Contents
Judgment of the Court (Sixth Chamber)13 October 2022note(Reference for a preliminary ruling — Structural Funds — European Regional Development Fund (ERDF) — Cohesion Fund — Regulation (EC) No 1083/2006 — Regulation (EU) No 1303/2013 — European Union funding — European Agricultural Fund for Rural Development (EAFRD) — Regulation (EC) No 1290/2005 — Regulation (EC) No 1698/2005 — Regulation (EU) No 1306/2013 — Grant agreement — Funds paid to a beneficiary into an account in an insolvent bank — National legislation not excluding those funds from the insolvency estate of that bank)In Case C‑698/20,REQUEST for a preliminary ruling under Article 267 TFEU from the Sąd Najwyższy (Supreme Court, Poland), made by decision of 22 September 2020, received at the Court on 21 December 2020, in the proceedingsGmina WieliszewvSyndyk masy upadłości Spółdzielczego Banku Rzemiosła i Rolnictwa w Wołominie w upadłości likwidacyjnej,intervener:Rzecznik Praw Obywatelskich,THE COURT (Sixth Chamber),composed of P. G. Xuereb, President of the Chamber, A. Arabadjiev (Rapporteur), President of the First Chamber, acting as Judge of the Sixth Chamber, and I. Ziemele, Judge,Advocate General: P. Pikamäe,Registrar: A. Calot Escobar,having regard to the written procedure,after considering the observations submitted on behalf of:– the Rzecznik Praw Obywatelskich, by M. Taborowski,– the Polish Government, by B. Majczyna, acting as Agent,– the European Commission, by I. Barcew and J. Hradil, acting as Agents,having decided, after hearing the Advocate General, to proceed to judgment without an Opinion,gives the following
Judgment
1This request for a preliminary ruling concerns the interpretation of Article 2(5), Articles 3 and 4, Article 57(1) and Articles 70 and 80 of Council Regulation (EC) No 1083/2006 of 11 July 2006 laying down general provisions on the European Regional Development Fund, the European Social Fund and the Cohesion Fund and repealing Regulation (EC) No 1260/1999 (OJ 2006 L 210, p. 25), as amended by Regulation (EU) No 423/2012 of the European Parliament and of the Council of 22 May 2012 (OJ 2012 L 133, p. 1) (‘Regulation No 1083/2006’), and of Article 2(15), Article 37(1), Article 66, Article 67(1), Article 74(1), and Article 89(1) of Regulation (EU) No 1303/2013 of the European Parliament and of the Council of 17 December 2013 laying down common provisions on the European Regional Development Fund, the European Social Fund, the Cohesion Fund, the European Agricultural Fund for Rural Development and the European Maritime and Fisheries Fund and laying down general provisions on the European Regional Development Fund, the European Social Fund, the Cohesion Fund and the European Maritime and Fisheries Fund and repealing Council Regulation (EC) No 1083/2006 (OJ 2013 L 347, p. 320).
2The request has been made in proceedings between the Gmina Wieliszew (municipality of Wieliszew, Poland; ‘the Municipality’) and the Syndyk masy upadłości Spółdzielczego Banku Rzemiosła i Rolnictwa w Wołominie w upadłości likwidacyjnej (Administrator in the insolvency of the Crafts and Agriculture Cooperative Bank) concerning the exclusion of the sum of 2439814 Polish zlotys (PLN) (approximately EUR 500000), deposited by the Municipality in an account at that bank, from the bank’s insolvency estate.
Legal context
EU law
The Protocol
3Under the third sentence of Article 1 of Protocol (No 7) on the Privileges and Immunities of the European Union (‘the Protocol’), ‘The property and assets of the [European] Union shall not be the subject of any administrative or legal measure of constraint without the authorisation of the Court of Justice [of the European Union]’.
Regulation (EC) No 1698/2005
4Article 2(i) of Council Regulation (EC) No 1698/2005 of 20 September 2005 on support for rural development by the European Agricultural Fund for Rural Development (EAFRD) (OJ 2005 L 277, p. 1) defined the concept of ‘public expenditure’ as being ‘any public contribution to the financing of operations whose origin is the budget of the State, of regional and local authorities, of the European Communities and any similar expenditure. Any contribution to the financing of operations whose origin is the budget of public law bodies or associations of one or more regional or local authorities or public law bodies within the meaning of Directive 2004/18/EC of the European Parliament and of the Council of 31 March 2004 on the coordination of procedures for the award of public works contracts, public supply contracts and public service contracts [(OJ 2004 L 134, p. 114)] shall be regarded as public contribution’.
5Article 3 of that regulation provided:‘The EAFRD shall contribute to the promotion of sustainable rural development throughout the Community in a complementary manner to the market and income support policies of the common agricultural policy, to cohesion policy and to the common fisheries policy.’
6Article 4(1) of that regulation stated:‘Support for rural development shall contribute to achieving the following objectives:(a) improving the competitiveness of agriculture and forestry by supporting restructuring, development and innovation;(b) improving the environment and the countryside by supporting land management;(c) improving the quality of life in rural areas and encouraging diversification of economic activity.’
7Article 15(1) of that regulation provided:‘The EAFRD shall act in the Member States through rural development programmes. These programmes implement a rural development strategy through a set of measures grouped together in accordance with the axes defined in Title IV, for the achievement of which aid from the EAFRD will be sought.Each rural development programme shall cover a period between 1 January 2007 and 31 December 2013.’
8Article 72(1) of Regulation No 1698/2005 was worded as follows:‘Without prejudice to the rules relating to the freedom of establishment and the free provision of services within the meaning of Articles 43 and 49 [EC], the Member State shall ensure that an investment operation retains the EAFRD contribution if that operation does not, within five years of the Managing Authority’s funding decision, undergo a substantial modification that:(a) affects its nature or implementation conditions or gives undue advantage to a firm or public body;(b) results either from a change in the nature of ownership of an item of infrastructure, or the cessation or relocation of a productive activity.’
Regulation No 1083/2006
9Under the first paragraph of Article 1 of Regulation No 1083/2006 that regulation ‘lays down the general rules governing the European Regional Development Fund (ERDF), the European Social Fund (ESF) (hereinafter referred to as the Structural Funds) and the Cohesion Fund’.
10Article 2(5) of that regulation provided:‘For the purposes of this Regulation the following terms shall have the meanings assigned to them here:…(5) “public expenditure”: any public contribution to the financing of operations whose origin is the budget of the State, of regional and local authorities, of the European Communities related to the Structural Funds and the Cohesion Fund and any similar expenditure. Any contribution to the financing of operations whose origin is the budget of public law bodies or associations of one or more regional or local authorities … shall be regarded as similar expenditure;’
11Article 3 of that regulation, entitled ‘Objectives’, provided:1. The action taken by the Community under Article 158 [EC] shall be designed to strengthen the economic and social cohesion of the enlarged European Union in order to promote the harmonious, balanced and sustainable development of the Community. This action shall be taken with the aid of the Funds, the European Investment Bank (EIB) and other existing financial instruments. It shall be aimed at reducing the economic, social and territorial disparities which have arisen particularly in countries and regions whose development is lagging behind and in connection with economic and social restructuring and the ageing of the population.The action taken under the Funds shall incorporate, at national and regional level, the Community’s priorities in favour of sustainable development by strengthening growth, competitiveness, employment and social inclusion and by protecting and improving the quality of the environment.2.To that end, the ERDF, the ESF, the Cohesion Fund, the EIB and the other existing Community financial instruments shall each contribute in an appropriate way towards achieving the following three objectives:(a) the Convergence objective, which shall be aimed at speeding up the convergence of the least-developed Member States and regions by improving conditions for growth and employment through the increasing and improvement of the quality of investment in physical and human capital, the development of innovation and of the knowledge society, adaptability to economic and social changes, the protection and improvement of the environment, and administrative efficiency. This objective shall constitute the priority of the [Structural Funds and the Cohesion Fund];(b) the Regional competitiveness and employment objective, which shall, outside the least-developed regions, be aimed at strengthening regions’ competitiveness and attractiveness as well as employment by anticipating economic and social changes, including those linked to the opening of trade, through the increasing and improvement of the quality of investment in human capital, innovation and the promotion of the knowledge society, entrepreneurship, the protection and improvement of the environment, and the improvement of accessibility, adaptability of workers and businesses as well as the development of inclusive job markets; and(c) the European territorial cooperation objective, which shall be aimed at strengthening cross-border cooperation through joint local and regional initiatives, strengthening transnational cooperation by means of actions conducive to integrated territorial development linked to the Community priorities, and strengthening interregional cooperation and exchange of experience at the appropriate territorial level.3. Under the three objectives referred to in paragraph 2, assistance from the Funds shall, according to their nature, take into account specific economic and social features, on the one hand, and specific territorial features, on the other. The assistance shall, in an appropriate manner, support sustainable urban development particularly as part of regional development and the renewal of rural areas and of areas dependent on fisheries through economic diversification. The assistance shall also support areas affected by geographical or natural handicaps which aggravate the problems of development, particularly in the outermost regions as referred to in Article 299(2) [EC] as well as the northern areas with very low population density, certain islands and island Member States, and mountainous areas.’
12Article 4 of that regulation, entitled ‘Instruments and missions’, stated in paragraph 1 thereof:‘The Funds shall contribute, each in accordance with the specific provisions governing it, towards achieving the three objectives referred to in Article 3(2) as follows:(a) the Convergence objective: the ERDF, the ESF and the Cohesion Fund;(b) the Regional competitiveness and employment objective: the ERDF and the ESF; and(c) the European territorial cooperation objective: the ERDF.’
13In accordance with Article 14(1) of Regulation No 1083/2006, the budget of the European Union allocated to the Funds is to be implemented within the framework of shared management between the Member States and the Commission.
14The first subparagraph of Article 57(1) of that regulation provided:‘The Member State or managing authority shall ensure that an operation comprising investment in infrastructure or productive investment retains the contribution from the Funds only if it does not, within five years from its completion, undergo a substantial modification which is caused by a change in the nature of ownership of an item of infrastructure or the cessation of a productive activity and which affects the nature or the implementation conditions of the operation or gives to a firm or a public body an undue advantage.’
15Article 70(1) and (2) of that regulation was worded as follows:1.Member States shall be responsible for the management and control of operational programmes, in particular through the following measures:(a) ensuring that management and control systems for operational programmes are set up in accordance with Articles 58 to 62 and function effectively;(b) preventing, detecting and correcting irregularities and recovering amounts unduly paid together with interest on late payments where appropriate. They shall notify these to the Commission and keep the Commission informed of the progress of administrative and legal proceedings.2. When amounts unduly paid to a beneficiary cannot be recovered, the Member State shall be responsible for reimbursing the amounts lost to the general budget of the European Union, when it is established that the loss has been incurred as a result of fault or negligence on its part.’
16Article 80 of the regulation provided:‘Member States shall satisfy themselves that the bodies responsible for making the payments ensure that the beneficiaries receive the total amount of the public contribution as quickly as possible and in full. No amount shall be deducted or withheld and no specific charge or other charge with equivalent effect shall be levied that would reduce these amounts for the beneficiaries.’
Regulation No 1303/2013
17Under Article 152(1) and (2) of Regulation No 1303/2013:1. This Regulation shall not affect either the continuation or modification, including the total or partial cancellation of assistance approved by the Commission on the basis of Regulation (EC) No 1083/2006 or any other legislation applying to that assistance on 31 December 2013. That Regulation or such other applicable legislation shall consequently continue to apply after 31 December 2013 to that assistance or the operations concerned until their closure. For the purposes of this paragraph assistance shall cover operational programmes and major projects.2. Applications to receive assistance made or approved under Regulation (EC) No 1083/2006 shall remain valid.’
18Article 153(1) of Regulation No 1303/2013 provides:‘Without prejudice to the provisions laid down in Article 152, Regulation (EC) No 1083/2006 is hereby repealed with effect from 1 January 2014.’
Regulation (EU) No 1305/2013
19Article 88 of Regulation (EU) No 1305/2013 of the European Parliament and of the Council of 17 December 2013 on support for rural development by the European Agricultural Fund for Rural Development (EAFRD) and repealing Regulation No 1698/2005 (OJ 2013 L 347, p. 487) provides that the latter regulation is to continue to apply to operations implemented pursuant to programmes approved by the Commission under that regulation before 1 January 2014.
Regulation (EU) No 1306/2013
20Under Article 11 of Regulation (EU) No 1306/2013 of the European Parliament and of the Council of 17 December 2013 on the financing, management and monitoring of the common agricultural policy and repealing Council Regulations (EEC) No 352/78, (EC) No 165/94, (EC) No 2799/98, (EC) No 814/2000, (EC) No 1290/2005 and (EC) No 485/2008 (OJ 2013 L 347, p. 549, and corrigendum OJ 2016 L 130, p. 13):‘Except where otherwise explicitly provided for in Union law, payments relating to the financing provided for in this Regulation shall be disbursed in full to the beneficiaries.’
21Article 34(1) and (2) of Regulation No 1306/2013 provides:1. The appropriations necessary to finance the expenditure referred to in Article 5 shall be made available to Member States in the form of prefinancing, interim payments and the payment of a balance, as described in this Section.2. The combined total of prefinancing and interim payments shall not exceed 95% of the EAFRD’s contribution to each rural development programme.…’
22Article 35(1) of that regulation states that ‘Following its decision to approve the rural development programme, the Commission shall pay an initial prefinancing amount to the Member State for the whole programming period’. Under Article 36(2) of that regulation, the Commission is to make interim payments in order to reimburse the expenditure effected by accredited paying agencies in implementing the programmes. As regards the payment of the balance, Article 37(1) and (2) of that regulation states that the Commission shall pay that balance after receiving the last annual progress report on the implementation of a rural development programme. Article 37(2) states that that payment is to take place no later than six months after the information and documents referred to in Article 37(1) are considered to be receivable by the Commission and the last annual account has been cleared.
23Article 54 of Regulation No 1306/2013 provides:1. For any undue payment following the occurrence of irregularity or negligence, Member States shall request recovery from the beneficiary within 18 months after the approval and, where applicable, reception, by the paying agency or body responsible for the recovery, of a control report or similar document, stating that an irregularity has taken place. The corresponding amounts shall be recorded at the time of the recovery request in the debtors’ ledger of the paying agency.2. If recovery has not taken place within four years from the date of the recovery request, or within eight years where recovery is taken in the national courts, 50% of the financial consequences of the non‑recovery shall be borne by the Member State concerned and 50% by the Union’s budget, without prejudice to the requirement that the Member State concerned must pursue recovery procedures in compliance with Article 58.Where, in the context of the recovery procedure, the absence of any irregularity is recorded by an administrative or legal instrument of a final nature, the Member State concerned shall declare as expenditure to the Funds the financial burden borne by it under the first subparagraph.However, if for reasons not attributable to the Member State concerned, it is not possible for recovery to take place within the time limit specified in the first subparagraph, and the amount to be recovered exceeds EUR 1 million, the Commission may, at the request of the Member State, extend the time limit by a period of up to half of the original period.3.On duly justified grounds, Member States may decide not to pursue recovery. A decision to this effect may be taken only in the following cases:(a) where the costs already and likely to be effected total more than the amount to be recovered, which condition shall be considered to have been met if:(i) the amount to be recovered from the beneficiary in the context of an individual payment for an aid scheme or support measure, not including interest, does not exceed EUR 100; or(ii) the amount to be recovered from the beneficiary in the context of an individual payment for an aid scheme or support measure, not including interest, falls between EUR 100 and EUR 150 and the Member State concerned applies a threshold equal to or higher than the amount to be recovered under its national law for not pursuing national debts.(b) where recovery proves impossible owing to the insolvency, recorded and recognised under national law, of the debtor or the persons legally responsible for the irregularity.Where the decision referred to in the first subparagraph of this paragraph is taken before the outstanding amount has been subject to the rules referred to in paragraph 2, the financial consequence of non-recovery shall be borne by the Union’s budget.4. Member States shall enter in the annual accounts to be sent to the Commission under point (c)(iv) of Article 102(1) the amounts to be borne by them under paragraph 2 of this Article. The Commission shall check that this has been done and make any adjustments needed in the implementing act referred to in Article 51.5.The Commission may, provided that the procedure laid down in Article 52(3) has been followed, adopt, implementing acts, excluding from Union financing sums charged to the Union’s budget in the following cases:(a) if the Member State has not respected the time limits referred to in paragraph 1;(b) if it considers that the decision not to pursue recovery taken by a Member State pursuant to paragraph 3 is not justified;(c) if it considers that an irregularity or lack of recovery is the outcome of irregularity or negligence attributable to the administrative authorities or another official body of the Member State.Those implementing acts shall be adopted in accordance with the advisory procedure referred to in Article 116(2).’
24Article 56 of that regulation is worded as follows:‘Where irregularities or negligence are detected in rural development operations or programmes, Member States shall make financial adjustments by totally or partially cancelling the Union financing concerned. Member States shall take into consideration the nature and gravity of the irregularities detected and the level of the financial loss to the EAFRD.Amounts of the Union financing under the EAFRD which are cancelled and amounts recovered, as well as the interest thereon, shall be reallocated to the programme concerned. However, the cancelled or recovered Union funds may be reused by Member States only for an operation under the same rural development programme and provided the funds are not reallocated to operations which have been the subject of a financial adjustment. After the closure of a rural development programme, the Member State shall refund the sums recovered to the Union’s budget.’
25Article 58(1)(e) of that regulation states:‘Member States shall, within the framework of the CAP, adopt all legislative, regulatory and administrative provisions and take any other measures necessary to ensure effective protection of the financial interests of the Union, in particular to:…(e) recover undue payments plus interest, and bring legal proceedings to that effect as necessary.’
Polish law
26Under Article 61 of the Ustawa z dnia 28 lutego 2003 r. Prawo upadłościowe (Law on insolvency of 28 February 2003) (Dziennik Ustaw (Journal of Laws; ‘Dz. U.’) of 2020, No 60, item 1228, ‘the U.P.U.’):‘From the date of the declaration of insolvency, the insolvent party’s assets become the insolvency estate, which is used to satisfy creditors.’
27In accordance with Article 63(1) of the U.P.U., any assets excluded from enforcement under the provisions of the Ustawa z dnia 17 listopada 1964 r. – Kodeks postępowania cywilnego (Law on the Code of Civil Procedure of 17 November 1964) (Dz. U. 2020, item 1575; ‘the Code of Civil Procedure’) are not included in the insolvency estate.
28Article 70 of the U.P.U. provides:‘Assets not forming part of the assets of the insolvent party shall be excluded from the insolvency estate.’
29Point 2(a) of Article 831(1) of the Code of Civil Procedure provides:‘The following may not be subject to enforcement:…(2a) resources from programmes financed with the contribution of funds referred to in points (2) and (3) of Article 5(1) of the Ustawa z dnia 27 sierpnia 2009 r. o finansach publicznych (Law on public finances of 27 August 2009) (Dz. U. of 2019, item 869, as amended), disbursed in the form of advances, unless the claim subject to the enforcement measure arose in connection with the implementation of the project to which those resources were allocated’.
30Points (2), (2a) and (3) of Article 5(1) of the Law on public finances states:‘The following shall be considered to be public funds:…(2) funds from the budget of the European Union and non-refundable funds paid in respect of aid granted by Member States of the European Free Trade Association (EFTA);(2a) the funds referred to in Article 3b of the Ustawa z dnia 6 grudnia 2006 r. o zasadach prowadzenia polityki rozwoju (Law on the principles governing development policy of 6 December 2006) (Dz. U. of 2018, items 1307 and 1669);(3) non-refundable funds from foreign sources other than those referred to in point 2.’
The dispute in the main proceedings and the question referred for a preliminary ruling
31It is apparent from the order for reference that the Municipality, on the basis of three grant agreements (together, ‘the grant agreements’), which it had concluded with the competent national authorities, obtained funds received by those authorities for the purpose of implementing projects co-financed by the EU budget.
32The first grant agreement was concluded on 26 May 2014 in order to finance a project under the ‘Innovative Economy’ operational programme, for the period 2007-2013, carried out with the support of the ERDF. The total eligible cost of that project was PLN 1014473 (approximately EUR 210000) and could be co-financed up to 85% by the EU budget. It is apparent from that agreement, first, that the public contribution was to be granted in the form of a reimbursement of the eligible expenditure incurred and/or in the form of advances and, second, that the beneficiary had to ensure the implementation and durability of that project during the five-year period laid down in Article 57 of Regulation No 1083/2006; it was also required to return the funds in certain situations, such as misuse of the funds.
33The second grant agreement, concluded on 28 August 2014, concerned the financing of a project under the action-plan ‘Basic services for the rural population and economy’, within the Rural Development Programme for 2007-2013, supported by the EAFRD. The Municipality benefited from assistance of PLN 2335084 (approximately EUR 480000), up to a ceiling of 50% of the eligible costs incurred for carrying out that project. As with the first agreement, the second agreement obliged the beneficiary to repay the funds in certain situations and included provisions intended to ensure the durability of the project.
34Similar provisions were included in the third grant agreement, concluded on 8 September 2014, which concerned the financing of a project under the ‘Infrastructure and environment’ operational programme for 2007-2013, supported by the Cohesion Fund. The total eligible cost of that project was PLN 5 107 639.40 (approximately EUR 1000000). That sum was to be paid to the beneficiary in the form of advances, followed by intermediate payments and a final payment.
35All the sums paid to the Municipality by the national authorities under the grant agreements were deposited in accounts which it held with the Spółdzielczy Bank Rzemiosła i Rolnictwa w Wołominie (the Crafts and Agriculture Cooperative Bank, ‘the Bank’).
36By order of 30 December 2015, the Bank was declared insolvent.
37The Municipality applied to the supervisory judge to have the sums which it had received under the grant agreements excluded from the Bank’s insolvency estate, but its application was dismissed by order of 18 March 2016. The Municipality subsequently brought an action to secure that exclusion before the Sąd Rejonowy dla m. st. Warszawy w Warszawie (District Court, Warsaw, Poland). The action was dismissed by judgment of 8 February 2017. After the Sąd Okręgowy w Warszawie (Regional Court, Warsaw, Poland), by judgment of 7 February 2018, dismissed an appeal brought by the Municipality, it lodged an appeal on a point of law with the Sąd Najwyższy (Supreme Court, Poland), the referring court.
38The referring court is uncertain as to how the sums referred to in paragraph 35 above are to be treated. In particular, it raises the question of the compatibility with EU law of national legislation under which such sums, originating from the EU budget, are not excluded from the insolvency estate of the bank in which they were deposited, inasmuch as that legislation has the effect of undermining the attainment of the objectives set by the EU legislation.
39In that regard, the referring court notes, in the first place, that owing to the fact that the sums referred to in paragraph 35 above were deposited in a current account at the Bank, they became the property of the Bank and, on that basis, they legitimately formed part of its insolvency estate for satisfying its creditors.
40It is true, according to the Sąd Najwyższy (Supreme Court), that it is apparent from Article 63 of the U.P.U., Article 831(1) of the Code of Civil Procedure and points (2) and (3) of Article 5(1) of the Law on public finances, that sums originating from public funds, including those from the EU budget, cannot be subject to enforcement proceedings. However, those provisions are not applicable to the dispute in the main proceedings. It is established, both in the literature and in Polish case-law, that the exclusion provided for by those provisions applies only if the insolvent party is the beneficiary of the funds in question. In the present case, it was the Municipality that was the beneficiary and not the Bank. Consequently, according to that court, in order to avoid the funds concerned being seized, the Municipality should have retained them and not paid them into the Bank, which, however, was not permitted under the grant agreements.
41In the second place, the referring court states that the Municipality followed the procedure provided for by Polish law, in particular Article 70 of the U.P.U., for exclusion from the insolvency estate of assets which, according to that local authority, did not belong to the insolvent party. However, the action brought by the Municipality in that regard was not upheld, on the ground that the Bank had become the owner of the funds deposited by the beneficiary, with the result that Article 70 does not apply to the dispute in the main proceedings.
42That being said, the Municipality is one of the Bank’s creditors, its claims being represented by the sums paid to it under the grant agreements. In order to attempt to recover those sums, the Municipality should therefore declare the claim that it has in respect of those sums to the Bank’s insolvency estate. However, there is no guarantee that that recovery attempt would succeed.
43According to the Sąd Najwyższy (Supreme Court), the fact that there may be no possibility to recover the sums at issue would constitute an infringement of Articles 57 and 80 of Regulation No 1083/2006. The lack of such a possibility would prevent the attainment of the objective pursued by the grant agreements, namely to co-finance and thus enable the implementation of specific investment projects. Furthermore, failure to allocate those sums for the purposes stipulated in the agreements in question would breach those agreements and could oblige the beneficiary of the sums in question to repay those amounts.
44In those circumstances, the Sąd Najwyższy (Supreme Court) decided to stay the proceedings and to refer the following question to the Court for a preliminary ruling:‘Must [Regulation No 1083/2006], and in particular Article 2(5), Articles 3, 4, 57(1), and Articles 70 and 80 thereof, and, currently, [Regulation No 1303/2013], in particular Article 2(15), Article 37(1), Articles 66, 67(1), 74(1) and 89(1) thereof, be interpreted as precluding national legislation which prevents an entity that has received resources from the budget of the European Union from effectively seeking in court proceedings that those resources be excluded from the insolvency estate where they have been paid into a bank account held at a bank which was subsequently declared insolvent, or national legislation which does not exclude those resources from the insolvency estate of the insolvent bank?’
The request for an expedited procedure
45The referring court has requested that the present request for a preliminary ruling be dealt with under the expedited procedure provided for in Article 105 of the Rules of Procedure of the Court of Justice.
46To support its request, the referring court refers to the nature of the insolvency proceedings and the objective of satisfying the creditors in as short a time as possible and thus of closing the Bank’s insolvency proceedings.
47Article 105(1) of the Rules of Procedure provides that, at the request of the referring court or tribunal or, exceptionally, of his own motion, the President of the Court may, where the nature of the case requires that it be dealt with within a short time, after hearing the Judge-Rapporteur and the Advocate General, decide that a reference for a preliminary ruling is to be determined pursuant to an expedited procedure derogating from the provisions of these Rules.
48In that regard, it must be borne in mind that that expedited procedure is a procedural instrument intended to address matters of exceptional urgency (judgment of 28 April 2022, Phoenix Contact, C‑44/21, EU:C:2022:309, paragraph 14).
49In the present case, by decision of 9 February 2021, the President of the Court, after hearing the Judge-Rapporteur and the Advocate General, rejected the application for an expedited procedure to be applied to the present case.
50In that regard, first, as regards the objective of satisfying the creditors in as short a time as possible and thus of swiftly closing the insolvency proceedings at issue in the main proceedings, it must be observed that the requirement for a dispute pending before the Court to be dealt with within a short time cannot derive solely from the fact that the referring court is required to ensure the dispute be settled rapidly (judgment of 28 April 2022, Caruter, C‑642/20, EU:C:2022:308, paragraph 24).
51Second, in this instance, the referring court has merely argued that the use of an expedited procedure was justified by the ‘nature’ of the insolvency proceedings, without explaining how that ‘nature’ would by itself require the present case to be dealt with within a short time, within the meaning of Article 105(1) of the Rules of Procedure. In any event, the economically or socially sensitive nature of a case, assuming it is established, does not mean, in itself, that that case must be dealt with within that short time (see, to that effect, judgment of 10 March 2022, Commissioners for Her Majesty’s Revenue and Customs (Comprehensive sickness insurance cover), C‑247/20, EU:C:2022:177, paragraph 45).
Consideration of the question referred
Admissibility
52The Rzecznik Praw Obywatelskich (Ombudsman, Poland) argues that the present request for a preliminary ruling is inadmissible on the ground that the referring body, composed of persons appointed in breach of national and EU law, cannot be classified as a ‘court or tribunal’ within the meaning of Article 267 TFEU.
53In particular, first, such violations of national and EU law in the procedure for appointing the persons forming the referring court allegedly do not permit the inference that that body satisfies the criterion that a court must be ‘established by law’.
54Secondly, the Ombudsman submits that the assessment of all the legal and factual circumstances relating to the process for the appointment of the persons referred to in paragraph 52 above does not make it possible to dispel all reasonable doubt as to the independence and impartiality of that body.
55Thirdly, the Ombudsman notes that one of the persons making up the chamber of the Sąd Najwyższy (Supreme Court) which submitted the present request for a preliminary ruling to the Court is the judge who, as a single judge, had referred the case that gave rise to the judgment of 29 March 2022, Getin Noble Bank (C‑132/20, EU:C:2022:235), and that, as regards that person, the Ombudsman had already raised doubts in that case as to whether the person satisfied the requirements to be regarded as a ‘court or tribunal’ within the meaning of Article 267 TFEU.
56In that regard, it should be borne in mind that, in accordance with the settled case-law of the Court, in order to determine whether a body making a reference is a ‘court or tribunal’ within the meaning of Article 267, which is a question governed by EU law alone, and therefore to determine whether the request for a preliminary ruling is admissible, the Court takes account of a number of factors, such as, inter alia, whether the body is established by law, whether it is permanent, whether its jurisdiction is compulsory, whether its procedure is inter partes, whether it applies rules of law and whether it is independent (judgment of 29 March 2022, Getin Noble Bank, C‑132/20, EU:C:2022:235, paragraph 66).
57It is not disputed that the Sąd Najwyższy (Supreme Court) as such satisfies the requirements set out in the paragraph above. In the instant case, the Ombudsman rather raises the question whether the judges making up the panel of judges of the Sąd Najwyższy (Supreme Court) which made the present request for a preliminary ruling to the Court satisfy those requirements.
58However, as the Court held in paragraph 69 of the judgment of 29 March 2022, Getin Noble Bank (C‑132/20, EU:C:2022:235), and for the reasons set out in paragraphs 70 and 71 of that judgment, in so far as a request for a preliminary ruling emanates from a national court or tribunal, it must be presumed that it satisfies those requirements, referred to in paragraph 56 above, irrespective of its actual composition.
59It is true that the presumption set out in the preceding paragraph may be rebutted where a final judicial decision handed down by a national or international court or tribunal leads to the conclusion that the judge or judges constituting the referring court are not an independent and impartial tribunal previously established by law, for the purposes of the second subparagraph of Article 19(1) TEU, read in the light of the second paragraph of Article 47 of the Charter of Fundamental Rights of the European Union (see, to that effect, judgment of 29 March 2022, Getin Noble Bank, C‑132/20, EU:C:2022:235, paragraph 72).
60However, in the present case, since the Court has not been made aware, either at the close of the written part of the procedure or, moreover, at the deliberation of the case, that the judges constituting the referring panel would be the subject of such a final judicial decision, the possible flaws that may have vitiated the national procedure for their appointment are not capable of leading to the inadmissibility of the present request for a preliminary ruling.
61It is nevertheless important to bear in mind that the presumption referred to in paragraph 58 above applies solely for the purposes of assessing the admissibility of references for a preliminary ruling under Article 267 TFEU. It cannot be inferred from this that the conditions for appointment of the judges that make up the referring court necessarily satisfy the guarantees of access to an independent and impartial tribunal previously established by law, for the purposes of the second subparagraph of Article 19(1) TEU or Article 47 of the Charter of Fundamental Rights (see, to that effect, judgment of 29 March 2022, Getin Noble Bank, C‑132/20, EU:C:2022:235, paragraph 74).
62Finally, it must be stated that a different assessment from that arising from paragraphs 57 to 61 above could be made in circumstances in which, beyond the personal situation of the judge or judges formally submitting a request pursuant to Article 267 TFEU, other factors were to have repercussions on the functioning of the referring court to which those judges belong and thus contribute to undermining the independence and impartiality of that court (see, to that effect, judgment of 29 March 2022, Getin Noble Bank, C‑132/20, EU:C:2022:235, paragraph 75).
63It follows from the foregoing considerations that the present request for a preliminary ruling is admissible.
Substance
64As a preliminary point, it should be observed that the referring court, by its question submitted for a preliminary ruling, has asked the Court about the interpretation of Regulation No 1083/2006 and of Regulation No 1303/2013, which repealed and replaced Regulation No 1083/2006, and seeks to ascertain whether those regulations preclude national legislation under which the sums from the EU budget received by a beneficiary of programmes co-financed by the European Union may not, in the event of the insolvency of the bank in which those sums were deposited, be excluded from the insolvency estate of that bank.
65However, it is apparent from the information available to the Court, in the first place, that while the first and third grant agreements relate to projects supported by the ERDF and the Cohesion Fund respectively, and which are therefore governed in particular by the provisions of Regulation No 1083/2006, repealed and replaced by Regulation No 1303/2013, the second grant agreement concerns a rural development programme supported by the EAFRD, which is inter alia governed by Regulation No 1698/2005, repealed and replaced by Regulation No 1305/2013, and by Council Regulation (EC) No 1290/2005 of 21 June 2005 on the financing of the common agricultural policy (OJ 2005 L 209, p. 1), repealed and replaced by Regulation No 1306/2013.
66In the second place, even though the grant agreements were signed after the repeal of Regulations No 1083/2006 and No 1698/2005 on 1 January 2014, they remain subject, pursuant respectively to Article 152 of Regulation No 1303/2013 and Article 88 of Regulation No 1305/2013, to the provisions of Regulations No 1083/2006 and No 1698/2005, since, according to the information in the order for reference, the projects covered by those agreements relate to the period 2007‑2013 and were approved on the basis of Regulations No 1083/2006 and No 1698/2005. Moreover, since Regulation No 1306/2013 does not contain a transitional provision such as Article 88 of Regulation No 1305/2013 and since, pursuant to Articles 119 and 121 of Regulation No 1306/2013, Regulation No 1290/2005 was repealed with effect from 1 January 2014, the second grant agreement is subject to the relevant provisions of Regulation No 1306/2013.
67In those circumstances, it must be held that, by its question, the referring court asks, in essence, whether Article 2(5) and Articles 3, 4, 57, 70 and 80 of Regulation No 1083/2006, Articles 11, 54, 56 and 58 of Regulation No 1306/2013, and Article 2(i), Articles 3 and 4 and Article 72(1) of Regulation No 1698/2005 must be interpreted as precluding national legislation which, first, does not enable an entity that has received funds in the framework of programmes co-financed by the EU budget, where those funds have been paid into an account held at a bank which has subsequently been declared insolvent, to secure the exclusion of those funds from the insolvency estate of that bank, and, second, does not prescribe the exclusion of those funds from that insolvency estate.
68It must first be borne in mind that assets that are withdrawn from the EU budget and transferred to the Member States under the Structural Funds and the Cohesion Fund cannot be regarded, once paid out, as assets of the European Union, within the meaning of the last sentence of Article 1 of the Protocol (see, to that effect, judgment of 30 May 2018, Dell’Acqua, C‑370/16, EU:C:2018:344, paragraph 40).
69In that regard, the Court has held, as regards Regulation No 1083/2006, that payments made by the Commission to the Member States under the Structural Funds and the Cohesion Fund entail a transfer of assets from the EU budget to the budgets of the Member States (see, to that effect, judgment of 30 May 2018, Dell’Acqua, C‑370/16, EU:C:2018:344, paragraph 39).
70In addition, it is apparent from Articles 34 to 37 of Regulation No 1306/2013 that the payments made by the Commission under the rural development programmes supported by the EAFRD also entail a transfer of assets between the EU budget and the budgets of the Member States.
71It follows, in the present case, that the sums received by the Municipality under the grant agreements and then deposited with the Bank cannot be classified as assets of the Union, within the meaning of the last sentence of Article 1 of the Protocol, such as to mean that they cannot be subject to any administrative or legal measure of constraint without the authorisation of the Court of Justice of the European Union, for the purposes of that provision.
72Furthermore, it must be held that none of the provisions referred to in paragraph 67 above requires Member States to adopt national provisions that allow for sums to be excluded from a bank’s insolvency estate solely on the ground that those sums were deposited with that bank by a beneficiary of a programme co-financed by the EU budget.
73First, as regards Article 57(1) of Regulation No 1083/2006, the content of which is essentially equivalent to that of Article 72(1) of Regulation No 1698/2005, it should be stated that it is apparent, in essence, from the wording of those provisions that the Member State or the managing authority is to ensure that a co-financed operation retains the contribution from the Fund concerned only if, within five years from its completion, that operation does not undergo a substantial modification, first, affecting its nature or its implementation conditions and, second, resulting either from a change in the nature of ownership of an item of infrastructure or the cessation of a productive activity.
74However, the existence of the requirement referred to in paragraph 72 above is not apparent from either the aforementioned Article 57 or Article 72(1).
75Secondly, Article 70 of Regulation No 1083/2006, whose content equates, in essence, to that of Articles 54, 56 and 58 of Regulation No 1306/2013, obliges the Member States, inter alia, to reimburse the amounts lost to the EU general budget when it is established that the loss has been incurred as a result of fault or negligence on their part.
76The requirement referred to in paragraph 72 above is not evident from either the wording of the aforementioned Article 70 or that of Articles 54, 56 and 58 of Regulation No 1306/2013.
77Moreover, it has not in any way been claimed that the Republic of Poland was at fault or negligent in the management or control of the operational programmes at issue, so as to justify the possible application of that Article 70.
78Thirdly, as regards Article 80 of Regulation No 1083/2006, which is equivalent to Article 11 of Regulation No 1306/2013, while it is apparent from the wording of those provisions, in essence, that the beneficiaries of a public contribution must receive that contribution in full, the fact remains that those provisions do not, in and of themselves, impose the requirement referred to in paragraph 72 above on the Member States.
79Furthermore, the findings of fact made by the referring court and referred to in paragraph 35 above show that the sums at issue were in fact paid to the Municipality by the national authorities under the grant agreements.
80Fourthly, it must be observed that the requirement referred to in paragraph 72 above does not arise either under Articles 3 and 4 of Regulation No 1083/2006 or under Articles 3 and 4 of Regulation No 1698/2005. Those articles merely set out in general terms the objectives, instruments and missions of the Funds referred to in the first paragraph of Article 1 of Regulation No 1083/2006 and also the missions and objectives of the EAFRD.
81Fifthly and lastly, it should be stated that that requirement is likewise not evident under Article 2(5) of Regulation No 1083/2006 or Article 2(i) of Regulation No 1698/2005, which merely define the concept of public expenditure.
82It is true, as the referring court observes, in essence, that the fact that it may be impossible to recover the sums at issue is likely, in some cases, to hinder the attainment of the objective pursued by the applicable EU legislation, or even to entail an obligation on the part of the beneficiary of those sums to reimburse them.
83However, that fact cannot justify an interpretation of that legislation which is incompatible with its wording. In that regard, it must be borne in mind that, according to settled case-law, an interpretation of a provision of EU law cannot have the result of depriving the clear and precise wording of that provision of all effectiveness. Thus, where the meaning of a provision of EU law is absolutely plain from its very wording, the Court cannot depart from that interpretation (judgment of 25 January 2022, VYSOČINA WIND, C‑181/20, EU:C:2022:51, paragraph 39).
84Finally, it should be made clear that the absence in EU law, where relevant, of the requirement referred to in paragraph 72 above is without prejudice to the possibility of excluding the sums at issue from the insolvency estate of the Bank under Polish law.
85Having regard to all the foregoing considerations, the answer to the question referred is that Article 2(5) and Articles 3, 4, 57, 70 and 80 of Regulation No 1083/2006, Articles 11, 54, 56 and 58 of Regulation No 1306/2013, and Article 2(i), Articles 3 and 4, and Article 72(1) of Regulation No 1698/2005 must be interpreted as not precluding national legislation which, first, does not enable an entity that has received funds in the framework of programmes co-financed by the EU budget, where those funds have been paid into an account held at a bank which has subsequently been declared insolvent, to secure the exclusion of those funds from the insolvency estate of that bank, and, second, does not prescribe the exclusion of those funds from that insolvency estate.
Costs
86Since these proceedings are, for the parties to the main proceedings, a step in the action pending before the national court, the decision on costs is a matter for that court. Costs incurred in submitting observations to the Court, other than the costs of those parties, are not recoverable.
Operative part
On those grounds, the Court (Sixth Chamber) hereby rules: Article 2(5) and Articles 3, 4, 57, 70 and 80 of Council Regulation (EC) No 1083/2006 of 11 July 2006 laying down general provisions on the European Regional Development Fund, the European Social Fund and the Cohesion Fund and repealing Regulation (EC) No 1260/1999, as amended by Regulation (EU) No 423/2012 of the European Parliament and of the Council of 22 May 2012, Articles 11, 54, 56 and 58 of Regulation (EU) No 1306/2013 of the European Parliament and of the Council of 17 December 2013 on the financing, management and monitoring of the common agricultural policy and repealing Council Regulations (EEC) No 352/78, (EC) No 165/94, (EC) No 2799/98, (EC) No 814/2000, (EC) No 1290/2005 and (EC) No 485/2008, and Article 2(i), Articles 3 and 4, and Article 72(1) of Council Regulation (EC) No 1698/2005 of 20 September 2005 on support for rural development by the European Agricultural Fund for Rural Development),must be interpreted as not precluding national legislation which, first, does not enable an entity that has received funds in the framework of programmes co-financed by the EU budget, where those funds have been paid into an account held at a bank which has subsequently been declared insolvent, to secure the exclusion of those funds from the insolvency estate of that bank, and, second, does not prescribe the exclusion of those funds from that insolvency estate.
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