SGL Carbon v Commission (Appeals – Environment - Classification, labelling and packaging - Classification of pitch, coal tar - Opinion) [2022] EUECJ C-65/21P

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Química del Nalón SA, formerly Industrial Química del Nalón SA (C‑73/21 P)

(Appeal – Actions for damages – Environment – Classification, labelling and packaging of substances and mixtures – Classification of pitch, coal tar, high temperature as an Aquatic Acute 1 (H400) and Aquatic Chronic 1 (H410) substance – Sufficiently serious breach of a rule of law conferring rights on individuals – Rule of law conferring rights on individuals – Duty of diligence)

1. Does the EU administration’s duty of diligence, understood as an obligation to take all relevant factors into consideration in the exercise of its powers, constitute a rule of law intended to confer rights on individuals, breach of which may give rise to non-contractual liability on the part of the European Union? That is the question of principle which the Court will need to consider in examining the ground of appeal raised by the appellants in support of their appeals against four judgments of the General Court of the European Union. (2)

2. In the judgments under appeal, the General Court dismissed actions for damages brought by a number of manufacturers of pitch, coal tar, high temperature (‘CTPHT’) (3) claiming to have suffered loss as a result of the erroneous classification of that substance as hazardous to the aquatic environment. Since that classification resulted from what was found, in the earlier judgments of the General Court (4) and the Court of Justice, (5) to have been a manifest error of assessment by the European Commission, there is no dispute as to the unlawfulness of the act which caused the damage relied on. However, the unlawfulness of an act is not sufficient, in itself, to give rise to non-contractual liability on the part of the European Union. The conditions which must be satisfied in order for such liability to arise include, in particular, a requirement for the damage to result from infringement of a rule intended to confer rights on individuals. The present case therefore raises the question of whether the obligation of the EU administration to take all relevant factors into consideration when exercising its powers constitutes such a rule.

3. The first paragraph of Article 3 of Regulation (EC) No 1272/2008 (6) provides:

‘A substance or a mixture fulfilling the criteria relating to physical hazards, health hazards or environmental hazards, laid down in Parts 2 to 5 of Annex I is hazardous and shall be classified in relation to the respective hazard classes provided for in that Annex.’

4. Annex I to Regulation No 1272/2008 sets out the criteria for classification of substances and mixtures in hazard classes. Point 4.1.3.5.5 of that annex contains provisions describing one method of classification, the ‘summation method’.

5. The background to the dispute is set out in detail in the judgments under appeal, to which I would refer for further detail. (7) For the purposes of the present proceedings, I would simply make the following points.

6. By the judgment of 7 October 2015, Bilbaína de Alquitranes and Others v Commission, (8) the General Court annulled Regulation (EU) No 944/2013 (9) in so far as it classified CTPHT as an Aquatic Acute 1 (H400) and Aquatic Chronic 1 (H410) substance.

‘30. In the present case, it must be held that the Commission committed a manifest error of assessment in that, by classifying CTPHT as an Aquatic Acute 1 (H400) and Aquatic Chronic 1 (H410) substance on the basis of its constituents, it failed to comply with its obligation to take into consideration all the relevant factors and circumstances so as to take due account of the proportion in which the 16 [polycyclic aromatic hydrocarbon (“PAH”)] constituents are present in CTPHT and their chemical effects.

31. According to point 7.6 of the background document, for the purpose of the classification of CTPHT on the basis of its constituents, it was assumed that all of the PAHs present in CTPHT dissolved in the water phase and were thus available to aquatic organisms. It is also mentioned that this assumption would likely give an overestimation of the toxicity of CTPHT and that, since the composition of the [Water-Accommodated Fraction] was uncertain, that toxicity estimate could be regarded as the worst case scenario.

32. However, neither the Commission nor [the European Chemicals Agency (“ECHA”)] was able to establish before the Court that, in basing the classification of CTPHT as an Aquatic Acute 1 (H400) and Aquatic Chronic 1 (H410) substance on the assumption that all of the PAHs present in that substance dissolved in the water phase and were thus available to aquatic organisms, the Commission took into consideration the fact that, according to point 1.3 of the background document, entitled “Physiochemical properties”, the constituents of CTPHT were released from CTPHT only to a limited extent and that that substance was very stable.

33. First, neither the [opinion of the Risk Assessment Committee (“RAC”)] on CTPHT nor the background document contains any reasoning which demonstrates that, in assuming that all of the PAHs present in that substance dissolve in the water phase and are available to aquatic organisms, account was taken of the low water solubility of CTPHT. Moreover, in response to a written question from the Court, the Commission and ECHA were able to demonstrate only that the water solubility of the 16 PAH constituents, considered in isolation, had been taken into account during the classification procedure of CTPHT. In addition, in response to a question from the Court at the hearing, the Commission and ECHA merely indicated that it had been assumed that all of the PAHs in CTPHT dissolved in water inasmuch as the examination of the aquatic toxicity of that substance had been conducted on the basis of its constituents. Such reasoning does not, however, establish that the low solubility of that substance was taken into consideration.

34. Secondly, it must be noted that, according to point 1.3 of the background document, the highest rate of water solubility of CTPHT in relation to a loading was 0.0014% at maximum. Given the low water solubility of CTPHT, the Commission has in no way demonstrated that it could base the classification in question of that substance on the assumption that all of the PAHs present in CTPHT dissolved in the water phase and were available to aquatic organisms. It is apparent from Table 7.6.2 in the background document that the 16 PAH constituents of CTPHT constitute 9.2% of that substance. By assuming that all of those PAHs dissolve in water, the Commission therefore, in essence, based the classification in question on the assumption that 9.2% of CTPHT could dissolve in water. However, as can be seen from point 1.3 of the background document, such a value is not realistic, given that the maximum rate is 0.0014%.’

9. The Court of Justice dismissed the Commission’s appeal by its judgment of 22 November 2017, Commission v Bilbaína de Alquitranes and Others. (10)

10. In paragraphs 39 and 46 to 55 of that judgment, the Court stated as follows:

‘39. It is true that point 4.1.3.5.5 of Annex I to Regulation No 1272/2008 does not provide for the use of criteria other than those expressly referred to in that provision. However, it should be noted that no provision expressly prohibits other factors liable to be relevant to the classification of a UVCB substance from being taken into consideration.

46. The strict and automatic application of the summation method in all circumstances is liable to result in an undervaluing of the aquatic toxicity of a UVCB substance with few known constituents. Such a result cannot be regarded as consistent with the goal of protection of the environment and human health pursued by Regulation No 1272/2008.

47. It must therefore be held that, when it applies the summation method in order to determine whether a UVCB substance comes within the categories of acute or chronic aquatic toxicity, the Commission is not required to limit its assessment solely to the factors expressly referred to in point 4.1.3.5.5 of Annex I to Regulation No 1272/2008, to the exclusion of any other factor. In accordance with its duty to act diligently, the Commission is required to examine carefully and impartially other factors which, although not expressly referred to by those provisions, are nevertheless relevant.

50. The ground in paragraph 28 of the judgment under appeal, according to which “in order to take the view that a substance falls within the categories of acute aquatic toxicity or chronic aquatic toxicity, that substance – and not merely its constituents – must satisfy the classification criteria”, is not contested.

51. The classification method referred to in point 4.1.3.5.5 of Annex I to Regulation No 1272/2008 is based on the assumption that the constituents taken into consideration are 100% soluble. On the basis of that assumption, that summation method implies that there is a concentration level of constituents below which the threshold of 25% cannot be reached and, thus, consists of calculating the sum of the concentrations of the constituents coming within the categories of acute or chronic toxicity, each weighted by factor M corresponding to their toxicity profile.

52. It is, however, inherent in that method that it loses reliability in situations where the weighted sum of the constituents exceeds the level of concentration corresponding to the threshold of 25% in a proportion less than the ratio between the observed solubility rate at the level of the substance in question as a whole and the hypothetical solubility rate of 100%. In such situations, it thus becomes possible that the summation method may lead, in specific cases, to a result greater than or less than the level corresponding to the regulatory threshold of 25%, according to whether the hypothetical solubility rate of the constituents is taken into consideration or that of the substance as a whole.

53. It is common ground that Table 7.6.2 of Annex I to the report attached to the RAC’s opinion shows that, first, the summation method leads to the result of 14 521% and that, secondly, that result is 581 times greater than the minimum level required for the threshold of 25%, after weighting by factor M, to be reached. Nor is it disputed that it is, moreover, apparent from point 1.3 of that document, entitled “Physiochemical properties”, that the maximum rate of water solubility of CTPHT was 0.0014%, a rate approximately 71 000 times lower than the hypothetical solubility rate of 100% used for the constituents taken into consideration.

54. The General Court therefore did not distort or err in the legal classification of the facts in holding, in paragraph 34 of the judgment under appeal, that, “by assuming that all of those [constituents] dissolve in water, the Commission therefore, in essence, based the classification in question on the assumption that 9.2% of CTPHT could dissolve in water. However, as can be seen from point 1.3 of the background document [annexed to the RAC’s opinion], such a value is not realistic, given that the maximum rate is 0.0014%”.

55. Since it found, in paragraph 32 of that judgment, that “neither the Commission nor ECHA [had been] able to establish … that … the Commission [had taken] into consideration the fact that, according to point 1.3 of the background document [annexed to the RAC’s opinion], entitled “Physiochemical properties”, the constituents of CTPHT were released from CTPHT only to a limited extent and that that substance was very stable”, the General Court held, without erring in law, in paragraph 30 of the judgment that “the Commission [had] committed a manifest error of assessment in that, by classifying CTPHT as an Aquatic Acute 1 (H400) and Aquatic Chronic 1 (H410) substance on the basis of its constituents, it [had] failed to comply with its obligation to take into consideration all the relevant factors and circumstances so as to take due account of the proportion in which the 16 … constituents are present in CTPHT and their chemical effects”.’

11. By six applications lodged at the Court Registry on 23 October 2018, the appellants and two other companies brought actions for damages seeking compensation for the loss allegedly suffered by reason of the unlawful classification of CTPHT as an Aquatic Acute 1 (H400) and Aquatic Chronic 1 (H410) substance.

12. By six judgments delivered on 16 December 2020, amongst which were the judgments under appeal, (11) the General Court dismissed those actions.

13. In paragraphs 70, 71, 96, 98 and 114 of the first judgment under appeal, the Court held as follows:

‘70. In any event, the answer to the question whether, in the present case, the infringement of the summation method rule on which the unlawful classification of CTPHT is based can be relied on in support of the present action for damages, from the perspective of the addition or strengthening of obligations affecting the applicant’s legal situation, would be decisive for the solution of the present dispute only if that infringement were sufficiently serious within the meaning of the case-law cited above, which will be examined below. ^[(12)^]

71. Regarding the breach of the duty of diligence inherent in the principle of sound administration, as alleged by the applicant in its reply, it must be pointed out that, formally, in the application, the applicant did not specifically and independently allege the breach of that duty of diligence in support of its action for damages. It is also not apparent that that allegation can be regarded as amplifying an argument previously put forward in the application. In those circumstances, as the Commission submitted in its observations on the replies to a written question put to the applicant in that regard, the action for damages must be declared inadmissible in so far as it is based on a breach of the duty of diligence. ^[(13)^]

96. Regarding, in the first place, the criteria relating to the degree of clarity and precision of the rule infringed, namely point 4.1.3.5.5 of Annex I to Regulation No 1272/2008, it should be noted that, according to the wording of that provision, the summation method is set out as an almost mechanical calculation, by way of which the Commission verifies whether the sum of concentrations (as a percentage) of the highly toxic constituents of the mixture multiplied by their corresponding M-factors is equal to or greater than 25%. If that is the case, the mixture, CTPHT in the present case, “is classified” as Acute or Chronic Category 1 … point 4.1.3.5.5 of Annex I to that regulation does not provide explicitly for the use of criteria other than those expressly referred to in that provision. ^[(14)^]

98. Accordingly, point 4.1.3.5.5 of Annex I to Regulation No 1272/2008 cannot be regarded as having constituted, on the date of adoption of Regulation No 944/2013, a completely clear rule as regards the Commission’s discretion when applying the summation method. Its wording does not suggest that such discretion exists and, above all, does not mention that the solubility of a mixture is a factor to be taken into account. In that regard, it must be noted that the General Court and, in particular, the Court of Justice acknowledged that the Commission does have a discretion, which should have led it to take into account factors other than those referred to expressly in point 4.1.3.5.5, based on considerations that do not stem directly or explicitly from the wording of that point. More specifically, the Court of Justice relied on considerations connected to the more general regulatory context, namely, in particular, the fact that the summation method does not disregard the methodological limitations … Those difficulties of interpretation, which complicate the application of the summation method and which were rendered apparent, moreover, by that judgment, preclude the Commission’s conduct from being regarded as manifestly and seriously contrary to the rule of law infringed … ^[(15)^]

114 In the light of the foregoing, the error committed by the Commission therefore appears to be excusable. Given the lack of clarity and the difficulties in interpreting the relevant provisions in Annex I to Regulation No 1272/2008 regarding the consideration that can be given to factors other than those expressly provided for when applying the summation method, the Commission’s conduct is close to that which could reasonably be expected from an administrative authority exercising ordinary care and diligence in an analogous situation, that is to say, a situation characterised by scientific complexity connected to the classification of a substance of unknown composition such as CTPHT with the purpose of ensuring a high level of protection of human health and the environment. That conduct is not equivalent to a manifest and grave disregard of the limits on the Commission’s discretion. Therefore, the error committed does not constitute a sufficiently serious breach of a rule of law, with the result that the European Union has not, in any event, incurred non-contractual liability in the present case. That finding applies equally to the infringement of the summation method and, for the sake of completeness and on the grounds set out above, to the alleged breach of the duty of diligence. ^[(16)^]’

14. By their appeals, which are essentially in identical terms and have been registered under case numbers C‑65/21 P, C‑73/21 P, C‑74/21 P and C‑75/21 P, the appellants claim that the Court should:

– reserve the question of the costs of the present proceedings to the General Court, to be decided once the case has been re-examined.

16. The Kingdom of Spain, intervening in support of the Commission, contends that the Court should:

17. The cases have been joined for the purposes of the judgment. A hearing has not been held.

18. The appellants have brought appeals against the judgments under appeal, by which the General Court dismissed their actions for damages. In those judgments, the General Court accepted, on the basis of the judgments of 7 October 2015, Bilbaína de Alquitranes and Others v Commission (17) and of 22 November 2017, Commission v Bilbaína de Alquitranes and Others (18) (‘the annulment judgments’), that the act alleged to have caused loss to the appellants was unlawful by reason of a manifest error of assessment by the Commission. It nevertheless held that that error was excusable and thus did not constitute a sufficiently serious breach of a rule of law, with the result that the non-contractual liability of the European Union did not arise in the circumstances before it. (19)

19. The appellants’ appeals are based on six grounds, the first alleging that the General Court was wrong to reject the argument they advanced on the basis of the duty of diligence, the second that it erred in law in concluding that there was no clear precedent, the third that it was wrong to find that the legal framework was complex, the fourth that it wrongly applied the ordinary, duly diligent administrative authority test, the fifth that the judgments under appeal do not contain a sufficient statement of reasons, and the sixth that the General Court was wrong in law to conclude that the Commission’s approach could be excused on the basis of the precautionary principle.

20. In accordance with the Court’s request, I shall restrict my analysis in this Opinion to the first part of the fourth ground of appeal. However, the first part of the fourth ground appears to overlap with the first ground of the appeals in that both concern the diligence to be exercised by the Commission. I should therefore begin by analysing the relationship between the first part of the fourth ground and the first ground, so that I can take all aspects of the issue they both raise into account.

21. By the first ground, the appellants contend that the General Court was wrong to dismiss, (20) as inadmissible, the argument they had put forward on the basis of breach of the duty of diligence. They submit that the Court made an error of law in holding that that argument, which had been advanced in the replies, had to be distinguished from that set out in the applications, by which it was contended that the Commission had made a manifest error of assessment in failing to examine, carefully and impartially, all factors relevant to the classification of CTPHT. The appellants refer in that regard to the judgment of 22 November 2017, Commission v Bilbaína de Alquitranes and Others, (21) in which the Court of Justice held that where an institution fails to examine, carefully and impartially, all the relevant facts, it necessarily breaches its duty of diligence. Consequently, the appellants submit, the argument based on breach of the duty of diligence did not need to be separately and independently raised, as if it were an autonomous argument. (22)

22. The Commission, supported by the ECHA, submits that the argument based on breach of the duty of diligence is ineffective given that, in dismissing the actions, the General Court held that the error which had been made did not constitute a sufficiently serious breach of a rule of law.

23. The Spanish Government submits that breach of the duty of diligence ought to have been specifically and independently alleged by the appellants in the applications. Otherwise, the requirement to specify the rule of law which has been infringed would be implicitly met in any claim for compensation, given that the duty of diligence is inherent in the principle of sound administration and applies generally to actions of the institutions.

24. Under the fourth ground of appeal, the appellants contend that the Court was wrong to conclude that the Commission had acted as an administrative authority exercising ordinary care and diligence and that the error it made in classifying CTPHT was therefore excusable. By the first part of this ground, the appellants object that the General Court did not carry out an analysis with regard to the claims they had made. Rather than determining whether solubility was expressly mentioned as a relevant factor in Regulation No 1272/2008, the General Court should have considered whether the Commission had adhered to the long-standing principle of law that all relevant factors must be taken into account.

25. The Commission, supported by the ECHA, submits that the fourth ground should be rejected as inoperative and unfounded. It nevertheless presents, in its defence, arguments relating to the second part of this ground, which is beyond the scope of this Opinion.

26. The Spanish Government does not consider that the error alleged in the fourth ground provides a proper basis for the appeal. It observes that the principle of diligence requires an assessment of whether, in the context of the administrative action in question, a minimum acceptable level of diligence was shown, and of whether that level of diligence was reasonable in the circumstances, proportionate to the significance of the case, and consistent with that usually shown by the administrative body in similar cases.

3. The relationship between the first part of the fourth ground of appeal and the first ground of appeal

27. It is apparent from the foregoing that these two grounds raise the issue of the Commission’s duty of diligence in different contexts. Whereas, under the first ground, that duty is expressly regarded as a rule of law conferring rights on individuals, under the fourth ground it is treated as a test of the seriousness of the breach of a rule of law.

28. Nonetheless, regardless of the exact formulations and contexts, the Commission is alleged in both cases, in my view, to have breached the same duty of diligence, understood as an obligation to examine all the relevant facts of the case forming the basis for its assessment. The appellants state, under the first ground of appeal, that the duty of diligence relied on in their replies should have been equated with the obligation of the administration, when exercising its powers, to take all the relevant facts of the case into consideration. It is a breach of that obligation that gives rise to the complaint raised under the first part of the fourth ground of appeal.

29. Does that obligation constitute a rule conferring rights on individuals, breach of which can give rise to non-contractual liability on the part of the European Union?

1. The condition of non-contractual liability of the European Union requiring a sufficiently serious breach of a rule of law intended to confer rights on individuals

30. It is clear from settled case-law of the Court that the European Union may incur non-contractual liability only if three conditions are fulfilled, the first being the existence of a sufficiently serious breach of a rule of law intended to confer rights on individuals (‘the first condition’), the second the fact of damage, and the third the existence of a causal link between the breach of the obligation resting on the author of the act and the damage sustained by the injured parties. (23)

31. The cumulative nature of those conditions means that, where one of them is not satisfied, the non-contractual liability of the European Union cannot be incurred. (24) That is why, in the present case, the General Court, having found that the error made by the Commission in classifying CTPHT did not constitute a sufficiently serious breach of a rule of law, held that the non-contractual liability of the European Union had not been incurred and, accordingly, did not consider the other conditions of such liability.

33. That condition has two separate elements, the first relating to the nature of the rule a breach of which may give rise to non-contractual liability on the part of the European Union (‘a rule of law intended to confer rights on individuals’), and the second to the seriousness of the breach of the rule in question (which must be ‘sufficiently serious’). Those two elements constitute two cumulative sub-conditions of the first condition, such that the first condition is not satisfied if one of those sub-conditions is not satisfied.

(b) The concept of ‘a rule of law intended to confer rights on individuals’

34. The concept of ‘a rule of law intended to confer rights on individuals’, which is at the core of the first condition, has been borrowed by the Court from its case-law on the liability of Member States for infringement of EU law. (25) Having substituted it for the concept previously used, that of ‘a superior rule of law for the protection of individuals’, the Court established the principle of a parallel between, on the one hand, the liability of the European Union, and, on the other, the liability of a Member State for damage caused to individuals by reason of an infringement of EU law. (26)

35. More specifically, in its judgment of 4 July 2000, Bergaderm and Goupil v Commission, (27) the Court, referring to the judgment of 5 March 1996, Brasserie du pêcheur and Factortame, (28) held that the conditions under which the State may incur liability for damage caused to individuals by a breach of EU law cannot, in the absence of particular justification, differ from those governing the liability of the European Union in like circumstances. (29)

36. It is thus apparent from the settled case-law of the Court that the non-contractual liability of the European Union does not arise from any sufficiently serious breach of a rule of EU law, but only from a sufficiently serious breach of a rule intended to confer rights on individuals. (30)

37. As the Court has explained, the purpose of that restriction is, without prejudice to the rules applicable to the assessment of the legality of a Union act, to limit liability to situations where the unlawful conduct of Union institutions, bodies, offices and agencies has caused damage to an individual by prejudicing his or her interests specifically protected by Union law. (31)

38. Nonetheless, in the case-law of the Court of Justice and the General Court, the concept of a ‘rule of law intended to confer rights on individuals’ is interpreted broadly. (32) The principles which ensure the protection of the fundamental rights of the person, such as the principles of equal treatment of undertakings, non-retroactivity of decisions, proportionality, protection of legitimate expectations and respect for private and family life, have been characterised as such rules. (33) It is only rules which are purely procedural or which govern the allocation of powers that are not regarded as being intended to protect individuals. (34)

39. In its case-law on the second element of the first condition, the Court has stated that a sufficiently serious breach of a rule of law intended to confer rights on individuals is established where the breach is one that implies that the institution concerned manifestly and gravely disregarded the limits on its discretion. (35) In that regard, the factors to be taken into consideration are, inter alia, the complexity of the situations to be regulated, the degree of clarity and precision of the rule breached and the measure of discretion left by that rule to the EU institution. (36) Furthermore, where an EU institution or body has been given a discretion, only that particular institution’s or body’s manifest and grave disregard of the limits on that discretion is capable of constituting a sufficiently serious breach of EU law. (37)

40. In any event, in general it is only an irregularity which would not have been committed, in similar circumstances, by an administrative authority exercising ordinary care and diligence that can incur the non-contractual liability of the European Union. (38)

2. The nature of the rules flowing from the principle of sound administration

41. The appellants’ actions for damages and appeals concern the administration’s obligation to take all relevant factors and circumstances into account in the exercise of its powers, that obligation being ‘automatically’ linked, they submit, to the duty of diligence, which is inherent in the principle of sound administration.

42. That principle (or right) is enshrined in Article 41 of the Charter of Fundamental Rights of the European Union (‘the Charter’). If, in determining whether a rule is to be regarded as being intended to confer rights on individuals, the fact that it served to protect interests of individuals specifically protected by EU law were a decisive consideration, the status of that rule as a right fundamental to the Charter would end any debate as to its nature. That, however, is not the case. (39)

43. Leaving aside the classic question of categorising a provision of the Charter as ‘enshrining a right or a principle’, it is clear from the case-law of the Court that the infringement of certain rights, such as that corresponding to the administration’s obligation to give reasons for its decisions, which is expressly referred to in Article 41(2)(c) of the Charter, does not always give rise to non-contractual liability on the part of the European Union. (40) Thus, the Court itself does not appear to regard its inclusion in the Charter as decisive of whether the right to sound administration is to be classified as a right intended to confer rights on individuals. It is not the case that every obligation of the administration automatically gives rise to a subjective right on the part of individuals.

44. In that regard, according to the General Court, the right to sound administration does not, in itself, confer rights upon individuals, except where it constitutes the expression of specific rights such as the right to have affairs handled impartially, fairly and within a reasonable time, the right to be heard, the right to have access to files, or the obligation to give reasons for decisions. (41)

45. Those specific rights could include the right corresponding to the administration’s duty of diligence, understood as a duty of the competent institution to examine carefully and impartially all the relevant aspects of the individual case, as established by the Court, inter alia, in the judgment of 21 November 1991, Technische Universität München. (42)However, the Court did not hold in that judgment that a breach of that obligation could trigger the non-contractual liability of the European Union.

46. In that regard, the Court of Justice ruled, in its judgment of 16 December 2008, Masdar (UK) v Commission, (43) that the EU administration may be non‑contractually liable for wrongful conduct where it fails to act with all necessary care and, as a result, causes harm. (44) The Court held that that duty of care is inherent in the principle of sound administration, applies generally to the actions of the EU administration in its relations with the public, (45) and entails that the EU administration must act with care and caution. (46)

47. However, the considerations set out by the Court in that judgment related to actions which had been taken by the Commission in a specific context. The applicant’s claim for damages had been made against the background of contractual relationships between, on the one hand, the Commission and its contractual partner and, on the other hand, that contractual partner and the applicant, as its subcontractor. The claim was based, inter alia, on a contention that the Commission, in exercising its power to suspend the payment of a contract in the case of irregularities committed by the co‑contractor, ought to have exercised care so as to ensure that it did not harm the subcontractor. Besides the fact that it did not accept the applicant’s submissions as to the content of the duty of diligence in the circumstances of that case, I would observe that, in that judgment, the Court did not characterise the duty of diligence as a ‘rule of law intended to confer rights on individuals’.

48. It appears that that characterisation has been more frequently accepted in the case-law of the General Court. (47) While, in certain judgments, it is difficult to determine whether the duty of diligence is regarded as the rule of law breached or as the test of the seriousness of a breach of another rule, (48) the fact remains that in other judgments the General Court has expressly stated that the duty of diligence, or even the principle of sound administration, should be characterised as ‘a rule of law intended to confer rights on individuals’. (49)

49. Nevertheless, it is difficult to speak of a clear and unequivocal characterisation of that duty. The General Court itself accepts that the duty to take due care may be taken into account not as a rule conferring rights on individuals, but as one of the criteria for regarding the irregularity or error committed by an institution as constituting a sufficiently serious breach of EU law, thus serving as the ‘qualifying factor’ for the breach of another principle or another rule of law of the European Union. (50)

50. In any event, it is far from obvious that the duty of diligence is to be characterised as a ‘rule of law intended to confer rights on individuals’. An overly flexible approach to such characterisation was expressly criticised by Advocate General Wahl in his Opinion in Ombudsman v Staelen. (51)The Advocate General indicated that he had doubts as to whether a breach of the right to sound administration gave rise to damages (52) and stated that it is ‘a matter of circumstances whether, in a given case, disregard for that principle [of diligence] involves the breach of a right conferred upon an individual’. (53)

52. First, I would reiterate (54) that the first element of the first condition is intended to limit such liability to situations where the unlawful conduct of EU institutions, bodies, offices and agencies has caused damage to an individual by prejudicing his or her interests specifically protected by EU law. I do not see why those specific interests cannot include an individual’s right to have his or her affairs handled by an administration taking all relevant facts of the case into account. That is a matter of the individual’s right not to have their situation determined by the administration in an arbitrary or abstract fashion.

53. Second, it is impossible in my view to analyse the administration’s duty of diligence in the abstract, without considering the concrete situation. The actions taken by the EU administration are diverse in nature. As regards the administration’s obligation to take all relevant circumstances into account, this differs depending on whether the context is that of an investigation, (55) the performance of contractual obligations, (56) the adoption of delegated and implementing acts, (57) or another administrative procedure leading to the determination of the legal situation of an individual. While, in all of those situations, it can be said that the administration has an obligation to take all relevant circumstances into account, the specific content of that obligation is different in each one, being determined by the provisions applicable to the particular case.

54. Thus the duty of diligence, being a general obligation of the EU administration, is one of variable contours. In practice, in each type of administrative intervention, the taking into consideration of all the relevant circumstances should be preceded by an analysis of the scope of the administration’s powers and of its discretion, as determined by the provisions applicable to the particular case.

55. That is true, in particular, as regards the administration’s adoption of delegated or implementing acts of general scope, or of individual acts In that situation, the scope of the administration’s duty of diligence is determined by the provisions applied in the particular case, which determine the scope of the powers of the administration and its discretion. On the basis of those provisions, the administration identifies all of the relevant circumstances to be taken into account. It is impossible to analyse the administration’s duty of diligence without taking account of the concrete situation governed by those provisions. It is only in conjunction with them that the duty of diligence can constitute a rule of law conferring rights on individuals, breach of which may give rise to non-contractual liability on the part of the European Union. (58)

56. In support of their claims for damages, the appellants rely on the findings of the General Court and the Court of Justice in the annulment judgments. They must therefore be understood as basing their claims on the breach of the Commission’s obligation identified by the General Court and the Court of Justice in the annulment judgments. Of particular relevance, in that regard, is the General Court’s finding (59) that ‘[the Commission] failed to comply with its obligation to take into consideration all the relevant factors and circumstances’. (60)

57. In that context, it is apparent from the passages of the annulment judgments referred to in points 7 and 10 of this Opinion that the Commission’s manifest error of assessment was made in applying the specific rules for classifying substances, set out in point 4.1.3.5.5 of Annex I to Regulation No 1272/2008. That error, made in the course of applying a concrete rule of law, consisted in the failure to take due account, for the purposes of classifying CTPHT, of the proportion in which the 16 PAH constituents are present in that substance and of their chemical effects.

58. It must therefore be held that, as the appellants correctly observe in their replies at first instance, the rule of law conferring rights on them in the present case was the Commission’s duty of diligence, in conjunction with the provisions on the classification of substances contained in point 4.1.3.5.5 of Annex I to Regulation No 1272/2008. The scope of the Commission’s duty of diligence was therefore governed by the provisions of Regulation No 1272/2008.

59. The appellants criticise the General Court for not analysing the seriousness of the Commission’s breach of its duty of diligence, understood as the obligation to take all relevant factors into consideration in the exercise of its powers.

60. In that regard, it is undoubtedly true that the General Court, in the judgments under appeal, did not expressly analyse that point. It decided to reject the argument based on breach of that duty.

61. Nonetheless, as is apparent from point 55 of this Opinion, it is impossible to analyse the seriousness of a breach of the duty of diligence in the abstract, without regard to the rules of law applied. Moreover, it is not inconceivable in my view that the analysis of the seriousness of the breach of the rules of law applied may simultaneously constitute the analysis of the seriousness of the breach of the duty of diligence committed in applying those rules. That would be the case where the circumstances under analysis were of equal relevance to both breaches.

62. In my view, that is the situation in the present case. The General Court did not cast doubt on the findings made in the annulment judgments that the unlawfulness of the contested act arose from a manifest error of assessment on the part of the Commission, consisting in the failure to take all the relevant factors and circumstances into account in classifying CTPHT. The General Court’s reasoning on point 4.1.3.5.5 of Annex I to Regulation No 1272/2008 relates to the reasons why that error was made, or in other words why relevant factors other than those expressly referred to in that point were not taken into consideration. The analysis relating directly to point 4.1.3.5.5 of Annex I to Regulation No 1272/2008 automatically extends, in my view, to the duty of diligence owed by the Commission in the application of that rule. The lack of clarity and the difficulties in interpreting the provisions of Annex I to Regulation No 1272/2008 regarding the consideration that can be given to factors other than those expressly provided for when applying point 4.1.3.5.5 of Annex I to Regulation No 1272/2008 are two factors which are relevant both to breach of that point and to breach of the duty of diligence owed in applying it. Those factors constitute a flaw which gave rise to both of those breaches.

63. Accordingly, the General Court was right, in my view, despite already having decided to reject the argument based on breach of the duty of diligence, to hold ‘for the sake of completeness’ (61) that the finding that there had not been a sufficiently serious infringement of the summation method applied equally, and on the same grounds, to breach of the duty of diligence. (62)

64. It will nonetheless be necessary to examine whether the General Court was right to hold that the error made in applying point 4.1.3.5.5 of Annex I to Regulation No 1272/2008 was excusable. That issue is raised by the second part of the fourth ground of appeal, which is not the subject of this Opinion.

65. In the light of the foregoing, I take the view that the first part of the fourth ground of appeal should be dismissed as unfounded.

66. Having regard to all of the foregoing considerations, I suggest that the Court should reject the first part of the fourth ground of appeal.

2 Judgments of 16 December 2020, SGL Carbon v Commission (T‑639/18, not published, EU:T:2020:628; ‘the first judgment under appeal’); of 16 December 2020, Industrial Química del Nalón v Commission (T‑635/18, EU:T:2020:624; ‘the second judgment under appeal’); of 16 December 2020, Deza v Commission (T‑638/18, not published, EU:T:2020:627; ‘the third judgment under appeal’); and of 16 December 2020, Bilbaína de Alquitranes v Commission (T‑645/18, not published, EU:T:2020:629; ‘the fourth judgment under appeal’) (together, ‘the judgments under appeal’), which are the subject matter, respectively, of the appeals in Cases C‑65/21 P, C‑73/21 P, C‑74/21 P and C‑75/21 P.

3 CTPHT is within the category of substances of unknown or variable composition, complex reaction products or biological materials (‘UVCBs’), because it cannot be fully identified by its chemical composition.

4 Judgment of 7 October 2015, Bilbaína de Alquitranes and Others v Commission (T‑689/13, not published, EU:T:2015:767).

5 Judgment of 22 November 2017, Commission v Bilbaína de Alquitranes and Others (C‑691/15 P, EU:C:2017:882).

6 Regulation of the European Parliament and of the Council of 16 December 2008 on classification, labelling and packaging of substances and mixtures, amending and repealing Directives 67/548/EEC and 1999/45/EC, and amending Regulation (EC) No 1907/2006 (OJ 2008 L 353, p. 1).

7 Paragraphs 15 to 22 of the judgments under appeal. While the key passages of those judgments are in identical terms, their numbering differs. For the sake of clarity I will therefore refer in the course of my analysis to the paragraphs of the first judgment under appeal, identifying the corresponding paragraphs of the other judgments under appeal in footnotes.

9 Commission Regulation of 2 October 2013 amending, for the purposes of its adaptation to technical and scientific progress, Regulation (EC) No 1272/2008 of the European Parliament and of the Council on classification, labelling and packaging of substances and mixtures (OJ 2013 L 261, p. 5).

11 As well as the judgments of 16 December 2020, Tokai erftcarbon v Commission (T‑636/18, not published, EU:T:2020:625), and of 16 December 2020, Bawtry Carbon International v Commission (T‑637/18, not published, EU:T:2020:626).

12 Paragraphs 71, 68 and 71, respectively, of the second, third and fourth judgments under appeal.

13 Paragraphs 72, 69 and 72, respectively, of the second, third and fourth judgments under appeal.

14 Paragraphs 97, 94 and 97, respectively, of the second, third and fourth judgments under appeal.

15 Paragraphs 99, 96 and 99, respectively, of the second, third and fourth judgments under appeal.

16 Paragraphs 115, 112 and 115, respectively, of the second, third and fourth judgments under appeal.

19 Paragraphs 114, 115, 112 and 115, respectively, of the first, second, third and fourth judgments under appeal.

20 Paragraphs 71, 72, 69 and 72, respectively, of the first, second, third and fourth judgments under appeal.

23 See, in that regard, judgment of 10 September 2019, HTTS v Council (C‑123/18 P, EU:C:2019:694, paragraph 32 and the case-law cited).

24 See, in that regard, order of 12 March 2020, EMB Consulting and Others v ECB (C‑571/19 P, not published, EU:C:2020:208, paragraph 29 and the case-law cited).

25 Molinier, J., and Lotarski, J., Droit du contentieux de l’Union européenne, 4th ed., LGDJ Lextenso, Paris, 2012, p. 229.

29 Judgment of 4 July 2000, Bergaderm and Goupil v Commission (C‑352/98 P, EU:C:2000:361,paragraph 41).

30 Judgment of 30 May 2017, Safa Nicu Sepahan v Council (C‑45/15 P, EU:C:2017:402, paragraph 29 and the case-law cited).

31 Judgment of 25 February 2021, Dalli v Commission (C‑615/19 P, EU:C:2021:133, paragraph 128).

33 Blumann, C., and Dubouis, L., Droit institutionnel de l’Union européenne, 6th ed., LexisNexis, Paris, 2016, pp. 748 and 750. See, in particular, judgment of 19 May 1992, Mulder and Others v Council and Commission (C‑104/89 and C‑37/90, EU:C:1992:217, paragraph 15); of 6 December 2001, Emesa Sugar v Council (T‑43/98, EU:T:2001:279, paragraph 64); and of 9 September 2015, Pérez Gutiérrez v Commission (T‑168/14, not published, EU:T:2015:607, paragraph 31).

34 Blumann, C., and Dubouis, L., op. cit., p. 748. See, in that regard, judgments of 19 April 2012, Artegodan v Commission (C‑221/10 P, EU:C:2012:216, paragraph 81); of 10 September 2019, HTTS v Council (C‑123/18 P, EU:C:2019:694, paragraph 103); of 6 October 2020, Bank Refah Kargaran v Council (C‑134/19 P, EU:C:2020:793, paragraph 62); and of 25 February 2021, Dalli v Commission (C‑615/19 P, EU:C:2021:133, paragraphs 56 to 63).

35 See, in that regard, judgment of 23 March 2004, Ombudsman v Lamberts (C‑234/02 P, EU:C:2004:174, paragraph 49).

36 Judgment of 10 September 2019, HTTS v Council (C‑123/18 P, EU:C:2019:694, paragraph 33 and the case-law cited).

37 Judgment of 4 April 2017, Ombudsman v Staelen (C‑337/15 P, EU:C:2017:256, paragraph 37).

38 Judgment of 10 September 2019, HTTS v Council (C‑123/18 P, EU:C:2019:694, paragraph 43).

39 As regards the consequences of the inclusion of the right to sound administration in the Charter, see Jacqué, J.-P., ‘Le droit à une bonne administration dans la charte des droits fondamentaux de l’Union européenne’, Revue française d’administration publique, vol. 137-138, Nos 1-2, 2011, pp. 79 to 83.

40 See, in that regard, judgments of 10 September 2019, HTTS v Council (C‑123/18 P, EU:C:2019:694, paragraph 103), and of 6 October 2020, Bank Refah Kargaran v Council (C‑134/19 P, EU:C:2020:793, paragraphs 61 and 62).

41 Judgment of 29 November 2016, T & L Sugars and Sidul Açúcares v Commission, (T‑279/11, not published, EU:T:2016:683, paragraph 60 and the case-law cited).

44 Judgment of 16 December 2008, Masdar (UK) v Commission (C‑47/07 P, EU:C:2008:726, paragraph 91).

45 Judgment of 16 December 2008, Masdar (UK) v Commission (C‑47/07 P, EU:C:2008:726, paragraph 92).

46 Judgment of 16 December 2008, Masdar (UK) v Commission (C‑47/07 P, EU:C:2008:726, paragraph 93).

47 See judgments of 18 September 1995, Nölle v Council and Commission (T‑167/94, EU:T:1995:169, paragraphs 75 and 76); of 29 April 2015, Staelen v Ombudsman (T‑217/11, EU:T:2015:238, paragraph 88); and of 6 June 2019, Dalli v Commission (T‑399/17, not published, EU:T:2019:384, paragraph 59).

48 See, in that regard, inter alia, judgments of 18 September 1995, Nölle v Council and Commission (T‑167/94, EU:T:1995:169, paragraphs 75 and 76), and of 15 January 2015, Ziegler and Ziegler Relocation v Commission (T‑539/12 and T‑150/13, not published, EU:T:2015:15), in which the General Court nevertheless held that the duty of diligence (referred to in the first of those judgments as the ‘principle of care’) is protective in nature, which appears to be a clear reference to the idea of a rule conferring rights on individuals.

49 See, in that regard, judgments of 16 September 2013, ATC and Others v Commission (T‑333/10, EU:T:2013:451, paragraph 93); of 29 November 2016, T & L Sugars and Sidul Açúcares v Commission (T‑103/12, not published, EU:T:2016:682, paragraphs 67 and 68); of 28 February 2018, Vakakis kai Synergates v Commission (T‑292/15, EU:T:2018:103, paragraph 85); and of 6 June 2019, Dalli v Commission (T‑399/17, not published, EU:T:2019:384, paragraph 59).

50 Judgment of 23 September 2015, Schroeder v Council and Commission (T‑205/14, EU:T:2015:673, paragraph 46 and the case-law cited).

51 Opinion of Advocate General Wahl in Ombudsman v Staelen (C‑337/15 P, EU:C:2016:823, point 47).

52 Opinion of Advocate General Wahl in Ombudsman v Staelen (C‑337/15 P, EU:C:2016:823, points 1 and 2).

53 Opinion of Advocate General Wahl in Ombudsman v Staelen (C‑337/15 P, EU:C:2016:823, point 46). As the General Court’s characterisation of the principle of diligence as ‘a rule of law intended to confer rights on individuals’ was not disputed on appeal in that case, the Court of Justice did not take a position on that issue in its judgment of 4 April 2017, Ombudsman v Staelen (C‑337/15 P, EU:C:2017:256).

55 As in the case which gave rise to the judgment of 4 April 2017, Ombudsman v Staelen (C‑337/15 P, EU:C:2017:256, paragraph 37).

56 As in the case which gave rise to the judgment of 16 December 2008, Masdar (UK) v Commission (C‑47/07 P, EU:C:2008:726, paragraph 93).

57 Including those relating to measures laying down the detailed rules for application of an act, to management measures or to trade defence measures, according to the classification proposed by Durand, C.-F., ‘Chapitre V. Typologie des interventions’, in Auby, J.-B., and Dutheil de la Rochère, J. (dir.), Traité de droit administratif européen, 2nd ed., Bruylant, Brussels, 2014, p. 163.

58 Nevertheless, it is also necessary for there to be a causal link between the breach of the duty of diligence and the erroneous application of those provisions which has caused the damage.

59 Judgment of 7 October 2015, Bilbaína de Alquitranes and Others v Commission (T‑689/13, not published, EU:T:2015:767, paragraph 30).

60 See paragraphs 51, 55, 58 and 59 of the action for damages in Case T‑639/18; paragraphs 42, 46, 49 and 50 of the action for damages in cases T‑635/18 and T‑638/18, and paragraphs 42, 46, 47 and 48 of the action for damages in Case T‑645/18.

61 Paragraphs 114, 115, 112 and 115, respectively, of the first, second, third and fourth judgments under appeal.

62 Against that background, I consider that the first ground of appeal is ineffective. Even supposing that the General Court erred in law in rejecting the applicants’ arguments based on the duty of diligence, that argument was ultimately taken into account in its analysis, in so far as the analysis of point 4.1.3.5.5 of Annex I to Regulation No 1272/2008 relates equally to the duty of diligence.

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You are here: BAILII >> Databases >> Court of Justice of the European Communities (including Court of First Instance Decisions) >> SGL Carbon v Commission (Appeals – Environment - Classification, labelling and packaging - Classification of pitch, coal tar - Opinion) [2022] EUECJ C-65/21P_O (03 February 2022) URL: http://www.bailii.org/eu/cases/EUECJ/2022/C6521P_O.html Cite as: [2022] EUECJ C-65/21P_O, EU:C:2022:78, ECLI:EU:C:2022:78

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