Societe Generale d'Entreprises Electro-Mecaniques SA (SGEEM); and Roland Etroy v European Investment Bank. (Actions for damages) [1992] EUECJ C-370/89 (2 December 1992)

Judgment 1 By application lodged at the Court Registry on 12 December 1989, Société Générale d' Entreprises Électro-Mécaniques, a limited company governed by French law, whose registered office is at Champs-sur-Marne ("the applicant company") and Roland Etroy, its Chairman and Managing Director, brought an action for damages under Article 178 and the second paragraph of Article 215 of the EEC Treaty, seeking an order that the European Investment Bank ("the Bank"), as representative of the European Economic Community, make good the damage which it had caused them by preventing the applicant company from being chosen as the successful tenderer for a public works contract. 2 The Republic of Mali sought financing by the Bank of one lot forming part of a construction project for a high-voltage electricity line, in the form of a conditional loan by way of risk capital, as provided for in Article 199 of the Third ACP-EEC Convention signed at Lomé on 8 December 1984 ("the Convention", OJ 1986 L 86, p. 3). 3 Such risk capital is financed from the resources of the Sixth European Development Fund ("the Fund") set up by Article 1(1) of the Internal Agreement of 19 February 1985 on the financing and administration of Community aid ("the Agreement", OJ 1986 L 86, p. 210) and is managed by the Bank on behalf of the Community pursuant to Article 10(2) of the Agreement. 4 The second paragraph of Article 52(1) of the Council Financial Regulation of 11 November 1986 applicable to the Fund (OJ 1986 L 325, p. 42) provides that instruments giving effect to risk capital operations are to be concluded by the Bank acting as the Community' s authorized agent and Article 52(2) that the Bank, acting for and on behalf of the Community, is to manage such operations. 5 The Bank considered that the loan transaction requested by Mali came within the scope of its task as defined by the Treaty and was compatible with the objectives laid down by the Convention, and decided to agree to the request for finance. 6 The contract for the financing of the project concluded between Mali and the Bank stated that the Bank was acting on behalf of the Community and referred in particular to Article 10(2) of the Agreement. 7 The applicant company submitted a tender in response to the invitation issued by Mali and its tender proved to be the lowest. Initially, the Malian authorities contemplated awarding it the contract. 8 The Bank considered that the applicant company' s tender revealed patent weaknesses likely to compromise the carrying out of the project. It accordingly informed the Malian authorities that it could not finance the project if the contract were to be awarded to the applicant company. 9 When the Malian authorities finally decided to award the contract to another tenderer, the applicants brought the present action in order to obtain compensation for the damage which they considered the Bank had caused them by unlawfully interfering in the negotiation and conclusion of the contract and by failing to exercise supervision over the acts of its staff, in breach of the principle of sound administration. 10 The Sixth Chamber, to which the case was first assigned, decided, pursuant to Article 95(3) of the Rules of Procedure, to refer the case back to the Full Court for a preliminary decision on the Court' s jurisdiction in the present action. 11 Reference is made to the Report for the Hearing for a fuller account of the facts of the case, the course of the procedure and the pleas and arguments of the parties, which are mentioned or discussed hereinafter only in so far as is necessary for the reasoning of the Court. 12 In the first place, the Court finds that the contested action by the Bank relates to the performance of a financing contract which it concluded on behalf of the Community in the exercise of the powers conferred upon it by the aforementioned provisions of Community law in relation to the granting and management of risk capital financed by the Fund. 13 Secondly, the Bank constitutes a Community body established by the Treaty (Case 110/75 Mills v EIB [1976] ECR 955, paragraph 14). It is intended to contribute towards the attainment of the Community' s objectives and thus by virtue of the Treaty forms part of the framework of the Community (Case 85/86 Commission v EIB [1988] ECR 1281, paragraph 29). 14 It follows that any acts and omissions towards the applicants for which the Bank may have been responsible in the implementation of the financing contract in question are attributable to the Community in accordance with the general principles common to the Member States, referred to in the second paragraph of Article 215 of the Treaty. 15 It would be contrary to the intention of the authors of the Treaty if, when it acts through a Community body established by the Treaty and authorized to act in its name and on its behalf, the Community could escape the consequences of the provisions of Article 178 and the second paragraph of Article 215 of the Treaty, the intention of which is to reserve for the Court' s jurisdiction cases involving the non-contractual liability of the Community as a whole towards third parties. 16 The term "institution" employed in the second paragraph of Article 215 of the Treaty must therefore not be understood as referring only to the institutions of the Community listed in Article 4(1) of the Treaty but as also covering, with regard to the system of non-contractual liability established by the Treaty, Community bodies such as the Bank. 17 The Court' s jurisdiction in the present case is not called into question by the terms of Article 180 of the Treaty, the specific provisions of which are not intended to provide an exhaustive list of the cases in which the Court has jurisdiction in actions concerning the Bank (Mills v EIB, paragraphs 16 and 17). 18 Nor does Article 29 of the Protocol on the Statute of the Bank, under which disputes between the Bank and third parties are to be decided by the competent national courts, form an obstacle to the Court' s jurisdiction since it makes an express exception for the jurisdiction of the Court of Justice. 19 It follows that the Court has jurisdiction under Article 178 of the Treaty to determine the present action for damages. 20 The Court having reached that preliminary decision on the question of its jurisdiction, the case must be referred back to the Sixth Chamber for a decision on the substance. On those grounds, THE COURT, before giving a ruling on the merits of the action, hereby: 1. Declares that the Court has jurisdiction to determine the present action; 2. Refers the case back to the Sixth Chamber; 3. Reserves the costs. © European Communities, 2001 All rights reserved BAILII: Copyright Policy | Disclaimers | Privacy Policy | Feedback | Donate to BAILII