delivered on 2 September 2021 (1)

Case C‑116/20

Agenţia de Plăți şi Intervenție pentru Agricultură – Centrul județean Dolj,

Agenţia de Plăți şi Intervenție pentru Agricultură (APIA) – Aparat Central

(Request for a preliminary ruling from the Curtea de Apel Timişoara (Court of Appeal, Timişoara, Romania))

(Reference for a preliminary ruling – Agriculture – Common agricultural policy (CAP) – Direct support schemes – Common rules – Single area payment scheme – Regulation (EC) No 73/2009 – Article 2(c) – Concept of ‘agricultural activity’ – Article 35 – Parcel made available to the farmer – National legislation requiring the production of a legal document attesting to the right to use that parcel – Force of res judicata)

1.This request for a preliminary ruling primarily concerns the interpretation of certain provisions of Regulation (EC) No 73/2009, (2) which establishes common rules for direct support schemes for farmers under the common agricultural policy (CAP) and establishes certain support schemes for farmers, and of Regulation (EC) No 1122/2009, (3) which lays down certain detailed rules for the application of Regulation No 73/2009.

2.The request has been made in proceedings between, on the one hand, SC Avio Lucos SRL (‘Avio Lucos’) and, on the other hand, the Agenția de plăți și intervenție pentru agricultură – Centrul județean Dolj (Agency for payments and measures for agriculture – Dolj District Centre, Romania; ‘the APIA, Dolj’) and the Agenția de Plăți și Intervenție pentru Agricultură (APIA) – Aparat Central (Agency for payments and measures for agriculture, Romania; ‘the APIA’) concerning, inter alia, a decision to recover the amount of the single area payment initially granted to Avio Lucos for the 2014 marketing year.

3.Although the Court has already had the opportunity to interpret Regulation No 73/2009 on various occasions, the present case concerns unresolved questions concerning the interpretation of the EU legislation on direct support measures under the CAP. More specifically, this case, which is being dealt with in coordination with Case C‑176/20, (4) asks the Court, in essence, to clarify to what extent EU law, in particular Regulations No 73/2009 and No 1122/2009, precludes national legislation adopted in the context of the single area payment scheme (5) which introduces, as a condition of eligibility for the payment, an obligation to prove the existence of a right to use or to exploit the areas concerned; where certain public land is taken on concession, such a right is afforded only to owners or breeders of animals. In that context, the referring court also seeks to obtain clarifications about the concept of ‘agricultural activity’, within the meaning of Article 2(c) of Regulation No 73/2009, and the principle of res judicata.

II. Legal context

4.Recitals 4, 7, 23 and 25 of Regulation No 73/2009 stated:

Furthermore, in order to avoid agricultural land being abandoned and to ensure that it is maintained in good agricultural and environmental condition, Regulation (EC) No 1782/2003 [ (6) ] established a Community framework within which Member States adopt standards taking account of the specific characteristics of the areas concerned, including soil and climatic conditions and existing farming systems, land use, crop rotation, farming practices and farm structures. This framework should be maintained. …

Regulation [No 1782/2003] recognised the positive environmental effect of permanent pasture. The measures in that Regulation aimed at encouraging the maintenance of existing permanent pasture to ensure against mass conversion to arable land should be maintained. …

Experience of the application of the single payment scheme shows that decoupled income support was in a number of cases granted to beneficiaries whose agricultural activities formed only an insignificant part of their overall economic activities or whose business purpose was not or only marginally targeted at performing an agricultural activity. To prevent agricultural income support from being allocated to such beneficiaries and to ensure that Community support is entirely used to ensure a fair standard of living for the agricultural community, Member States should be empowered, where such allocation occurs, to refrain from granting such natural and legal persons direct payments under this Regulation.

The support schemes under the CAP provide for direct income support, in particular with a view to ensuring a fair standard of living for the agricultural community. That objective is closely related to the maintenance of rural areas. In order to avoid any misallocation of Community funds, no support payments should be made to farmers who have artificially created the conditions required to obtain such payments.’

5.Article 2 of Regulation No 73/2009, which is entitled ‘Definitions’, provided:

‘For the purposes of this Regulation, the following definitions shall apply:

(a)“farmer” means a natural or legal person, or a group of natural or legal persons, whatever legal status is granted to the group and its members by national law, whose holding is situated within Community territory, as defined in Article 299 of the Treaty, and who exercises an agricultural activity;

(b)“holding” means all the production units managed by a farmer situated within the territory of the same Member State;

(c)“agricultural activity” means the production, rearing or growing of agricultural products including harvesting, milking, breeding animals and keeping animals for farming purposes, or maintaining the land in good agricultural and environmental condition as established in Article 6;

(h)“agricultural area” means any area taken up by arable land, permanent pasture or permanent crops.’

6.Article 6(1) of that regulation provided:

‘Member States shall ensure that all agricultural land, especially land which is no longer used for production purposes, is maintained in good agricultural and environmental condition. Member States shall define, at national or regional level, minimum requirements for good agricultural and environmental condition on the basis of the framework established in Annex III, taking into account the specific characteristics of the areas concerned, including soil and climatic condition, existing farming systems, land use, crop rotation, farming practices, and farm structures. Member States shall not define minimum requirements which are not foreseen in that framework.

7.Article 19(1) of that regulation reads as follows:

‘Each year, a farmer shall submit an application for direct payments indicating, where applicable:

(a)all the agricultural parcels on the holding …;

(b)the payment entitlements declared for activation;

(c)any other information provided for by this Regulation or by the Member State concerned.’

8.Article 28 of the same regulation, which is entitled ‘Minimum requirements for receiving direct payments’, provided, in paragraph 2 thereof:

‘From 2010, Member States may establish appropriate objective and non-discriminatory criteria to ensure that no direct payments are granted to a natural or legal person:

(a)whose agricultural activities form only an insignificant part of its overall economic activities; or

(b)whose principal business or company objects do not consist of exercising an agricultural activity.’

9.Article 34 of Regulation No 73/2009, which is entitled ‘Activation of payment entitlements per eligible hectare’, stated:

‘1. Support under the single payment scheme shall be granted to farmers upon activation of a payment entitlement per eligible hectare. Activated payment entitlements shall give a right to the payment of the amounts fixed therein.

(a)any agricultural area of the holding, and any area planted with short rotation coppice … that is use for an agricultural activity or, where the area is used as well for non-agricultural activities, predominantly used for agricultural activities; and

Except in the case of force majeure or exceptional circumstances, hectares shall comply with the eligibility condition throughout the calendar year.’

10.Article 35 of that regulation, which was entitled ‘Declaration of eligible hectares’, provided, in paragraph 1 thereof:

‘The farmer shall declare the parcels corresponding to the eligible hectares accompanying any payment entitlement. Except in the case of force majeure or exceptional circumstances, these parcels shall be at the farmer’s disposal on a date fixed by the Member State which shall be no later than the date fixed in that Member State for amending the aid application.’

11.Article 124 of the regulation, which is entitled ‘Area under the single area payment scheme’, provided:

‘1. …

For the purposes of this Title, “utilised agricultural area” shall mean the total area taken up by arable land, permanent grassland, permanent crops and kitchen gardens as established by the Commission for its statistical purposes.

For [the Republic of] Bulgaria and Romania, the agricultural area under the single area payment scheme shall be the part of its utilised agricultural area which is maintained in good agricultural condition, whether or not in production, where appropriate adjusted in accordance with the objective and non-discriminatory criteria to be set by [the Republic of] Bulgaria or Romania after approval by the Commission.

Except in the case of force majeure or exceptional circumstances, the parcels referred to in the first subparagraph shall be at the farmer’s disposal on the date fixed by the Member State which shall be no later than the date fixed in that Member State for amendment of the aid application.

The minimum size of eligible area per holding for which payments may be requested shall be [0.3] ha. However, any new Member State may decide, on the basis of objective criteria and after approval by the Commission, to set the minimum size at a higher level not exceeding 1 ha.

4. Any land benefiting from payments under the single area payment scheme shall be maintained in good agricultural and environmental condition in accordance with Article 6.

12.Article 4 of legea zootehniei nr 72/2002 (Law No 72/2002 on animal breeding), (7) of 16 January 2002 provides:

‘For the purposes of this Law, “animal breeder” shall mean natural or legal persons who keep as owners the species of animals referred to in Article 2, which are listed in the agricultural register.’

13.Article 5(1) of that law provided:

‘The rearing and use of animals shall be the activity of animal breeders, regardless of their legal status, for the purposes of obtaining products and animal products.’

14.Article 6(1) of Ordonanța de urgență a Guvernului nr. 125/2006 pentru aprobarea schemelor de plăți directe și plăți naționale directe complementare, care se acordă în agricultură începând cu anul 2007, și pentru modificarea articolului 2 din Legea nr. 36/1991 privind societățile agricole și alte forme de asociere în agricultură (Government Emergency Order No 125/2006 approving direct payment schemes and complementary national direct payments granted for agriculture as from 2007 and amending Article 2 of Law No 36/1991 on agricultural companies and other forms of association in the field of agriculture), (8) of 21 December 2006, in the version thereof applicable to the dispute in the main proceedings, provides:

‘The beneficiaries of the direct payments under the single area payment scheme may be natural persons and/or legal persons who exploit the agricultural land in respect of which the payment is sought as owners, lessors, concessionaires, management-level members of participative associations, lessees or other related persons.’

15.Article 7(1) of OUG No 125/2006 provides:

‘In order to receive payments under single area payment schemes, applicants must be registered in the Register of Farmers, which is managed by the Agenția de Plăți și Intervenție pentru Agricultură (Agency for payments and measures for agriculture, Romania), submit their application for payment within the time limits prescribed and satisfy the following general conditions:

(a)exploit agricultural land of an area of at least one hectare; the area of the agricultural parcels must be at least 0.3 hectare …

…

(c)provide, on pain of criminal prosecution, genuine, complete and entirely valid data in the single area payment application form and in the documents annexed thereto, including the list of the relevant areas;

…

(f)submit documents proving the lawful use of the law in respect of which the application has been lodged;

(g)provide any information requested by the [APIA] within the time limits prescribed;

…’

Article 5(1) of Ordinul ministrului agriculturii și dezvoltării rurale nr. 246/2008 privind stabilirea modului de implementare, a condițiilor specifice și a criteriilor de eligibilitate pentru aplicarea schemelor de plăți directe și plăți naționale directe complementare în sectorul vegetal, pentru acordarea sprijinului aferent măsurilor de agromediu și zone defavorizate (Regulation of the Minister for Agriculture and Rural Development No 246/2008 concerning the drawing up of the method of implementation, specific conditions and eligibility criteria for the implementation of the complementary national direct payment schemes in the crop sector, for the grant of support relating to agro-environmental measures and disadvantaged areas), (9) of 23 April 2008, in the version thereof applicable to the dispute in the main proceedings, states the following:

‘The documents providing proof of the lawful use of municipal permanent pastureland, in accordance with Article 7(1)(f) of [OUG No 125/2006], as amended and supplemented by Law No 139/2007 and as subsequently amended and supplemented, are documents attesting to a right of ownership, concession or leasing contracts concluded between the municipal councils and animal breeders, which indicate the land used and certificate issued by the city council in accordance with the information contained in the farming register. Any agreement concluded before the present Regulation enters into force which concerns the use of municipal pastureland shall continue to be effective until the date on which the entitlement ends.’

4. The strategy for the organisation of activities to improve and exploit meadows

Point 1 of Chapter VI of the strategia privind organizarea activității de îmbunătățire și exploatare a pajiștilor la nivel național, pe termen mediu și lung (strategy for the organisation of activities to improve and exploit meadows nationally in the medium and long term), adopted by Regulation of the Minister for Agriculture, Food and Forestry and of the Minister for Public Administration No 226/235/2003, (10) as amended and supplemented by Ordinul ministrului agriculturii, pădurilor și dezvoltării rurale nr. 541/2009 (Regulation of the Minister for Agriculture, Forestry and Rural Development No 541/2009), (11) of 25 August 2009, states:

‘The responsibilities of the meadow users

(a)In order to use the meadows managed by municipal councils, cities or local authorities:

–established associations of animal breeders and animal breeders who are natural or legal persons shall submit an application to the local council, …

(b)Meadow users who conclude concession contracts shall satisfy the following minimum conditions:

–they shall be registered with the National Register of Holdings;

–they shall guarantee a minimum density of 0.3 LSU [livestock units] [per hectare] for the land in respect of which the application is made;

–they shall submit a grazing schedule in accordance with the provisions of point 8 of Chapter IV for the period of resumption of use of the meadow in respect of which the application is made.

…’

Article 430 of the Cod procedură civilă (Code of Civil Procedure), adopted by Law No 134/2010, (12) provides:

‘(1) A judgment which decides, in whole or in part, the substance of the proceedings or rules on a procedural plea or on any other matter shall have, with effect from its delivery, the force of res judicata with regard to the issue decided.

(2) The force of res judicata shall cover the operative part of the judgment and the considerations upon which that operative part is based, including those pursuant to which the issue concerned was decided.

(3) A judgment by which interim measures are adopted shall not have the force of res judicata.

(4) Where a judgment is subject to an appeal or an appeal on a point of law, the force of res judicata shall be provisional.

(5) A judgment against which an application for annulment or for review is brought shall retain the force of res judicata until it is replaced by another judgment.’

Article 431 of that code states:

‘(1) Proceedings may not be brought a person twice in the same capacity, on the basis of the same charges and in respect of the same matter.

(2) The parties may challenge the force of res judicata previously acquired in other dispute where there is a connection with the resolution of that dispute.’

Article 2 of Ordonanța de urgență a Guvernului nr. 34/2013 privind organizarea, administrarea și exploatarea pajiștilor permanente și pentru modificarea și completarea Legii fondului funciar nr. 18/1991 (Government Emergency Order No 34/2013 on the management and exploitation of permanent meadows, amending and supplementing Law No 18/1991 on land ownership (13)), in the version thereof applicable to the dispute in the main proceedings, states the following:

‘For the purposes of this Emergency Order:

…

(b)“pastureland and grassland” mean agricultural land registered in title deeds under that category of use and intended for the production of fodder, grass and other herbaceous plants for animals, harvested by mowing or put to use by grazing;

(c)“livestock unit (LSU)” means a standard unit of measurement established according to the nutritional requirements of each animal species, which allows for conversion between the various categories of animals;

(d)“user of pastureland and grassland” means an animal breeder, who is a natural or legal person, registered in the National Register of Holdings and who carries out agricultural activities specific to the category of use of the pastureland and grassland, in accordance with the statistical classification of the economic activities within the European Union for crop and livestock production, and who has a legal right of use over the agricultural land and who puts the pastureland to use by means of grazing animals owned by him or by mowing at least once each year;

(e)“National Register of Holdings (NRH)” means the collection of data in electronic format which includes the information identifying each holding in Romania …;

(f)“meadow owners” means holders of rights of ownership or other rights in rem over such or persons who, under civil laws, have the status of the owners or keepers of meadows held in the right of another;

…’

III. The dispute in the main proceedings, the questions referred for a preliminary ruling and the procedure before the Court

21.Avio Lucos is a company incorporated under Romanian law. Its principal activity is ‘activities in support of crops’.

Avio Lucos is a company incorporated under Romanian law. Its principal activity is ‘activities in support of crops’.

22.In the course of 2014, Avio Lucos submitted to the APIA, Dolj, inter alia, an application for the single area payment for the year 2014 in respect of an area of 341.70 hectares of pastureland.

In the course of 2014, Avio Lucos submitted to the APIA, Dolj, inter alia, an application for the single area payment for the year 2014 in respect of an area of 341.70 hectares of pastureland.

23.In order to prove its right to use that land, it submitted a series of documents, which included a concession contract, concluded on 28 January 2013 with the Consiliul local Podari (Municipal Council of the Municipality of Podari Romania), concerning a pasture situated within that municipality (14) (‘the concession contract’). Under that contract, Avio Lucas had the right to exploit directly, by grazing, at its own risk, the assets supplied on concession. It was also required to ensure that the land taken on concession was exploited by grazing and to pay the associated fee, (15) and was prohibited from leasing that land or granting a sub-concession over it.

In order to prove its right to use that land, it submitted a series of documents, which included a concession contract, concluded on 28 January 2013 with the Consiliul local Podari (Municipal Council of the Municipality of Podari Romania), concerning a pasture situated within that municipality (14) (‘the concession contract’). Under that contract, Avio Lucas had the right to exploit directly, by grazing, at its own risk, the assets supplied on concession. It was also required to ensure that the land taken on concession was exploited by grazing and to pay the associated fee, (15) and was prohibited from leasing that land or granting a sub-concession over it.

24.Avio Lucos subsequently concluded, on 30 January 2013, a joint venture contract with four natural persons who own animals (‘the natural persons’), under which the actual exploitation of the municipal pastureland taken on concession was to be conducted by the provision of animals (cows, sheep, goats etc.) by those natural persons, in the number owned and specified contractually, for the purpose of the continuous grazing of the abovementioned land. (16)

Avio Lucos subsequently concluded, on 30 January 2013, a joint venture contract with four natural persons who own animals (‘the natural persons’), under which the actual exploitation of the municipal pastureland taken on concession was to be conducted by the provision of animals (cows, sheep, goats etc.) by those natural persons, in the number owned and specified contractually, for the purpose of the continuous grazing of the abovementioned land. (16)

Following the submission of that single area payment application, on 23 October 2014 the APIA, Dolj, adopted a decision granting an advance payment to Avio Lucos under the area support schemes for the 2014 marketing year and, on 9 December 2014, it adopted a decision granting that payment, which totalled 529 340.24 Romanian lei (RON) (approximately EUR 108000).

25.Following the submission of that single area payment application, on 23 October 2014 the APIA, Dolj, adopted a decision granting an advance payment to Avio Lucos under the area support schemes for the 2014 marketing year and, on 9 December 2014, it adopted a decision granting that payment, which totalled 529 340.24 Romanian lei (RON) (approximately EUR 108000).

However, the APIA, Dolj, subsequently found inter alia that, on the date on which the concession contract was concluded, Avio Lucos was not entitled to take on concession pastureland in the public domain or the private sphere of the municipality, since it was not an animal breeder and nor did it own animals, in breach of the applicable national law.

26.However, the APIA, Dolj, subsequently found inter alia that, on the date on which the concession contract was concluded, Avio Lucos was not entitled to take on concession pastureland in the public domain or the private sphere of the municipality, since it was not an animal breeder and nor did it own animals, in breach of the applicable national law.

In the light of that finding, the APIA, Dolj, first, adopted a decision imposing multiannual penalties on Avio Lucos totalling RON 555 729.59 (approximately EUR 113000). That decision has been the subject of a number of administrative and judicial appeals brought by Avio Lucos, all of which were dismissed. (17) Second, the APIA, Dolj, established that Avio Lucos owed a debt to the State totalling RON 529 340.24 (approximately EUR 108000), which corresponds to the amount which had already been paid to it.

27.In the light of that finding, the APIA, Dolj, first, adopted a decision imposing multiannual penalties on Avio Lucos totalling RON 555 729.59 (approximately EUR 113000). That decision has been the subject of a number of administrative and judicial appeals brought by Avio Lucos, all of which were dismissed. (17) Second, the APIA, Dolj, established that Avio Lucos owed a debt to the State totalling RON 529 340.24 (approximately EUR 108000), which corresponds to the amount which had already been paid to it.

28.Avio Lucos challenged the latter decision before the Tribunalul Dolj (Regional Court, Dolj, Romania), which dismissed its application by judgment of 12 December 2017. Avio Lucos lodged an appeal against that judgment, which was allowed by the Curtea de Apel Craiova (Court of Appeal, Craiova, Romania), which referred the case back to the Tribunalul Dolj (Regional Court, Dolj), on the ground that the judgment had not examined Avio Lucos’ grounds of defence alleging infringement of EU law.

Avio Lucos challenged the latter decision before the Tribunalul Dolj (Regional Court, Dolj, Romania), which dismissed its application by judgment of 12 December 2017. Avio Lucos lodged an appeal against that judgment, which was allowed by the Curtea de Apel Craiova (Court of Appeal, Craiova, Romania), which referred the case back to the Tribunalul Dolj (Regional Court, Dolj), on the ground that the judgment had not examined Avio Lucos’ grounds of defence alleging infringement of EU law.

Following the re-registration of the case at the Tribunalul Dolj (Regional Court, Dolj), that court, by judgment of 25 February 2018, dismissed Avio Lucos’ application on the ground that Avio Lucos was not a ‘farmer’ within the meaning of Article 2(a) of Regulation No 73/2009, since it proved only that it held on concession the land in respect of which it had made its single area payment application, without carrying out any agricultural activity, that is to say, the breeding of animals.

29.Following the re-registration of the case at the Tribunalul Dolj (Regional Court, Dolj), that court, by judgment of 25 February 2018, dismissed Avio Lucos’ application on the ground that Avio Lucos was not a ‘farmer’ within the meaning of Article 2(a) of Regulation No 73/2009, since it proved only that it held on concession the land in respect of which it had made its single area payment application, without carrying out any agricultural activity, that is to say, the breeding of animals.

30.Avio Lucos appealed against that judgment before the Curtea de Apel Timişoara (Court of Appeal, Timişoara, Romania), the referring court. Avio Lucos claims, inter alia, that the Tribunalul Dolj (Regional Court, Dolj), examined the eligibility criteria not in the light of EU law but solely in the light of concepts of national law which have no equivalent in EU law. For their part, the APIA, Dolj, and the APIA have raised, inter alia, a plea of res judicata based on two final judgments of the Curtea de Apel Craiova (Court of Appeal, Craiova) dismissing the actions brought by Avio Lucas against the decision imposing multiannual penalties.

Avio Lucos appealed against that judgment before the Curtea de Apel Timişoara (Court of Appeal, Timişoara, Romania), the referring court. Avio Lucos claims, inter alia, that the Tribunalul Dolj (Regional Court, Dolj), examined the eligibility criteria not in the light of EU law but solely in the light of concepts of national law which have no equivalent in EU law. For their part, the APIA, Dolj, and the APIA have raised, inter alia, a plea of res judicata based on two final judgments of the Curtea de Apel Craiova (Court of Appeal, Craiova) dismissing the actions brought by Avio Lucas against the decision imposing multiannual penalties.

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delivered on 2 September 2021 (1)

Case C‑116/20

Agenţia de Plăți şi Intervenție pentru Agricultură – Centrul județean Dolj,

Agenţia de Plăți şi Intervenție pentru Agricultură (APIA) – Aparat Central

II. Legal context

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