Dear Mr J.,
On 21 July 1999 you sent a complaint against the Commission of the European Communities concerning a claim for compensation to Mrs Hedwig, the Mediator of the European Commission in matters relating to its personnel. Mrs Hedwig forwarded your complaint to my office where it was received on 6 August 1999.
On 6 September 1999 I forwarded the complaint to the Commission for its comments. The Commission sent its opinion on your complaint on 3 December 1999. I forwarded this opinion to you on the same day with an invitation to make observations, if you so wished. On 21 December 1999, you sent me your observations on the Commission's opinion.
I am writing now to let you know the results of the inquiries that have been made.

THE COMPLAINT

In March 1994, the complainant, a German company, concluded a contract with the Polish "National Fund for Environmental Protection and Water Management" (the 'Fund') for establishing a "Masterplan for Water and Wastewater Management in Upper Silesia", the various tasks to be completed in September 1997. The contract was to be financed from the European Community's Phare Programme under a 1991 commitment, the disbursement period of which expired on 31 December 1997.
The implementation of the project ran into difficulties in the field which caused various delays in 1994 and 1995. In the spring of 1996, the complainant renegotiated the terms of the contract with the Fund and signed an Addendum no. 2 which extended the performance deadlines and the payment schedule. This agreement did however not deal with the complainant's claim for additional compensation for cost overruns incurred as a consequence of the above-mentioned problems.
The total budget of the project which amounted to 1 530 670.64 ECU had been paid to the complainant.
In January 1998, the complainant asked for compensation for the costs caused by the delays which had occurred in 1994 and 1995. The relevant amount claimed appears to be around € 429 000.
The Fund did not pay the sum demanded by the complainant. Instead, it advised the complainant to address its claim to the Commission. On 30 June 1999, the Delegation of the European Commission in Poland informed the complainant that the Commission was not in a position to consider its claim.
In its letter of 21 July 1999, the complainant lodged the present complaint.

THE INQUIRY

The Commission's opinion
In its opinion, the Commission explained that it was unable to do anything for the complainant for three reasons: First, there was no direct obligation on which a claim for compensation could be based. The contractual relationship out of which the complainant's claim arose, was exclusively and entirely with the Fund, not with the Commission. The simple fact that the Fund financed the contract from a Phare commitment did not engender, by itself, any direct financial or contractual responsibility of the Community towards the complainant. Second, the financial commitment which the Commission had entered into in 1991 for the benefit of the Fund had expired at the end of 1997, and could no longer be used to pay for the claim raised by the complainant. Third, even if this commitment had still been in force, the Commission could have used these funds only on the formal and express request of the beneficiary Polish authorities, in this case the Fund, to which it had committed itself to fund the contract expenditure. However, no such request had been made. The Commission concluded that the complainant thus had to address its claim to its client, the Fund.
The complainant's observations
In its observations, the complainant informed the Ombudsman that it recognizes the Commission's legal point of view, and that it intended to contact its Polish client, the Fund, accordingly. It considered, however, that some of the detailed comments of the Commission required further clarification since they might tend unnecessarily to create a controversial basis for the complainant's further discussions with the Fund about its claim. The complainant therefore requested the Commission to review these comments in the light of its own observations.

THE DECISION

1 Refusal to pay compensation
1.1 In its complaint, the complainant claimed that the Commission should have compensated it for the costs caused by the delays which had occurred in 1994 and 1995 and which had rendered the implementation of its contract with the Polish "National Fund for Environmental Protection and Water Management" (the 'Fund') for establishing a "Masterplan for Water and Wastewater Management in Upper Silesia" more difficult.
1.2 The Commission explained that it could not accept this claim for three reasons: First, there was no direct obligation on which a claim for compensation could be based. The contractual relationship out of which the complainant's claim arose, was exclusively and entirely with the Fund, not with the Commission. The simple fact that the Fund financed the contract from a Phare commitment did not engender, by itself, any direct financial or contractual responsibility of the Community towards the complainant. Second, the financial commitment which the Commission had entered into in 1991 for the benefit of the Fund had expired at the end of 1997, and could no longer be used to pay for the claim raised by the complainant. Third, even if this commitment had still been in force, the Commission could have used these funds only on the formal and express request of the beneficiary Polish authorities, in this case the Fund, to which it had committed itself to fund the contract expenditure. However, no such request had been made.
1.3 In its observations on the Commission's opinion, the complainant informed the Ombudsman that it recognised the Commission's legal point of view and that it intended to address its claim to the Fund as suggested by the Commission.
1.4 In view of the fact that the complainant has accepted the arguments submitted by the Commission, the Ombudsman considers that there is no need for him to proceed to an examination of the merits of these arguments. In any event, the arguments put forward by the Commission would appear to be reasonable at first sight.
1.5 On the basis of the above, there appears to have been no maladministration on the part of the Commission.
2 Further request
2.1 In his observations on the Commission's opinion, the complainant requests that the Commission should review some of its comments in the light of its own observations since they might tend unnecessarily to create a controversial basis for the complainant's further discussions with its client. None of the specific statements in the Commission's opinion to which the complainant objects have any bearing on the question as to whether the Commission's refusal to pay the compensation demanded by the complainant constituted maladministration. The Ombudsman therefore considers that these statements and the complainant's comments relating thereto do not need to be examined in the present decision, and advises the complainant to raise these matters directly with the Commission.
3 Conclusion
On the basis of the European Ombudsman's inquiries into this complaint, there appears to have been no maladministration on the part of the Commission of the European Communities. The Ombudsman therefore closes the file.
The President of the European Commission will also be informed of this decision.
Yours sincerely
Jacob SÖDERMAN