Practice and Procedure


PUBLISHED March 13, 2003

The limitation provisions in the Regulation on Fraud Prevention EC 2988/95 applied to the recovery of export refunds alleged to have been unduly paid to the defendants in this case, except for Grain Special Procedure ('GSP') claims. These involved claims for export refunds made by exporters for exports prior to 1 April 1995, where the remedies provided for were "measures" rather than "penalties".Preliminary issues regarding limitation in relation to claims in three actions by the Department for the Environment, Food and Rural Affairs ('DEFRA') against three companies whose business had included the processing and export from the UK of malt produced from barley. DEFRA had claimed for recovery of export refunds alleged to have been unduly paid to each of the defendants, together with penalties and interest. It had alleged that: (i) malt made from barley harvested in one year had been exported under cover of declarations to the relevant authorities that it had been harvested in the previous year "new for old"; (ii) that in various instances malt had been exported under cover of declarations that it was ready for export on a particular date when in fact it had not been ready for export until a later date; and (iii) that in various instances exports had been made outside the time limit of the licence required for exports of such a kind. The time span involved broadly covered 1993-97. The defendants had denied liability and put DEFRA to proof of the allegations, as well as raising defences of legitimate expectation and estoppel. In relation to the preliminary issue, the following questions had arisen: (a) the applicable legal provision(s); (b) the true construction of those provision(s); and (c) how that provision(s) applied to the facts of the proceedings. The claims before the court could be characterised into the following four groups: (A) Grain Special Procedure ('GSP') claims, involving claims for export refunds made by exporters for exports prior to 1 April 1995, called "common law restitutionary actions"; (B) GSP claims involving claims made after 1 April 1995, known as "penal restitutionary actions"; (C) Pre-Finance Processing ('PFP') claims involving the reconstitution and forfeiture of securities (and payment of the corresponding sums with interest) offered and subsequently released for advances claimed under the PFP procedure, styled as "PFP security actions"; and (D) claims involving the reconstitution and forfeiture (and payment of the corresponding sums with interest) of securities offered (and subsequently since released) to back export licences known as the ("licence security claims").HELD: (1) Local limitation periods were subordinate to any limitation periods prescribed as applicable by EC law. The specific regulations applying to malt exports did not include any express limitation provision. (2) Regulation on Rules re Export Refunds on Agricultural Products 800/99 did not apply to any of these claims. (3) Regulation on Fraud Prevention 2988/95 applied to all the claims, except the so-called common law restitutionary claims. (4) However, in Regulation 2988/95 there was a clear and expressed intent to distinguish "measures" from "penalties". The common law restitutionary claims fell within Art.4.1 of Regulation 2988/95 and the remedies in consequence provided for (as conceded) were to be regarded as measures, not penalties: by virtue of the express provision of Arts.4.4 and 3 which on their wording did not extend to measures. The limitation periods set by Art.3 therefore did not apply to this particular group of claims. (5) With regard to the common law restitutionary claims, the limitation regime was that potentially applicable to administrative decisions under general principles of EC Law (see Rijn-Schelde-Verolme (RSV) etc v Commission (1987) ECR 4617 and, for the commencement of legal proceedings, that potentially applicable under the Limitation Act 1980 (including s.32(1)(c) to the extent available). (6) Only limited findings could be made on the issues of fact and law that had arisen from the materials currently before the court. Some points relating to limitation were therefore left open.Judgment accordingly.