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

ORDER OF THE PRESIDENT OF THE GENERAL COURT

11 March 2020 (*)

(Application for interim relief — Plant protection products — Non-renewal of approval of the active substance chlorpropham — Application for suspension of operation of a measure — No urgency)

In Case T‑612/19 R,

Aceto Agricultural Chemicals Corp. Ltd, established in Chester (United Kingdom), represented by C. Mereu and P. Sellar, lawyers,

applicant,

v

European Commission, represented by F. Castilla Contreras, A. Dawes and I. Naglis, acting as Agents,

defendant,

APPLICATION under Articles 278 and 279 TFEU for suspension of the operation of Commission Implementing Regulation (EU) 2019/989 of 17 June 2019 concerning the non-renewal of approval of the active substance chlorpropham, in accordance with Regulation (EC) No 1107/2009 of the European Parliament and of the Council concerning the placing of plant protection products on the market, and amending the Annex to Commission Implementing Regulation (EU) No 540/2011 (OJ 2019 L 160, p. 11),

THE PRESIDENT OF THE GENERAL COURT

makes the following

Order

 Background to the dispute, procedure and forms of order sought

1        The applicant, Aceto Agricultural Chemicals Corp. Ltd, is a company established in the United Kingdom. The applicant was a wholly owned subsidiary of Aceto Agricultural Chemicals Corp., a company established in the United States (‘the former parent company’). In the context of a restructuring under Chapter 11 of the United States Bankruptcy Code, on 14 April 2019 the former parent company entered into an asset purchase agreement with New Mountain Capital L.P., an investment firm established in the United States (‘the new ultimate parent company’).

2        The applicant’s business consists in the holding of authorisations for plant protection products containing chlorpropham and management of the procedural and regulatory aspects of the marketing activities for plant protection products containing chlorpropham of its parent company.

3        Chlorpropham was originally approved in 2004 in accordance with the procedure for the listing of active substances of plant protection products established by Council Directive 91/414/EEC of 15 July 1991 concerning the placing of plant protection products on the market (OJ 1991 L 230, p. 1). It was added to Annex I to Directive 91/414 by Commission Directive 2004/20/EC of 2 March 2004 amending Directive 91/414 to include chlorpropham as an active substance (OJ 2004 L 70, p. 32).

4        With the entry into force of Regulation (EC) No 1107/2009 of the European Parliament and of the Council of 21 October 2009 concerning the placing of plant protection products on the market and repealing Council Directives 79/117/EEC and 91/414 (OJ 2009 L 309, p. 1), the active substances included in Annex I to Directive 91/414 were deemed to be approved under that regulation and are now listed in Part A of the Annex to Commission Implementing Regulation (EU) No 540/2011 of 25 May 2011 implementing Regulation No 1107/2009 as regards the list of approved active substances (OJ 2011 L 153, p. 1).

5        On 24 July 2014, an application was made for the renewal of the approval of chlorpropham, in accordance with Article 1 of Commission Implementing Regulation (EU) No 844/2012 of 18 September 2012 setting out the provisions necessary for the implementation of the renewal procedure for active substances, as provided for in Regulation No 1107/2009 (OJ 2012 L 252, p. 26).

6        The rapporteur Member State drew up a renewal assessment report in consultation with the co-rapporteur Member State, and submitted it to the European Food Safety Authority (EFSA) on 29 April 2016.

7        On 18 June 2017, EFSA communicated to the European Commission its conclusions as to whether chlorpropham was capable of satisfying the approval criteria set out in Article 4 of Regulation No 1107/2009.

8        On 9 January 2018, the Commission presented a draft proposal for the non-renewal of the approval of chlorpropham. The applicant and the second applicant in the main action, UPL Europe Ltd, made their observations in a series of exchanges with the Commission.

9        On 17 June 2019, the Commission adopted Implementing Regulation (EU) 2019/989 concerning the non-renewal of approval of the active substance chlorpropham, in accordance with Regulation No 1107/2009, and amending the Annex to Implementing Regulation No 540/2011 (OJ 2019 L 160, p. 11, ‘the contested regulation’).

10      As provided by Article 1 of the contested regulation, the approval of the active substance chlorpropham is not renewed. In accordance with Article 3 of the contested regulation, Member States must withdraw authorisations for plant protection products containing chlorpropham by 8 January 2020. Article 4 of that regulation provides that any grace period granted by Member States in accordance with Article 46 of Regulation No 1107/2009 is to expire by 8 October 2020 at the latest. Article 5 of the contested regulation sets the date of the entry into force of the regulation as the 20th day following that of its publication in the Official Journal of the European Union.

11      By application lodged at the General Court Registry on 10 September 2019, the applicant and UPL Europe requested the Court to annul the contested regulation.

12      By a separate document, lodged at the Court Registry on 25 October 2019, the applicant made the present application for interim measures, in which it claims that the President of the General Court should:

–        suspend operation of the contested regulation pursuant to Article 156 and Article 157(2) of the Rules of Procedure of the General Court pending the Court’s ruling in the main action;

–        suspend the expiry date provided for in Articles 4 and 5 of the contested regulation;

–        grant any interim measures he may consider appropriate and hold a hearing if deemed necessary;

–        order the Commission to pay the costs.

13      In its observations on the application for interim measures, lodged at the Court Registry on 18 November 2019, the Commission contends that the President of the General Court should:

–        dismiss the application for interim measures;

–        reserve the costs.

 Law

 General considerations

14      It is apparent from Articles 278 and 279 TFEU, read in conjunction with Article 256(1) TFEU, that the judge hearing an application for interim measures may, if he considers that circumstances so require, order that application of a measure challenged before the General Court be suspended or prescribe any necessary interim measures, pursuant to Article 156 of the Rules of Procedure. Nevertheless, Article 278 TFEU establishes the principle that actions do not have suspensory effect, since acts adopted by the institutions of the European Union are presumed to be lawful. It is therefore only exceptionally that a judge hearing an application for interim measures may order the suspension of operation of an act challenged before the General Court or prescribe any interim measures (see, to that effect, order of 19 July 2016, Belgium v Commission, T‑131/16 R, EU:T:2016:427, paragraph 12).

15      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 measure applied for’.

16      Accordingly, the judge hearing an application for interim relief may order suspension of operation of an act and other interim measures, 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 applicant’s interests, it must be made and produce its effects before a decision is reached in the main action. Those conditions are cumulative, and consequently an application for interim measures must be dismissed if any one of them is not satisfied. The judge hearing an application for interim relief is also to undertake, when necessary, a weighing of the competing interests (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).

17      In the context of that overall examination, the judge hearing the application for interim relief enjoys a broad discretion and is free to determine, having regard to the particular 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).

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

19      In the circumstances of the present case, it is appropriate to begin by examining whether the condition relating to urgency is satisfied.

 Urgency

20      In order to demonstrate urgency, the applicant relies, in essence, on serious and irreparable harm due to the immediate risk of bankruptcy, the risk of financial loss for the group and the risk of damage to the applicant’s reputation.

21      In the first place, as regards the alleged harm due to the immediate risk of bankruptcy, first, the applicant claims that its existence is at risk on account of the loss of its one and only product line. The applicant indicates that it is an ad hoc company responsible for managing regulatory compliance for the products containing chlorpropham marketed by its parent company. [confidential] (1)

22      Second, the applicant submits that it made no commercial sense for it to diversify its business. It further asserts that there was nothing to indicate that the approval of chlorpropham would not be renewed, until the renewal procedure was at a very advanced stage. The applicant claims that the diversification of its business would have required investments which its former parent company and the group were not in a position to make. Last, the applicant asserts that it does not have the technical skills to develop an alternative business.

23      Third, the applicant claims that its situation will be aggravated by the uncertainties linked to the United Kingdom’s exit from the European Union. According to the applicant, it is exceptionally difficult to anticipate the regulatory environment that will apply following the United Kingdom’s exit from the European Union. All these developments constitute exceptional circumstances which increase the level of uncertainty for the applicant, thus preventing any investment.

24      Fourth, the applicant submits that the United Kingdom’s exit from the European Union and its parent company’s bankruptcy proceedings constitute, together, specific circumstances which should be taken into account in the assessment of the seriousness of the alleged harm. The applicant claims that its situation is similar to the situation in the case that gave rise to the order of 28 April 2009, United Phosphorus v Commission (T‑95/09 R, not published, EU:T:2009:124).

25      Fifth, the applicant also claims that it would not be possible for a new approval to be obtained before a decision is reached in the main proceedings. A new approval procedure would also entail investment of significant resources. In the context of the bankruptcy proceedings, the applicant’s parent company does not have those resources. Such a procedure would, moreover, take at least five years.

26      In the second place, as regards the loss of turnover, first, the applicant states that if implementation of the contested regulation is not suspended, the group will lose [confidential]. (2) That loss would represent [confidential] of the group’s total global turnover in 2019 and [confidential] in 2018. For Aceto Life Sciences LLC, the applicant’s immediate parent company, that loss would represent [confidential] of its turnover in 2019 and [confidential] of its turnover in 2018.

27      Second, the applicant submits that, whilst those losses in turnover do not exceed the 10% threshold, the United Kingdom’s exit from the European Union and the parent company’s bankruptcy proceedings constitute specific circumstances which should be taken into account in the assessment of the seriousness of the alleged harm.

28      Third, the applicant submits that it would not be able to recover the lost market share. The applicant states that its competitors have a number of alternative products and that it is inevitable that consumers’ preferences will change, and that, consequently, it will be exceptionally difficult to recoup lost market share.

29      In the third place, the applicant submits that the contested regulation will have a negative impact on its reputation.

30      In order to determine whether the interim measures sought are urgent, it should be noted 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 Courts of the European Union. To attain that objective, urgency must, in general terms, be assessed in the light of the need of an interlocutory order to avoid serious and irreparable harm 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      In addition, according to well-established case-law, there is urgency only if the serious and irreparable damage feared by the party seeking the interim measures is so imminent that its occurrence can be foreseen with a sufficient degree of probability. That party remains, in any event, required to prove the facts that form the basis of its claim that such damage is likely, it being clear that purely hypothetical damage, based on future and uncertain events, cannot justify the granting of interim measures (see order of 22 June 2018, Arysta LifeScience Netherlands v Commission, T‑476/17 R, EU:T:2018:407, paragraph 24 and the case-law cited).

32      Moreover, according to the second sentence of Article 156(4) of the Rules of Procedure, an application for interim measures ‘shall contain all the evidence and offers of evidence available to justify the grant of interim measures’.

33      Thus, an application for interim measures must, in itself, enable the defendant to prepare its observations and the judge hearing the application to rule on it, if necessary, without other supporting information, since the essential elements of fact and law on which the application is founded must be set out 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).

34      It is in the light of those criteria that it is necessary to examine whether the applicant has been able to demonstrate urgency.

35      In the present case, in the first place, as regards the alleged harm concerning the risk of bankruptcy and the loss of turnover, it must be noted that the alleged harm is purely financial in nature.

36      It is settled case-law that damage of a pecuniary nature cannot, save in exceptional circumstances, be regarded as irreparable or even reparable only with difficulty, since, as a general rule, pecuniary compensation is capable of restoring the aggrieved person to the situation that obtained before he suffered the damage. Any such damage could, in particular, be recouped by the applicant’s bringing an action for compensation on the basis of Articles 268 and 340 TFEU (see, to that effect, orders of 28 November 2013, EMA v InterMune UK and Others, C‑390/13 P(R), EU:C:2013:795, paragraph 48 and the case-law cited, and of 28 April 2009, United Phosphorus v Commission, T‑95/09 R, not published, EU:C:2009:124, paragraph 33 and the case-law cited).

37      In the event of such damage, the interim measure sought is justified only where, in the absence of that measure, the applicant would be in a position that would imperil its financial viability before final judgment is given in the main action, or where 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).

38      The assessment of that damage must be carried out in the light, inter alia, of the size and turnover of the undertaking and the characteristics of the group to which it belongs (see order of 15 November 2011, Xeda International v Commission, T‑269/11 R, not published, EU:T:2011:665, paragraph 20 and the case-law cited; see also, to that effect, order of 15 April 1998, Camar v Commission and Council, C‑43/98 P(R), EU:C:1998:166, paragraph 36 and the case-law cited).

39      It has been held that, in the case of a loss corresponding to less than 10% of the turnover of companies operating in highly regulated markets, the financial difficulties which those companies could experience do not appear to be such as to threaten their very existence (see, to that effect, orders of 11 April 2001, Commission v Bruno Farmaceutici and Others, C‑474/00 P(R), EU:C:2001:219, paragraph 106, and of 15 November 2011, Xeda International v Commission, T‑269/11 R, not published, EU:T:2011:665, paragraph 21).

40      As regards a loss representing nearly two-thirds of the turnover of undertakings operating in highly regulated markets, while acknowledging that the financial difficulties they underwent could have been such as to threaten their existence, it has nevertheless been pointed out that, in a highly regulated sector where major investment is often required and the competent authorities may be led to intervene when public health risks become apparent, for reasons which cannot always be foreseen by the undertakings concerned, it was for those undertakings, if they were not to bear themselves the loss resulting from such intervention, to protect themselves against its consequences by adopting an appropriate policy (see, to that effect, order of 16 June 2016, ICA Laboratories and Others v Commission, C‑170/16 P(R), not published, EU:C:2016:462, paragraph 29 and the case-law cited).

41      In the present case, first, it should be noted that the sole purpose of the applicant’s business is to hold authorisations for products containing chlorpropham and to manage the regulatory activities relating thereto.

42      In that regard, it must be pointed out that the applicant is operating in a highly regulated market. As noted in paragraph 40 above, it was for the applicant, therefore, to adopt a course of conduct that took into account the increased risk of a ban on the marketing of products containing chlorpropham, so as not to have to bear itself the loss resulting from such a ban. Consequently, the President of the General Court must take the applicant’s commercial strategy into account.

43      As regards the argument that it made no commercial sense for the applicant to diversify its business because there was nothing to indicate that the approval of chlorpropham would not be renewed, until the renewal procedure was at a very advanced stage, it should be noted that the contested regulation cannot be regarded as a random and unforeseeable event. As a matter of principle, the risk that a substance may not be approved or renewed upon review is inherent in that type of procedure. Furthermore, the applicant was involved in the procedure and was aware of the high probability of non-renewal of the substance from 9 January 2018, when the Commission notified it of its proposal not to proceed with the renewal of chlorpropham.

44      With regard to the claim that the diversification of the applicant’s business would require investments which its former parent company and the group were not in a position to make, it should be noted that Aceto Agricultural Chemicals Corp., the applicant’s former parent company, entered into an asset purchase agreement, to which the applicant was a party, with the new ultimate parent company. The applicant has not demonstrated that the latter company would not be in a position to invest in the diversification of the applicant’s business.

45      As regards the claim that the applicant does not have the technical skills to develop an alternative business, it should be noted that the applicant has not put forward any argument to support that assertion.

46      Second, as is apparent from the case-law recalled in paragraph 38 above, the assessment of the threat to the applicant’s existence must also take account of the characteristics and the overall financial situation of the group to which it belongs.

47      In the present case, the applicant has not provided any information about the financial situation of the new ultimate parent company or of the group to which it belongs.

48      The only evidence adduced by the applicant refers only to the loss in global turnover of the former group and to the loss in turnover of the applicant’s former immediate parent company. In any event, those losses in turnover, representing a small proportion of the total turnover of the former group, are not sufficient to support a finding that the alleged harm is serious and irreparable within the meaning of the case-law cited in paragraph 30 above.

49      Third, as regards the argument relating to the specific circumstances of the case in connection with the exit of the United Kingdom from the European Union and the bankruptcy proceedings of the applicant’s parent company, it should be noted that, while it is for the judge hearing the application for interim measures to take account of the circumstances of each case and to weigh them against the harm caused in terms of turnover, reliance on specific circumstances cannot be regarded as sufficient to establish that the applicant’s existence is threatened, in the absence of evidence relating to the financial situation of the applicant and of the group to which it belongs.

50      In any event, it should be noted that the arguments as to the alleged difficulties encountered by the former parent company and their effects on the applicant are irrelevant, given that the applicant has been acquired by another company. As regards the arguments concerning the uncertainty of the regulatory environment following the United Kingdom’s exit from the European Union, it should be noted that the transitional period in place until the end of 2020 enables the applicant and the group to which it belongs to adopt a commercial strategy to avoid the alleged risk of bankruptcy.

51      Fourth, as regards the claim that the applicant would not be able to return to the European market even if it were to be successful in the main proceedings, because of the competition on the market, it should be noted that the applicant is not a producer or distributor of products containing chlorpropham and that it is not therefore clear from the file which market share might be irretrievably lost.

52      Fifth, as regards the argument that it would be impossible to obtain a new approval before a decision is reached in the main proceedings, because a new approval procedure would entail investment of significant resources and would take at least five years, it should be noted that the applicant has not provided any information about the financial situation of the new ultimate parent company and, moreover, in the light of the average duration of proceedings before the General Court, the applicant would have had the legality of the contested regulation determined well within the period required to obtain a new approval.

53      In the second place, as regards the alleged harm resulting from damage to its reputation, it should be noted that, if there was indeed damage to the applicant’s reputation as a result of the adoption of the contested regulation, the damage would already have arisen when that regulation was adopted and would last until such time as the contested regulation is annulled by the judgment in the main action (see, to that effect, order of 15 November 2011, Xeda International v Commission, T‑269/11 R, not published, EU:T:2011:665, paragraph 42 and the case-law cited).

54      Given that the contested regulation was adopted following a complex administrative procedure in which scientific experts and professionals working in the sector concerned participated, a suspension of the operation of that regulation ordered by the President of the Court on a purely interim basis and in summary proceedings would scarcely be capable of restoring the applicant’s reputation (see, to that effect, order of 15 November 2011, Xeda International v Commission, T‑269/11 R, not published, EU:T:2011:665, paragraph 42 and the case-law cited).

55      In that regard, it should be noted that the applicant itself states in its pleadings that the ban on chlorpropham-based products has already been extensively publicised.

56      In addition, the regulatory authorities and businesses in the sector concerned, which are familiar with the regulatory framework, tend, rather, to view non-renewal of the approval of a plant protection product as a normal part of a regulatory procedure. Such non-renewal may be regarded as being simply the result of scientific developments and improvement in research methods (see, to that effect, order of 15 November 2011, Xeda International v Commission, T‑269/11 R, not published, EU:T:2011:665, paragraph 43 and the case-law cited).

57      In the light of the foregoing, it must be concluded that the applicant has not demonstrated that the condition relating to urgency has been met.

58      Consequently, and without it being necessary to examine whether the condition relating to the existence of a prima facie  case is satisfied in this instance, it must be concluded that the application for interim measures must be dismissed.

On those grounds,

THE PRESIDENT OF THE GENERAL COURT

hereby orders:

1.      The application for interim measures is dismissed.

2.      The costs are reserved.

Luxembourg, 11 March 2020.

*      Language of the case: English.

1 Confidential information omitted.

2 Confidential information omitted.

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