Wagenknecht v Commission (Appeal - Protection of the European Union’s financial interests - Combating fraud - Judgment) [2022] EUECJ C-130/21P (24 March 2022)

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(Appeal – Protection of the European Union’s financial interests – Combating fraud – Multiannual Financial Framework – Alleged conflict of interest of the Prime Minister of the Czech Republic – Request to prevent the latter from meeting with the College of European Commissioners – Request to stop direct payments in the EU budget in favour of certain agri-food groups – Action for failure to act – Alleged failure to act by the European Commission – Composition of the General Court of the European Union – Alleged lack of impartiality – Application inadmissible – Definition of position – Locus standi – Interest in bringing proceedings)

APPEAL under Article 56 of the Statute of the Court of Justice of the European Union, brought on 1 March 2021,

Lukáš Wagenknecht, residing in Pardubice (Czech Republic), represented by A. Koller, advokátka,

European Commission, represented by F. Erlbacher and M. Salyková, acting as Agents,

composed of J. Passer, President of the Seventh Chamber, acting as President of the Eighth Chamber, F. Biltgen (Rapporteur) and N. Wahl, Judges,

having decided, after hearing the Advocate General, to proceed to judgment without an Opinion,

1 By his appeal, Mr Lukaš Wagenknecht seeks to have set aside the order of the General Court of the European Union of 17 December 2020, Wagenknecht v Commission (T‑350/20, ‘the order under appeal’, not published, EU:T:2020:635), by which the General Court dismissed as inadmissible his action for failure to act under Article 265 TFEU and seeking a declaration that the European Commission unlawfully failed to act on his request to adopt binding and deterrent measures designed to prevent or deal with the alleged conflict of interests of Mr Andrej Babiš, the Prime Minister of the Czech Republic.

2 The background to the dispute is set out in paragraphs 1 to 4 of the order under appeal as follows:

‘1 By letter of 30 January 2020, the [appellant] […], a member of the Senát Parlamentu České republiky (Senate of the Czech Republic), asked the European Commission to adopt binding and dissuasive measures designed to prevent or deal with the alleged conflict of interests of Mr Andrej Babiš, the Prime Minister of the Czech Republic, in particular, first, by preventing the Members of the College of Commissioners, particularly its President, from meeting [Mr Babiš], and discussing with him questions connected with the Multiannual Financial Framework of the European Union for 2021-2027 and with the EU budget in general and, second, by adopting measures intended to put an end to the direct payments of agricultural aid from the EU budget in favour of certain companies over which Mr Babiš exercises control and of which he is the effective proprietor (‘the call to act’), on the ground of an alleged conflict of interests of that representative of the Czech Republic, which arises from his personal and family interests in the Agrofert group and the Synbiol group, both active in particular in the agri-food sector.

2 In its reply of 25 March 2020, the Commission, while noting that the call to act addressed to it corresponded, to a large extent, to that already addressed to the European Council and which was the subject of the action for failure to act, pending before the General Court on that date, in Case T‑715/19 Wagenknecht v European Council, explained that it had already taken the necessary and proportionate measures in order to protect the EU budget. The Commission referred, first, to the fact that no payments under the European Structural and Investment Funds had been made to the beneficiaries potentially affected by the alleged conflict of interest and, second, to the decision of 28 November 2019 suspending payments under the European Agricultural Fund for Rural Development (EAFRD). In that context, the Commission stated that the latter decision had been challenged before the Court in Case T‑76/20, Czech Republic v Commission. Thus, because of that case, pending at the time and having subsequently been removed from the Register of the General Court following its withdrawal by the [appellant] (order of 25 August 2020, Czech Republic v Commission, T‑76/20, not published, EU:T:2020:379), the Commission had decided to refrain from making any further observations.

3 By email of 30 March 2020, the [appellant] again contacted the Commission, reiterating the questions which he had posed in the call to act, on the ground that, in his view, the Commission had not adopted a position on them in its reply of 25 March 2020. In the same email, the [appellant] posed additional questions, while acknowledging that those questions went beyond the scope of the call to act.

4 By letter of 23 April 2020, the Commission, taking note of the [appellant’s] email of 30 March 2020, replied that it had nothing to add to the previous correspondence.’

3 By application lodged at the Registry of the General Court on 9 June 2020, the appellant brought an action under Article 265 TFEU for a declaration that the Commission had failed to fulfil its obligations in that it failed to act in response to the call to act of 5 June 2019.

4 On 11 August 2020, the Commission raised a plea of inadmissibility under Article 130(1) of the Rules of Procedure of the General Court. The appellant did not lodge observations on that plea of inadmissibility.

5 By the order under appeal, the General Court, first, granted the Commission’s request that no regard should be had to the passages in the application referring to an opinion of the Commission’s Legal Service dated 19 November 2018 and, secondly, dismissed the action as inadmissible, having held, first in paragraphs 28 to 31 of that order, that the appellant had neither an interest in bringing proceedings nor locus standi and, secondly in paragraphs 32 to 36 of that order, that the Commission had, in its letter of 25 March 2020, defined its position on the call to act.

8 The appellant’s arguments, as set out in the application, must be grouped into six grounds of appeal, alleging (i) infringement of the second paragraph of Article 18 of the Statute of the Court of Justice of the European Union, (ii) incorrect classification by the General Court of the Commission’s letter of 25 March 2020 as a definition of position, (iii) an error of assessment by the General Court as regards the appellant’s interest in bringing proceedings and his locus standi, (iv) infringement of Article 6(1) of the European Convention for the Protection of Human Rights and Fundamental Freedoms, signed in Rome on 4 November 1950 (‘ECHR’), Articles 2, 41 and 47 of the Charter of Fundamental Rights of the European Union (‘the Charter’), and Article 2 TEU, (v) an incorrect assessment by the General Court of the use made by the appellant of the Commission’s legal opinion of 19 November 2018, and (vi) infringement of the general principle of the foreseeability of the law with regard to costs.

9 By his first ground of appeal, the appellant claims that the General Court infringed the second paragraph of Article 18 of the Statute of the Court of Justice of the European Union, in that one of the members of the formation of the General Court which ruled on his action, namely Judge J. Laitenberger, was in a situation in which there appeared to be a conflict of interests in the case, without however recusing himself, and therefore failed to fulfil its obligation of objective impartiality. In addition, the President of the General Court infringed his obligation to notify that judge of his conflict of interests.

10 According to the appellant, that conflict of interests arises from two circumstances, only one of which is sufficient to establish the breach of the obligation of impartiality relied on.

11 In the first place, the appellant states that, before being appointed as a Judge at the General Court, Mr Laitenberger spent 20 years in the service of the Commission, in particular at the Directorate-General (DG) for Competition and the Spokesperson Service. By ruling in a case concerning the alleged failure of his former employer to act, approximately nine months after leaving that employer, that judge was in a situation in which there appeared to be a conflict of interests and therefore did not satisfy the requirement of objective impartiality.

12 In the second place, the appellant claims that Mr Laitenberger, when he was Director-General of DG Competition, defended the Commission’s lack of action against the Agrofert group in another dispute relating structurally to the same issue as the one raised in the present case.

13 In that regard, the appellant submits that, between January and March 2018, he had an exchange of communications with Mr Laitenberger through his spokesperson, as a result of three questions which he had raised in order to ascertain whether the fact that a Member State had not recovered the amount of a subsidy which the Commission refused to charge to the EU budget because the European Anti-Fraud Office (OLAF) considered that it had been paid in breach of EU rules, and which was therefore paid out of that Member State’s budget, constituted unlawful State aid under EU law. The response he received was, in essence, that the Commission could not, in principle, order a Member State to recover aid solely on the ground that it had been granted unlawfully if it had not been shown to be incompatible with the common market. That reply, which was allegedly provided on behalf of DG Competition by Mr Laitenberger’s spokesperson, merely addressed, in general terms, the principles underlying State aid rather than specifically taking a view on the dispute concerning a subsidiary of Agrofert.

15 It must be recalled that the guarantees of access to an independent and impartial tribunal previously established by law, and in particular those which determine what constitutes a tribunal and how it is composed, represent the cornerstone of the right to a fair trial. That right means that every court is obliged to check whether, as composed, it constitutes such a tribunal where a serious doubt arises on that point. That check is necessary for the confidence which the courts in a democratic society must inspire in those subject to their jurisdiction (judgment of 26 March 2020, Review Simpson v Council and HG v Commission, C‑542/18 RX-II and C‑543/18 RX-II, EU:C:2020:232, paragraph 57 and the case-law cited).

16 The Court has also held that there are two aspects to the requirement of impartiality, guaranteed in Article 47 of the Charter. First, the members of the court or tribunal must themselves be subjectively impartial, that is, none of its members may show bias or personal prejudice, there being a presumption of personal impartiality in the absence of evidence to the contrary. Secondly, the court or tribunal must be objectively impartial, that is to say, it must offer guarantees sufficient to exclude any legitimate doubt in this respect (judgment of 4 December 2019, H v Council, C‑413/18 P, not published, EU:C:2019:1044, paragraph 55 and the case-law cited).

17 In the present case, by merely alleging that one of the members of the formation of the General Court which made the order under appeal was in a situation in which there appeared to be a conflict of interests, the appellant does not seek to call into question the personal impartiality of that member, but the objective impartiality of the formation of that court.

18 As regards the grounds on which the appellant bases that claim, it should be stated that the mere fact that that member of the formation of the General Court worked for the Commission, the defendant at first instance, before performing his duties as a Judge at the General Court is not sufficient to cast a doubt as to his objective impartiality and that of this formation in the present case (see, to that effect, order of 2 April 2020, Kerstens v Commission, C‑577/18 P‑REV, not published, EU:C:2020:250, paragraphs 25 to 30).

19 In that regard, Article 18 of the Statute of the Court of Justice of the European Union, which is the expression of the right of access to an independent and impartial tribunal enshrined in Article 47 of the Charter, provides, in its first paragraph, that no Judge or Advocate General of the Court of Justice of the European Union may take part in the disposal of any case in which he or she has previously taken part as agent or adviser or has acted for one of the parties, or in which he or she has been called upon to pronounce as a member of a court or tribunal, of a commission of inquiry or in any other capacity, and in the first sentence of its second paragraph that if, for some special reason, any Judge or Advocate General considers that he or she should not take part in the judgment or examination of a particular case, he or she must so inform the President.

20 As regards the prohibition imposed by the first paragraph of Article 18 of the Statute of the Court of Justice of the European Union on a judge taking part in the disposal of a case in which he or she had previously intervened in a different capacity and the reference in the second paragraph of Article 18 to a ‘special reason’ for not taking part in the judgment of a particular case, it is to no avail, in the light of the specific circumstances as described by the appellant, that the latter relies on the alleged defence, raised by Mr Laitenberger in his position as Director-General of DG Competition, of the Commission’s lack of action against the Agrofert group in another dispute which concerned the same issue as the one raised in the present action.

21 First, even if the correspondence between the appellant and the Commission in 2018, like his application in the present case, concerned an alleged conflict of interest on the part of the Czech Prime Minister, the subject matter of that correspondence was unlawful State aid which the Czech Republic had allegedly granted, whereas the subject matter of the present case concerns payments from the EU budget. It is therefore not the same case, as the appellant himself acknowledges.

22 Secondly, in that correspondence, as the appellant also acknowledges, the Commission merely set out in general terms the principles underlying State aid, without specifically addressing the dispute referred to by the appellant. It follows that those answers are of no relevance to the present case and cannot in any way constitute evidence of the existence of bias.

23 Third, and in any event, although it appears that the appellant’s interlocutors were assigned to the Commission’s Spokesperson Service and that one of them was a press officer for DG Competition, it is not apparent from that correspondence that Mr Laitenberger personally drafted or approved the answers provided. Accordingly, the appellant’s claim that there was an exchange of communications with Mr Laitenberger through his spokesperson has not been established.

24 It follows from the foregoing that the appellant has not demonstrated that there was no objective impartiality, within the meaning of the case-law referred to in paragraph 16 above, either by Judge Laitenberger or by the formation of the General Court which made the order under appeal.

26 By his second ground of appeal, the appellant complains that the General Court made two errors of assessment in paragraph 36 of the order under appeal by classifying the Commission’s letter of 25 March 2020 as a definition of position in relation to the invitation to act.

27 In the first place, in that letter, contrary to the General Court’s assertion in paragraph 36, the Commission did not explain to the appellant why it refused to act in the manner requested. The Commission simply avoided responding to the two requests made in the invitation to act, without giving effect to them.

28 In the second place, the General Court classified the Commission’s letter of 25 March 2020 as a definition of its position, even though that institution did not reply to the appellant’s request to terminate the payments of direct agricultural aid from the EU budget, coming under the first pillar of the common agricultural policy (CAP), to companies controlled by the Prime Minister of the Czech Republic. However, the Commission referred to the suspension of payments to those companies under the European Structural and Investment Funds and the EAFRD, which come under the second CAP pillar. In those circumstances, recourse to Article 263 TFEU, as advocated by the General Court, is meaningless in so far as the appellant did not raise any objection in relation to the declaration made or to the measures adopted by the Commission with regard to that second pillar.

29 The failure to respond to the claim relating to the first pillar constitutes a failure to act on the part of the Commission and should lead to the order under appeal being set aside. In addition, the General Court made a misleading reference to the EAFRD in connection with the payment of direct agricultural aid in order to conceal that lack of a response.

31 As is clear from the case-law of the Court of Justice, the General Court was correct to point out, in paragraphs 33 to 35 of the order under appeal, that the conditions for admissibility of an action for failure to act, laid down in Article 265 TFEU, are not satisfied where the institution called upon to act has defined its position on that request before the action is brought (orders of 8 February 2018, CBA Spielapparate- und Restaurantbetrieb v Commission, C‑508/17 P, not published, EU:C:2018:72, paragraph 15, and of 3 December 2019, WB v Commission, C‑270/19 P, not published, EU:C:2019:1038, paragraph 13), and that the adoption of a measure different from that sought or considered necessary by the persons concerned, such as a duly reasoned refusal to act in accordance with the call to act, constitutes a definition of position putting an end to the failure to act (see, to that effect, judgment of 19 November 2013, Commission v Council, C‑196/12, EU:C:2013:753, paragraph 22 and the case-law cited).

32 It is in accordance with that case-law that the General Court considered, in essence, in paragraph 36 of the order under appeal that the Commission’s letter of 25 March 2020, in response to the call to act of 30 January 2020 and containing the institution’s decision not to take steps to the effect recommended in that call to act, brought an end to the failure to act, thereby rendering inadmissible the appellant’s action under Article 265 TFEU. The General Court added that it was open to the appellant to bring an action under Article 263 TFEU against that decision, provided that he could prove that he had locus standi.

33 However, it must be borne in mind that the definition of a position, within the meaning of the second paragraph of Article 265 TFEU, must set out clearly and definitively the position of the institution concerned on the appellant’s call to act and that the classification of that institution’s response to that call to act as a ‘definition of position’ putting an end to the alleged failure to act is a question of law which may be raised on appeal (see, to that effect, order of 16 June 2020, CJ v Court of Justice of the European Union, C‑634/19 P, not published, EU:C:2020:474, paragraphs 29 and 31 and the case-law cited).

34 In the present case, the arguments put forward by the appellant in his second ground of appeal are not such as to call into question the classification of the Commission’s letter of 25 March 2020 as a ‘definition of position’ or, therefore, the General Court’s conclusion that the action was inadmissible on that ground.

35 In that regard, it is clear from the wording of that letter that the Commission refused to act in response to the invitation made to it. By explaining to the appellant, in that letter, that it had already taken the necessary and proportionate measures to protect the EU budget, by not paying to the beneficiaries potentially concerned by the alleged conflict of interests the sums under the European Structural and Investment Funds and by suspending payments under the EAFRD, the Commission, implicitly but unequivocally, refused to act in accordance with the two requests made by the appellant in the invitation to act, while giving him the reason for not acting. Accordingly, it did not avoid replying to those requests. It follows that the General Court did not make an error of assessment in finding, in paragraph 36 of the order under appeal, that the Commission’s letter of 25 March 2020 constituted a definition of position within the meaning of the second paragraph of Article 265 TFEU.

36 In those circumstances, the appellant’s argument that the General Court erred in referring, in paragraph 36 of the order under appeal, to the EAFRD funds as direct agricultural aid from the EU budget is ineffective, since, whatever the classification of the payments made under those funds, the Commission refused to act in accordance with the appellant’s requests on the ground that the suspension of those payments was one of the necessary and proportionate measures taken in order to protect the EU budget.

37 Furthermore, it must be borne in mind that the issue of the conditions for the admissibility of an action for a failure to act is distinct from the issue whether the act adopted by the EU institution to which the request was made, which brings its failure to act to an end, may be the subject of an action for annulment (see, to that effect, order of 16 June 2020, CJ v Court of Justice of the European Union, C‑634/19 P, not published, EU:C:2020:474, paragraph 36 and the case-law cited). Accordingly, the appellant’s argument that bringing an action under Article 263 TFEU against the Commission’s letter of 25 March 2020 is irrelevant is ineffective.

38 It follows from the foregoing that the second ground of appeal must be rejected as unfounded.

39 By his third ground of appeal, the appellant takes issue with paragraphs 28 to 31 of the order under appeal, in which the General Court concluded that the appellant had neither locus standi nor an interest in bringing proceedings in the action for failure to act.

40 According to the appellant, the acts which he asked to be adopted in respect of third parties could be of direct and individual concern to him. Where the adoption of such acts is necessary to ensure compliance with the fundamental values set out in Article 2 TEU, it is necessary to adopt a broad interpretation of the admissibility criteria in order to allow individuals to bring an action before the General Court alleging that an EU institution has failed to comply with those values.

41 The appellant also claims that he has an interest in bringing proceedings. In the first place, he claims that he has an interest, as a Member of Parliament of a Member State and Chairperson of the Permanent Committee of the Czech Senate responsible for monitoring the management of public resources, in asking the General Court to verify whether the Commission has complied with its obligations under EU legislation. In the second place, as a European taxpayer, he has an interest in asking the Court to ascertain whether the Commission respected and applied the rules relating to the proper distribution of its money.

43 In so far as, for the reasons set out in paragraphs 31 to 38 above, the General Court did not err in law in holding the action to be inadmissible on the ground that the Commission had defined its position on the invitation to act of 30 January 2020 before that action was brought, there is no need to examine the appellant’s arguments alleging an incorrect assessment of his locus standi and his interest in bringing proceedings. In those circumstances, such an error would have no bearing on the outcome of the dispute and would not affect the operative part of the order under appeal in so far as that action was dismissed as inadmissible (see, by analogy, judgment of 3 October 2013, Inuit Tapiriit Kanatami and Others v Parliament and Council, C‑583/11 P, EU:C:2013:625, paragraph 74, and order of 25 October 2016, VSM Geneesmiddelen v Commission, C‑637/15 P, not published, EU:C:2016:812, paragraphs 54 and 55).

45 By his fourth ground of appeal, the appellant alleges infringement of Article 6(1) of the ECHR, Articles 2, 41 and 47 of the Charter, and Article 2 TEU in that, in paragraph 37 of the order under appeal, the General Court upheld the Commission’s plea of inadmissibility without examining the substance of the case, holding in particular that, even though the appellant is a member of a national Parliament and is subject to threats to his physical integrity, Article 47 of the Charter is not intended to modify the system of judicial review laid down by the Treaties.

46 The appellant submits that the General Court failed to fulfil its obligation of independence, within the meaning of Article 6(1) of the ECHR, in three respects. First, it uncritically took into consideration the Commission’s arguments as the executive power, while disregarding almost entirely those of the appellant, in breach of the right to a fair trial which requires an examination of the main arguments of all the litigants. Second, by holding the appellant’s action to be inadmissible, the General Court limited its jurisdiction as regards the executive branch of the European Union. Third, the General Court infringed the requirement of judicial independence from the point of view of fundamental values and rights by failing to criticise the action of the executive and by not maintaining the proper balance between the judiciary and the executive.

47 In that regard, the appellant submits that the General Court tolerated the Commission’s subversive use of the litigation strategy consisting of raising a plea of inadmissibility in order to allow infringement of the fundamental values enshrined in Article 2 TEU, such as democracy, the rule of law, equality and justice.

48 Furthermore, by overlooking the threats to the appellant’s physical integrity, the General Court infringed his right to life, as guaranteed by Article 2 of the Charter.

49 The appellant adds that, by refraining from ruling on the substance of the case and disregarding most of his arguments, the General Court, by its failure to state reasons, infringed its obligation to state reasons, as enshrined in Article 41 of the Charter and based on the right to a fair trial.

51 Relying on an infringement of Article 6(1) of the ECHR, Articles 2, 41 and 47 of the Charter, and Article 2 TEU, the appellant essentially criticises the fact that the General Court, under Article 130 of its Rules of Procedure, ruled on the plea of inadmissibility without going to the substance of the case.

52 In that regard, suffice it to state, as the General Court did, in essence, in paragraph 37 of the order under appeal, that, although the conditions governing the admissibility of an action before the Court of Justice must be interpreted in the light of the values and fundamental rights of EU law, those values and fundamental rights nevertheless cannot have the effect of altering the system of judicial review laid down by the Treaties, in particular the rules relating to the admissibility of direct actions brought before the EU Courts (order of 14 April 2021, Wagenknecht v European Council, C‑504/20 P, EU:C:2021:305, paragraph 39 and the case-law cited).

53 Moreover, the appellant’s claim that, in the order under appeal, the General Court infringed its obligation to state reasons is based on the failure to deal with the substance of the case in that order, which is merely the consequence of the legitimate decision of the General Court to rule without going to the substance of the case, pursuant to Article 130 of its Rules of Procedure.

55 By his fifth ground of appeal, the appellant, in essence, takes issue with paragraphs 14 to 24 of the order under appeal, by which the General Court granted the Commission’s request that the passages in the application referring to the opinion of the Commission’s Legal Service of 19 November 2018 be disregarded. The appellant submits that the General Court incorrectly assessed the extent to which he relied on that opinion in his application.

56 The appellant asserts that, in his application, the two references to that legal opinion were intended to provide an additional, non-essential illustration of his own arguments, with the first reference appearing in a footnote and the second in the heading of one paragraph of the application.

58 It must be held that this plea is ineffective. Even if it were well founded, it would not affect either point 1 of the operative part of the order under appeal, which states that no regard is to be had to that opinion of the Commission’s Legal Service, as annexed to the application, or the passages of that application referring to the content of that opinion, or point 2 of the operative part dismissing the appellant’s action as inadmissible.

60 By his sixth ground of appeal, the appellant claims that the General Court infringed the principle of predictability of the law by ordering him to pay the costs, even though the amount of those costs was not indicated in the order under appeal and that Articles 133 to 141 of the Rules of Procedure of the General Court, relating to costs, do not lay down any substantive rule allowing costs to be determined.

62 In accordance with settled case-law, where all the other grounds of appeal have been rejected, any submissions concerning the alleged unlawfulness of the decision of the General Court on costs must be rejected as inadmissible, pursuant to the second paragraph of Article 58 of the Statute of the Court of Justice of the European Union, in accordance with which an appeal may not relate only to the amount of the costs or the party ordered to pay them (orders of 12 January 2017, Europäischer Tier- und Naturschutz and Giesen v Commission, C‑343/16 P, not published, EU:C:2017:10, paragraph 24, and of 14 April 2021, Wagenknecht v European Council, C‑504/20 P, EU:C:2021:305, paragraph 52).

63 Since the other grounds of appeal have been rejected, the sixth ground of appeal must be rejected as inadmissible.

64 It follows from the foregoing that the appeal must be dismissed in its entirety.

65 Under Article 138(1) of the Rules of Procedure of the Court of Justice, applicable to appeal proceedings by virtue of Article 184(1) thereof, the unsuccessful party is to be ordered to pay the costs if they have been applied for in the successful party’s pleadings.

66 In the present case, since the Commission has applied for costs and the appellant has been unsuccessful, the latter must be ordered to bear his own costs relating to the appeal and to pay those incurred by the Commission.

2. Orders Mr Lukaš Wagenknechtto bear his own costs and to pay those incurred by the European Commission.

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You are here: BAILII >> Databases >> Court of Justice of the European Communities (including Court of First Instance Decisions) >> Wagenknecht v Commission (Appeal - Protection of the European Union’s financial interests - Combating fraud - Judgment) [2022] EUECJ C-130/21P (24 March 2022) URL: http://www.bailii.org/eu/cases/EUECJ/2022/C13021P.html Cite as: EU:C:2022:226, ECLI:EU:C:2022:226, [2022] EUECJ C-130/21P

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