Article, Case comment

Case C-578/11 P Deltafina v Commission – The CJEU Confirms Its Ruling on Effective Remedies for Undue Delay

Michal Ovadek, LLB student of International and European Law and BA student of International Relations at the University of Groningen in the Netherlands

Last November the Court of Justice of the EU decided a trio of breakthrough cases which concerned the choice of the appropriate remedy for reasonable time requirement breaches.[1] The reasonable time requirement finds its expression in a number of international treaties, not least in Article 47 of the Charter of Fundamental Rights of the European Union. In essence, it requires the CJEU to decide cases without undue delay, while also requiring an effective remedy for any breaches of the procedural guarantee. On 12 June 2014 the CJEU has ruled on a more low-key appeal in Deltafina[2] which had been previously deferred until the case-law was clarified. The CJEU has used this opportunity to repeat the previously expounded approach without taking into account any criticism levied by commentators. This led in dismissing the plea and directing the litigants to recover their damages at the General Court; yet, once again, the CJEU did not leave the matter entirely in the hands of the General Court and instead itself established that the General Court has exceeded what can be considered reasonable time for the purpose of Article 47 of the Charter.

Before further examining the implications of the Court’s approach, a short recap of the preceding events is in order. On 26 November 2013 the CJEU handed down judgments in the industrial bags cartel. In those cases, the Court definitively reaffirmed that an action for damages based on Article 268 and Article 340 TFEU constitutes the suitable effective remedy for instances where the General Court took excessively long to adjudicate. This meant, however, that, pursuant to Article 256(1) TFEU which confers exclusive jurisdiction in actions for damages on the General Court, the remedial proceedings were to be conducted at the same court that has been liable of causing the breach in the first place (contrary to nemo iudex in causa sua). Without explicitly acknowledging this problem, the CJEU attempted to alleviate the lack of impartiality of any follow-on actions for damages by ruling itself on the existence of the breach of the reasonable time requirement and thereby establishing a “sufficiently serious breach of a rule of law that is intended to confer rights on individuals”.[3] This would leave the General Court, sitting in a different composition from the one responsible for the breach, with merely having to settle the question of damages (existence and causation) and simultaneously a better chance of being impartial in the meaning of Article 47 of the Charter (and Article 6(1) ECHR).

This is precisely what the CJEU has done in Deltafina as well. The CJEU admitted that damages claims “may not be made directly to the Court of Justice in the context of an appeal” (para 87). Nonetheless, the CJEU pre-emptively adjudged the General Court’s conduct in the first instance proceedings as breaching the reasonable time requirement (period of five years and eight months). Furthermore, the assessment of the delay lacks transparency: the CJEU claims that the existence of delay is “clear in the present case” without elaborating on what exactly makes it ‘clear’. Therefore, the CJEU contends, it was not even necessary “for the parties to produce evidence in that regard” (para 90). In other words, the CJEU has not been very persuasive in defending its seemingly unsystematic approach.

Comment

In order to uncover the reasoning that underlies the juggling of the CJEU it is useful to consider what would happen if the litigants were to meticulously follow the CJEU’s case-law. Knowing that the appropriate remedy for undue delay is an action for damages before the General Court (as established in Gascogne Sack Deutschland et al)[4], the litigants should, in principle, bypass the Court of Justice. The Court of Justice could have no complaints should the litigants not raise the allegation of undue delay in the context of the appeal. Instead, they could directly initiate an action for damages, in the course of which the determination of whether the General Court breached the reasonable time requirement would have necessarily needed to be made by the General Court. It is near certain that in such a scenario the General Court would have not been considered impartial for the purposes of Article 47 of the Charter.

Nevertheless, the paradox does not stop there. As has been consistently held since Baustahlgewebe,[5] where the delay has not prejudiced the outcome of the proceedings, the breach of the reasonable time requirement is in itself not a sufficient reason to set aside the belated judgment.[6] However, Article 169(1) (formerly Article 113(1)) of the Rules of Procedure of the Court of Justice requires that an appeal “shall seek to have set aside, in whole or in part, the decision of the General Court”. The CJEU has, in fact, declared inadmissible pleas concerning excessive delay which did not seek to set aside a judgment in the past.[7] As a consequence, if any litigant were to adhere literally to both the case-law of the Court and its Rules of Procedure, the Court of Justice would never have the chance to decide whether the General Court’s conduct was dilatory, due to the actions being inadmissible. That in turn would lead to the General Court having to judge its own conduct during an action for damages and as such being likely incapable of satisfying the requirement of impartiality of Article 47 of the Charter. Since 26 June 2014, the latter scenario is, in fact, not merely hypothetical anymore. Kendrion, one of the litigants whose case was decided by the CJEU last November, has brought an action for damages before the General Court against the Court of Justice.[8] It is now up to the CJEU to recognise and act to ameliorate the situation. Similarly, the way the General Court will approach the action for damages might have important consequences for the overall resolution of this conundrum.

Finally, it may be worth adding that the list of issues that plague this remedy does not by any means end here. The fundamental effectiveness of the remedy may also be questioned: the costs[9] and length of the remedial proceedings is likely such as to discourage litigants from actually pursuing their claims. Furthermore, there has been no successful litigation proving the effectiveness of the remedy in practice. All of this does not sit well with the case-law of the ECtHR: the present setup of the remedy at the CJEU falls short of the recommendations provided by the ECtHR (see for example Scordino v Italy[10] and compare:the remedy is general instead of specific, only a posteriori compensation and thus no prevention of delay, no other remedies). This difference in the level of legal protection looks all the more unjustified given the requirement of convergence of meaning between the ECHR and the Charter where these concern identical rights (as is the case here) laid down by Article 52(3) of the Charter. Should the EU finally accede to the ECHR, it would be interesting to see what the ECtHR will adjudicate about these discrepancies.

 

[1]Case C-40/12 P Gascogne Sack Deutschland GmbH v Commission [2013] (CoJ, 26 November 2013); Case C-50/12 P Kendrion NV v Commission [2013] (CoJ, 26 November 2013) and Case C-58/12 P Groupe Gascogne SA v Commission [2013] (CoJ, 26 November 2013)

[2] Case C-578/11 P Deltafina v Commission [2014] (CoJ, 12 June 2014)

[3]Case C-352/98 P Bergaderm and Goupil v Commission [2000] ECR I-05291, para 42

[4]See cases in note 1

[5]Case C-185/95 P Baustahlgewebe v Commission [1998] ECR I-8417

[6]See also para 82 of Deltafina

[7]See for example Case C-583/08 P Gogos v Commission [2010] ECR I-04469, para 56

[8] Case T-479/14 Kendrion v Court of Justice of the European Union (pending)

[9]See Stephen Kinsella and Angelene Duke, ‘Who are the Real Winners and Losers in the General Court?’ (Competition Policy International, 24 January 2014) <https://www.competitionpolicyinternational.com/who-are-the-real-winners-and-losers-in-the-general-court> accessed 26 June 2014

[10]Scordino v Italy (No. 1) App no 36813/97 (ECtHR, 29 March 2006)