Bulgaria / Supreme Administrative Court of the Republic of Bulgaria / 14082/2017 Appellate: S.I. LLC against an act by the head of the contracting authority of an operative programme

Key facts of the case:

The appellant S.I. LLC appealed against a decision of the lower administrative court, rejecting the company’s appeal against a decision by the contracting authority of an operative programme, obliging the company to reimburse funds under a grant agreement for human resources training programmes. The lower administrative court had found the decision lawful and rejected the company’s appeal. The appellant claims the lower court’s decision violates material law and is not duly justified.

The Supreme Administrative Court looks both at EU acts regulating the powers of the authorities, managing EU funds, and the national law on the matter, which has introduced common conditions for admissibility of costs and procedures for verifying costs and imposing financial corrections. Thus, the head of the contracting authority had to, when verifying costs and imposing financial sanctions, comply with the national law’s procedures and requirements towards his/her decisions. Moreover, the decisions should also be compliant with the requirements of the Administrative Procedure Code (Административнопроцесуален кодекс) towards individual administrative acts.

The Supreme Administrative Court finds the decision for financial corrections not duly justified and issued in violation of administrative procedure rules, as the beneficiary was not given the opportunity to make a statement on the evidence. The national contracting authority had to also take into account Art. 41 of the Charter, providing for a right to good administration, as it was directly applying EU law within the meaning of Art. 51 of the Charter.  

Key legal question raised by the Court:

Was the decision for financial corrections against the beneficiary pronounced in compliance with material law and administrative procedure rules?

Outcome of the case:

 

The Supreme Administrative Court revoked the decision of the lower court and the decision for financial corrections by the head of the contracting authority.

 

Paragraphs referring to EU Charter: 

”Art. 41 of the Charter of Fundamental Rights entails the right to good administration as a fundamental right. According to the provision, the right includes (a) the right of every person to be heard, before any individual measure which would affect him or her adversely is taken; (b) the right of every person to have access to his or her file, while respecting the legitimate interests of confidentiality and of professional and business secrecy; (c) the obligation of the administration to give reasons for its decisions. According to Art. 51 of the Charter, it is addressed to the Member States when the implement Union law. Providing grants from the European Social Fund is direct application of Union law, thus entails an obligation for national authorities, responsible for applying the law, to comply with Art. 41 of the Charter.

Art. 41 of the Charter, in view of Art. 6 (1) of the TEU, is primary law. It expresses a general principle of EU law, firmly required by the ECJ as it is part of the right of defence - Judgment of the Court of 18 December 2008 in Case C-349/07, para. 37, Judgement of the Court of 1 October 2009 in Case C-141/08P, para. 83.”

Paragraphs referring to EU Charter (original language): 

„Съгласно чл. 41 от Хартата на основните права на Европейския съюз (Хартата) основно право на правните субекти е правото на добра администрация. Съгласно тази разпоредба правото на добра администрация включва: 1) правото на всяко лице да бъде изслушвано, преди срещу него да бъде предприета индивидуална мярка, която би имала неблагоприятни последици за него; 2) правото на достъп до документите, които се отнасят до него; 3) задължение на администрацията да мотивира решението си. Съгласно чл. 51 от Хартата тя е приложима от държавите членки, когато прилагат правото на Съюза. Предоставянето на безвъзмездна финансова помощ от Европейския социален фонд е пряко приложение на правото на Съюза, което значи и задължение на националните органи, отговорни за приложимостта на право, да спазват разпоредбата на чл. 41 от Хартата.

Разпоредбите на чл. 41 от Хартата, с оглед на чл. 6 (1) от Договора за Европейския съюз (ДЕС), имат юридическата сила на първично право. Те изразяват общ принцип в правото на Европейския съюз, спазването на който Съдът на Европейския съюз в практиката си неотклонно изисква, защото е елемент на правото на защита - Решение от 18 декември 2008, Soprop й, С-349/07, EU: C: 2008:746, точка 37; решение от 01 октомври 2009, F. S., С-141/08Р, EU: C: 2009:598, точка 83.”

Language: 
Bulgarian
Deciding body (original language): 
Върховен административен съд на Република България
Language: 
Bulgarian