1 BY APPLICATION LODGED AT THE COURT REGISTRY ON 28 MARCH 1983 , THE GRAND DUCHY OF LUXEMBOURG BROUGHT AN ACTION , UNDER ARTICLE 173 OF THE EEC TREATY , FOR A DECLARATION THAT COMMISSION DECISIONS NOS 83/38 AND 83/49 OF 14 JANUARY 1983 ( OFFICIAL JOURNAL 1983 , L 38 , P . 32 AND L 40 , P . 57 , RESPECTIVELY ), BY WHICH THE COMMISSION REFUSED TO CHARGE TO THE EAGGF GUARANTEE SECTION CERTAIN EXPENDITURE INCURRED BY THE GRAND DUCHY IN THE 1976 AND 1977 FINANCIAL YEARS IN RESPECT OF PRIVATE-STORAGE AID FOR TABLE WINES , ARE VOID .
2 THE REASONS GIVEN TO THE GRAND DUCHY BY THE COMMISSION FOR ITS REFUSAL ARE BASED , IN SO FAR AS THIS CASE IS CONCERNED , ON THE FACT THAT , UNDER THE LUXEMBOURG PROVISIONS IN FORCE AT THE MATERIAL TIME AND CONTRARY TO THE COMMUNITY RULES ON THE MATTER , WINE STORED AS TABLE WINE COULD SUBSEQUENTLY OBTAIN THE LUXEMBOURG MARQUE NATIONALE AND HENCE BE SOLD AS QUALITY WINE PRODUCED IN A SPECIFIED REGION ( QUALITY WINE PSR ).
3 THE LEGISLATION IN FORCE IN LUXEMBOURG AT THE TIME PROVIDED THAT ANY WINE MADE FROM GRAPES FROM RECOGNIZED VINE VARIETIES COULD OBTAIN THE MARQUE NATIONALE AND SO BECOME QUALITY WINE PSR , PROVIDED THAT IT SATISFIED CERTAIN QUALITY REQUIREMENTS . WINE COULD BE TESTED WITH A VIEW TO ITS OBTAINING THE MARQUE NATIONALE SEVERAL TIMES OVER A PERIOD OF UP TO TWO YEARS FOLLOWING VINIFICATION . IN THE MEANTIME , IT WAS REGARDED AS TABLE WINE AND WAS THUS ELIGIBLE FOR STORAGE AID IF A STORAGE CONTRACT WAS CONCLUDED .
4 IN THE VIEW OF THE LUXEMBOURG GOVERNMENT , THERE WAS NOTHING AT ALL IN THE COMMUNITY RULES ON STORAGE CONTRACTS TO PREVENT STORAGE CONTRACTS FROM BEING CONCLUDED FOR TABLE WINES WHICH , UNDER THE RELEVANT NATIONAL LEGISLATION , MIGHT SUBSEQUENTLY BECOME QUALITY WINES PSR . IT THEREFORE ASKED , AS ITS PRINCIPAL CLAIM , THAT THE COURT RECOGNIZE THAT IT IS ENTITLED TO SETTLEMENT OF ALL ITS EXPENDITURE IN CONNECTION WITH THE PAYMENT OF THE STORAGE AID THAT IS CONTESTED BY THE COMMISSION FOR THE REASONS SET OUT ABOVE . IN THE ALTERNATIVE , IT ASKS THAT AT LEAST THE AID IN RESPECT OF STORED TABLE WINE WHICH NEVER IN FACT BECAME QUALITY WINE PSR BE CHARGED TO THE EAGGF .
THE PRINCIPAL CLAIM
5 STORAGE AID FOR TABLE WINE WAS PROVIDED FOR IN ARTICLE 5 ET SEQ . OF REGULATION ( EEC ) NO 816/70 OF THE COUNCIL OF 28 APRIL 1970 LAYING DOWN ADDITIONAL PROVISIONS FOR THE COMMON ORGANIZATION OF THE MARKET IN WINE ( OFFICIAL JOURNAL , ENGLISH SPECIAL EDITION 1970 ( I ), P . 234 ). THE GRANTING OF SUCH AID WAS MADE CONDITIONAL UPON THE CONCLUSION OF STORAGE CONTRACTS , FOR WHICH DETAILED RULES WERE LAID DOWN IN SUBSEQUENT COMMISSION REGULATIONS .
6 THE FIRST SUBPARAGRAPH OF ARTICLE 3 ( 1 ) OF REGULATION ( EEC ) NO 1437/70 OF THE COMMISSION OF 20 JULY 1970 ( OFFICIAL JOURNAL , ENGLISH SPECIAL EDITION 1970 ( II ), P . 469 ) PROVIDES : ' ' INTERVENTION AGENCIES SHALL CONCLUDE CONTRACTS ONLY FOR TABLE WINES ' ' . REGULATION NO 1437/70 WAS REPLACED BY COMMISSION REGULATION ( EEC ) NO 2015/76 OF 13 AUGUST 1976 ( OFFICIAL JOURNAL 1976 , L 221 , P . 20 ); THE SECOND PARAGRAPH OF ARTICLE 1 OF THAT REGULATION PROVIDED THAT STORAGE CONTRACTS COULD BE CONCLUDED IN RESPECT OF ' ' TABLE WINES , GRAPE MUSTS AND CONCENTRATED GRAPE MUSTS ' ' .
7 COMMISSION REGULATION ( EEC ) NO 2206/77 OF 5 OCTOBER 1977 ( OFFICIAL JOURNAL 1977 , L 255 , P . 13 ) INSERTED IN REGULATION NO 2015/76 THE FOLLOWING ARTICLE 6 ( 7 ):
' ' A TABLE WINE WHICH HAS BEEN THE SUBJECT OF A STORAGE CONTRACT MAY NOT SUBSEQUENTLY BE RECOGNIZED AS A QUALITY WINE PSR . ' '
8 THE LUXEMBOURG GOVERNMENT EMPHASIZES THAT BOTH THE BASIC REGULATION NO 816/70 AND THE IMPLEMENTING REGULATIONS NOS 1437/70 AND 2015/76 MERELY STIPULATE THAT STORAGE CONTRACTS ARE TO BE CONCLUDED ONLY FOR TABLE WINE ; THEY ARE SILENT AS TO THE SUBSEQUENT CHANGES IN THE WINE AND ITS USE .
9 IT FOLLOWS , IN THE CONTENTION OF THE LUXEMBOURG GOVERNMENT , THAT FOR IT TO BE POSSIBLE TO REGARD A STORAGE CONTRACT AS MEETING THE NECESSARY CONDITIONS AND HENCE AS ELIGIBLE FOR STORAGE AID , IT WAS SUFFICIENT , BEFORE THE ENTRY INTO FORCE OF REGULATION NO 2206/77 , THAT THE WINE WAS TABLE WINE AT THE TIME WHEN THE CONTRACT WAS CONCLUDED . SINCE THE COMMISSION DOES NOT DISPUTE THAT THE WHOLE OF THE WINE STORED IN LUXEMBOURG IN THE 1976 AND 1977 FINANCIAL YEARS ACTUALLY WAS TABLE WINE WHEN THE STORAGE CONTRACTS WERE CONCLUDED , IT MAY NOT REFUSE TO CHARGE THE PAYMENT OF THE AID IN QUESTION TO THE EAGGF .
10 THE LUXEMBOURG GOVERNMENT ARGUES THAT THE SAID REGULATION NO 2206/77 , WHICH PRECLUDES A STORED WINE FROM BEING SUBSEQUENTLY RECOGNIZED AS QUALITY WINE PSR , INTRODUCED NEW LEGISLATIVE PROVISIONS AND CANNOT HAVE RETROACTIVE EFFECT .
11 THE COMMISSION REPLIES , FIRST , THAT , FAR FROM INTRODUCING NEW REQUIREMENTS FOR OBTAINING STORAGE AID , REGULATION NO 2206/77 MERELY CONFIRMS AND CLARIFIES THE LEGISLATIVE POSITION THAT EXISTED BEFORE THAT REGULATION ENTERED INTO FORCE . IT POINTS OUT THAT THE THIRD RECITAL IN THE PREAMBLE TO THE REGULATION IS WORDED TO THAT EFFECT .
12 THE COMMISSION ARGUES THAT , EVEN LEAVING ASIDE REGULATION NO 2206/77 , EXAMINATION OF THE INTERVENTION SYSTEM APPLYING AT THAT TIME UNDER THE COMMON ORGANIZATION OF THE MARKET IN WINE SHOWS THAT THE SOLUTION PUT FORWARD BY THE LUXEMBOURG GOVERNMENT MUST BE REJECTED .
13 WHEREAS REGULATION NO 816/70 LAID DOWN A PRICE AND INTERVENTION SYSTEM FOR TABLE WINES , REGULATION ( EEC ) NO 817/70 OF THE COUNCIL 28 APRIL 1970 LAYING DOWN SPECIAL PROVISIONS RELATING TO QUALITY WINES PRODUCED IN SPECIFIED REGIONS ( OFFICIAL JOURNAL , ENGLISH SPECIAL EDITION 1970 ( I ), P . 252 ) MERELY INTRODUCED A ' ' POLICY OF ENCOURAGING QUALITY ' ' FOR THE WINES CONCERNED AND DID NOT ENVISAGE ANY ECONOMIC-SUPPORT MEASURE , SUCH AS STORAGE AID . IN THE COMMISSION ' S VIEW , IT FOLLOWS THAT THE COMMUNITY LEGISLATURE HAS LAID DOWN TWO ALTERNATIVE SYSTEMS FOR WINES , DEPENDING ON WHETHER THEY ARE TABLE WINES OR QUALITY WINES . A GIVEN PRODUCT MAY NOT , THEREFORE , BE SUBJECT BOTH TO THE TABLE WINE REGIME , AND THUS QUALIFY FOR STORAGE AID , AND TO THE QUALITY WINE REGIME , WHICH WOULD ENABLE IT TO ENJOY PARTICULARLY ADVANTAGEOUS MARKETING CONDITIONS .
14 IN ORDER TO RESOLVE THIS PROBLEM OF INTERPRETATION , IT IS NECESSARY FIRST TO ELIMINATE THE ARGUMENTS THAT THE COMMISSION SEEKS TO DERIVE FROM REGULATION NO 2206/77 . THAT REGULATION DOES NOT APPLY TO THE CONTRACTS AT ISSUE , SINCE THEY WERE CONCLUDED PRIOR TO ITS ENTRY INTO FORCE , AND THE STATEMENTS INSERTED BY THE COMMISSION IN THE PREAMBLE TO THAT REGULATION CANNOT BE RELIED ON AS AGAINST THE MEMBER STATE CONCERNED .
15 ACCORDINGLY , IT SHOULD BE EXAMINED WHETHER , AS THE COMMISSION CLAIMS , THE CONCLUSION OF STORAGE CONTRACTS IN RESPECT OF WINES WHICH , UNDER LUXEM BOURG LEGISLATION , COULD SUBSEQUENTLY BECOME QUALITY WINES PSR SHOULD BE REGARDED AS CONFLICTING WITH THE COMMON ORGANIZATION OF THE MARKET IN WINE , EVEN IN THE ABSENCE OF AN EXPRESS PROVISION TO THAT EFFECT .
16 IT IS CLEAR FROM THE TEXT OF THE ABOVEMENTIONED COMMUNITY PROVISIONS THAT ONLY TABLE WINES AND , FOLLOWING THE ENTRY INTO FORCE OF COUNCIL REGULATION NO 1160/76 OF 17 MARCH 1976 ( OFFICIAL JOURNAL 1976 , L 135 , P . 1 ), GRAPE MUSTS AND CONCENTRATED GRAPE MUSTS ARE ELIGIBLE FOR STORAGE AID .
17 IN CONTRAST , ALTHOUGH QUALITY WINES ALSO FALL WITHIN THE SCOPE OF REGULATION NO 816/70 , THEY ARE EXCLUDED FROM TITLE I THEREOF , RELATING TO PRICES AND INTERVENTION . THE COMMUNITY LEGISLATURE THEREFORE DID NOT CONSIDER THAT IT WAS NECESSARY , IN ORDER TO STABILIZE THE MARKET AND ENSURE A FAIR STANDARD OF LIVING FOR THE AGRICULTURAL COMMUNITY CONCERNED , TO PROVIDE FOR INTERVENTION MEASURES FOR QUALITY WINES . IT CONSIDERED THAT IT WAS ENOUGH TO FOSTER A POLICY OF ENCOURAGING QUALITY BY MEANS OF THE SPECIFIC MEASURES IN REGULATION NO 817/70 IN ORDER TO CONTRIBUTE TO THE IMPROVEMENT OF CONDITIONS ON THE MARKET AND , AS A RESULT , TO AN INCREASE IN OUTLETS AS IS STATED IN THE SECOND RECITAL IN THE PREAMBLE TO THE REGULATION .
18 HOWEVER , THE LUXEMBOURG GOVERNMENT POINTS OUT THAT , UNLIKE REGULATION NO 816/70 , WHICH ITSELF DEFINES TABLE WINE ( IN ANNEX II ), REGULATION NO 817/70 RELIES TO A VERY CONSIDERABLE DEGREE ON THE RELEVANT NATIONAL RULES FOR THE DEFINITION OF QUALITY WINE PSR . CONSEQUENTLY , IT IS PERMISSIBLE FOR A MEMBER STATE TO PROVIDE , AS THE LUXEMBOURG LEGISLATION PROVIDED , THAT ANY WINE PRODUCED IN ITS TERRITORY SHOULD BE REGARDED AS TABLE WINE UNTIL SUCH TIME , IF EVER , AS IT PASSES THE PRESCRIBED TESTS TO OBTAIN THE APPELLATION ' ' QUALITY WINE PSR . ' ' .
19 IT IS SUFFICIENT IN THIS CONNECTION TO POINT OUT THAT IT IS IN ANY EVENT NOT PERMISSIBLE FOR THE PARTICULAR NATURE OF THE LUXEMBOURG LEGISLATION IN FORCE AT THE TIME AS REGARDS THE GRANTING OF THE MARQUE NATIONALE TO QUALITY WINES PSR TO HAVE THE EFFECT OF ENABLING LUXEMBOURG TO GIVE ITS PRODUCERS FOR THE SAME PRODUCT THE BENEFIT OF TWO REGIMES WHICH THE COMMUNITY LEGISLATURE HAD INTRODUCED FOR TWO DISTINCT PRODUCTS . AS EMERGES FROM WHAT HAS BEEN STATED ABOVE , SUCH AN OVERLAPPING OF ADVANTAGES WOULD RUN CONTRARY TO THE SYSTEM SET UP BY REGULATION NO 816/70 , ON THE ONE HAND , AND REGULATION 817/70 , ON THE OTHER .
20 IF THE LUXEMBOURG LEGISLATION WAS LIABLE TO PRODUCE RESULTS THAT CONFLICTED WITH COMMUNITY RULES , THE GRAND DUCHY OF LUXEMBOURG WAS IN ANY EVENT OBLIGED UNDER ARTICLE 5 OF THE EEC TREATY TO TAKE THE NECESSARY MEASURES TO PRECLUDE WINE IN RESPECT OF WHICH STORAGE AID HAD ALREADY BEEN PAID FROM OBTAINING THE MARQUE NATIONALE : THAT WAS IN FACT DONE FOLLOWING THE ENTRY INTO FORCE OF REGULATION N 2206/77 .
21 THE INTERPRETATION OF THE COMMUNITY RULES SUGGESTED BY THE LUXEMBOURG GOVERNMENT SHOULD , THEREFORE , BE REJECTED AND THE VIEW , RIGHTLY TAKEN BY THE COMMISSION , SHOULD BE CONFIRMED , NAMELY THAT QUALITY WINES PSR , WHATEVER THE TIME AT WHICH THAT APPELLATION WAS CONFERRED ON THEM UNDER THE RELEVANT NATIONAL LEGISLATION , ARE NOT ELIGIBLE FOR THE STORAGE AID PROVIDED FOR UNDER REGULATION NO 816/70 .
22 SINCE IT IS NOT CONTESTED THAT AT LEAST SOME OF THE TABLE WINE WHICH WAS STORED IN LUXEMBOURG IN THE 1976 AND 1977 FINANCIAL YEARS SUBSEQUENTLY OBTAINED THE MARQUE NATIONALE AND WAS DISPOSED OF AS QUALITY WINE PSR , THE LUXEMBOURG GOVERNMENT ' S PRINCIPAL CLAIM , NAMELY FOR RECOGNITION OF ITS ENTITLEMENT TO CLEARANCE OF ALL THE EXPENSES CONNECTED WITH THE PAYMENT OF THE STORAGE AID AT ISSUE IN THIS CASE , MUST BE REJECTED .
THE ALTERNATIVE CLAIM
23 IN THE EVENT THAT ITS PRINCIPAL CLAIM IS REJECTED , THE LUXEMBOURG GOVERNMENT REQUESTS THAT ITS ENTITLEMENT TO CLEARANCE SHOULD BE RECOGNIZED AT LEAST AS REGARDS THE EXPENSES CONNECTED WITH THE PAYMENT OF THE STORAGE AID DISBURSED IN RESPECT OF THE QUANTITIES OF TABLE WINE WHICH WERE NEVER RECOGNIZED AS QUALITY WINE PSR .
24 IT SHOULD BE ACKNOWLEDGED , FIRST , THAT , CONTRARY TO THE VIEW TAKEN BY THE COMMISSION , BEFORE REGULATION NO 2206/77 ENTERED INTO FORCE , IT WAS POSSIBLE FOR THE LUXEMBOURG AUTHORITIES TO CONCLUDE STORAGE CONTRACTS IN GOOD FAITH IN RESPECT OF WINES WHICH , AT THE TIME THE CONTRACTS WERE CONCLUDED , WERE IN FACT TABLE WINES AND WERE NEVER RECOGNIZED AS QUALITY WINES PSR EVEN THOUGH THE POSSIBILITY EXISTED UNDER THE RELEVANT NATIONAL LEGISLATION .
25 IN THIS REGARD , IT MUST BE BORNE IN MIND THAT THE OBJECT OF THE COMMUNITY LEGISLATURE IN INTRODUCING STORAGE AID WAS TO LEND SUPPORT TO THE MARKET IN TABLE WINE AT TIMES OF CRISIS BY ENCOURAGING THE WITHDRAWAL OF SURPLUS TABLE WINE FROM THE MARKET .
26 IT IS INDISPUTABLE THAT THE CONTRACTS CONCLUDED BY THE LUXEMBOURG AUTHORITIES WERE COMPLETELY CONSONANT WITH THAT OBJECTIVE , AS THEY HAD THE EFFECT OF REMOVING FROM THE MARKET QUANTITIES OF TABLE WINE WHOSE CHARACTERISTICS WERE SUCH AS TO PRECLUDE THE WINE BEING DISPOSED OF AS QUALITY WINE PSR .
27 THEREFORE THE ALTERNATIVE CLAIM OF THE LUXEMBOURG GOVERNMENT IS , IN PRINCIPLE , WELL FOUNDED .
28 HOWEVER , IN ORDER TO PROVE WHAT PROPORTION OF THE WINE STORED WAS ACTUALLY DISPOSED OF AS TABLE WINE , THE LUXEMBOURG GOVERNMENT HAS MERELY PRODUCED STATISTICS SHOWING , FOR PARTICULAR VINE VARIETIES , THE QUANTITIES SOLD AS TABLE WINE AND AS QUALITY WINE PSR RESPECTIVELY FOR THE YEARS IN QUESTION . IT MAINTAINS THAT , IN ANY EVENT , IT IS FOR THE COMMISSION , WHICH IS CLAIMING THAT THE STORAGE CONTRACTS AT ISSUE WERE IRREGULAR , TO STATE WHAT PROPORTION OF THE TABLE WINE STORED WAS IN FACT RECOGNIZED AS QUALITY WINE PSR .
29 THE COMMISSION CONTENDS THAT IT IS FOR THE MEMBER STATE WHICH IS ASKING THE COMMISSION TO CHARGE EXPENDITURE TO THE EAGGF TO PROVE THAT THE EXPENDITURE WAS INCURRED IN CONFORMITY WITH THE COMMUNITY RULES . IN THAT RESPECT IT CONTESTS THE PROBATIVE VALUE OF THE STATISTICS PRODUCED BY THE LUXEMBOURG GOVERNMENT .
30 IT IS TRUE THAT , IN ORDER TO OBTAIN EAGGF FINANCING FOR THE STORAGE AID IN QUESTION , THE LUXEMBOURG GOVERNMENT HAD TO DEMONSTRATE , NOT ONLY THAT THE WINE STORED WAS ACTUALLY TABLE WINE AT THE TIME WHEN THE STORAGE CONTRACTS WERE CONCLUDED , BUT ALSO THAT IT WAS NEVER RECOGNIZED AS QUALITY WINE PSR . HOWEVER , IN VIEW OF THE PARTICULAR CIRCUMSTANCES , THE QUESTION MUST BE ASKED WHETHER THE LUXEMBOURG GOVERNMENT HAS NOT SATISFIED THAT EVIDENTIAL REQUIREMENT .
31 IT SHOULD BE OBSERVED THAT ALTHOUGH , BY SUBMITTING THE AFOREMENTIONED STATISTICS TO THE COURT , THE LUXEMBOURG GOVERNMENT HAS NOT SHOWN PRECISELY WHAT QUANTITIES OF THE STORED WINE WERE DISPOSED OF AS TABLE WINE , IT HAS NEVERTHELESS SHOWN THAT A QUANTITY EQUIVALENT TO AT LEAST ONE-THIRD OF THAT WINE WAS NOT MARKETED AS QUALITY WINE PSR .
32 IN THOSE CIRCUMSTANCES , THE LUXEMBOURG GOVERNMENT SHOULD BE HELD TO BE ENTITLED TO HAVE THE COMMISSION CHARGE TO THE EAGGF PART OF THE SUMS THAT WERE PAID AS STORAGE AID FOR TABLE WINE IN THE 1976 AND 1977 FINANCIAL YEARS ; IN THE ABSENCE OF MORE PRECISE DATA , THAT AMOUNT SHOULD BE FIXED AT ONE-THIRD OF THE SUMS CLAIMED .
33 FROM ALL THE FOREGOING CONSIDERATIONS IT FOLLOWS THAT COMMISSION DECISIONS 83/38/EEC AND 83/49/EEC OF 14 JANUARY 1983 MUST BE DECLARED VOID IN SO FAR AS THEY REFUSE TO CHARGE TO THE EAGGF GUARANTEE SECTION ONE-THIRD OF THE EXPENDITURE INCURRED BY THE GRAND DUCHY OF LUXEMBOURG IN THE 1976 AND 1977 FINANCIAL YEARS IN RESPECT OF STORAGE AID FOR TABLE WINE .
COSTS
34 UNDER ARTICLE 69 ( 2 ) OF THE RULES OF PROCEDURE , THE UNSUCCESSFUL PARTY IS TO BE ORDERED TO PAY THE COSTS .
35 HOWEVER , UNDER THE FIRST SUBPARAGRAPH OF ARTICLE 69 ( 3 ), WHERE EACH PARTY SUCCEEDS ON SOME AND FAILS ON OTHER HEADS , THE COURT MAY ORDER THAT THE PARTIES BEAR THEIR OWN COSTS IN WHOLE OR IN PART .
36 AS THE COMMISSION WAS UNSUCCESSFUL IN RESPECT OF THE ALTERNATIVE CLAIM FOR PARTIAL CLEARANCE , THE COURT SHOULD ORDER THE PARTIES TO BEAR THEIR OWN COSTS .
ON THOSE GROUNDS ,
THE COURT
HEREBY :
1 . DECLARES COMMISSION DECISIONS 83/38/EEC AND 83/49/EEC OF 14 JANUARY 1983 VOID IN SO FAR AS THEY REFUSE TO CHARGE TO THE EUROPEAN AGRICULTURAL GUIDANCE AND GUARANTEE FUND , GUARANTEE SECTION , ONE-THIRD OF THE EXPENDITURE INCURRED BY THE GRAND DUCHY OF LUXEM BOURG IN THE 1976 AND 1977 FINANCIAL YEARS IN RESPECT OF PRIVATE-STORAGE AID FOR TABLE WINES ;
2.ORDERS THE PARTIES TO BEAR THEIR OWN COSTS .
