15 April 2021 (*1)

(Appeal – European Regional Development Fund (ERDF) – Grant intended to support the deinstitutionalisation of social services for adults and people with disabilities – Letter of the European Commission refusing to suspend or cancel payment of the grant – Action for annulment – Admissibility – Concept of ‘challengeable act’ – Article 47 of the Charter of Fundamental Rights of the European Union – Effective judicial protection)

In Case C‑622/20 P,

APPEAL under Article 56 of the Statute of the Court of Justice of the European Union, brought on 12 November 2020,

Validity Foundation – Mental Disability Advocacy Centre, established in Budapest (Hungary),

Center for Independent Living Association, established in Sofia (Bulgaria),

represented by B. Van Vooren and P. Bogaert, advocaten, and by L. Gorywoda, adwokat,

appellants,

the other parties to the proceedings being:

European Network on Independent Living Brussels Office (ENIL Brussels Office), established in Brussels (Belgium),

applicant at first instance,

European Commission,

defendant at first instance,

THE COURT (Ninth Chamber),

composed of N. Piçarra, President of the Chamber, M. Vilaras (Rapporteur), President of the Fourth Chamber, and K. Jürimäe, Judge,

Advocate General: J. Kokott,

Registrar: A. Calot Escobar,

having decided, after hearing the Advocate General, to give a decision by reasoned order, in accordance with Article 181 of the Rules of Procedure of the Court of Justice,

makes the following

1By their appeal, Validity Foundation – Mental Disability Advocacy Centre and Center for Independent Living Association seek to have set aside the order of the General Court of the European Union of 2 September 2020, ENIL Brussels Office and Others v Commission (T‑613/19, not published, ‘the order under appeal’, EU:T:2020:382), by which the General Court dismissed their action for annulment of the letter of the European Commission of 24 May 2019 (‘the letter at issue’) by which that institution took a position on the appellants’ request to act, under Article 265 TFEU, which was set out in a letter of 26 April 2019 and was intended, in essence, to require the Commission to suspend the call for proposals for the award of grants under the procedure ‘Support for the deinstitutionalisation of social services for elderly people and people with disabilities’ (BG16RFOP0001-5.002) and all related payments.

Legal context

2As is apparent from Article 1, entitled ‘Subject matter’, Regulation (EU) No 1303/2013 of the European Parliament and of the Council of 17 December 2013 laying down common provisions on the European Regional Development Fund, the European Social Fund, the Cohesion Fund, the European Agricultural Fund for Rural Development and the European Maritime and Fisheries Fund and laying down general provisions on the European Regional Development Fund, the European Social Fund, the Cohesion Fund and the European Maritime and Fisheries Fund and repealing Council Regulation (EC) No 1083/2006 (OJ 2013 L 347, p. 320, and corrigendum OJ 2016 L 200, p. 140), lays down the common rules applicable to the European Regional Development Fund (ERDF), the European Social Fund (ESF), the Cohesion Fund, the European Agricultural Fund for Rural Development (EAFRD) and the European Maritime and Fisheries Fund (EMFF), which operate under a common framework, entitled, together, ‘European Structural and Investment Funds’ (‘the ESI Funds’).

3Article 4 of Regulation No 1303/2013, entitled ‘General principles’, provides, inter alia, in paragraph 1 thereof, that the ESI Funds are to provide support, through multiannual programmes, which complements national, regional and local intervention, to deliver the EU strategy for smart, sustainable and inclusive growth.

4According to Article 6 of that regulation, entitled ‘Compliance with Union and national law’, ‘operations supported by the ESI Funds shall comply with applicable Union law and the national law relating to its application’.

5Article 7 of that regulation, entitled ‘Promotion of equality between men and women and non-discrimination’, provides, in its second paragraph, that the Member States and the Commission are to take appropriate steps to prevent any discrimination based on, inter alia, disability during the preparation and implementation of programmes and that, in particular, accessibility for persons with disabilities is to be taken into account throughout the preparation and implementation of operational programmes.

6Article 74 of Regulation No 1303/2013, entitled ‘Responsibilities of Member States’, provides:

‘1. Member States shall fulfil the management, control and audit obligations, and assume the resulting responsibilities, which are laid down in the rules on shared management set out in the Financial Regulation and the Fund-specific rules.

…

3. Member States shall ensure that effective arrangements for the examination of complaints concerning the ESI Funds are in place. The scope, rules and procedures concerning such arrangements shall be the responsibility of Member States in accordance with their institutional and legal framework. Member States shall, upon request by the Commission, examine complaints submitted to the Commission falling within the scope of their arrangements. Member States shall inform the Commission, upon request, of the results of those examinations.

…’

7Article 83 of the regulation, entitled ‘Interruption of the payment deadline’, provides:

‘1. The payment deadline for an interim payment claim may be interrupted by the authorising officer by delegation within the meaning of the Financial Regulation for a maximum period of six months if:

(a) following information provided by a national or Union audit body, there is clear evidence to suggest a significant deficiency in the functioning of the management and control system;

(b) the authorising officer by delegation has to carry out additional verifications following information that has come to that officer’s attention alerting him or her that expenditure in a payment application is linked to an irregularity having serious financial consequences;

…

8Article 85 of the regulation, entitled ‘Financial corrections by the Commission’, provides:

‘1. The Commission shall make financial corrections by cancelling all or part of the Union contribution to a programme and effecting recovery from the Member State, in order to exclude from Union financing expenditure which is in breach of applicable law.

(a) the breach has affected the selection of an operation by the body responsible for support from the ESI Funds or in cases where, due to the nature of the breach, it is not possible to establish that impact but there is a substantiated risk that the breach has had such an effect;

(b) the breach has affected the amount of expenditure declared for reimbursement by the budget of the Union or in cases where, due to the nature of the breach, it is not possible to quantify its financial impact but there is a substantiated risk that the breach has had such an effect.

3. When deciding on a financial correction under paragraph 1, the Commission shall respect the principle of proportionality by taking account of the nature and gravity of the breach of applicable law and its financial implications for the budget of the Union. The Commission shall keep the European Parliament informed of decisions taken to apply financial corrections.

…’

9Article 142 of the regulation, entitled ‘Suspension of payments’, provides:

‘1. All or part of the interim payments at the level of priorities or operational programmes may be suspended by the Commission if one or more of the following conditions are met:

(a) there is a serious deficiency in the effective functioning of the management and control system of the operational programme, which has put at risk the Union contribution to the operational programme and for which corrective measures have not been taken;

(b) expenditure in a payment application is linked to an irregularity having serious financial consequences which has not been corrected;

(c) the Member State has failed to take the necessary action to remedy the situation giving rise to an interruption under Article 83;

…

3. The Commission shall end suspension of all or part of interim payments where the Member State has taken the necessary measures to enable the suspension to be lifted.’

10 Article 144 of Regulation No 1303/2013, entitled ‘Criteria for financial corrections’, lays down the criteria for financial corrections and specifies that the Commission is to make financial corrections by means of implementing acts after carrying out the necessary examination.

Background to the dispute

11The background to the dispute is set out in paragraphs 1 to 10 of the order under appeal and, for the purposes of the present proceedings, may be summarised as follows.

12The appellants are non-governmental organisations that defend and represent people with disabilities.

13Under the operational programme ‘Regions in Growth 2014-2020’, adopted by the Commission in respect of the Republic of Bulgaria and co-financed by the ERDF, the managing authority designated by the Bulgarian authorities (‘the managing authority’) published on 30 March 2018 a call for proposals for the award of grants under the procedure ‘Support for the deinstitutionalisation of social services for elderly people and people with disabilities’ (BG16RFOP0001-5.002), under Priority Axis 5 ‘Regional social infrastructure’ of the operational programme, for which the deadline was 1 October 2018 (‘the call for proposals’).

14By a letter of 11 February 2019, the appellants and another non-governmental organisation, European Network on Independent Living Brussels Office (ENIL Brussels Office) (‘ENIL’), sent to the managing authority a request to have, in essence, the call for proposals suspended immediately on the ground that the housing structure to be developed in Bulgaria, under the projects awarded under that call for proposals, perpetuated the segregation and isolation of people with disabilities in breach of the prohibition of discrimination on grounds of disability. By a letter of 5 March 2019, the managing authority refused to grant that request.

15By a letter of 26 April 2019, ENIL invited the Commission to act in accordance with Article 265 TFEU in order to take the necessary measures to suspend the call for proposals and all related payments and encourage the managing authority to ensure that any future call for proposals under the ‘Regions in Growth 2014-2020’ operational programme would comply with the rights of persons with disabilities.

16By the letter at issue, addressed to ENIL, with a copy to the appellants, and notified on 1 July 2019, the Commission’s Directorate-General for Regional and Urban Policy stated that, since the call for proposals complied with the partnership agreement concluded in that respect with the Republic of Bulgaria and the operational programme ‘Regions in Growth 2014-2020’, there was no need to take any action. In addition, the Commission observed that, within the framework of shared management between the Commission and the Member States, it did not have the competence to suspend the call for proposals launched by the managing authority.

The procedure before the General Court and the order under appeal

17By application lodged at the Registry of the General Court on 10 September 2019, the appellants and ENIL brought an action for annulment of the letter at issue.

18By separate document lodged at the Registry of the General Court on 15 January 2020, the Commission raised an objection of inadmissibility under Article 130(1) of the Rules of Procedure of the General Court on the ground, inter alia, that the letter at issue did not constitute a challengeable act for the purposes of Article 263 TFEU.

19Having regard to the appellants’ arguments, the General Court considered, in paragraph 30 of the order under appeal, that it was appropriate to examine whether an act of the Commission – such as that which the Commission refused to adopt by the letter at issue – aimed at interrupting payment deadlines, suspending payments associated with a call for proposals or cancelling all or part of the European Union’s contribution to an operational programme could produce binding legal effects capable of affecting the appellants’ interests by bringing about a distinct change in their legal position.

20After examining Articles 83, 85, 142 and 144 of Regulation No 1303/2013, the General Court found, in paragraph 35 of the order under appeal, that it is solely in the context of relations between the Member State and the Commission that operations to interrupt deadlines, suspend deadlines associated with a call for proposals or cancel all or part of the European Union’s contribution to an operational programme will take place. The General Court added, in paragraph 36 of that order, that there is nothing to prevent the Member State concerned by a Commission decision interrupting payment deadlines, suspending payments associated with a call for proposals or cancelling all or part of the European Union’s contribution to an operational programme from deciding to defray out of its own funds the portion of the European Union’s financing that is withdrawn, so as to finance the projects awarded under a call for proposals.

The General Court therefore concluded, in paragraph 37 of the order under appeal, that a decision to interrupt payment deadlines, to suspend payments associated with a call for proposals or to cancel all or part of the European Union’s contribution to an operational programme, such as the decision which the appellants requested the Commission to adopt, produced, above all, binding legal effects vis-à-vis the Member State to which the ERDF contribution was addressed. The General Court therefore noted, in paragraph 38 of that order, that it was not apparent that such a decision could directly entail binding legal effects on the appellants’ legal position.

22In paragraph 39 of the order under appeal, the General Court rejected the appellants’ argument relying on the judgment of 9 July 2003, <i>Vlaams Fonds voor de Sociale Integratie van Personen met een Handicap</i> v <i>Commission</i> (T‑102/00, EU:T:2003:192), on the ground that the circumstances of the present case were not analogous to those at issue in the case which gave rise to that judgment. The General Court noted in that regard, that, first, neither the appellants nor the group of persons whom they claimed to represent could be regarded as being the beneficiaries of the financial assistance in question and, secondly, the appellants were not liable for the sums which would have to be recovered in the event of a decision by the Commission to interrupt the deadlines or suspend the payments associated with the call for proposals.

23In paragraphs 40 and 41 of the order under appeal, the General Court, relying on the judgment of 23 April 2009, <i>Sahlstedt and Others </i>v <i>Commission</i> (C‑362/06 P, EU:C:2009:243, paragraph 35), rejected the appellants’ argument that their legal standing stemmed from the fact that they represented a defined and identifiable group of persons with disabilities who were not in a position to defend themselves. The General Court noted in that regard that the appellants had not relied on any special circumstances, nor had they established that they would be acting on behalf of certain persons with disabilities entitled to bring an action for annulment individually. For that reason, the General Court also found, in paragraph 42 of the order under appeal, that the appellants could not validly rely on the right to effective judicial protection of persons with disabilities.

24Moreover, the General Court added, in paragraph 43 of that order, that although the requirement as to the binding legal effects that an act must produce must be interpreted in the light of the right to judicial protection guaranteed under the first paragraph of Article 47 of the Charter of Fundamental Rights of the European Union (‘the Charter’), that right is not intended to change the rules relating to the admissibility of direct actions brought before the Courts of the European Union.

25The General Court therefore held, in paragraph 44 of the order under appeal, that the letter at issue was not capable of producing binding legal effects with regard to the appellants, so that it did not constitute an act which may be the object of an action for annulment. Thus, after having examined and rejected, in paragraphs 45 to 49 of that order, a number of the appellants’ other arguments, it upheld the objection of inadmissibility raised by the Commission and dismissed the action brought before it.

Form of order sought by the appellants before the Court of Justice

26The appellants claim that the Court of Justice should set aside the order under appeal, annul the letter at issue and order the Commission to pay the costs relating to the proceedings before the General Court and the Court of Justice.

The appeal

27Pursuant to Article 181 of the Rules of Procedure of the Court of Justice, where the appeal is, in whole or in part, manifestly inadmissible or manifestly unfounded, the Court may at any time, acting on a proposal from the Judge-Rapporteur and after hearing the Advocate General, decide by reasoned order to dismiss that appeal in whole or in part.

28It is appropriate to apply that provision in the present appeal.

29In support of their appeal, the appellants raise two grounds, alleging, first, an error of law, in so far as the General Court found that a decision of the Commission such as that which the appellants requested the Commission to adopt does not directly entail binding legal effects on their legal position and, secondly, an error of law in the interpretation of Article 47 of the Charter.

The first ground of appeal

Arguments of the appellants

30The appellants claim that the General Court erred in law when it held, in paragraphs 37 and 38 of the order under appeal, that a decision of the Commission such as that which the appellants requested the Commission to adopt does not directly entail binding legal effects on their own legal position. They add that the General Court also erred in law when it found, in paragraph 41 of that order, that they had not relied on any special circumstances capable of justifying the admissibility of their action, nor had they shown that they would be acting on behalf of certain persons with disabilities entitled to bring an action for annulment individually.

31In the first place, the appellants claim that persons with disabilities are beneficiaries of the grants made by the ESI Funds, since, even though they are not ‘financial beneficiaries’, they are ‘ultimate beneficiaries’, that is to say, persons for whose benefit the funds made available to the Member State concerned will be used. According to the appellants, a decision of the Commission suspending payments relating to the procedure referred to in the letter at issue directly affected the legal position of the persons who will be housed in the new homes built using the funds made available to the Republic of Bulgaria. Those new homes are in fact mini-institutions that perpetuate the segregation, isolation and dependence of persons with disabilities. Those persons would also experience the social effects of the letter at issue, as they would continue to be denied access to the community and would not be able to interact with persons outside the institution where they live.

32Therefore, according to the appellants, it must be found, in line with the judgment of 9 July 2003, <i>Vlaams Fonds voor de Sociale Integratie van Personen met een Handicap</i> v <i>Commission</i> (T‑102/00, EU:T:2003:192), that persons with disabilities have been directly and individually affected by a decision of the Commission such as that the adoption of which was refused by the letter at issue. The appellants add that there are 1 020 persons with disabilities concerned, making up a closed group of persons who will be transferred to the new homes built using the funds made available to the Republic of Bulgaria. They highlight, in addition, that the use of those funds has already had an effect on those persons and those effects are not merely hypothetical.

33According to the appellants, should the Commission request the repayment of funds by the Republic of Bulgaria, the latter would, in turn, require the repayment of payments made to the companies responsible for the construction of those new homes. Those companies would cancel their construction plans and the persons who would be housed in those new homes would be adversely affected by this. The presumption, in paragraph 36 of the order under appeal, that the Republic of Bulgaria would decide to defray the funding of the projects in question out of its own funds is purely hypothetical. It follows, according to the appellants, that the General Court failed to assess the effects of the letter at issue beyond the economic realm.

34In the second place, the appellants claim that they represent persons with disabilities, directly and individually concerned by the letter at issue, who are prevented due to special circumstances from bringing an action on their own behalf. Consequently, the General Court incorrectly found, in paragraph 41 of the order under appeal, that there were no special circumstances in the present case and that the appellants did not represent the persons with disabilities, since the names of those persons were not mentioned in the application.

35In that regard, the appellants emphasise that they did not mention names of persons with disabilities in the application in the light of circumstances preventing those persons from bringing an action, due, in particular, to a fear of reprisal. If the General Court considered that the names of those persons were necessary, it could have requested that they be communicated to it by way of a measure of inquiry within the meaning of Article 91 of its Rules of Procedure. In that regard, the appellants annexed two witness statements to their application, from a Bulgarian lawyer and from a social worker, relating to the effects of the projects financed by the ESI funds on persons with disabilities likely to be affected by those projects.

36Moreover, the appellants claim that there are special circumstances, to which the General Court failed to have regard, preventing those persons from acting on their own behalf. First, they have a justified fear of reprisal. Secondly, they are placed under the guardianship of the directors of the institutions, who must give their permission for an action to be brought before the courts. Thirdly, it is, in practice, impossible for those persons to learn about their rights.

Findings of the Court

37According to consistent case-law, developed in the context of actions for annulment brought by Member States or institutions, any measures adopted by the institutions, whatever their form, which are intended to have binding legal effects are regarded as acts open to challenge, within the meaning of Article 263 TFEU (judgment of 13 October 2011, <i>Deutsche Post and Germany</i> v <i>Commission</i>, C‑463/10 P and C‑475/10 P, EU:C:2011:656, paragraph 36 and the case-law cited).

38Where the action for annulment against an act adopted by an institution is brought by a natural or legal person, the Court of Justice has repeatedly held that the action lies only if the binding legal effects of that act are capable of affecting the interests of the applicant by bringing about a distinct change in his or her legal position (judgment of 13 October 2011, <i>Deutsche Post and Germany</i> v <i>Commission</i>, C‑463/10 P and C‑475/10 P, EU:C:2011:656, paragraph 37 and the case-law cited).

39It must, however, be pointed out that the case-law cited in the previous paragraph was developed in the context of actions brought before the EU judicature by natural or legal persons against measures of which they were the addressees. Where an action for annulment is brought by a non-privileged applicant against a measure that has not been addressed to it, the requirement that the binding legal effects of the measure being challenged must be capable of affecting the interests of the applicant by bringing about a distinct change in his or her legal position overlaps with the conditions laid down in the fourth paragraph of Article 263 TFEU, pertaining to the act being challenged being of direct and individual concern to the applicant (judgment of 13 October 2011, <i>Deutsche Post and Germany</i> v <i>Commission</i>, C‑463/10 P and C‑475/10 P, EU:C:2011:656, paragraph 38).

40In the present case, it is apparent from paragraphs 27 to 30 of the order under appeal that, in order to rule on the admissibility of the action, the General Court examined whether a measure aimed at interrupting payment deadlines, suspending payments associated with a call for proposals or cancelling all or part of the European Union’s contribution to an operational programme referred to in paragraph 13 of the present order, which the Commission refused to adopt by the letter at issue, could produce binding legal effects capable of affecting the interests of the appellants by bringing about a distinct change in their legal position.

41The General Court held, in paragraphs 35 to 37 of the order under appeal, that such a measure, if it had been adopted, would have been addressed not to the appellants but to the Member State concerned, namely the Republic of Bulgaria. It inferred, in paragraph 38 of that order, that it was not apparent that such a measure could directly entail binding legal effects on the appellants’ legal position.

42In that regard, the General Court, in paragraphs 39 to 42 of the order under appeal, expanded, in essence, on the question whether the action brought before it met the conditions for admissibility under the fourth paragraph of Article 263 TFEU, pertaining to the appellants’ being directly and individually concerned by the act which the Commission refused to adopt.

43In so far as it considered that this was not the case, the General Court found, in paragraph 44 of the order under appeal, that the letter at issue did not constitute an act which could be the object of an action for annulment brought by the appellants.

44By the first ground of appeal, the appellants claim, in essence, that that finding of the General Court is vitiated by an error of law, given that, first, the letter at issue is of direct and individual concern to the persons who will be housed in the new homes built using the funds made available to the Republic of Bulgaria by the EDRF and, secondly, it is impossible for those persons, on account of their disabilities and the fear of reprisal, to defend themselves. That fear of reprisal also justifies the failure, referred to in paragraph 41 of the order under appeal, to mention the names of those persons in the application submitted to the General Court.

45In that regard, it should be borne in mind, as stated by the General Court in paragraph 40 of the order under appeal, that, according to the case-law of the Court of Justice, the defence of the general and collective interests of a category of persons is not sufficient to establish the admissibility of an action for annulment brought by an association. In the absence of special circumstances, such as the role which it could have played in a procedure leading to the adoption of the measure in question, such an association is not entitled to bring an action for annulment on behalf of its members where the latter cannot do so individually (judgment of 23 April 2009, <i>Sahlstedt and Others</i> v <i>Commission</i>, C‑362/06 P, EU:C:2009:243, paragraph 35 and the case-law cited).

46In the present case, as correctly found by the General Court in paragraph 41 of the order under appeal, the appellants did not rely on any special circumstances, within the meaning of that case-law, capable of justifying the admissibility of their action. The General Court also pointed out that the appellants had not shown that they would be acting on behalf of certain persons with disabilities entitled to bring an action for annulment individually.

47The appellants’ argument that, in essence, the persons with disabilities who would be directly and individually concerned by a decision such as the decision whose adoption was refused by the letter at issue were prevented, on account of their disabilities and a fear of reprisal, from bringing an action against that letter themselves, cannot lead to a different conclusion.

48Thus, first, any difficulties, however serious, faced by persons with disabilities in challenging a measure which is of direct and individual concern to them cannot warrant an action being brought against that measure by a third party to whom that measure is not of direct and individual concern, even if it is a non-governmental organisation the purpose of which is to defend the rights of such persons.

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