, in order to prevent a lacuna in the legal protection afforded by the EU judicature. To attain that objective, urgency must be assessed in the light of the need for an interlocutory order to avoid serious and irreparable damage to the party requesting the interim measure. That party must demonstrate that it cannot await the outcome of the main proceedings without suffering serious and irreparable damage (see order of 14 January 2016, AGC Glass Europe and Others v Commission, C-517/15 P-R, EU:C:2016:21, paragraph 27 and the case-law cited).

31      Where the harm alleged is of a financial nature, the interim measures sought are justified if, in the absence of those measures, the applicant would be in a position that would imperil its financial viability before final judgment is given in the main action, or if its market share would be affected substantially in the light, inter alia, of the size and turnover of its undertaking and, where appropriate, the characteristics of the group to which it belongs (see order of 12 June 2014, Commission v Rusal Armenal, C-21/14 P-R, EU:C:2014:1749, paragraph 46 and the case-law cited).

32      In the present case, in the first place, the applicant claims that it was impossible for it to produce a first demand bank guarantee after payment was suspended and the ‘uncertainty created’ by the contested decision.

33      It should be noted in that connection, with regard to a request for exemption from an obligation to provide a bank guarantee as a condition for avoiding the immediate recovery of a fine imposed by the European Commission, that case-law has established that such requests may be granted only in exceptional circumstances (see, to that effect, order of 30 April 2010, Ziegler v Commission, C-113/09 P(R), not published, EU:C:2010:242, paragraph 43 and the case-law cited).

34      It is true that, in the present case, the obligation to provide a bank guarantee forms part of the legal framework relating to the funding of a political foundation. However, that difference in the underlying legal framework does not preclude the application of the principles established in the case-law cited in paragraph 33 above to the present case (see, to that effect, order of 14 March 2017, ADDE v Parliament, T-48/17 R, not published, EU:T:2017:170, paragraph 18).

35      The existence of exceptional circumstances, such as those required by the case-law cited in paragraph 33 above, may, in principle, be regarded as established where the party seeking dispensation from the obligation to provide the requisite bank guarantee adduces evidence that it is objectively impossible for it to provide such a guarantee or that such provision would imperil its existence (see, to that effect, order of 13 April 2011, Westfälische Drahtindustrie and Others v Commission, T-393/10 R, EU:T:2011:178, paragraph 23).

36      First, the applicant has neither established nor indeed claimed that the provision of a bank guarantee would affect its financial situation. Second, it merely states that it would be impossible for it to provide such a guarantee, without adducing any evidence in support of that assertion.

37      In that regard, it should be noted that, according to case-law, the content of refusal letters from banks should enable the judge hearing an application for interim relief to ascertain (i) whether the relevant application was genuine and (ii) the context in which it was made. In principle, it is therefore for the party seeking interim measures to provide, at the point at which it submits its application, clear and sufficiently detailed information concerning the refusal letter to show that it was objectively impossible for it to provide the requisite bank guarantee (see, to that effect, order of 20 April 2012, Fapricela v Commission, C-507/11 P(R), not published, EU:C:2012:231, paragraph 55).

38      However, the applicant has not provided a single refusal letter from a bank or identified the steps it has taken to obtain a bank guarantee. The mere assertion - wholly unsubstantiated - that it was impossible for it to provide such a guarantee is not sufficient for the purpose of proving that it is objectively impossible for it to provide such a guarantee.

39      In the second place, in order to obtain suspension of the operation of the contested decision in so far as it suspends payment of the prefinancing and to obtain an order that the Parliament pay to it the prefinancing amount, the applicant submits that it cannot await the outcome of the main proceedings.

40      In that regard, the applicant contends that payment of the prefinancing was suspended for an indefinite period. Accordingly, it is deprived of essential funds needed to enable it to function. In the light of the provisional budget, annexed to the contested decision, of EUR 1 092 000, and its own resources, estimated in that budget at EUR 162 000, and in the absence of funding from the Parliament, it claims that it will not be able to ‘survive’ until the conclusion of the substantive proceedings.

41      According to the applicant, first, its own resources are not immediately available and many donors are reluctant to make donations. Even if it managed to collect by way of own resources, based on the most optimistic estimate, EUR 162 000, it would, on the basis of its annual budget and resulting daily operating costs of EUR 3 000, be able to ‘survive’ only 54 days. Thus, according to the applicant, it is clear that, even with drastic cost saving measures, it would not be able to ‘survive’ until a decision is reached in the substantive proceedings. The damage would be so serious that, if it had to be wound up, it would have to cease all its activities, in breach of Article 11 and 12 of the Charter of Fundamental Rights of the European Union.

42      For the purpose of examining those arguments, it should be borne in mind that the second sentence of Article 156(4) of the Rules of Procedure provides that an application for interim measures must ‘contain all the evidence and offers of evidence available to justify the grant of interim measures’.

43      Thus, an application for interim measures must, of itself, enable the defendant to prepare its observations and the judge hearing the application to rule on it, if necessary without any other supporting information, since the essential elements of fact and law on which the application is based must be found in the actual text of that application (see order of 6 September 2016, Inclusion Alliance for Europe v Commission, C-378/16 P-R, not published, EU:C:2016:668, paragraph 17 and the case-law cited).

44      It is also established case-law that, in order to determine whether all the conditions set out in paragraphs 30 and 31 above are met, the judge hearing the application for interim measures must have hard and precise information, supported by detailed and certified documents showing the situation of the party seeking interim relief and making it possible to examine the actual consequences which would be likely to result if the measures sought were not granted. It follows that that party, especially where it alleges harm of a financial nature, must provide, with supporting documentation, an accurate and comprehensive picture of its financial situation (see, to that effect, order of 29 February 2016, ICA Laboratories and Others v Commission, T-732/15 R, not published, EU:T:2016:129, paragraph 39 and the case-law cited).

45      Lastly, while the application for interim measures may be supplemented on specific points by references to documents annexed to the application, those documents cannot compensate for the failure to set out the essential elements of that application. It is not the task of the judge hearing the application for interim measures to seek, in place of the party concerned, the information that may be found in the annexes to the application for interim measure, in the main application or in the annexes to that application, which is liable to substantiate the application for interim measures. To impose such an obligation on the judge hearing the application for interim measures would also be likely to deprive of any effect Article 156(5) of the Rules of Procedure, under which the application for interim measures must be made by separate document (see, to that effect, order of 20 June 2014, Wilders v Parliament and Others, T-410/14 R, not published, EU:T:2014:564, paragraph 16 and the case-law cited).

46      It should be noted, first, that, by claiming that it cannot ‘survive’ until the conclusion of the substantive proceedings, the applicant is arguing, essentially, that its financial viability is imperilled and is thus alleging damage of a financial nature.

47      Second, notwithstanding the requirements set out in paragraphs 42 to 45 above, the applicant has failed to provide an accurate and comprehensive picture of its financial situation. Indeed, the applicant has given no indication of its financial resources at the time it lodged the present application.

48      Third, that omission cannot be made good by the calculation of the daily costs, based on a breakdown of the annual budget into daily figures. As such, the provisional budget for 2017 provides no details concerning the applicant’s financial resources at the time the present application was lodged. For the same reason, the applicant’s claim, disputed by the Parliament, that it would have difficulty in collecting in advance for 2017 the sums of which its own resources are made up must be rejected.

49      Accordingly, it must be concluded that, as it has failed to establish an accurate and comprehensive picture of its financial situation, the applicant has not succeeded in demonstrating to the requisite legal standard that it would suffer serious and irreparable harm, as regards its claim that operation of the contested decision should be suspended, in so far as it suspends payment of the prefinancing, and as regards the injunctive relief sought, namely, an order that the Parliament pay to it the prefinancing amount.

50      It follows from all the foregoing that the application for interim measures must be dismissed, as the applicant has failed to establish urgency, without it being necessary to rule on whether there is a prima facie case or even to weigh up the interests involved.

51      Lastly, it should be noted that, pursuant to Article 160 of the Rules of Procedure, refusal of the present application for interim measures cannot bar the applicant from making a further application on the basis of new facts that come to its attention.

52      Pursuant to Article 158(5) of the Rules of Procedure, the costs must be reserved.

On those grounds,

THE PRESIDENT OF THE GENERAL COURT

hereby orders:

1.      The application for interim measures is dismissed.

2.      The costs are reserved.

Done in Luxembourg on 4 July 2017.

*      Language of the case: English.

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