Brussels, 21/01/2010 (Agence Europe) - In a ruling delivered on Wednesday 20 January (cases T-252/07, T-271/07 and T-272/07) the General Court of the EU dismissed compensation actions by three cotton ginning undertakings. The Court concluded that the companies had not established that there was a causal link between the infringement of the principle of proportionality by the Council in adopting the 2004 aid scheme for cotton and the losses alleged.
The cotton sector aid scheme was reformed in 2004, then, as a result of an action brought by Spain, the regulation was annulled by the Court of Justice in September 2006. By its judgment in Spain v Council, the Court held that the principle of proportionality had been infringed. Following that judgment, Sungro SA, Eurosemillas SA and Surcotton SA, three Spanish-based cotton ginning companies which had benefitted from the 2004 aid scheme, brought actions for compensation for the losses allegedly suffered because of the adoption and application of the said scheme during the 2006-2007 marketing year. Sungro claimed a total of €37,188 in compensation from the Council and the Commission, Eurosemillas claimed €2.66 million, and Surcotton €1.73 million
In its ruling, the General Court noted that the Community's non-contractual liability for unlawful conduct by its institutions is subject to three cumulative conditions being satisfied: - the unlawfulness of the conduct of the Community institutions; - the fact of damage; - and the existence of a causal link between that conduct and the damage complained of.
The Court concluded that the companies had failed to establish that the alleged losses were directly connected to the infringement of the principle of proportionality by the Council in adopting the 2004 aid scheme for cotton. In addition, the Court noted that the new proposal for an aid scheme for cotton submitted by the Commission and dated 9 November 2007 states that the studies conducted conclude that the percentages of 35% of aid coupled to production and of 65% of aid decoupled from production should be maintained. Similarly, the new aid scheme for cotton adopted in 2008 retains these same percentages of coupled and decoupled aid. Consequently, the General Court concluded that the companies had not established that the losses they suffered were connected, by reason of a relationship of cause and effect, with the infringement of the principle of proportionality which vitiated the annulled 2004 aid scheme for cotton. Therefore, the actions must be dismissed as unfounded, without there being any need to examine whether the other conditions required for establishing the Community's non-contractual liability are satisfied.
An appeal against the decision of the General Court, limited to points of law only, may be brought before the Court of Justice within two months of notification of the decision. (L.C./transl.rt)