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

ORDER OF THE PRESIDENT OF THE GENERAL COURT

19 March 2021 (*)

(Application for interim relief – Plant protection products – Regulation (EC) No 1107/2009 – Implementing Regulation (EU) 2020/2087 – Non-renewal of approval of the active substance mancozeb – Application for suspension of operation of a measure – No urgency)

In Case T‑742/20 R,

Indofil Industries (Netherlands) BV, established in Amsterdam (Netherlands), represented by C. Mereu and P. Sellar, lawyers,

applicant,

v

European Commission, represented by A. Dawes, I. Naglis and G. Koleva, acting as Agents,

defendant,

APPLICATION under Articles 278 and 279 TFEU for suspension of operation of Commission Implementing Regulation (EU) 2020/2087 of 14 December 2020 concerning the non-renewal of the approval of the active substance mancozeb, 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 2020 L 423, p. 50),

THE PRESIDENT OF THE GENERAL COURT

makes the following

Order

 Background to the dispute and legal context

1        The applicant, Indofil Industries (Netherlands) BV, is a company governed by Netherlands law and a subsidiary of Indofil Industries Ltd (‘Indofil’).

2        Indofil is highly specialised in the manufacture and development of plant protection products of which fungicides represent the main bulk of its production.

3        Indofil’s flagship fungicide product is mancozeb.

4        This substance is an effective fungicide to counteract blight in potato as well as other pathogens that affect vines, soft fruit, top fruit, carrots and onions.

5        Indofil manufactures mancozeb in its Indian facilities and sells it in the European Union through the applicant.

6        Mancozeb was approved in the European Union by Commission Directive 2005/72/EC of 21 October 2005 amending Council Directive 91/414/EEC to include chlorpyrifos, chlorpyrifos-methyl, mancozeb, maneb, and metiram as active substances (OJ 2005 L 279, p. 63), which added the active substance mancozeb to Annex I to 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).

7        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 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 have been approved and were listed in 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).

8        As the approval of the active substance mancozeb was due to expire, the applicant submitted an application for renewal of the approval of that active substance 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), within the period prescribed by that article.

9        On 27 September 2017, the rapporteur Member State – the United Kingdom of Great Britain and Northern Ireland – in consultation with the co-rapporteur Member State – the Hellenic Republic – submitted a renewal assessment report to the European Food Safety Authority (EFSA) and to the European Commission.

10      On 29 November 2019, by Implementing Regulation (EU) 2019/2094 amending Implementing Regulation No 540/2011 as regards the extension of the approval periods of the active substances benfluralin, dimoxystrobin, fluazinam, flutolanil, mancozeb, mecoprop-P, mepiquat, metiram, oxamyl and pyraclostrobin (OJ 2019 L 317, p. 102), the Commission extended the approval period of mancozeb until 31 January 2021 so that the renewal procedure could be completed before the expiry of the approval period of that substance.

11      On 31 January 2020, following the withdrawal of the United Kingdom from the European Union, the Hellenic Republic agreed to assume the role of rapporteur Member State.

12      On 2 September 2020, the Hellenic Republic sent its evaluation to the Commission in the form of an updated renewal assessment report. The evaluation was also made available to EFSA, the other Member States and the applicants.

13      On 23 October 2020, in the framework of the Standing Committee on Plants, Animals, Food and Feed, the Member States delivered their opinion by qualified majority on the draft regulation not to renew the approval of the active substance mancozeb.

14      On 14 December 2020, the Commission adopted Implementing Regulation (EU) 2020/2087 concerning the non-renewal of the approval of the active substance mancozeb, in accordance with Regulation No 1107/2009, and amending the Annex to Implementing Regulation No 540/2011 (OJ 2020 L 423, p. 50, ‘the contested regulation’).

 Procedure and forms of order sought

15      By application lodged at the Court Registry on 18 December 2020, the applicant and UPL Europe Ltd brought an action for annulment of the contested regulation.

16      By separate document, lodged at the Court Registry on the same date, the applicant brought the present application for interim relief, in which it claims, in essence, that the President of the General Court should:

–        order the suspension of operation of the contested regulation with immediate effect in accordance with Article 157(2) of the Rules of Procedure of the General Court;

–        order the suspension of operation of the contested regulation in accordance with Article 156 of the Rules of Procedure pending the judgment of the General Court in the main action;

–        order any other interim measure as appropriate and arrange a hearing if necessary;

–        order the Commission to pay the costs.

17      On 21 and 22 December 2020 and on 8, 19 and 20 January 2021, the applicant offered further evidence, in accordance with Article 85(3) of the Rules of Procedure.

18      In its observations on the application for interim relief and the further evidence offered, which were lodged at the Court Registry on 14 and 28 January 2021, the Commission contends, in essence, that the President of the Court should:

–        dismiss the application for interim relief;

–        reserve the costs until judgment is delivered in the main proceedings.

 Law

 General considerations

19      It is apparent from reading Articles 278 and 279 TFEU together with Article 256(1) TFEU that the judge dealing with an application for interim relief may, if he considers that the circumstances so require, order that the operation 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 the judge dealing with an application for interim relief may order the suspension of operation of an act challenged before the General Court or prescribe any interim measures (order of 19 July 2016, Belgium v Commission, T‑131/16 R, EU:T:2016:427, paragraph 12).

20      The first sentence of Article 156(4) of the Rules of Procedure provides that applications 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’.

21      Thus the judge dealing with 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 dealing with 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).

22      In the context of that overall examination, the judge dealing with 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).

23      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 relief without there being any need first to hear oral argument from the parties.

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

 Urgency

25      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 (order of 14 January 2016, AGC Glass Europe and Others v Commission, C‑517/15 P-R, EU:C:2016:21, paragraph 27).

26      In order to attain that objective, urgency must generally be assessed in the light of the need for an interlocutory order so as 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).

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

28      In the present case, in the first place, in order to demonstrate the serious nature of the harm, the applicant claims that, on the basis of the financial years 2018, 2019 and 2020, its financial losses amount to 100% of its turnover and 10% of the turnover of the group comprising the applicant and Indofil (‘the Indofil group’). For the 2020 financial year, the overall turnover of the applicant, whose business, the applicant submits, is exclusively related to sales of mancozeb, was approximately EUR 28.5 million, and the overall turnover of the Indofil group in respect of all activities was approximately EUR 283 million. In addition, the applicant would also suffer non-pecuniary losses relating to certain intangible assets (licences, registrations, a well-known name, a trusted network of resellers, customers’ loyalty) and to the probable immediate repayment of foreign currency loans taken out by the applicant and by Indofil directly. Moreover, the applicant claims that it will suffer objectively significant harm as a result of the need to make a final commercial choice of some significant magnitude within a disadvantageous timescale. According to the applicant, its financial and non-financial losses are objectively significant as they will result in the removal of the one commercial activity undertaken by the applicant as a result of losing approximately EUR 27 million a year, well before the grace period set by the contested regulation has ended. In addition, the applicant maintains that it has made efforts to diversify its products as any prudent and diligent operator would do in a highly regulated environment.

29      In the second place, in order to demonstrate the irreparable nature of the harm, the applicant submits that, for reasons of a structural or legal nature, it will lose all of its mancozeb market shares to competitors selling other fungicidal plant protection products. That irreversible loss is not limited to financial loss alone but will result from the loss of an intangible asset that is constituted by a customer base, the value of that customer base and the value that brings to the goodwill of the business, in so far as its customers will have established contractual relationships with competitors selling competing products. In addition, the applicant submits that the significant financial investment in the development of a new approval dossier, in order for the substance mancozeb to be remarketed in the European Union, is incompatible with the reduction in profits resulting from the adoption of the contested regulation. Finally, the applicant maintains that the loss which it will suffer cannot be compensated by an action for damages.

 Seriousness of the damage

30      As regards the first type of damage alleged, it should be noted that the damage alleged is purely financial.

31      Regarding the seriousness of the financial damage alleged, it is settled case-law that the interim measure sought will be justified only if it appears that, without such a measure, the party seeking it would be in a position that could imperil its existence before the final decision in the main action (see order of 21 January 2019, Agrochem-Maks v Commission, T‑574/18 R, EU:T:2019:25, paragraph 33 and the case-law cited).

32      In that regard, it is settled case-law that the assessment of the serious nature of such damage is carried out in the light of, inter alia, the size and turnover of the undertaking and the characteristics of the group to which it belongs (see order of 21 January 2019, Agrochem-Maks v Commission, T‑574/18 R, EU:T:2019:25, paragraph 34 and the case-law cited).

33      However, it is apparent from the case-law that it cannot be excluded that financial harm which is objectively significant and which allegedly results from the obligation to make a final commercial choice of some magnitude within a disadvantageous timescale could be considered ‘serious’, or even that the seriousness of such harm could be considered obvious, even in the absence of information concerning the size of the undertaking concerned (order of 23 November 2018, GMPO v Commission, T‑733/17 R, not published, EU:T:2018:839, paragraph 45).

34      That case-law must nevertheless be assessed having regard to the field in which the applicant operates (order of 23 November 2018, GMPO v Commission, T‑733/17 R, not published, EU:T:2018:839, paragraph 46). It must be recalled that, according to settled case-law, on the one hand, with regard to a loss corresponding to less than 10% of turnover of undertakings active in highly regulated markets, it has been found that the financial difficulties which those undertakings risked suffering did not appear to be such as to threaten their very existence, and, on the other, regarding a loss representing almost two thirds of the turnover of those undertakings, while acknowledging that the financial difficulties they underwent could have been such as to threaten their very existence, it has nevertheless been underlined 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 order of 21 January 2019, Agrochem-Maks v Commission, T‑574/18 R, EU:T:2019:25, paragraph 35 and the case-law cited).

35      In this instance and in the first place, the applicant is not claiming that the financial damage suffered by it as a result of losses attributable to the contested regulation is likely to undermine the viability of the group of companies to which it belongs, and therefore that that group, including Indofil, could disappear. However, it states that its overall turnover in 2020, although its business is exclusively related to sales of mancozeb, amounts to approximately EUR 28.5 million, that the overall turnover of the Indofil group amounts to approximately EUR 283 million for the same financial year, and that, on the basis of those turnover figures, its loss corresponds to a loss of 100% of its own turnover and approximately 10% of the turnover of the Indofil group.

36      In the light of that information, it must be pointed out, in the terms of the order of 28 April 2009, United Phosphorus v Commission (T‑95/09 R, not published, EU:T:2009:124, paragraph 69), that, in the evaluation of the seriousness of the harm, the judge dealing with the application for interim relief cannot confine himself to having recourse, in a mechanical and rigid manner, solely to the relevant turnover but must also examine the circumstances of each case and bring them into relation, when taking his decision, with the harm occasioned in terms of turnover.

37      While it is true that that case-law has, up to now, principally been invoked in order to allow the court to assess whether the seriousness of the alleged harm could be established despite the fact that the turnover did not exceed the indicative threshold of 10% referred to in paragraph 34 above, that prohibition of a mechanical and rigid analysis cannot be limited to that interpretation alone but must also be understood as requiring the courts to confirm whether, given the specific circumstances of the case, the seriousness ought not to be established despite that threshold being exceeded (order of 21 January 2019, Agrochem-Maks v Commission, T‑574/18 R, EU:T:2019:25, paragraph 40). The fact that the indicative threshold of 10% is exceeded cannot in itself convince the judge dealing with an application for interim relief of the seriousness of the alleged harm (see, to that effect, order of 21 January 2019, Agrochem-Maks v Commission, T‑574/18 R, EU:T:2019:25, paragraph 47).

38      Under those circumstances, it should be recalled that the applicant was established with the sole object of selling on the EU market the mancozeb which Indofil manufactures in its Indian facilities. The choice of such dependence on a single product forms part of the ‘risks of the undertaking’ of which the applicant must accept the consequences (see, to that effect, order of 18 June 2008, Dow AgroSciences and Others v Commission, T‑475/07 R, not published, EU:T:2008:214, paragraph 116).

39      In addition, it should be noted that it is apparent from the documents in the file that the applicant’s sales to the United Kingdom in 2019 represented 3.4% of the mancozeb market in the European Union. Assuming that, for the financial year 2020-2021, the applicant’s sales to the United Kingdom also represented 3.4% of its declared sales in the European Union, if those sales by the applicant to the United Kingdom are excluded as from 1 February 2020 because of the United Kingdom’s withdrawal, the applicant’s sales in the European Union during that period would represent less than 10% of the turnover of the Indofil group.

40      In the second place, as regards the non-financial losses which the applicant allegedly risks incurring in respect of certain intangible assets and the probable immediate repayment of foreign currency loans, it must be noted that the applicant has not produced any evidence to prove that its parent company would not be in a position to intervene in order to mitigate such losses.

41      In the third place, as regards the objectively significant harm resulting from the need to make a final commercial choice of some magnitude within a disadvantageous timescale, the applicant claims that that harm will result from the fact that the contested regulation will prevent it from selling mancozeb and related substances on the EU market for plant protection purposes well before the expiry of the grace period set by the contested regulation.

42      It must be pointed out, first, that the applicant operates on a highly regulated market and that any loss which it might incur as a result of the non-renewal of mancozeb is an integral part of the regulatory process. However, as noted in paragraph 34 above, it was therefore incumbent on the applicant to behave in such a way as to take into account the increased risk of a ban on the marketing of its product, in terms of having to bear the loss arising from such a ban.

43      According to the case-law, the judge dealing with an application for interim relief should, in his analysis of the seriousness of the alleged harm, take into account the business strategy adopted by the party seeking interim measures (see, to that effect, order of 21 January 2019, Agrochem-Maks v Commission, T‑574/18 R, EU:T:2019:25, paragraph 46).

44      In the present case, the applicant claims that both it and Indofil have acted as diligent actors and have made efforts to diversify their products since 2014 as any prudent and diligent operator would do in a highly regulated environment.

45      In that regard, it must be stated that, although the applicant confirms that it and Indofil had begun to diversify their commercial activities from 2014 in order to limit the risks associated with the non-renewal of mancozeb, it has not adduced sufficient evidence in support of that claim and has not demonstrated that its parent company would not be in a position to continue to invest in that diversification (see, to that effect, order of 11 March 2020, Aceto Agricultural Chemicals v Commission, T‑612/19 R, not published, EU:T:2020:102, paragraph 44).

46      Furthermore, as the Commission points out, in so far as the applicant and Indofil may not have sufficiently diversified their product ranges in good time, there is a lack of diligence which prevents operation of the contested regulation from being suspended (see, to that effect, order of 18 June 2008, Dow AgroSciences and Others v Commission, T‑475/07 R, not published, EU:T:2008:214, paragraph 116).

47      Next, as regards the applicant’s argument that the alleged losses would affect it well before the expiry of the grace period laid down in Article 4 of the contested regulation, it must be pointed out that the evidence which it produces concerning the Kingdom of Denmark, the Italian Republic and the Portuguese Republic does not usefully support its claim.

48      The authorities of those Member States intend to grant a grace period which will expire on 31 December 2021 in the case of the Kingdom of Denmark and on 4 January 2022 in the case of the Italian Republic and the Portuguese Republic.

49      In the light of the foregoing, it must be concluded that the applicant has not established the seriousness of the damage alleged.

 Irreparability of the damage

50      Nor, moreover, does it appear to be the case that the damage alleged in the present case can be categorised as irreparable.

51      It is well-established case-law that damage of a pecuniary nature cannot, save in exceptional circumstances, be regarded as irreparable or even as difficult to repair 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 be recouped by the applicant’s bringing an action for compensation on the basis of Articles 268 and 340 TFEU (see 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:T:2009:124, paragraph 33 and the case-law cited).

52      In addition, while, in the case-law, account has also been taken of the fact that, if the interim measures sought were not granted, the market share of the party seeking those measures would be irremediably affected, it must be pointed out that this situation can be placed on an equal footing with that of the risk of disappearance from the market and justify adoption of the interim measures sought only if the irremediable effect on market share is also of a serious nature. It is therefore not sufficient that a market share may be irremediably lost by an undertaking; rather, it is necessary for that market share to be sufficiently large in the light of, in particular, the size of that undertaking, regard being had to the characteristics of the group to which it belongs through its shareholders. An applicant for interim measures who invokes the loss of such a market share must also demonstrate that regaining a significant proportion of that share is impossible by reason of obstacles of a structural or legal nature (see order of 28 April 2009, United Phosphorus v Commission, T‑95/09 R, not published, EU:T:2009:124, paragraph 35 and the case-law cited).

53      In the present case, as regards, in the first place, the applicant’s argument that its damage would result from the irreversible loss, for structural or legal reasons, of market shares and an intangible asset that is constituted by a customer base, the value of that customer base and the value that brings to the goodwill of the business, in so far as its customers will have established contractual relationships with competitors selling competing products, it must be pointed out, as the Commission has, that the applicant has not adduced any evidence to substantiate its claim.

54      Consequently, the difficulty invoked, as set out in the written pleadings, as regards regaining market share lost as a result of the loyalty of customers to the product that they use cannot therefore, in itself, convince the judge dealing with the application for interim relief of the irreparable nature of the alleged harm (order of 8 June 2020, Ascenza Agro v Commission, T‑77/20 R, not published, EU:T:2020:246, paragraph 94).

55      In the second place, as regards the argument that the production of a new approval dossier for mancozeb imposes a heavy financial burden, it must be stated that the applicant has not produced any evidence concerning the extent of that burden or Indofil’s ability to bear such a burden.

56      Third, as regards the applicant’s assertion that its losses could not be compensated by means of an action for damages, it is not apparent from its written pleadings that, in view of its nature and the manner in which it will foreseeably occur, the harm alleged, should it occur, may not be adequately identified and quantified and that, in practice, it will not therefore be possible to make good that harm by bringing an action for damages (see, to that effect, order of 22 June 2018, Arysta LifeScience Netherlands v Commission, T‑476/17 R, EU:T:2018:407, paragraph 94 and the case-law cited).

57      Although the applicant submits that there is a risk that the alleged harm cannot be compensated, it does not provide any evidence in support of its claim that financial compensation would not in itself be sufficient to constitute restitutio in integrum.

58      It follows that the applicant has not established either the serious or the irreparable nature of the harm alleged.

59      It follows from all of the above that the application for interim relief must be dismissed, as the applicant has failed to establish urgency, without it being necessary to rule on the prima facie case or to weigh up the interests.

60      In accordance with 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 relief is dismissed.

2.      The costs are reserved.

Luxembourg, 19 March 2021.

*      Language of the case: English.

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