Parliament v Council (Law governing the institutions) [1998] EUECJ C-22/96 (28 May 1998)

Judgment By application lodged at the Court Registry on 25 January 1996, the European Parliament brought an action under Article 173 of the EC Treaty for annulment of Council Decision 95/468/EC of 6 November 1995 on a Community contribution for telematic interchange of data between administrations in the Community (IDA) (OJ 1995 L 269, p. 23, hereinafter 'the contested decision'). Article 1 of the contested decision provides as follows: 'The purpose of this Decision is to determine the Community contribution to certain projects in the field of telematic interchange of data between administrations with a view to facilitating cooperation between them. For this purpose, a list of projects is laid down for 1995, 1996 and 1997 for which a specific need is hereby recognised along with the need for a Community contribution to render them operational throughout the Community.' Article 2(1) of the contested decision lists the projects recognised as projects for telematic exchange of data between administrations requiring Community support. Article 2(2) of the contested decision is in the following terms: '2. The Community may support, within the framework of this Decision and in particular Article 4 thereof, other projects to meet the need for telematic interchange of data between administrations in accordance with Article 1 in so far as such need has been identified in another Council Decision.' Articles 3 to 5 of the contested decision lay down the conditions governing the grant of the Community contribution. In particular, Article 4 prescribes the procedure to be followed for the implementation of the contested decision. Article 5(1) specifies the types of action which the Community contribution may encompass, namely: presentation of technical network solutions to enable communication between the administrations' autonomous information systems; preparation and validation of common rules for a communications architecture; examination of any possible impact on users; contribution to laying down a legal framework, in particular by drawing up specimen agreements; and consultation and coordination of all parties concerned in the national administrations and Community institutions as well as of network operators, service providers and industrial companies. Article 5(2) lays down the framework conditions which must be fulfilled in the case of Community contributions. According to Article 6, the contested decision is to apply until 31 December 1997. The recitals in the preamble to the contested decision refer inter alia to: - the fact that the functioning of the internal market involves close cooperation between the competent administrations in the Member States and between them and the Community institutions (first recital); - the need in certain cases to have recourse to the use of telematic techniques (second recital); - the need, with regard to the Member States' internal telematic systems, for compliance with rules governing architecture, management, responsibility and maintenance, in order to ensure the interoperability of those systems (third recital); - the need, in certain cases, to secure a Community contribution (fifth and seventh recitals); - the establishment of the conditions under which the implementation of certain specific projects may be eligible for Community support (sixth recital); - the fact that the Treaty does not provide for powers other than those in Article 235 of the EC Treaty for the adoption of the contested decision, the main purpose of which is to facilitate cooperation between administrations (ninth recital). The documents before the Court show that on 12 March 1993 the Commission submitted to the Parliament and the Council a communication (COM(93) 69 final) on trans-European telematic networks between administrations (OJ 1993 C 105, pp. 10 and 12). That communication contained two proposals for Council decisions based on Article 235 of the EEC Treaty, which merely provides for the Parliament to be consulted. The first of those proposals concerned a series of guidelines for trans-European data communications networks between administrations ('the guidelines proposal'), whilst the second established a multiannual Community programme to support the implementation of trans-European networks for the interchange of data between administrations (IDA) ('the IDA proposal'). Following the entry into force of the Treaty on European Union, the Commission altered the legal basis for those two proposals by substituting Article 129d of the EC Treaty for Article 235 of the EEC Treaty (citing the first paragraph of Article 129d in the guidelines proposal and the third paragraph of that article in the IDA proposal). The first paragraph of Article 129d of the Treaty provides that the guidelines referred to in Article 129c(1), covering the objectives, priorities and broad lines of measures envisaged in the sphere of trans-European networks and identifying projects of common interest, are to be adopted by the Council, acting in accordance with the co-decision procedure referred to in Article 189b. The third paragraph of Article 129d provides that the Council, acting in accordance with the cooperation procedure referred to in Article 189c, is to adopt the other measures provided for in Article 129c(1), namely those relating to the interoperability of the networks and financial support for projects of common interest. Article 129d also provides for the Economic and Social Committee and the Committee of the Regions to be consulted. On 17 November 1994 the Parliament approved the two proposals for decisions, subject to certain amendments not relating to the legal basis (OJ 1994 C 341, p. 121). By letter of 29 March 1995 the Council consulted the Parliament with a view to replacing the legal basis by Article 235 of the Treaty. The measure to which that letter related was entitled 'Proposal for a Council Decision on support for telematic exchange of data between administrations in the Community (IDA)'. The Council stated in its letter that, 'for the purposes of a measure concerning specific projects falling outside a general frame of reference, the only applicable powers were those referred to in Article 235'. On 21 September 1995, in the context of that fresh consultation, the Parliament adopted a resolution in which it disputed the legal basis proposed by the Council and considered that the Commission proposal should be based on the third paragraph of Article 129d of the Treaty (OJ 1995 C 269, p. 153). Since the Council nevertheless adopted the contested decision on the basis of Article 235 of the Treaty, the Parliament has brought this action for its annulment. By order of the President of the Court of 27 September 1996, the Commission was given leave to intervene in support of the form of order sought by the Parliament. In support of its claim, the Parliament, supported by the Commission, maintains that, despite the amendments made, the contested decision falls within the ambit of the two initial Commission proposals, which concerned the guidelines and the IDA programme. According to those institutions, the contested decision defines, at least implicitly, the guidelines identifying projects of common interest within the meaning of the first indent of Article 129c(1) of the Treaty, and thereby justifies reliance on the first paragraph of Article 129d as its legal basis. In addition, there are numerous aspects of the contested decision which relate to interoperability within the meaning of the second indent of Article 129c(1), and it is therefore appropriate to use the third paragraph of Article 129d as the legal basis. Lastly, since the contested decision identifies projects of common interest, the Community contribution for which it provides falls within the third indent of Article 129c(1) and the correct legal basis is the third paragraph of Article 129d. The Parliament and the Commission further assert that, even if the contested decision must be regarded as not containing guidelines within the meaning of the first indent of Article 129c(1), the measures relating to the interoperability of the networks justify recourse to the third paragraph of Article 129d. They refer in that regard to Case C-271/94 Parliament v Council [1996] ECR I-1689 (the ' Edicom ' judgment), which established the autonomy of the second indent of Article 129c(1) in relation to the first indent thereof. In addition to advancing that plea alleging an incorrect choice of legal basis, the Parliament maintains that the contested decision should be annulled, at least in part, on the grounds of lack of competence and misuse of powers as regards the adoption of Article 2(2) thereof. According to the Parliament, the scope of that provision is too wide, with the result that it confers residual powers on the Council in disregard of the Parliament's right to intervene in the legislative procedure. The Commission states in addition that, if the contested decision is found nevertheless to fall outside the ambit of Community action in relation to trans-European networks, it must be regarded as unlawful by virtue of having infringed Article 189a(1) of the EC Treaty. In those circumstances, the alterations made by the Council could no longer be regarded as amendments to the Commission proposal within the meaning of that provision. For its part, the Council considers that Article 129d was not capable of forming the basis of the decision and that, in the absence of specific powers, Article 235 was the only appropriate legal basis. It points out in that regard that it altered the initial Commission proposals with a view to adopting a measure allocating, for 1995, 1996 and 1997, a specific financial contribution to certain projects in the field of the telematic transmission of data between administrations, without any guidelines identifying projects of common interest having been established beforehand within the meaning of the first indent of Article 129c(1). Since the establishment of such guidelines is an essential precondition for the Community financing provided for in the third indent of Article 129c(1), the contested decision could not have been based on Article 129d. According to the Council, the absence of a series of guidelines also meant that the contested decision could not be categorised as a measure relating to the interoperability of the networks within the meaning of the second indent of Article 129c(1). The Council maintains that the fact that such a measure must be preceded by the establishment of guidelines is not affected by the Edicom judgment, since the Court took account, in paragraph 26 of that judgment, of the fact that several Community measures, adopted before the Treaty on European Union entered into force, had already defined the guidelines encompassing the decision annulled by that judgment. The Council also disputes the Parliament's argument concerning the unlawfulness of Article 2(2) of the contested decision. Lastly, it considers that the alterations which it made to the Commission proposals fall within the limits prescribed by Article 189a(1). The merits of the action It should be noted in limine that, according to settled case-law, the use of Article 235 of the Treaty as the legal basis for a measure is justified only where no other provision of the Treaty gives the Community institutions the necessary power to adopt the measure in question (see, in particular, Case 45/86 Commission v Council [1987] ECR 1493, paragraph 13, the Edicom judgment, cited above, paragraph 13, and Case C-268/94 Portugal v Council [1996] ECR I-6177 , paragraph 21). It should also be noted that, in the context of the organisation of the powers of the Community, the choice of the legal basis for a measure must be based on objective factors which are amenable to judicial review. Those factors include in particular the aim and content of the measure (see Case C-300/89 Commission v Council [1991] ECR I-2867 , paragraph 10, the Edicom judgment, cited above, paragraph 14, and Portugal v Council , cited above, paragraph 22). It is therefore necessary to consider whether the contested decision should have been based on the first or third paragraphs of Article 129d of the Treaty. First, as regards the objective of the contested decision, according to the first, second and ninth recitals in its preamble it contributes, by the use of telematic techniques for the exchange of information, towards close cooperation between the competent administrations in the Member States and between them and the Community institutions. In that regard, the third recital in the preamble underlines the importance of ensuring the interoperability of the Member States' internal telematic systems. According to the fifth recital, a Community contribution is necessary in certain cases. The sixth recital states that the conditions should be laid down under which the implementation of certain specific projects is eligible for Community support. The objective of the contested decision therefore serves a purpose which falls within Article 129b. That article, which sets out the objectives to be achieved by the Community measures provided for in Article 129c, states in paragraph (1) that 'the Community shall contribute to the establishment and development of trans-European networks' and, in paragraph (2), that 'action by the Community shall aim at promoting the interconnection and interoperability of national networks as well as access to such networks'. The very content of the contested decision confirms that it is designed to further the establishment and development of trans-European telematic networks between administrations. According to Article 1 of the contested decision, its purpose is to determine the Community contribution to certain projects in the field of telematic interchange of data between administrations. The list of projects set out in Article 2, the types of action defined in Article 5(1) and the framework conditions laid down in Article 5(2) clearly show that the content of the contested decision falls within the ambit of the development of trans-European networks. Next, it is necessary to consider whether the Community action provided for by the contested decision comprises measures falling within Article 129c(1). The first indent of Article 129c(1) provides for the establishment by the Community of a series of guidelines covering the objectives, priorities and broad lines of the measures envisaged and identifying projects of common interest. The second indent concerns the implementation by the Community of any measures that may prove necessary to ensure the interoperability of the networks, in particular in the field of technical standardisation. Lastly, the third indent relates to participation by the Community in the financial efforts made by the Member States for projects of common interest which are identified in the framework of the guidelines referred to in the first indent. Although the Council does not deny that the contested decision provides for the Community to make a financial contribution to projects concerning telematic networks, that contribution cannot, in its view, be based on the third indent of Article 129c(1), since no projects of common interest identified pursuant to the guidelines referred to in the first indent of that provision were established beforehand. The Council's arguments in that regard are not, however, borne out by an examination of the contested decision. That decision shows, as the Advocate General observes in point 7 of his Opinion, that the objectives of the Community action are defined by the recitals in its preamble. As regards priorities, the relationship between intervention by the Community and action by the Member Sates is defined, in particular, by the fifth and seventh recitals. The broad lines of the measures envisaged are dealt with in Article 5 of the contested decision. Lastly, the projects of common interest are identified in Article 2 of the contested decision. That finding is borne out by the fact, noted by the Advocate General in point 7 of his Opinion, that several of the projects provided for in Article 2(1) of the contested decision correspond to aspects of the guidelines proposal which was to be adopted on the basis of the first paragraph of Article 129d. Consequently, as is apparent from the foregoing examination, the contested decision establishes a series of guidelines within the meaning of the first indent of Article 129c(1) and provides, in relation to projects of common interest identified in those guidelines, for a financial contribution within the meaning of the third indent of that provision. It is immaterial in that regard whether the guidelines are established in the same measure as that providing for the financial contribution or in a separate measure adopted beforehand. In either case, the requirement that projects of common interest must be identified is fulfilled. Furthermore, certain aspects of the contested decision concern the interoperability of networks within the meaning of the second indent of Article 129c(1). First, the third recital in the preamble to that decision emphasises the need to ensure the interoperability of national telematic systems. Second, the fourth indent of Article 4(3)(a) of the contested decision provides that the special procedure laid down by Article 4 is applicable to the 'adoption of common rules and procedures for bringing about technical and administrative interoperability'. Moreover, according to Article 5(1), the types of action which the Community contribution may encompass include, in particular, measures relating to interoperability. Indeed, interoperability is specified as one of the framework conditions laid down in Article 5(2). Although the establishment and development of trans-European telecommunications networks between administrations entail, in themselves, the interconnection and interoperability of national networks as well as access to such networks, the content of the contested decision shows that it covers measures falling specifically within the second indent of Article 129c(1). It follows from the foregoing that the contested decision comprises measures falling within the first, second and third indents of Article 129c(1) of the Treaty, the procedure for the adoption of which is fixed by Article 129d. The Council was not entitled, therefore, to adopt the contested decision on the basis of Article 235. Consequently, the contested decision must be annulled, so that it is unnecessary to examine the pleas alleging the illegality of Article 2(2) thereof and infringement of Article 189a(1) of the Treaty. Maintenance of the effects of the decision In its defence, the Council asked the Court to order, in the event of annulment of the contested decision, that its effects should be maintained. The Commission joined in making that request, stating by way of qualification that, at the very least, the effects of legal relationships which have already come into existence on the basis of the contested decision should be maintained. In support of its request, the Commission asserts that cooperation between the administrations in the Member States and between them and the Community institutions requires an intensive interchange necessitating the continued use of telematic media. It maintains, by way of example, that networks such as that used to monitor intra-Community commercial trade for the purposes of value added tax declarations and that serving as a medium for veterinary controls on arrival and in combating illegal movements of cattle would cease to exist if the effects of the contested decision were not maintained. In its observations on the Commission's statement in intervention, the Parliament expresses doubts as to the compatibility of the Commission's request with the fourth paragraph of Article 37 of the EC Statute of the Court of Justice, since the Parliament did not seek in its application an order that the effects of the contested decision be maintained. It further states that, in the event of a ruling that the effects of the contested decision should be maintained, that ruling should be limited to the implementing measures already taken on the basis of the contested decision, as in the case of the Edicom judgment. It appears from the information provided by the Commission that, in order to avoid discontinuity in the measures commenced, and for important reasons of legal certainty, the effects of the measures already taken to implement the contested decision and based thereon should be maintained. By contrast, as regards the other effects of the decision, neither the Council nor the Commission has explained the difficulties which annulment of the contested decision would entail in that regard. In the absence of such explanation, the Court is unable to assess the degree and extent of those difficulties and to accede to that aspect of the request. Furthermore, it should be noted that, under Article 6, the contested decision was to apply until 31 December 1997. In view of the particular circumstances of the case and for reasons of legal certainty, comparable to those which arise where certain regulations are annulled, there appears to be justification for the Court to exercise the power expressly conferred upon it by the second paragraph of Article 174 of the EC Treaty where a regulation is annulled and to state the effects of the annulled decision which must be maintained. Consequently, the effects of the implementing measures already taken by the Commission on the basis of the contested decision should be maintained. Costs 43. Under Article 69(2) of the Rules of Procedure, the unsuccessful party is to be ordered to pay the costs if they have been applied for in the successful party's pleadings. The Parliament has asked that the Council be ordered to pay the costs. Since the Council has been unsuccessful, it must be ordered to pay the costs. In accordance with the first subparagraph of Article 69(4), the Commission must be ordered to bear its own costs. On those grounds, THE COURT hereby: 1. Annuls Council Decision 95/468/EC of 6 November 1995 on a Community contribution for telematic interchange of data between administrations in the Community (IDA); 2. Maintains the effects of the implementing measures already taken by the Commission of the European Communities on the basis of that decision; 3. Orders the Council of the European Union to pay the costs; 4. Orders the Commission of the European Communities to bear its own costs. Rodríguez Iglesias Gulmann Mancini Murray Edward Puissochet Hirsch Jann Sevón Delivered in open court in Luxembourg on 28 May 1998. R. Grass G. C. Rodríguez Iglesias Registrar President 1: Language of the case: French. BAILII: Copyright Policy | Disclaimers | Privacy Policy | Feedback | Donate to BAILII