Opinion of Advocate General Rantos delivered on 2 September 2021.#SC Avio Lucos SRL v Agenţia de Plăţi şi Intervenţie pentru Agricultură – Centrul judeţean Dolj and Agenţia de Plăţi şi Intervenţie pentru Agricultură (APIA) – Aparat Central.#Request for a preliminary ruling from the Curtea de Apel Timişoara.#Reference for a preliminary ruling – Agriculture – Common agricultural policy – Direct support schemes – Common rules – Single area payment scheme – Regulation (EC) No 73/2009 – Article 2(c) – Concept of ‘agricultural activity’ – Article 35 – Regulation (EC) No 1122/2009 – National legislation requiring the production of a legal document establishing the right to use the agricultural parcel made available to the farmer under a concession contract and making the validity of such a contract conditional on the future concessionaire having the status of breeder or owner of animals – Concessionaire of an area of pastureland who has concluded a cooperation contract with animal breeders – Res judicata.#Case C-116/20.

1.

This request for a preliminary ruling primarily concerns the interpretation of certain provisions of Regulation (EC) No 73/2009, ( 2 ) which establishes common rules for direct support schemes for farmers under the common agricultural policy (CAP) and establishes certain support schemes for farmers, and of Regulation (EC) No 1122/2009, ( 3 ) which lays down certain detailed rules for the application of Regulation No 73/2009.

2.

The request has been made in proceedings between, on the one hand, SC Avio Lucos SRL (‘Avio Lucos’) and, on the other hand, the Agenția de plăți și intervenție pentru agricultură – Centrul județean Dolj (Agency for payments and measures for agriculture – Dolj District Centre, Romania; ‘the APIA, Dolj’) and the Agenția de Plăți și Intervenție pentru Agricultură (APIA) – Aparat Central (Agency for payments and measures for agriculture, Romania; ‘the APIA’) concerning, inter alia, a decision to recover the amount of the single area payment initially granted to Avio Lucos for the 2014 marketing year.

3.

Although the Court has already had the opportunity to interpret Regulation No 73/2009 on various occasions, the present case concerns unresolved questions concerning the interpretation of the EU legislation on direct support measures under the CAP. More specifically, this case, which is being dealt with in coordination with Case C‑176/20, ( 4 ) asks the Court, in essence, to clarify to what extent EU law, in particular Regulations No 73/2009 and No 1122/2009, precludes national legislation adopted in the context of the single area payment scheme ( 5 ) which introduces, as a condition of eligibility for the payment, an obligation to prove the existence of a right to use or to exploit the areas concerned; where certain public land is taken on concession, such a right is afforded only to owners or breeders of animals. In that context, the referring court also seeks to obtain clarifications about the concept of ‘agricultural activity’, within the meaning of Article 2(c) of Regulation No 73/2009, and the principle of res judicata.

4.

Recitals 4, 7, 23 and 25 of Regulation No 73/2009 stated:

…

…

…

5.

Article 2 of Regulation No 73/2009, which is entitled ‘Definitions’, provided:

‘For the purposes of this Regulation, the following definitions shall apply:

…

6.

Article 6(1) of that regulation provided:

‘Member States shall ensure that all agricultural land, especially land which is no longer used for production purposes, is maintained in good agricultural and environmental condition. Member States shall define, at national or regional level, minimum requirements for good agricultural and environmental condition on the basis of the framework established in Annex III, taking into account the specific characteristics of the areas concerned, including soil and climatic condition, existing farming systems, land use, crop rotation, farming practices, and farm structures. Member States shall not define minimum requirements which are not foreseen in that framework.

…’

7.

Article 19(1) of that regulation reads as follows:

‘Each year, a farmer shall submit an application for direct payments indicating, where applicable:

8.

Article 28 of the same regulation, which is entitled ‘Minimum requirements for receiving direct payments’, provided, in paragraph 2 thereof:

‘From 2010, Member States may establish appropriate objective and non-discriminatory criteria to ensure that no direct payments are granted to a natural or legal person:

9.

Article 34 of Regulation No 73/2009, which is entitled ‘Activation of payment entitlements per eligible hectare’, stated:

‘1.   Support under the single payment scheme shall be granted to farmers upon activation of a payment entitlement per eligible hectare. Activated payment entitlements shall give a right to the payment of the amounts fixed therein.

2.   For the purposes of this Title, “eligible hectare” shall mean:

…

Except in the case of force majeure or exceptional circumstances, hectares shall comply with the eligibility condition throughout the calendar year.’

10.

Article 35 of that regulation, which was entitled ‘Declaration of eligible hectares’, provided, in paragraph 1 thereof:

‘The farmer shall declare the parcels corresponding to the eligible hectares accompanying any payment entitlement. Except in the case of force majeure or exceptional circumstances, these parcels shall be at the farmer’s disposal on a date fixed by the Member State which shall be no later than the date fixed in that Member State for amending the aid application.’

11.

Article 124 of the regulation, which is entitled ‘Area under the single area payment scheme’, provided:

‘1.   …

For the purposes of this Title, “utilised agricultural area” shall mean the total area taken up by arable land, permanent grassland, permanent crops and kitchen gardens as established by the Commission for its statistical purposes.

For [the Republic of] Bulgaria and Romania, the agricultural area under the single area payment scheme shall be the part of its utilised agricultural area which is maintained in good agricultural condition, whether or not in production, where appropriate adjusted in accordance with the objective and non-discriminatory criteria to be set by [the Republic of] Bulgaria or Romania after approval by the Commission.

2.   …

Except in the case of force majeure or exceptional circumstances, the parcels referred to in the first subparagraph shall be at the farmer’s disposal on the date fixed by the Member State which shall be no later than the date fixed in that Member State for amendment of the aid application.

The minimum size of eligible area per holding for which payments may be requested shall be [0.3] ha. However, any new Member State may decide, on the basis of objective criteria and after approval by the Commission, to set the minimum size at a higher level not exceeding 1 ha.

3.   There shall be no obligation to produce or employ the factors of production …

4.   Any land benefiting from payments under the single area payment scheme shall be maintained in good agricultural and environmental condition in accordance with Article 6.

…’

12.

Article 4 of legea zootehniei nr 72/2002 (Law No 72/2002 on animal breeding), ( 7 ) of 16 January 2002 provides:

‘For the purposes of this Law, “animal breeder” shall mean natural or legal persons who keep as owners the species of animals referred to in Article 2, which are listed in the agricultural register.’

13.

Article 5(1) of that law provided:

‘The rearing and use of animals shall be the activity of animal breeders, regardless of their legal status, for the purposes of obtaining products and animal products.’

14.

Article 6(1) of Ordonanța de urgență a Guvernului nr. 125/2006 pentru aprobarea schemelor de plăți directe și plăți naționale directe complementare, care se acordă în agricultură începând cu anul 2007, și pentru modificarea articolului 2 din Legea nr. 36/1991 privind societățile agricole și alte forme de asociere în agricultură (Government Emergency Order No 125/2006 approving direct payment schemes and complementary national direct payments granted for agriculture as from 2007 and amending Article 2 of Law No 36/1991 on agricultural companies and other forms of association in the field of agriculture), ( 8 ) of 21 December 2006, in the version thereof applicable to the dispute in the main proceedings, provides:

‘The beneficiaries of the direct payments under the single area payment scheme may be natural persons and/or legal persons who exploit the agricultural land in respect of which the payment is sought as owners, lessors, concessionaires, management-level members of participative associations, lessees or other related persons.’

15.

Article 7(1) of OUG No 125/2006 provides:

‘In order to receive payments under single area payment schemes, applicants must be registered in the Register of Farmers, which is managed by the Agenția de Plăți și Intervenție pentru Agricultură (Agency for payments and measures for agriculture, Romania), submit their application for payment within the time limits prescribed and satisfy the following general conditions:

…

…

…’

16.

Article 5(1) of Ordinul ministrului agriculturii și dezvoltării rurale nr. 246/2008 privind stabilirea modului de implementare, a condițiilor specifice și a criteriilor de eligibilitate pentru aplicarea schemelor de plăți directe și plăți naționale directe complementare în sectorul vegetal, pentru acordarea sprijinului aferent măsurilor de agromediu și zone defavorizate (Regulation of the Minister for Agriculture and Rural Development No 246/2008 concerning the drawing up of the method of implementation, specific conditions and eligibility criteria for the implementation of the complementary national direct payment schemes in the crop sector, for the grant of support relating to agro-environmental measures and disadvantaged areas), ( 9 ) of 23 April 2008, in the version thereof applicable to the dispute in the main proceedings, states the following:

‘The documents providing proof of the lawful use of municipal permanent pastureland, in accordance with Article 7(1)(f) of [OUG No 125/2006], as amended and supplemented by Law No 139/2007 and as subsequently amended and supplemented, are documents attesting to a right of ownership, concession or leasing contracts concluded between the municipal councils and animal breeders, which indicate the land used and certificate issued by the city council in accordance with the information contained in the farming register. Any agreement concluded before the present Regulation enters into force which concerns the use of municipal pastureland shall continue to be effective until the date on which the entitlement ends.’

17.

Point 1 of Chapter VI of the strategia privind organizarea activității de îmbunătățire și exploatare a pajiștilor la nivel național, pe termen mediu și lung (strategy for the organisation of activities to improve and exploit meadows nationally in the medium and long term), adopted by Regulation of the Minister for Agriculture, Food and Forestry and of the Minister for Public Administration No 226/235/2003, ( 10 ) as amended and supplemented by Ordinul ministrului agriculturii, pădurilor și dezvoltării rurale nr. 541/2009 (Regulation of the Minister for Agriculture, Forestry and Rural Development No 541/2009), ( 11 ) of 25 August 2009, states:

‘The responsibilities of the meadow users

18.

Article 430 of the Cod procedură civilă (Code of Civil Procedure), adopted by Law No 134/2010, ( 12 ) provides:

‘(1)   A judgment which decides, in whole or in part, the substance of the proceedings or rules on a procedural plea or on any other matter shall have, with effect from its delivery, the force of res judicata with regard to the issue decided.

(2)   The force of res judicata shall cover the operative part of the judgment and the considerations upon which that operative part is based, including those pursuant to which the issue concerned was decided.

(3)   A judgment by which interim measures are adopted shall not have the force of res judicata.

(4)   Where a judgment is subject to an appeal or an appeal on a point of law, the force of res judicata shall be provisional.

(5)   A judgment against which an application for annulment or for review is brought shall retain the force of res judicata until it is replaced by another judgment.’

19.

Article 431 of that code states:

‘(1)   Proceedings may not be brought a person twice in the same capacity, on the basis of the same charges and in respect of the same matter.

(2)   The parties may challenge the force of res judicata previously acquired in other dispute where there is a connection with the resolution of that dispute.’

20.

Article 2 of Ordonanța de urgență a Guvernului nr. 34/2013 privind organizarea, administrarea și exploatarea pajiștilor permanente și pentru modificarea și completarea Legii fondului funciar nr. 18/1991 (Government Emergency Order No 34/2013 on the management and exploitation of permanent meadows, amending and supplementing Law No 18/1991 on land ownership ( 13 )), in the version thereof applicable to the dispute in the main proceedings, states the following:

‘For the purposes of this Emergency Order:

…

…’

21.

Avio Lucos is a company incorporated under Romanian law. Its principal activity is ‘activities in support of crops’.

22.

In the course of 2014, Avio Lucos submitted to the APIA, Dolj, inter alia, an application for the single area payment for the year 2014 in respect of an area of 341.70 hectares of pastureland.

23.

In order to prove its right to use that land, it submitted a series of documents, which included a concession contract, concluded on 28 January 2013 with the Consiliul local Podari (Municipal Council of the Municipality of Podari Romania), concerning a pasture situated within that municipality ( 14 ) (‘the concession contract’). Under that contract, Avio Lucas had the right to exploit directly, by grazing, at its own risk, the assets supplied on concession. It was also required to ensure that the land taken on concession was exploited by grazing and to pay the associated fee, ( 15 ) and was prohibited from leasing that land or granting a sub-concession over it.

24.

Avio Lucos subsequently concluded, on 30 January 2013, a joint venture contract with four natural persons who own animals (‘the natural persons’), under which the actual exploitation of the municipal pastureland taken on concession was to be conducted by the provision of animals (cows, sheep, goats etc.) by those natural persons, in the number owned and specified contractually, for the purpose of the continuous grazing of the abovementioned land. ( 16 )

25.

Following the submission of that single area payment application, on 23 October 2014 the APIA, Dolj, adopted a decision granting an advance payment to Avio Lucos under the area support schemes for the 2014 marketing year and, on 9 December 2014, it adopted a decision granting that payment, which totalled 529 340.24 Romanian lei (RON) (approximately EUR 108000).

26.

However, the APIA, Dolj, subsequently found inter alia that, on the date on which the concession contract was concluded, Avio Lucos was not entitled to take on concession pastureland in the public domain or the private sphere of the municipality, since it was not an animal breeder and nor did it own animals, in breach of the applicable national law.

27.

In the light of that finding, the APIA, Dolj, first, adopted a decision imposing multiannual penalties on Avio Lucos totalling RON 555 729.59 (approximately EUR 113000). That decision has been the subject of a number of administrative and judicial appeals brought by Avio Lucos, all of which were dismissed. ( 17 ) Second, the APIA, Dolj, established that Avio Lucos owed a debt to the State totalling RON 529 340.24 (approximately EUR 108000), which corresponds to the amount which had already been paid to it.

28.

Avio Lucos challenged the latter decision before the Tribunalul Dolj (Regional Court, Dolj, Romania), which dismissed its application by judgment of 12 December 2017. Avio Lucos lodged an appeal against that judgment, which was allowed by the Curtea de Apel Craiova (Court of Appeal, Craiova, Romania), which referred the case back to the Tribunalul Dolj (Regional Court, Dolj), on the ground that the judgment had not examined Avio Lucos’ grounds of defence alleging infringement of EU law.

29.

Following the re-registration of the case at the Tribunalul Dolj (Regional Court, Dolj), that court, by judgment of 25 February 2018, dismissed Avio Lucos’ application on the ground that Avio Lucos was not a ‘farmer’ within the meaning of Article 2(a) of Regulation No 73/2009, since it proved only that it held on concession the land in respect of which it had made its single area payment application, without carrying out any agricultural activity, that is to say, the breeding of animals.

30.

Avio Lucos appealed against that judgment before the Curtea de Apel Timişoara (Court of Appeal, Timişoara, Romania), the referring court. Avio Lucos claims, inter alia, that the Tribunalul Dolj (Regional Court, Dolj), examined the eligibility criteria not in the light of EU law but solely in the light of concepts of national law which have no equivalent in EU law. For their part, the APIA, Dolj, and the APIA have raised, inter alia, a plea of res judicata based on two final judgments of the Curtea de Apel Craiova (Court of Appeal, Craiova) dismissing the actions brought by Avio Lucas against the decision imposing multiannual penalties.

31.

The referring court has doubts as to whether EU law precludes national legislation which introduces an obligation, first, to prove the existence of a right to use or to exploit an agricultural area or, second, to be a breeder or owner of animals in order to take pastureland on concession, with a view to obtaining financial support relating to the single area payment schemes. In addition, in that court’s view, the question is raised as to whether the activity actually carried out by Avio Lucos falls within the scope of Article 2 of Regulation No 73/2009. Finally, the referring court, which notes the existence of two final judicial decisions finding the applications for payment under the single area payment scheme to be ineligible in respect of the year 2014 because they did not comply with national law as regards the requirement relating to the lawfulness of the right to exploit or to use the land, asks whether EU law precludes the application of the principle of res judicata which prevents analysis of the conformity of that national requirement with the EU law applicable in respect of the year 2014 as part of a new dispute concerning the lawfulness of the measure to recover the sums unduly paid to the applicant.

32.

In those circumstances, the Curtea de Apel Timişoara (Court of Appeal, Timişoara) decided to stay the proceedings and to refer the following questions to the Court of Justice for a preliminary ruling:

33.

Written observations have been lodged by Avio Luco, the APIA, the Romanian Government, the French and German Governments (in relation to Question 1 only), the Italian Government (in relation to Questions 1 and 2 only), and the European Commission.

34.

The Court decided, pursuant to Article 76(2) of its Rules of Procedure, to give a ruling without a hearing. By measure of organisation of procedure of 24 February 2021, the Court put questions for a written response to Avio Lucos and to the APIA. The written observations on the questions forming the subject of those measures of organisation of procedure were lodged by those same parties within the time limit specified.

35.

First of all, the Romanian Government argues that the request for a preliminary ruling is not relevant to the resolution of the dispute in the main proceedings and is therefore inadmissible, in view of the fact that the referring court has information at its disposal to enable it to settle that dispute. In addition, that court does not set out, in its request, the other possible interpretations of Article 431(2) of the Code of Civil Procedure which justify its doubts as to that provision’s application. Lastly, the court fails to explain why it would fall to it to assess the merits of the plea of res judicata after receiving answers from the Court to the first three questions referred for a preliminary ruling, even though those questions would be redundant if Article 431(2) of the Code of Civil Procedure does apply to the dispute in the main proceedings.

36.

It is my view that those arguments should be rejected. It is settled case-law of the Court that it is solely for the national court before which the dispute has been brought, and which must assume responsibility for the subsequent judicial decision, to determine in the light of the particular circumstances of the case both the need for a preliminary ruling in order to enable it to deliver judgment and the relevance of the questions which it submits to the Court. It follows that the questions referred by the national courts enjoy a presumption of relevance and that the Court may refuse to rule on those questions only where it is quite obvious that the interpretation that is sought bears no relation to the actual facts of the main action or its purpose, where the problem is hypothetical, or where the Court does not have before it the factual or legal material necessary to give a useful answer to those questions. ( 18 )

37.

That is clearly not the case here, the interpretation of EU legislation, in particular of the provisions of Regulation No 73/2009, sought by the referring court is directly linked to the purpose of the dispute in the main proceedings, the problem raised by that dispute is not hypothetical but in fact genuine, and the Court has before it the factual and legal material necessary to give a useful answer to the questions submitted.

38.

In those circumstances, I am of the opinion that the questions referred for a preliminary ruling are admissible.

39.

By its first question, the referring court asks, in essence, whether the EU law applicable to the financial support relating to the agricultural year 2014, in particular Regulations No 73/2009 and No 1122/2009, preclude the introduction, through national law, of an obligation to provide proof of the right to use an agricultural area for the purpose of obtaining the financial support relating to the single area payment schemes.

40.

As a preliminary point, I would observe that, although the referring court does makes reference to Regulation No 1122/2009 in the wording of the first question for a preliminary ruling, ( 19 ) that regulation is not mentioned in the grounds of the decision to refer the matter. In any case, that regulation appears irrelevant for the purposes of answering that question, since the rules governing eligibility for the financial support relating to the single area payment schemes do not fall within its scope ratione materiae. ( 20 ) I will therefore examine the first question referred for a preliminary ruling solely in the light of Regulation No 73/2009, which is applicable ratione temporis to the dispute in the main proceedings and was subsequently repealed by Regulation No 1307/2013.

41.

In that connection, it must be observed, first of all, that Regulation No 73/2009 does not refer to the concept of a ‘right of use’, as provided for in Romanian law. ( 21 ) Under Article 34(1) of that regulation, support under the single payment scheme is to be granted to farmers, on the basis of an annual declaration, upon activation of a payment entitlement ( 22 ) per eligible hectare in the Member State in which the payment entitlement was allocated. In order to receive that support, a farmer is required, pursuant to Article 35(1) of the regulation, to declare the parcels corresponding to the eligible hectares accompanying any payment entitlement. Except in the case of force majeure or exceptional circumstances, those parcels must be ‘at the farmer’s disposal on a date fixed in that Member State’. ( 23 )

42.

Next, Article 124 of Regulation No 73/2009, which is contained in Title V on the ‘implementation of direct payments in the new Member States’, provides, in the first subparagraph of paragraph 2 thereof, that, ‘for the purpose of granting payments under the single area payment scheme, all agricultural parcels corresponding to the criteria provided for in paragraph 1’, that is to say, as far as concerns Romania, ‘the part of its utilised agricultural area which was maintained in good agricultural condition …, whether or not in production …, and, where appropriate, adjusted in accordance with the objective and non-discriminatory criteria to be set by [Romania] after approval by the Commission’.

43.

Finally, in accordance with Article 19(1)(c) of Regulation No 73/2009, the farmer must have at its disposal the documents deemed necessary by the Member State that are capable of substantiating the aid application.

44.

It follows that Regulation No 73/2009 does not clarify how the areas concerned are to be at ‘the disposal’ of a farmer, with the meaning of Article 35(1) of that regulation and, a fortiori, whether the term ‘at the disposal’ implies a ‘right to use’ those areas. In the absence of such clarification, it is necessary, in interpreting that provision, to take into account not only its wording, but also the context in which it occurs and the objectives pursued by the rules of which it is part. ( 24 )

45.

In the first place, as far as concerns the wording of Article 35(1) of Regulation No 73/2009, I would observe that the fact that an area is ‘at the disposal’ of the farmer means, in principle, that the farmer can use it at his convenience with a view to carrying out his agricultural activity on it or, in other words, that the agricultural area is, at the very least, de facto at that farmer’s disposal.

46.

With regard, in the second place, to the context in which Article 35(1) of Regulation No 73/2009 occurs, I noted in point 41 of this Opinion that support under the single payment scheme is to be granted to farmers upon activation of a payment entitlement per ‘eligible hectare’. Under Article 34(2)(a) of that regulation, that term means any ‘agricultural area of the holding … that is used for an agricultural activity’.

47.

Those terms are themselves defined in the regulation. Thus, Article 2(b), (c) and (h) define the concept of a ‘holding’ as being ‘all the production units managed by a farmer situated within the territory of the same Member State’; ( 25 ) that of ‘agricultural activity’ as being ‘the production, rearing or growing of agricultural products …, or maintaining the land in good agricultural and environmental condition’; and that of an ‘agricultural area’ as being ‘any area taken up by arable land, permanent pasture or permanent crops’. ( 26 )

48.

In that connection, the requirement laid down in Article 2(b) of Regulation No 73/2009 on the concept of a ‘holding’ that a production unit must be ‘managed’ by a farmer does not mean that such a farmer must have unlimited power over the area in question. As the Court has had the opportunity to clarify, the concept of ‘management’ does not imply that the farmer has unlimited power over the area in question when using it for agricultural purposes. However, the farmer must enjoy a degree of autonomy with regard to that area sufficient for the carrying-out of his agricultural activity, that being a matter for the referring court to assess, taking into account all the circumstances of the case. The farmer must therefore be able to exercise a certain degree of decision-making power when using the area concerned. ( 27 )

49.

That interpretation constitutes a continuation of the case-law of the Court on the concept of an ‘agricultural area of the holding’, to which reference is made in Article 44(2) of Regulation No 1782/2003, ( 28 ) which was replaced by Regulation No 73/2009, in which it held, in essence, that there is no requirement that that area is at the farmer’s disposal pursuant to a lease or other similar transaction. ( 29 ) On that basis, the Court has likewise found, in particular in the judgment in Pontini and Others, ( 30 ) in the light of Article 12 of Regulation No 1254/1999, ( 31 ) that that provision did not make the eligibility of an aid application conditional upon production of a valid legal document attesting to the applicant’s right to use the forage areas covered by that application. On the contrary, it is the actual use of the forage area which constitutes one of the eligibility conditions for the grant of the premiums concerned. ( 32 ) Even though it is defined in somewhat different terms, the concept of a ‘holding’, as laid down in Article 2(b) of Regulation No 73/2009, is essentially identical.

50.

In the third place, with regard to the objectives of the rules in question, first, Article 39(1)(b) TFEU provides that the CAP is intended to ensure a fair standard of living for the agricultural community, in particular by increasing the individual earnings of persons engaged in agriculture. In that context, pursuant to recitals 23 and 25 of Regulation No 73/2009, that regulation seeks to prevent support from being granted to beneficiaries who have artificially created the conditions required to obtain such payments, whose agricultural activities formed only an insignificant part of their overall economic activities or whose business purpose was not or only marginally targeted at performing an agricultural activity. Accordingly, in the light of those objectives, support under the single payment scheme provided for in the regulation is intended to ensure a fair standard of living for farmers who genuinely carry out an agricultural activity, which means that they actually have an agricultural area at their disposal.

51.

It follows that, in order to determine whether or not an agricultural area is ‘at the disposal’ of a farmer within the meaning of Article 35(1) of Regulation No 73/2009, it is apparent from the wording, context and objectives of those rules that it is the genuine and actual nature of the use of the agricultural land and the possibility of exercising a certain degree of decision-making power when using it which determine the eligibility for the grant of the support under the single area payment scheme. ( 33 ) However, the EU rules do not make the eligibility of an application for such support expressly conditional upon the obligation to prove or to substantiate the use of the area covered by the application and does not clarify how the Member States can determine whether a farmer possesses the agricultural areas declared to be part of its holding.

52.

It is in the light of those considerations that it is necessary to determine whether EU law precludes the Member States from laying down in their national legislation an obligation to produce a valid legal document attesting to the right to use the agricultural area in order to be eligible for grants under the single area payment scheme.

53.

In that connection, the Court has already had the opportunity to determine the discretion afforded to the Member States as regards the monitoring of compliance with the conditions laid down for the grant of aid within the context of the integrated administration and control system (‘the IACS’). Thus, in its judgment in Pontini and Others, ( 34 ) the Court pointed out that the Member States have the task of adopting measures to ensure the proper implementation of the IACS and that they are especially required to take the necessary measures to ensure the reality and the regularity of the aid schemes financed by the Union in general and by the European Agricultural Guidance and Guarantee Fund (EAGGF) in particular, as well as to prevent and deal with irregularities. In addition, the Member States have a measure of discretion for the purposes of implementing the aid schemes that they deem necessary in order to prevent and penalise irregularities and fraud effectively.

54.

In that context, in the Court’s view, the Member States enjoy a margin of discretion as regards the supporting documents and the evidence to be required from an aid applicant in relation to the forage areas covered by its application. In the light of that discretion, it is permissible for the Member States to lay down more detailed rules in national legislation as to the evidence to be submitted in support of an aid application by referring, in particular, to the usual practices in their territory in the field of agriculture as regards the enjoyment and use of the forge areas, and the legal documents to be produced in respect of that use. ( 35 )

55.

The Court did however add that that discretion was subject to certain limits. In particular, the exercise by Member States of their discretion in respect of the evidence to be provided in support of an aid application, particularly as regards the possibility of requiring an aid applicant to produce a valid legal document attesting to his right to use the areas covered by his application, must be consistent with the objectives pursued by the EU legislation concerned, as well as the general principles of EU law and, in particular, the principle of proportionality. ( 36 ) That principle requires that the measures implemented through provisions must be appropriate for attaining the objective pursued and must not go beyond what is necessary to achieve that objective. ( 37 ) For example, the Court has established that the Member States cannot require very specific evidence, such as a lease or another similar type of contract, and that, under the principle of freedom of contract, the evidence may include the fact that the parcels are made available without monetary consideration. ( 38 )

56.

It is therefore necessary to ascertain, in the present case, whether the measures implemented by the Romanian legislation are appropriate for attaining one of the objectives pursued by the CAP and whether the obligation imposed does not go beyond what is strictly necessary to achieve it.

57.

In that connection, first, as regards the capacity to achieve the objectives pursued by the CAP, as described in point 50 of this Opinion, I note that the Romanian Government has stated the national legislation was intended to make it easier for the greatest number of owners or keepers of animals to enjoy direct access to the pastureland in question (which belongs to the regional administrative authorities) and not those who carry out agricultural activities by way of an intermediary, as well as to ensure a fair standard of living for active farmers. The introduction of an obligation to prove the ‘right to use’ an agricultural area can in fact provide a degree of assurance that the objectives of the CAP will indeed be pursued. For example, the production of a legal document can help to prevent aid applicants benefitting abusively from land belonging to others with a view to circumventing EU legislation, as in the case which gave rise to the judgment in Pontini and Others. In other words, such a provision allows for the protection of the right of the lawful owners of agricultural areas covered by a declaration not to be deprived fraudulently of any financial benefits under the CAP and, at the same time, the protection of the Union’s finances against any aid application made fraudulently, without the knowledge of the lawful owners, with a view to procuring those advantages unduly without the applicants (themselves) being the owners or enjoying a right to use the land in question. Furthermore, the requirement to produce formal documents is not a feature peculiar to Romanian law. For instance, as the Italian Government made clear in its written observations, Italian law requires that farmers applying for aid produce, in order to prove their ownership of the land concerned, evidence that they hold a corresponding formal title to exploit the land as additional proof of the control exercised. ( 39 )

58.

In that regard, I am of the view that the obligation to hold a lawful title to use the land concerned is a suitable means of achieving the abovementioned objectives, since such an obligation allows the prevention of fraud and the protection of the financial interests of the national authorities, on the one hand, to be combined with the protection of the legitimate expectations of applicants vis-à-vis their access to the aid scheme, on the other hand.

59.

Second, with regard to the proportionality of the Romanian legislation, it must observed that an obligation to provide proof of a ‘right to use’ the agricultural land for the purposes of eligibility for grants under the single area payment scheme is not always consistent with the objectives of the CAP. For example, where agricultural areas are exploited by farmers who carry out harvesting on that land and are therefore able to prove that those areas are put to regular and genuine use by means other than the production of such a title, evidence that the area is ‘at a farmer’s disposal’, within the meaning of Article 35(1) of Regulation No 73/2009, cannot be based solely on the formalised legal document related to that land. Such a document is not always capable of providing proof that the agricultural area is being exploited genuinely and effectively.

60.

For instance, on the one hand, a person can hold a deed of title over land without actually using that land for an agricultural activity and, on the other hand, farmers can actually carry out an agricultural activity on parcels without however being in possession of a related formalised legal document. In the latter scenario, a strict requirement to be in possession of a legal document would result in those farmers being excluded from receipt of the single area payment, which would be contrary to the objective of the legislation in question. ( 40 ) In those circumstances, requiring that all applicants provide proof of the right to use the agricultural land declared by them with a view to obtaining support does not appear to me to be consistent with the principle of proportionality.

61.

Lastly, third, as Advocate General Mazák had essentially observed, ( 41 ) the validity of contracts concluded by farmers is a civil law question the assessment of which differs between the Member State, such that there would be a risk that the rules governing the eligibility for support would not be interpreted uniformly in the Member State if they were permitted to make single area payments subject to considerations falling within the scope of contract law.

62.

For all the reasons set out above, I take the view that the providing proof, in the form of a formal legal document, of the right to use the agricultural area concerned must be regarded more as being one indication, amongst others, providing assurance that the applicant for a single area payment genuinely and regularly exploits the areas declared by him or her rather than as a condition of eligibility for the aid scheme, or even as the only evidence substantiating the actual use of those areas for the purposes of an agricultural activity.

63.

In the light of the foregoing, I propose that the Court answer the first question referred for a preliminary ruling to the effect that Regulation No 73/2009 does not preclude the introduction, through national legislation, of an obligation to provide proof of the right to use an agricultural area for the purpose of obtaining financial support relating to the single area payment schemes, provided that the objectives pursued by the EU legislation and the general principles of EU law, in particular the principle of proportionality, are observed.

64.

By its second question, which is submitted in the event that the first question is answered in the negative, the referring court asks, in essence, whether, if proof of the right to use an agricultural area is provided by the submission of a concession agreement for an area of pastureland, EU precludes the condition laid down in national legislation under which, for a such a contract to be concluded validly, the future concessionaire must be a breeder or an owner of animals only.

65.

It should be observed that the practical effect of such a condition is that, at the very least, any concessionaire of an area of pastureland who is not an owner or breeder of animals cannot receive the financial support relating to the single area payment schemes. In other words, the referring court seeks to ascertain whether EU precludes a restriction on access to the use of pastureland only to concessionaires who are breeders or owners of animals. ( 42 )

66.

In accordance with the analysis set out in point 54 of this Opinion, in the absence of an express provision in Regulation No 73/2009, the Member States have a measure of discretion as regards the supporting documents and evidence that are to be required of an aid applicant vis-à-vis the areas covered by his application and a declaration by him. It is therefore necessary to establish whether the condition of being a ‘breeder or owner of animals’ in order to be able to submit a valid legal document attesting to the right to use the areas covered by the aid application is consistent with the objectives pursued by the EU legislation and the general principles of EU law, in particular the principle of proportionality.

67.

With regard to the objective pursued by the national legislation at issue, I note, first, that the Romanian Government explains, as background information, the specific situation of agriculture in Romania, namely that it faces issues such as land abandonment, an ageing agricultural community, low numbers of young farmers and high numbers of small holdings, a high percentage of which is made up of semi-subsistence holdings. Its decision to make the conclusion of concession contracts relating to pastureland subject to the concessionaire being an owner or breeder of animals should therefore be understood in the light of those specific issues, so as to ensure that grazing is not carried out with animals belonging to third parties who do not benefit from the single area payment scheme. The more specific objective of that legislation is to prevent the concessionaire of the areas stated in the single payment application, who is the beneficiary of that support, from being merely a ‘couch farmer’, the term used by the European Court of Auditors to describe the situation in which the agricultural activity is not actually carried out by the aid applicant, but rather by the person who physically grazes the areas declared in the application. In such cases, the aid applicant would ultimately be granted the support as a mere rentier without carrying out the subsidised activity. ( 43 )

68.

In the light of those considerations, and in particular the specific nature of agriculture in Romania, it appears to me that the condition of being a ‘breeder or owner of animals’ is justified in the light of EU law. Furthermore, although the Romanian Government does not rely on it as a legal basis, I would point out that, under Article 28(2) of Regulation No 73/2009, ‘Member States may establish appropriate objective and non-discriminatory criteria to ensure that no direct payments are granted to a natural or legal person: (a) whose agricultural activities form only an insignificant part of its overall economic activities; or (b) whose principal business or company objects do not consist of exercising an agricultural activity’. That rule could therefore fall within the scope of such ‘minimum requirements for receiving direct payments’.

69.

As for the proportionality of the condition in question, although it is true that it is for the national court to interpret and apply national law, I would tend towards regarding the legislation at issue as seemingly particularly strict in that it appears to exclude de jure the possibility of grazing being carried out with animals belonging to third parties, even where the persons who are in possession of the pastureland and apply for support perform that activity directly. Accordingly, even though the legislation of some Member States does indeed prohibit grazing by third parties (where the land is given on concession to X, who is the aid beneficiary, but third parties carry out the grazing in principle), ( 44 ) the specific feature of the Romanian legislation is that it appears to prohibit grazing with animals belonging to third parties (even if the aid applicant has an agricultural area at his disposal and actually carries out the grazing with animals that do not belong to him). Such an exclusion seems to me contrary to the objective specified by the Romanian Government of making it easier for the greatest number of owners or keepers of animals to enjoy direct access to pastureland, inter alia, with a view to achieving the objective of maintaining the land in good agricultural condition, and in particular avoiding the abandonment of agricultural land (see points 67 and 74 of this Opinion). I will expand upon this point in my analysis of the third question referred for a preliminary ruling (see points 77 to 79 of this Opinion).

70.

In the light of the foregoing, I propose that the Court answer the second question referred for a preliminary ruling to the effect that Regulations No 73/2009 and No 1122/2009 do not preclude national legislation which imposes, as a condition of validity of a concession contract concluded for the exploitation of areas declared in a single area payment application, that the future concessionaire must be a breeder or owner of animals, provided that the objectives pursued by the EU legislation and the general principles of EU law, in particular the principle of proportionality, are observed. However, EU law does preclude such a condition from becoming the sole condition of eligibility for the grant of a single area payment.

71.

By its third question, which is closely connected to the first and second questions, the referring court seeks to ascertain whether the activity of an undertaking which, after concluding a concession contract for pastureland with a view to obtaining the right to exploit that land and obtaining the right to the single area payment, subsequently concludes a cooperation contract with animal breeders falls within the concept of ‘agricultural activity’ within the meaning of Article 2(c) of Regulation No 73/2009.

72.

First of all, I would observe that, under Article 2(c) of Regulation No 73/2009, ‘agricultural activity’ is defined as ‘the production, rearing or growing of agricultural products including harvesting, milking, breeding animals and keeping animals for farming purposes, or maintaining the land in good agricultural and environmental condition as established in Article 6’. As the wording of that definition makes clear, two categories of activities can come under the concept of ‘agricultural activity’ within the meaning of that provision.

73.

The first category of activities covers ‘the production, rearing or growing of agricultural products including harvesting, milking, breeding animals and keeping animals for farming purposes’. However, it seems clear to me, in the present case, that Avio Lucos’ activity does not fall within that category of activities. Indeed, it is apparent from Article 8 of the participative cooperation contract that the animals have always been kept, reared and used in the context of the grazing activity by natural persons, and not by Avio Lucos.

74.

The second category of activities is concerned with ‘maintaining the land in good agricultural and environmental condition as established in Article 6’ of Regulation No 73/2009, which lays down that ‘the minimum requirements’ are to be defined ‘at national or regional level’ by the States, ‘taking into account the specific characteristics of the areas concerned’. ( 45 ) The aim of such agricultural activities is to avoid agricultural land being abandoned and to ensure that it is maintained in good agricultural and environmental condition, ( 46 ) and to encourage the maintenance of existing permanent pasture so as to ensure against their mass conversion to arable land. ( 47 )

75.

The activity undertaken by Avio Lucos appears to correspond to this second category of activities, which can come under the concept of ‘agricultural activity’. As is clear from the decision to refer the matter, under Article 7 of the cooperation agreement Avio Lucos undertakes, on an annual basis and at its own expense, to clean up the pastureland, uproot weeds and remove excess water from the land, thereby ensuring optimal conditions for the restoration of the pasture.

76.

Furthermore, the cooperation agreement does not appear to require that the applicant has its own animals with a view to ensuring the maintenance of the land in good agricultural and environmental condition. ( 48 ) In that regard, although Article 6(1) of Regulation No 73/2009 does provide that it is for the Member States to define, at national or regional level, minimum requirements for good agricultural and environmental condition on the basis of the framework established in Annex III to that regulation, taking into account the ‘specific characteristics of the areas concerned’, that article does add that the Member States cannot define minimum requirements which are not foreseen in that framework.

77.

In that connection, as the Commission observes, according to the notification made by Romania concerning the implementation of the minimum standards for good agricultural and environmental conditions (in respect of an application for the 2014 agricultural year), farmers are obliged to undertake the following with a view to implementing the standard relating to the minimum livestock stocking rates and/or appropriate regimes: ‘cut the grass at least once each year and/or ensure a minimum level of grazing (minimum of 0.3 animals per hectare) in order to maintain the land (permanent pasture) in a good state’.

78.

The obligation on the applicant to be the owner of or to keep animals which graze on the agricultural land is not a minimum requirement covered by that framework. If, as in the present case, the pastureland is maintained by grazing (and not by mowing), the farmer is required to ensure that the grazing is carried out, but there is no obligation that he ensure such grazing exclusively with his own animals. Since, in the present cases, the parties to the main proceedings are in agreement that the animals grazed on the land in question and it is not disputed that the applicant ensured conditions for the restoration of the pastureland, it appears that Avio Lucas did actually carry out the necessary agricultural activity, by maintaining the land in good agricultural and environmental condition in accordance with the notification made by Romania.

79.

A literal interpretation to that effect also appears to me to be consistent with the objectives referred to in Regulation No 73/2009, as set out inter alia in recitals 4 and 7 thereof, concerning the maintenance of pastureland in good agricultural and environmental condition, since the positive environmental effect of permanent pasture has been recognised. Such an objective is consistent with the goal of the CAP set out in Article 39(1)(a) TFEU, which consists, inter alia, in increasing agricultural productivity by ensuring the rational development of agricultural production. That said, it must be borne in mind that the CAP likewise seeks, as its primary aim, as I have noted in points 50 to 57 of this Opinion, to ensure a fair standard of living for the agricultural community. Those two objectives are complementary.

80.

In the light of the foregoing, I propose that the Court answer the third question referred for a preliminary ruling to the effect that Article 2 of Regulation No 73/2009 is to be interpreted as meaning that the activity of a beneficiary under the single area payment scheme who – after concluding a concession contract for pastureland with a view to obtaining the right to exploit that land and obtaining the right to the single payment for the 2014 agricultural year – subsequently concludes a cooperation contract with animal breeders under which he permits them to graze animals, free of charge, on the land granted under the concession, with the beneficiary retaining the right to use the land but undertaking not to hinder the grazing activity and to maintain the pastureland, falls within the concept of ‘agricultural activity’ within the meaning of that article such as cleaning, removing weeds and excess water, in order to keep the land in good agricultural and environmental condition, having regard to the characteristics of the areas concerned.

81.

By its fourth question, the referring court asks, in essence, about the compliance with EU law of national legislation on the force of res judicata of a final decision of a national court by which that court held, in the context of a dispute relating to the legality of the imposition of multiannual penalties, that an single area payment application is ineligible because it fails to comply with the requirement laid down in national law to provide proof of the right to use the area, which prevents it from analysing the compliance of those national requirements with EU law in a new dispute concerning the legality of the measure to recover the sums unduly paid to the applicant, since that measure is based on the same facts and the same national legislation which were analysed in the earlier final judicial decision concerning the legality of the imposition of multiannual penalties.

82.

As a preliminary point, attention should be drawn to the importance, both for the EU legal order and for the national legal systems, of the principle of res judicata. In order to ensure stability of the law and legal relations, as well as the sound administration of justice, it is important that judicial decisions which have become definitive after all rights of appeal have been exhausted or after expiry of the time limits provided for in that regard can no longer be called into question. ( 49 )

83.

Accordingly, EU does not require that a national court disapply domestic rules of procedure conferring finality on a decision, even if to do so would make it possible to remedy an infringement of EU law on the part of the decision in question. ( 50 )

84.

In the absence of EU legislation in this area, the rules implementing the principle of res judicata are a matter for the national legal order, in accordance with the principle of the procedural autonomy of the Member States. However, those rules must not be less favourable than those governing similar domestic actions (principle of equivalence); nor may they be framed in such a way as to make it in practice impossible or excessively difficult to exercise the rights conferred by EU law (principle of effectiveness). ( 51 )

85.

In that regard, the Court has already held that every case in which the question arises as to whether a national procedural provision makes the application of EU law impossible or excessively difficult must be analysed by reference to the role of that provision in the procedure, its progress and its special features, viewed as a whole, before the various national bodies. For those purposes, account must be taken, where appropriate, of the basic principles of the domestic judicial system, such as protection of the rights of the defence, the principle of legal certainty and the proper conduct of procedure. ( 52 )

86.

In addition, it is appropriate to recall that it is for the national courts to interpret, as far as it is possible, the provisions of national law in such a way that they can be applied in a manner which contributes to the implementation of EU law. ( 53 ) It must be made clear that the requirement to interpret national law in conformity with EU law includes the obligation, on national courts, including those ruling as courts of last instance, to alter, where necessary, settled case-law if that case-law is based on an interpretation of national law that is incompatible with EU law. Consequently, a national court cannot validly claim that it is impossible for it to interpret a provision of national law in a manner that is consistent with EU law merely because that provision has been interpreted by other courts in a manner that is incompatible with EU law or is applied in such a manner by the relevant national authorities. ( 54 )

87.

In the present case, the question arises whether the interpretation of the principle of res judicata to which the referring court makes reference, under which, in the light of Article 431(2) of the Code of Civil Procedure, the force of res judicata likewise operates in cases in which the new proceedings put the court in the position of having to restate or contradict, entirely or partially, the legal relationship which it upheld or which was rejected in the earlier judgment, is compatible with the principle of effectiveness as referred to in EU law.

88.

That question is raised by the fact that the decision which imposed multiannual penalties on Avio Lucos, on similar grounds to those at issue in the present case, was first the subject of administrative appeals and then of judicial appeals, all of which were dismissed. ( 55 ) More specifically, it is apparent from the decision to refer the matter that the dispute in the main proceedings is based on the same material legal relationship as that which gave rise to the final judicial decisions (that is to say, the invalidity of the concession agreement because the applicant is not a keeper of animals in the context of the same single area payment application for the 2014 marketing year). In any case, it is for the referring court to determine whether, under domestic law, the force of res judicata which attaches to those judgments encompasses the present case or elements of it and, where appropriate, to examine the consequences laid down in that law.

89.

In that regard, it should however be observed that, since the subject of the earlier decision and that of the present case are different, in so far as those cases concern different administrative decisions, even though they relate to identical questions of fact and of law, the referring court could interpret Article 431(2) of the Code of Civil Procedure taking into account the fact that the force of res judicata, if it is based on broader criteria, may make it in practice impossible or excessively difficult to exercise the rights conferred by EU law.

90.

It is therefore necessary to establish, more specifically, whether the interpretation of Article 431(2) of the Code of Civil Procedure set out above can be justified with a view to protecting the principle of legal certainty, having regard to the consequences resulting therefrom for the application of EU law.

91.

In that regard, I note that such a broad interpretation of Article 431(2) of the Code of Civil Procedure, in so far as the subject of the decisions at issue is different, would prevent not only the possibility of calling into question the judicial decision having the force of res judicata if that decision were to include an infringement of EU law, but also the recovery decision, which might also include the same infringement of EU law, from being called into question. Even more significantly, the force of res judicata could, potentially, be applied in respect of any other administrative decision concerning an aid applicant who does not keep animals in order to carry out an agricultural activity.

92.

Accordingly, an application of the principle of res judicata to that effect would mean that, if the final judicial decision were to be based on an interpretation of rules that are contrary to EU law, for example by making the ‘keeping’ of animals an absolute criterion of eligibility for the support at issue, the incorrect application of those rules would be repeated every time that a concessionaire is excluded from that scheme on the same grounds, there being no possibility of correcting that misinterpretation.

93.

In the light of the foregoing, I propose that the Court answer the fourth question referred for a preliminary ruling to the effect that EU law is to be interpreted as not requiring a national court to disapply domestic rules of procedure conferring finality on a judicial decision, even if to do so would make it possible to remedy an infringement of EU law. At the same time, the detailed rules governing the implementation of the principle of res judicata must not be framed in such a way as to make it in practice impossible or excessively difficult to exercise the rights conferred by EU law.

94.

In the light of the foregoing, I propose that the Court answer the questions referred by the Curtea de Apel Timişoara (Court of Appeal, Timişoara, Romania) for a preliminary ruling as follows: