18 August 2020 (*)

(Interim measures — Grant agreement concluded in the context of the Seventh Framework Programme for research, technological development and demonstration activities (2007-2013) — Reimbursement of sums paid — Debit notes — Application for suspension of operation — No urgency)

In Case T‑358/20 R,

Net Technologies Finland Oy,

established in Helsinki (Finland), represented by S. Pappas and N. Kyriazopoulou, lawyers,

applicant,

Research Executive Agency (REA),

represented by S. Payan-Lagrou and V. Canetti, acting as Agents, and by M. Le Berre, lawyer,

defendant,

APPLICATION under Articles 278 and 279 TFEU for the suspension of operation of two debit notes issued by the REA on 7 May 2020 requiring payment by the applicant of the sum of EUR 188 477.27 no later than 22 June 2020,

makes the following

Facts, procedure and forms of order sought

The applicant, Net Technologies Finland Oy, is a Finnish limited liability company whose business activity covers the area of telecommunications (networks design, development, implementation, operation and maintenance).

Grant Agreement FP7-SEC-2012-312484 (‘the grant agreement’) was concluded between a company acting as the coordinator of a consortium and the Research Executive Agency (REA) in the context of the Seventh Framework Programme for research, technological development and demonstration activities (2007-2013) for the realisation of the project ‘Inter System Interoperability for Tetra-TetraPol Networks’ and entered into force on 1 September 2013. On 1 May 2014 the applicant assumed the rights and obligations of one of the member companies of that consortium.

For the purposes of the grant agreement, the applicant concluded five service contracts with senior consultants and telecommunications engineers for a period between 1 May 2014 and 31 December 2016, with the possibility of extension.

In April 2018 a financial audit was carried out by the internal auditors of the REA in accordance with the general conditions of the grant agreement. After some correspondence between the parties, the REA issued, on 7 May 2020, debit note No 3242005825 for the reimbursement of the sum of EUR 171 342.97 for an unjustified contribution and debit note No 3242005872 for the reimbursement of the sum of EUR 17 134.30 for liquidated damages, requiring payment by no later than 22 June 2020 (‘the contested debit notes’).

By application lodged at the Court Registry on 11 June 2020, the applicant brought an action asking the General Court to declare that:

–the REA was in breach of its contractual obligations pursuant to the grant agreement;

–the claims in the contested debit notes are unfounded, and

–the corresponding costs for the in-house consultants are eligible.

By separate document lodged at the Court Registry on the same day, the applicant brought the present application for interim measures, in which it claims that the President of the Court should:

–order the suspension of operation of the contested debit notes until the Court has made a definitive ruling in the main proceedings;

–order, pursuant to Article 157(2) of the Rules of Procedure of the General Court, the immediate suspension of operation of the debit notes at issue pending the adoption of an order which will bring the present interim proceedings to an end;

–order the REA to pay the costs incurred in the present interim proceedings.

By order of 18 June 2020, Net Technologies Finland v REA (T‑358/20 R, not published), adopted pursuant to Article 157(2) of the Rules of Procedure, the President of the Court ordered the suspension of the operation of the contested debit notes until the date of the order bringing the present interim measures proceedings to an end.

In its observations, lodged at the Court Registry on 24 June 2020, on the present application for interim measures, the REA contends that the President of the Court should:

–set aside the order of 18 June 2020, Net Technologies Finland v REA (T‑358/20 R);

–dismiss the present application for interim measures;

–reserve the costs pursuant to Article 158(5) of the Rules of Procedure.

Law

It is apparent from reading Articles 278 and 279 TFEU together with Article 256(1) TFEU that the judge hearing an application for interim measures may, if he considers that the circumstances so require, order that the operation of a measure challenged before the General Court be suspended or prescribe any necessary interim measures, pursuant to Article 156 of the Rules of Procedure. Nevertheless, Article 278 TFEU establishes the principle that actions do not have suspensory effect, since acts adopted by the institutions of the European Union are presumed to be lawful. It is therefore only exceptionally that the judge hearing an application for interim measures may order the suspension of operation of an act challenged before the General Court or prescribe any interim measures (order of 19 July 2016, Belgium v Commission, T‑131/16 R, EU:T:2016:427, paragraph 12).

The first sentence of Article 156(4) of the Rules of Procedure provides that an application for interim measures must state ‘the subject matter of the proceedings, the circumstances giving rise to urgency and the pleas of fact and law establishing a prima facie case for the interim measure applied for’.

Accordingly, the judge hearing an application for interim measures may order suspension of operation of an act and other interim measures if it is established that such an order is justified, prima facie, in fact and in law, and that it is urgent in so far as, in order to avoid serious and irreparable harm to the applicant’s interests, it must be made and produce its effects before a decision is reached in the main proceedings. Those conditions are cumulative, and consequently an application for interim measures must be dismissed if any one of them is not satisfied. The judge hearing an application for interim measures is also to undertake, when necessary, a weighing of the competing interests (see order of 2 March 2016, Evonik Degussa v Commission, C‑162/15 P-R, EU:T:2016:142, paragraph 21 and the case-law cited).

In the context of that overall examination, the court hearing the application for interim measures enjoys a broad discretion and is free to determine, having regard to the particular circumstances of the case, the manner and order in which those various conditions are to be examined, there being no rule of law imposing a pre‑established scheme of analysis within which the need to order interim measures must be assessed (see order of 19 July 2012, Akhras v Council, C‑110/12 P(R), not published, EU:C:2012:507, paragraph 23 and the case-law cited).

Having regard to the material in the case file, the judge hearing the application considers that he has all the information needed to rule on the present application for interim measures without there being any need first to hear oral argument from the parties.

In the circumstances of the present case, it is appropriate to examine first whether the condition relating to urgency is satisfied.

Concerning the urgency requirement, it should be noted that the purpose of the procedure for interim relief is to guarantee the full effectiveness of the future final decision, in order to prevent a lacuna in the legal protection afforded by the EU Courts. To attain that objective, urgency must be assessed in the light of the need of an interlocutory order to avoid serious and irreparable harm to the party requesting the interim measure. That party must demonstrate that it cannot await the outcome of the main proceedings without suffering serious and irreparable harm (see order of 14 January 2016, AGC Glass Europe and Others v Commission, C‑517/15 P-R, EU:C:2016:21, paragraph 27 and the case-law cited).

In order to demonstrate the urgency of the suspension of operation sought, the applicant asserts that the immediate operation of the contested debit notes would inevitably bring about the end of its business activities, or even its disappearance from the market. In that regard, it submits that the sum claimed by the REA amounts to more than half of the financial contribution it had received. The applicant submits that it is an SME, owned by two individual shareholders, with an average annual turnover of EUR 228 260.34 in 2017, EUR 58 515.90 in 2018 and EUR 160 511.34 in 2019 and with very low profits, namely EUR 1 589.49 in 2017, EUR 799.05 in 2018 and EUR 127.83 in 2019. Thus, the sum claimed by the REA exceeds its 2019 turnover by almost EUR 28 000.

According to the applicant, the harm is not hypothetical or based on uncertain events, as the contested debit notes set an expiry date by which the sums claimed must be paid.

The REA disputes the applicant’s arguments. First, it contends that the contested debit notes alone, not any recovery measure, are the subject matter of the present dispute. According to the REA, the sole automatic effect of the failure to pay those notes by the expiry date is that default interest would become payable and any steps to be taken by the Commission or the REA in those circumstances would require additional measures after issuing the contested debit notes.

Second, the REA maintains that the applicant has not established the urgency of the measures applied for, in so far as it has not produced an accurate overall picture of its financial situation and has not therefore demonstrated either the risk of harm caused to it or the imminence of such harm.

In the first place, it must be borne in mind that, according to well established case-law, there is urgency only if the serious and irreparable harm feared by the party seeking the interim measures is so imminent that its occurrence can be foreseen with a sufficient degree of probability. That party remains, in any event, required to prove the facts that form the basis of its claim that such harm is likely, it being clear that purely hypothetical harm, based on future and uncertain events, cannot justify the granting of interim measures (see order of 22 June 2018, Arysta LifeScience Netherlands v Commission, T‑476/17 R, EU:T:2018:407, paragraph 24 and the case-law cited).

In that regard, it must be noted that financial harm such as that raised by the applicant could, in principle, be characterised as imminent if the REA were to adopt an enforceable act for the purposes of the first paragraph of Article 299 TFEU, which would fix once and for all its intention to pursue the recovery of its claims and would be capable of being enforced by appending an order for its enforcement, as provided for under the second paragraph of Article 299 TFEU (see, to that effect, order of 8 May 2013, Talanton v Commission, T‑165/13 R, not published, EU:T:2013:235, paragraph 18).

According to case-law, debit notes such as those contested in the present case are not definitive acts adopted by an institution, body, office or agency of the European Union, but are only preparatory in nature in the context of a debt recovery procedure, the details of which the institution, body, office or agency of the European Union has not yet defined. As a result, failing any other evidence submitted by the applicant, the contested debit notes cannot be considered to be enforceable acts. The same applies in relation to any reminder letters adopted following such notes (see, to that effect, order of 8 May 2013, Talanton v Commission, T‑165/13 R, not published, EU:T:2013:235, paragraphs 22 and 23; see also, by analogy, order of 5 March 2020, HB v Commission, T‑795/19 R, not published, EU:T:2020:88, paragraphs 54 and 55).

When the debtor does not pay the amount claimed in the reminder letter, the creditor institution, body, office or agency can either waive recovery of the debt, offset the debt or have recourse to enforcement; the latter may take place either by way of an enforceable decision or an enforcement order obtained by a legal proceedings (see, to that effect, order of 8 May 2013, Talanton v Commission, T‑165/13 R, not published, EU:T:2013:235, paragraph 23).

In the light of the foregoing, it must be held that the risk alleged by the applicant is purely hypothetical, since it is based on future and uncertain events, and cannot, as such, justify the granting of interim measures.

In the second place, the applicant has not established that the payment of the sums claimed by the REA would imperil its financial viability prior to delivery of the judgment bringing the main proceedings to an end and that the resulting harm would therefore be irreparable.

Pursuant to settled case-law, harm of a pecuniary nature cannot, otherwise than in exceptional circumstances, be regarded as irreparable since, as a general rule, pecuniary compensation is capable of restoring the aggrieved person to the situation that obtained before the harm was suffered (see order of 23 April 2015, Commission v Vanbreda Risk & Benefits, C‑35/15 P(R), EU:C:2015:275, paragraph 24 and the case-law cited).

However, where the harm referred to is of a pecuniary nature, the interim measures sought are justified where, in the absence of those measures, the person seeking the measures would be in a position that would imperil its financial viability before final judgment is given in the main action, or where its market share would be affected substantially in the light, inter alia, of the size and turnover of its undertaking and, as the case may be, the characteristics of the group to which it belongs (see order of 12 June 2014, Commission v Rusal Armenal, C‑21/14 P-R, EU:C:2014:1749, paragraph 46 and the case-law cited).

For that purpose, the judge hearing the application for interim measures must have concrete and precise indications, supported by detailed, certified documentary evidence, which shows the situation in which the party seeking the interim measures finds itself and enables the probable consequences, should the measures sought not be granted, to be assessed. It follows that that party, in particular when it relies on the occurrence of financial harm, must, in principle, produce, with supporting documentation, an accurate overall picture of its financial situation (see order of 29 February 2016, ICA Laboratories and Others v Commission, T‑732/15 R, not published, EU:T:2016:129, paragraph 39 and the case-law cited).

In addition, under the second sentence of Article 156(4) of the Rules of Procedure, applications for interim measures ‘shall contain all the evidence and offers of evidence available to justify the grant of interim measures’.

Thus, an application for interim measures must, of itself, enable the defendant to prepare its observations and the judge hearing the application to rule on it, if necessary, without any supporting information, since the essential elements of fact and law on which the application is based must be found in the actual text of that application. In view of the rapidity which, by its nature, characterises the procedure for interim measures, it is reasonable to require the party seeking interim measures to submit, save in exceptional circumstances, all the evidence available in support of the application when that application is made, so that the judge hearing the application for interim measures may assess, on that basis, the merits of the application (see order of 6 September 2016, Inclusion Alliance for Europe v Commission, C‑378/16 P-R, not published, EU:C:2016:668, paragraphs 17 and 18 and the case-law cited).

In the present case, the applicant has submitted accounting documents relating to its financial situation for the 2017 to 2019 financial years, which set out, inter alia, its turnover and profits for those years. In that regard, the applicant merely asserts that, in the light of those figures, the payment of the sums claimed by the REA will inevitably bring about the end of its business activities.

However, it must be stated that the applicant has not submitted any document to support that assertion or any analysis or any other evidence establishing a genuine risk to its financial viability. In particular, the applicant has not provided any information on its shareholders and their financial situation or relating to its own or its shareholders’ ability to take out a bank loan, which would allow it to repay the sum claimed.

It follows that the applicant has failed to produce an accurate overall picture of its financial situation that would allow the judge hearing the application for interim measures to assess whether its financial viability would be imperilled.

Therefore, it must be concluded that the applicant has not demonstrated to the requisite legal standard that, if the suspension it has applied for were not granted, it would suffer serious and irreparable harm on account of the fact that the payment of the sums claimed in the contested debit notes before a ruling is made in the main proceedings would inevitably result in the end of its business activities and would imperil its financial viability or substantially affect its market share.

It follows from the foregoing that the application for interim measures must be dismissed for lack of urgency, there being no need to examine whether there is a prima facie case or to weigh up the interests at stake.

Since the present order terminates the proceedings for interim measures, it is necessary to cancel the order of 18 June 2020, Net Technologies Finland v REA (T‑358/20 R, not published), adopted pursuant to Article 157(2) of the Rules of Procedure, suspending the operation of the contested debit notes until the date of the order bringing the present interim measures proceedings to an end.

Costs

By virtue of Article 158(5) of the Rules of Procedure, it is appropriate to reserve the costs.

On those grounds,

hereby orders:

1.The application for interim measures is dismissed.

2.The order of 18 June 2020, Net Technologies Finland v REA (T‑358/20 R) is cancelled.

3.The costs are reserved.

Luxembourg, 18 August 2020.

Registrar

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Language of the case: English.