The background to the complaint

1. The present complaint concerns the European Commission's alleged failure to pay the complainant's eligible costs in the context of a development project in Uruguay.

2. The complainant is an Italian company. It took part in the project entitled "Formación para la Seguridad Fluviomarítima del Río de la Plata" (hereinafter the 'project'), concluded under Financing Agreement URY/1998/0555 between the Commission and the Government of Uruguay (hereinafter the 'agreement'). The project aimed at the modernisation of the Oceanography, Hydrography and Meteorology Service of Uruguay through the training of its personnel and the supply of ships and hydrographical study equipment. It was financed by the Commission for a total amount of EUR 600 000, by the complainant for a total amount of EUR 441 000 and by the Italian Government for a total amount of EUR 154 940.

3. The agreement indicated that the complainant was responsible for the award of supply contracts, for the financial, technical and administrative implementation of the project, as well as for the management, control and coordination of the project activities. Initially, the agreement was scheduled to last until 31 December 2001. Its duration was subsequently extended until 31 December 2003.

4. On 23 July 2003, the complainant requested the Commission to make a payment of EUR 161 000 to it. The latter rejected the request, considering that the request was not supported by the necessary documents.

5. In 2007, the complainant was declared insolvent.

6. In 2008, the complainant's liquidator contacted the Commission and requested payment of an amount of EUR 174 689.04. By letter of 17 December 2008, the Commission invited the complainant to submit invoices in support of its claim.

7. On 31 January 2009, the complainant sent the Commission a letter including 11 invoices, as well as financial and audit reports.

8. On 3 July 2009, the Commission informed the complainant that the costs eligible for EU funding amounted to EUR 101 914.50, while the remainder of the costs claimed by the complainant was ineligible. Before payment of the costs considered eligible could be made, the Commission invited the complainant to submit the necessary supporting documents.

9. However, on 18 December 2009, the Commission informed the complainant that no payment would be made in its favour, given that (i) the relevant supporting documents had been presented only after 31 December 2003, which was the date when the agreement expired, and that (ii) no originals had been submitted.

10. On 26 January 2010, the complainant submitted three original invoices to the Commission.

11. On 11 March 2010, the Commission acknowledged receipt of the invoices and asked the complainant to submit evidence that the payment requests had been duly submitted and received by the relevant Commission services before 31 December 2003. The Commission also requested that this information be provided by 31 March 2010, after which date the file would be closed. The Commission declared the file closed on 22 April 2010.

12. On 22 March 2011, the complainant turned to the European Ombudsman.

The subject matter of the inquiry

13. The Ombudsman opened an inquiry into the following allegation and claim:

Allegation

The Commission wrongly failed to pay the complainant’s eligible costs for the services which it provided.

Claim

The European Commission should pay the costs that it considered eligible in its letter dated 3 July 2009.

The inquiry

14. On 17 June 2011, the Ombudsman requested the Commission to submit an opinion on the complainant's allegation and claim. The Ombudsman also invited the Commission to forward to him a copy of the agreement. The Commission sent its opinion on 12 March 2012. The opinion was then forwarded to the complainant with an invitation to submit observations.

15. On 19 March 2012, the Ombudsman received a further letter from the Commission, which was forwarded to the complainant on 21 March 2012. The complainant sent its observations on the Commission's opinion on 29 March 2012. On 4 April 2012, the Ombudsman's services wrote to the complainant, inviting it to consider the last letter sent by the Commission and to take it into account in its observations, if necessary. The complainant did not reply to that letter.

The Ombudsman's analysis and conclusions

Preliminary remark

16. Given their factual connection, it is appropriate to consider the complainant's allegation and claim together.

A. Allegation that the Commission wrongly failed to pay the complainant’s eligible costs for the services which it provided and the claim

Arguments presented to the Ombudsman

17. The complainant alleged that the Commission failed to pay it an amount corresponding to the project's eligible costs (EUR 101 914.50). In support of its allegation, the complainant argued that (i) no clause in the financing agreement required invoices to be submitted to the Commission before 31 December 2003, and (ii) it received contradictory information from different Commission officials regarding the eligible costs.

18. In its opinion, the Commission pointed out that the first request for payment submitted by the complainant reached it in 2003, but was not accompanied by the necessary supporting documents. As the project ended in December 2003, the Commission considered that it had no legal basis to process the payment.

19. In 2008, when the complainant's liquidator contacted the Commission anew and reiterated the request for payment, the Commission took the view that it could not proceed with the request, because Article 8.2 of the General Conditions of the agreement set out that "no payments can be authorised after the expiry of the Financing Agreement itself"[1], that is to say, after 31 December 2003.

20. As to the complainant's argument that no clause in the agreement required invoices to be submitted to the Commission before 31 December 2003, the Commission first pointed out that the fact that the agreement required all invoices to be submitted to the Commission before 31 December 2003 was known to the complainant. However, the Commission acknowledged that, according to its internal procedures, it should have ensured that it had complied with all contractual obligations before closing the project. This did not happen in the present case. The Commission thus stated that it was prepared to pay those costs claimed by the complainant which it considered eligible in its letter of 3 July 2009 and for which original invoices amounting to the sum of EUR 101 914.50 had been submitted in 2010.

21. As regards the complainant's argument that it received contradictory information from different Commission officials regarding the eligible costs, the Commission recognised that the information its different services gave to the complainant could have confused it. The Commission acknowledged that, in the case at hand, such confusion might have arisen because of the period of time that had elapsed between the closing of the project and the complainant's request. As a consequence, the information at the disposal of the service in charge of the operational checks was incomplete. The Commission apologised to the complainant for not having been clear enough in its communications with it.

22. As regards the Ombudsman's request to the Commission to include in its reply a copy of the agreement, the Commission explained that, since the complainant was not a party to it, the document could not be made available to the complainant or other third parties. The Commission therefore invited the Ombudsman to inspect the agreement should he consider this necessary.

23. In its further letter of 19 March 2012, the Commission stated that, after it had drafted the opinion to the Ombudsman, it learned that three debit notes had been issued to the complainant in the framework of other contracts concluded between the complainant and the Commission. As a consequence, the amount of EUR 101 914.50 that the Commission was prepared to pay to the complainant would be offset against the amounts of the three debit notes.

24. In its observations, the complainant stated that it was willing to accept the Commission's offer to pay the amount corresponding to the eligible costs. The complainant did not comment on the Commission's statement that, after it had drafted its opinion, it learned of the three debit notes issued to the complainant, and decided that the amount it was prepared to pay would accordingly be offset against the complainant's other debts.

The Ombudsman's assessment

25. The Ombudsman takes note of the Commission's view that, on the basis of the relevant clause in the agreement, the complainant should have submitted its invoices to it by 31 December 2003 in order to be reimbursed for the eligible costs. In the course of the inquiry, however, the Commission stated that it was prepared to reimburse the complainant's costs which it recognised as eligible in its letter of 3 July 2009, namely, an amount of EUR 101 914.50. The Commission also apologised to the complainant for having provided information, which was not entirely clear.

26. In view of the above, the Ombudsman notes that the Commission has, in the course of the inquiry, acknowledged that it owes the complainant the costs it previously recognised to be eligible.

27. The Ombudsman also notes that the Commission subsequently pointed out that it would not make a payment to the complainant but instead offset the amount owed to the complainant against debit notes issued to the complainant in the framework of other projects. In this regard, the Ombudsman considers that the complainant challenged neither the existence of the debit notes referred to by the Commission nor the Commission's decision to offset the eligible costs it had recognised against these debit notes.

28. In light of the foregoing, the Ombudsman concludes that the Commission has settled the case.

B. Conclusion

On the basis of his inquiry into this complaint, the Ombudsman closes it with the following conclusion:

The Commission has settled the case.

The complainant and the Commission will be informed of this decision.

 

P. Nikiforos Diamandouros

Done in Strasbourg on 29 April 2013

[1] Article 8.2 of the General Conditions of the Financing Agreement reads as follows: "[l]os contratos firmados en el marco del presente Convenio darán lugar a pagos solamente si su expiración es anterior a la fecha de vencimiento del presente Convenio. El último pago de estos contratos deberá realizarse a más tardar a la fecha límite del compromiso financiero fijado en el artículo 3 del presente Convenio de financiación".