Siemens v Commission (Judgment) [2014] EUECJ T-223/11 (15 July 2014)

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(Arbitration clause - Contract for the loan of fissile material intended for the Joint Research Centre’s Ispra site - Non-performance of the contract - Default interest)

Siemens AG, established in Munich (Germany), represented by J. Risse, R. Harbst and H. Haller, lawyers,

European Commission, represented by R. Lyal and W. Mölls, acting as Agents, and by R. Van der Hout and A. Krämer, lawyers,

ACTION based on an arbitration clause seeking an order for reimbursement by the Commission of all or part of the costs of reprocessing fissile material incurred by the applicant in the context of the performance of Contract No AG 2052 relating to the lending of fissile material intended for the Joint Research Centre site in Ispra (Italy), and for default interest,

composed of H. Kanninen, President, G. Berardis and C. Wetter (Rapporteur), Judges,

having regard to the written procedure and further to the hearing on 25 September 2013,

1 The applicant, Siemens AG, is principally active in three business sectors: energy, industries and medical equipment. It was also active in the nuclear energy business for a long time, but started to withdraw from that sector at the beginning of the 1990s.

2 On 19 November 1986, the European Atomic Energy Community (Euratom), represented by the Commission of the European Communities, entered into contract No AG 2052 (‘the Contract’) with Alkem GmbH, whose legal successor is the applicant.

3 The Contract concerned the provision of 25.68 kg of plutonium and mixed oxide (‘the fissile material’) to the Commission’s Joint Research Centre (‘JRC’) site in Ispra (Italy). The fissile material came from the applicant’s nuclear fuel production centre in Hanau (Germany) (‘the Hanau facility’ or ‘the Hanau site’).

4 With the exception of a single amendment, dated 15 December 1987, the Contract has not been amended. The amendment in question changed the delivery date originally envisaged for transport to the Commission’s JRC Ispra site, so as to be before the end of December 1987, the date originally envisaged having been before the end of August 1986. The amendment also modified the lump sum referred to in Article 3 of the Contract.

‘The fissile fuel will remain the property of the Contractor and will be returned after a period of approximately five years or at such other time, for which the conditions will be mutually agreed.’

6 Article 3 of the Contract is headed ‘Contract price’. Paragraph 1, as amended, provides:

‘In consideration of the work provided for by this contract, the Commission shall pay to the Contractor the following lump sum: 1 312 820.00 [DEM] (one million three hundred [and] twelve thousand and eight hundred and twenty).

‘The aforesaid sum is fixed and firm and shall be understood to cover all expenditure incurred by the Contractor in the performance of this contract.’

‘The provisions of this contract and the Annexes thereto may not be amended or added to except by supplementary agreement signed by a duly authorised representative of, and on behalf of, each of the Contracting Parties.’

9 In accordance with Article 23 of the Contract, the annexes form an integral part of the Contract.

10 Annex No 1 to the Contract is entitled ‘Detailed description of supply’. The latest version of that annex, dated October 1987, describes, in point 1 thereof, the scope of Alkem’s work and contains the following stipulations:

‘- [t]aking over at ALKEM [the] containers supplied by [the Commission’s JRC] (i.e. outer containers).

- [t]aking back all [fissile material] free ALKEM after an experimental period of approx[imately] five years and recovery to original material including waste disposal of contaminated cans …’

11 Point 1.2 of Annex No 1 to the Contract describes the scope of work of the Commission’s JRC and contains the following provisions:

‘- [f]urnishing free ALKEM [Commission’s JRC] containers (i.e. outer containers) …

- [t]ransportation of all [fissile material] back to ALKEM/Hanau in the same quantity as delivered according to article 1.1. Furthermore, all [fissile material] transported back to ALKEM follow[s] the same specification as delivered.

- [r]epacking of the “inner cans” in the required outer container at ISPRA - model 2500, MS 2500-S, MS 1000-S.’

12 Point 2.1 of Annex No 1 to the Contract, entitled ‘Specification of the PERLA-[fissile material]’ contains a description of the state of the fissile material delivered, including the maximum tolerated levels of impurities and americium (a by-product of the nuclear reaction of plutonium).

13 Article 16 of Annex No 2 to the Contract, entitled ‘General terms and conditions applicable to contracts awarded by the Joint Research Centre’, provides that the Court of Justice of the European Union is to have jurisdiction. Article 19 of the Contract provides that the Contract is to be governed by German law.

14 Paragraph 313 of the Bürgerliches Gesetzbuch (BGB; German Civil Code) provides as follows:

(1) If circumstances upon which a contract was based have materially changed after conclusion of the contract and if the parties would not have concluded the contract or would have done so upon different terms if they had foreseen that change, adaptation of the contract may be claimed in so far as, having regard to all the circumstances of the specific case, in particular the contractual or statutory allocation of risk, it cannot reasonably be expected that a party should continue to be bound by the contract in its unaltered form.

(2) If material assumptions that have become the basis of the contract subsequently turn out to be incorrect, they shall be treated in the same way as a change in circumstances.

(3) If adaptation of the contract is not possible or cannot reasonably be imposed on one party, the disadvantaged party may rescind the contract. In the case of a contract for the performance of a recurring obligation, the right to rescind shall be replaced by the right to terminate on notice.’

15 The object of the Contract was the supply of fissile material for use in the PERLA laboratory at the Commission’s JRC site in Ispra. The fissile material was intended for use as perfectly calibrated samples (‘standards’) with defined physical properties.

16 The fissile material was delivered to the Commission’s JRC on 25 November 1987.

17 In 1991, the Minister for the Environment of the Land of Hesse (Germany) ordered the decommissioning of the Hanau facility.

18 Following that decision, the applicant brought an action for damages against the Land of Hesse, which was upheld by judgment of the Landgericht Wiesbaden (Wiesbaden Regional Court) of 6 April 1993. The Land of Hesse lodged an appeal against that judgment, in the course of which the applicant withdrew its claim for compensation.

19 By letter of 24 May 1993, Euratom informed the applicant of its wish to reinitiate contact with the applicant, in particular in order to establish its views on the possibility of exchanging some of the standards of fissile material in the case of plutonium dioxide (PuO₂) with a high americium content, and of obtaining possible new standards. There was no reply to that letter.

20 On 23 November 1995, a meeting was held between the applicant and Euratom. At that meeting, the applicant stated that it was not possible to receive fissile material at Hanau. Euratom asked the applicant to contact other companies capable of reprocessing such material, including Compagnie générale des matières nucléaires (‘Cogema’).

21 On 23 September 1997, as nuclear material remained in the facility after its closure, the Minister for the Environment of the Land of Hesse issued a ‘clean-out’ licence, at the applicant’s request, thereby providing a legal basis for the definitive closure of the Hanau facility.

22 By letter of 23 March 1998, the applicant informed Euratom that PreussenElektra AG had the right of use and consumption of the used PuO₂, and that that company would be minded to transfer those rights to Euratom. It also reiterated that fissile material could no longer be returned to Hanau and stated that the clean-out licence for the Hanau facility precluded the acceptance of any plutonium from the outside. Finally, it asked Euratom to make contact with Cogema.

23 By letter of 21 July 1999, Euratom stated that it did not wish to acquire the rights to the fissile material, on the ground that that was incompatible with its long-term policy. It pointed in that regard to Article 1.2 of the Contract, and stated that the early discussions following the end of the contract period were largely dictated by the fact that the applicant was unable to receive the fissile material at its Hanau plant. However, it raised the possibility of continuing to use the fissile material possibly until 2007, which was the date of the end of the Commission’s JRC framework programme.

24 After consultation with PreussenElektra, the applicant rejected the proposal to extend the use of the fissile material until 2007 by letter to Euratom of 1 October 1999. By letter of 6 December 1999, Euratom indicated that it wished to reflect on possible solutions.

25 In 2002 and 2003, there was contact between Euratom and the applicant on a number of occasions with a view to finding a mutually acceptable strategy. One of the options discussed concerned the inclusion of the fissile material in a call for tenders with the aim of eliminating fully or in part the nuclear substances located at the Ispra site of the Commission’s JRC. That option was not pursued, however.

26 Finally, the parties considered processing the fissile material at Cogema’s site in La Hague (France), since Cogema was willing to accept it. By letter to Euratom of 5 November 2004, the applicant confirmed that ‘[a]ll the cost for acceptance and treatment at La Hague [would] be borne by [the applicant]’ and that it was also willing ‘to cover such proved transport cost which [would] arise additionally due to the fact of transport to La Hague instead [of] to Hanau on today’s basis’. It added that it was ‘safe to say that the valid contract [comprised] adequately the duties of the parties and none of them [would] be changed in a material way due to the [aforementioned] approach’, and that, therefore, ‘[it did] not intend to enter into a new contract’.

27 The following years saw regular contact between the applicant, Cogema (now Areva) and Euratom in order to discuss and organise the transfer of the fissile material to the facility in La Hague.

28 In that context, on 12 May, 16 and 21 June, 16 September and 20 December 2005, and on 17 February, 24, 27 and 29 November 2006, there was contact on a number of occasions in order to solve the problems caused by the size of the ‘model 2500’ containers, the repacking of those containers, the handling of fissile material which was not covered by the authorisation granted to Euratom at Ispra, and to find an acceptable solution so that the standards could be accepted for processing by Areva at La Hague.

29 At the meeting on 11 January 2007, the parties agreed that the following contracts would be signed: the treatment contract (between the applicant and Areva) and the contract for transportation to La Hague (between Euratom and a specialist transporter). It is apparent from the minutes of that meeting that Euratom was required to prepare the ‘PERLA standards’ for transport, to arrange the transport while ensuring that all necessary approvals had been obtained, and to insure the packaging and the ‘PERLA standards’ against the consequences of a nuclear incident until their arrival at the Areva site. The applicant’s tasks included, inter alia, accepting the material through Areva and, additionally, pre-treatment, reprocessing and waste treatment.

30 By letter to Euratom dated 12 July 2010, the applicant announced that the fissile material had been transferred from Ispra to La Hague on 29 April 2009, that it had paid the treatment costs in advance and that it was claiming reimbursement from Euratom of the costs resulting from the delayed return.

31 The applicant sent a statement to Euratom, dated 17 March 2011, according to which the total costs were in the order of EUR 16 216 967.69, made up as follows:

- an invoice from Areva dated 5 November 2009 for EUR 1 500 000 incurred as a result of the poor state of the fissile material, in particular because of the decay of vinyl and the impurities present;

- an invoice from Höfer & Bechtel GmbH for EUR 25 748.40, because it had been obliged to ensure that ‘leak tests’ were carried out.

32 From the total sum of EUR 16 216 967.69, the applicant deducted the fixed sum of 201 100 German marks (DEM) (EUR 102 820.80) originally envisaged and paid in accordance with the terms of the Contract, thus resulting in a total of EUR 16 114 147.

33 By application lodged at the Court Registry on 20 April 2011, the applicant brought the present action.

34 Upon hearing the report of the Judge-Rapporteur, the General Court (Sixth Chamber) decided to open the oral procedure. The parties presented oral argument and answered the questions put to them by the Court at the hearing on 25 September 2013.

- order the Commission to pay to the applicant an amount of EUR 16 114 147 plus interest at a rate of 8 percentage points above the base rate in force in Germany since 20 April 2011;

37 In support of the action, the applicant relies, in the application, on Article 1.2 of the Contract and Paragraph 313 of the BGB in requesting that the Commission be ordered to pay the additional costs the applicant has had to bear in order for the fissile material to be reprocessed. It also submits, in the reply, that the Commission failed to fulfil its contractual obligations by returning fissile material of a quality that was not in accordance with the Contract and after a delay, and is therefore obliged to provide compensation for any damage resulting therefrom.

38 The Commission disputes the admissibility of the argument that it failed to fulfil its contractual obligations in respect of the return of the fissile material, and the validity of all the applicant’s arguments.

39 According to the applicant, Article 1.2 of the Contract imposes an obligation to negotiate an agreement in good faith.

40 The applicant submits that, in so far as Euratom failed to fulfil its obligation to renegotiate, in good faith, the return of the fissile material to the applicant, German law acknowledges that, in the case of failed negotiations, the competent judge must determine what would have been an equitable result of the negotiations and adapt the contract accordingly. Thus, it asks the Court to determine what the parties would have agreed if Euratom had complied with its obligations under Article 1.2 of the Contract.

- Euratom asked it to provide the fissile material ‘at cost’, which it accepted;

- Euratom benefited from the prolonged use of the fissile material without additional costs or extras;

- Euratom was responsible for the additional costs because of its insistence on the use of particular containers;

- Euratom refused to negotiate with Areva, refused to acquire ownership of the fissile material and refused to include it in its call for tenders;

- the reprocessing costs are 160 times higher than those initially determined by the Contract;

42 In the reply, the applicant disputes the Commission’s assertion that the requirement as to the use of the written form would be infringed if the present plea in law were allowed.

43 Likewise, as regards the question whether the applicant was contractually obliged to reprocess the fissile material, it submits that point 1.1 of Annex No 1 to the Contract provides that it had to reprocess the fissile material and, moreover, that an agreement between the parties concluding negotiations would also have concerned the reprocessing methods.

44 The applicant also disputes, in the reply, the validity of the Commission’s claim that the applicant had been in creditor’s default. Euratom had not made an unambiguous and unconditional offer for full performance, which is necessary in order for a creditor to be ruled in default under German law. The applicant submits that, in any event, any default on its part would not release Euratom from its contractual obligations.

45 The Commission rejects the applicant’s interpretation of Article 1.2 of the Contract.

46 The Commission explains that the Contract provides that the applicant was responsible for taking back the fissile material in question and that Euratom was responsible for transporting that material to the applicant. Since the parties had agreed on a lump sum covering all the costs envisaged by the Contract, any other costs linked to the performance of a contractual obligation had, according to the Commission, to be borne by the party responsible.

47 Moreover, the Commission disputes that the reprocessing of the fissile material forms part of the applicant’s contractual obligations. According to the Commission, the word ‘reprocessing’, which implies chemical separation and the recovery of fissile plutonium from the irradiated nuclear fuel, does not appear in the Contract. The reprocessing that could not be carried out at the Hanau site is not the same as the process for ‘recovery to original material’ referred to in the Contract, which involves integrating PuO₂powders into the ‘MOX’ (mixed oxides) fuel fabrication process.

48 Furthermore, according to the Commission, in accordance with Article 58 of the Financial Regulation of 21 December 1977 applicable to the general budget of the European Communities (OJ 1977 L 356, p. 1), which applies to the present case and which was reproduced in Article 88 of Council Regulation (EC, Euratom) No 1605/2002 of 25 June 2002 on the Financial Regulation applicable to the general budget of the European Communities (OJ 2002 L 248, p. 1), service contracts to which the European Union is party can only be concluded in writing and before their execution. In reliance on the judgment in Case T-271/08 Citymo v Commission [2007] ECR II-1375, paragraph 114, the Commission submits that the Financial Regulation, which, pursuant to Article 249 EC (now, after the entry into force of the Treaty of Lisbon, Article 288 TFEU), is binding in its entirety, does not support the view that Article 1.2 of the Contract allows the applicant to impose ex post and unilaterally a retroactive contract on Euratom. Any amendment of the Contract could be made only by written agreement.

49 In addition, the Commission claims that the applicant was in creditor’s default pursuant to Paragraphs 293, 295 and 296 of the BGB, which prevented it from exercising contractual remedies under ordinary law. Euratom’s letter of 24 May 1993, sent approximately five years after the conclusion of the Contract and delivery, constituted a request for at least some of the fissile material to be taken back. In the light of that delay, the Commission considers that it is not liable in any way for the deterioration of the fissile material.

50 According to the Commission, the applicant was also in debtor’s default. The applicant was obliged to take back the fissile material at the JRC site in Ispra and to prepare the transport with the JRC. Although the Hanau site was no longer available, the take-back obligation was not impossible and could still be fulfilled.

51 Furthermore, the Commission disputes the claim that the applicant provided a unilateral favour to Euratom. It points out that the alleged ‘service’ was provided, inter alia, in the interest of training inspectors and carrying out research - activities which are of interest for the nuclear industry at large, including the applicant.

52 The Commission also refutes the claim that it benefited from the prolonged use of the fissile material and failed to fulfil its duty to cooperate. It states that the containers used were in accordance with the Contract. Moreover, it denies that the closure of the Hanau site was a case of force majeure and that the reprocessing costs were incurred in connection with the performance of the Contract.

53 It should be borne in mind that interpreting a contract in the light of provisions of national law is justified only where there is doubt as to the content of the contract or the meaning of some of its provisions (see, to that effect, judgment of 12 July 2007 in Case T-312/05 Commission v Alexiadou, not published in the ECR, paragraphs 28 and 29, and judgment of 19 November 2008 in Case T-316/06 Commission v Premium, not published in the ECR, paragraph 53).

54 The range of relevant matters to be taken into account when interpreting the provision at issue includes, in particular, the wording of that provision, its purpose in the context of the contract, and the possibility of its creating some ambiguity in the context of the dispute (see, to that effect, Opinion of the Advocate General in Case C-209/90 Commission v Feilhauer [1992] ECR I-2622, paragraph 22, and Commission v Premium, cited in paragraph 53 above, paragraph 54).

55 By the first plea, the applicant claims, in essence, that the Commission should be ordered, on the basis of Article 1.2 of the Contract, to pay the additional costs which the applicant had to incur in order for the fissile material to be reprocessed after it was taken back on 29 April 2009. According to the applicant, that article imposes an obligation to negotiate an agreement in good faith. The provision ‘for which the conditions will be mutually agreed’ reflects the agreement between the applicant and Euratom as to how to proceed if the circumstances underlying the Contract should change.

56 It should be borne in mind that Article 1.2 of the Contract provides that the fissile material will remain the property of the contractor - in this instance the applicant - and will be returned to the contractor after a period of approximately five years or at such other time for which the conditions will be mutually agreed.

57 It must be observed that it was not without good reason that the parties envisaged a defined period of approximately five years for the loan of the fissile material, material containing plutonium. The increase in americium content is a natural process caused by the radioactive decay (natural deterioration) of the fissile material, regardless of whether the material is used or not. The increase in americium content can thus be calculated in advance over a period of five years. It is undisputed as between the parties, who confirmed this moreover at the hearing, that, at the end of the period provided for the loan of the fissile material (from 25 November 1987 to 25 November 1992), the critical threshold for the level of americium present in that material had not yet been reached. It was not until 1995 that the americium content had reached a critical level that probably meant that chemical reprocessing was necessary in order to reintroduce the fissile material into the fuel cycle.

58 It must also be noted that the use of the word ‘approximately’ in Article 1.2 of the Contract reflects the contracting parties’ expressed wish for a degree of flexibility in coordinating and arranging the taking back of the fissile material. Given that plutonium is not just any product, its handling is part of a complex process involving numerous administrative approvals and complex issues regarding secure transport. The return of the fissile material required intensive cooperation between the contracting parties. That explains, as the parties themselves admit, the margin of discretion provided for in the Contract.

59 Article 1.2 of the Contract also provides for the possibility of return in full compliance with the Contract after the initial period of approximately five years.

60 However, contrary to the applicant’s submission, the option whereby the end of the period of approximately five years could be replaced by another period, for which the conditions were to be mutually agreed, is subject to a strict condition. It is evident from Article 1.2 of the Contract, read in conjunction with Article 18.3 thereof, that any change in the term of the Contract requires the consent of both parties thereto, in writing.

61 It must be noted that, in the present case, the parties did not extend the period of approximately five years by supplementary agreement.

62 Contrary to what the applicant claims, the legal consequence of the period of five years being exceeded is not the automatic extension of the time-limit for the return of the fissile material and, therefore, the imposition of an obligation to renegotiate the costs. An agreement concerning an extension was the premiss for triggering the clause that provided for agreement to be reached as to the terms on which the loan would continue for the new period to be covered. As has already been noted, the parties did not amend the period of approximately five years. It must also be noted that the applicant never requested renegotiation of the Contract and raised the impact of the reprocessing costs on Euratom only after having had to incur additional costs in order for the fissile material to be reprocessed. The earlier contacts between the contracting parties were aimed essentially at finding solutions in order to ease the difficulties facing the applicant as a result of the closure of the Hanau plant.

63 In so far as the applicant relies on Paragraph 315 of the BGB, according to which the courts could impose unilaterally on a party conditions that are deemed equitable, suffice it to note that that provision is intended to remedy a situation where performance is to be specified by just one of the parties to the contract and, therefore, unilaterally. That is not the case here, however.

64 It follows from the foregoing that the first plea must be rejected as unfounded.

65 Accordingly, it is not necessary to rule on the arguments put forward by the Commission concerning the applicant’s default as creditor or debtor. They are not relevant to the interpretation of Article 1.2 of the Contract and cannot therefore overturn the finding made in paragraph 64 above.

66 In the alternative, the applicant relies on Paragraph 313 of the BGB, in accordance with which it is entitled to compensation in any event. It takes the view that the Contract was based on the idea that the fissile material could lawfully be returned to the Hanau site, the only site mentioned in the Contract. Since the Contract had been concluded on an ‘at cost’ basis, the material had to be processed at that site and not elsewhere. It then submits that that basis changed significantly, in particular owing to the closure of the Hanau plant and the increase in reprocessing costs. Claiming that the parties did not conclude the Contract under those conditions, the applicant submits that it is unfair that it alone should suffer the consequences. In that context, it refers to the political changes which, in its view, caused the closure of the Hanau plant - changes which were outside its control - and, in addition, to the fact that the costs of reprocessing the fissile material increased by a factor of 160 in relation to those initially provided for in the Contract.

67 With regard to the decision to close the Hanau plant, the applicant disputes the argument that the decisions taken by the German legislature fall within its sphere of risk solely because it is subject to German law. It explains that, in its judgment of 23 October 1952 (NJW 1953, 184), the Bundesgerichtshof (German Federal Court of Justice) held that force majeure is a ‘non-operating, external event caused by natural forces or third-party actions which could not have been foreseen or prevented or rendered harmless by the parties, considering all economically justifiable means and diligence and which does not have to be accepted by the party due to its frequency of occurrence’. That case-law also includes third-party actions which could not have been foreseen, including those of the legislature. The applicant states that the additional costs originated mainly from the contamination of the fissile material.

68 Furthermore, the applicant claims that the German case-law has allowed adjustments to the scheme of a contract in the light of cost increases which are clearly much lower than those at issue in the present case.

69 The Commission submits that the plea in law is unfounded. First, the reprocessing did not form part of the applicant’s contractual obligations. According to the Commission, the costs of reprocessing the fissile material were never envisaged, and any reference to an element of the Contract calculated on the basis of reprocessing costs was irrelevant as regards a means of pricing the take-back obligation using a lump sum.

70 Moreover, the events invoked by the applicant fell exclusively within its sphere of risk. The late return of the fissile material was due to the fact that the applicant had failed to comply with its obligation to take the material back. According to the Commission, debtor’s default does not give rise to the application of Paragraph 313 of the BGB.

71 The Commission also disputes the applicant’s claim that the events that took place at the Hanau plant constitute a case of force majeure which falls more within the Commission’s sphere of risk than that of the applicant. It disputes the interpretation that the Contract was based on the material being returned to Hanau and that the material could not have been returned elsewhere. It notes that the applicant withdrew from the appeal brought by the Land of Hesse against the decision of the Landgericht Wiesbaden to uphold the action for damages brought by the applicant when the Land decided to close the site, which shows that the closure of the site was a commercial decision on the part of the applicant.

72 Finally, the Commission submits that the Contract provided explicitly that the agreed sum covered all costs incurred by the applicant in the performance of the Contract and any changes had to comply with the rules as to form laid down in the Contract and the Financial Regulations. This is substantiated by the fact that the applicant declared in its letter of 5 November 2004 to Euratom that it would bear the additional costs relating to transport to La Hague instead of to Hanau.

73 By the second plea in law, the applicant invokes Paragraph 313 of the BGB with a view to the Commission’s being ordered to pay the additional costs which the applicant had to bear in order for the fissile material to be reprocessed.

74 It is apparent from Paragraph 313 of the BGB that an adjustment of the Contract may be sought if four cumulative criteria are satisfied: certain elements underpin or form the basis of the Contract; those elements have been subject to material change since the Contract was concluded; the contracting parties would not have concluded the Contract in this way if they had anticipated that change in circumstances; and it would be inequitable or unfair for just one of the parties to have to bear the consequences of the new circumstances. In addition, it is evident from that provision that it does not apply if the disruption stems from a risk that a party is obliged to bear.

75 It is also apparent from the German case-law that that provision is to be interpreted strictly. Thus, it follows from the judgment of the Bundesgerichtshof of 23 October 1952, mentioned in paragraph 67 above, that the fact that an incident occurs rarely is not sufficient to transform it into a case of force majeure if that incident does not in itself constitute an extraordinary situation caused by external events.

76 In the present case, the applicant invokes the impossibility of taking the material back to the Hanau site because the Contract had been concluded on the basis of two elements forming the basis of the Contract within the meaning of Paragraph 313 of the BGB, namely (1) the fact that the fissile material could be returned to Hanau, and (2) that it could be reprocessed there at a cost of DEM 886 820.00, that is the amount fixed for the preparation of the standards, covering the costs of the initial and subsequent processing of the plutonium.

77 With regard to the first basis of the Contract relied on by the applicant, it should be noted that although point 1.2 of Annex No 1 to the Contract provides for transportation of the material in question back to ‘ALKEM/Hanau’, the applicant cannot be released from its contractual obligation to take back the material simply because that material could no longer be taken back by the Hanau plant. The taking back of the material was an obligation stipulated in the Contract; it did not necessarily have to be linked to the Hanau site specifically. After the decision to close Hanau, the applicant was immediately aware of that fact, and thus able to contemplate the implications for its Contract with Euratom. Accordingly, it was incumbent on the applicant to notify Euratom of that development in order to establish where and when the material would be taken back. As the Commission submits, and the applicant moreover has not disputed, whether before or after 1995 there have always been sites that would serve as appropriate replacements for the Hanau site with regard to the processing of fissile material, including material requiring reprocessing before entering the MOX fuel fabrication process.

78 As regards the second basis of the Contract relied on by the applicant - an obligation to reprocess the fissile material - it must be noted that such an obligation does not form part of the applicant’s contractual obligations. Therefore, there is no such basis.

79 More specifically, the obligations of each of the two parties are stated in detail in Annex No 1 to the Contract. With regard to the applicant’s obligations, it is evident from this that the applicant was responsible for preparing the material to be loaned, organising the transportation of that material to the Euratom site at Ispra, and additional analysis. It was also under an obligation to take back all the material after a period of approximately five years and for ‘recovery to original material’, including waste disposal of contaminated cans. Likewise, as regards Euratom’s obligations, it is evident that Euratom was responsible for transporting all fissile material back to the applicant’s site, such fissile material being required to be in the same quantity and following the same specification as on delivery.

80 It must be observed that, contrary to what is claimed by the applicant, the Contract makes no mention of the notion of reprocessing the material concerned.

81 In that regard, as the Commission explained without being contradicted by the applicant, ‘recovery to original material’, as referred to in the fourth indent of point 1.1 of Annex No 1 to the Contract, is not the same as ‘reprocessing’, since ‘reprocessing’ means the chemical separation and recovery of fissile plutonium from irradiated nuclear fuel, whereas ‘recovery to original material’ means that PuO₂powders returned from Ispra would have been incorporated into the MOX fuel fabrication process.

82 It is also important to note that the fact that the Contract was concluded ‘at cost’ does not afford the applicant a basis on which to argue that the Commission should be ordered to pay the additional costs the applicant had to bear in order for the fissile material to be reprocessed.

83 As is evident from Article 3.1 of the Contract, the only costs envisaged by the Contract were those relating to the preparation of the fissile material, transport to Ispra and additional analysis. It is also evident from Article 3.2 that the total sum of those costs is ‘fixed and firm’ and to be understood to cover all expenditure incurred by the applicant in the performance of the Contract.

84 Furthermore, the Alkem plant at Hanau was a MOX fabrication facility that had neither the equipment nor the necessary licences for the reprocessing of nuclear material. Consequently, since the reprocessing of nuclear material had never been possible at the Alkem plant in Hanau, it could not in any way have been contemplated by the contracting parties when they concluded the Contract.

85 For the sake of completeness, it must be noted that, since the applicant was active and operating installations in the nuclear sector, a sector that is characterised by considerable risks, it must have known of the risks associated with those activities and the sensitivities of public opinion. In that regard, it will be recalled that there was lively debate in Germany about the use of nuclear energy for peaceful purposes, following the Chernobyl disaster in April 1986, a debate of which the applicant could not have been unaware. Accordingly, the closure of the Hanau site cannot be regarded as an extraordinary situation caused by external events, the risk of such a measure in a case such as this having been further heightened by the radioactive leaks detected at the Hanau site in 1991. Consequently, the closure of that site cannot be regarded as a case of force majeure as interpreted by German case-law.

Third plea in law: the fissile material was returned late and not in accordance with the Contract

87 In the reply, the applicant submits that it is entitled to compensation because, first, Euratom returned fissile material of a quality that was not in accordance with the Contract and, secondly, the return was delayed. According to the applicant, the material, as returned by the Commission, contained an excessively high level of americium and was polluted because of the use of vinyl envelopes. It maintains that, owing to that contamination, it would no longer have been able to process the material at the Hanau site even if it had not been closed, and, moreover, that it had to incur additional costs in order for the relevant material to be reprocessed. In addition, the Commission’s argument that the obligation under Article 1.2 of the Contract to renegotiate has no effect would mean that the Commission would, since 1991, have been late in complying with its obligation to return the fissile material.

88 The Commission contends that that plea is inadmissible since it is a new plea which does not appear in the application and which cannot be introduced at the stage of the reply. The applicant’s argument in relation to the vinyl envelopes was, moreover, based on matters of fact which are new, and therefore manifestly inadmissible.

89 It should be observed that this plea was raised by the applicant at the stage of the reply, in support of the first head of claim.

90 In that regard, it is apparent from Article 44(1)(c) in conjunction with Article 48(2) of the Rules of Procedure of the General Court that no new plea in law may be introduced after the application has been lodged unless that plea is based on matters of law or of fact which come to light in the course of the procedure. However, a plea which constitutes an amplification of a plea previously made, either expressly or by implication, in the application and is closely linked to it must be declared admissible (Case T-345/05 Mote v Parliament [2008] ECR II-2849, paragraph 85; judgment of 13 June 2012 in Case T-246/09 Insula v Commission, not published in the ECR, paragraph 199, and judgment of 13 June 2012 in Case T-366/09 Insula v Commission, not published in the ECR, paragraph 224).

91 The plea relied on by the applicant at the stage of the reply is not based on a matter which has come to light in the course of the procedure.

92 Moreover, the plea relied on by the applicant at the stage of the reply does not constitute an amplification of a plea previously made, either expressly or by implication, in the application and that is at the same time closely linked to it.

93 It is certainly true that, in the application, the applicant submitted that the fissile material had been returned late by the Commission, and that the effect of that delayed return had been that the material had contained impurities and a high americium content, which had adversely affected the applicant.

94 Nevertheless, the argument put forward for the first time in the reply is not closely linked to the arguments supporting the two pleas on which the applicant relied in the application, which are quite distinct, in law, from the elements of the plea relied on by the applicant at the stage of the reply.

95 By the first plea, the applicant requested that the Commission be ordered to pay the additional costs the applicant had had to incur in order for the fissile material to be reprocessed following the failure of the contracting parties’ negotiations for an agreement on the conditions for the return of the fissile material, and, by the second plea, it requested that the Commission be ordered to pay the additional costs the applicant had had to incur in order for the fissile material to be reprocessed since, in the circumstances of the case and under German law, the applicant was released from its contractual obligations and the obligations had to be allocated equitably among the contracting parties.

96 However, by the plea invoked at the stage of the reply, the applicant claimed compensation on the grounds that the fissile material had been returned late and not in accordance with the Contract. It follows from this that there are no close links between that plea and the first two pleas.

97 Furthermore, in view of the fact that the present plea reproduces, in essence, arguments that are quite common in actions brought pursuant to an arbitration clause, it was entirely open to the applicant to submit those pleas in the application, which it did not do.

98 Consequently, the third plea, submitted for the first time in the reply, must be declared inadmissible.

99 It follows from all of the foregoing that the present action must be dismissed in its entirety.

100 Under Article 87(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. Since the applicant has been unsuccessful, it must be ordered to pay the costs, in accordance with the form of order sought by the Commission.

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You are here: BAILII >> Databases >> Court of Justice of the European Communities (including Court of First Instance Decisions) >> Siemens v Commission (Judgment) [2014] EUECJ T-223/11 (15 July 2014) URL: http://www.bailii.org/eu/cases/EUECJ/2014/T22311.html Cite as: [2014] EUECJ T-223/11, EU:T:2014:668, ECLI:EU:T:2014:668

Court of Justice of the European Communities (including Court of First Instance Decisions)