Appropriate Technology for Tibetans (ApTibet) is a UK charity that helps
Tibetan refugees, mainly in northern India, Nepal and in China. The
charity's principal trustee is the Dalai Lama. In 2000/2001 ApTibet won
75% EC funding for four projects, two of which had been completed as of
2005, the other two being well on the way to completion.

In 2005 the EC suddenly cancelled all four contracts, and then demanded
repayment of all grant moneys paid - some 2M euros. The reason given was
that ApTibet had subcontracted part of the work to another charity,
Appropriate Technology Asia. There is no suggestion that ApTibet had
mishandled the projects, nor that there was any deficiency in their
reporting or accounting procedures. The EC must have been aware of how
the work was to be handled, as the use of the subcontractor was detailed
in the accounting reports that were provided to the Commission. ApTibet
are unable to execute this work "on the ground", because a charity
having the Dalai Lama as it's chief trustee cannot operate in China.
Appropriate Technologies Asia, on the other hand, is technically a
distinct charity, with completely different trustees.

 http://www.atasia.org.uk/ata.aspx

In response to the Commission's action, ApTibet went to court to obtain
a ruling against the EC, preventing them from clawing back the funds,
and requiring them to pay the outstanding 400,000EU due. The Commission
failed to respond to any of the lawyers' correspondence, and did not
answer the court case, with the result that ApTibet won a default
judgement. The Commission is now asking the High Court to rule that it
has no jurisdiction, and that under the terms of the cancelled
contracts, jurisdiction resides in Brussels. Nonetheless they are also
asking the High Court to overturn its earlier judgement against them.

ApTibet cannot repay the grant funds; they have been spent (properly, as
the Commission acknowledges) on the projects they were intended for.
Since 2005, the charity has been unable to carry out its work or raise
funds, because of the Commission's actions. If Mondays' court action is
not a complete success for ApTibet they will be destroyed, as they don't
have funds to continue fighting the Commission, whether in the UK or in
Brussels.

It seems likely that the Commission is acting in this way as a result of
pressure from the Chinese government; it's hard to see what other
explanation there could be.