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Judgment of the Court of 17 December 1956. - M. René Bourgaux v Common Assembly of the European Coal and Steel Community. - Case 1/56.
European Court reports
French edition Page 00421
Dutch edition Page 00451
German edition Page 00443
Italian edition Page 00417
English special edition Page 00361
Danish special edition Page 00039
Greek special edition Page 00115
Portuguese special edition Page 00117
Summary
Parties
Subject of the case
Grounds
Decision on costs
Operative part
Keywords
++++
1 . SERVANTS OF THE COMMUNITY - APPLICATION FOR THE ANNULMENT OF AN ADMINISTRATIVE DECISION - JURISDICTION OF THE COURT
( TREATY, ARTS . 42 AND 38 )
2 . SERVANTS OF THE COMMUNITY - PERIOD BEFORE THE ENTRY INTO FORCE OF THE STAFF REGULATIONS - CONTRACTS OF EMPLOYMENT - LIMITING THE TERM OF SUCH CONTRACTS
( TREATY, ART . 78 - CONVENTION ON THE TRANSITIONAL PROVISIONS THIRD PARAGRAPH OF ART . 7 )
3 . SERVANTS OF THE COMMUNITY - ABOLITION OF POST - POWERS OF THE ADMINISTRATION - REVIEW BY THE COURT - REINSTATEMENT OF THE SERVANT
( TREATY, ART . 31 )
4 . OFFICIALS OF THE COMMUNITY - STAFF REGULATIONS - ADOPTION BY THE COMMITTEE OF PRESIDENTS - ENTRY INTO FORCE
( TREATY, ART . 78 - CONVENTION ON THE TRANSITIONAL PROVISIONS, THIRD PARAGRAPH OF ART . 7 )
5 . SERVANTS OF THE COMMUNITY - PERIOD PRIOR TO THE ENTRY INTO FORCE OF THE STAFF REGULATIONS - SITUATION DURING SUCH PERIOD
( CONVENTION ON THE TRANSITIONAL PROVISIONS, THIRD PARAGRAPH OF ART . 7 )
6 . COSTS
( RULES OF PROCEDURE, ART . 61 - RULES OF THE COURT CONCERNING COSTS, SECOND SUBPARAGRAPH OF ART . 2 ( 1 ) AND ART . 5 )
Summary
1 . THE GENERAL WORDING OF ARTICLE 42 OF THE TREATY MAKES IT IMPOSSIBLE TO CONCLUDE THAT AN ARBITRATION CLAUSE CAN BE SUBJECT TO A BINDING LEGAL LIMITATION WHICH IN THIS CASE WOULD RULE OUT THE REMEDY OF AN APPLICATION FOR ANNULMENT .
THE REMEDIES AVAILABLE IN ADMINISTRATIVE MATTER TO THE STAFF OF ALL FOUR INSTITUTIONS ARE ORGANICALLY DISTINCT FROM THE RESTRICTED NATURE OF THE REVIEW BY THE COURT WHICH, UNDER ARTICLE 38 OF THE TREATY, APPLIES TO THE ACTIVITIES OF THE ASSEMBLY AS AN INSTITUTION .
SINCE THE AIM OF THESE REMEDIES IS TO RESTORE CONTRACTUAL RIGHTS OR RIGHTS UNDER THE STAFF REGULATIONS WHICH HAVE BEEN INTERFERED WITH IT INVOLVES THE RIGHT TO APPLY FOR THE ANNULMENT OF ANY MEASURE INFRINGING THEM .
2 . BY LIMITING THE DURATION OF CONTRACTS OF EMPLOYMENT THE PARTIES DID NOT INTEND THAT THEY SHOULD COME TO AN END BY THE MERE EFFLUX OF THE TERM FIXED; BUT TO PROVIDE FOR A TRANSITIONAL SITUATION MADE NECESSARY IN VIEW OF THE TIME REQUIRED TO DRAFT STAFF REGULATIONS .
3 . IF DEPARTMENTS ARE REORGANIZED AND STAFF IS REDUCED THE ALLOCATION OF POSTS AMONG FORMER HOLDERS IS WITHIN THE DISCRETION OF THE ADMINISTRATION, BUT IT IS FOR THE COURT TO CONSIDER WHETHER THIS DISCRETION HAS BEEN LAWFULLY EXERCISED OR WHETHER THE RELEVANT DECISION AMOUNTS TO A MISUSE OF POWERS EITHER BECAUSE A RIGHT VESTED IN THE SERVANT CONCERNED BY VIRTUE OF HIS GRADE AND SENIORITY WAS WILFULLY DISREGARDED OR BECAUSE IT WAS A CONCEALED DISCIPLINARY MEASURE .
IF DEPARTMENTS ARE REORGANIZED THE DECISION TO ASSIGN A SERVANT TO A NEW POST MUST BE BASED ON PERSONAL QUALIFICATIONS HAVING REGARD TO THE ABILITIES REQUIRED FOR EACH NEW POST TOGETHER WITH EXPERIENCE IN THE RELEVANT FIELD .
IF ASSIGNMENT TO ANOTHER POST HAVING THE SAME GRADE IS IMPOSSIBLE, THE ADMINISTRATION, IN THE ABSENCE OF A PROVISION UNDER THE CONTRACT OR THE STAFF REGULATIONS, IS NOT UNDER A DUTY TO OFFER THE SERVANT A POSITION SUBORDINATE TO THE ONE WHICH HAS BEEN ABOLISHED .
4 . WHEN THE COMMITTEE OF PRESIDENTS USED THE EXPRESSION " FINAL ADOPTION " IN RELATION TO THE WORDING OF A DRAFT OF THE STAFF REGULATIONS IT WAS NOT PREJUDGING THE DATE OF THE ENTRY INTO FORCE OF THE STAFF REGULATIONS, SINCE THAT WAS DEPENDENT ON STEPS TO BE TAKEN BY EACH OF THE FOUR INSTITUTIONS .
5 . THE FACT THAT A SERVANT'S CONTRACT OF EMPLOYMENT WAS CONCLUDED BEFORE THE ENTRY INTO FORCE OF THE STAFF REGULATIONS DOES NOT IMPLY THAT THE PROVISIONS OF A DRAFT OF THE STAFF REGULATIONS WHICH HAVE NOT YET ENTERED INTO FORCE, ESPECIALLY THOSE PROVIDING FOR AND REGULATING THE ASSIGNMENT OF NON-ACTIVE STATUS, ARE TO BE APPLIED IN THEIR ENTIRETY IN ADVANCE .
NEVERTHELESS, IF AN EMPLOYEE'S POST IS ABOLISHED AND HE CANNOT BE ASSIGNED TO ANOTHER POST THE ADMINISTRATION MUST BE GUIDED BY THE DRAFT OF THE STAFF REGULATIONS AS FAR AS THE PAYMENT OF FAIR COMPENSATION FOR THE DAMAGE SUFFERED IS CONCERNED .
6 . THE QUESTION WHETHER AN ACTION IS UNREASONABLE AND VEXATIOUS AND FOR THIS REASON JUSTIFIES AN ORDER THAT THE APPLICANT MUST PAY THE COSTS MUST BE DETERMINED SUBJECTIVELY FROM THE POINT OF VIEW OF THE APPLICANT .
Parties
IN CASE 1/56
RENE BOURGAUX, ASSISTED BY PIERRE CHAREYRE, ADVOCATE AT THE CONSEIL D'ETAT AND THE COUR DE CASSATION, PARIS, AND HENRI ROLIN, ADVOCATE AT THE COUR D'APPEL, BRUSSELS, WITH AN ADDRESS FOR SERVICE IN LUXEMBOURG AT THE CHAMBERS OF G . MARGUE, 6 RUE ALPHONSE MUNCHEN, APPLICANT,
V
THE COMMON ASSEMBLY OF THE EUROPEAN COAL AND STEEL COMMUNITY, REPRESENTED BY ITS SECRETARY GENERAL, M.F.F.A . DE NEREE TOT BABBERICH, ACTING AS AGENT, ASSISTED BY PIERRE ANSIAUX, ADVOCATE AT THE COUR DE CASSATION, BELGIUM, AND JEAN COUTARD, ADVOCATE AT THE CONSEIL D'ETAT AND THE COUR DE CASSATION, PARIS, WITH AN ADDRESS FOR SERVICE IN LUXEMBOURG AT ITS OFFICES, 19A, RUE BEAUMONT, DEFENDANT,
Subject of the case
APPLICATION FOR THE ANNULMENT OF A DECISION OF THE BUREAU OF THE COMMON ASSEMBLY AND OF AN ORDER OF ITS PRESIDENT,
Grounds
P . 367
A - JURISDICTION AND ADMISSIBILITY
IN THIS CASE THE COURT'S JURISDICTION ARISES UNDER ARTICLE 42 OF THE TREATY READ TOGETHER WITH ARTICLE 17 OF THE APPLICANT'S CONTRACT OF EMPLOYMENT WHICH REFERS TO " THE TERMS OF THE RULES OF PROCEDURE IN FORCE "; ALL THE VARIOUS VERSIONS OF THE RULES OF PROCEDURE OF THE COMMON ASSEMBLY HAVE CONTAINED AN ARTICLE CONFERRING JURISDICTION UPON THE COURT .
THE DEFENDANT MAINTAINS THAT, SINCE THE APPLICANT CLAIMS THE ANNULMENT OF A DECISION AFFECTING HIM, THE JURISDICTION OF THE COURT IS GOVERNED AND LIMITED BY THE PROVISIONS OF ARTICLE 38 OF THE TREATY, UNDER WHICH THE APPLICATION IS INADMISSIBLE .
NEVERTHELESS THE GENERAL WORDING OF ARTICLE 42 MAKES IT IMPOSSIBLE TO CONCLUDE THAT AN ARBITRATION CLAUSE CAN BE SUBJECT TO A BINDING LEGAL LIMITATION WHICH IN THIS CASE WOULD RULE OUT THE REMEDY OF AN APPLICATION FOR ANNULMENT .
THE REMEDIES AVAILABLE IN ADMINISTRATIVE MATTERS TO THE STAFF OF ALL FOUR INSTITUTIONS ARE ORGANICALLY DISTINCT FROM THE RESTRICTED NATURE OF THE REVIEW BY THE COURT WHICH UNDER ARTICLE 38 OF THE TREATY APPLIES TO THE ACTIVITIES OF THE ASSEMBLY AS AN INSTITUTION .
SINCE THE AIM OF THESE REMEDIES IS TO RESTORE CONTRACTUAL RIGHTS OR RIGHTS UNDER THE STAFF REGULATIONS WHICH HAVE BEEN INFRINGED, THE ANNULMENT OF A MEASURE INFRINGING THEM CANNOT BE EXCLUDED IN AN APPROPRIATE CASE .
THEREFORE THE COURT HAS JURISDICTION TO HEAR THIS CASE AND THE APPLICATION IS ADMISSIBLE .
B - THE PURPOSE OF THE APPLICATION
IN HIS ORIGINATING APPLICATION THE APPLICANT LAUNCHES A GENERAL ATTACK ON THE DECISION OF THE BUREAU OF THE COMMON ASSEMBLY OF 25 NOVEMBER 1955 ( IN CONJUNCTION WITH ORDER NO 1087 OF THE PRESIDENT OF THAT INSTITUTION DATED 13 DECEMBER 1955 ).
THE DISCUSSIONS AND DECISIONS OF THE BUREAU ON THAT DAY ACCORDING TO THE MINUTES OF PROCEEDINGS OF THAT SITTING WERE COMPLEX AND MANY OF THEM ARE INTERCONNECTED .
DURING THE HEARING THE APPLICANT LIMITED HIS CHALLENGE TO THE MANY DECISIONS OF THE BUREAU TO THE ONE ( ITEM NO 15 OF THE MINUTES ) PROVIDING FOR THE NON-RENEWAL OF HIS CONTRACT AND HAS THEREBY ADMITTED THAT THE INSTITUTION IS ENTITLED TO ORGANIZE ITS ADMINISTRATION IN THE BEST INTERESTS OF THE SERVICE .
P . 368
IN THESE CIRCUMSTANCES THE APPLICANT'S OFFER IN HIS REPLY TO PROVE BY MEANS OF A NEW EXPERT'S REPORT THAT THE REORGANIZATION HAS NOT ACHIEVED ITS OBJECT AS WELL AS THE DEFENDANT'S REQUEST FOR THE PRESENTATION OF EVIDENCE BY EXPERTS WHOM IT CONSULTED ARE TO BE REJECTED AS HAVING NO PURPOSE .
C - THE SUBSTANCE OF THE CASE
THE APPLICANT CONCLUDES FROM THE GENERAL TENOR OF HIS CONTRACT, WHICH ACCORDING TO THE PROVISIONS OF THE THIRD PARAGRAPH OF ARTICLE 7 OF THE CONVENTION ON THE TRANSITIONAL PROVISIONS APPEARS TO FORESHADOW THE STAFF REGULATIONS, THAT HE HAS A RIGHT " ANTE-DATING THE STAFF REGULATIONS " TO PREVENT THE DEFENDANT FROM TERMINATING THE RELATIONSHIP BETWEEN THE PARTIES, EVEN THOUGH SUBJECT TO A FIXED TERM, EXCEPT FOR COMPELLING REASONS .
BY LIMITING THE DURATION OF THE CONTRACT TO A FIXED TERM THE INTENTION OF THE PARTIES WAS TO PROVIDE FOR A TRANSITIONAL SITUATION MADE NECESSARY IN VIEW OF THE TIME REQUIRED TO DRAFT STAFF REGULATIONS .
THE DEFENDANT DOES NOT DISPUTE THIS EXPLANATION BUT, IN SO FAR AS THE NON-RENEWAL OF THE CONTRACT IS CONCERNED, RELIES ON THE FACT THAT SINCE MR BOURGAUX'S POST HAD BEEN ABOLISHED IT COULD NOT CONTINUE TO EMPLOY HIM IN THE SERVICE .
IN FACT FOLLOWING A REORGANIZATION OF ITS ADMINISTRATION FOR REASONS OF ECONOMY IT EFFECTED STAFF REDUCTIONS AFTER CONSULTING EXPERTS IN THIS FIELD .
IN PARTICULAR, SINCE THE NUMBER OF HEADS OF DEPARTMENT AND HEADS OF DIVISION WAS REDUCED BY TWO UNITS, THE APPLICANT COULD NOT BE KEPT ON IN HIS GRADE UNLESS ANOTHER SERVANT OCCUPYING A POST UNAFFECTED BY THE STAFF REORGNIZATION WAS DISMISSED .
IN THIS RESPECT IT IS APPROPRIATE TO OBSERVE THAT IN THIS CASE THERE WAS A COMPLETE RECONSTRUCTION OF THE ASSEMBLY'S ADMINISTRATION FOLLOWED BY A REALLOCATION OF POSTS .
FIVE POSTS OF HEADS OF DEPARTMENT OR DIVISION WERE ABOLISHED AND THREE NEW POSTS WERE CREATED .
IN THESE CIRCUMSTANCES THE PROBLEM TO BE RESOLVED WAS WHICH OF THE FIVE HOLDERS OF THESE POSTS WERE TO BE GIVEN THE THREE NEW POSTS .
ALTHOUGH THE SELECTION WAS WITHIN THE DISCRETION OF THE BUREAU OF THE COMMON ASSEMBLY, IT IS NEVERTHELESS APPROPRIATE TO CONSIDER WHETHER IT HAS BEEN PROPERLY EXERCISED OR WHETHER THE RELEVANT DECISION, AS THE APPLICANT CLAIMS, AMOUNTS TO A MISUSE OF POWERS EITHER BECAUSE A RIGHT VESTED IN HIM BY VIRTUE OF HIS GRADE AND SENIORITY WAS WILFULLY DISREGARDED OR BECAUSE IT WAS A CONCEALED DISCIPLINARY MEASURE .
THE SELECTION SHOULD HAVE BEEN DETERMINED BY PERSONAL QUALIFICATIONS HAVING REGARD TO THE ABILITIES REQUIRED FOR EACH NEW POST TOGETHER WITH EXPERIENCE IN THE RELEVANT FIELD .
P . 369
IN THIS CASE THE APPLICANT'S PREVIOUS DUTIES HAD BEEN SPREAD OVER SEVERAL DIVISIONS .
THE DISMISSAL OF OTHER EMPLOYEES WHO WERE ALREADY IN POSITIONS OF AUTHORITY COULD NOT BE JUSTIFIED SINCE THE INTERESTS OF EVERYONE AFFECTED DESERVED EQUAL CONSIDERATION .
MOREOVER THERE WAS NO REASON WHY THE DEFENDANT SHOULD DECIDE TO ASSIGN ONE OF THE POSTS TO THE APPLICANT RATHER THAN TO THE THREE OTHER RECLASSIFIED EMPLOYEES WHOSE ABILITY HAS NEVER GIVEN GROUNDS FOR CRITICISM .
THERE ARE THEREFORE NO GROUNDS FOR THE VIEW THAT THE APPLICANT WAS THE VICTIM OF A DECISION BASED ON REASONS OTHER THAN THE EXIGENCIES OF THE SERVICES .
NEITHER CAN THE COURT SUBSCRIBE TO THE VIEW THAT THE SELECTION ADVERSELY AFFECTING THE APPLICANT AMOUNTED TO A CONCEALED SANCTION .
ALTHOUGH MR BOURGAUX'S PERSONAL FILE CONTAINING THE CORRESPONDENCE, WHICH WAS PRODUCED TO THE COURT, SHOWS THAT CERTAIN DIFFICULTIES AROSE BETWEEN HIM AND HIS SUPERIORS, IT ALSO APPEARS FROM THESE LETTERS, WHICH MAKE IT CLEAR THAT HE WAS HIGHLY REGARDED, AND FROM THE DEFENDANT'S STATEMENTS AT THE HEARING, THAT THE COMMON ASSEMBLY HAD NO CAUSE TO CRITICIZE HIM .
AS FAR AS CONCERNS THE UNFAVOURABLE VIEWS EXPRESSED BY THE SECRETARY GENERAL OF THE ASSEMBLY RECORDED IN STATEMENTS COMMUNICATED TO THE PRESIDENT, WHICH SURPRISINGLY CONTRADICT THE RECOMMENDATIONS ALREADY CONTAINED IN THE DOCUMENTS CLEARLY REFERRED TO, IT MAY BE NOTED, WITHOUT ITS BEING NECESSARY TO CONSIDER THEIR MORE OR LESS CONFIDENTIAL NATURE, THAT THERE IS NOTHING TO SHOW THAT THEY WERE BROUGHT TO THE NOTICE OF THE BUREAU AND INFLUENCED ITS DECISION, ESPECIALLY AS THE ONLY IMPORTANT OPINION, THAT OF 27 JANUARY 1955, WAS GIVEN ALMOST ONE YEAR BEFORE THE CONTESTED MEASURE .
THIS SUBMISSION IS THEREFORE UNFOUNDED .
THE APPLICANT'S ARGUMENT THAT THE DEFENDANT SHOULD HAVE OFFERED HIM SOME OTHER SIMILAR POST IN ITS ADMINISTRATION CANNOT BE ACCEPTED, BECAUSE THE REORGANIZATION OF THE DEPARTMENTS MADE SUCH A STEP IMPOSSIBLE . MOREOVER THERE WAS NO OBLIGATION TO OFFER A POSITION SUBORDINATE TO THE ONE WHICH HAD BEEN ABOLISHED, SINCE EVEN THE DRAFT STAFF REGULATIONS ONLY PROVIDE IN SUCH A CASE FOR ENTITLEMENT TO A POST OF THE SAME GRADE AND COMPENSATION IF SUCH REINSTATEMENT IS IMPOSSIBLE; FURTHERMORE THE EXPERT'S OPINION DOES NOT MENTION SUCH A POSSIBILITY AND THERE IS NO GROUND FOR ASSUMING THAT ANY SUCH POST WOULD HAVE BEEN AVAILABLE .
THE APPLICANT SUBMITS IN THE ALTERNATIVE THAT THE EFFECT OF THE REFUSAL TO INCORPORATE HIM IN THE REORGANIZED ADMINISTRATION OF THE ASSEMBLY SHOULD NOT HAVE BEEN THE COMPLETE TERMINATION OF ALL LEGAL RELATIONS BETWEEN THE PARTIES BUT THE ASSIGNMENT TO HIM OF NON-ACTIVE STATUS TOGETHER WITH ALL THE ATTENDANT CONSEQUENCES OF SUCH A STEP, FOR INSTANCE THAT HE MIGHT HAVE A PRIOR CLAIM TO BE REINSTATED AND, IF THIS PROVED TO BE IMPOSSIBLE, THE RIGHT TO A PENSION .
HE BASES THIS SUBMISSION ON THE PROVISIONS OF THE STAFF REGULATIONS OF THE COMMUNITY WHICH HE MAINTAINS WERE ADOPTED BY THE COMMITTEE OF PRESIDENTS ON 12 DECEMBER 1955 AND REPLACED THE PROVISIONAL STAFF REGULATIONS OF 1 JULY 1953 . HOWEVER THE CONSTRUCTION WHICH THE APPLICANT WISHED TO PLACE UPON THE DECISION OF THE COMMITTEE OF PRESIDENTS IS WRONG .
P . 370
THIS DECISION WAS ONLY CONCERNED WITH THE PROVISIONS OF THE DRAFT REGULATIONS AND THIS MOREOVER DID NOT PREVENT DRAFT AMENDMENTS FROM BEING DISCUSSED AT THE MEETING OF THE COMMITTEE OF PRESIDENTS ON 28 JANUARY 1956 . THE EXPRESSION " FINAL ADOPTION " THEREFORE HAD NO RELEVANCE EXCEPT WITHIN THE COMMITTEE OF PRESIDENTS AND THE DATE OF THE ENTRY INTO FORCE OF THE STAFF REGULATIONS IN THE VARIOUS INSTITUTIONS WAS STILL INDETERMINATE, SINCE IT IN FACT DEPENDED ON THE COMPLETION OF THE ANNEXES APPLICABLE TO EACH INSTITUTION AND ON THE DRAWING UP BY A JOINT COMMITTEE OF THE GENERAL PROVISIONS WITHOUT WHICH THE STAFF REGULATIONS COULD NOT BE APPLIED .
EVEN IF THE STAFF REGULATIONS HAD BEEN APPLICABLE BEFORE THEIR ENTRY INTO FORCE AND PUBLICATION AND HAD REPLACED THE PROVISIONAL REGULATIONS AS SOON AS THEY HAD BEEN " ADOPTED ", THE POSITION STILL REMAINS THAT THEIR PROVISIONS ON THE ASSIGNMENT OF NON-ACTIVE STATUS WOULD NOT HAVE APPLIED TO THE APPLICANT SINCE HE HAD NOT PREVIOUSLY BEEN ESTABLISHED .
THIS SUBMISSION MUST THEREFORE BE REJECTED AS UNFOUNDED .
THE POSITION IS THE SAME WITH REGARD TO THE ARGUMENT THAT THE STAFF REGULATIONS APPLIED DE FACTO, WHICH IS INFERRED FROM THE FACT THAT FOLLOWING A REQUEST BY EMPLOYEES OF THE COMMON ASSEMBLY TO THE PRESIDENT THAT THE STAFF REGULATIONS MIGHT BE APPLIED TO THEM, ORDERS ISSUED BY HIM PROVIDED ON THEIR BEHALF FOR A SPECIAL FORM OF EXTENSION OF THEIR CONTRACTS, WHICH AMOUNTED IN PRINCIPLE TO THE REVOCATION AS FROM 31 DECEMBER 1955 OF THE PROVISIONAL STAFF REGULATIONS OF 1 JULY 1953 BUT RETAINING IN AN ANNEX THE PROVISIONS THEREIN MENTIONED UNTIL THE DATE WHEN THE DEFINITIVE STAFF REGULATIONS ENTERED INTO FORCE .
THE APPLICANT HOWEVER COULD NOT DERIVE ANY BENEFIT FROM SUCH AN EXTENSION BECAUSE THE NEW STAFF ORGANIZATION GOVERNED BY THE ABOVE-MENTIONED REGULATIONS ENTERED INTO FORCE ON 1 JANUARY 1956, BUT DID NOT PROVIDE A POST FOR HIM .
FINALLY, THE APPLICANT CLAIMS THAT, SINCE HIS CONTRACT WAS CONCLUDED BEFORE THE ENTRY INTO FORCE OF THE STAFF REGULATIONS, IT GIVES HIM THE RIGHT TO HAVE APPLIED TO HIM IN ADVANCE THE PROVISIONS OF THE STAFF REGULATIONS RELATING TO THE POSSIBILITY OF THE ABOLITION OF A POST AND IN PARTICULAR THE ASSIGNMENT OF NON-ACTIVE STATUS .
THERE ARE HOWEVER IN THIS CASE NO GROUNDS FOR THE DIRECT APPLICATION IN THEIR ENTIRETY OF THE RULES RELATING TO ASSIGNMENT OF NON-ACTIVE STATUS, WHICH WOULD AMOUNT TO THE APPLICATION IN ADVANCE OF A DRAFT WHICH WAS STILL IN THE PROCESS OF BEING DRAFTED .
FURTHERMORE THE STAFF REGULATIONS COULD NOT IN ANY CIRCUMSTANCES APPLY TO THE APPLICANT AS OF RIGHT, BECAUSE HE HAS NOT BEEN ESTABLISHED, WHICH IS A CONDITION PRECEDENT TO THEIR APPLICATION, AND BECAUSE THE RELEVANT BUDGET RULES AND ESTIMATES HAD NOT BEEN DRAWN UP .
WHEN THE BUREAU OF THE COMMON ASSEMBLY TOOK ITS DECISION IT HAD TO BE GUIDED BY THE PROVISIONS OF THE DRAFT STAFF REGULATIONS GOVERNING THE CONSEQUENCES OF ABOLITION OF A POST .
P . 371
IN THIS CONNEXION THE BUREAU OF THE ASSEMBLY DECIDED TO AWARD THE APPLICANT NOT ONLY THE MINIMUM COMPENSATION PROVIDED FOR UNDER ARTICLE 15 OF HIS CONTRACT BUT ALSO COMPENSATION EQUAL TO HIS ENTIRE SALARY FOR TWO COMPLETED YEARS . THE COMPENSATION WHICH THE BUREAU OF THE ASSEMBLY HAS THUS AWARDED THE APPLICANT IS IN KEEPING WITH ITS OBLIGATION TO BE GUIDED BY THE RULES SPECIFIED IN THE DRAFT STAFF REGULATIONS, EVEN THOUGH THE DEFENDANT REFERRED IN ITS ORAL ARGUMENT TO DRAFT REGULATIONS WHICH AT THE TIME HAD BEEN WITHDRAWN AND REPLACED .
MOREOVER THE APPLICANT HAS NOT MADE ANY COMPLAINT AS TO THE AMOUNT OF THE COMPENSATION GRANTED .
THIS SUBMISSION IS UNFOUNDED .
THE APPLICANT'S APPLICATION MUST BE DISMISSED .
Decision on costs
THE PARTIES HAVE FAILED IN SOME OF THEIR SUBMISSIONS AND IN PARTICULAR THE DEFENDANT HAS FAILED IN ITS SUBMISSION THAT THE APPLICATION IS INADMISSIBLE; IT WOULD THEREFORE BE APPROPRIATE FOR THE PARTIES TO BEAR THEIR OWN COSTS .
IN THIS CASE THE DEFENDANT SUBMITS THAT MR BOURGAUX'S APPLICATION IS FRIVOLOUS AND VEXATIOUS AND THAT HE SHOULD THEREFORE BE ORDERED TO BEAR THE ENTIRE COSTS . ALTHOUGH THE COURT HAS OBJECTIVELY ACKNOWLEDGED THAT THE INSTITUTION, WHICH RELIES ON THE FACT THAT OWING TO THE REORGANIZATION OF ITS DEPARTMENTS IT COULD NOT KEEP THE APPLICANT ON ITS STAFF, HAS ACTED IN GOOD FAITH, THE APPLICANT FROM HIS POINT OF VIEW MIGHT DOUBT WHETHER HIS REDUNDANCY WAS UNAVOIDABLE ESPECIALLY IN VIEW OF THE FACT THAT THE DEFENDANT'S BEHAVIOUR WAS, AS MENTIONED ABOVE, TO SOME EXTENT EQUIVOCAL .
AS THE APPLICATION WAS THEREFORE NOT VEXATIOUS THE COURT DECIDES THAT THE PARTIES MUST BEAR THEIR OWN COSTS .
Operative part
THE COURT
HEREBY :
DECLARES THAT MR BOURGAUX'S APPLICATION IS ADMISSIBLE;
DISMISSES MR BOURGAUX'S APPLICATION AS UNFOUNDED;
ORDERS EACH PARTY TO BEAR ITS OWN COSTS . |
OPINION OF MR ADVOCATE GENERAL LAGRANGE ( )
Summary
I — The facts
II — The application for annulment (Case 7/56)
Admissibility
Jurisdiction of the Court
Examination of the substance
Scope of the decisions in issue
Withdrawal of individual decisions
Interpretation of Article 78 of the Treaty
Application thereof to the present case
Final conclusion
III — The applications for damages (Cases 3 to 7/57)
Admissibility
Liability
Reparation for the damage
Amount of the injury
Final conclusion
Mr President,
Members of the Court,
The applications before the Court involve particularly difficult points of interpretation of the provisions of Article 78 of the Treaty as regards the nature and the scope of the powers concerning staff matters conferred by that article on the committee referred to as ‘the Committee of the Four Presidents’, in relation to those of the other institutions of the Community. Thus the action goes far beyond the usual scope of disputes between an administrative authority and its servants: in fact, it concerns the very balance of powers set up by the Treaty. This is sufficient indication of the importance of the judgment which is to be delivered in these cases. By putting an end to the controversies of which the said Article 78 has been the subject since the entry into force of the Treaty, that judgment will give the various authorities responsible for staff matters a clearer idea of the limits of their respective powers, and thereby will enable them better to conduct the administrative life of the Community. This is also the justification for the exhaustiveness which I felt was required of my explanations, in an action in which the defendant administrative authority is to a large extent ‘morally’ in agreement with the applicants, and confines itself in its conclusions to relying upon the wisdom of the Court. Finally, I think that it is particularly necessary that the ECSC system should be clearly formulated and should be capable of application forthwith from day to day and without disputes, in view of the prospect of the entry into force in the not too distant future of the new European Treaties, which involve solutions to these questions which are very different from those contained in the present Treaty and which will require careful adjustments.
I — The facts
It is not my intention to give a complete chronological account of the elaboration of the Staff Regulations of the Community, since it was experienced by the Court itself as an institution, and since it has doubtless not been forgotten by the Members of the Court; I wish to mention only those aspects which seem essential to the understanding of this action. The problem of the Staff Regulations arose from the beginning out of Article 78 of the Treaty and Article 7 of the Convention on the Transitional Provisions. The third paragraph of the latter article, to which I shall return later, is worded as follows: ‘Until the Committee provided for in Article 78 of the Treaty has decided upon the size of the staff of the Community and has laid down staff regulations, the personnel required shall be engaged on a contractual basis’. Thus from the beginning, the nature of the links between the Community and the servants of the four institutions was of a contractual nature. But also from the beginning the idea was accepted that this was only a transitional period and that a system of staff regulations governed by public law should be substituted as soon as possible for the contractual system —‘as soon as possible’ meaning as soon as general Staff Regulations of Officials had been drawn up. The Assembly in particular had voted resolutions to that effect, and the Committee of Presidents had started to examine the drawing up of those general Staff Regulations. In the meantime, although they remained fixed term contracts, the nature of the contracts became less and less precarious; they were supplemented by regulations involving firm guarantees (discipline, leave, insurance scheme, etc.) applicable to all the staff of each institution; finally, the period of their validity was fixed in anticipation of the date envisaged for the entry into force of the Staff Regulations. Thus in its judgment in the Kergall case, the Court found that those contracts were by nature ‘contracts governed by public law which are the precursors of the Staff Regulations’, and drew from that theory certain legal consequences as to the ‘eligibility’ of staff in service to be brought within the ambit of the future Staff Regulations.
However, although the drawing up of the Staff Regulations was obviously a condition precedent to their entry into force, it was not the only one. For, in addition to the provisions making up the Staff Regulations properly so-called (general rights and duties of the servants, recruitment, promotion, discipline, leave, pensions, dismissal, positions, etc.), the substitution of a system of staff regulations for a contractual system presupposes the creation of the posts and the administrative services corresponding to the tasks which the administration must perform, and the fixing of the salary scales pertaining thereto. Moreover, it is necessary to lay down the conditions under which servants currently in service can be, according to the accepted form of words, ‘established’ in the new services, that is, brought within the ambit of the Staff Regulations and appointed to a definite grade and step, without necessarily fulfilling the conditions stipulated in this connexion by the Staff Regulations for the Future. Only after all this work has been carried out can individual measures of implementation be adopted.
However, in addition there was a double problem parallel to all the others: (1) Were those various operations to be common to the four institutions, and if so to what extent? (2) In that connexion, what was to be the role of the Committee of Presidents?
On the first point, it seems that the need not for absolute standardization but for what was described as ‘harmonization’ was accepted very quickly, on the basis of the following idea: the settlement of similar situations in the same way in the four institutions. Agreement was easily reached to place in this category everything which concerned what I have called the Staff Regulations properly so-called (general rules, recruitment, promotion, discipline, etc.); in relation to those questions, it was even decided in the end to put into force only one set of provisions, the general Staff Regulations of Officials of the Community, common to the four institutions, with only certain implementing rules particular to the institutions being set apart in annexes pertaining to each of them. The same was true of the drawing up of a common scale of grades, each one corresponding to a salary comprised within a maximum and a minimum limit. The various problems raised by the creation of posts, the correspondence between posts and the determination of the grades in which they were to be classified, that is to say the problems of harmonization properly so-called, gave rise to great difficulties of implementation which are at the root of this dispute.
On the second point, namely the role of the Committee of Presidents and the nature and extent of its powers in relation to those of the institutions, in particular those of the Assembly, it was not possible to define any common formula on which all four institutions were in agreement. Proceedings followed a rather empirical course, and it has only become possible since the Staff Regulations have been definitively approved and implemented to form an opinion, on the basis of their provisions, as to the legal system which emerges from them: that was not yet the case on 12 December 1955, the date of the adoption of the decisions the lawfulness of which is in issue.
On that date, the position was as follows:
(1)
A ‘scale’ comprising 13 grades, divided into steps, had been adopted by the Committee of Presidents at its meeting on 9 May 1955, at the same time as the corresponding scale of salaries was fixed;
(2)
On 25 November 1955, the Bureau of the Assembly had taken a whole series of decisions as a consequence of the re-organization of the departments of the Secretariat of the Common Assembly, which for the purposes of this opinion may be summarized as follows:
—
The adoption of a ‘job-description list’, that is of a complete table comprising the classification of the various posts into the grades and categories established by the Committee of Presidents together with a description in relation to each of the posts of the tasks to which it corresponded;
—
A decision to implement as from 1 January 1956 the scale of salaries fixed by the Committee of Presidents on 9 May 1955;
—
Finally, the following decision which 1 quote word for word:
‘On a proposal by Mr Fohrmann and after hearing a statement by Mr de Nerée in which he associates himself with the proposal made by the Bureau in restricted session, and after discussing the question, the Bureau decides:
Within the framework of the re-organization of the Secretariat of the Common Assembly, and taking into account in particular the decisions of the Bureau of 27 October 1954 on the subject of annual and biennial steps, the appointments and promotions set out below will take effect on the date indicated in the individual decisions or orders, which shall be communicated in good time by the President to each person concerned.’
There follows a list of all the officials of the Assembly, classified by grades and steps. The five applicants are to be found classified therein as follows:
Mr Genuardi, Grade 2, Step 1,
Mr Cicconardi, Grade 3, Step 5,
Mrs Steichen, Grade 8, Step 5
Mrs Couturaud, Grade 9A, Step 5,
Miss Algera, Grade 9A, Step 3.
Such was the situation in brief immediately before 12 December 1955. What happened on that day?
1.
The Committee of Presidents held its fourteenth meeting, at the end of which it declared that the Staff Regulations were definitively adopted with regard to the three institutions other than the Council of Ministers; in regard to the latter the Committee took note of the reservation expressed by its President in his statement to the effect that he was obliged to consult his colleagues before giving his definitive agreement. The minutes add:
‘As regards the procedure to be followed in drawing up the annexes, the Committee decides that the administrations of the institutions shall consult each other. At the same time, it specifies that such consultation shall be directed towards harmonizing the provisions, but that it shall not prejudice the discretionary nature of the annexes.’
Among those annexes (which according to the Staff Regulations are considered as falling within the jurisdiction of the institutions), there must appear that same table of posts, drawn up in correlation with the ‘job-description’ list and the classification of those posts in the scale drawn up by the Committee of Presidents.
2.
‘Late in the evening’ of the same day, to use the words of the Assembly, the President of that institution sent to each servant concerned an individual order signed by himself and the Secretary-General approving the application to that servant of the Staff Regulations. In view of the importance of those orders, from which the applicants purport to derive the vested rights upon which they seek to base their arguments, I consider it necessary to set the precise terms of them before the court. For example, this is the one which concerns Miss Algera:
‘The President of the Common Assembly of the European Coal and Steel Community.
Having regard to Article 43 of the Rules of Procedure of the Common Assembly, adopted by the Assembly at its session on 10 January 1953, amended at its sessions on 16 January 1953 and 12 May 1954;
Having regard to the provisions of the rules of Internal Administration of the Assembly, adopted by the Bureau at its meeting on 25 November 1955;
Having regard to the proceedings of the Bureau on 25 November 1955;
Having regard to the written declaration of Miss Algera dated 12 December 1955 to the effect that she wishes to benefit from the application of the Staff Regulations,
ORDERS:
1.
The contract of employment concluded between the Common Assembly of the European Coal and Steel Community, on the one hand, and Miss Algera, on the other hand, which expires on 31 December 1955, shall lapse on 31 December 1955.
2.
The Provisional Rules and the annexes thereto, which entered into force on 1 July 1953 pursuant to a decision of the Bureau of the Common Assembly of 15 June 1953, shall lapse on 31 December 1955.
3.
From 1 January 1956, Miss Dini Algera
SHALL BENEFIT FROM THE APPLICATION OF THE STAFF REGULATIONS,
shall be appointed to the grade of assistant I,
shall take seniority equivalent to the third step.
4.
Pending the total or partial implementation of the provisions of the Staff Regulations and the annexes thereto, and within the framework of the alterations consequent upon the entry into force of the Rules of Internal Administration, the articles of the contract and of the Provisional Rules, which both lapse on 31 December 1955 and which are set out in an annex hereto, shall apply on a transitional basis.
The annex attached hereto forms an integral part of this order.
Luxembourg, 12 December 1955.
Signed: G. Pella
President of the Common Assembly
Signed: de Nerée
Secretary General of the Common Assembly’
Let us stop for a moment at this point — late in the evening of 12 December 1955 — and attempt to see how the situation appears both from the point of view of the Committee of Presidents and from that of the Assembly.
For the latter, it seemed fairly clear: the Assembly confined itself to implementing the decisions of its Bureau by adopting individual orders bringing its servants within the ambit of the Staff Regulations and establishing them in a specific grade and step, and communicating those orders to the persons concerned at the same moment. That action can be explained only if, in the opinion of the Assembly, the Committee of Presidents had already adopted the decisions necessary to render the individual classification of the servants possible, which means that, according to that opinion, the Committee of Presidents had exhausted its power of decision by establishing the scale of grades and steps on 9 May 1955, and that all other operations came within the jurisdiction of the institution. Only one obstacle remained, but it concerned only the implementation of the validly adopted classification decisions: that obstacle was, in the absence of the validly drawn up and published Staff Regulations themselves, an assurance regarding the entry into force of those Staff Regulations in the near future: in that connexion, the decision of the Committee of Presidents declaring that the Staff Regulations were definitively adopted as regards three of the institutions, including the Assembly, appeared sufficient to the Assembly to remove that last obstacle. (In fact, definitive adoption for all four institutions was not to take place until 28 January 1956.) As to the passage concerning the drawing up of the annexes, the Assembly doubtless saw in it only a confirmation of its position of independence, since the minutes merely provided for consultation between the institu tions over harmonizing ‘the provisions’, without prejudice to the ‘discretionary nature’ of the said annexes: such forms of words doubtless meant that the classification tables, as drawn up by the institutions, and at all events by the Assembly for its part, were to be incorporated in Annex I, the drawing up of which was to be preceded, like that of the other annexes, by joint preparatory studies, with each institution moreover entirely reserving its power of final decision.
As regards the Committee of Presidents, one thing is certain, and that is that on 12 December 1955 it had not yet officially taken up any position on the legal problem with which the Court is concerned today. Moreover, none of the three institutions apart from the Assembly thought that it was obliged — or able — to draw up for its own. part a classification table of posts and, still less, to proceed to the establishment and individual classification of its servants. It may therefore be inferred that, in the opinion of the Committee of Presidents as such, the preliminary ‘harmonization’ work which it had asked the institutions to carry out for the purpose of drawing up the annexes concerned not only the very formulation of the provisions, but also the elaboration of the classification tables designed to be incorporated into Annex I.
It must however be acknowledged that uncertainty, not to say ambiguity, remained. But that ambiguity in its turn was removed as from March 1956; because:
First, as appears from the minutes of the session of 15 March 1956, the Bureau of the Assembly decided at the end of a meeting in private,
‘to agree to the request of the President of the High Authority with a view to drawing up, with the other institutions, as harmonious a table of posts as possible. This affirmative answer to the request of the President of the High Authority [the minutes add] shall in no way constitute an interpretation of Article 78 of the Treaty and must not entail any prejudice to the autonomy of the decisions of the Bureau of the Assembly, if the effort necessary to reach harmonization proves impossible.’
Secondly, the Committee of Presidents had on 5 March 1956 already ‘taken note of the unanimous intention of the heads of the four institutions to achieve harmonization of the grades and remuneration of the staff in all the institutions of the Community’, and on 29 March 1956 it decided ‘to constitute’ a working party ‘having as its terms of reference’
‘to seek and achieve harmonization between the tables of duties and grades of the different institutions, so as to permit common Staff Regulations for Community staff the annexes thereto and the General Rules to enter into force.’
Thus the positions at this point were as follows:
(1)
The Committee of Presidents and the Assembly were in agreement to undertake the harmonization work and not to implement the Staff Regulations immediately;
(2)
The Assembly formally maintained its position of principle as to its ‘sovereignty’ in this field and reserved all its rights in the event of failure;
(3)
The Committee of Presidents continued to withhold its commitment on this question of principle;
(4)
Even in practice, there remained ‘differences of emphasis’ which were important: the Assembly agreed to take part only in drawing up ‘as harmonious a table of posts as possible’, thus appearing to accept in advance the possibility of certain discrepancies between similar posts in different institutions, which were not however to prevent the implementation of the common Staff Regulations. The Committee of Presidents, on the other hand, expressly made the implementation of the Staff Regulations, including the annexes and the General Rules, subject to the conclusion, that is to say doubtless the complete success of the harmonization work: thus the consequence of failure — which all concerned were determined to avoid at all costs — would have been the implementation of four different sets of Staff Regulations, one for each of the four institutions.
I shall pass very quickly over the following stages which did not bring about any alterations in the positions which had been taken up. Let me point out only that the special committee entrusted by the Committee of Presidents with the harmonization work (known as the ‘Delvaux Committee’, from the name of its chairman, a Judge of the Court) did not confine itself to carrying out its task in an abstract way, but proposed practical solutions to settle the case of servants of the Assembly who, under the new tables, were classified in a grade or step lower than that which had been assigned to them on 12 December 1955: that solution consisted in the award of a ‘differential allowance’ designed to ensure that servants thus affected would continue to receive for a certain period of time a level of remuneration corresponding to their first classification. Let me also point out that the President of the Assembly continued to maintain his reservations of principle, in particular concerning the transitional measures envisaged. In fact, the minutes of the meeting of the Committee of Presidents on 12 May 1956 state: ‘he wishes to point out that this resolution [concerning the transitional measures proposed by the Delvaux Committee and accepted in principle by the four Presidents] must not take for granted a position which the Common Assembly cannot yet definitively accept. Indeed, such definitive acceptance is conditional upon its being possible to overcome the difficulties which are raised by the transitional measures, which is a condition which must be fulfilled if the adoption by the Assembly of its own Staff Regulations is to be avoided.’ Thus, the Assembly's power freely to adopt the Staff Regulations of its servants, including their classification in the scale of grades drawn up by the Committee of Presidents, was once again expressly asserted by its President, who associated himself only out of courtesy with the various attempts at harmonization which had been undertaken.
I come now to the decisions or measures which immediately preceded or accompanied the contested decisions:
(1)
Meeting of the Committee of Presidents on 15 June 1956. The following appears in the minutes: ‘As regards the Common Assembly, it [the Committee of Presidents] takes note of the statement of the President of that institution to the effect that he will put before the Bureau of the Assembly the proposals or suggestions submitted by the Harmonization Committee [the Delvaux Committee] and will communicate by letter either his agreement or his proposals for amendments, after having contacted the officials of the Assembly for the purpose of seeking a possible settlement by mutual agreement as suggested by the Committee’. Let me add however that ‘finding that the Special Committee has not received all the elements necessary to enable it to accomplish its task, Mr Delvaux, with the agreement of this colleagues, Mr Rasquin, Mr Vanrullen and Mr Finet, asks that their mission be terminated and that they be relieved of their functions’.
(2)
Meeting of the Bureau of the Common Assembly on 19 June 1956. I quote paragraphs (2) and (3) from page 4 of the minutes, as they seem to me the most important:
‘2.
The Bureau has instructed Mr Vanrullen, the Vice-President, to continue his task with a view to resolving the problem of reclassification and the measures relating thereto, on the basis of the proposals made by the Delvaux Committee and adopted by the Committee of the Four Presidents at its meeting on 15 June 1956;
3.
The Bureau has delegated all its administrative powers to Mr Vanrullen for the purpose of carrying out the task which is mentioned under (2).’
(3)
Meeting of the Bureau on 22 June 1956. Of the minutes of this meeting I would only note the fact that the Bureau intended to content itself with the agreement of the majority of the staff, not of all its servants.
(4)
On 27 June 1956, a letter was sent by Mr Vanrullen, in the name of the President, to each of the employees affected by the harmonization measures. It appears necessary to me to place before the Court the essential passages of that letter:
‘Dear Madam [I quote throughout from the letter sent to Miss Algera],
By an order of 12 December 1955, you were brought within the ambit of the Staff Regulations and appointed to the grade of assistant I.
The Bureau of the Common Assembly proposes to implement, in the near future, the Staff Regulations common to the four institutions, which were adopted by the Committee of the Four Presidents on 28 January 1956.
According to the provisions of those Staff Regulations and the annexes thereto, and in particular the salary scale and the table of correspondence between grades and posts, the duties which you perform correspond to grade II and to category C (assistant II). Consequently, taking your seniority into account, your establishment, in accordance with Article 2 (2) and the transitional provisions of the Staff Regulations, will be effected on the following terms:
1.
You will be appointed as an established official in category C, grade 11, step 8, with seniority in your step from 1 January 1956.
2.
The starting point for your general seniority in the service will be fixed at 1 February 1956.
3.
If under the above classification you would receive remuneration lower than that which you are currently receiving, until 30 June 1958 you will receive a compensatory allowance calculated in accordance with the provisions of Article 60 of the Staff Regulations.
4.
You will be granted the maximum additional seniority provided for in Article 108 of the General Rules of the Community (pensions scheme).
In order to enable the Bureau of the Assembly to take a decision as soon as possible, I shall take it that you accept the above proposals, if I have not received a negative reply from you before 10 July 1956.
Yours faithfully,
pp. the President of the Common Assembly,
Signed: Emile Vanrullen,
Vice-President.’
(5)
On 7 July, a certain number of employees refused to accept the terms in the letter of 27 June and insisted quite simply that the decision of 12 December 1955 should be kept in force.
(6)
On 12 July, in a letter again signed in the name of the President of the Common Assembly, Mr Vanrullen wrote the following:
‘Dear Madam,
By a letter of 7 July 1956 you informed me of your disagreement with the terms on which your establishment could be effected under the provisions of Article 2 (2) and the transitional provisions of the Staff Regulations.
Under these circumstances, and in so far as you persist in the point of view expressed in your aforementioned letter, when the Staff Regulations are implemented by the Bureau of the Common Assembly, it will be possible to apply them to you only as a temporary member of staff, subject to a one-year contract, renewable twice within the limits laid down by Article 2 (3) of the Staff Regulations.
I ask you to inform me before 21 July whether these proposals meet with your agreement. You will find enclosed a specimen contract.
If I have not received your reply by 20 July I shall have to take it that you renounce the benefit of the provisions of the order notified to you on 12 December 1955 and shall accordingly presume the nullity of your renunciation to the benefit of the provisions of your contract, of the Provisional Staff Rules of the Common Assembly of 1 July 1953 and of the application of the table of rank and salary drawn up by the Bureau at its meeting on 27 October 1954, which will once more apply to you.
Your contract, which in the normal course of events would have expired on 31 December 1955, will be prolonged a final time from 1 January 1956 to 31 December 1956 at the salary of 2754 EPU (European Payments Union) units of account, fixed by the Bureau at its meeting on 25 November 1955.
Yours faithfully,
pp. the President of the Common Assembly,
Signed: Emile Vanrullen,
Vice-President.’
(7)
On 19 July, each of the applicants sent a letter persisting in his position.
(8)
On 10 October 1956, a ‘communication’ bearing the number 56/12 was addressed to the staff, informing it of the decisions adopted by the Bureau on 1 October 1956 the essential parts of which are the following:
(a)
The implementation of the common Staff Regulations and of the General Rules, with retroactive effect from 1 July 1956, with regard to those servants who accepted Mr Vanrullen's proposals, with or without reservations;
(b)
The implementation, with regard to the same servants and with effect from the same date, of the annexes to the common Staff Regulations
‘taking into account the provisions of the third paragraph of Article 62 of those Staff Regulations’,
according to which the annexes shall be drawn up by each institution and may be amended after consultation with the staff and ascertainment of the opinion of the Committee of Presidents;
(c)
Finally (and I quote)
‘the decision regarding the officials who have not accepted the Bureau's proposals communicated to them by Mr Vanrullen will be … taken by the new Bureau [which was to take up its duties one month later]. The system laid down by the provisional regulations shall remain applicable to those servants. The Bureau has instructed Vice-President Vanrullen and myself to collect forthwith the necessary details to enable the new Bureau to take its decisions with full knowledge of the facts.’
The communication bears the signature of the Secretary-General.
The following passage, which obviously is not reproduced in the communication, appears in the minutes of the meeting of the Bureau on 1 October 1956:
‘Mr Pella stresses the political but also the legal importance of the decision adopted by the Bureau, and in his opinion, with which his colleagues concur, the Bureau's decision to accept Annex I which is common to the four institutions is a legal basis on which certain amendments to the orders notified on 12 December 1955 to the majority of the staff may be undertaken.’
(9)
On 15 October 1956, Communication No 56/13 was addressed to the staff. Its first sentence is worded as follows:
‘The remuneration for the month of October 1956 for those servants who accepted the proposals made in the context of harmonization has been calculated on the basis of the new classification.’
(10)
Finally, on 30 November 1956, the newly-appointed Bureau decided, ‘whilst keeping the contested decisions in force’, to grant the applicants the suspension of application which they had requested.
I apologize for the length and exhaustiveness of this statement of the facts: 1 thought it necessary for a proper understanding of the context of the dispute, both in law and in fact.
From the procedural point of view, this action has two aspects, as the Court is aware, since the applicants through their counsel have brought before the Court one collective application for annulment and five individual applications for damages; the latter are submitted only in the alternative, in case, ‘should the inconceivable occur’, to use the expression beloved of French lawyers, the application for annulment should not be successful.
II — The application for annulment (Case 7/56)
The conclusions contained in Application 7/56 seek the annulment (I quote) ‘of the decision dated 12 July 1956, issued by the Vice-President of the Common Assembly, implemented by Communication No 56/13 dated 15 October 1956, withdrawing from the applicants, who did not accept the harmonization measures which had the effect of demoting them, the benefit of the Staff Regulations which had been granted to them and replacing them under contract until 31 December 1956, upon which date they will be dismissed’.
In his statement of defence, counsel for the Common Assembly expresses his doubts as to the admissibility of the application in so far as it is directed against Decision No 56/13 of 15 October. However, he does not press the point, and relies on the wisdom of the Court in the matter.
In fact, as has been seen, the application does not attack that ‘communication’ of 15 Octoberin isolation; it seeks the annulment of the decision of 12 July issued by the Vice-President of the Assembly. On the other hand, it does not attack the decision adopted by the Bureau on 1 October 1956 which formed the subject-matter of Communication No 56/12 of 10 October.
Under Article 43 (2) of the Rules of Procedure of the Common Assembly, adopted pursuant to Article 25 of the Treaty and published in the Journal Officiel de la Communauté No 13 of 9 June 1954, the composition and organization of the Secretariat of the Assembly ‘shall be laid down by the Bureau, which shall determine in particular the Staff Regulations and the conditions for the appointment of staff. Paragraph (3) of the same article adds: The Bureau shall determine the number of servants, the scales of their salaries, allowances and pensions and the estimates of extraordinary expenditure necessary to the functioning of the Assembly. The President of the Assembly shall be responsible for proposing the adoption of those conclusions to the Committee referred to in Article 78 (3) of the Treaty.’ Thus the Bureau holds the powers exercised in the name of the Assembly in the field which concerns the Court today.
The Bureau itself adopted ‘rules of internal administration’ which were not published, but are annexed to the case file. In that field, they merely reiterate the provisions of the Rules of Procedure of the Assembly. However, they add (Article 3 (2)), that the Bureau ‘shall also give its decision … in all disputes which may arise between the administration of the Assembly and its servants’. Finally, the President represents the Assembly ‘in … administrative, judicial or financial measures’. He may delegate his powers by means of an order (Articles 1 and 5).
In the present case, it is clear that the decisions were adopted by the Bureau, but it is very difficult to ascertain by what measure and in what way the five applicants received notification of the decisions or merely were informed of them. It is even difficult to ascertain the date on which the decisions were adopted and whether they were adopted by the old or the new Bureau. It can apparently be accepted that they were adopted by the old Bureau, subject to confirmation by that which was to take up its duties in November 1956, and that the latter did expressly confirm them.
As to the question of the measure which gave expression to the Bureau's decision in regard to the applicants, there is room for doubt. Mr Vanrullen's letter of 12 July 1956, when taken together with that of 27 June, clearly appears as a decision, subject only to the condition of the absence of an answer from the person concerned, that is of a favourable answer: in that connexion, continued refusal appears to me to amount to the absence of a reply. That condition was fulfilled, since the refusal was in fact confirmed; let me point out, moreover, that at its meeting of 19 June 1956, the Bureau had ‘delegated all its administrative powers to Mr Vanrullen for the purpose of carrying out the task which is mentioned under (2)’, that is, ‘resolving the problem of reclassification and the measures relating thereto, on the basis of the proposals made by the Delvaux Committee and adopted by the Committee of the Four Presidents at its meeting on 15 June 1956’. Was that delegation valid, and did it authorize Mr Vanrullen himself to take definitive decisions with regard to the servants concerned? It is most doubtful, but it appears difficult to me to infer therefrom that there was no decision. The most that can be accepted is that it was subject to confirmation by the Bureau, which is what took place.
Moreover, as counsel for the applicants quite rightly points out in the note which he submitted in reply to the questions asked by the Court, ‘it was only Communication No 56/13 which enabled the applicants to realize, from the analysis of their remuneration as regards deduction for pensions, which was provided in answer to their request for details, that Mr Vanrullen's proposals had been confirmed by the Bureau, of which Communication No 56/12 made no mention whatever’.
In short, there appears to be no other measure brought to the applicants' attention which could have been contested by them as manifesting the decision adopted by the Bureau.
Therefore I am of the opinion that the application is admissible.
Another preliminary question, which should be examined by the Court of its own motion if there appears to be any doubt about it, is the question whether the Court has jurisdiction to give judgment on the action. As a basis for such jurisdiction, one may hesitate between Article 42 of the Treaty, which refers to an arbitration clause (and which formed the basis of the clause conferring jurisdiction contained in the Provisional Staff Rules while the staff remained under contract), and Article 58 of the new general Staff Regulations, under which ‘any dispute between the Community and any person to whom these Staff Regulations apply shall be referred to the Court of Justice’. The two legal areas can also be combined: it is clear however that there can be no ‘hiatus’ between the two systems, and that, since it has jurisdiction both in disputes arising under the contract and in those arising under the Staff Regulations, the Court must necessarily also have jurisdiction over a dispute in which an employee under contract seeks to rely upon vested rights resulting from a decision which involves an anticipatory application of the Staff Regulations in his favour.
I come now to the legality of the contested decisions. Only one submission is made in the application: that which is based on the infringement of the vested rights which each of the applicants derived from the order of 12 December 1955.
The first question concerns the scope of the various orders in relation to the point under consideration. Is it indeed an individual decision creating rights?
There can be no doubt that it is. Let me quote paragraph (3) of the order again:
‘From 1 January 1956, Miss Dini Algera …
Shall benefit from the application of the Staff Regulations
shall be appointed to the grade of assistant I,
shall take seniority equivalent to the third step.’
The decision was not qualified by any condition, and did not contain any provision such as to render it temporary in nature. Finally, it was validly notified.
Moreover, its constituent parts appear to me to be indissociable. I do not think that it is possible, inter alia, to consider separately, on the one hand, the application of the Staff Regulations and, on the other hand, appointment to a definite grade and step. In fact, the application to a servant of the Staff Regulations is part of a whole operation, the purpose of which is to establish in the new services staff who are currently in service, taking into account the nature of the posts to be filled and the qualifications of each of the persons concerned to fill those various posts. This is what is expressed by Article 59 of the Staff Regulations where it states that ‘servants (meaning staff who are currently in service) may be established in any grade of a category or service referred to in Article 24 of the Staff Regulations’ if they fulfil certain conditions. Application of the Staff Regulations is expressed by appointment, either definitively or as a probationer, to a specific grade (Article 60), exactly as for future servants (Articles 1 and 2), the only purpose of the transitional provisions being, as I have stated, to exempt staff already in service from the conditions laid down by the Staff Regulations for future recruitment and to allow their direct appointment to any grade and step of seniority. Moreover since establishment entails the servants' renouncing the benefit of their contract, they are entitled, in order to be able to exercise their option with full knowledge of the facts, to be acquainted with the grade and the step in seniority to which the administration is proposing to appoint them, and not only the decision of principle considering them eligible to become officials under the Staff Regulations: at this point a certain contractual factor steals into the picture, as a consequence of this option in favour of staff.
Since it is thus established that the decision is of an indissociable nature, and at the same time that its legal nature is that of ah individual decision creating rights, the question arises whether it could be revoked or amended.
At this point I think that reference should be made to the traditional distinction in administrative law between lawfully adopted decisions and illegal decisions.
Indeed, it is a principle that, when individual decisions comply with the law, they cannot be withdrawn: persons who are the addressees of those decisions derive from them an individual right and they are entitled to require that it should be respected. This is what distinguishes those decisions from measures in the nature of regulations or legislation which, except as otherwise provided, are automatically applicable to staff in service, the latter having no opportunity to seek to assert individual ‘rights’ allegedly acquired under the preceding legislation or regulations; it is enough if those measures do not have retroactive effect, in accordance with general principles. Thus, for example, a new salary scale, even a lower one, a new age-limit, even a lower one, would be applicable to those officials who were in service on the day when the measure laying down that salary scale or that age-limit entered into force. On the other hand, an individual decision (for example, an appointment or a promotion) creates a vested right to its preservation from the day on which it is complete, provided that it has been legally adopted.
This solution, which meets the need to ensure the stability of legal relationships, and which, in the realm of unilateral public law relationships, corresponds to the effects of a contract in multilateral relationships, is common to the principles of the law of all six member countries.
The question of the withdrawal of illegal individual decisions is more difficult. In France, according to the thoroughly consistent — one might almost say classical — case-law of the Conseil d'Etat, the withdrawal of individual decisions which have created rights is possible when they are illegal, but only within the time-limit laid down for the commencement of legal proceedings or, if proceedings have been commenced, up to the time when judgment is delivered. The applicants mention this case-law, but, as there was no time-limit in the present instance (since that time-limit was laid down only by the Rules of Procedure of the Court of 21 February 1957), the applicants infer therefrom that the orders could not be revoked at all, which amounts to saying that illegal decisions should receive as much protection as lawful decisions.
That argument appears to me to be unacceptable. Let me point out that France appears to be the only member country of the Community in which the withdrawal of an illegal measure is limited to the period laid down for the commencement of legal proceedings. In Germany, the inviolability of the vested rights of officials was formally enshrined in the Weimar Constitution (Article 129) and is generally regarded as one of the ‘traditional principles’ which, according to the express provisions of the fifth paragraph of Article 33 of the Basic Law, govern the elaboration of civil service law: measures of a retroactive nature, affecting grading for example, have been considered as prejudicing the vested rights of officials (Bundesgerichtshof, Großer Senat, 11 June 1952, Neue Juristenzeitung, 52/933: Article 86 of the Bundesbeamtengesetz of 14 July 1953). However, although administrative measures which have created rights cannot be revoked at will, they can be withdrawn in a certain number of cases, and in particular when the measure contravenes a mandatory legal prescription or resulted from an invalid mode of procedure (for example, failure to obtain the assent of an authority whose agreement was required), and the fact that individual rights of a public law nature result from an administrative measure (for example appointment, grading, etc.) does not prevent that measure from being withdrawn if it lacks a legal basis (Hessischer Verwaltungsgerichtshof, 2 December 1949, Deutsches Verwaltungsblatt 50/681). It will be for the Court to decide whether, when the general time-limit laid down for the application of Article 58 is applicable (it is so now), it intends to lay down case-law modelled on the French case-law which will protect the vested rights of officials. For the time being, all that I would be inclined to accept for my part is the idea of a ‘reasonable period of time’: for it would be quite contrary to natural justice to allow an administrative authority to reverse established situations, even if they are illegal, which have been producing their effects for many months, or even years. On this idea, I am in agreement with Fischbach, Kommentar zum Bundesbeamtengesetz, 1954, p. 137. However, such is obviously not the case in this instance.
Is it therefore necessary to consider the question whether the orders of 12 December 1955 were lawful or illegal, with regard to the exercise by the Assembly and the Committee of Presidents of their respective powers?
Before being sure that such examination is required, I must clarify one further problem.
For it may be asked whether the decision adopted by the Assembly to accept the harmonization proposals made by the Delvaux Committee was in the nature of a novation enabling it to go back on the decisions of 12 December 1955, which were based on a different job-classification table. A moment ago I pointed out that officials did not have a vested right to the preservation of decisions in the form of regulations, but merely the right to escape any retroactive effect of such decisions. Moreover, it is accepted that individual measures by a public authority must comply with the regulations, including those adopted by the authority itself. Thus if it is considered that, by accepting the common harmonization table, the Assembly took a decision in the form of a regulation, then must it not be accepted that the Assembly could, and even had to, consequently revise the individual classification previously carried out according to other standards? It would then become superfluous to decide the question of principle because one of two alternatives would have to apply:
Either the argument consistently defended by the Assembly and its President, to the effect that the Assembly has the power itself to draw up the table showing the correspondence of posts, is accepted: in that case, the orders of 12 December would be lawful, but the subsequent individual decisions, taken by virtue of a new correspondence table (in fact the freely accepted harmonization table), would also be lawful. It would seem that this is the meaning of Mr Pella's statement, quoted above, to the Bureau on 1 February 1956 in which he says that ‘the Bureau's decision to accept Annex I which is common to the four institutions [let it not be forgotten that that annex comprises the correspondence table] is a legal basis on which certain amendments to the orders notified on 12 December 1955 to the majority of the staff may be undertaken’;
Or an argument more restrictive of the Assembly's powers, to the effect that the orders of 12 December 1955 were illegal, is accepted: and in that case, according to the opinion which I have set out, those illegal orders could also be withdrawn, although on completely different grounds. Then it would remain only to verify that the fresh decisions were indeed taken after valid action on the part of the Committee of Presidents and therefore were not in their turn also illegal, like the first decisions.
The latter alternative is attractive in that it would make it possible to avoid the problem of Article 78, but I do not think that it can be adopted.
Because, if it is accepted that the Assembly had the power itself to fix the correspondence of posts to grades, the drawing up of the table of posts appears as a mere internal measure, intimately bound up with the organization of the services, and without any connexion with the Staff Regulations: from this point of view, the only measure in the nature of a regulation preceding the establishment proceedings is the table fixing the scale of grades and the corresponding salaries, drawn up by the Committee of Presidents. Since that table was drawn up by an authority external to the Assembly, namely the Committee of Presidents, the Assembly as an institution has the power freely to carry out individual classifications: once these have been made, they create rights in favour of those who are the subject of them, so long as the scale of the grades and the amount of the salaries have not been altered.
There clearly appears here the fundamental distinction between rules pertaining to the Staff Regulations and rules for the organization of the service.
The very concept of Staff Regulations implies that a validly appointed (or ‘invested’, to employ the term favoured by French theorists, to distinguish a unilateral system of staff regulations from a contractual system) official is the holder of his grade (he is sometimes even referred to as the ‘proprietor’), and he can be deprived of it only in the circumstances laid down in the Staff Regulations. In this connexion, the present Staff Regulations do seem to comply with those principles, in particular if one refers to Article 59 which speaks of ‘establishment in any grade of a category or service’ referred to in the Staff Regulations. Thus if it happens that the table of the correspondence of posts to grades is changed, such alteration can be applied to staff in service only in the future, that is on the occasion of a subsequent promotion, unless it is to be retroactive; it can be applied upon those conditions, because the Community Staff Regulations are not based on the distinction between grade and post, as for example in France and England, but on the contrary establish a legal connexion between the grade and the post; but alteration of the correspondence table cannot make possible demotion with immediate effect or, even less so, with retroactive effect. Any other interpretation would lead to the denial of the very idea of Staff Regulations.
In these circumstances, the true alternative seems to me to be the following:
Either the Assembly had the power itself to draw up the correspondence of posts to grades, the scale of which had been drawn up by the Committee of Presidents; when it had done so and when it had subsequently, and according to this argument validly, carried out the individual classification of the servants by appointing them to a specific grade and step, it had exhausted its power and was not entitled to reverse those individual decisions in favour of a fresh classification of posts modifying the first classification;
Or the Assembly was not alone in holding that power: it had to share it with the Committee of Presidents. In that case, the individual decisions were illegal and could be revoked.
Consequently, the Court is under an obligation, in my opinion, to decide upon the interpretation of Article 78 of the Treaty.
It would be excessive to inflict a reading of Article 78 upon the Court, since the Court already knows it by heart and since, although certain difficulties attend its application, that article is not as obscure as has been suggested: as in naval warfare, obscurity is sometimes artificial …
However, it is clear that that provision must be viewed in the general institutional context of the Treaty.
The Treaty is based upon delegation, with the consent of the Member States, of sovereignty to supranational institutions for a strictly defined purpose, namely the operation of a common market in coal and steel. The legal principle underlying the Treaty is a principle of limited authority. The Community is a legal person governed by public law, and as such it ‘shall enjoy the legal capacity it requires to perform its functions and attain its objectives’ (Article 6), but only that capacity: this is the application of the principle of speciality, which is well known in public law. The way in which the functions are to be performed and the determination of the objectives to be attained are precisely fixed by the Treaty.
Moreover (same article), ‘the Community shall be represented by its institutions, each within the limits of its powers’. Those powers are themselves carefully defined by all the provisions of the Treaty which confer powers, and the principle of limited authority (which is precisely called ‘conferred authority’) is expressly stated for each institution: it is Article 8 for the High Authority, whose duty it is ‘to ensure that the objectives set out in this Treaty are attained in accordance with the provisions thereof.’ It is Article 20 for the Assembly, which ‘shall exercise the supervisory powers which are conferred upon it by this Treaty’. It is Article 26 for the Council, which ‘shall exercise its powers in the cases provided for and in the manner set out in this Treaty’. Finally, it is Article 31 for the Court, which ‘shall ensure that in the interpretation and application of this Treaty, and of rules laid down for the implementation thereof, the law is observed’.
That is an absolutely essential aspect of the Treaty. The Member States agreed to give up part of their sovereignty only in favour of institutions functioning under clearly defined conditions, which must be sufficient in themselves.
Therefore, none of the institutions can excercise powers other than those conferred upon it by the Treaty, either in relation to the other institutions or in regard to third parties, whether they be States or private persons. On the other hand, each institution, within the limits of its powers, is fully autonomous and cannot be subject to the authority of any other: it exercises its powers spontaneously and directly under the conditions laid down by the Treaty, with the Court appearing in this connexion as the body responsible for regulating the respective spheres of authority by virtue of Articles 33 and 38.
However, such ‘autonomy’ clearly could not be absolute as regards financial matters, since no institution, even a supranational one, can escape the necessity of submitting to a certain amount of supervision in that area. Hence, Article 78 institutes financial supervision, which is entrusted to the auditor and which partakes of the nature both of an audit of expenditure undertaken and of a checking of accounts, and budgetary supervision which relates to the establishment of the budget of expenditure (since there is no budget of revenue, and consequently no budgetary balance to be achieved). For this reason Article 78 is based on a twofold concern for reconciliation:
(1)
In presentation, Article 78 seeks to reconcile the principle of the autonomy of the institutions with the unity of the Community, which alone has legal personality: this is the system of estimates, drawn up by each institution as regards its own expenditure, but consolidated in the general estimate.
(2)
In substance, it seeks to reconcile the right of each institution freely to ensure the organization and functioning of its departments, which is the corollary of the principle of autonomy, with the necessity for sufficiently effective financial and budgetary supervision.
To consider only the preliminary budgetary supervision, which relates to the establishment of the budget of expenditure, that reconciliation is ensured in two ways:
(a)
It is ensured first of all by the power given to the Committee of Presidents to ‘adopt’ the general estimate, which is the sum of the four estimates: the term ‘adopt’, which is less strong than, for example, ‘approve’, but stronger than terms such as ‘enact’ or ‘implement’, clearly implies a power of supervision sanctioned by the power to ‘refuse to adopt’. The choice of such an expression clearly demonstrates the concern to reconcile the needs of administrative autonomy with the no less important needs of the supervision of expenditure by an authority which is external to the institution but which by its very composition appears as a manifestation of the Community.
(b)
However, this power which is exercised at the last stage of the preparation of the budget of expenditure is rightly seen to be incapable on its own of ensuring real budgetary supervision with any degree of effectiveness. That is easily understood, since the budget of expenditure comprises only administrative expenditure, the greatest proportion of which is represented by staff expenditure, which, in a national budget, would be almost entirely in the nature of obligatory expenditure, that is, expenditure which merely represents in figures the effect of pre-existing rights. It is well known that the only effective supervision in this area is preventive and must deal essentially with the fixing of the staff complement and the salaries and other pecuniary allowances. For this reason the Committee of Presidents was given responsibility for fixing in advance the number of servants, the scales of their salaries, allowances and pensions, and the extraordinary expenditure, in short all the items which make up the bulk of the administrative expenditure. Of course, this power also must be exercised in a way which is compatible with the autonomy of the institutions, as I have described it.
Bearing in mind these few ideas, which appear to me to emerge fairly clearly both from Article 78 and from the institutional provisions of the Treaty and in particular Article 6 thereof, it seems that the solution to the difficulties reflected in this dispute is relatively easy.
With their help, two arguments can be put aside, one of them resulting in a legal misconception and the other in a factual misconception of the powers of the Committee of Presidents.
(A)
The first argument was developed with great conviction and much talent by the chairman of the Common Assembly's Accounts and Administration Committee in a document reproduced at length by Professor de Soto in his note. The argument consists in denying the Committee of Presidents any power of decision and supervision in relation to the Common Assembly's expenditure, on the basis of the ‘sovereignty’ of that Parliamentary Assembly.
I shall not spend long on that argument, not only because it conflicts with the basic provisions of the Treaty, as I stated them a moment ago, but also because subsequently the distinguished chairman ceased to propose it in that absolute form. The mistake which in my opinion he makes results — once again — from the misuse of the word ‘sovereignty’ which is at present the cause of many misunderstandings and a source of many misfortunes. Leaving aside the matter of agreement on the meaning of the term, if anybody is ‘sovereign’ in the Treaty, it is the Community, and the Community alone; the Assembly is no more ‘sovereign’ than the other institutions: like the other institutions, it is only ‘sovereign’ to the extent to which it falls to it to exercise the powers which have been conferred upon it by the Treaty, and to tell the truth, among those powers the power of decision occupies a very limited place: this system may be regrettable, but the Court can only make a finding of fact. Fortunately, moreover, the Assembly has found ways other than the exercise of powers of decision to carry out its task of supervising the executive and to play its part in the progress of the Community. For this reason I prefer to use the term ‘autonomy’ when speaking of the institutions rather than the word ‘sovereignty’.
In fact, on reading the report it clearly appears that its author's preoccupation, in which he doubtless echoes his colleagues, is to preserve the freedom of the Assembly in regard to ‘the creation of the services which the Assembly finds necessary in order duly to acquit itself of the rights and duties of supervision which are incumbent upon it’; referring to the Committee of Presidents, he states a little further on: ‘that Committee can certainly not intervene, because the Assembly would thereby be impeded in the creation of the services which it deems necessary’. As will be seen shortly, I think that on this point the freedom of the institutions must indeed be acknowledged.
(B)
The second argument which in my view must be set aside is that which gives an exhaustive scope to the clause appearing in the second subparagraph of Article 78 (3): ‘However, the number of the Community's servants and the scale of their salaries, allowances and pensions, where not fixed under some other provision of this Treaty or by rules laid down for the implementation thereof, and any extraordinary expenditure, shall be determined in advance by a Committee, etc.’.
It has been argued that the ‘rules laid down for the implementation’ of the Treaty which are mentioned here apply in particular to the ‘Rules of Procedure’ of the Assembly (Article 25), to the ‘Rules of Procedure’ of the Council (Article 30), to the ‘General Rules of Organization adopted by the High Authority’ (Article 16) and, as regards the Court, to the rules which the Court is empowered to adopt in order to lay down the Staff Regulations of its staff (Article 16 of the Protocol on the Statute of the Court). It is argued that under these different provisions, each of the four institutions has sovereign power to fix the Staff Regulations of its staff, even to the extent to which the rules contained in the Staff Regulations cover the subjects set out in the second subparagraph of Article 78 (3), that is the staff complement, the scale of salaries and the pension scheme. It is argued that the Committee of Presidents could exercise its powers only if one or other of the institutions did not use its right in this connexion or used it only partially. In short, it is argued that Article 78, including even the provisions of the second subparagraph of Article 78 (3), cannot be regarded as obstructing the principle of the autonomy of the institutions, and that the Committee of Presidents has only a coordinating role to play. I do not share that opinion. On this point I am in complete agreement with Professor de Soto in thinking that the clause in question must be seen as no more than a mere safeguard clause. It is indeed clear that if a particular provision of the Treaty (or of rules laid down for the implementation of such a provision delegating powers to it for that purpose) had conferred power on an authority other than the Committee of Presidents to fix the staff complement or the amount of the remuneration of certain servants, that special provision would have taken precedence over the general rule contained in Article 78. However, in that case it can only be a special provision. If the case should arise, this could be true of Assistant Rapporteurs if the rules governing their service, which are laid down by the Council on a proposal from the Court (Article 16), happened to include a provision making the Council responsible for the fixing of their salaries: since the decision in this connexion would then belong to an institution other than that which employs the persons concerned, the supervision required by Article 78 would exist, and ‘the exception to the exception’ would take on its full meaning: in that case there would no longer be any need for the external authority in the shape of the Committee of Presidents.
In short, a hypothetical situation such as this would involve the solution adopted by the Treaty itself in relation to the Members of the High Authority and the Judges, Advocates General and Registrar of the Court of Justice, the pecuniary rules governing whose service are laid down by the Council under a special provision of the Treaty (Article 29). Moreover, Article 15 of the Statute of the Court provides that ‘The salary, allowances and pension of the Registrar shall be determined by the Council, acting on a proposal from the Committee provided for in Article 78 (3) of this Treaty’ (that is, the Committee of Presidents), which clearly shows that, even in a case where authority was conferred upon the Council, owing to the particularly important nature of the duties carried out, it was considered necessary to make the Committee of Presidents a party to the drawing up of the pecuniary rules governing the service of the person entrusted with those duties: how could it be imagined that, in all the other cases in which there is no guarantee of an external decision, it would depend only upon the will of the institutions to escape the supervision of the Committee of Presidents? That proposition appears to me absolutely untenable. I thus come to the conclusion that Article 78 gives the Committee of Presidents certain powers of decision (moreover, the wording is perfectly clear on this point), but that since that attribution of authority derogates from the principle of the autonomy of the institutions, it must, like any exception, be strictly construed, taking into account the proper purpose of that article, which is & financial and budgetary provision.
I must now draw the inferences from that conclusion.
The first inference — which is doubtless not indispensable for the purpose of reaching a decision in the present action, but which I consider it necessary to mention in order to have an overall picture of Article 78 — is that the Committee of Presidents does not possess any authority of its own to lay down the whole of the Staff Regulations of servants of the Community. In support of the contrary opinion, reliance has frequently been placed upon the provisions (which are even expressly referred to in the current Staff Regulations) of the third paragraph of Article 7 of the Convention on the Transitional Provisions, which is in the following terms: ‘Until the Committee provided for in Article 78 of the Treaty [that is, the Committee of Presidents] has decided upon the size of the staff of the Community and has laid down Staff Regulations, the personnel required shall be engaged on a contractual basis’.
However, in my view it cannot be accepted that such a provision, of a purely transitional nature (and it is found in fact in the Convention on the Transitional Provisions) had the purpose, and can have the effect, of permanently conferring on the Committee of Presidents a power which it was not acknowledged to have by Article 78 of the Treaty, the latter constituting the basic provision in this regard, and which would also (as has been seen) be extraneous to the purpose of that article.
In reality, Article 7 of the Convention does not have — and could not have — any other purpose than to enable the Community to ‘get started’, if I may use that expression, before the financial procedures provided for by the Treaty, in particular Article 78, had had time to come into play. That is the reason why the second paragraph of Article 7 provides for repayable advances by the Member States until such time as the levy can be collected, since under Article 78 the revenue can be collected only by virtue of the general estimate, which itself must be adopted by the Committee of Presidents. Similarly the fixing of the staff complement and of the scale of salaries, allowances and pensions is within the competence of the Committee of Presidents. The purpose of the third paragraph of Article 7 of the Convention is simply to enable indispensable staff to be recruited immediately without waiting for the decisions which the Committee of Presidents must eventually take within the framework of the powers which it derives from the second subparagraph of Article 78 (3) of the Treaty. There is a close and obvious connexion between the two provisions, and when, repeating the wording of Article 78 of the Treaty on the point, Article 7 of the Convention states: ‘Until the Committee provided for in Article 78 of the Treaty has decided upon the size of the staff of the Community and has laid down Staff Regulations, the personnel required shall be engaged on a contractual basis,’ it can have in view only the pecuniary provisions of the Staff Regulations as described in Article 78. Neither Article 7 of the Convention nor Article 78 of the Treaty purported to come to any decision on the legal nature of the relationship which was to arise in the future between the Community and its servants or to draw a distinction between public law Staff Regulations and contract. Once again, it is a question of purely financial provisions.
Therefore, it appears that in law each institution remains free to fix the Staff Regulations of its servants, on a contractual or any other basis (the concept of staff regulations is not incompatible with that of contract, as is proved by the system in force in many international organizations); it remains free to do so, except on such points as have been reserved to the authority of the Committee of Presidents (the fixing of the staff complement and of remuneration).
Let me point out that, from this point of view, the provisions of Article 16 of the Protocol concerning the Court, under which the Staff Regulations of the officials and other servants of that institution ‘shall be laid down by the Court’, appears as an application of the general rule and not as an exception derogating by implication from a provision of a general and permanent nature contained in the Convention on the Transitional Provisions}
Of course, the independence of each institution with regard to drawing up the Staff Regulations of its servants in no way prevents the Committee of Presidents from playing a coordinating role, for it is highly desirable in a Community to arrive at common Staff Regulations, especially when all the administrative authorities have their seat in the same city, and one can only welcome the result obtained in this connexion; but, in my opinion, those common Staff Regulations must be considered as having been freely accepted by each institution, and from a strictly legal point of view (I am not speaking of the political point of view) it would doubtless have been more correct to implement four separate sets of provisions, each containing the few differences acknowledged to be necessary, instead of being obliged to relegate those differences to annexes.
In fact, the result of this is the paradoxical situation that the rules in regard to which the institution is autonomous (that is, the whole of the Staff Regulations proper) form the subject-matter of a single set of provisions purporting to be ‘drawn up by the Committee of Presidents’, whereas the points in regard to which that Committee has a power of its own are relegated to annexes ‘drawn up by each institution’ (Article 62). The least one can say is that such a presentation is apt to cause confusion amongst those who are not forewarned … Having thus established (1) that the Committee of Presidents possesses certain powers of decision, and (2) that those powers are however limited to financial and budgetary aspects and must be combined with the strictly administrative powers retained by the institutions, it remains for me to consider which matters, in a complex operation such as that which took place to effect the establishment of the staff within the structures of the new Staff Regulations, came under one sphere of authority and which came under the other: this brings me to the heart of the dispute.
In the remarkable opinion submitted by the Assembly, Professor de Soto of the Faculty of Law of the University of Strasbourg gave a very apposite analysis, isolating the various operations necessary to attain what is referred to as establishment (p. 12 et seq.). I can do no better than to refer to that analysis, which however I shall supplement somewhat.
In logical, if not chronological, order, those operations are the following:
(1)
Drawing up of Staff Regulations for the servants of the institution, comprising the general rules on recruitment, promotion, discipline, pensions, etc.
(2)
Organization of the service, accomplished according to the requirements of the task which the institution has to carry out.
(3)
Organization of the departments corresponding to that organization of the service.
(4)
Determination of the grades and steps and, where necessary, division of the whole of the staff into categories (for example, administrative, advisory and clerical).
(5)
Fixing of the salary pertaining to each of the grades and steps.
(6)
Description of the work pertaining to the various posts (which has been called the ‘job-description’).
(7)
Classification of each post in the scale of grades, taking account of the job-description.
(8)
Fixing of the staff complement, that is, the number of posts in each grade, always taking into account the job-description.
(9)
Finally, application of the Staff Regulations and individual establishment of each of the employees in the scale of grades, taking into account the post to which he is assigned (1 have already said that in my opinion these two operations merge into one another).
Doubtless, such an analysis is somewhat artificial, inasmuch as each of the operations is not necessarily effected by a special decision, but in my opinion it enables it to be seen more clearly what is incumbent respectively upon the Committee of Presidents and upon the institution, if reference is always made to the distinction between those matters which come under the administrative power and those which come under the budgetary supervision.
On No (I) (Drawing up of the general Staff Regulations), I have already stated my view and I shall not cover the point again.
On No (2) (Organization of the service), it is my opinion that this comes within the institution's own authority: this is a fundamental point, and the Assembly rightly attaches great importance to it, because it must be seen to constitute the essential guarantee of what I have referred to as the principle of the autonomy of the institutions.
On No (3) (Organization of the departments corresponding to the organization of the services), it is my opinion that this also is a power of the institution, which is a necessary corollary of the foregoing.
On No (4) Table of grades and steps and, where necessary, division into categories), the authority of the Committee of Presidents is beyond dispute; moreover, it has exercised it.
The same applies to No (5) (fixing of the salary pertaining to each of the grades and steps).
I thus come to operations (6) and (7). It seems to me that the distinction between them, which was very well brought out by Professor de Soto, constitutes the key to the problem: in my opinion, operation No (6) (drawing up of the ‘job-description’) comes under the authority of the institution, whereas operation No (7) (classification of each post in the scale of grades, taking account of the job-description) comes under the authority of the Committee of Presidents. In fact, in the former case, it is a matter of describing the nature of the task required of the holder of the post, and the institution is the sole judge in this matter; in the latter case, it is a matter of assessing ‘what the job is worth’, taking that description into account, and that is indeed a budgetary power: when Article 78 gives the Committee of Presidents the power to fix ‘the scale of their salaries’ (the salaries of servants), it is clearly a question of doing so with regard to the nature of the posts which they occupy and by comparison with the other posts, and not solely in terms of an abstract, arbitrary salary scale. That is the only way in which the Committee can carry out its role and achieve what has been described as harmonization, that is, to make the same classification in relation to posts which are of the same kind and which correspond exactly to the same tasks in two different institutions. In short, that solution seems to me to be the only one which complies both with the letter and the spirit of Article 78. Moreover, it seems that the first paragraph of Article 25 of the Community Staff Regulations must indeed be taken to mean this when it states: ‘The list of posts corresponding to each grade in each of the categories and in each of the services shall be determined in accordance with Article 78 of the Treaty’.
For the sake of completeness, I should like briefly to finish with my list:
As regards operation No (8) (fixing of the number of posts per grade, always taking into account the job-description), I think that, for the same reasons, this is one of the powers of the Committee of Presidents; it is clear that, if it is done in advance, a merely general determination of the staff complement of a whole institution can only be arbitrary and exclusive of any serious budgetary supervision. In that case, the Committee could once again think of exercising a certain supervision only when it had occasion to ‘adopt’ the general estimate; but for the reasons which I have already stated at the beginning of my opinion, such supervision would be futile in practice, and moreover it would not be the supervision required by Article 78, since that article formally provides that supervision must be undertaken in advance. Doubtless, the supervision of the staff complement by grade must be reconciled with respect for, and the need for, the organization of the service as conceived by the institution; the operation of the service must not be made impossible in practice under the pretext of economies and budgetary supervision, which would constitute a sort of ‘misuse of powers’, but that is a problem pertaining to all financial supervision in all the administrations in the world, and it must usually be resolved in a spirit of reciprocal understanding, of the existence of which there can be no doubt in this Community: to deny that power, on the other hand, might prevent any rational achievement of a scheme of economies if ever it should prove necessary, or, what is worse, might reduce it to overall abatements proportional to the budget of each institution, thus perpetrating injustice under an appearance of equality of sacrifice. On this point, however, I must admit that a solution contrary to the one which I favour seems to have been accepted by the Staff Regulations in the second paragraph of Article 25.
Finally, operation No (9), which relates to individual measures of establishment, can clearly come only under the authority of the institution alone.
Having thus in a sense ‘dissected’ the operations and apportioned the corresponding spheres of authority, I have now to consider a difficult problem of which Professor de Soto was well aware, namely the way in which authority is to be exercised in those respective spheres. In fact, as I have said, it is not possible in practice to demand that each of those operations should give rise to separate decisions, and on the other hand it must not be forgotten that the Committee of Presidents, although having powers of its own, is not an institution of the Community. It exercises its powers over internal matters, but it is doubtful whether it can publish or notify decisions which are directly applicable to third parties and enforceable of themselves: at all events, it has never done so up to the present time. It follows from this that decisions which it may take must be incorporated into the regulations or individual decisions of the various institutions upon which they are binding, and the legality of the measures adopted by the Committee of Presidents can be discussed, should the need arise, only ‘through’ them, as is the case in this action. Moreover, it could not be otherwise, since the only basis for litigation in this field is Article 58 of the Staff Regulations, which gives jurisdiction to the Court only over any dispute ‘between the Community and any person to whom the Staff Regulations apply’, and since under Article 6 of the Treaty ‘the Community shall be represented by its institutions’ of which the Committee of Presidents is not one.
For those reasons, in his opinion Professor de Soto suggests a formula for a ‘concurring opinion’, which to tell the truth is very ingenious. He suggests that the Committee of Presidents exercises the powers which it derives from Article 78 through such a process.
Despite its flexibility, I do not think for my part that that process can be accepted, because a concurring opinion allows only a negative power, a right to veto, to be exercised. It is my opinion that, in the cases in which it has authority, the Committee of Presidents must exercise its authority fully. For example, when it determines ‘the number of the Community's servants’, it must fix that number positively and not confine itself to refusing its assent to proposals made to it until those proposals comply with its wishes. Similarly with the problem before the Court: when dealing with the proposals of the institutions involving the classification of posts into various grades, it must be able where necessary to alter that classification and draw up a new table itself, provided only that it does not alter the job-description of the posts without the agreement of the institution.
That does not prevent the final decision which it arrives at from being notified to the institutions, which must then comply with it by drawing up the table which must appear in the annexes and which may alone be relied upon against third parties.
However, if it was open to me to express a wish in this connexion, I should say that in my opinion it is most desirable that stricter formal habits should be adopted both by the Committee of Presidents and by the institutions. It could be desired in particular that, at the end of its proceedings, the Committee of Presidents should draw up formal decisions, duly notified to the institutions and separate from the minutes. For their part, the institutions should, where appropriate, refer to the decisions thus adopted by the Committee of Presidents in their own decisions; when their own decisions take the form of regulations (such as the annexes to the Staff Regulations and the tables incorporated therein), they should be published either in the Official Journal or, failing that, by being posted up on the premises, or by any other means of publication having the effect of validly and officially informing the staff of them. In that way the nature of the activity of the Committee of Presidents as being internal to the Community could be reconciled with the need for a scheme clearly exhibiting that each was exercising its re-spective powers. Thus Professor de Soto's preoccupations with regard to litigation could be laid to rest, since only the decisions of the institutions would be subject to appeal, which would not of course prevent the parties from discussing the legality of every part of those decisions, including such parts as might originate with the Committee of Presidents.
In short, I am of the opinion that the individual orders of 12 December 1955 were illegal, in that they were issued before the Committee of Presidents had exercised its power to draw up the correspondence between posts and grades, and that for that reason they could be withdrawn.
It remains to be considered whether the further decisions of the Assembly are themselves valid from the point of view of prior action on the part of the Committee of Presidents. In that connexion, it does seem to emerge from the whole of the proceedings of the Committee of Presidents which took place during 1956 that, having prompted the drawing up of a harmonization table (which was the work of the Delvaux Committee), the Committee of Presidents adopted it, if only by finding that the institutions were in agreement over that table. To tell the truth, the table was never formally approved, since the Committee of Presidents was concerned above all — and quite properly so — to attain agreement between the institutions, and since certain points remained in abeyance. None the less, signs of the exercise on its part of a power of decision of its own can occasionally be seen: for example, the following appears in the minutes of the 19th meeting on 15 June 1956:… (3) As regards the Court of Justice, the Committee of Presidents agrees that the administrator should be classified in Grade 3 under the title ‘Administrator of the Court of Justice acting as Assistant Director’. At all events, it is not disputed that the fresh classification of the five applicants, which moreover they refused, corresponded to the part of the harmonization table upon which agreement had been reached and which had been approved by the Committee of Presidents.
On all those grounds, I am of the opinion:
That the Court should dismiss Application 7/56; and
That the costs should be borne by the applicants.
III — The applications for damages (Cases 3 to 7/57)
Here again, there are questions of admissibility and problems going to the substance of the case.
As regards admissibility, the Assembly has raised an objection of inadmissibility based on the fact that the applications for damages are submitted in the alternative to the single application for annulment and are inconsistent with it, since they presuppose that it will be dismissed. It is objected that that procedure is not correct.
I do not see why that should be so. It frequently happens that litigants commence several sets of proceedings, either before the same court, or before different courts, and there is nothing to prevent this in the case of autonomous procedures on separate legal grounds and when the actions also have a separate legal subject-matter. It is quite usual for civil servants, for example, to claim annulment of administrative decisions which concern them and, on the other hand, compensation for the damage which they consider that the administration has caused them. In such a case, it can happen that, by virtue of its retroactive effects and of the obligations with regard to restitutio in integrum which it may entail, annulment deprives the conclusions in the action for damages of their subject-matter; but this is in the nature of any pleading in the alternative. The fact that in the present case the conclusions in the alternative formed the subject-matter of separate applications may be explained by the difference between the legal nature of an action for damages and that of an application for annulment.
On the substance of the case, after the long explanations which I felt obliged to go into regarding the application for annulment and after the excellent oral arguments which the Court heard yesterday morning, my own comments will be short.
As in any action for damages, three questions have to be answered: (1) Is there any liability entailing reparation? (2) If the answer is in the affirmative, is there any damage? (3) If so, what is the amount of it?
(A)
Liability— The applicants did not specify the legal basis upon which they were founding their applications for damages. In support of their case, they referred only to the seventh paragraph of Article 34 of the Staff Regulations of the Community, which provides for the granting of certain pecuniary allowances to servants assigned non-active status following the abolition of posts. That provision is clearly not applicable of itself in the present case: in my opinion (and apparently also in that of the applicants, when they speak of “analogy”, it can be used only as an indication in assessing the damage suffered by the persons concerned if it is considered that they were the victims of a wrongful breach of the link between them arid the administration. No express reference was made to Article 40 of the Treaty.
However, although the legal basis of the applications was not specified, the legal grounds on which they rest seem fairly clear, especially following the oral arguments.
In my view, there are two legal grounds: that of wrongful breach of contract, and that of wrongful act or omission. In fact, counsel for the applicants spoke of “a breach” of the links between the administration and its servants “having the nature of a wrongful act or omission”, and he also spoke of the “fraudulent conduct”, of the “excessive haste”, of the “recklessness” and of the “capriciousness” with which the administration acted towards the applicants: all of those are indeed factors which constitute a wrongful act or omission on the part of the Community such as to make it liable under Article 40, which is the ordinary law of quasi-delictual liability in the Treaty.
(a)
On the contractual ground, it cannot be found that there is any liability. In fact, the alleged breach could only be that which occurred in July or October 1956. As the Court has clearly seen, no breach of a contractual link was involved at that time: it was a question of a unilateral decision relating to the establishment of servants under the new Staff Regulations, by which the Assembly altered the classification as effected by the orders of 12 December 1955. The contract was renewed, whereas the first decision (the one upon which the applicants rely as having created rights in their favour) terminated it as from 31 December 1955: it cannot be said in these circumstances there was a breach of the contract, and moreover the pecuniary allowances received by the applicants from 1 January 1956 are clearly much higher than the amount of the termination allowances provided for in the contracts. Finally, the decision in Case 1/55, Kergall v Common Assembly, does not apply here, since there was no refusal to re-new the contracts, and no refusal to apply the Staff Regulations to the persons concerned in disregard of the “eligibility” therefor which they had acquired before the Staff Regulations came into force.
(b)
Therefore the true — and only — legal ground is that of a wrongful act or omission based on Article 40. The question is, “what wrongful act or omission?”
I unequivocally refuse to accept as constituting a wrongful act or omission such of the conduct of the Assembly as concerns the decision of July-October 1956, at least in so far as that decision is considered as being lawful. A moment ago I maintained that it was lawful, first, because it could lawfully reverse the orders of December 1955 and, secondly, because it had itself been adopted in accordance with the classification drawn up by the Committee of Presidents, at least as far as the posts occupied by the applicants were concerned. An administration can — sometimes — incurliability by virtue of adopting a lawful decision, but it certainly cannot do so on the ground of a wrongful act or omission.
On the other hand, the question arises to its fullest extent in relation to the orders of December 1955, which in my submission the Court should find to be illegal.
I think, and I frankly say, that there is such a wrongful act or omission; I do not describe it as “serious”, or “gross”, or “unjustifiable”, all of which expressions have a significance in legal language which in no way corresponds to the facts of the case. There were neither fraudulent manoeuvres, nor any intention to cause harm — quite the contrary! On the other hand, the error of law which underlies the decision is, as has been seen, most excusable, and the Assembly has never varied its argument in law. The true wrongful act or omission does not lie there. In reality, it lies in a general mode of behaviour which counsel for the applicants has described, this time in terms of which I fully approve, as “excessive haste”, “recklessness”, and “capriciousness”. Doubtless those responsible for that excessive haste were to a large extent the Assembly, as a deliberative body, which had for a long time been continually pressing for the implementation of the Staff Regulations, and also the staff themselves, whose conduct certainly had the same purpose.
However, this does not lessen the liability of the institution as such. In truth, two courses of action were possible: either, placing its reliance upon what it thought was its right, and judging the moment opportune, the Assembly on its own could have adopted the decisions concerning its servants without waiting any longer and, to be consistent with itself, could have implemented its own Staff Regulations; or (which was obviously the reasonable course), while persisting in its reservations regarding its autonomous powers concerning the classification of posts (in accordance with its argument in law), it could have voluntarily accepted to take part in efforts to reach harmonization with the other institutions, under the aegis of the Committee of Presidents. I say that that was the reasonable course, because it is the only one which complied with the very idea of the Community, if that idea is to embody a living reality and not only the abstract legal concept contained in Article 6 of the Treaty; subsequently, the President of the Assembly came to understand this very well. But then, quite clearly, individual implementation should not have been proceeded with before the completion or an attempt at the completion of the harmonization work: to take any other course of action was to end in deadlock.
Therefore I am of the opinion that the Assembly was guilty of a “wrongful act or omission” which renders it liable under Article 40 of the Treaty.
(B)
Reparation for the damage — In this connexion, the question is the extent to which the wrongful act or omission caused the applicants an injury in respect of which they are entitled to reparation.
First of all, there can be no question of considering as an injury capable of conferring entitlement to reparation anything which relates to the effects of the decision of July-October 1956 (at least, if the Court, as I submit, considers it to have been lawful) that is, the consequences of the lowering of the applicants' administrative status on account of the new classification which was applied to them (and which they refused). No one can be entitled to the perpetuation of an illegal situation the illegality of which has been duly acknowledged, or to pecuniary compensation for being deprived of the advantages which would have resulted in the future from such a situation: in reality that would be to sanction vested rights resulting from the initial illegal decision, whereas, ex hypothesi, there were no such rights because of the very illegality of that decision. It appears to me that no doubt is possible on this point.
The only question which was open to discussion in this connexion concerns the retroactive regularization which the administration could have contemplated effecting, that is, if it had caused repayments to be made corresponding to the difference between the salaries pertaining to the new classification and the salaries actually received pursuant to the first decision. In that case, it would have been possible to think of offsetting those repayments by the grant of an allowance for a wrongful act or omission. However, that question does not arise, since the administration did not act in that way, and following the new classification which was refused by the persons concerned, refrained from establishing them, re-applied their contract and did not issue any repayment order against them.
Does that mean that the applicants have suffered no damage in respect of which they are entitled to reparation? I do not think so. It is clear that they have suffered what could be termed a perturbation in their lives due to the course of action adopted by the Assembly, which I have described and which I see no purpose in recapitulating. I think that, in the circumstances in which the events of this case have taken place, this must be seen as an undoubted injury, albeit one which is difficult to assess.
(C)
Amount of the injury— If account is taken of all the measures adopted by the Assembly with regard to the persons concerned, it can only be considered that the material parts of the injury have been to a large extent made good. In this connexion, it is enough to point out that not only, as I have said, was no repayment demanded from them, but (1) they received the offer of the continuation for two years of the pecuniary status resulting from the first classification in the form of a differential allowance; (2) in fact, despite the refusal of this offer and their being kept under contract, that contract was declared to have been extended until 31 December 1956, and (3) finally, by virtue of the suspension of implementation granted by the administration, the persons concerned still continue today to benefit from the Staff Regulations resulting from the orders of 12 December 1955. Moreover, it must also be pointed out that no evidence whatever has been submitted concerning the reality and importance of the ‘offers’ which the applicants allegedly received from outside the institution and which they were allegedly led to refuse by the more advantageous classification on which they believed they were entitled to count.
On the other hand, I think that there is in this case a non-material factor, the effects of which are not capable of being fully compensated by the material advantages granted by the Assembly, however great they may be. I think that the Court must itself sanction the course of action adopted by the Assembly, and that a judgment dismissing the applications, on whatever grounds it was based, would not fully attain that result. For that reason, borrowing a concept which finds frequent application in the case-law of certain member countries, I think that the Court could order the Assembly to pay symbolic damages of 1 franc.
I am of the opinion, regarding Cases 3 to 7/57:
—
That the Common Assembly should be ordered to pay each of the applicants the sum of 1 franc;
—
That the Court should dismiss the other conclusions in the applications;
—
That the costs should be borne in their entirety by the Common Assembly.
( ) Translated from the French. |
Judgment of the Court of 10 December 1957. - Acciaierie Laminatoi Magliano Alpi (A.L.M.A.) v High Authority of the European Coal and Steel Community. - Case 8-56.
European Court reports
French edition Page 00179
Dutch edition Page 00193
German edition Page 00191
Italian edition Page 00179
English special edition Page 00095
Danish special edition Page 00049
Greek special edition Page 00163
Portuguese special edition Page 00163
Summary
Parties
Subject of the case
Grounds
Decision on costs
Operative part
Keywords
++++
1 . PROCEDURE - LETTER SENT BY THE HIGH AUTHORITY - REGISTERED MAIL - DELIVERY TO EMPLOYEE OF THE ADDRESSEE UNDERTAKING - EFFECTS
2 . PRICES - PUBLICATION - SYSTEM - COMMUNICATION TO THE HIGH AUTHORITY OF PRICE LISTS AND CONDITIONS OF SALE
3 . PRICES - PUBLICATION - SYSTEM - OFFENCES - FINES
4 . PROCEDURE - ACTION IN WHICH THE COURT HAS UNLIMITED JURISDICTION - FINE - REDUCTION - POWERS OF THE COURT
Summary
1 . IF, BEFORE IMPOSING A FINE ON AN UNDERTAKING, THE HIGH AUTHORITY GIVES THAT UNDERTAKING, BY WAY OF A REGISTERED LETTER, THE OPPORTUNITY TO SUBMIT ITS COMMENTS PURSUANT TO ARTICLE 36 OF THE TREATY, THE STATEMENT CONTAINED IN THAT LETTER BECOMES FULLY EFFECTIVE AS SOON AS THE POSTAL EMPLOYEE DELIVERS THAT LETTER IN DUE COURSE TO AN EMPLOYEE OF THE UNDERTAKING AT ITS REGISTERED OFFICE, THE EFFECT OF WHICH IS TO BRING THE LETTER WITHIN THE CONTROL OF THAT UNDERTAKING
( TREATY, ARTICLE 36 ).
2 . THE TREATY IS NOT INFRINGED WHEN THE HIGH AUTHORITY DETERMINES THE EXTENT AND MANNER OF PUBLICATION OF PRICE LISTS AND CONDITIONS OF SALE, PURSUANT TO ARTICLE 60 ( 2 ) ( A ) OF THE TREATY, LAYING DOWN, INTER ALIA, THAT THEY SHALL BE COMMUNICATED TO IT, ARTICLE 60 ( 2 ) ( A ) MUST BE VIEWED IN THIS CONNEXION AS A SPECIAL PROVISION IN RELATION TO ARTICLE 47
( TREATY, ARTICLES 47 AND 60 ).
3 . ARTICLE 64 ALSO COVERS OFFENCES AGAINST DECISIONS OF THE HIGH AUTHORITY REGULATING PUBLICATION OF PRICES AND CONDITIONS OF SALE PURSUANT TO ARTICLE 60 ( 2 ) ( A )
TREATY, ARTICLES 60 ( 2 ) ( A ) AND 64 .
4 . IF A DECISION OF THE HIGH AUTHORITY IMPOSING A FINE IS THE SUBJECT-MATTER OF AN ACTION, THE COURT IS EMPOWERED NOT ONLY TO ANNUL BUT ALSO TO AMEND THE DECISION TAKEN, BY REDUCING THE AMOUNT OF AN EXCESSIVE FINE, SINCE THIS IS AN ACTION IN WHICH THE COURT HAS UNLIMITED JURISDICTION . IT HAS THIS POWER EVEN IN THE ABSENCE OF FORMAL CONCLUSIONS TO THAT EFFECT .
( TREATY, ARTICLE 36 ).
Parties
IN CASE 8/56
ACCIAIERIE LAMINATOI MAGLIANO ALPI ( ALMA ) SPA, HAVING ITS REGISTERED OFFICE IN TURIN, REPRESENTED BY ITS SOLE DIRECTOR, MARIO BELTRANDI, ENGINEER, ASSISTED BY ARTURO COTTRAU, ADVOCATE OF THE TURIN BAR AND BEFORE THE CORTE DI CASSAZIONE, ROME, WITH AN ADDRESS FOR SERVICE IN LUXEMBOURG AT THE CHAMBERS OF GEORGES MARGUE, 6 RUE ALPHONSE MUENCHEN, APPLICANT,
V
HIGH AUTHORITY OF THE EUROPEAN COAL AND STEEL COMMUNITY, REPRESENTED BY ITS LEGAL ADVISER, PROFESSOR GIULIO PASETTI-BOMBARDELLA, ADVOCATE, ACTING AS AGENT, ASSISTED BY ALBERTO TRABUCCHI, PROFESSOR AT THE UNIVERSITY OF PADOVA, ADVOCATE BEFORE THE CORTE DI CASSAZIONE, ROME, WITH AN ADDRESS FOR SERVICE IN LUXEMBOURG AT ITS OFFICES, 2 PLACE DE METZ, DEFENDANT,
Subject of the case
APPLICATION FOR THE ANNULMENT OF THE DECISION OF THE HIGH AUTHORITY OF 24 OCTOBER 1956 NOTIFIED TO THE APPLICANT BY REGISTERED LETTER OF 9 NOVEMBER 1956 IMPOSING ON THE APPLICANTS A FINE OF LIT 800 000,
Grounds
P . 98
A - INFRINGEMENT OF ARTICLE 36 OF THE TREATY
THE APPLICANT COMPLAINS THAT THE HIGH AUTHORITY IMPOSED THE CONTESTED FINE WITHOUT HAVING PREVIOUSLY GIVEN IT THE OPPORTUNITY TO SUBMIT ITS COMMENTS PURSUANT TO THE FIRST PARAGRAPH OF ARTICLE 36 OF THE TREATY . IN THIS CONNEXION, IT CLAIMS THAT THE REGISTERED LETTER SENT BY THE HIGH AUTHORITY ON 4 NOVEMBER 1955, WHICH, WITHOUT ANY DOUBT, CONSTITUTED AN INVITATION SATISFYING THE REQUIREMENTS OF THE SAID PROVISION, NEVER ARRIVED AT MAGLIANO ALPI, WHERE THE WORKS OF THE APPLICANT COMPANY ARE SITUATED, SINCE THE ADDRESS CONTAINED SPELLING ERRORS .
IT IS UNNECESSARY TO EXAMINE WHETHER THIS COMPLAINT IS ALSO, OR EXCLUSIVELY, ONE OF INFRINGEMENT OF ESSENTIAL PROCEDURAL REQUIREMENTS, SINCE THE COURT IS OF THE OPINION THAT IT IS UNFOUNDED .
THE HIGH AUTHORITY HAS SUBMITTED TO THE COURT A PHOTOCOPY OF THE ACKNOWLEDGEMENT OF RECEIPT OF THE ABOVE-MENTIONED LETTER, BEARING THE SEAL OF ALMA, THE AUTHENTICITY OF WHICH HAS NOT BEEN CHALLENGED . IT HAS THEREFORE SHOWN THAT THE LETTER WAS DELIVERED TO AN EMPLOYEE OF THE APPLICANT AT A BUILDING SITUATED AT 33 CORSO REGIO PARCO, TURIN, BEING THE ADDRESS WHICH THE APPLICANT, IN ITS APPLICATION, STATES TO BE THAT OF ITS REGISTERED OFFICE .
P . 99
THIS BEING SO, IT IS OF LITTLE IMPORTANCE WHETHER THE LETTER - AS STATED BY THE APPLICANT - WAS NOT CONVEYED FROM TURIN TO MAGLIANO ALPI . SINCE IT IS ESTABLISHED THAT IT DULY ARRIVED AT THE APPLICANT'S REGISTERED OFFICE, APPLICATION MAY BE MADE OF A PRINCIPLE OF LAW RECOGNIZED IN ALL COUNTRIES OF THE COMMUNITY, NAMELY THAT A WRITTEN DECLARATION OF INTENT BECOMES EFFECTIVE AS SOON AS IT ARRIVES IN DUE COURSE WITHIN THE CONTROL OF THE ADDRESSEE .
THE SUBMISSION CONCERNING INFRINGEMENT OF ARTICLE 36 MUST THEREFORE BE REJECTED .
B - INFRINGEMENT OF ARTICLE 64 OF THE TREATY
ACCORDING TO THE APPLICANT, THE HIGH AUTHORITY FAILED TO APPRECIATE THE SCOPE OF ARTICLE 64 OF THE TREATY; IT CLAIMS THAT THE OFFENCE OF WHICH IT WAS GUILTY SHOULD HAVE BEEN PUNISHED ON THE BASIS OF ARTICLE 47 .
THIS ARGUMENT MUST BE REJECTED .
ACCORDING TO ARTICLE 64 FINES MAY BE IMPOSED UPON UNDERTAKINGS WHICH INFRINGE THE PROVISIONS OF CHAPTER V OF THE TREATY OR DECISIONS TAKEN THEREUNDER BY THE HIGH AUTHORITY . THAT CHAPTER COVERS OFFENCES AGAINST THE PROVISIONS CONCERNING PUBLICATION OF PRICE LISTS AND CONDITIONS OF SALE, CONTAINED IN ARTICLE 60 ( 2 ) ( A ), AS WELL AS OFFENCES AGAINST THE RULE OF NON-DISCRIMINATION . SINCE THE APPLICANT DID NOT FULFIL ITS OBLIGATION TO PUBLISH ITS PRICE LISTS, AS WELL AS INFRINGING THE HIGH AUTHORITY'S DECISIONS NOS 31/53, 2/54 AND 37/54, LAYING DOWN THE EXTENT AND MANNER OF SUCH PUBLICATION, THE HIGH AUTHORITY CORRECTLY APPLIED ARTICLE 64 TO IT .
CONTRARY TO THE APPLICANT'S BELIEF, THE TREATY IS NOT INFRINGED WHEN THE HIGH AUTHORITY DETERMINES THE EXTENT AND MANNER OF PUBLICATION OF PRICE LISTS PURSUANT TO ARTICLE 60 ( 2 ) ( A ) OF THE TREATY, LAYING DOWN, INTER ALIA, THAT THOSE LISTS SHALL BE COMMUNICATED TO IT . AS ITS AGENT HAS NOTED, ARTICLE 60 ( 2 ) ( A ) MUST BE VIEWED IN THIS CONNEXION AS A SPECIAL PROVISION IN RELATION TO ARTICLE 47 .
THE APPLICANT WRONGLY MAINTAINS THAT THE ARGUMENT ADDUCED BY THE HIGH AUTHORITY WOULD LEAD TO ABSURD CONSEQUENCES IN THAT IT WOULD ALLOW THE IMPOSITION OF VERY HEAVY FINES IN RESPECT OF INFRINGEMENTS OF PURELY PREVENTIVE PROVISIONS . IN FACT, ARTICLE 64 DOES NOT LAY DOWN A MINIMUM; IT THEREFORE ALLOWS AND REQUIRES THE HIGH AUTHORITY TO ASSESS THE AMOUNT OF THE FINE IN RELATION TO THE NATURE OF THE RULE INFRINGED . FURTHERMORE, THE RULES RELATING TO PUBLICATION OF PRICES ARE NOT OF MINOR IMPORTANCE, BUT ARE ON THE CONTRARY A FUNDAMENTAL PRINCIPLE OF THE COMMON MARKET .
THE SUBMISSION CONCERNING INFRINGEMENT OF ARTICLE 64 MUST THEREFORE ALSO BE REJECTED .
C - AMOUNT OF THE FINE
THE COURT HAS EXAMINED THE QUESTION WHETHER THE AMOUNT OF THE FINE SHOULD BE REDUCED .
IT NOTES THAT THE ACTION BEFORE IT IS ONE IN WHICH IT HAS UNLIMITED JURISDICTION ( SECOND PARAGRAPH OF ARTICLE 36 ) AND THAT, THEREFORE, IT IS EMPOWERED NOT ONLY TO ANNUL BUT ALSO TO AMEND THE DECISION WHICH HAS BEEN ADOPTED .
P . 100
ALTHOUGH THE APPLICANT HAS PUT FORWARD NO FORMAL SUBMISSION TO THIS EFFECT, THE COURT BELIEVES, THE ADVOCATE-GENERAL CONCURRING, THAT THAT PART OF THE APPLICATION STRESSING THE MODEST FINANCIAL CIRCUMSTANCES OF THE APPLICANT MAY BE INTERPRETED AS AN ALTERNATIVE SUBMISSION REQUESTING SUCH A REDUCTION . FURTHERMORE, EVEN IN THE ABSENCE OF ANY FORMAL SUBMISSION, THE COURT IS AUTHORIZED TO REDUCE THE AMOUNT OF AN EXCESSIVE FINE SINCE SUCH A RESULT WOULD NOT HAVE AN EFFECT ULTRA PETITA, BUT WOULD ON THE CONTRARY AMOUNT TO A PARTIAL ACCEPTANCE OF THE APPLICATION . IN ACCORDANCE WITH THE VIEWS EXPRESSED BY THE ADVOCATE-GENERAL THE COURT IS, HOWEVER, OF THE OPINION THAT THE AMOUNT OF THE FINE IS NOT EXCESSIVE IN THIS CASE . AS REGARDS THE GRAVITY OF THE OFFENCE, ACCOUNT SHOULD BE TAKEN OF THE IMPORTANCE OF THE PRINCIPLE OF THE PUBLICATION OF PRICES, ON THE ONE HAND, AND OF THE FACT, ON THE OTHER HAND, THAT THE APPLICANT PERSISTENTLY DISREGARDED THE RULES IN QUESTION FOR MORE THAN THREE YEARS, THEREBY BETRAYING CONSIDERABLE NEGLIGENCE AT THE VERY LEAST . FURTHERMORE, AS REGARDS THE APPLICANT'S FINANCIAL SITUATION THE COURT REFERS TO THE FIGURES QUOTED IN THE ADVOCATE-GENERAL'S OPINION . IT NOTES, MOREOVER, THAT THE ACCOUNTS FOR 1955 AND 1956 CONTAIN ITEMS ON THE DEBIT SIDE ENTITLED " EXTRAORDINARY RESERVE FUND ", AMOUNTING TO LIT 18 043 659 AND 18 621 034 RESPECTIVELY . THIS BEING THE CASE, NO MANIFEST INJUSTICE HAS BEEN ESTABLISHED AND THE COURT DOES NOT INTEND TO SUBSTITUTE ITS ASSESSMENT FOR THAT OF THE HIGH AUTHORITY .
THE COURT IS NOT UNAWARE OF THE DIFFICULTIES WHICH THE APPLICANT MAY ENCOUNTER AS THE RESULT OF THE COINCIDENCE OF ITS OBLIGATIONS TO PAY THE FINE AND DISCHARGE ARREARS IN RESPECT OF LEVIES . THE COURT RELIES ON THE HIGH AUTHORITY'S JUDGMENT REGARDING THE MANNER IN WHICH THE FINE IS TO BE PAID .
Decision on costs
SINCE THE APPLICANT HAS FAILED IN ALL HEADS OF ITS APPLICATION IT MUST BEAR THE COSTS OF THE ACTION IN ACCORDANCE WITH ARTICLE 60 OF THE RULES OF PROCEDURE OF THE COURT .
Operative part
THE COURT
HEREBY :
DISMISSES THE APPLICATION BROUGHT AGAINST THE DECISION OF THE HIGH AUTHORITY OF 24 OCTOBER 1956 IMPOSING ON THE APPLICANT A FINE OF LIT 800 000;
ORDERS THE APPLICANT TO PAY THE COSTS . |
OPINION OF MR ADVOCATE-GENERAL ROEMER ( )
Summary
A — Preliminary remark
B — Right to bring an application and whether the applicants are lawfully represented
C — Analysis and order of the submissions
I — Necessity for this study
II — Legal structure of the equalization scheme for ferrous scrap
III — Place and order of the complaints alleged
D — Admissibility of the applications
E — Admissibility of the different submissions raised
F — Examination of the different submissions
I — Complaints directly concerning the contested individual decisions
II — Additional submission in Application No 9/56; Assessment by the Fund on its own authority
III — Complaints against the fixing of the equalization rate
IV — Complaints against the general decisions of the High Authority
G — Results and conclusions
Mr President,
Members of the Court,
I have today to deliver my opinion in two cases:
1.
Meroni & Co., Industrie Metallurgiche, Società per Azioni, whose registered office is in Milan, represented by its amministratore, Aldo Meroni, Engineer,
v
High Authority of the ECSC (Register No 9, year 1956);
2.
Meroni & Co., Industrie Metallurgiche, Società in Accomandita Semplice, whose registered office is in Erba, province of Como, represented by its procuratore, Agostino Artioli,
v
High Authority of the ECSC (Register No 10, year 1956).
A — Preliminary remark
These applications have been made by two separate companies under Italian commercial law and they have not been joined during the proceedings.
Each of them contests an individual decision of the High Authority. The purpose of the two individual decisions was to claim and recover a sum, different in the two cases, owned by the addressees of the decisions by way of contributions to the Imported Ferrous Scrap Equalization Fund.
The nature of the submissions and arguments put forward in Case 10/56 and in Case 9/56 is identical. In the latter case, there is an additional submission arising from the fact that the amount of the contribution due was calculated by way of an estimate made by the Fund on its own authority and the applicant puts forward various complaints against that estimate. I think I shall be able to take sufficiently into account the necessity of dealing separately with the additional arguments with regard to the estimate and the submission arising from it by stressing the particular aspects of that part of the dispute.
In favour of the approach which I am choosing, there is also the fact that during the oral arguments the explanations of the applicants and of the defendant in the two cases were de facto submitted to the Court jointly and in an indivisible way.
So I would mention that except where I expressly indicate otherwise, my exposition will cover the two cases.
B — Right to bring an application and whether the applicants are lawfully represented
1.
Meroni & Co., Industrie Metallurgiche, Società per Azioni, Milan, is represented by Aldo Meroni, amministratore, who alone holds that office. For the purposes of the present case, the amministratore has given a power of attorney to Arturo Cottrau of the Italian Bar.
2.
Meroni & Co., Industrie Metallurgiche, Società in Accomandita Semplice, Erba, is legally represented by Ambrogio Meroni and Aldo Meroni, gerenti, who alone hold that office. The gerente Ambrogio Meroni has appointed Agostino Artioli procuratore, with power to represent the company, and in particular to conduct legal proceedings and defend it in legal proceedings in its name. For the purposes of the present case the procuratore has given a power of attorney to Arturo Cottrau of the Italian Bar.
The legal form of the applicant companies, their legal representation, the power of attorney given to the procuratore and to his agent are attested by documents certified as true copies and there is no objection on this point.
The two companies are undertakings for the purposes of Article 80 of the Treaty. They thus have the right to bring an application before the Court of Justice and they are lawfully represented.
For the procedure followed in the two cases, I would refer to the explanations of the Judge-Rapporteur. It has been in accordance with the Rules of Procedure of the Court of Justice and does not call for any comment.
I am thus in a position to come to the subject-matter of the dispute and to analyse the submissions in the application.
C — Analysis and order of the submissions
I — Necessity for this study
The contested decisions are individual decisions for recovery. The applications are based on three submissions, infringement of an essential procedural requirement, misuse of powers, and manifest failure to observe the Treaty.
But upon closer examination, this division — which seems simple — does not suffice. For the individual fixing of the contribution is based on general decision of the High Authority and on decisions of the Fund and the Joint Bureau. The complaints put forward as part of each submission are sometimes concerned directly with the individual decisions, sometimes with the activity of the Brussels agencies and with decisions adopted by them in application of the general decisions of the High Authority concerning the system for the equalization of purchases of ferrous scrap inside and outside the territory of the Community. According to the High Authority, certain complaints are even directed against the general decisions of the High Authority establishing the equalization system. It therefore argues that the time-limit has expired and that certain submissions are inadmissible. Thus it seems necessary to start by explaining the legal structure of the system for the equalization of ferrous scrap and in particular the bases for an individual decision of the kind contested. The order of the submissions and complaints necessary for proceeding to an examination from the legal point of view follows from this.
II — Legal structure of the equalization system for ferrous scrap
Before the Common Market was established, the need for an arrangement for the equalization of imported ferrous scrap had been recognized (see the preamble to Decision No 2/53, JO No 1 of 10.2. 1953, p. 5.) At the same time the High Authority had fixed maximum prices for ferrous scrap, which were in force until 1 April 1954.
1. Voluntary equalization arrangement (Decision No 33/53)
From 15 March 1953 to 1 April 1954, equalization was based on a voluntary agreement between the Community producers of pig-iron and of steel, who had created a ‘Joint Bureau of Ferrous Scrap Consumers’ (hereinafter referred to as ‘the Joint Bureau’), an ‘imported Ferrous Scrap Equalization Fund’ (hereinafter referred to as ‘the Fund’) and an Office representing consumers and traders on a basis of parity. The Joint Bureau and the Fund take the form of companies established under private law. They are cooperative undertakings under Belgian commercial law and their registered offices are at Brussels. As appears from the file, these ‘central Brussels agencies’ created a ‘regional office’ in each country of the Community and empowered an association to take charge of the matters concerned. The regional office for Italy is ‘Consorzio Approvvigionamenti Materie Prime Siderurgiche SA, Milano’, or ‘Campsider’ for short.
The voluntary agreement was authorized by Decision No 33/53 of 19 June 1953 ( JO No 8 of 9.6.1953, p. 137 ) of the High Authority acting under Article 65 of Article 53 (a) of the Treaty.
The conditions and obligations attaching to that authorization required in particular:
That the statutes of the Joint Bureau and of the Fund be published without delay in an appropriate newspaper in every Member State;
That all decisions of the Joint Bureau and of the Fund be communicated to the High Authority;
That an observer from the High Authority be present at all meetings;
That the administration and the accounts of the Fund be supervised by the High Authority;
Finally, that, after approval from the High Authority, all the decisions for which Article 3 of the statutes of the Fund makes provision be published.
As regards the latter provision, it should be noted that the German translation of Article 2 (4) of Decision No 33/53 contains an inaccurate translation using the word ‘Geschäftsordnung’ as the equivalent of the French word ‘règlement’. The rules (règlements) referred to in Article 3 of the statutes of the Fund cover the means whereby equalization is to be achieved. Article 3 of the statutes says:
‘The object of the Imported Ferrous Scrap Equalization Fund shall be:
To bring about, by the means referred to below, the equalization of the prices of ferrous scrap imported from third countries with the prices of ferrous scrap originating within the Community. The means whereby such equalization is to be achieved, both as regards the amount of the contributions to be paid for the subsidizing of imported ferrous scrap and as regards the basis for and the rate of the levy intended to finance the fund shall be laid down in rules to be drawn up by the Board’.
It appears from this provision in the statutes that the means whereby equalization is to be achieved must be laid down by rules drawn up by the Board of the Fund.
2. First compulsory equalization system (Decision No 22/54)
Since it was found that the first voluntary system was inadequate, the High Authority, acting by virtue of Article 53 (b) of the Treaty, created, by Decision No 22/54 of 26 March 1954 ( JO No 4 of 30.3.1954, p. 286 ) and with effect from 1 April 1954, an equalization arrangement which was compulsory for all undertakings in the Community using ferrous scrap.
The High Authority entrusted the functioning of that equalization arrangement ‘subject to its supervision’ to the above-mentioned existing agencies had already applied the voluntary equalization system, namely the Fund and the Joint Bureau (Art. 1 (2)). The Fund, defined by the High Authority as the executive agency of the equalization scheme (first paragraph of Article 6), fixes the rate of the contributions and the accounting periods. On this point, the decision lays down the following rules: the contributions must be necessary for the equalization of imported ferrous scrap; the amount thereof is to be calculated in proportion to the tonnages of ferrous scrap purchased by each undertaking or imported from third countries. The Joint Bureau also has a part to play, as Article 5 provides that the Joint Bureau shall propose to the Fund the tonnage of ferrous scrap to be imported, the maximum import purchase price and the equalization price — factors which are essential for calculating the rate of contribution. Finally, it is provided that an observer from the High Authority is to be present at all meetings of the Joint Bureau and of the Fund. He can reserve the final decision to the High Authority. Where the deliberating bodies of the Fund and of the Joint Bureau fail to reach a unanimous decision as required by the first paragraph of Article 9 of the decision, the question concerned is to be ‘resolved by decision of the High Authority’.
Article 4 provides that the Fund shall notify the undertakings of the amount of the contributions to be paid and the time within which they must be paid. It is given power to hold those amounts. Where there is a failure to pay within due time, the Fund is required to call upon the High Authority to intervene, and the latter ‘may adopt an enforceable decision’. (Decision No 22/54, second paragraph of Article 4).
Contrary to the text of Decision No 33/53 of the High Authority, there is no express provision giving the High Authority the right to supervise the administration and the accounts. The High Authority no longer requires publication of alterations to the statutes or of the decisions of the Fund. However, since the Fund and the Joint Bureau — as I have pointed out — are companies under private law, alterations to the statutes are to be found published in the ‘Commercial Companies’ section of the annexes to the ‘Moniteur Belge’, these being matters relating to the Commercial Register.
3. The expanded compulsory equalization system (Decision No 14/55)
This compulsory equalization system was expanded on 1 April 1955 by Decision No 14/55 ( JO No 8 of 30.3.1955, p. 685.) The expanded system was originally to apply until 31 March 1956, but it was extended three times, finally until 31 January 1957:
By Decision No 10/56 ( JO No 7 of 15.3.1956, p. 81 ) until 30 June 1956;
By Decision No 24/56 ( JO No 15 of 27.6.1956, p. 165 ), until 31 October 1956; Finally by Decision No 31/56 ( JO No 23 of 18.10.1956, p. 308 ) until 31 January 1957.
Compared with the earlier rules, the two significant alterations to the system as from 1 April 1955 are as follows:
1.
The Joint Bureau may, within certain limits, enter directly into contracts of purchase on behalf of consumers to be named at a later date.
2.
A bonus is granted for economies in ferrous scrap by means of an increased use of pig-iron.
Decision No 26/55 ( JO No 18 of 26.7.1955, p. 869 ), later supplemented by Decision No 3/56 ( JO No 4 of 22.2.1956, p. 17 ), laid down detailed rules concerning the granting of the bonus for economies in ferrous scrap resulting from an increased use of pigiron. This point need not be examined in the present case.
The contributions must now finance and cover, in addition to the equalization of imported ferrous scrap, the means necessary for purchasing the tonnages available and for the granting of the bonus for economies, it being understood that, as regards imports in common, recourse is to be had, in principle, to the usual means of credit. But the obligation to pay this contribution continues to fall on all the undertakings of the Community which use ferrous scrap and not only on those which are members of the Fund and of the Joint Bureau.
The preamble to Decision No 14/55 expressly stresses the responsibility of the High Authority:
‘The High Authority is responsible for the proper functioning of the financial arrangement and thus must be in a position to intervene effectively at any moment.’
The observer from the High Authority is now called its ‘permanent representative’. Finally, it is provided that the High Authority may put any proposals to the Joint Bureau or to the Fund. If those agencies do not hold meetings within the following ten days, ‘the decision shall be taken by the High Authority’ (text of the third paragraph of Article 9 of the Decision).
4. Basis for an individual assessment to the contribution
The following bases appear from this legal structure. They are steps in the process at the end of which an individual decision is adopted fixing the contribution due by a given undertaking.
(a)
First, it is necessary to refer to the relevant general decision of the High Authority. Since the decisions contested in the present applications cover the period from 1 April 1954 to 30 June 1956, it is necessary to refer to Decision No 22/54 for the period from 1 April 1954 to 31 March 1955 and to Decision No 14/55 for the period beginning on 1 April 1955.
No direct indication is to be found in those decisions as to the calculation and amount of the contribution payable by an undertaking. On the contrary, according to the second paragraph of Article 3 of the decisions, it is the Fund which fixes the rate of the contributions and the accounting periods.
(b)
These decisions of the Fund, which fix the rate of the contributions and the accounting periods, valid equally for all undertakings using ferrous scrap, thus constitute the additional basis for the individual assessment to the contribution.
It is necessary to point out here that during the period under consideration the High Authority adopted a decision of its own, the Boards of the Joint Bureau and of the Fund having failed to reach a unanimous decision. The decision in question was Decision No 9/56 ( JO No 5 of 5.3.1956, p. 25 ). That decision fixed for three months, from November 1955 to January 1956, not the rate of contribution itself but an element of the equalization price, that is to say an essential factor in the fixing of the equalization rate.
(c)
It is only at this stage that it is possible to apply the system to the situation existing in the different undertakings. For each undertaking it is necessary to establish the tonnage of purchases of ferrous scrap subject to the contribution.
By multiplying that tonnage by the rate of contribution, the amount of the contribution is obtained.
(d)
Three ‘stages’, so to speak, may thus be distinguished in fixing individual contributions:
1.
The relevant general decision of the High Authority;
2.
The decisions of the Fund in force during the period under consideration, concerning the rate of contribution, or the decision of the High Authority in lieu thereof;
3.
The establishing of the tonnage of ferrous scrap subject to the contribution as the basis of the calculation for the undertaking concerned and the application of the contribution rate to that basic tonnage.
III — Place and order of the complaints alleged
In relation to these three stages, the complaints put forward by the applicants may be classified as follows:
1.
Against the general decisions of the High Authority two complaints are made:
(a)
the repercussions of the decisions were contrary to the recommendations which the Council of Ministers annexed to its assent;
(b)
the decision to extend the period during which the system was to apply was irregular.
2.
Against the activity and decisions of the Fund particularly as regards the fixing of the contribution rate, it is alleged:
(a)
that the reasons stated were inadequate, particularly in that no indication was given of the various factors used in fixing the contribution rate;
(b)
that matters were handled incompetently: incomplete information to the undertakings, inaccurate, provisional and late communications;
(c)
errors of fact in determining the factors used in fixing the contribution rate, particularly as regards the average prices taken for Community scrap and imported scrap.
3.
Against the individual decisions of the High Authority it is directly alleged:
(a)
that the reasons stated were inadequate;
(b)
that the procedure was irregular in that the applicants were not given an opportunity to submit their observations;
(c)
in addition, but only in Case 9/56, that the purchases of ferrous scrap subject to the contribution were estimated by the Fund on its own authority without any legal basis and in an arbitrary manner.
D — Admissibility of the applications
Before examining whether the complaints are admissible and whether they are well founded, it is necessary to consider whether, as a whole, the applications are admissible.
The High Authority has objected that in the letters which they addressed to it on 12 and 13 April 1956, the applicants recognized their obligations and that consequently the applications are inadmissible. During the hearing, the High Authority emphasized that it was not saying that the said unqualified acceptance related to the individual decisions which it only took some months afterwards, but that it related to the decisions and statements of account of the Fund, duly communicated to the applicants and of which they had knowledge prior to 12 and 13 April.
An examination of the contents of the two letters and of those which had previously been addressed by the High Authority to the applicants shows that no sum due is specified and that the applicants object and make it clear that they are ‘unconvinced’. These two facts are sufficient to exclude in this case an acknowledgement of the debt or a waiver of the right to bring proceedings, particularly since no decision against which proceedings could be instituted had as yet been adopted. The letters of 12 and 13 April 1956 do not affect any of the complaints directly put forward against the individual decisions.
When one considers the remainder of the complaints put forward against the general decisions and the decisions of the Fund, it appears that they are already more or less ascertainably contained in the letters of the applicants of April 1956 or that there is therein at least an allusion to them. In those letters the repercussions of the equalization system are criticized and it is suggested that the establishing of the bases for the calculation of the rate of contribution and in particular the two average prices, should be subjected to scrutiny. In general terms, it is complained that undertakings are not given enough information and that insufficient statistical data is available. In these circumstances, the offer to pay the debt by instalmerits — of unspecified amounts — can only be interpreted as meaning that the principle of the equalization system as such is not disputed and that the existence of an obligation is in principle recognized. On the other hand, the applicants state that they have absolutely no knowledge of the factors determining the amount of their contribution.
From this 1 conclude that the applicants' letters of 12 and 13 April 1956 are not in contradiction with the arguments and submissions raised in the applications. Thus it is not necessary to inquire whether, in principle, the waiver of the right to argue the unlawful nature of such decisions could be effective in respect of a later legal action.
E — Admissibility of the different submissions raised
1. Directly against the individual decisions
The second paragraph of Article 33 of the Treaty provides that as against decisions concerning them undertakings may rely on all the grounds on which an application may be based. Those grounds are thus clearly admissible. Indeed the defendant does not raise any objection on this point.
2. Against the general decisions
The High Authority is of the opinion that the submissions put forward against General Decisions Nos 22/54 and 14/55 and against Decision No 10/56 extending the scheme are inadmissible because the period within which an application may be brought had expired and also because as against general decisions undertakings can only allege a misuse of powers affecting them.
This gives rise to a question of great importance as regards the legal protection of undertakings. It is a question which has been considered in detail in Case 15/57, Compagnie des Hauls Fourneaux de Chasse. It may be enunciated as follows:
In an application against an individual decision applying a general decision to an undertaking, may the undertaking or an association argue in addition that the general decision which is being applied is unlawful, first notwithstanding that the period within which an application may be made for annulment of the general decision has expired and secondly in reliance on the four grounds?
The third paragraph of Article 36 of the Treaty supplies an express answer to this question as regards the case where the contested individual decision imposes a pecuniary sanction or orders a periodic penalty payment. Such an individual decision is based on the fact that the addressee has not observed a general decision. Non-observance may consist of an infringement of a prohibition or of a failure to comply with a positive requirement. In the case of such non-observance, there is an express reference to the first paragraph of Article 33, which means that the four grounds mentioned in the first paragraph of Article 33 may be relied upon in support of the objection of illegality. The period prescribed in the third paragraph of Article 33 does not apply because what is involved here is merely an objection put forward by the applicant upon the occasion of another application and not a direct application for the annulment of the general decision. This objection is not intended to secure the annulment of the general decision, but its illegality is argued for the purpose of obtaining the annulment of the individual decision applying the general decision to the applicant.
Do the rules contained in the third paragraph of Article 36 of the Treaty constitute special rules as regards the imposing of pecuniary sanctions and periodic penalty payments, or have we, here, a significant instance of the application of a general concept of law, which, because of its significance, is especially emphasized by the Treaty? I do not see any good reason why the objection under discussion here should be interpreted restrictively. On the contrary, the field of application of the objection of illegality must be widened beyond the case of pecuniary sanctions and period penalty payments to supplement the legal protection of undertakings. Since it is only within strict limits that undertakings may contest general decisions by means of an application for annulment, it must be open to them, where obligations, requirements and prohibitions arise directly from general decisions, to argue that the general decision which is being applied is illegal. It is from this point of view that Article 41 of the Treaty should also be considered. The general decision is the basis giving rise to actions brought before the national courts and the person affected may contest the validity of the decision of the High Authority, which is of significance as regards the judgment to be delivered by the court. It is only exceptionally that undertakings can be regarded as having a sufficient interest to bring a direct application for the annulment of general decisions. Often the interest of the undertakings is not apparent prior to such time as an individual decision applying a general decision to them is adopted against them. On the other hand, there is no denying that it is desirable that an illegal general decision should not be applied in practice to an undertaking and that the said undertaking should not be placed under obligations arising from it. It is interesting to note that Article 184 of the Treaty establishing the European Economic Community does not follow the limited terms of Article 36 of the ECSC Treaty, and provides generally:
‘Notwithstanding the expiry of the period laid down in the third paragraph of Article 173, any party may, in proceedings in which a regulation of the Council or of the Commission is in issue, plead the grounds specified in the first paragraph of Article 173, in order to invoke before the Court of Justice the inapplicability of that regulation.’
The Treaty establishing the European Atomic Energy Community contains the same provision in Article 156.
Thus as regards this part of the problem, I come to the same result as did my colleague Mr Lagrange in his opinion. I am glad to note that we have reached this result absolutely independently.
It is therefore admissible for the applicants to raise the illegality of the general decisions upon which the contested individual decisions for recovery are based, and it is not possible to apply the limitations which would have been effective if the applicants had directly contested the general decisions by an application for annulment.
3. Against the decisions of the Fund
There is now no longer any difficulty in examining the admissibility of the complaints put forward against the ‘second stage’, that is to say against the decisions of the Fund. The applicants have rightly argued that it does not seem that any application lies against those decisions and that it must therefore be open to them to contest them when the individual decision of the High Authority applies them to them. Moreover, in its rejoinder, the High Authority has abandoned its first objection according to which the decisions of the ‘independent’ fund cannot be contested.
It does not matter here whether the decisions of the Fund, particularly those concerning the fixing of the rates of contribution, may in any case be contested as constituents of the individual decision or whether, on the contrary, it is necessary to consider them as general decisions within the meaning of the Treaty. For in both cases the submissions alleged are admissible.
To sum up, all the submissions are therefore admissible, whatever the ‘stage’ at which they are directed. However, it is only the contested individual decision that can be annulled.
F — Examination of the different submissions
I come now to the examination of the different submissions. Although, in investigating what were the bases on which the individual decisions for recovery were adopted, it has been necessary to start with the general decisions of the High Authority, here it seems to me that it will be useful to follow the reverse order and to start by examining the complaints which directly concern the contested individual decisions.
I — Complaints directly concerning the contested individual decisions
1. Inadequate reasons
(a) The reasons actually given
Each of the contested decisions states that the applicants must pay a certain amount to the Fund in respect of a given period. In law, they are based on the general decisions of the High Authority. As regards fact, they state that the applicants have not paid the amounts due under those decisions.
(b) Reasons required by the Treaty
The Court of Justice has already on several occasions considered the extent of the duty, by which, under Article 15 of the Treaty, the High Authority is bound, to state reasons when it adopts its decisions. The Court has held in its judgments that the reasons on which a decision of the High Authority is based must mention, in addition to the rules of law being applied, the essential elements of the findings of fact on which the legal justification for the measure depends — I am referring to the judgments in Cases 6/54 and 2/56.
In the opinion which I delivered in the latter case, I said that the purpose of the duty to state reasons was to inform the interested parties and, should legal proceedings arise, the Court of Justice itself, as to the provisions being applied and the factual circumstances to which they were applied.
In the present case it is enforceable decisions in respect of pecuniary obligations which are involved. The reasons on which such decisions are based must above all indicate clearly the method of calculation and the composition of the sum mentioned in the operative part of the decision. In accordance with the legal structure of the equalization system which I have explained, the basis adopted, apart from the provisions of the Treaty and of the general decisions of the High Authority which are being applied, should be the decisions of the Fund fixing the rates of contributions and the accounting periods over the span of time in question. Finally it is necessary to establish the tonnage of ferrous scrap which is subject to the contribution and which is to be taken into consideration in the case of the undertaking concerned. These are the essential facts and foundations for the genesis of an enforceable decision of this kind.
(c) The arguments of the High Authority
There is no need of long explanations in or der to show that the reasons stated for the contested decisions do not contain those features which I have said are essential. The reasons do not even refer to the Fund's decisions and findings or invitations to pay the amounts in question. The Fund is simply mentioned as the recipient of the payment.
Moreover the High Authority has admitted that it has not supplied full reasons of its own. It has taken the view that it was not necessary for it to do so because it had delegated its own tasks to an ‘independent’ association of undertakings and, according to Article 4 of Decisions Nos 22/54 and 14/55, its role was limited to adopting an enforceable decision under Article 92.
(d) The relationship between the High Authority and the Fund
There thus arises the question as to what is the relationship between the High Authority and the Fund. With the regard to the duty to state reasons, this question only calls for an answer in so far as it is necessary to examine whether the Fund is alone responsible for calculating the contribution of each undertaking, the High Authority having no other function than to adopt an enforceable decision under Article 92 of the Treaty.
In order to answer this question, it is necessary to start with the Treaty. The equalization system is based on Article 53 (b) of the Treaty, according to which the High Authority may make any financial arrangements which it recognizes to be necessary for the performance of the tasks set out in Article 3. The unanimous assent of the Council of Ministers is required. Apart from these financial arrangements made by the High Authority, Article 53 covers two other kinds of arrangements: arrangements made by several undertakings and arrangements made or maintained by a Member State. Whereas several undertakings may make, on a voluntary basis, an agreement which requires the authorization of the High Authority, the financial arrangements made by the Member States and by the High Authority rest on a legislative foundation. That appears with particular clarity in the case of this system for equalization of ferrous scrap, which is compulsory for all the undertakings of the Community using ferrous scrap. Since the scheme is imposed by force of law and in view of the direct intervention of the High Authority, it is understandable that the unanimous assent of the Council is necessary. However the requirement that the Council must give its unanimous consent cannot possibly mean, although this was suggested by counsel for the High Authority, that the arrangement can be ‘independent’. Since the High Authority brings the equalization arrangement into being by a legislative act it is much more natural to conclude that the means available under public law are also necessary for its application and that it must therefore undertake this matter itself. It is not necessary to consider here how far the High Authority may delegate application of the same to other bodies. This is a point to which I shall revert. It is enough to note that the Fund cannot be ‘independent’ for the very reason that it has not the status of a public authority. The fact that in many cases of non-payment by an undertaking, as here, a decision of the High Authority is necessary, is a proof of this. Under the Treaty, it is the High Authority alone which may adopt decisions and the duty to state reasons applies to all decisions of the High Authority.
The High Authority had no power to create, by General Decisions Nos 22/54 and 15/55, a category of decisions for which the Treaty makes no provision, and capable of adoption without any reasons being given. Article 14 of the Treaty enumerates exhaustively the forms whereby the High Authority may act by virtue of its prerogatives as a public authority. Reasons must be given for all these forms — decision, recommendation and opinion — for Article 15 so provides. The second paragraph of Article 4 of Decisions Nos 22/54 and 14/55 provides that the Fund shall call upon the High Authority ‘to intervene’. Since it is the Fund's task ‘under the responsibility of the High Authority’ to apply the equalization arrangement, the High Authority must, upon being called upon so to do by the Fund, itself enforce the arrangement and consider what means of doing so is appropriate. Although its intervention may, apart from any other possible course, consist in adopting an enforceable decision, its power to do so is not based on the second paragraph of Article 4 of the general decisions, but exclusively on the Treaty. According to the Treaty it would be illegal for the High Authority to adopt an enforceable decision creating a pecuniary obligation towards a third party, that is to say, towards a body independent of the Community, and to leave responsibility for the factual accuracy of the decision to that third party. With regard to the duty to state reasons, it does not matter whether the High Authority controls the activities of the Fund. Even if the High Authority applied the equalization arrangement through its own servants, it would have to give full reasons for its decisions.
(e) Special features of this case
In concluding this part of my opinion, I must still point out the special features of this case.
Even if the High Authority's line of argument, which I have just rejected, were correct, it would at least have been necessary for the decision to refer to an invitation to pay emanating from the Fund and mentioning the same sum. That reference has not been made, nor is there before us any invitation on the part of the Fund to pay the sum. There are only to be found on the file a number of provisional invitations to pay, covering brief periods. It was only during the proceedings that the High Authority produced a statement of the total of the sums claimed in its decisions. A comparison between this statement and the various invitations to pay reveals obscurities and contradictions. It was only during the oral hearing that the High Authority explained an obvious difference in the figures in its statements by saying that an unspecified sum had been added to the principal amount by way of interest. In these circumstances it is understandable that the applicants said that they were ‘unconvinced’ in their observations of April 1956. That only made it the more necessary to produce clear and full reasons and to give accurate information as to the composition of the sum claimed.
(f) Results
I conclude that the contested decisions are not supported by sufficient reasons, that the inadequacy of the reasons for which the High Authority is itself to blame is to be explained by a misconceived notion of the relationship existing between the High Authority and the Fund and that, accordingly, there has been an infringement of an essential procedural requirement.
2. Irregularity of the procedure
In their reply, the applicants have also referred expressly for the first time, in support of the ground of ‘infringement of an essential procedural requirement’, to the fact that the procedure prior to the adoption of the decision was irregular because, since the High Authority did not supply them with precise information, it did not enable them to check or to submit their observations upon the amount and the composition of the contribution claimed.
The High Authority is of the opinion that this complaint is out of time and that therefore it is not admissible. Article 22 of the Protocol on the Statute of the Court provides that the application shall contain a brief statement of the grounds on which it is based. The application refers to the ground of ‘infringement of an essential procedural requirement’ and also indicates that the applicants have made unsuccessful requests to the Fund and to the High Authority for information, so that they have been unable to check either the account or the composition of the contributions claimed. I therefore think that the formal requirements as to the exercise of these rights within the required period have been complied with and that we are not faced with a new and independent ground raised for the first time in the reply.
Moreover the High Authority was under an obligation to permit the applicants to submit their observations before adopting any immediately enforceable decision. While it is for the Fund to call upon the High Authority to intervene, it is for the latter to examine all aspects of the case submitted to it in order to be able to decide, with full knowledge of the relevant information, whether it should accede to the Fund's request for its intervention and, if so, what form its intervention should take.
Admittedly, the High Authority did, by letter of 21 March 1956, invite the applicants to submit their observations. But that letter does no more than state that the applicants have not yet paid the balance of the contributions which they owed by virtue of Decisions Nos 22/54 and 14/55, notwithstanding ‘Campsider's’ repeated invitations to pay. It says that the High Authority will adopt an enforceable decision if payment is not made within a fortnight or if arguments of substance have not been put forward.
The view may be taken that this invitation was in the first instance sufficient and that the High Authority could await any observations to be presented. The question then moves on: was the High Authority entitled, by virtue of the first observations of the applicants, namely the letters of 12 and 13 April 1956, which it regards as ‘acquiescence’, to adopt a decision without any other examination, or on the contrary, according to the rules of proper procedure, was it required to give more precise explanations in answer to those first observations of the applicants? For want of provisions clarifying this point in the Treaty, it seems to me to be primarily a question of what was reasonable. I have said that it was possible to conclude from the observations of the applicants that in principle they recognized their obligation. The fact that the High Authority then adopted a decision without taking the discussion any further cannot mean in principle that its procedure was defective so that the decision was adopted in infringement of an essential procedural requirement. However, the amount of the debt in respect of the contribution stated in the decision ought to have been supported by reasons set out with particular care because in their observations the applicants had said that they were unconvinced in respect of that amount.
Thus on the facts it emerges that this submission is well founded, but to a large extent it overlaps the submission of insufficient reasons for the contested decisions. Thus it has no special significance of its own.
II — Additional submission in Application No 9/56: Assessment by the Fund on its own authority
1. The arguments of the parties
As I said at the beginning of my opinion, Application No 9/56, brought against the individual decision of 24 October 1956, puts forward a submission which, just like the facts on which it is based, is not raised in Application No 10/56, and I shall therefore examine it only in respect of Case 9/56. The applicant contests for several reasons the assessment by the Fund on its own authority of the applicant's purchases of ferrous scrap from within the Community, that is, of the tonnage subject to the contribution. This is the tonnage to which the rate of contribution is applied to give the amount payable by way of contribution.
It says that indeed it did not send in monthly returns of purchases of ferrous scrap from within the Community made during the accounting period concerned, but that it was never seriously invited to do so. Since it has been assessed for the contribution it has been forced to the conclusion that the Fund proceeded, acting on its own initiative, to make an assessment of the quantities of bought scrap assessable to the levy.
It argues that there is no legal basis either for the action of the Fund in making the assessment on its own authority or for using an estimate as a method of calculating one of the bases of assessment.
The High Authority began its defence by arguing that the compulsory equalization system necessarily involved the power to make assessments on the Fund's own authority of the starting points for the calculation, where undeclared, and the power to require payment of the contributions on the basis of the estimates thus made, for otherwise every undertaking subject to the contribution could avoid the obligation to pay by omitting to send in monthly returns.
During the preparations for this case, in its answer to the direct question put by the order of the Court of 18 July 1957, the High Authority declared that the decisions of the Joint Bureau and of the Fund of 26 May 1955, drafted in identical terms, give the latter the power to make assessments on its own authority, where no return is sent in, in order to proceed to requiring payment. The High Authority also declared that the applicant's monthly steel production, which had been declared to it for the purpose of calculating the general contribution, had constituted the basis for the assessments made by the Fund on its own authority of ferrous scrap bought by the applicant over the period in question.
The applicant then described as arbitrary the technical and accounting aspects of the calculation made in order to arrive at the estimated assessment made by the Fund, pointing out that, for no reason and in a bewildering way, the quantities of bought scrap in question had been estimated at a level lower than the quantity of its production of steel, sometimes by only 0.13 %, but sometimes by as much as 10.5 %
2. The facts
The applicant claims that it was never seriously invited to declare its purchases of scrap. Two letters from Campsider of 22 May 1954 and of 14 June 1955, which have been produced to the Court, contradict this allegation. In those letters Campsider repeatedly invites the applicant to send in its returns and communicates to it the estimate of its consumption of ferrous scrap subject to the contribution for the period 1 April 1954 to 30 April 1955, while allowing it a period for rectifying the assessment and disclosing its actual purchases. Furthermore, the periodical invitations to pay sent out by the Fund carried a warning that it would make an assessment on its own authority should the returns not be sent in within the time allowed.
These facts, however, are of no relevance in arriving at a decision as regards the legality of these demands for payment and of the assessment later made by the Fund.
3. The legal basis necessary according to the Treaty
A legal basis founded on the Treaty is necessary in order to make an estimate.
By virtue of Article 53 (b), the High Authority may make financial arrangements. This wide power includes the power to adopt the measures necessary in order that the arrangements shall function properly. A determination of the quantities of scrap purchased by the undertakings is necessary for the equalization system. The High Authority was therefore entitled to rely on the first paragraph of Article 47 of the Treaty so as to require every undertaking to send in returns as to its purchases of scrap and to investigate the returns, and to rely on the third paragraph of the same article to issue threats of fines or periodic penalty payments in the case of non-compliance. It may also be admitted that in a decision adopted on the basis of Article 53 (b), the High Authority may order that in the case of a failure to comply with the obligation to send in a return as to purchases of scrap, those purchases shall be determined by way of a lump-sum estimate made on its own authority. But it would be necessary to define rules and criteria in order to prevent arbitrary assessments. For where administrations proceed to assessments on their own authority, they have, and this is a universally accepted principle of national law, rights and duties. In particular, they are under the duty to follow a regular procedure rendering it possible to review the accounting and technical data and the logical conclusion appearing in the estimate. The decision must render it possible to check that the estimate is reasonable by reference to the elements of fact taken into account and to the factual consequences drawn from them. The applicant was quite right to refer, during the oral hearing, to the example of the general levy. Article 50 of the Treaty provides that the High Authority shall, by a general decision, determine the mode of assessment and collection. In Article 4 of Decision No 2/52 and in Article 5 of Decision No 3/52, which were decisions adopted for that purpose, the High Authority required the Community undertakings to send in returns as to their monthly production on a prescribed form. It was only in a later decision, Decision No 31/55 of 19 November 1955 ( JO No 21 of 28.11.1955, p. 906 ), that the High Authority introduced assessments made on its own authority, for the following reason:
‘Whereas … the High Authority should be able, in default of a declaration on the part of an undertaking, to determine the assessable tonnage and the corresponding amount of levy;’.
4. The legal basis alleged in the present case
In the case of the Fund, there is nothing to be found in Decisions Nos 22/54 and 14/55 of the High Authority imposing an obligation whereby undertakings must send in returns. Nor, accordingly, is there any provision for penalties in the case of non-compliance with an obligation to send in returns nor is there any procedure for assessments by the Fund on its own authority. It should, on the contrary, be noted, and this is interesting, that Decision No 2/57, which replaced Decision No 14/55 as from 1 February 1957, provides in Article 16 that undertakings must send in returns to the Fund and to the High Authority, and that the second paragraph of Article 17 contains the warning that in the case of false declarations the measures provided for in the third paragraph of Article 47 of the Treaty will be applied. The case of omission to send in these returns is still not covered by any rules. For the period with which we are concerned in the present case it is, according to the High Authority, in the decisions of the Joint Bureau and of the Fund of 26 May 1955, drafted in identical terms, that the legal basis is to be sought. Yet the lumpsum assessment in respect of the applicant was made as from 1 April 1954, when the compulsory equalization system came into force.
The question thus arises whether the High Authority had the power to confer upon an association of undertakings, required by it to put into practice the equalization arrangement which it had created, the task of adopting by means of regulations provisions of a type issued by a public authority, which it could itself adopt under the Treaty in the form of a general decision stating the reasons on which it was based and published in the Journal Officiel. In other words, could the High Authority delegate certain of the powers of a public authority to associations governed by private law?
5. The delegation of the powers of a public authority to private associations in national law
In domestic economic law, there is frequently found a delegation of the administrative powers of a public authority to associations of undertakings. The State reserves to itself a right of control and of supervision. That kind of delegation is made for the most varied reasons, for example in order. that the State shall not have direct responsibility, or because technical knowledge and special installations are necessary and the public administrations do not possess these to a sufficient extent, or from a desire for decentralization. The creation of these associations endowed with special powers may also be useful to the State for various purposes, for example in planning the economy or in order to support a market in difficulty. Associations endowed with powers extending beyond the association and of which membership is compulsory, are of particular significance here. There are all sorts of different views as to the limits and constitutional conditions Concerning them, and opinions differ as to whether they are politically desirable. However there is no need to examine these creations of national law any further. Let it suffice for me to extract two points which, in a modern State founded on the rule of law, seem to me to be generally accepted as conditions governing the delegation of the administrative powers of public authorities to private associations: the delegation must be governed by a law which specifies the content of the delegation precisely and which must guarantee not only sufficient control by the State, but also complete legal protection against the measures adopted by these associations. Legal protection may be achieved by assimilating the measures adopted by such associations to those of public administrations, so that they may be contested by legal proceedings in accordance with the general rules of administrative law.
6. Delegation in Community law
In my opinion, these two points are also of necessity fundamental for our Community law, because the Treaty does not expressly lay down rules concerning this question. I have just explained that the text of Article 53 (b), whereby the High Authority can make financial arrangements, does not admit of the conclusion that the financial arrangement created is independent and subject to no more than supervision by the High Authority. Thus the text of Article 53 does not compel us to the conclusion that the High Authority can delegate certain defined powers conferred on it by the Treaty to agencies for running the financial arrangements but, on the other hand, it does not seem to prohibit such a delegation either. At the very least, however, it is necessary to require that the guarantees laid down by the Treaty as to legal protection shall continue to exist even in the case of delegation. Those guarantees include the rules relating to the publication of decisions together with a statement of the reasons on which they are based and also the provisions relating to proceedings before the Court. The High Authority cannot evade those guarantees by leaving it to agencies to which powers have been delegated to adopt in its place the decisions which it is incumbent upon it to adopt itself. On the contrary, the decisions of these associations should be assimilated to decisions of the High Authority or otherwise the latter should itself adopt the real decisions, the supporting preparatory work and the purely technical implementing measures being left to others.
7. Application to the present case
Let me apply these considerations to the case examined here, that is to say to the provision according to which the Fund may make an assessment on its own authority in the case of non-compliance with the obligation to send in a return, which presupposes that rules have been laid down making such a return compulsory.
Article 3 of Decisions Nos 22/54 and 14/55 only lays down the rule that the quantity of scrap bought by each undertaking is to be taken as the basis for the calculation of the contributions. Nothing is said as to how these quantities shall be ascertained. Perhaps the Fund received declarations from regional offices. Moreover, it issued a warning on a form, under the heading ‘Provisions governing payments’ in its notices to pay (this it did for the first time in the notice of 22 October 1954 — Annex I to the rejoinder), that in the case of a failure to send in the return within the time prescribed, the Fund had power to estimate on its own authority with the aid of the regional offices the quantity of scrap bought. That warning corresponds word for word to the decisions of the Joint Bureau and of the Fund of 26 May 1955 which the High Authority disclosed during the early stages of this case at the request of the Court and which, says the High Authority, constitute the legal basis for the procedure for assessments on the Fund's own authority. It is not denied that those decisions of 26 May 1955 have not been published. They may, it is true, have been brought to the notice of the members of the ‘societes cooperatives’ by the Board. Originally, 22 undertakings were members (Cf. the statutes of the Fund of 24 April 1953, Annex No 11,164 to the ‘Moniteur Belge’ of 18/19 May 1953 and the statute of the Joint Bureau of the same date, Annex No 11,165). When the statutes were first amended on 1 April 1954 the Fund had 58 members and the Joint Bureau had 155 (Cf. Annexes Nos 9,235 and 9,236 to the ‘Moniteur Belge’ of 26/27 April 1954). When they were amended for the second time, on 4 July 1955, the number of members of the Fund and the Joint Bureau was 136 (Cf. Annexes Nos 21,688 and 21,693 to the ‘Moniteur Belge’ of 29 July 1955), and it has finally come down to 123 since the amendment of the statutes on 21 February 1957 (Cf. Annexes Nos 4,328 and 4,317 to the ‘Moniteur Belge’ of 18/19 March 1957). Since the contribution on ferrous scrap affects about 240 consumers of scrap, the conclusion may be drawn that about 100 Community undertakings had no knowledge of these decisions which were important both in economic and in legal terms. It is generally known that it is mainly the small undertakings of the Community which do not belong to the Brussels ‘societes cooperatives’, whereas the large undertakings have become members of those profit-making companies to defend their own interests. I would refer, here, to the published material which I have just mentioned in the annexes to the ‘Moniteur Belge’.
So I do not see any possibility of assimilating these decisions to decisions of the High Authority. There is no statement of the reasons on which they are based and they were only communicated to the undertakings on statements of account as part of a note as to the means of payment. We do not even know the text concerning the obligation to send in returns.
Regulations of this kind, which were to be binding on all Community undertakings consuming ferrous scrap, whether or not they were members of the Joint Bureau and of the Fund, and whether or not they wished to participate in the equalization system, must be adopted by virtue of the Treaty in the form of general decisions.
I cannot, I must admit, adopt the applicant's argument to the effect that the Brussels decisions altered Article 3 of the decisions of the High Authority. Rather, those decisions supplemented the provision in question. But where I do agree with the applicant is as regards its assertion that the supplementary provision is essential for the functioning of the contribution procedure and that it ought to have been adopted by the High Authority itself, which was what happened as regards the general levy. The argument of the High Authority, to the effect that a compulsory equalization scheme must necessarily also involve assessments made on the assessing body's own authority, simply proves that the general decision was incomplete on this point.
I am thus led to the conclusion that the assessment made by the Fund lacks any legal basis.
8. Manner in which the assessment on the Fund's own authority was in fact made
In these circumstances, it will be sufficient, for the sake of completeness, for me to say a few words on how the assessment in question was made in practice.
Since there is no statement of the reasons on which it was based, it is impossible to grasp or review the procedure or the means used in making the assessment. For example, during this case, the conclusions drawn, in accountancy terms, from the consumption of ferrous scrap estimated on the basis of the figure for the production of steel have been called in question, yet they have been neither explained nor justified. Even if it must be admitted that certain sources of errors are inherent in the very nature of assessments of this kind, when they are made, nevertheless it is necessary to require the uniform application of appropriate general or particular criteria. The significant and unexplained variations to which I have referred above render it reasonable to take the view that such criteria were not uniformly applied. This view has not been refuted, and accordingly it may be thought that matters have also been mishandled in the actual making of the assessment. Since the person liable to pay the levy has no fewer rights in a procedure for assessment on the assessing body's own authority than in a procedure for determining liability based on accurate accountancy returns, this presumption admits of the conclusion that there was an irregularity in the finding reached by way of the assessment made by the Fund on its own authority.
III — Complaints against the fixing of the equalization rate
In Case 9/56, in seeking a legal basis for the assessment made by the Fund on its own authority, I have already had to refer to the general decisions of the Fund and of the Joint Bureau which constituted that basis. Let me now come to the other complaints raised simultaneously in the two cases against the decisions of the Fund. These submissions, inadequate reasons, provisional and late communication of the rates of contribution, factually inaccurate fixing of the average prices for Community scrap and for imported scrap, are no longer concerned with the undertakings in particular, but with the general activity of the Fund to be found in the fixing of a contribution rate of general application over a given period. The rules relating to this activity of the Fund must be found first of all in the general decisions of the High Authority, which has created the equalization scheme and which, under its responsibility, has required the Fund to put it into effect. The second paragraph of Article 3 of Decisions Nos 22/54 and 14/55 only says that the Fund shall fix the contribution rate and the accounting periods. The only reservation is that the representative of the High Authority may make the decisions subject to the approval of the High Authority. Apart from this, only general information is to be found in the decisions: the total resources arising from the contribution are to make it possible to equalize the prices. The Fund, upon a proposal from the Joint Bureau, decides upon the quantity of ferrous scrap to be imported, the maximum import price and the equalization price. The Fund must take cognizance of the total quantity of the resources of the Community in ferrous scrap subject to the contribution.
The decisions do not contain any indication rendering it possible to ascertain how these factors are determined. Nor do they say whether the decision whereby the rate of contribution is fixed must be supported by reasons and published.
Let me put in a reminder here of a fact which I have already mentioned, namely that as regards the voluntary equalization arrangement based on Article 53 (a), Article 2 (4) of Decision No 33/53 describes the fixing of the rate of contribution as a regulation which must be published after prior approval by the High Authority. That regulation was only valid for the undertakings taking part in that voluntary agreement. They were in a position to withdraw from it and they were not subject to an authoritarian and enforceable decision of the High Authority. In the compulsory system, however, the fixing of the rate of contribution applies to all undertakings in the Community using ferrous scrap and it can be applied by an enforceable decision of the High Authority.
There thus arises again the question whether, in this way, the High Authority had power to delegate to the Fund the right to adopt a general decision, namely a decision fixing the rate of contribution. In order to decide this point, the significance of the contribution rate in the equalization system needs to be examined more closely.
1. The significance of the fixing of the contribution rate
The statement of the reasons on which Decisions Nos 22/54 and 14/55 are based explains that imported ferrous scrap and scrap treated as such must be made available to consumers on the Common Market at prices comparable to those current within the Community. According to the explanations given during the hearing, however, the Fund based its activities on the concept that complete equalization had to be brought about. This explains in particular why the final fixing of the rate could only take place a posteriori and after contracts for importation had been performed. I can even discern matters which go still further than complete equalization: ‘the Zurich formula’ for the calculation of the equalization price includes a ‘bonus to encourage importers’. Hence the formula was manifestly intended to call forth special efforts for effecting the highest possible imports of scrap. In a given situation on the market, that may be very desirable, just as it may be necessary in a different situation to stimulate efforts to increase resources arising from domestic scrap. It thus emerges that the fixing of the contribution rate is a significant instrument of economic policy. To achieve merely ‘comparable’ prices, which might vary to a certain extent depending on the situation on the market, it would have been possible to fix the contribution rate for certain periods in advance and definitively. It would thus have been possible to take into account the trend and the results achieved in calculating the rate of contribution for the following period.
From 1 April 1955, the resources of the Fund had to suffice not only in order to equalize the prices of imported scrap, but also, according to the new Article 2 (Decision No 14/55 (b) and (c)), to enable it to import a certain quantity to be kept on hand, that is to say, a ‘rotating fund’ and in particular to enable it to pay a bonus for savings in scrap. The amount of that bonus was fixed by the Fund on a proposal from the Joint Bureau. Thus from 1 April 1955 it is even less possible than for the previous year to speak of an equalization of prices in pure accountancy terms.
Two decisions adopted, by way of exception, by the High Authority itself make it perfectly clear that the fixing of the rate of contribution must have been based on concontribution must have been based on considerations and appraisals of economic policy of that kind. Where the Joint Bureau and the Fund were not unanimous, the High Authority was to adopt a decision itself by virtue of the second paragraph of Article 9 of Decisions Nos 22/54 and 14/55. Such an eventuality occurred and the High Authority itself determined, by a decision, not the rate of contribution properly so called, but a factor appertaining to the equalization price which itself constitutes an essential element as regards the rate of contribution. I have in mind Decisions Nos 9/56 ( JO No 5 of 5.3.1956, p. 25 ) and 34/56 ( JO No 28 of 11.12.1956, p. 382 ). The first, Decision No 9/56, which applied in the period with which we are concerned in these cases (it was valid from November 1955 to January 1956) contains the following recitals:
‘…
Whereas it is necessary to maintain the equalization levy at the lowest level compatible with the objective sought by the Imported Ferrous Scrap Equalization Fund and to keep prices on the Common Market balanced within reasonable limits;
Whereas the equalization price for the months of November and December 1955 and January 1956 must be fixed having regard to a realistic assessment of the conditions observed on the common market in ferrous scrap during the months under consideration …’
In my opinion, these facts and circumstances surely justify the conclusion that the fixing of the rate of contribution depended not only on technical collaboration and on accountancy operations (for example determination of the tonnage of Community scrap amenable to the contribution) but also on considerations and ideas appertaining to economic policy.
The fixing of the rate of contribution thus appears as the overriding decision in respect of the whole system.
2. The power of the Fund to fix the rate of contribution
The general decisions of the High Authority leave it entirely to the Fund to take this important decision within the limits indicated, the Joint Bureau having, however, a right to make proposals in respect of certain matters. If, therefore, one refers to the text of the general decisions of the High Authority, the complaints of the applicants are not well founded, because the High Authority has not adopted any rules either as to how the rate is to be fixed, or as to publication, or as to the reasons to be given. Review by the Court must therefore look to the Treaty itself and the Court must examine whether the High Authority had the power, under the Treaty, to delegate to the Fund, by general decisions, as it has done, the duty of fixing the rate of contribution.
I have already set out the principles whereby this question may be answered in my examination as to the legal basis for the other general decisions of the Brussels agencies, namely the deliberations concerning assessments on their own authority. Thus the decisive element is whether the guarantees of legal protection to be found in the Treaty also exist in the case of a delegation of powers.
It was possible tor the undertakings, upon reading the provisional invitations to pay, to ascertain the provisional rate of contribution. Furthermore, circular letters sent out by the regional office for Italy, Campsider, appear on the file. They give notice of the rate of contribution, which they also describe as provisional, and they indicate the date of the decisions of the Joint Bureau in Brussels. The first circular letter that we have is dated 8 February 1955 and it gives notice of the rates as from 1 April 1954. Sometimes the figure, stated in EPU units of account, includes the equalization rate charged with effect from 1 April 1955 in respect of the increased use of pig-iron, sometimes this latter equalization rate appears separately. The circular also states the equalization price applied. Finally, a fact which is not denied and which is to be found in the answer of the regional office, Campsider, produced by the applicants is that Campsider, in its circulars, also informed the undertakings of the formulae used in calculating the rate of contribution. On the other hand it does not seem that the undertakings were informed of the actual data, expressed in figures, used for each fixing of a contribution rate.
The method used for announcing decisions whereby the different rates of contribution were fixed, unsupported by any more precise reasons, does not accord with the requirements imposed by the Treaty as regards the publishing of and the stating of reasons underlying general decisions of the High Authority. Therefore as regards their legal status those decisions of the Fund cannot be assimilated to decisions of the High Authority. Taking into account the overriding significance of the fixing of the rate of contribution as regards the equalization system as a whole, it is necessary to insist on the same guarantees of legal protection as those that the Treaty requires for decisions of the High Authority. By virtue of the third paragraph of Article 48 of the Treaty the High Authority had the power to use producers' associations in order to obtain information which it required, and to facilitate the performance of the tasks entrusted to it, namely the High Authority. However, it could not leave these tasks to the initiative, to the responsibility and to the decisions of an association. It seems that Decisions Nos 22/54 and 14/55 of the High Authority do not take account of the difference of principle which exists, on the one hand, between an equalization arrangement based on a voluntary agreement between a number of undertakings, which only has effect as between themselves and only needs a prior authorization on the part of the High Authority, and, on the other hand, an equalization arrangement created by the High Authority itself, brought into force by means of its powers as a public authority and made compulsory for all the undertakings of the Community, such as the arrangement which is the basis for the decisions contested in these cases.
3. Appraisal of the different complaints
For these reasons, the decisions of the Fund fixing the rate of contribution, which have not even been described in the individual decisions of the High Authority against which the applications have been brought, do not constitute a sufficient legal basis for the said individual decisions.
If this view is adopted it becomes superfluous to go on to a special examination of the different complaints. However, I shall do so briefly for the sake of completeness. It will be apparent that these complaints are in fact directed at infringements of certain important guarantees of legal protection the existence of which I have just noted. At the same time, it will be seen that the applicants have not been able to find much to say in support of their claims.
(a) Insufficient statement of reasons
In the first place, the applicants say that the statement of reasons is insufficient. In particular they complain of the failure to publish the essential data as regards the fixing of the rate of contribution.
This complaint is well founded. If the High Authority had itself fixed the rate of contribution, it would have been under a duty to state reasons for its decision by virtue of Article 15 of the Treaty and to publish the decision in the Journal Officiel, which is what it did in the case of Decision No 9/56.
(b) Method of fixing the rate
Secondly, the applicants complain that the rate was originally only fixed provisionally and that the definitive determination only took place a long time afterwards. More generally, the undertakings were given insufficient information, and did not receive information which they requested. This also includes the complaint that the amount of the additional contribution for the granting of the equalization bonus for scrap was not always fixed separately from the rate for the general contribution.
These complaints are concerned partly with infringements of an essential procedural requirement and partly with the fact that the rate was fixed by decisions of the Fund.
It is not necessary, as I have already said, to examine here whether it was possible to fix the rate of contribution at the beginning and on a definitive basis. The High Authority will have to examine this question, for which it must alone take entire responsibility. However, it may be thought that the undertakings ought to have been in a position to calculate exactly and at the earliest possible moment what payments they would be liable to make by virtue of the decisions published. Moreover it is perfectly reasonable to take the view that the publication of the average prices may have been significant as regards the way in which the undertakings conducted their business. Publication of the same necessarily forms part of the statement of the reasons on which the decisions fixing the rate of contribution are based. It is equally necessary that the statement of reasons should include an indication as to the part of the contribution which is necessary for the equalization of the prices and the part which is intended to render it possible to pay the bonus for saving scrap.
(c) Inaccurate fixing of the average prices
Thirdly, the applicants allege that incorrect figures have been taken for two factors involved in determining the rate of contribution, the average price of Community scrap having been taken at too low a figure and that of imported scrap at too high a figure. Here the applicants contradict themselves for elsewhere they have said that these figures, as in fact taken as starting points for the different settings for the rate, have not been published. They ought to have been published in the statement of the reasons, and when one turns to the decisions of the Fund and to the documents on the file, one gets no nearer to finding an indication of them. The equalization price stated in a given case is not identical with the average Community price. These two prices are different, in turn, from the price of Italian scrap. Thus the invoices produced by the applicants have not sufficient evidential value.
The statement of the reasons on which a decision is based is meant to enable the Court to proceed to a review. Where the reasons are inadequate, this infringement of an essential procedural requirement of itself means that the decision is defective.
Therefore it is not necessary, in the present cases, to determine what were the average prices which the Fund in fact took as its starting points for the different rates of contribution or whether the allegation of the applicants, which rests on presumptions and which is to the effect that those prices do not reflect the true position, is correct. Rather, it will be for the High Authority, once the case is sent back to it, to determine these fundamental facts on its own responsibility and to indicate them in its decision.
4. Result
Thus it is clear that the contested individual decisions are inconsistent with the Treaty in so far as they are based on rates of contribution fixed by decisions of the Fund. For the delegation to the latter of the power to fix the rates of contribution, such as is provided for by the general decision of the High Authority, has ignored important guarantees as to legal protection laid down by the Treaty. In particular, there is no sufficient statement of the reasons on which the decisions are based and there has been no proper publication of them, whereas their significance for the equalization system and their compulsory application to all the undertakings of the Community made these matters essential.
IV — Complaints against the general decisions of the High Authority
Finally, I come to the complaints put forward against the third stage, that is against the general decisions of the High Authority. As regards these, we have just noted that the said decisions are irregular in so far as they delegate to the Fund the power to fix the equalization rate with general compulsory effect, while failing to uphold the essential guarantees as to legal protection. The applicants also make two other complaints.
1. Effects contrary to the recommendations of the Council of Ministers
First, the applicants say that it was only on the basis of six recommendations which it appended that the Council of Ministers gave its assent to Decision No 14/55. The applicant in Case 9/56 says that none of those six recommendations was observed, whereas the applicant in Case 10/56 is of the opinion that three of them were not observed. The explanations of the applicants on this point are conceived in very general terms and are based on two points:
(a)
The internal resources of the Community in scrap have diminished despite the recommendation of the Council of Ministers, because the importation of scrap has been excessively encouraged, the Fund having used incorrect average prices.
This argument has already been examined.
(b)
The High Authority should not have remained inactive when faced with the increase in the rate of contribution, which went up from 0.75 EPU units in March 1954 to 10.5 EPU units in July 1956. It ought to have intervened.
This second assertion is no longer concerned with the legality of Decision No 14/55 at the time when it was adopted, but is to the effect that there should have been intervention on the part of the High Authority in fixing the rate of contribution.
I have already said, as regards this, that the High Authority ought to have proceeded to fix the rate of contribution in a decision adopted by itself. There does not seem any reason why, had it done so, the High Authority would not have increased the rate of contribution beyond a certain sum. Rather, it might have been inclined to accept an alignment of Community prices. The recitals, which I have already quoted, in the preamble to Decision No 9/56, appear to justify this idea where they state that it is necessary to keep the equalization charge at the lowest possible level and to maintain a balance between prices only within reasonable limits. At the time when the High Authority adopted Decision No 9/56 the rate of contribution had already reached the figure of 9 EPU units. However, as I have said, the High Authority did not itself fix the rate of contribution, but only one factor for determining the equalization price. The question whether the High Authority ought to have acted at a given moment does not arise if one starts with the idea that it ought itself, from the beginning, to have fixed the rate of contribution. It is therefore enough to observe that the material content of this complaint has already been considered, but that the complaint cannot, in addition, result in a declaration that Decision No 14/55 was contrary to the Treaty as from a given moment which the applicants do not even specify.
2. Inconsistency with the Treaty of Decision No 10/56 extending the system
Finally the applicants say that the decisions whereby the system was extended were inconsistent with the Treaty. Since the contested individual decisions concern the period up till 30 June 1956, the first decision whereby the system was extended. No 10/56, was used for this purpose.
The applicants see an illegality in the light of the Treaty in the fact that the High Authority simply prolonged the applicability of Decision No 14/55 although in the recitals to Decision No 10/56 it stated itself that the system in force was in need of modification. The reason given for the extension is that new rules have not yet been drawn up.
In such a case there might be an infringement of the Treaty if the decision to be amended could have been revoked straight away, without its being necessary to replace it, or if the High Authority had been able to proceed to certain modifications, pending a general reform later. The applicants have not expressly put forward such arguments. It may be deduced from their explanations that what they had in mind was mainly the need to place an upper limit on the rate of contribution or to reduce it.
So this complaint is closely related to the one which I have just examined and according to which the High Authority ought to have acted when certain effects of the equalization system made themselves felt, particularly when the rate of contribution reached a certain level. However, it is not possible to deduce from this that the decision whereby the system was extended was itself contrary to the Treaty.
G — Result and conclusions
I — Result
1.
In Case 10/56, 1 thus reach the result that the contested decision is irregular:
(a)
for infringement of an essential procedural requirement, because, in failing properly to assess the powers of the Fund, the High Authority has not given supporting reasons;
(b)
by reason of the application of the decisions of the Fund concerning the fixing of the rate of contribution, because the High Authority has delegated to the Fund the power to proceed to fix the same without due regard to the essential guarantees of legal protection laid down in the Treaty.
2.
The decision contested in Case 9/56 is also irregular for the two reasons stated above and, thirdly, because it is based on an assessment, made by the Fund on its own authority, of the applicant's purchases of scrap subject to the contribution, although there is no legal basis for such an assessment.
II — Conclusions
In respect of the two cases l am therefore of the opinion that:
1.
In Case 9/56:
The decision of the High Authority of 24 October 1956 concerning the company Meroni & Co., Industrie Metallurgiche, Società per Azioni, Milan, notified to the latter on 12 November 1956, should be annulled; and that The defendant should be ordered to bear the costs pursuant to Article 60 (1) of the Rules of Procedure of the Court and the case should be referred back to the High Authority in accordance with Article 34 of the Treaty.
2.
In Case 10/56:
The decision of the High Authority of 9 November 1956 concerning the undertaking Meroni & Co., Industrie Metallurgiche, Società in Accomandita Semplice, Erba, province of Como, communicated to the latter on 14 November 1956, should be annulled;
The defendant should be ordered to bear the costs pursuant to Article 60 (1) of the Rules of Procedure of the Court, and the case should be referred back to the High Authority in accordance with Article 34 of the Treaty.
( ) Translated from the German. |
OPINION OF MR ADVOCATE GENERAL ROEMER ( )
Summary
I — Facts
II — Jurisdiction of the Court — Nature of the action and admissibility of the application for annulment
1. Jurisdiction of the Court
2. Nature of the action
3. Admissibility of the application for annulment
III — Claims of the applicant
IV — Substance
1. Abolition of the post occupied by the applicant
2. Assignment to a new post
3. Assignment to non-active status
(a) Application of the Staff Regulations of the Community in their final form
(b) Application of the principles of the judgment in Case 1/55 (Kergall)
V — Result, costs and opinion
Mr President,
Members of the Court,
Allow me, at the outset of my opinion in Case 1/56, Bourgaux v Common Assembly, briefly to rehearse the facts once again.
I — Facts
The applicant entered the employment of the Common Assembly on 1 January 1953. His contract was concluded for two years and on its expiry was extended for a further year until 31 December 1955 under a general extension of similar contracts. The applicant was head of the Reports of Proceedings and Parliamentary Services Department. On 25 November 1955 the Bureau of the Common Assembly after obtaining an opinion from outside experts for the purpose of reorganizing its Secretariat resolved inter alia that two departments should be dissolved and that the corresponding posts of heads of department including the applicant's post should disappear; it also resolved that the applicant's contract should not be further extended. On 13 December 1955 notification was sent to the applicant of an order, in so far as it affected him, of the President. He was at the same time informed that apart from the compensation due to him under his contract of employment and the provisional Staff Regualtions he would receive further compensation equivalent to two years' salary. This compensation was paid to the applicant, who accepted it.
On 12 January 1956 the applicant brought the present action against these decisions and he claims that the Court should:
1.
Find that the decision of the Bureau of 25 November 1955 was improperly adopted;
2.
Consequently annul that decision and the order of the President of 13 December 1955.
In the course of the proceedings the applicant withdrew a further application in which he claimed one franc as symbolic compensation for non-material damage.
The defendant contends that the claim should be dismissed.
II — Jurisdiction of the Court, nature of the action and admissibility of the application for annulment
The Court has to settle an action by a servant of the Community who objects to the termination of his services.
Jurisdiction of the Court
The jurisdiction of the Court to decide such kinds of action has not been contested in the written procedure. Even in the oral procedure the defendant's representative did not in fact contest jurisdiction but only the admissibility of the application for annulment. It has not been alleged that another court has jurisdiction. The defendant's representative merely indicated that without the provisions with regard to arbitration in Article 42 of the Treaty national courts might possibly be called upon to decide this case. It was however alleged that individuals could not bring actions for the annulment of orders of the Bureau of the Common Assembly or orders of its President but that the Court could order only damages in such cases. This is however a question which must be separated from the question of admissibility; I shall deal with it immediately afterwards.
I can therefore be very brief on the question of admissibility and refer to the judgment of the Court and my opinion in Case 1/55 Kergall v Common Assembly. In the present case too the jurisdiction of the Court rests on Article 42 of the Treaty in conjunction with Article 17 of the contract of employment concluded with the applicant and the relevant articles of the applicable Staff Regulations. All the Staff Regulations which have been in force in the Community, just like the definitive Staff Regulations, contain an article on the jurisdiction of the Court. Therefore for the question of jurisdiction it does not need to be considered which regulations apply to the present case.
The jurisdiction however does not rest solely on Article 42 of the Treaty. In his application the applicant relies on the definitive Staff Regulations and maintains that they must apply to him; the defendant contests this. The question of admissibility is also dealt with by Article 58 of the Staff Regulations of the Community. This provision is not an arbitration clause contained in a private contract concerned with public law. Therefore Article 42 of the Treaty is no longer sufficient to give jurisdiction to the Court. With regard to the legal position of employees, in so far as regulations similar to laws unilaterally established by the authority, namely the provisional regulations on the legal position of staff and ultimately the definitive Staff Regulations of the Community, have taken their place alongside the purely contractual provisions, the first paragraph of Article 43 of the Treaty applies in addition to Article 42. This gives the Court jurisdiction in any other case provided for by provisions supplementing the Treaty. In my view the Staff Regulations, which the institutions of the Community are empowered under the Treaty to adopt, must be regarded as such a supplementary provision; I would refer to Article 16 of the Statute of the Court of Justice and the last paragraph of Article 7 of the Convention on the Transitional Provisions. The application of the arbitration clause was as much a safeguard for the initial period as the engagement of servants on the basis of contracts of employment. The power to adopt Staff Regulations necessarily embraces the power to decide disputes arising therefrom; and the final decision, by a court, could only be entrusted to the Court of Justice of the Community.
Nature of the application
From this there are important consequences for the nature of a staff case. Only after the nature of such an action is clarified can an opinion on the question of admissibility of an application for annulment in such an action be given.
The Treaty recognizes applications for annulment, ‘recours en annulation’, under Article 33 and ‘recours de pleine jurisdiction’ (cases in which the Court has unlimited jurisdiction). The latter term is expressly used in Articles 36 and 88. As is known this distinction is taken from French law. Without going into details I should like to remind the Court briefly of the principles of this distinction, which moreover in the course of time has become a little less clear-cut in French law:
The ‘recours en annulation’ is directed against an administrative measure, the lawfulness of which is examined, and if necessary the measure is annulled.
The ‘recours de pleine jurisdiction’ is directed against the authority as a party and invokes subjective rights; the Court considers the matter comprehensively both from the point of view of facts and law and can not only annul the decision of the authority but also amend it or order the authority to make reparation.
The Treaty says just as little about the category into which the action based on an arbitration clause comes as do the relevant articles of the Staff Regulations with regard to particulars about the nature of the staff action. The Treaty however is also silent on the typical case of ‘recours de pleine jurisdiction’ under French law, liability of the adminstration for a wrongful act or omission (‘faute de service’) (first paragraph of Article 40 of the Treaty); this is obviously because it necessarily follows from the nature of the action that it can only be a ‘recours de pleine jurisdiction’. An action for wrongful act or omission may relate to a preliminary decision of the administration although Article 40 of the Statute does not necessarily require it. The Court can not only annul this preliminary decision of the administration but also replace it by awarding compensation or varying the amount of compensation. In this connexion it is interesting to observe that Much in his work ‘Die Amtshaftung’ (p. 91, Note 235) expressly mentions that the annulment of a preliminary decision of the administration must be decided in the context of a ‘recours de pleine jurisdiction’ and not in an action for annulment under Article 33 of the Treaty. In our case too which is concerned with the legal relationship of the servant to the administrative authority it would be inappropriate to apply the provisions which are intended to ensure an objective review of the legality of the economic adminstration of the High Authority. Contracts of employment concluded with employees give rise to rights and duties on both sides for they give the employees claims governed by public law to the performance of obligations on the part of the administration. Actions concerned with this legal position must therefore be classified in the second category, ‘recours de pleine jurisdiction’, and the Court must be recognized as having unlimited jurisdiction.
In contrast to Articles 33 and 38 of the Treaty where a limitation of the Court's powers of review or a limitation to specific grounds of nullity is specified, Articles 42 and 43 of the Treaty, like the Staff Regulations, say simply that the Court shall have jurisdiction ‘to give judgment’ in the cases referred to there. The Court's jurisdiction is therefore basically unlimited and the judgment can order any measures which are required to resolve the case before the Court.
At this point I should however immediately observe that this does not mean unlimited jurisdiction in respect of all factors and preliminary questions in relation to the measures taken against officials. The administration has a discretion in certain cases which it must exercise in accordance with its obligations in the interests of the service. The jurisdiction of the Court extends as far as these limits. Beyond this the administration is entitled to determine the internal affairs of the service. These service directives do not interfere with a sphere of law special to the official but concern him only as a member of a hierarchic authority which would in certain circumstances be disturbed by intervention by the Court in this sphere.
Admissibility of the application for annulment
From these considerations it follows that Article 38 of the Treaty which has been frequently referred to in the written and oral procedure does not apply to the present case. Article 38 of the Treaty, as a special provision for decisions of the Common Assembly and not of its Bureau, cannot be relied on in a question of the legal protection of the official because the legal protection of officials must be the same for all four institutions of the Community. This legal protection within the special power relationship between the authority and its officials which is subject in all institutions to the same rules, cannot be affected by the fact that the decisions of the institutions which are of external significance, on account of their varying nature and scope are subject to different conditions for review by the Court; in the case of the Court of Justice itself, owing to the final nature of its judgments, there is no provision for any such review. For similar reasons my colleague, Mr Advocate General Lagrange, in a staff action recently dealt with claimed that the High Authority could not rely on Article 33 of the Treaty.
It remains to be considered whether, in the context of an action which is not more precisely specified but which according to my researches should not be classified as an application for a declaration that a decision is void within the meaning of Article 33 of the Treaty, application can nevertheless be made for annulment of an official decision.
If it is clear that the application for annulment does not mean that it is an application for a declaration that a decision is void within the meaning of Article 33 of the Treaty then there need be no difficulties. The two types of action, ‘annulation’ and ‘pleine jurisdiction’ are not clearly opposed to one another but rather stand in the relationship of ‘the lesser’ to ‘the greater’. The well-known principle can therefore be applied: ‘Qui peut le plus, peut le moins’. There are numerous examples where, in an action involving unlimited jurisdiction, the annulment of an administrative measure can be applied for and ordered. I have already mentioned one such case arising from the Treaty: in an action based on liability for a wrongful act or omission a preliminary decision of the administration can be annulled. On French law let me quote from Laubadère, Traité Théorique et Pratique des Contrats Administratifs 1956, T. II, p., 196:
‘Le juge du contrat peut en principe annuler les mesures prises par l'administration et contraires à ses engagements contractuels’;
examples are cited from the case-law of the Conseil d'État. Finally I would refer to the Statutes of the international administrative courts and quote as example Article 9 of the Statute of the Administrative Court of the United Nations relating to staff cases:
‘S'il reconnait le bien-fondé de la requête, le Tribunal ordonne l'annulation de la décision contestée ou l'exécution de l'obligation invoquée’.
In brief it may be said that the Court has jurisdiction in the present case and that also the application for annulment is admissible.
III — Claims of the applicant
There is still an observation called for with regard to the applicant's claims. The application contests not only the order of the President of the Common Assembly of 13 December 1955 individually notified to the applicant but also the decision of the Bureau of 25 November 1955 on which that order was based. This ‘decision’ is contained in voluminous minutes of 15 pages and represents in truth a whole series of decisions which relate to the agenda of this session of the Bureau. The applicant has not particularized the decision he wished to contest. During the oral procedure and ultimately at the hearing today the applicant restricted his written claims and expressly declared that he was not contesting the new organization as such or the abolition of the post which he occupied but only the termination of his employment with the Common Assembly. This decision is numbered 15 on page 14 of the minutes of the meeting of the Bureau of 25 November 1955. The applicant had to contest this decision since it is simply repeated in the notification of the President of 13 December 1955 and the grounds for terminating the employment appear only from the minutes of the meeting.
IV — Consideration of the substance
I thus come to the individual complaints in the application.
Abolition of the post occupied by the applicant
In the written procedure the applicant had objected that the abolition of the post which he occupied was improper. I have already stated that this objection was not maintained in the oral procedure. It is therefore not necessary to say anything more about this issue. I would like only to mention that in the case of measures relating to administrative organization we enter the sphere of the above-mentioned internal conduct of the service. The Court has already decided in the judgment in Case 1/55, Kergall, that the Bureau of the Common Assembly has power to develop its Secretariat in its discretion and in the interests of the service and to order the abolition of posts which appear superfluous to it.
At most a misuse of powers could have been alleged here. For this it would have been necessary to contest the opinion and perhaps the objectivity of the experts whose recommendations the defendant followed. The applicant does not seek to make such complaints. Accordingly the applicant's application by notice dated 20 November 1956 which it put forward in the alternative and which seeks to have certain documents produced and the experts heard has lost its purpose and need not be considered.
In judging the present case there are thus the following basic facts which are not contested :
The administration of the Common Assembly embracing 90 posts which are at the disposal of the Bureau and the members of the Assembly has been restructured in such a way that 21 of the existing posts have disappeared whilst 19 different types of posts have been created. This meant that the continued employment after 1 January 1956 of two persons who had until then been employed became impossible. On this basis, which he now recognizes, the applicant contests only the consequences affecting him personally namely the final termination of his employment with the Common Assembly. He claims in the first place that he ought to have been given one of the new posts. Alternatively he takes the view that the Common Assembly ought not definitively to have terminated his employment but have assigned him non-active status. These are the only two claims which were still made in the oral procedure and which I can now consider.
Assignment to a new post
If we consider the general picture of the new organization of the Secretariat as appears from the pleadings we observe that we are not dealing simply with the disappearance of two posts but that in fact a completely new structure and new distribution of posts has been put in hand. It suffices in the present case to consider the groups consisting of the earlier ‘Chefs de Service’ and ‘Chefs de Division’. As appears from a comparison of Decision No 6 and No 7 of 25 November 1955, five managerial posts have disappeared and three new ones have been created. The total result of the new structure for the number of posts (the disappearance of two posts) affects these two groups. The authority was faced with the question which three of the five holders of the posts which have disappeared should be given the three new posts. Since there are no express provisions appertaining thereto this decision lay in the discretion of the authority.
When the applicant maintains that he ought to have been considered for a new post this means in law that he alleges that the authority has not exercised its discretion properly in relation to him. On this the applicant says that two officials who were below him in rank were given new posts.
The applicant's representative made this claim clear at the hearing — let me quote from the pleading of Mr Chareyre (minutes of the Court, I b, p. 1):
‘C'était nécessairement le rang qu'occupaient les intéressés… qui devait déterminer ceux à conserver…’
Mr Rolin argued in a similar manner, cf. minutes of the Court, IV a, p. 16 to IV b, P. 2.
The applicant refers to various incidents with his superiors simply to explain why the authority has acted as it did with him. In my view these allegations do not suffice to show a wrongful use of discretion. The view that preference should be given to the highest officials in relation to re-employment must be rejected. On the contrary the criterion is on the one hand the range of duties of the new posts and in the particular case the tasks of the particular office and on the other hand the ability and experience of the official as proved by his previous duties. In the present case it is significant that the duties for which the applicant was previously responsible have been redistributed among several posts. The case of the second head of department specially mentioned by the applicant, Mr Limpach, is different because his duties were retained under one office subject to being made a subdepartment. Mr Limpach was the head of the Finance Branch; he became head of the Finance Office as Mr Rolin stated at the hearing (minutes of the Court, B IV a, p. 16). In these circumstances very special facts would have to be shown to justify preference being given to the applicant with regard to one of the new posts (thereby disregarding the claims of another official whose interests could likewise not be overlooked); such facts do not appear to me to be present in this case.
The applicant's personal file does not justify a different judgment nor do the two documents produced towards the end of the hearing. On the contrary the personal documents reveal negative factors which in considering and deciding which three officials should be assigned to the new posts were quite capable of influencing the defendant against the applicant. In particular it appears from documents Nos. 13, 27 and 28 that the defendant on several occasions warned the applicant and threatened him with disciplinary measures and to suggest that his contract would not be renewed and that he would not be integrated under the Staff Regulations. When Mr Chareyre asks the question today: ‘Should not Mr Bourgaux have been preferred to the others (… être préféré à d'autres)?’ the reply might be given that these incidents which I have just mentioned do not speak in favour of preferring the applicant in the appointment to the three new posts. To show misuse of powers (and this is what it amounts to) explicit reasons ought to have been given why the defendant in the view of the applicant should have assigned him to one of the three new posts and not one of the three officials who were kept on. Only if these resaons were shown and moreover if the result of the comparison must necessarily have been unequivocally in favour of the applicant could the contrary decision of the defendant be regarded as defective.
The applicant has produced photocopies of typed copies of written communications of the Secretary General to the President of the defendant dated 2 February 1955 and 29 November 1955.
Both documents are opinions of the Secretary General in preparation for an answer to letters addressed to the President of the General Assembly. The document of 29 November 1955 is subsequent to the decision of the Bureau of 25 November 1955; it simply puts right an error as to the post which the applicant filled. The opinion of 2 February 1955 relates to a letter from the applicant to the President of the Common Assembly; this letter is numbered 21 in the applicant's personal file; the applicant sent it himself with a covering note (No 22 in the personal file) to the Secretary General with the request that it be forwarded to President Pella and the Bureau rejected the application made therein at its meeting on 27 May 1955 (Document No 25 in the personal file).
These documents do not appear to me important because they are not capable of showing that the applicant's employment should have continued and that he should have been assigned to one of the new posts. I therefore do not need to consider the observations of the applicant's representative, Mr Rolin, to the effect that the defendant ought to have produced these documents and that its neglect to do so represented an objectionable failure to fulfil its duty on the part of a party to an action in respect of adducing all the evidence. Nor do I need to give an opinion on the submission of the defendant's representative, Mr Ansiaux, that both documents and especially the document of 29 November 1955, by reason of their nature ought not to be in the personal file and were confidential. The defendant's observation that the applicant had not revealed how he had come into possession of the documents to which he did not have access in the course of his employment or in the course of the action, has not been disputed by the applicant. I do not have to give an opinion on the submission of counsel for the defendant, Mr Ansiaux, that by irregularly obtaining a photostat copy of these documents the applicant had committed a breach of confidence vis-a-vis the authority and for this reason had made his employment in the service impossible, I will simply observe that the fidelity of officials to the administration and the confidence of the administration in its officials must be a major factor in their relationship if the constitutional tasks of the administration, which can act only through its officials, are to be performed.
At the hearing the applicant alleged in conclusion that the High Authority at the time in question proceeded to engage more than 80 new recruits and that the Common Assembly did not endeavour to fit the applicant into one of these new posts. It suffices to observe that this fact could in no way justify annulling the defendant's measure respecting the applicant as claimed. The Common Assembly as one of the institutions of the Community could not assign the applicant to a post which was vacant in another institution of the Community. This would not be compatible with the independence of the institutions of our Community which is laid down in the Treaty. The Common Assembly could at most suggest that the High Authority should take over the applicant in an appropriate position and in doing so recommend him in accordance with its responsibility if it felt able to do so. If the Common Assembly did not do so, that might constitute a disregard of its obligation to assist the applicant, giving rise at most to a claim for damages; damages are however not claimed and the amount of the compensation actually granted is not contested. Moreover the applicant was never prevented himself from applying for free posts and requesting the recommendation of the Common Assembly for this purpose. We have no information regarding any such applications by the applicant.
Accordingly it must be observed with regard to the first ground of claim:
The fact that the contested decisions did not provide for further employment of the applicant is not sufficient to justify their annulment. The first claim is therefore not valid.
Transfer to non-active status
The second claim is that the contested decisions should be annulled because they ought not to have definitively terminated the applicant's employment but to have transferred him to ‘non-active status’. On this issue too the applicant somewhat altered his position at the hearing and in part broadened his claim; new evidence was adduced at the hearing.
‘Transfer to non-active status’ involves the maintenance of the employment relationship so that the employee continues to receive monthly payments during the waiting period and has a prior right to be assigned to a vacant post in his category, service and career bracket in so far as he possesses the requisite qualifications; after the expiry of the waiting period without a new post being assigned the employee has a claim to proportionate retirement pension. In this case there could be no talk of any allowance for termination of employment either under his contract or the Staff Regulations and likewise no compensation by way of a single capital payment. The applicant cannot seize upon a single factor of non-active status and claim a prior right to a vacant post while retaining the compensation for termination of employment or repaying only according to the terms of the contested decision.
The applicant bases his claim to be assigned non-active status on two arguments the second of which is expressed in the alternative. In the first place the applicant considers that the definitive Staff Regulations of the Community should already have been applied to him. In the second place he alleges that according to the judgment of the Court in the case of Kergall the current draft of the definitive Staff Regulations should have taken into account so that he should in any case have enjoyed the advantages of non-active status.
(a) Application of the Staff Regulations of the Community in their final form
The applicant bases his claim for the direct application of the Staff Regulations in their final form on the fact that the Committee of Four Presidents at its meeting on 12 December 1955 decided that the Staff Regulations for three institutions of the Community with the exception of the Council of Ministers which had made a reservation should be finally accepted. This meant in the applicant's view that the ‘provisional Staff Regulations’ of 1 July 1953 in accordance with Article 51 thereof were ‘automatically’ replaced by these regulations. Moreover on the same day all servants of the Common Assembly received a new contract bringing them within the regulations so that on their signature the provisions of the regulations which had just been adopted would apply to them.
The defendant has replied that the Common Assembly up to the day of the first hearing in this case had not yet brought the regulations into force and the wording approved at the meeting on 12 December 1955 had not been published and had once more been amended by the Committee of Four Presidents at the meeting on 28 January 1956.
There are three different arguments in the applicant's submissions in support of the view that the Common Assembly ought to have applied the provisions on the assignment of non-active status to the applicant's case:
1.
The ‘adoption’ by the Committee of Four Presidents at the meeting on 12 December 1955 means that the regulations were directly applicable to all servants of the three institutions.
2.
The ‘adoption’ replaced the ‘provisional regulations’ of 1 July 1953 by the new regulations.
3.
The ‘contracts of employment for the application of the Staff Regulations’ meant that the Staff Regulations would immediately apply to employees who signed these contracts; and such an offer of contract ought to have been made to the applicant.
The documents necessary to assess these three submissions are before the Court; I will deal with them in the following examination.
On the first issue it appears from the minutes of 12 December 1955 that the Committee of Four Presidents discussed the draft article by article and, subject to numerous amendments, agreed upon one text. Since a reservation was made by the President of the Council of Ministers the Commission decided,
‘que le statut est définitivement adopté en ce qui concerne les trois institutions’ — page 30 of the minutes.
It hardly need be said that this decision can only mean that the text was now finally established and that no further amendments were to be made. Even this intention of concluding discussion of the text of the Staff Regulations did not prevent amendments from being discussed at the meeting of the Committee of Four Presidents on 28 January 1956 or amendments of the text which was adopted on 12 December 1955 from being made; it follows from this that the ‘definitive adoption’ on 12 December 1955 was a purely internal matter of the Committee of Four Presidents and did not exclude discussion being reopened. The final text of the Staff Regulations as published contains a note that they were adopted on 28 January 1956 whereas it is significant that the date of their entry into force in respect of the individual institutions remained open. The impossibility of any other interpretation is apparent from the fact that these were only part of the complete provisions on the Staff Regulations: there was provision for the drawing-up of annexes by the individual institutions and of staff rules by a joint committee, both of which steps were essential for the application of the actual Staff Regulations. To summarize it may be said that after the meeting on 12 December 1955 it was finally established that the future Staff Regulations, like all the earlier drafts, would contain provisions on transfer to non-active status. There is nothing in the decision of the Committee of Four Presidents however implying that these provisions were now to be immediately applied. My impression is that the applicant's counsel admitted this at the hearing. Let me quote from the observations of Mr Chareyre, minutes of the Court IV a 1:
‘… à la seance du 12 décembre 1955 le statut a été déclaré adopté en ce qui concerne trois des institutions, et cela implique non pas peut-être que la mise en vigueur ait été réalisée pour ceux des agents qui etaient appelés à souscrire au statut mais d'après les termes mêmes de l'arrêt Kergall cela impliquait que les règles ainsi adoptées se substituaient sur le champ à celles qui résultaient du règlement interieur’.
What Mr Rolin says today about the ‘adoption’ of the Staff Regulations carries no conviction that there was an obligation on the Common Assembly to apply the Staff Regulations after the decision at the meeting of the four Presidents of 12 December 1955 directly and generally to their administration.
I thus come to the applicant's second argument which relies on Article 51 of the ‘provisional Staff Regulations’ of 1 July 1953 and the judgment in Kergall. As far as that judgment is concerned the applicant can have in mind only one part, namely at 2 A 4. The Court is there quoting the provisions of Article 15 of the contract of employment and Article 51 of the ‘provisional regulations’ of 1 July 1953 to draw conclusions on the legal nature of the contract of employment from the fact that in both provisions there is mention of definitive Staff Regulations. The Court however did not interpret Article 51 of the ‘provisional regulations’. As is known, the first sentence of Article 51 is as follows:
‘Le présent règlement sera remplacé de plein droit par le Statut du personnel de la Communauté des son adoption’.
I should like for the moment to assume that the applicant's argument is correct and that the regulations adopted by the Committee of the Four Presidents on 12 December 1955 did in fact immediately replace the provisional regulations. What would this have meant in the applicant's case? Article 2 of the Staff Regulations specifies the four classes of staff to which the regulations apply. The applicant belongs to none of these four classes. Before the Staff Regulations entered into force all those persons already employed had to be dealt with according to the transitional provisions which such positive regulations must necessarily have. Article 59 provides:
‘Staff may be established as officials’.
Article 3 of the Staff Regulations provides:
‘Recruitment save for the regular filling of vacant posts shall not be allowed’.
According to the decision of the Bureau of 25 November 1955, however, no post was provided for the applicant so that the Staff Regulations could not be applied to him. Had they been applied to him solely for the purpose of transferring him immediately to non-active status this might on the contrary have represented a misuse of powers on the part of the administration.
It is thus seen that even accepting the applicant's argument the legal consequence which he asserts does not follow. It suffices moreover to say that the word ‘adoption’ (which is unfortunately not a legal term of art) in Article 51 can be understood only in the sense of ‘applicability’ for otherwise there would have been a legal vacuum and conflicts. Finally the words ‘Staff Regulations’ in the same article must be understood in the sense of comprehensive Staff Regulations whereas the text accepted on 12 December 1955, as stated, provided only principles requiring to be supplemented by the annexes which had not yet been adopted and by the staff rules.
For the reasons the second argument of the applicant in my view does not lead to the conclusion that he ought to or could have been transferred to non-active status.
I come to the third and last argument which relies on the so-called ‘contracts for the application of the Staff Regulations’. Consideration of the documents filed shows that we are concerned with the following steps:
1.
An application by each member of staff for the Staff Regulations to be applied to him.
2.
An order by the President of the Common Assembly in relation to each member of staff containing transitional provisions: in principle the provisions of the contract of employment and the ‘provisional regulations’ of 1 July 1953 cease to apply on 31 December 1955; until however the Staff Regulations apply the individual articles listed in an annex continue to apply.
3.
A letter from the Secretary General of the Common Assembly to each member of staff concerned appointing him to his post with effect from 1 January 1956 and referring to the decision of the Bureau of 25 November 1955 and Article 12 of the ‘provisional regulations’.
Only two conclusions can be drawn from the aforesaid steps:
1.
Even if the applicant had made an application as mentioned under 1. above, no order could have been made in his favour since he was not to be appointed to a vacant post.
2.
Even for staff who had requested that the Staff Regulations be applied to them and in respect of whom there had been an order the text approved on 12 December 1955 did not immediately apply. On the contrary the Common Assembly, as we were informed on the second day of the hearing, brought the Staff Regulations with the annexes and staff rules into effect only by the decision of its Bureau of 1 October 1956 and with effect from 1 July 1956.
Since the contracts of employment of all staff expired on 31 December 1955 the Common Assembly was presented with the question of how its legal relationship to its staff was to be governed after that time. The entry into force of the Staff Regulations with its annexes and the staff rules was to be expected during the course of 1956; a restructuring of the Secretariat with a new detailed list of posts had just been drawn up at the meeting of the Bureau on 25 November 1955. In these circumstances the ‘contracts for the application of the Staff Regulations’ were to be regarded as a special form of the necessary extension of the contracts of employment then in force which were due to expire at the end of the year. No such extension could be granted to the applicant, however, because the new detailed list of posts, according to which no post was provided for him, entered into force on 1 January 1956.
This demonstrates that the applicant's first claim that he should have been transferred to non-active status on the ground that the Staff Regulations in their final from were immediately applicable is unfounded.
(b) Application of the principles of the judgment in Case 1/55, Kergall
The second argument of the applicant remains to be considered, namely that in any case an application of the principles of the judgment in the case of Kergall should have led to his transfer to non-active status. The Court stated in that judgment that the administration in adopting its decisions and quantifying the grant provided for by … the contract of employment … ought to have had regard to the provisions of the draft (p. 25 of French version) and ought to have granted an analogous payment (‘indemnité analogue’, second paragraph p. 28).
I think the correct interpretation of the judgment is that the Court was never thinking of a direct application of drafts. It simply stated that in the application of the contract of employment and the provisional regulations the legal principles of the drafts should be respected. In the particular case of Kergall that meant that the Bureau in applying Article 15 of the contract of employment which provided for a minimum compensation and thus gave it a discretion, ought to have regard to the fact that the dismissal of the applicant Kergall was the result of the disappearance of his post and that on the disappearance of a post the draft of the Staff Regulations provided a non-active status of three years for the official affected and that for the first year the full salary and for the following two years half the salary should be paid. This was one of the points of view to be had regard to in applying Article 15 of the contract of employment, albeit the main one; there could be other considerations and there were in fact in the case of Kergall; they meant that the financial result of this consideration was not completely equivalent to that provided for in the draft.
The principles applying to non-active status are set out at paragraph 2 A 7 in the Judgment in Case 1/55, Kergall. As appears from the context the Court set these principles out to clarify the concept of ‘non-active status’ which basically has been retained in all the drafts of the Staff Regulations in their final form and corresponds to the provisions of the national Civil Service law of several Member States. As appears from the conclusions drawn by the Court, however, it did not thereby mean to say that these provisions should already be applied. It was thus erroneous to state at the hearing (as did Mr Rolin in his arguments — Minutes of the Court IV a 14 and IV b 4) that according to the judgment in Case 1/55, Kergall, the provisions on non-active status and in particular the prior claim to new posts were already directly applicable to an official whose position was governed by a contract. Nor did the defendant attempt to apply these provisions directly; this appears from the fact that the applicant was paid and accepted compensation for loss of office and a single capital sum for which there is no place on transfer to non-active status. In the absence of legal and budgetary provision the defendant could not continue to make monthly payments to the applicant of the amount of his previous salary.
The question was discussed at the hearing whether the applicant ought not to have received more compensation since according to a later draft of the Staff Regulations of 1955 the non-active status was extended from three to four years. This question appears to me irrelevant since the application has not contested the amount of compensation awarded and the Court is bound by the claim contained therein. Likewise the personal position of the applicant and his type of post in his home country can be relevant only to the amount of compensation and need not therefore be discussed. It thus appears that as regards the second part of the claim the contested measures of the defendant do not infringe the principles which the Court laid down in its judgment in the case of Kergall. Only the provisions of the provisional Staff Regulations can be directly applied to an official under a contract, who according to the judgment is in the legal position of a provisionally established official; they do not provide for non-active status and simply make possible the grant of appropriate compensation. It seems to me that the applicant's counsel himself recognized this. At the hearing he said (I quote Mr Chareyre, Minutes of the Court I b 4):
‘Le succès de ce deuxième moyen est conditionné par l'opinion que vous aurez du point de savoir quel etait le statut auquel était soumis Monsieur Bourgaux au moment ou a été prise à son égard la mesure de non-renouvellement de son contrat’.
In view of what I have said I think there is no discernible authority requiring the applicant to be transferred to non-active status. The contested decisions could not therefore have transferred the applicant to non-active status and are therefore not defective.
V — Conclusion, costs and submission
The general result in my opinion is that the action is unfounded. The costs are thus governed by Article 60(1) of the Rules of Procedure of the Court. With regard to the question of the costs which are recoverable may I refer to my opinion in the case of Kergall according to which in principle in staff actions costs of representation of the institutions are not to be borne by the staff. In the present case the defendant has asked that the applicant should bear the whole costs; it based this application on the view that the action was an abusive procedure. It would be going too far to agree with the defendant in this; it would require renewed consideration of the facts and procedure. I therefore ask to be allowed to leave this decision, which can be given ex aequo et bono, completely in the discretion of the Court.
In these circumstances my opinion is that the action should be dismissed.
( ) Translated from the German. |
OPINION OF MR ADVOCATE-GENERAL LAGRANGE ( )
Mr President,
Members of the Court,
The company ALMA (Acciaierie Laminatoi Magliano Alpi) asks you to annul a decision of the High Authority dated 24 October 1956 imposing on it, pursuant to Article 64 of the Treaty, a fine of Lit 800000 for failure to publish its price lists and conditions of sale. This is an action based on Article 36, therefore an action in which the Court has unlimited jurisdiction.
The application is in due form and was submitted within the period of one month from notification of the decision pursuant to the provisions of Article 33 of the Treaty and Article 39 of the Protocol on the Statute of the Court. It is therefore admissible.
With regard to substance, two submissions have been raised:
The first is based on an infringement of the first paragraph of Article 36, according to which: ‘Before imposing a pecuniary sanction or ordering a periodic penalty payment as provided for in this Treaty, the High Authority must give the party concerned the opportunity to submit its comments.’
The file contains a copy of a letter dated 4 November 1955, signed by a member of the High Authority, the content of which un doubtedly fulfils the formality required by the first paragraph of Article 36. Moreover, this point is not contested.
But the applicant claims that it never received the letter in question.
However, the file contains a photocopy of an acknowledgement of receipt in respect of a letter posted on 7 November 1955 in Luxembourg by the High Authority addressed to ‘Acc. e Lam. di Magliona Alpi’ (instead of ‘Magliano Alpi’), Corso Regiodarco, 33 (instead of Corso Regioparco, 33), Turin, Italy. The acknowledgement of receipt it-self bears the stamp of the receiving office (Turin, 9/11/55), the signature of the employee of the receiving office and (and this seems to me to be the decisive point and to justify the new arguments developed in the oral hearing) the signature of the addressee preceded by the seal of the company:‘ALMA’, which proves that the minor spelling mistakes contained in the written address did not prevent delivery of the letter to the addressee at the very place indicated by the company as being its registered office. The fact (which has, moreover, not been established) that the company official whose duty it is to receive the mail did not in fact convey the letter to the place at which the works are actually situated (a hamlet in the Alps, some 100 km from Turin) is a matter internal to the company which cannot affect the regularity of the notification.
The first submission must therefore be rejected.
The second submission is based on an infringement of Article 64 of the Treaty, which is said to allow infringements of the rules relating to non-discrimination alone to be sanctioned, to the exclusion of those concerning publication of prices. According to the applicant, it cannot be imagined that the authors of the Treaty intended to provide for the same sanction (twice the value of ‘sales effected in disregard thereof’) in respect of offences differing both in character and gravity. Moreover, the expression ‘sales effected in disregard thereof’ clearly shows that the offence relates to the regularity of the act of sale itself, and not a purely extraneous error such as a failure to publish price lists.
In my opinion this interpretation cannot be accepted. The text of Article 64 is perfectly clear: ‘The High Authority may impose upon undertakings which infringe the provisions of this Chapter or decisions taken thereunder fines not exceeding twice the value of the sales effected in disregard thereof’ This provision refers to all offences against the provisions of Chapter V, not only offences against the rule of non-discrimination. In particular, failure by an undertaking to publish its price list and conditions of sale constitutes an infringement of the provisions of Article 60 (2) (a), which requires such publication, and of the decisions in which the High Authority defined the extent and manner of such publication pursuant to that article: they are Decision No 31/53 of 2 May 1953 and the amending Decision No 2/54 of 7 January 1954 (which are well known to the Court), both published in the Journal Officiel, No 1, of 13 January 1954, p. 218, which provide that price lists and conditions of sale must be communicated to the High Authority. In calculating the fine, ‘sales effected in disregard thereof’ must be taken to mean all sales effected by the company for so long as it has not published its price list, which might obviously amount to a fine of some magnitude in view of the gravity of the offence. But that is a maximum.
I suggest therefore that the Court should also reject the second submission.
A final question arises, that is whether the Court should consider a reduction of the fine. It certainly has the power to do so, since Article 36 expressly provides that ‘The Court shall have unlimited jurisdiction in appeals against pecuniary sanctions and periodic penalty payments imposed under this Treaty.’
However, in the first place, does the applicant make such a request in its conclusions? This is open to some doubt: outwardly, those conclusions merely claim the annulment of the decision imposing the fine; there is no express alternative conclusion regarding a reduction of that fine. However, we may note the following passage from the application:
‘The applicant is a small undertaking in the nature of a cottage industry, providing with some difficulty a livelihood for some 50 families of Italian workers inhabiting the inhospitable mountains of Magliano Alpi. How can a pecuniary sanction of Lit 800000 be imposed on an undertaking of such modest proportions, bearing in mind the fact that the company capital is Lit 6 million? And how could the applicant pay such a sum when it has already been obliged to ask the Community to arrange a three-year repayment plan for the discharge of arrears due in respect of levies between 1953 and 1956?’
I believe that this passage in the application may be deemed to constitute an alternative submission requesting the Court to grant a reduction of the fine.
Fundamentally, account should be taken both of the gravity of the offence and of the size and financial potential of the undertaking.
On the first point, it must be admitted that even if bad faith is not shown, the failure to publish its price lists during a period of three years amounts at the very least to a fairly high degree of negligence on the part of the company which, despite its modest dimensions, could not all the same have been in ignorance of the existence of the Community nor of the most elementary duties under which the Treaty places undertakings, such as the payment of levies and the publication of price lists.
On the second point, the documents produced at the request of the Court provide the following information: the fully paid-up capital amounts to six million lire. Gross profits have been as follows: for the financial year 1954 — Lit 12868069, 1955 — Lit 14634274, 1956 — Lit 18317316.
Accounts, banks, suppliers and creditors, on the debit side, account yearly for fairly high figures, in the order of some Lit 60 million on average. However, one million lire each year is paid to shareholders by way of dividend. The principal preoccupation of the sole director (which he reiterates each year in his report to the general meeting) is the fact that it is impossible for the company, in view of its lack of means, to modernize its plant.
It is my opinion that in view of all these considerations the figure of Lit 800000 calculated by the High Authority is not excessive, taking into account both the gravity of the offence and the financial standing of the company.
It is my opinion that:
the application should be dismissed;
the costs should be borne by ALMA.
( ) Translated from the French. |
Judgment of the Court of 13 June 1958. - Meroni & Co., Industrie Metallurgiche, SpA v High Authority of the European Coal and Steel Community. - Case 9-56.
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Summary
Parties
Subject of the case
Grounds
Decision on costs
Operative part
Keywords
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1 . PROCEDURE - APPLICATION FOR ANNULMENT - OBJECTION OF ILLEGALITY - SCOPE OF ARTICLE 36 OF THE TREATY
2 . PROCEDURE - APPLICATION FOR ANNULMENT - OBJECTION OF ILLEGALITY - ANNULMENT OF AN INDIVIDUAL IMPLEMENTING DECISION - EFFECTS
3 . PROCEDURE - APPLICATION FOR ANNULMENT - OBJECTION OF ILLEGALITY - ANNULMENT OF AN INDIVIDUAL IMPLEMENTING DECISION - GROUNDS
4 . DECISIONS OF THE HIGH AUTHORITY - STATEMENT OF REASONS - EXTENT OF THE DUTY TO STATE REASONS
5 . DECISION OF THE HIGH AUTHORITY - STATEMENT OF REASONS - EXTENT OF THE DUTY TO STATE REASONS IN THE PARTICULAR CASE OF AN ASSESSMENT BY THE FUND ON ITS OWN AUTHORITY
6 . DUTY TO PUBLISH AND PROFESSIONAL SECRECY
7 . ASSESSMENTS EFFECTED BY A BODY ON ITS OWN AUTHORITY AND PROVISIONAL ESTIMATES
8 . DELEGATION OF POWERS - LIMITS
9 . DELEGATION OF POWERS - NECESSITY FOR AN EXPRESS DECISION
10 . DELEGATION OF POWERS - DISCRETIONARY POWER
11 . DELEGATION OF POWERS - RIGHT OF VETO ON THE PART OF THE DELEGATING AUTHORITY
Summary
1 . THE THIRD PARAGRAPH OF ARTICLE 36 OF THE TREATY DOES NOT CONTAIN A SPECIAL RULE, APPLICABLE ONLY IN THE CASE OF PECUNIARY SANCTIONS AND PERIODIC PENALTY PAYMENTS, BUT A GENERAL PRINCIPLE, EMPHASIZED IN THAT ARTICLE, BECAUSE IT IS TO BE APPLIED TO THE PARTICULAR CASE OF AN ACTION IN WHICH THE COURT HAS UNLIMITED JURISDICTION . THE FACT THAT THE PRINCIPLE IS EXPRESSLY STATED IN THE SAID ARTICLE DOES NOT EXCLUDE THE APPLICATION OF THE SAME PRINCIPLE IN CASES IN WHICH IT IS NOT EXPRESSLY STATED
( TREATY, ARTICLES 33, 36 ).
2 . THE ILLEGALITY OF THE GENERAL DECISION ON WHICH AN INDIVIDUAL DECISION IS BASED CAN LEAD ONLY TO THE ANNULMENT OF THE INDIVIDUAL DECISION .
3 . AN APPLICANT MAY PUT FORWARD THE FOUR GROUNDS OF ANNULMENT SET OUT IN THE FIRST PARAGRAPH OF ARTICLE 33 FOR THE PURPOSE OF CONTESTING THE LEGALITY OF THE GENERAL DECISION ON WHICH THE INDIVIDUAL DECISION IN DISPUTE IS BASED
( TREATY, ARTICLE 33 ).
4 . DECISIONS OF THE HIGH AUTHORITY ADOPTED IN APPLICATION OF ARTICLE 92 OF THE TREATY MUST CONTAIN AN EXACT AND DETAILED STATEMENT OF ALL THE INDIVIDUAL ITEMS COMPRISED IN THE CLAIM, PAYMENT OF WHICH THEY MAKE ENFORCEABLE . ONLY AN ACCOUNT OF THAT KIND CAN MAKE POSSIBLE A REVIEW BY THE COURT
( TREATY, ARTICLES 15, 92 ).
5 . THE DECISION OF THE HIGH AUTHORITY OUGHT TO HAVE STATED THAT THE PAYMENT CLAIMED BY THE FERROUS SCRAP EQUALIZATION FUND WAS BASED ON A LUMP-SUM ESTIMATE . IT OUGHT TO HAVE REFERRED TO THE PROVISIONS ALLEGEDLY GIVING THE FUND THE POWER TO MAKE AN ASSESSMENT ON ITS OWN AUTHORITY . IT OUGHT TO HAVE RENDERED IT POSSIBLE FOR THE DEBTOR TO UNDERSTAND THE CIRCUMSTANCES IN WHICH HIS DEBT HAD BEEN CALCULATED
( TREATY, ARTICLES 15, 92 ).
6 . INFORMATION COLLECTED BY COOPERATIVE BODIES REPRESENTING A SIGNIFICANT PROPORTION OF THE UNDERTAKINGS CONCERNED CANNOT BE REGARDED AS SECRET WITHIN THE MEANING OF ARTICLE 47 OF THE TREATY . THEREFORE SUCH INFORMATION IS NOT COVERED BY PROFESSIONAL SECRECY AND THE PROVISIONS OF ARTICLES 5 AND 47, RELATING TO ITS PUBLICATION, ARE APPLICABLE
( TREATY, ARTICLES 5, 47 ).
7 . ANY PROCEDURE FOR MAKING ASSESSMENT BY A BODY ON ITS OWN AUTHORITY AND FOR PROVISIONAL ESTIMATES MUST BE SUBJECT TO PRECISE RULES, SO AS TO EXCLUDE ANY ARBITRARY DECISIONS AND TO RENDER IT POSSIBLE TO REVIEW THE DATA USED .
8 . A DELEGATING AUTHORITY CANNOT CONFER UPON THE AUTHORITY RECEIVING THE DELEGATION POWERS DIFFERENT FROM THOSE WHICH IT HAS ITSELF RECEIVED UNDER THE TREATY ( GENERAL PRINCIPLE ).
THE HIGH AUTHORITY'S POWER TO AUTHORIZE OR ITSELF MAKE THE FINANCIAL ARRANGEMENTS REFERRED TO IN ARTICLE 53 OF THE TREATY GIVES IT THE RIGHT TO ENTRUST CERTAIN POWERS, ON CONDITIONS TO BE DETERMINED BY IT AND SUBJECT TO ITS SUPERVISION, TO BODIES ESTABLISHED UNDER PRIVATE LAW, HAVING A DISTINCT LEGAL PERSONALITY AND POSSESSING POWERS OF THEIR OWN .
HOWEVER, SUCH A DELEGATION OF POWERS CAN ONLY INVOLVE CLEARLY DEFINED EXECUTIVE POWERS, THE USE OF WHICH MUST BE ENTIRELY SUBJECT TO THE SUPERVISION OF THE HIGH AUTHORITY
( TREATY, ARTICLES 3, 53, 65 ).
9 . A DELEGATION OF POWERS CANNOT BE PRESUMED . EVEN WHEN EMPOWERED TO DELEGATE ITS POWERS THE DELEGATING AUTHORITY MUST TAKE AN EXPRESS DECISION TRANSFERRING THEM .
10 . TO DELEGATE A DISCRETIONARY POWER TO BODIES OTHER THAN THOSE WHICH THE TREATY HAS ESTABLISHED TO EFFECT AND SUPERVISE THE EXERCISE OF SUCH POWER EACH WITHIN THE LIMITS OF ITS OWN AUTHORITY, WOULD RENDER LESS EFFECTIVE THE GUARANTEE RESULTING FROM THE BALANCE OF POWERS ESTABLISHED BY ARTICLE 3
( TREATY, ARTICLE 3 ).
11 . IN RESERVING TO ITS PERMANENT REPRESENTATIVE ON THE BRUSSELS AGENCIES THE POWER TO MAKE ANY DECISION SUBJECT TO THE APPROVAL OF THE HIGH AUTHORITY, THE LATTER DID NOT RETAIN SUFFICIENT POWERS FOR THE DELEGATION RESULTING FROM DECISION NO 14/55 TO BE CONTAINED WITHIN THE LIMITS DEFINED ABOVE .
Parties
IN CASE 9/56
MERONI & CO ., INDUSTRIE METALLURGICHE, S.P.A ., MILAN, REPRESENTED BY ITS DIRECTOR, ALDO MERONI, ENGINEER, ASSISTED BY ARTURO COTTRAU OF THE TURIN BAR AND ADVOCATE AT THE CORTI DI CASSAZIONE, ROME, WITH AN ADDRESS FOR SERVICE IN LUXEMBOURG AT THE CHAMBERS OF GEORGES MARGUE, 6 RUE ALPHONSE-MUNCHEN, APPLICANT,
V
HIGH AUTHORITY OF THE EUROPEAN COAL AND STEEL COMMUNITY, REPRESENTED BY PROFESSOR GIULIO PASETTI, ACTING AS AGENT, ASSISTED BY PROFESSOR ALBERTO TRABUCCHI, WITH AN ADDRESS FOR SERVICE IN LUXEMBOURG AT ITS OFFICES, 2 PLACE DE METZ, DEFENDANT,
Subject of the case
APPLICATION FOR THE ANNULMENT OF THE DECISION OF THE HIGH AUTHORITY OF 24 OCTOBER 1956, NOTIFIED TO THE APPLICANT BY POST ON 12 NOVEMBER 1956, ACCORDING TO WHICH THE APPLICANT IS REQUIRED TO PAY THE CAISSE DE PEREQUATION DES FERRAILLES IMPORTEES ( IMPORTED FERROUS SCRAP EQUALIZATION FUND ), 36 RUE RAVENSTEIN, BRUSSELS, THE SUM OF LIT 54 819 656 ( FIFTY-FOUR MILLION EIGHT HUNDRED AND NINETEEN THOUSAND SIX HUNDRED AND FIFTY-SIX ), BEING AN ENFORCEABLE DECISION WITHIN THE MEANING OF ARTICLE 92 OF THE TREATY,
Grounds
P . 139
A - ADMISSIBILITY
1 . THE APPLICATION HAS BEEN LODGED IN COMPLIANCE WITH THE PRESCRIBED FORMALITIES, AND ITS REGULARITY IN THAT REGARD HAS NOT BEEN CONTESTED AND DOES NOT GIVE RISE TO ANY OBJECTION ON THE PART OF THE COURT .
2 . IN ITS APPLICATION AGAINST THE DECISION OF THE HIGH AUTHORITY DATED 24 OCTOBER 1956, BEING AN ENFORCEABLE DECISION WITHIN THE MEANING OF ARTICLE 92 OF THE TREATY, THE APPLICANT ARGUES THAT DECISION NO 14/55 OF 26 MARCH 1955 ESTABLISHING A FINANCIAL ARRANGEMENT FOR ENSURING A REGULAR SUPPLY OF FERROUS SCRAP FOR THE COMMON MARKET INVOLVES A MANIFEST FAILURE TO OBSERVE THE PROVISIONS OF THE TREATY AND IS VITIATED BY MISUSE OF POWERS .
ARTICLE 33 PROVIDES THAT APPLICATIONS " SHALL BE INSTITUTED WITHIN ONE MONTH OF THE NOTIFICATION OR PUBLICATION, AS THE CASE MAY BE, OF THE DECISION OR RECOMMENDATION ", AND THAT WHERE THEY ARE MADE BY UNDERTAKINGS OR ASSOCIATIONS REFERRED TO IN ARTICLE 48, THEY ARE ONLY ADMISSIBLE, WHERE THEY CONCERN A GENERAL DECISION OR RECOMMENDATION, IF THE APPLICANTS CONSIDER THE SAID DECISIONS OR RECOMMENDATIONS TO INVOLVE A MISUSE OF POWERS AFFECTING THEM .
THE APPLICATION WAS LODGED ON 14 DECEMBER 1956 AND ALTHOUGH, THEREFORE, THE TIME-LIMIT FOR INSTITUTING PROCEEDINGS LAID DOWN IN THE LAST PARAGRAPH OF ARTICLE 33 WAS RESPECTED AS REGARDS THE DECISION OF 24 OCTOBER 1956, IT HAD EXPIRED AS REGARDS DECISION NO 14/55 OF 26 MARCH 1955 .
HOWEVER, DECISION NO 14/55 OF 26 MARCH 1955 IS NOT CONTESTED DIRECTLY, BUT IN THE CONTENT OF AN APPLICATION AGAINST THE ENFORCEABLE DECISION OF 24 OCTOBER 1956 . WHILE THE DECISION OF 24 OCTOBER 1956 IS AN INDIVIDUAL DECISION CONCERNING THE APPLICANT, DECISION NO 14/55 OF 26 MARCH 1955 IS A GENERAL DECISION ON WHICH THE DECISION OF 24 OCTOBER 1956 IS BASED .
IN ASSESSING WHETHER THE APPLICANT IS ENTITLED TO CLAIM, IN SUPPORT OF ITS APPLICATION AGAINST THE INDIVIDUAL DECISION, THAT THE GENERAL DECISION ON WHICH IT IS BASED IS ILLEGAL, THE QUESTION ARISES WHETHER THE APPLICANT MAY CONTEST THE GENERAL DECISION AFTER THE EXPIRY OF THE PERIOD LAID DOWN IN THE LAST PARAGRAPH OF ARTICLE 33, AND RAISE AGAINST THE SAID GENERAL DECISION NOT ONLY MISUSE OF POWERS AFFECTING ITSELF, BUT THE FOUR GROUNDS OF ANNULMENT SET OUT IN THE FIRST PARAGRAPH OF ARTICLE 33 .
AS THE ADVOCATE GENERAL SAYS IN HIS OPINION, AN ILLEGAL GENERAL DECISION OUGHT NOT TO BE APPLIED TO AN UNDERTAKING AND NO OBLIGATIONS AFFECTING THE SAID UNDERTAKING MUST BE DEEMED TO ARISE THEREFROM .
P . 140
ARTICLE 36 OF THE TREATY PROVIDES THAT IN SUPPORT OF AN APPLICATION AGAINST A DECISION OF THE HIGH AUTHORITY IMPOSING PECUNIARY SANCTIONS OR PERIODIC PENALTY PAYMENTS
" A PARTY MAY, UNDER THE SAME CONDITIONS AS IN THE FIRST PARAGRAPH OF ARTICLE 33 ..., CONTEST THE LEGALITY OF THE DECISION OR RECOMMENDATION WHICH THAT PARTY IS ALLEGED NOT TO HAVE OBSERVED ".
THAT PROVISION OF ARTICLE 36 SHOULD NOT BE REGARDED AS A SPECIAL RULE, APPLICABLE ONLY IN THE CASE OF PECUNIARY SANCTIONS AND PERIODIC PENALTY PAYMENTS, BUT AS THE APPLICATION OF A GENERAL PRINCIPLE, APPLIED BY ARTICLE 36 TO THE PARTICULAR CASE OF AN ACTION IN WHICH THE COURT HAS UNLIMITED JURISDICTION .
NO ARGUMENT CAN BE BASED ON THE EXPRESS STATEMENT IN ARTICLE 36 TO THE EFFECT THAT A CONTRARIO THE APPLICATION OF THE RULE LAID DOWN IS EXCLUDED IN CASES IN WHICH IT HAS NOT BEEN EXPRESSLY STATED . FOR THE COURT HAS DECIDED, IN ITS JUDGMENT IN CASE 8/55, THAT AN ARGUMENT IN REVERSE IS ONLY ADMISSIBLE WHEN NO OTHER INTERPRETATION APPEARS APPROPRIATE AND COMPATIBLE WITH THE PROVISION AND ITS CONTEXT AND WITH THE PURPOSE OF THE SAME .
ANY OTHER DECISION WOULD RENDER IT DIFFICULT, IF NOT IMPOSSIBLE, FOR THE UNDERTAKINGS AND ASSOCIATIONS MENTIONED IN ARTICLE 48 TO EXERCISE THEIR RIGHT TO BRING ACTIONS, BECAUSE IT WOULD OBLIGE THEM TO SCRUTINIZE EVERY GENERAL DECISION UPON PUBLICATION THEREOF FOR PROVISIONS WHICH MIGHT LATER ADVERSELY AFFECT THEM OR BE CONSIDERED AS INVOLVING A MISUSE OF POWERS AFFECTING THEM .
IT WOULD ENCOURAGE THEM TO LET THEMSELVES BE ORDERED TO PAY THE PECUNIARY SANCTIONS OR PERIODIC PENALTY PAYMENTS FOR WHICH THE TREATY MAKES PROVISION SO AS TO BE ABLE, BY VIRTUE OF ARTICLE 36, TO PLEAD THE ILLEGALITY OF THE GENERAL DECISIONS AND RECOMMENDATIONS WHICH THEY WERE ALLEGED NOT TO HAVE OBSERVED .
AN APPLICANT'S RIGHT, AFTER THE EXPIRATION OF THE PERIOD PRESCRIBED IN THE LAST PARAGRAPH OF ARTICLE 33, TO TAKE ADVANTAGE OF THE IRREGULARITY OF GENERAL DECISIONS OR RECOMMENDATIONS IN SUPPORT OF PROCEEDINGS AGAINST DECISIONS OR RECOMMENDATIONS WHICH ARE INDIVIDUAL IN CHARACTER CANNOT LEAD TO THE ANNULMENT OF THE GENERAL DECISION, BUT ONLY TO THE ANNULMENT OF THE INDIVIDUAL DECISION WHICH IS BASED ON IT .
ARTICLE 184 OF THE TREATY ESTABLISHING THE EUROPEAN ECONOMIC COMMUNITY EXPRESSLY ADOPTS A SIMILAR POINT OF VIEW AND PROVIDES THAT :
" NOTWITHSTANDING THE EXPIRY OF THE PERIOD LAID DOWN IN THE THIRD PARAGRAPH OF ARTICLE 173, ANY PARTY MAY, IN PROCEEDINGS IN WHICH A REGULATION OF THE COUNCIL OR OF THE COMMISSION IS IN ISSUE, PLEAD THE GROUNDS SPECIFIED IN THE FIRST PARAGRAPH OF ARTICLE 173 IN ORDER TO INVOKE BEFORE THE COURT OF JUSTICE THE INAPPLICABILITY OF THAT REGULATION ".
ARTICLE 156 OF THE TREATY ESTABLISHING THE EUROPEAN ATOMIC ENERGY COMMUNITY CONTAINS A PRECISELY SIMILAR PROVISION .
P . 141
THE FACT THAT THE POSITION ADOPTED IS THE SAME DOES NOT CONSTITUTE A DECISIVE ARGUMENT BUT CONFIRMS THE REASONING SET OUT ABOVE BY SHOWING THAT THE AUTHORS OF THE NEW TREATIES REGARDED IT AS COMPELLING .
THE ANNULMENT OF AN INDIVIDUAL DECISION BASED ON THE IRREGULARITY OF THE GENERAL DECISIONS ON WHICH IT IS BASED ONLY AFFECTS THE EFFECTS OF THE GENERAL DECISION IN SO FAR AS THOSE EFFECTS TAKE CONCRETE SHAPE IN THE ANNULLED INDIVIDUAL DECISION .
TO CONTEST AN INDIVIDUAL DECISION CONCERNING HIM, ANY APPLICANT IS ENTITLED TO PUT FORWARD THE FOUR GROUNDS OF ANNULMENT SET OUT IN THE FIRST PARAGRAPH OF ARTICLE 33 .
IN THE CIRCUMSTANCES, THERE IS NO REASON WHY AN APPLICANT WHO IS CONTESTING AN INDIVIDUAL DECISION SHOULD NOT BE ENTITLED TO PUT FORWARD THE FOUR GROUNDS OF ANNULMENT SET OUT IN THE FIRST PARAGRAPH OF ARTICLE 33 SO AS TO QUESTION THE LEGALITY OF THE GENERAL DECISIONS AND RECOMMENDATIONS ON WHICH THE INDIVIDUAL DECISION IS BASED .
3 . THE DEFENDANT HAS CONTESTED THE ADMISSIBILITY OF THE APPLICATION FOR THE ANNULMENT OF THE DECISION OF THE HIGH AUTHORITY, DATED 24 OCTOBER 1956, BEING A DECISION ENFORCEABLE AGAINST THE APPLICANT WITHIN THE MEANING OF ARTICLE 92 OF THE TREATY, ON THE GROUND THAT THE APPLICANT, BY ITS LETTER OF 12 APRIL 1956, GAVE ITS CONSENT IN ADVANCE TO THE INDIVIDUAL DECISION OF 24 OCTOBER 1956 .
THE DEFENDANT HAS MADE IT CLEAR THAT IT " HAD NEVER INTENDED TO GIVE ITS CONSENT IN ADVANCE " OR TO RENOUNCE THE RIGHT TO BRING A LATER APPLICATION AGAINST THE STATEMENT OF SUMS DUE FROM IT MADE AFTER 12 APRIL 1956, BUT THAT " IT CONSIDERS IT REASONABLE TO OBJECT THAT THE OFFER OF PAYMENT CONSTITUTED APPROVAL OF THE ACTUAL FUNCTIONING OF THE BRUSSELS AGENCIES AND THUS OF THE MEANS WHEREBY THE LATTER DETERMINED THE EQUALIZATION RATE ".
THE APPLICANT'S LETTER OF 12 APRIL 1956 MAKES EXPRESS RESERVATIONS AS REGARDS THE CALCULATIONS RESULTING IN THE DETERMINATION OF ITS DEBT, AND THOSE RESERVATIONS CONCERN IN PARTICULAR THE CONDITIONS OF APPLICATION OF GENERAL DECISION NO 14/55 .
THOSE RESERVATIONS RENDER IT IMPOSSIBLE TO CONSIDER THE LETTER OF 12 APRIL 1956 AS CONSTITUTING RECOGNITION OF THE DEBT OR A RENUNCIATION OF THE RIGHT TO CONTEST IT, DESPITE THE OFFER OF PAYMENT BY INSTALMENTS WHICH IS CONTAINED THEREIN .
THEREFORE THE LETTER OF 12 APRIL 1956 DOES NOT RENDER THE APPLICATION INADMISSIBLE .
B - SUBSTANCE
FIRST SUBMISSION : INFRINGEMENT OF AN ESSENTIAL PROCEDURAL REQUIREMENT
THE APPLICANT SEES AN INFRINGEMENT OF AN ESSENTIAL PROCEDURAL REQUIREMENT IN THE FAILURE TO STATE REASONS IN THE DECISION IN DISPUTE AND IN THE ESTIMATE MADE BY THE FUND ON ITS OWN AUTHORITY AND NOTIFIED THEREIN .
( I ) FAILURE TO STATE REASONS
THE APPLICANT SEES " A MANIFEST LACK OF REASONS " IN THE DECISION OF 24 OCTOBER 1956 . THE DECISION CONTAINS ONLY THE TWO FOLLOWING REASONS :
" WHEREAS THE LIMITED COMPANY MERONI & CO ., INDUSTRIE METALLURGICHE, STABILIMENTO ELETTROSIDERURGICO, VIA DELLA CEBROSA, SETTIMO TORINESE, AN UNDERTAKING WITHIN THE MEANING OF ARTICLE 80 OF THE TREATY, HAS FAILED TO PAY TO THE IMPORTED FERROUS SCRAP EQUALIZATION FUND THE CONTRIBUTIONS DUE FOR FERROUS SCRAP IMPORTED AFTER 1 APRIL 1954 IN CONFORMITY WITH THE DECISIONS MENTIONED ABOVE;
WHEREAS THE CONTRIBUTIONS DUE FOR THE PERIOD FROM 1 APRIL 1954 TO 30 JUNE 1956 AMOUNT TO THE SUM OF LIT 54 819 656 . "
P . 142
TAKING INTO ACCOUNT THE CASE-LAW OF THE COURT, THOSE TWO PARAGRAPHS CANNOT CONSTITUTE A STATEMENT OF THE CONSIDERATIONS OF LAW AND OF FACT UPON WHICH THE DECISION OF 24 OCTOBER 1956 IS BASED .
IT THEREFORE LACKS THE SUPPORTING REASONS INDISPENSABLE FOR THE EXERCISE OF JUDICIAL REVIEW .
ACCORDINGLY, THE DECISION OF 24 OCTOBER 1956 DOES NOT COMPLY WITH THE REQUIREMENTS OF ARTICLE 15 OF THE TREATY, WHICH PROVIDES : " DECISIONS ... OF THE HIGH AUTHORITY SHALL STATE THE REASONS ON WHICH THEY ARE BASED ".
HOWEVER, IN ITS DEFENCE, THE HIGH AUTHORITY USES THE BRUSSELS AGENCIES AS A SHIELD :
" THE DECISION OF THE HIGH AUTHORITY DID NOTHING EXCEPT REPRODUCE THE DATA RESULTING FROM THE VARIOUS ABSTRACTS OF ACCOUNT SENT FROM TIME TO TIME TO THE APPLICANT, AND CLEARLY NO INDICATION OF REASONS IS REQUIRED FOR THAT ".
ACCORDING TO THE HIGH AUTHORITY, THE FAILURE TO STATE REASONS WHICH HAS BEEN OBSERVED IN THE DECISION OF 24 OCTOBER 1956 CANNOT CONSTITUTE AN INFRINGEMENT OF AN ESSENTIAL PROCEDURAL REQUIREMENT BECAUSE THAT DECISION HAS BEEN SUPPLIED WITH THE REASONS REQUIRED BY THE TREATY THROUGH THE INTERMEDIARY OF THE FUND .
FOR THE PURPOSES OF THE PRESENT APPLICATION, IT IS NOT NECESSARY TO EXAMINE WHETHER THE STATING OF APPROPRIATE REASONS IN THE NOTICES TO PAY ADDRESSED BY THE FUND TO THE APPLICANT VALIDLY ABSOLVED THE HIGH AUTHORITY FROM STATING ITS OWN REASONS FOR THE DECISION OF 24 OCTOBER 1956, SINCE THE REASONS WHICH APPEAR IN THE SAID NOTICES DO NOT CONSTITUTE REASONS FOR THE DEBT, ENFORCEMENT OF WHICH IS ORDERED BY THE DECISION OF 24 OCTOBER 1956 .
IN FACT, THE PAYMENT REQUIRED BY THE DECISION OF THE HIGH AUTHORITY OF 24 OCTOBER 1956 FOR THE PERIOD FROM 1 AUGUST 1954 TO 30 JUNE 1956 IS NOT EQUAL TO THE TOTAL SHOWN IN THE NOTICES ADDRESSED BY THE FUND TO THE MERONI UNDERTAKING FOR THAT PERIOD .
IT DIFFERS THEREFROM IN PARTICULAR BY THE ADDITION OF INTEREST FOR LATE PAYMENT AND THE DEDUCTION OF CERTAIN PAYMENTS MADE BY THE MERONI COMPANY .
ALTHOUGH THE NOTICES TO PAY CARRIED A STATEMENT INFORMING THE DEBTOR THAT INTEREST FOR LATE PAYMENT WOULD BE CLAIMED FROM THE 25TH DAY FOLLOWING THE DATE OF THE NOTICE AND ALTHOUGH, IN HIS ORAL ARGUMENTS, THE AGENT FOR THE HIGH AUTHORITY SAID THAT MERONI HAD BEEN WARNED OF THE PENALTY IN A LETTER OF 20 SEPTEMBER 1956, THE FIGURES APPEARING ON THE NOTICES DO NOT MENTION EITHER ANY EXTRA CHARGES DUE FOR LATE PAYMENT OR ANY DEDUCTIONS ON ACCOUNT OF EARLIER PAYMENTS .
IT IS IMPOSSIBLE TO FIND IN THE NOTICES TO PAY ADDRESSED BY THE FUND TO THE APPLICANT ANY STATEMENT OF THE REASONS FOR THE PAYMENT DEMANDED OF IT .
P . 143
TO BE LEGAL, THE STATEMENT OF THE REASONS FOR THE DECISION OF 24 OCTOBER 1956 OUGHT TO HAVE INCLUDED AN EXACT AND DETAILED STATEMENT OF ALL THE INDIVIDUAL ITEMS COMPRISED IN THE CLAIM, PAYMENT OF WHICH WAS MADE ENFORCEABLE BY THE DECISION .
ONLY AN ACCOUNT OF THAT KIND COULD MAKE POSSIBLE A REVIEW OF THE SAID DECISION BY THE COURT .
THE REASONS ON WHICH THE DECISION OF 24 OCTOBER 1956 IS BASED HAVE NOT BEEN SUFFICIENTLY STATED TO COMPLY WITH THE LAW EITHER BY THE HIGH AUTHORITY IN THE TEXT NOTIFIED TO THE APPLICANT OR BY THE FUND IN THE NOTICES TO PAY WHICH THE LATTER ADDRESSED TO IT .
THIS FAILURE TO STATE REASONS IN CONNEXION WITH THE DECISION OF 24 OCTOBER 1956 CONSTITUTES AN INFRINGEMENT OF AN ESSENTIAL PROCEDURAL REQUIREMENT .
THEREFORE, IN APPLICATION OF ARTICLE 33 OF THE TREATY, THAT DECISION MUST BE ANNULLED .
( II ) ASSESSMENT BY THE FUND ON ITS OWN AUTHORITY
ALTHOUGH THE APPLICANT, IN ITS APPLICATION, EXPRESSES ASTONISHMENT AT THE FACT THAT THE DECISION OF 24 OCTOBER 1956 DOES NOT GIVE ANY INDICATION OF THE FACTS AND FIGURES FORMING THE BASIS OF THE ORDER TO PAY WHICH IT MAKES ENFORCEABLE, IN ITS REPLY THE SAID APPLICANT STATES THAT IT " PRESUMES - FOR THE BRUSSELS AGENCIES HAVE NEVER SUPPLIED IT WITH EXPLANATIONS ON THIS POINT - THAT IT HAS BEEN CHARGED ON THE PRODUCTION AND NOT ON THE TONNAGE PURCHASED WHICH WAS NEVER DECLARED ".
THAT PRESUMPTION IS CONFIRMED IN THE REJOINDER WHICH STATES THAT " THE PROCEDURE OF LUMP-SUM ASSESSMENT BY THE BRUSSELS AGENCIES IS MERELY A REMEDY FOR THE FAILURE OF AN UNDERTAKING TO MAKE RETURNS AND IS SIMPLY A NECESSARY AND INEVITABLE CONSEQUENCE OF THE SYSTEM OF COMPULSORY CONTRIBUTIONS " AND THAT " WITHOUT THAT REMEDY THERE WOULD BE NO POINT IN PROVIDING FOR THE OBLIGATION TO CONTRIBUTE BECAUSE IN ORDER TO DEFEND ITSELF EVERY UNDERTAKING WOULD RESORT TO FAILING TO MAKE RETURNS ".
THE NOTICES TO PAY ADDRESSED BY THE FUND TO MERONI ALL CONTAIN THE FOLLOWING STATEMENT : " WHERE DETAILS FOR EACH FACTORY AS TO TONNAGE ASSESSABLE ARE NOT RECEIVED BY THE 15TH DAY OF THE SECOND MONTH FOLLOWING THE MONTH TO WHICH THE ASSESSMENT RELATES, THE MANAGERS ARE AUTHORIZED TO PROCEED TO MAKE LUMP-SUM ESTIMATES WITH THE HELP OF THE REGIONAL OFFICES ". HOWEVER, THE DECISION OF 24 OCTOBER 1956 DOES NOT STATE THAT THE CLAIM FOR PAYMENTS RESTS ON THIS BASIS AND DOES NOT MENTION THE PROVISIONS ALLEGEDLY GIVING THE FUND THE POWER TO MAKE AN ASSESSMENT ON ITS OWN AUTHORITY IN THE CASE OF A FAILURE TO MAKE A RETURN .
IN SO FAR AS THE OBLIGATION WHICH IT ENFORCES ARISES FROM A LUMP-SUM ESTIMATE, THE DECISION OF 24 OCTOBER 1956 DID NOT STATE THE REASONS ON WHICH IT WAS BASED .
THAT FAILURE TO STATE REASONS, WHICH LEAVES THE APPLICANT IN THE DARK AS TO THE CIRCUMSTANCES IN WHICH ITS DEBT WAS CALCULATED, CONSTITUTES AN INFRINGEMENT OF AN ESSENTIAL PROCEDURAL REQUIREMENT .
FOR THIS REASON ALSO, IN APPLICATION OF ARTICLE 33 OF THE TREATY, THE DECISION OF 24 OCTOBER 1956 MUST BE ANNULLED .
P . 144
SECOND SUBMISSION : MANIFEST FAILURE TO OBSERVE THE PROVISIONS OF THE TREATY
IN THIS SECOND SUBMISSION, THE APPLICANT COMPLAINS THAT THE HIGH AUTHORITY :
( A ) DID NOT INFORM IT OF " THE OBJECTIVE DATA ON WHICH THE ITALIAN UNDERTAKINGS WERE ASSESSED, IN MANIFEST CONTRADICTION WITH ARTICLE 47 OF THE TREATY, WHICH PROVIDES THAT THE HIGH AUTHORITY " SHALL PUBLISH SUCH DATA AS COULD BE USEFUL TO GOVERNMENTS OR TO ANY OTHER PARTIES CONCERNED "; ( B ) ONLY SENT " PROVISIONAL ACCOUNTS TO THE INTERESTED PARTIES AFTER 18 MONTHS " AND ONLY APPLIED TO THEM " EQUALIZATION BONUSES ... WHICH WERE ALSO PROVISIONAL ".
( I ) INSUFFICIENT INFORMATION
IN THE NUMEROUS COMMUNICATIONS WHICH IT ADDRESSED TO THE APPLICANT, THE FUND NEVER INFORMED IT OF ANYTHING MORE THAN THE TONNAGE ASSESSABLE AND THE RATE OF ASSESSMENT PER UNIT .
NO INFORMATION HAS BEEN PUBLISHED, EITHER BY THE HIGH AUTHORITY OR BY THE BRUSSELS AGENCIES, SO AS TO INFORM THOSE TO BE CHARGED OF THE METHODS WHEREBY THEIR OBLIGATIONS HAD BEEN WORKED OUT OR OF THE FACTS ON WHICH THE CALCULATIONS WERE BASED .
IT IS ONLY THROUGH " AN ADDENDUM TO THE ANSWER OF THE HIGH AUTHORITY TO THE QUESTIONS PUT BY THE COURT " THAT THE COURT AND, IT WOULD APPEAR, THE APPLICANT, HAVE BEEN INFORMED OF THE SUCCESSIVE FORMULAE WHEREBY THE EQUALIZATION RATE WAS CALCULATED .
ARTICLE 5 OF THE TREATY REQUIRES THE HIGH AUTHORITY TO " PUBLISH THE REASONS FOR ITS ACTIONS " AND ARTICLE 47 PROVIDES THAT ALTHOUGH
" THE HIGH AUTHORITY MUST NOT DISCLOSE INFORMATION OF THE KIND COVERED BY THE OBLIGATION OF PROFESSIONAL SECRECY, IN PARTICULAR INFORMATION ABOUT UNDERTAKINGS, THEIR BUSINESS RELATIONS OR THEIR COST COMPONENTS ... IT SHALL PUBLISH SUCH DATA AS COULD BE USEFUL TO GOVERNMENTS OR TO ANY OTHER PARTIES CONCERNED ".
IN THE REJOINDER, THE HIGH AUTHORITY HAS RETORTED TO THE APPLICANT THAT IT IS " REQUIRED TO SHOW AN ELEMENTARY RESPECT FOR PROFESSIONAL SECRECY ".
IN THE PRESENT CASE, INFORMATION COLLECTED BY COOPERATIVE BODIES REPRESENTING AT CERTAIN PERIODS, AND IN PARTICULAR ON 4 JULY 1955, UP TO 136 UNDERTAKINGS CHOSEN FROM AMONGST THE LARGER OF THE 240 UNDERTAKINGS ASSESSABLE TO THE EQUALIZATION LEVY CANNOT BE REGARDED AS SECRET WITHIN THE MEANING OF ARTICLE 47 OF THE TREATY . IN FAILING TO PUBLISH THE REASONS FOR ITS ACTIONS, AT LEAST IN GENERAL TERMS, AND IN FAILING TO PUBLISH THE DATA NOT COVERED BY PROFESSIONAL SECRECY AND OF POSSIBLE USE TO GOVERNMENTS OR TO ANY OTHER PARTIES CONCERNED, OR IN FAILING TO REQUIRE THE BRUSSELS AGENCIES TO PUBLISH THE SAME, THE HIGH AUTHORITY HAS INFRINGED ARTICLES 5 AND 47 OF THE TREATY .
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FOR THIS REASON ALSO, IN APPLICATION OF ARTICLE 33 OF THE TREATY, THE DECISION OF 24 OCTOBER 1956 MUST BE ANNULLED .
( II ) THE PROVISIONAL NATURE OF THE NOTICES TO PAY ADDRESSED TO THE APPLICANT
THE APPLICANT COMPLAINS THAT THE HIGH AUTHORITY BASED THE DECISION OF 24 OCTOBER 1956 ON PROVISIONAL ACCOUNTS, AND THAT THE FUND HAS, UP TO THE DATE OF THE APPLICATION, NAMELY 18 MONTHS AFTER THE SYSTEM WAS INTRODUCED, NEVER SENT IT DEFINITIVE ACCOUNTS .
IT ASKS " WHETHER IT CAN HONESTLY BE CLAIMED THAT AN UNDERTAKING CAN SUCCEED IN RELIABLY WORKING OUT ITS OWN PRICE-LIST IF IT IS NOT INFORMED ACCURATELY AND IN DUE TIME OF ITS EQUALIZATION DEBT ".
AS AGAINST THE APPLICANT'S REQUIREMENT, THE DEFENDANT PUTS FORWARD THE VERY NATURE OF THE CONCEPT OF EQUALIZATION, WHICH REQUIRES " AN A POSTERIORI CALCULATION " IMPLYING KNOWLEDGE OF THE FACTUAL DATA IN RESPECT OF WHICH EQUALIZATION IS TO BE EFFECTED .
IT ADDS IN ITS REJOINDER THAT " ONLY SMALL-SCALE CORRECTIONS WILL EVER BE INVOLVED ".
THE ORDER OF MAGNITUDE OF THE DEFINITIVE ADJUSTMENTS IS UNKNOWN, FOR THE CORRECTIONS NOTIFIED BY THE FUND, IN PARTICULAR IN ITS LETTER OF 31 OCTOBER 1955, ARE THEMSELVES DESCRIBED AS PROVISIONAL .
FOR THE PURPOSES OF THE PRESENT CASE IT WOULD ONLY HAVE BEEN POSSIBLE TO ESTABLISH THEM BY MEANS OF AN EXPERT'S REPORT .
HOWEVER, SUCH A REPORT IS NOT INDISPENSABLE IN THIS CASE, FOR THE DECISION OF 24 OCTOBER, WITH WHICH THE APPLICATION IS CONCERNED, MUST ALREADY, FOR THE REASONS SET OUT ABOVE, BE ANNULLED .
THIRD SUBMISSION : MISUSE OF POWERS
THE APPLICANT COMPLAINS THAT THE DEFENDANT HAS COMMITTED A MISUSE OF POWERS :
IN BASING THE DECISION OF 24 OCTOBER 1956, WHICH IS AN ENFORCEABLE DECISION, ON THE INACCURATE CALCULATIONS OF THE BRUSSELS AGENCIES;
IN FAILING TO OBSERVE THE RECOMMENDATIONS WHICH THE COUNCIL OF MINISTERS HAD APPENDED TO THE UNANIMOUS ASSENT GIVEN BY IT TO DECISION NO 14/55 OF THE HIGH AUTHORITY;
IN IRREGULARLY DELEGATING TO THE BRUSSELS AGENCIES POWERS CONFERRED ON IT BY THE TREATY .
( I ) INACCURACY OF THE CALCULATIONS MADE BY THE BRUSSELS AGENCIES
THE APPLICANT CLAIMS THAT THE BRUSSELS AGENCIES " ARTIFICIALLY TOOK AS THE AVERAGE PRICE FOR INTERNAL FERROUS SCRAP A PRICE WHICH WAS WELL KNOWN TO BE LOWER THAN THE REAL PRICE, WHEREAS, EQUALLY ARTIFICIALLY, THE AVERAGE PRICE TAKEN FOR IMPORTED FERROUS SCRAP WAS EXAGGERATED ". IT COMPLAINS THAT THE SAID AGENCIES THUS " MADE A TRAVESTY OF THE FACTS AND CREATED A SITUATION IN WHICH THE EFFECTS OF THE SYSTEM WERE NOT THE SAME FOR ALL THE INTERESTED PARTIES, SOME OF WHOM BENEFITED, WHEREAS OTHERS CONVERSELY SUFFERED LOSS ".
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THE APPLICANT HAS ITSELF ADMITTED " THAT IT IS NOT IN A POSITION TO PROVE ITS DOUBTS ", " THAT IT STILL DOES NOT KNOW HOW THE IMPORT OPERATIONS WERE CARRIED OUT AND WHAT WAS THE WEIGHTED AVERAGE RATE WHICH WAS CALCULATED ".
IT IS NOT POSSIBLE TO EXAMINE WHETHER THE APPLICANT'S ALLEGATIONS ARE WELL FOUNDED, IN VIEW OF THE INADEQUACY OF THE REASONS STATED FOR THE DECISION OF 24 OCTOBER 1956 AND THE LACK OF INFORMATION ON THE FACTORS USED BY THE BRUSSELS AGENCIES IN THEIR CALCULATIONS .
HOWEVER, FOR THE PURPOSES OF THE PRESENT APPLICATION, THAT EXAMINATION IS NOT NECESSARY, BECAUSE THE INADEQUACY OF THE REASONS STATED AND THE FAILURE TO PUBLISH THE DATA ON WHICH THE DECISION OF 24 OCTOBER 1956 IS BASED CONSTITUTE OF THEMSELVES INFRINGEMENTS OF THE TREATY OF A NATURE SUCH AS TO BRING ABOUT THE ANNULMENT OF THE SAID DECISION .
( II ) INFRINGEMENT OF THE RECOMMENDATIONS WHICH THE COUNCIL OF MINISTERS ALLEGEDLY APPENDED TO ITS UNANIMOUS ASSENT IN RESPECT OF DECISION NO 14/55
THE APPLICANT CLAIMS THAT THE HIGH AUTHORITY DID NOT OBSERVE SIX RECOMMENDATIONS WHICH THE COUNCIL OF MINISTERS APPENDED TO THE ASSENT WHICH IT GAVE IN RESPECT OF DECISION NO 14/55 .
JOURNAL OFFICIEL NO 8 OF 30 MARCH 1955, P . 689, ONLY INDICATES THAT THE SAID ASSENT WAS " GIVEN UNANIMOUSLY IN THE TERMS SET OUT IN THE MINUTES OF THE PROCEEDINGS OF THE COUNCIL ".
THE MINUTES OF THE COUNCIL OF MINISTERS ARE NOT PUBLISHED .
SIX PRINCIPLES LAID DOWN BY THE COUNCIL OF MINISTERS AND THE HIGH AUTHORITY DURING THE MEETING OF THE COUNCIL OF MINISTERS OF 21 AND 22 MARCH 1955, BEING PRINCIPLES " ON WHICH GENERAL POLICY IN THE MATTER OF FERROUS SCRAP IS TO BE BASED ", WERE PUBLISHED IN THE THIRD GENERAL REPORT ON THE ACTIVITIES OF THE COMMUNITY ( P . 105 ) AND THOSE SIX PRINCIPLES APPEAR TO BE THE ONES WHICH THE APPLICANT HAS IN MIND .
HOWEVER, FOR THE PURPOSES OF THE PRESENT APPLICATION, IT IS NOT NECESSARY TO EXAMINE THE LEGAL CONSEQUENCES WHICH PRINCIPLES PUBLISHED IN THOSE CIRCUMSTANCES MAY INVOLVE, BECAUSE FOR THE REASONS MENTIONED ABOVE THE DECISION OF 24 OCTOBER 1956 MUST BE ANNULLED .
( III ) ILLEGALITY OF THE DELEGATION OF POWERS RESULTING FROM DECISION NO 14/55
THE APPLICANT CLAIMS THAT IN THE MIND OF THE HIGH AUTHORITY " THE BRUSSELS ACCOUNTS ARE UNASSAILABLE AND ALMOST SACROSANCT AND ARE CERTAINLY OF GREATER WEIGHT AND AUTHORITY THAN ARE DECISIONS PROPER, WHICH CAN ALWAYS BE CONTESTED BEFORE THE COURT OF JUSTICE ". IN OTHER WORDS, THE APPLICANT COMPLAINS THAT THE HIGH AUTHORITY HAS DELEGATED TO THE BRUSSELS AGENCIES POWERS CONFERRED UPON IT BY THE TREATY, WITHOUT SUBJECTING THEIR EXERCISE TO THE CONDITIONS WHICH THE TREATY WOULD HAVE REQUIRED IF THOSE POWERS HAD BEEN EXERCISED DIRECTLY BY IT .
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THE APPLICANT ALSO COMPLAINS THAT THE HIGH AUTHORITY HAS CREATED " A SITUATION IN WHICH THE LARGE - AND MEDIUM-SIZED INDUSTRIES PREDOMINATE OVER THOSE OF LIMITED FINANCIAL MEANS, WHICH HAVE TO OBTAIN THEIR SUPPLIES ON THE INTERNAL MARKETS ", IN OTHER WORDS THAT IT HAS, BY ITS DECISION NO 14/55, DELEGATED POWERS TO AGENCIES ILL-QUALIFIED TO EXERCISE THEM .
THOSE TWO COMPLAINTS REFER TO THE DELEGATION OF POWERS WHICH GENERAL DECISION NO 14/55 GRANTED TO THE BRUSSELS AGENCIES . THE FIRST COMPLAINT IS CONCERNED WITH THE MANNER IN WHICH THE POWERS WERE DELEGATED, THE SECOND WITH THE ACTUAL PRINCIPLE OF DELEGATION .
HOWEVER, BEFORE EXAMINING THOSE COMPLAINTS, IT IS DESIRABLE TO EXAMINE WHETHER DECISION NO 14/55 DID IN FACT GRANT A DELEGATION OF POWERS TO THE BRUSSELS AGENCIES .
( A ) DID DECISION NO 14/55 GRANT A DELEGATION OF POWERS TO THE BRUSSELS AGENCIES?
IT IS DESIRABLE TO ESTABLISH WHETHER DECISION NO 14/55 " ESTABLISHING A FINANCIAL ARRANGEMENT FOR ENSURING A REGULAR SUPPLY OF FERROUS SCRAP FOR THE COMMON MARKET " CONSTITUTES A TRUE DELEGATION, TO THE BRUSSELS AGENCIES, OF POWERS WHICH HAD BEEN CONFERRED ON THE HIGH AUTHORITY BY THE TREATY, OR WHETHER IT ONLY GRANTS THOSE AGENCIES THE POWER TO DRAW UP RESOLUTIONS THE APPLICATION OF WHICH BELONGS TO THE HIGH AUTHORITY, THE LATTER RETAINING FULL RESPONSIBILITY FOR THE SAME .
CERTAIN PROVISIONS OF DECISION NO 14/55 FAVOUR THE SECOND PROPOSITION, IN PARTICULAR :
THE RECITAL STATING THAT " THE HIGH AUTHORITY IS RESPONSIBLE FOR THE PROPER FUNCTION OF THE FINANCIAL ARRANGEMENTS AND THUS MUST BE IN A POSITION TO INTERVENE EFFECTIVELY AT ANY MOMENT ";
ARTICLE 1, WHICH STATES THAT : " THE OPERATION OF THE AFORESAID ARRANGEMENTS UNDER THE RESPONSIBILITY OF THE HIGH AUTHORITY SHALL BE GIVEN TO THE JOINT BUREAU OF FERROUS SCRAP CONSUMERS ( HEREINAFTER REFERRED TO AS " THE JOINT BUREAU ") AND TO THE IMPORTED FERROUS SCRAP EQUALIZATION FUND ( HEREINAFTER REFERRED TO AS " THE FUND ") ".
THE SECOND PARAGRAPH OF ARTICLE 4, WHICH PROVIDES THAT " IF PAYMENT IS NOT EFFECTED IN DUE TIME, THE FUND SHALL REQUEST THE HIGH AUTHORITY TO INTERVENE, WHEN THE LATTER MAY " ( NOT " MUST ") " TAKE AN ENFORCEABLE DECISION ";
ARTICLE 8, WHICH PROVIDES THAT : " THE HIGH AUTHORITY SHALL APPOINT A PERMANENT REPRESENTATIVE OR HIS DEPUTY SHALL ATTEND ALL MEETINGS OF THE ADMINISTRATIVE COUNCIL AND OF THE GENERAL ASSEMBLY OF THE JOINT BUREAU AND OF THE FUND . THE PERMANENT REPRESENTATIVE OR HIS DEPUTY SHALL FORWARD IMMEDIATELY TO THE HIGH AUTHORITY THE DECISIONS TAKEN BY THE BODIES MENTIONED ABOVE AND SHALL INFORM THE HIGH AUTHORITY CONCERNING ALL MATTERS CALLING FOR A RULING BY IT UNDER ARTICLE 9 BELOW ";
ARTICLE 9, WHICH STATES THAT : " THE DECISIONS OF THE JOINT BUREAU AND OF THE FUND SHALL BE ADOPTED UNANIMOUSLY BY THE RESPECTIVE BOARDS IN REGARD TO MATTERS FALLING WITHIN THEIR OWN COMPETENCE AND BY THE TWO BOARDS JOINTLY FOR MATTERS IN WHICH THEY SHARE RESPONSIBILITY . THE PERMANENT REPRESENTATIVE OF THE HIGH AUTHORITY OR HIS DEPUTY MAY HOWEVER SUBORDINATE THE DECISION TO THE APPROVAL OF THE HIGH AUTHORITY . WHERE NO UNANIMOUS DECISION IS TAKEN BY THE BOARDS OF THE JOINT BUREAU AND THE FUND REGARDING THE MEASURES PROVIDED FOR IN ARTICLES 3 AND 4 AND IN THE FIRST PARAGRAPH OF ARTICLE 5 ABOVE, THE DECISION SHALL BE TAKEN BY THE HIGH AUTHORITY . THE HIGH AUTHORITY, ITS PERMANENT REPRESENTATIVE OR THE LATTER'S DEPUTY MAY CALL UPON THE JOINT BUREAU AND THE FUND TO MEET WITHIN NOT MORE THAN TEN DAYS, AND NOTIFY THOSE BODIES OF ALL PROPOSALS ADVANCED . IF NO MEETING TAKES PLACE WITHIN TEN DAYS, THE HIGH AUTHORITY ITSELF MAY TAKE A DECISION RESPECTING THE PROPOSALS CONCERNED ".
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OTHER PROVISIONS OF DECISION NO 14/55 CONFIRM THE FIRST PROPOSITION, AND IN PARTICULAR THE FIRST PARAGRAPH OF ARTICLE 4 :
" THE FUND SHALL NOTIFY THE UNDERTAKINGS OF THE AMOUNT OF CONTRIBUTION PAYABLE AND OF THE DATES ON WHICH PAYMENT MUST BE MADE . IT IS AUTHORIZED TO COLLECT SUCH PAYMENTS . "
AND THE FIRST PARAGRAPH OF ARTICLE 6 :
" THE FUND SHALL BE THE EXECUTIVE BODY RESPONSIBLE FOR THE FINANCIAL ARRANGEMENTS ESTABLISHED BY THE DECISION . "
FROM THOSE TWO INTERPRETATIONS, THE HIGH AUTHORITY HAS CHOSEN THE FIRST, SAYING IN ITS STATEMENT OF DEFENCE THAT :
" THE HIGH AUTHORITY ADOPTS THE DATA FURNISHED BY THE BRUSSELS AGENCIES WITHOUT BEING ABLE TO ADD ANYTHING THERETO . ANY OTHER SPECIFIC EXPLANATIONS WOULD MEAN UNAUTHORIZED INTERFERENCE IN ANOTHER BODY'S POWERS FOR THE PURPOSE OF EXPLAINING THE FACTORS INVOLVED IN THE ELABORATION OF ITS DECISIONS ... THE PRICES OF IMPORTS, THE QUALITIES OF THE FERROUS SCRAP IMPORTED AND THE WEIGHTED AVERAGE PRICE WITHIN THE COMMUNITY ARE FACTORS WHICH THE BRUSSELS AGENCIES TAKE INTO CONSIDERATION IN ORDER TO FIX THE EQUALIZATION RATE . THE CONTESTED DECISION DOES NO MORE THAN REPRODUCE THE RESULT OF THE APPLICATION BY THOSE AGENCIES OF THE EQUALIZATION RATE TO THE APPLICANT . THUS IF IT WERE TO BE ADMITTED THAT THE ERROR OF WHICH IT COMPLAINS CAN CONSTITUTE A MISUSE OF POWERS, THAT MISUSE OF POWERS WAS COMMITTED DURING DELIBERATIONS OF THE EQUALIZATION AGENCIES WHICH THE HIGH AUTHORITY CAN NO LONGER CONTEST IN VIEW OF THE FACT THAT ITS REPRESENTATIVE ON THE BRUSSELS AGENCIES DID NOT RESERVE THE FINAL DECISION TO THE HIGH AUTHORITY UNDER ARTICLE 9 OF DECISIONS NOS 22/54 AND 14/55 . FOR IT IS BEYOND THE BOUNDS OF REASON TO SUPPOSE THAT A DECISION OF THE COMPETENT AGENCIES IN BRUSSELS, ONCE ADOPTED UNANIMOUSLY AND WITHOUT RESERVATIONS ON THE PART OF THE REPRESENTATIVE OF THE HIGH AUTHORITY, REMAINS EXPOSED TO POSSIBLE CHANGES IMPOSED UNILATERALLY BY THE HIGH AUTHORITY ALONE . THE FACT THAT THE UNANIMOUS CONSENT OF ALL THE MEMBERS OF THE DELIBERATING AGENCIES HAS BEEN REQUIRED IN ORDER THAT THE DECISIONS SHALL BE BINDING IS OF VERY GREAT SIGNIFICANCE . HOWEVER EVEN IF, CONTRARY TO THE CLEAR WORDING OF THE ARTICLES ALREADY QUOTED AND TO THEIR LOGICAL INTERPRETATION, IT WERE TO BE ADMITTED THAT THE REPRESENTATIVE OF THE HIGH AUTHORITY CAN LATER, AT ANY TIME, VARY OR ANNUL THOSE DECISIONS, THE SUBMISSION UNDER DISCUSSION WOULD STILL BE IRRELEVANT AS REGARDS THE ANNULMENT OF THE CONTESTED DECISION . FOR WERE SUCH A MISUSE TO EXIST, IN ORDER TO BE ABLE TO CONTEST THE DECISION AT ISSUE BEFORE THE COURT, IT WOULD BE NECESSARY TO ALTER THE CONTENT THEREOF AND TO ATTRIBUTE TO IT AN EFFECT QUITE DIFFERENT FROM MERELY RENDERING A PRE-EXISTING OBLIGATION ENFORCEABLE . MOREOVER THE APPLICANT WOULD HAVE HAD TO DEMONSTRATE THAT IN THE CONTESTED DECISION THE HIGH AUTHORITY TOOK OVER AS ITS OWN THE DELIBERATIONS OF THE BRUSSELS AGENCIES WHICH LED TO THE FIXING OF THE EQUALIZATION RATE AND THAT THOSE DELIBERATIONS CONSTITUTE A DECISION OF THE HIGH AUTHORITY ITSELF AGAINST WHICH THE APPLICANT IS ENTITLED TO INSTITUTE PROCEEDINGS . "
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THE HIGH AUTHORITY COULD HAVE ARGUED THAT THE POWER OF ITS REPRESENTATIVE, PURSUANT TO ARTICLE 9 OF DECISION NO 14/55 TO " SUBORDINATE THE DECISION TO THE APPROVAL OF THE HIGH AUTHORITY " MEANT THAT IT REMAINED RESPONSIBLE FOR ANY DECISION OF THE BRUSSELS AGENCIES . HOWEVER THE ABOVE QUOTATION FROM THE STATEMENT OF DEFENCE RENDERS IT NECESSARY TO TAKE THE VIEW THAT THE HIGH AUTHORITY DOES NOT TAKE OVER AS ITS OWN THE DELIBERATIONS OF THE BRUSSELS AGENCIES LEADING TO THE FIXING OF THE EQUALIZATION RATE .
THEREFORE DECISION NO 14/55 BRINGS ABOUT A TRUE DELEGATION OF POWERS, AND THE QUESTION WHETHER SUCH DELEGATION ACCORDS WITH THE REQUIREMENTS OF THE TREATY MUST BE EXAMINED .
( B ) DETAILS OF THE APPLICATION OF DECISION NO 14/55
IF THE HIGH AUTHORITY HAD ITSELF EXERCISED THE POWERS THE EXERCISE OF WHICH IS CONFERRED BY DECISION NO 14/55 ON THE BRUSSELS AGENCIES, THOSE POWERS WOULD HAVE BEEN SUBJECT TO THE RULES LAID DOWN BY THE TREATY AND IN PARTICULAR THOSE WHICH IMPOSE UPON THE HIGH AUTHORITY :
THE DUTY TO STATE REASONS FOR ITS DECISIONS AND TO REFER TO ANY OPINIONS WHICH WERE REQUIRED TO BE OBTAINED ( ARTICLE 15 );
THE DUTY TO PUBLISH ANNUALLY A GENERAL REPORT ON ITS ACTIVITIES AND ITS ADMINISTRATIVE EXPENSES ( ARTICLE 17 );
THE DUTY TO PUBLISH SUCH DATA AS COULD BE USEFUL TO GOVERNMENTS OR TO ANY OTHER PARTIES CONCERNED ( ARTICLE 47 ).
ON THE SAME SUPPOSITION, ITS DECISIONS AND RECOMMENDATIONS WOULD HAVE BEEN SUBJECT TO REVIEW BY THE COURT OF JUSTICE ON THE CONDITIONS LAID DOWN BY ARTICLE 33 .
DECISION NO 14/55 DID NOT MAKE THE EXERCISE OF THE POWERS WHICH IT CONFERRED UPON THE BRUSSELS AGENCIES SUBJECT TO ANY OF THE CONDITIONS TO WHICH IT WOULD HAVE BEEN SUBJECT IF THE HIGH AUTHORITY HAD EXERCISED THEM DIRECTLY .
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EVEN IF THE DELEGATION RESULTING FROM DECISION NO 14/55 APPEARED AS LEGAL FROM THE POINT OF VIEW OF THE TREATY, IT COULD NOT CONFER UPON THE AUTHORITY RECEIVING THE DELEGATION POWERS DIFFERENT FROM THOSE WHICH THE DELEGATING AUTHORITY ITSELF RECEIVED UNDER THE TREATY .
THE FACT THAT IT IS POSSIBLE FOR THE BRUSSELS AGENCIES TO TAKE DECISIONS WHICH ARE EXEMPT FROM THE CONDITIONS TO WHICH THEY WOULD HAVE BEEN SUBJECT IF THEY HAD BEEN ADOPTED DIRECTLY BY THE HIGH AUTHORITY IN REALITY GIVES THE BRUSSELS AGENCIES MORE EXTENSIVE POWERS THAN THOSE WHICH THE HIGH AUTHORITY HOLDS FROM THE TREATY .
IN NOT MAKING THE DECISIONS OF THE BRUSSELS AGENCIES SUBJECT TO THE RULES TO WHICH THE DECISIONS OF THE HIGH AUTHORITY ARE SUBJECT UNDER THE TREATY, THE DELEGATION RESULTING FROM DECISION NO 14/55 INFRINGES THE TREATY .
THEREFORE THE DECISION OF 24 OCTOBER 1956, WHICH IS AN ENFORCEABLE DECISION IN RESPECT OF AN OBLIGATION ARISING FROM THE APPLICATION OF GENERAL DECISION NO 14/55 WHICH IS ILLEGAL, MUST BE ANNULLED .
THE APPLICANT COMPLAINS THAT THE BRUSSELS AGENCIES PROCEEDED, WITHOUT LEGAL AUTHORIZATION, TO MAKE ON THEIR OWN AUTHORITY ASSESSMENTS IN RESPECT OF IT AND TO MAKE PROVISIONAL ESTIMATES OF ITS DEBTS UNDER THE EQUALIZATION SCHEME .
WHILE IT HAS BEEN ESTABLISHED, IN RESPECT OF THE FIRST SUBMISSION, THAT THE DECISION OF 24 OCTOBER 1956 MUST BE ANNULLED FOR INFRINGEMENT OF AN ESSENTIAL PROCEDURAL REQUIREMENT, BECAUSE IT DID NOT INDICATE THAT THE AMOUNT OF THE PAYMENT CLAIMED HAD BEEN CALCULATED BY WAY OF AN ASSESSMENT EFFECTED ON THE AGENCIES' OWN AUTHORITY AND A PROVISIONAL ESTIMATE, IT APPEARS EXPEDIENT TO INQUIRY WHETHER THE BRUSSELS AGENCIES HAD THE POWER TO MAKE ASSESSMENTS OF THE EQUALIZATION CONTRIBUTIONS IN THAT WAY .
IN ITS REPLY TO THE QUESTIONS PUT BY THE FIRST CHAMBER, THE HIGH AUTHORITY DECLARED, ON 18 JULY 1957, THAT THE POWER TO MAKE ASSESSMENTS ON THE " AGENCIES' OWN AUTHORITY RESULTED FROM " DECISIONS IN IDENTICAL TERMS ADOPTED ON 26 MAY 1955 BY THE IMPORTED FERROUS SCRAP EQUALIZATION FUND AND BY THE JOINT BUREAU OF FERROUS SCRAP CONSUMERS, STATING THAT WHERE DETAILS FOR EACH FACTORY AS TO TONNAGES ASSESSABLE WERE NOT RECEIVED BY THE 15TH DAY OF THE SECOND MONTH FOLLOWING THE MONTH TO WHICH THE ASSESSMENT RELATED, THE MANAGERS WERE AUTHORIZED TO PROCEED TO MAKE LUMP-SUM ESTIMATES WITH THE HELP OF THE REGIONAL OFFICES ".
DECISION NO 14/55 DID NOT GIVE THE BRUSSELS AGENCIES THE POWER TO HAVE RECOURSE TO SUCH A METHOD OF ASSESSMENT, NOR DID IT GIVE THE POWER TO APPLY IT RETROACTIVELY, OR THE POWER TO NOTIFY PROVISIONAL ESTIMATES .
WHILE IT IS TRUE THAT THE METHOD CONSISTING OF ASSESSMENTS MADE BY THE HIGH AUTHORITY ON ITS OWN AUTHORITY IS ALSO USED AS REGARDS THE BASIS FOR THE GENERAL LEVY, THAT WAS EXPRESSLY AUTHORIZED BY DECISION NO 31/55 OF 19 NOVEMBER 1955 ( JO NO 21 OF 28.11.1955, P . 906 ) AFTER THE HIGH AUTHORITY HAD, BY DECISIONS NOS 2/52, ARTICLE 4, AND 3/52, ARTICLE 5, REQUIRED UNDERTAKINGS TO MAKE RETURNS AS TO THEIR PRODUCTION AND LAID DOWN DETAILED RULES IN RESPECT OF THE RETURNS .
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ANY PROCEDURE FOR ASSESSMENT BY A BODY ON ITS OWN AUTHORITY AND FOR PROVISIONAL ESTIMATES MUST BE SUBJECT TO PRECISE RULES SO AS TO EXCLUDE ANY ARBITRARY DECISIONS AND TO RENDER IT POSSIBLE TO REVIEW THE DATA USED .
A DELEGATION OF POWERS CANNOT BE PRESUMED AND EVEN WHEN EMPOWERED TO DELEGATE ITS POWERS THE DELEGATING AUTHORITY MUST TAKE AN EXPRESS DECISION TRANSFERRING THEM .
THERE IS NO LEGAL BASIS FOR THE BRUSSELS AGENCIES' ASSESSMENT ON THEIR OWN AUTHORITY OR FOR THE NOTIFICATION OF PROVISIONAL DEBTS AND FOR THIS REASON ALSO THE DECISION OF 24 OCTOBER 1956, WHICH IS AN ENFORCEABLE DECISION IN RESPECT OF OBLIGATIONS ARISING FROM A PROCEDURE LACKING ANY LEGAL FOUNDATION, MUST BE ANNULLED .
( C ) EXTENT OF THE DELEGATION OF POWERS
THE APPLICANT COMPLAINS THAT THE HIGH AUTHORITY HAS, BY ITS DECISION NO 14/55, DELEGATED TO THE BRUSSELS AGENCIES POWERS WHICH THEY ARE ILL-QUALIFIED TO EXERCISE . ARTICLE 8 OF THE TREATY REQUIRES THE HIGH AUTHORITY
" TO ENSURE THAT THE OBJECTIVES SET OUT IN THIS TREATY ARE ATTAINED IN ACCORDANCE WITH THE PROVISIONS THEREOF "
AND DOES NOT PROVIDE ANY POWER TO DELEGATE .
HOWEVER, THE POSSIBILITY OF ENTRUSTING TO BODIES ESTABLISHED UNDER PRIVATE LAW, HAVING A DISTINCT LEGAL PERSONALITY AND POSSESSING POWERS OF THEIR OWN, THE TASK OF PUTTING INTO EFFECT CERTAIN " FINANCIAL ARRANGEMENTS COMMON TO SEVERAL UNDERTAKINGS " AS MENTIONED IN SUBPARAGRAPH ( A ) OF ARTICLE 53 CANNOT BE EXCLUDED .
THE FINANCIAL ARRANGEMENTS MADE BY THE HIGH AUTHORITY ITSELF IN APPLICATION OF SUBPARAGRAPH ( B ) OF THE SAME ARTICLE MUST SERVE THE SAME PURPOSES AS THOSE AUTHORIZED IN APPLICATION OF SUBPARAGRAPH ( A ).
THEREFORE IT MUST BE POSSIBLE FOR THOSE ARRANGEMENTS TO BE SIMILAR IN FORM AND IN PARTICULAR TO USE THE AID OF BODIES HAVING A DISTINCT LEGAL PERSONALITY .
HENCE THE POWER OF THE HIGH AUTHORITY TO AUTHORIZE OR ITSELF TO MAKE THE FINANCIAL ARRANGEMENTS MENTIONED IN ARTICLE 53 OF THE TREATY GIVES IT THE RIGHT TO ENTRUST CERTAIN POWERS TO SUCH BODIES SUBJECT TO CONDITIONS TO BE DETERMINED BY IT AND SUBJECT TO ITS SUPERVISION .
HOWEVER, IN THE LIGHT OF ARTICLE 53, SUCH DELEGATIONS OF POWERS ARE ONLY LEGITIMATE IF THE HIGH AUTHORITY RECOGNIZES THEM
" TO BE NECESSARY FOR THE PERFORMANCE OF THE TASKS SET OUT IN ARTICLE 3 AND COMPATIBLE WITH THIS TREATY, AND IN PARTICULAR WITH ARTICLE 65 . "
ARTICLE 3 LAYS DOWN NO FEWER THAN EIGHT DISTINCT, VERY GENERAL OBJECTIVES, AND IT IS NOT CERTAIN THAT THEY CAN ALL BE SIMULTANEOUSLY PURSUED IN THEIR ENTIRETY IN ALL CIRCUMSTANCES .
IN PURSUIT OF THE OBJECTIVES LAID DOWN IN ARTICLE 3 OF THE TREATY, THE HIGH AUTHORITY MUST PERMANENTLY RECONCILE ANY CONFLICT WHICH MAY BE IMPLIED BY THESE OBJECTIVES WHEN CONSIDERED INDIVIDUALLY, AND WHEN SUCH CONFLICT ARISES MUST GRANT SUCH PRIORITY TO ONE OR OTHER OF THE OBJECTIVES LAID DOWN IN ARTICLE 3 AS APPEARS NECESSARY HAVING REGARD TO THE ECONOMIC FACTS OR CIRCUMSTANCES IN THE LIGHT OF WHICH IT ADOPTS ITS DECISIONS .
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RECONCILING THE VARIOUS OBJECTIVES LAID DOWN IN ARTICLE 3 IMPLIES A REAL DISCRETION INVOLVING DIFFICULT CHOICES, BASED ON A CONSIDERATION OF THE ECONOMIC FACTS AND CIRCUMSTANCES IN THE LIGHT OF WHICH THOSE CHOICES ARE MADE .
THE CONSEQUENCES RESULTING FROM A DELEGATION OF POWERS ARE VERY DIFFERENT DEPENDING ON WHETHER IT INVOLVES CLEARLY DEFINED EXECUTIVE POWERS THE EXERCISE OF WHICH CAN, THEREFORE, BE SUBJECT TO STRICT REVIEW IN THE LIGHT OF OBJECTIVE CRITERIA DETERMINED BY THE DELEGATING AUTHORITY, OR WHETHER IT INVOLVES A DISCRETIONARY POWER, IMPLYING A WIDE MARGIN OF DISCRETION WHICH MAY, ACCORDING TO THE USE WHICH IS MADE OF IT, MAKE POSSIBLE THE EXECUTION OF ACTUAL ECONOMIC POLICY .
A DELEGATION OF THE FIRST KIND CANNOT APPRECIABLY ALTER THE CONSEQUENCES INVOLVED IN THE EXERCISE OF THE POWERS CONCERNED, WHEREAS A DELEGATION OF THE SECOND KIND, SINCE IT REPLACES THE CHOICES OF THE DELEGATOR BY THE CHOICES OF THE DELEGATE, BRINGS ABOUT AN ACTUAL TRANSFER OF RESPONSABILITY .
IN ANY EVENT UNDER ARTICLE 53 AS REGARDS THE EXECUTION OF THE FINANCIAL ARRANGEMENTS MENTIONED THEREIN, IT IS ONLY THE DELEGATION OF THOSE POWERS " NECESSARY FOR THE PERFORMANCE OF THE TASKS SET OUT IN ARTICLE 3 " WHICH MAY BE AUTHORIZED .
SUCH DELEGATIONS OF POWERS, HOWEVER, CAN ONLY RELATE TO CLEARLY DEFINED EXECUTIVE POWERS, THE USE OF WHICH MUST BE ENTIRELY SUBJECT TO THE SUPERVISION OF THE HIGH AUTHORITY .
THE OBJECTIVES SET OUT IN ARTICLE 3 ARE BINDING NOT ONLY ON THE HIGH AUTHORITY, BUT ON THE " INSTITUTIONS OF THE COMMUNITY ... WITHIN THE LIMITS OF THEIR RESPECTIVE POWERS, IN THE COMMON INTEREST ".
FROM THAT PROVISION THERE CAN BE SEEN IN THE BALANCE OF POWERS WHICH IS CHARACTERISTIC OF THE INSTITUTIONAL STRUCTURE OF THE COMMUNITY A FUNDAMENTAL GUARANTEE GRANTED BY THE TREATY IN PARTICULAR TO THE UNDERTAKINGS AND ASSOCIATIONS OF UNDERTAKINGS TO WHICH IT APPLIES .
TO DELEGATE A DISCRETIONARY POWER, BY ENTRUSTING IT TO BODIES OTHER THAN THOSE WHICH THE TREATY HAS ESTABLISHED TO EFFECT AND SUPERVISE THE EXERCISE OF SUCH POWER EACH WITHIN THE LIMITS OF ITS OWN AUTHORITY, WOULD RENDER THAT GUARANTEE INEFFECTIVE .
IN THE LIGHT OF THE CRITERIA SET OUT ABOVE, IT IS APPROPRIATE TO EXAMINE WHETHER THE DELEGATION OF POWERS GRANTED BY THE HIGH AUTHORITY TO THE BRUSSELS AGENCIES BY VIRTUE OF DECISION NO 14/55 SATISFIES THE REQUIREMENTS OF THE TREATY .
ARTICLE 5 OF DECISION NO 14/55 PROVIDES THAT :
" THE JOINT BUREAU MAY PROPOSE TO THE FUND :
( A ) THE TONNAGES OF SCRAP IMPORTED FROM THIRD COUNTRIES OF SCRAP TREATED AS SUCH WHICH MAY BE ENTITLED TO EQUALIZATION;
( B ) THE CONDITIONS TO WHICH THE ENTITLEMENT TO EQUALIZATION SUBSIDY IS SUBJECT ...;
( C ) THE MAXIMUM IMPORT PRICE;
( D ) THE EQUALIZATION PRICE, WHICH MAY BE FIXED EITHER FOR THE DATE OF ORDER OR FOR THE DATE OF DELIVERY;
( E ) THE CRITERIA FOR CALCULATING ECONOMY IN SCRAP DUE TO AN INCREASED USE OF PIG-IRON;
( F ) THE AMOUNT OF THE BONUS TO BE GRANTED IN REGARD TO THESE ECONOMIES . "
P . 153
THE THIRD GENERAL REPORT ON THE ACTIVITIES OF THE COMMUNITY PUBLISHED ( P . 105 ) THE GENERAL PRINCIPLES DRAWN UP BY THE COUNCIL OF MINISTERS AND THE HIGH AUTHORITY " ON WHICH THE GENERAL POLICY IN THE MATTER OF FERROUS SCRAP IS TO BE BASED ".
THOSE GENERAL PRINCIPLES STATE IN THE PARTICULAR THAT
" THE COST OF FERROUS SCRAP FOR THE PRODUCER OF STEEL - THAT IS TO SAY THE SUM OF THE PURCHASE PRICE AND THE EQUALIZATION LEVY - MUST NOT EXCEED A REASONABLE LEVEL IN COMPARISON WITH THE LEVEL IN FACT BORNE BY PRODUCERS OF STEEL IN THE PRINCIPAL COMPETITOR COUNTRIES .
IN ORDER TO PREVENT COST PRICES FROM BECOMING TOO HIGH IN THE COMMUNITY AS A WHOLE, AND IN PARTICULAR TO PREVENT THE NET CHARGE BORNE AS A RESULT OF THE FUNCTIONING OF THE FUND IN CERTAIN REGIONS OF THE COMMUNITY FROM BEING INCREASED, THE AMOUNT OF THE EQUALIZATION LEVY MUST NOT BE INCREASED WITHOUT DUE CAUSE .
THE EFFORT MADE TO ENCOURAGE IMPORTS AND A REASONABLE LEVEL OF PRICES MUST NOT LEAD TO AN IMPROVIDENT INCREASE IN THE CONSUMPTION OF FERROUS SCRAP EITHER IN EXISTING PLANT OR BY THE CREATION OF NEW PLANT .
...
SO FAR AS IS TECHNICALLY AND ECONOMICALLY POSSIBLE, AND TO THE EXTENT TO WHICH OTHER RAW MATERIALS MAY BE AVAILABLE, EVERY EFFORT SHOULD BE MADE TO REDUCE THE CONSUMPTION OF FERROUS SCRAP BY AN INCREASED USE OF PIG-IRON . "
SEVERAL PROPOSALS WHICH, UNDER THE ABOVE-MENTIONED ARTICLE 5, THE COMPETENT OFFICE MUST SUBMIT TO THE FUND, IN PARTICULAR THE FIXING OF THE " MAXIMUM IMPORT PRICE ", THE " EQUALIZATION PRICE " , THE " CRITERIA FOR THE CALCULATION OF ECONOMY IN SCRAP " AND THE " AMOUNT OF THE BONUS TO BE GRANTED FOR SUCH ECONOMIES " CANNOT BE THE RESULT OF MERE ACCOUNTANCY PROCEDURES BASED ON OBJECTIVE CRITERIA LAID DOWN BY THE HIGH AUTHORITY .
THEY IMPLY A WIDE MARGIN OF DISCRETION AND ARE AS SUCH THE OUTCOME OF THE EXERCISE OF A DISCRETIONARY POWER WHICH TENDS TO RECONCILE THE MANY REQUIREMENTS OF A COMPLEX AND VARIED ECONOMIC POLICY .
P . 154
IN STATING IN ITS THIRD GENERAL REPORT THAT " THE GENERAL POLICY CONCERNING FERROUS SCRAP MUST BE BASED ON THE GENERAL PRINCIPLES " DRAWN UP BY THE COUNCIL OF MINISTERS AND BY THE HIGH AUTHORITY, THE LATTER IMPLICITLY ADMITS THAT THOSE PRINCIPLES DO NOT SUFFICE FOR FORMULATING THE DECISIONS OF THE BRUSSELS AGENCIES .
SINCE OBJECTIVE CRITERIA WHEREBY THEIR DECISIONS MAY BE FORMULATED ARE LACKING, THE BRUSSELS AGENCIES MUST EXERCISE A WIDE MARGIN OF DISCRETION IN CARRYING OUT THE TASKS ENTRUSTED TO THEM BY DECISION NO 14/55 .
HOWEVER ON TWO OCCASIONS, BY DECISIONS NOS 9/56 AND 34/56, THE HIGH AUTHORITY HAS ITSELF ADOPTED, IN THE PLACE AND STEAD OF THE BRUSSELS AGENCIES, DECISIONS WHICH IMPLY THE EXERCISE OF A DISCRETIONARY POWER .
IT MAY BE ASKED WHETHER, IN ALLOCATING TO ITS OWN JURISDICTION DECISIONS WHICH, IN APPLICATION OF DECISION NO 14/55, COULD HAVE BEEN ADOPTED BY THE BRUSSELS AGENCIES, THE HIGH AUTHORITY INTENDED TO RESERVE TO ITSELF THE ASSESSMENT OF THE ECONOMIC FACTS AND CIRCUMSTANCES RELEVANT TO THE FORMULATION OF THOSE DECISIONS .
HOWEVER THERE IS NOTHING TO INDICATE THAT SUCH WAS THE CASE, BECAUSE THE HIGH AUTHORITY'S INTERVENTION WAS NOT BASED ON THE DISCRETIONARY NATURE OF THE DECISIONS IN QUESTION, BUT ON THE PROVISIONS OF THE SECOND PARAGRAPH OF ARTICLE 9 OF DECISION NO 22/54 WHICH PROVIDES THAT
" WHERE NO UNANIMOUS DECISION IS TAKEN BY THE BOARDS OF THE JOINT BUREAU AND THE FUND ... THE DECISION SHALL BE TAKEN BY THE HIGH AUTHORITY . "
ARTICLE 9 OF DECISION NO 14/55 OF THE HIGH AUTHORITY GIVES ITS PERMANENT REPRESENTATIVE ON THE BRUSSELS AGENCIES THE POWER TO MAKE ANY DECISION SUBJECT TO THE APPROVAL OF THE HIGH AUTHORITY .
IN RESERVING TO ITSELF THE POWER TO REFUSE ITS APPROVAL, THE HIGH AUTHORITY HAS NOT RETAINED SUFFICIENT POWERS FOR THE DELEGATION RESULTING FROM DECISION NO 14/55 TO BE CONTAINED WITHIN THE LIMITS DEFINED ABOVE .
IN THE PARAGRAPH OF THE STATEMENT OF DEFENCE SET OUT ABOVE THE HIGH AUTHORITY HAS MADE IT CLEAR THAT IT " ADOPTS THE DATA FURNISHED BY THE BRUSSELS AGENCIES WITHOUT BEING ABLE TO ADD ANYTHING THERETO ".
IN THOSE CIRCUMSTANCES THE DELEGATION OF POWERS GRANTED TO THE BRUSSELS AGENCIES BY DECISION NO 14/55 GIVES THOSE AGENCIES A DEGREE OF LATITUDE WHICH IMPLIES A WIDE MARGIN OF DISCRETION AND CANNOT BE CONSIDERED AS COMPATIBLE WITH THE REQUIREMENTS OF THE TREATY .
THE DECISION OF 24 OCTOBER 1956 IS BASED ON A GENERAL DECISION WHICH IS UNLAWFUL FROM THE POINT OF VIEW OF THE TREATY AND IT MUST, FOR THIS REASON ALSO, BE ANNULLED .
Decision on costs
THE DEFENDANT HAS FAILED IN ALL ITS SUBMISSIONS .
UNDER ARTICLE 60 ( 1 ) OF THE RULES OF PROCEDURE OF THE COURT, THE UNSUCCESSFUL PARTY SHALL BE ORDERED TO PAY THE COSTS .
Operative part
THE COURT
HEREBY :
1 . DECLARES THAT THE APPLICATION IS ADMISSIBLE;
2 . ANNULS THE DECISION OF THE HIGH AUTHORITY OF 24 OCTOBER 1956, NOTIFIED TO THE APPLICANT BY POST ON 12 NOVEMBER 1956, ACCORDING TO WHICH THE APPLICANT IS REQUIRED TO PAY TO THE IMPORTED FERROUS SCRAP EQUALIZATION FUND, 36, RUE RAVENSTEIN, BRUSSELS, THE SUM OF LIT 54 819 656 ( FIFTY-FOUR MILLION, EIGHT HUNDRED AND NINETEEN THOUSAND, SIX HUNDRED AND FIFTY-SIX ), THE SAID DECISION BEING AN ENFORCEABLE DECISION WITHIN THE MEANING OF ARTICLE 92 OF THE TREATY;
ORDERS THE DEFENDANT TO PAY THE COSTS . |
Judgment of the Court of 13 June 1958. - Meroni & Co., Industrie Metallurgiche, società in accomandita semplice v High Authority of the European Coal and Steel Community. - Case 10-56.
European Court reports
French edition Page 00053
Dutch edition Page 00055
German edition Page 00053
Italian edition Page 00051
English special edition Page 00157
Danish special edition Page 00097
Greek special edition Page 00227
Portuguese special edition Page 00229
Summary
Parties
Subject of the case
Grounds
Decision on costs
Operative part
Keywords
++++
1 . PROCEDURE - APPLICATION FOR ANNULMENT - OBJECTION OF ILLEGALITY - SCOPE OF ARTICLE 36 OF THE TREATY
2 . PROCEDURE - APPLICATION FOR ANNULMENT - OBJECTION OF ILLEGALITY - ANNULMENT OF AN INDIVIDUAL IMPLEMENTING DECISION - EFFECTS
3 . PROCEDURE - APPLICATION FOR ANNULMENT - OBJECTION OF ILLEGALITY - ANNULMENT OF AN INDIVIDUAL IMPLEMENTING DECISION - GROUNDS
4 . DECISIONS OF THE HIGH AUTHORITY - STATEMENT OF REASONS - EXTENT OF THE DUTY TO STATE REASONS
5 . DUTY TO PUBLISH AND PROFESSIONAL SECRECY
6 . DELEGATION OF POWERS - LIMITS
7 . DELEGATION OF POWERS - NECESSITY FOR AN EXPRESS DECISION
8 . DELEGATION OF POWERS - DISCRETIONARY POWER
9 . DELEGATION OF POWERS - RIGHT OF VETO ON THE PART OF THE DELEGATING AUTHORITY
Summary
( CF . PARAGRAPH 1, SUMMARY IN CASE 9/56 OF 13 JUNE 1958 ):
1 . THE THIRD PARAGRAPH OF ARTICLE 36 OF THE TREATY DOES NOT CONTAIN A SPECIAL RULE, APPLICABLE ONLY IN THE CASE OF PECUNIARY SANCTIONS AND PERIODIC PENALTY PAYMENTS, BUT A GENERAL PRINCIPLE, EMPHASIZED IN THAT ARTICLE, BECAUSE IT IS TO BE APPLIED TO THE PARTICULAR CASE OF AN ACTION IN WHICH THE COURT HAS UNLIMITED JURISDICTION . THE FACT THAT THE PRINCIPLE IS EXPRESSLY STATED IN THE SAID ARTICLE DOES NOT EXCLUDE THE APPLICATION OF THE SAME PRINCIPLE IN CASES IN WHICH IT IS NOT EXPRESSLY STATED
( TREATY, ARTICLES 33, 36 ).
*/ 656J0009 /*.
( CF . PARAGRAPH 2, SUMMARY IN CASE 9/56 OF 13 JUNE 1958 ):
2 . THE ILLEGALITY OF THE GENERAL DECISION ON WHICH AN INDIVIDUAL DECISION IS BASED CAN LEAD ONLY TO THE ANNULMENT OF THE INDIVIDUAL DECISION .
*/ 656J0009 /*.
( CF . PARAGRAPH 3, SUMMARY IN CASE 9/56 OF 13 JUNE 1958 ):
3 . AN APPLICANT MAY PUT FORWARD THE FOUR GROUNDS OF ANNULMENT SET OUT IN THE FIRST PARAGRAPH OF ARTICLE 33 FOR THE PURPOSE OF CONTESTING THE LEGALITY OF THE GENERAL DECISION ON WHICH THE INDIVIDUAL DECISION IN DISPUTE IS BASED
( TREATY, ARTICLE 33 ).
*/ 656J0009 /*.
( CF . PARAGRAPH 4, SUMMARY IN CASE 9/56 OF 13 JUNE 1958 ):
4 . DECISIONS OF THE HIGH AUTHORITY ADOPTED IN APPLICATION OF ARTICLE 92 OF THE TREATY MUST CONTAIN AN EXACT AND DETAILED STATEMENT OF ALL THE INDIVIDUAL ITEMS COMPRISED IN THE CLAIM, PAYMENT OF WHICH THEY MAKE ENFORCEABLE . ONLY AN ACCOUNT OF THAT KIND CAN MAKE POSSIBLE A REVIEW BY THE COURT
( TREATY, ARTICLES 15, 92 ).
*/ 656J0009 /*.
( CF . PARAGRAPH 6, SUMMARY IN CASE 9/56 OF 13 JUNE 1958 ):
5 . INFORMATION COLLECTED BY COOPERATIVE BODIES REPRESENTING A SIGNIFICANT PROPORTION OF THE UNDERTAKINGS CONCERNED CANNOT BE REGARDED AS SECRET WITHIN THE MEANING OF ARTICLE 47 OF THE TREATY . THEREFORE SUCH INFORMATION IS NOT COVERED BY PROFESSIONAL SECRECY AND THE PROVISIONS OF ARTICLES 5 AND 47, RELATING TO ITS PUBLICATION, ARE APPLICABLE
( TREATY, ARTICLES 5, 47 ).
*/ 656J0009 /*.
( CF . PARAGRAPH 8, SUMMARY IN CASE 9/56 OF 13 JUNE 1958 ):
6 . A DELEGATING AUTHORITY CANNOT CONFER UPON THE AUTHORITY RECEIVING THE DELEGATION POWERS DIFFERENT FROM THOSE WHICH IT HAS ITSELF RECEIVED UNDER THE TREATY ( GENERAL PRINCIPLE ).
THE HIGH AUTHORITY'S POWER TO AUTHORIZE OR ITSELF MAKE THE FINANCIAL ARRANGEMENTS REFERRED TO IN ARTICLE 53 OF THE TREATY GIVES IT THE RIGHT TO ENTRUST CERTAIN POWERS, ON CONDITIONS TO BE DETERMINED BY IT AND SUBJECT TO ITS SUPERVISION, TO BODIES ESTABLISHED UNDER PRIVATE LAW, HAVING A DISTINCT LEGAL PERSONALITY AND POSSESSING POWERS OF THEIR OWN .
HOWEVER, SUCH A DELEGATION OF POWERS CAN ONLY INVOLVE CLEARLY DEFINED EXECUTIVE POWERS, THE USE OF WHICH MUST BE ENTIRELY SUBJECT TO THE SUPERVISION OF THE HIGH AUTHORITY
( TREATY, ARTICLES 3, 53, 65 ).
*/ 656J0009 /*.
( CF . PARAGRAPH 9, SUMMARY IN CASE 9/56 OF 13 JUNE 1958 ):
7 . A DELEGATION OF POWERS CANNOT BE PRESUMED . EVEN WHEN EMPOWERED TO DELEGATE ITS POWERS THE DELEGATING AUTHORITY MUST TAKE AN EXPRESS DECISION TRANSFERRING THEM .
*/ 656J0009 /*.
( CF . PARAGRAPH 10, SUMMARY IN CASE 9/56 OF 13 JUNE 1958 ):
8 . TO DELEGATE A DISCRETIONARY POWER TO BODIES OTHER THAN THOSE WHICH THE TREATY HAS ESTABLISHED TO EFFECT AND SUPERVISE THE EXERCISE OF SUCH POWER EACH WITHIN THE LIMITS OF ITS OWN AUTHORITY, WOULD RENDER LESS EFFECTIVE THE GUARANTEE RESULTING FROM THE BALANCE OF POWERS ESTABLISHED BY ARTICLE 3
( TREATY, ARTICLE 3 ).
*/ 656J0009 /*.
( CF . PARAGRAPH 11, SUMMARY IN CASE 9/56 OF 13 JUNE 1958 ):
9 . IN RESERVING TO ITS PERMANENT REPRESENTATIVE ON THE BRUSSELS AGENCIES THE POWER TO MAKE ANY DECISION SUBJECT TO THE APPROVAL OF THE HIGH AUTHORITY, THE LATTER DID NOT RETAIN SUFFICIENT POWERS FOR THE DELEGATION RESULTING FROM DECISION NO 14/55 TO BE CONTAINED WITHIN THE LIMITS DEFINED ABOVE .
*/ 656J0009 /*.
Parties
IN CASE 10/56
MERONI AND CO ., INDUSTRIE METALLURGICHE, S.A.S ., ERBA ( PROVINCE OF COMO ), ITALY, REPRESENTED BY ITS MANAGING DIRECTOR, AGOSTINO ARTIOLI, ASSISTED BY ARTURO COTTRAU OF THE TURIN BAR AND ADVOCATE AT THE CORTE DI CASSAZIONE, ROME, WITH AN ADDRESS FOR SERVICE IN LUXEMBOURG AT THE CHAMBERS OF GEORGES MARGUE, 6 RUE ALPHONSE-MUNCHEN, APPLICANT,
V
HIGH AUTHORITY OF THE EUROPEAN COAL AND STEEL COMMUNITY, REPRESENTED BY PROFESSOR GIULIO PASETTI, ACTING AS AGENT, ASSISTED BY PROFESSOR ALBERTO TRABUCCHI, WITH AN ADDRESS FOR SERVICE IN LUXEMBOURG AT ITS OFFICES, 2 PLACE DE METZ, DEFENDANT,
Subject of the case
APPLICATION FOR THE ANNULMENT OF THE DECISION OF THE HIGH AUTHORITY OF 24 OCTOBER 1956, NOTIFIED TO THE APPLICANT BY POST ON 14 NOVEMBER 1956, ACCORDING TO WHICH THE APPLICANT IS REQUIRED TO PAY THE CAISSE DE PEREQUATION DES FERRAILLES IMPORTEES ( IMPORTED FERROUS SCRAP EQUALIZATION FUND ), 36, RUE RAVENSTEIN, BRUSSELS, THE SUM OF LIT 23 174 181 ( TWENTY-THREE MILLION ONE HUNDRED AND SEVENTY-FOUR THOUSAND ONE HUNDRED AND EIGHTY-ONE ), BEING AN ENFORCEABLE DECISION WITHIN THE MEANING OF ARTICLE 92 OF THE TREATY,
Grounds
P . 161
A - ADMISSIBILITY
1 . THE APPLICATION HAS BEEN LODGED IN COMPLIANCE WITH THE PRESCRIBED FORMALITIES, AND ITS REGULARITY IN THAT REGARD HAS NOT BEEN CONTESTED AND DOES NOT GIVE RISE TO ANY OBJECTION ON THE PART OF THE COURT .
2 . IN ITS APPLICATION AGAINST THE DECISION OF THE HIGH AUTHORITY DATED 24 OCTOBER 1956, BEING AN ENFORCEABLE DECISION WITHIN THE MEANING OF ARTICLE 92 OF THE TREATY, THE APPLICANT ARGUES THAT DECISION NO 14/55 OF 26 MARCH 1955 ESTABLISHING A FINANCIAL ARRANGEMENT FOR ENSURING A REGULAR SUPPLY OF FERROUS SCRAP FOR THE COMMON MARKET INVOLVES A MANIFEST FAILURE TO OBSERVE THE PROVISIONS OF THE TREATY AND IS VITIATED BY MISUSE OF POWERS .
ARTICLE 33 PROVIDES THAT APPLICATIONS " SHALL BE INSTITUTED WITHIN ONE MONTH OF THE NOTIFICATION OR PUBLICATION, AS THE CASE MAY BE, OF THE DECISION OR RECOMMENDATION ", AND THAT WHERE THEY ARE MADE BY UNDERTAKINGS OR ASSOCIATIONS REFERRED TO IN ARTICLE 48, THEY ARE ONLY ADMISSIBLE, WHERE THEY CONCERN A GENERAL DECISION OR RECOMMENDATION, IF THE APPLICANTS CONSIDER THE SAID DECISIONS OR RECOMMENDATIONS TO INVOLVE A MISUSE OF POWERS AFFECTING THEM .
P . 162
THE APPLICATION WAS LODGED ON 14 DECEMBER 1956 AND ALTHOUGH, THEREFORE, THE TIME-LIMIT FOR INSTITUTING PROCEEDINGS LAID DOWN IN THE LAST PARAGRAPH OF ARTICLE 33 WAS RESPECTED AS REGARDS THE DECISION OF 24 OCTOBER 1956, IT HAS EXPIRED AS REGARDS DECISION NO 14/55 OF 26 MARCH 1955 .
HOWEVER, DECISION NO 24/55 OF 26 MARCH 1955 IS NOT CONTESTED DIRECTLY, BUT IN THE CONTEXT OF AN APPLICATION AGAINST THE ENFORCEABLE DECISION OF 24 OCTOBER 1956 . WHILE THE DECISION OF 24 OCTOBER 1956 IS AN INDIVIDUAL DECISION CONCERNING THE APPLICANT, DECISION NO 14/55 OF 26 MARCH 1955 IS A GENERAL DECISION ON WHICH THE DECISION OF 24 OCTOBER 1956 IS BASED .
IN ASSESSING WHETHER THE APPLICANT IS ENTITLED TO CLAIM, IN SUPPORT OF ITS APPLICATION AGAINST THE INDIVIDUAL DECISION, THAT THE GENERAL DECISION ON WHICH IT IS BASED IS ILLEGAL, THE QUESTION ARISES WHETHER THE APPLICANT MAY CONTEST THE GENERAL DECISION AFTER THE EXPIRY OF THE PERIOD LAID DOWN IN THE LAST PARAGRAPH OF ARTICLE 33, AND RAISE AGAINST THE SAID GENERAL DECISION NOT ONLY MISUSE OF POWERS AFFECTING ITSELF, BUT THE FOUR GROUNDS OF ANNULMENT SET OUT IN THE FIRST PARAGRAPH OF ARTICLE 33 .
AS THE ADVOCATE GENERAL SAYS IN HIS OPINION, AN ILLEGAL GENERAL DECISION OUGHT NOT TO BE APPLIED TO AN UNDERTAKING AND NO OBLIGATIONS AFFECTING THE SAID UNDERTAKING MUST BE DEEMED TO ARISE THEREFROM .
ARTICLE 36 OF THE TREATY PROVIDES THAT IN SUPPORT OF AN APPLICATION AGAINST A DECISION OF THE HIGH AUTHORITY IMPOSING PECUNIARY SANCTIONS OR PERIODIC PENALTY PAYMENTS
" A PARTY MAY, UNDER THE SAME CONDITIONS AS IN THE FIRST PARAGRAPH OF ARTICLE 33 ..., CONTEST THE LEGALITY OF THE DECISION OR RECOMMENDATION WHICH THAT PARTY IS ALLEGED NOT TO HAVE OBSERVED . "
THAT PROVISION OF ARTICLE 36 SHOULD NOT BE REGARDED AS A SPECIAL RULE, APPLICABLE ONLY IN THE CASE OF PECUNIARY SANCTIONS AND PERIODIC PENALTY PAYMENTS, BUT AS THE APPLICATION OF A GENERAL PRINCIPLE, APPLIED BY ARTICLE 36 TO THE PARTICULAR CASE OF AN ACTION IN WHICH THE COURT HAS UNLIMITED JURISDICTION .
NO ARGUMENT CAN BE BASED ON THE EXPRESS STATEMENT IN ARTICLE 36 TO THE EFFECT THAT A CONTRARIO THE APPLICATION OF THE RULE LAID DOWN IS EXCLUDED IN CASES WHICH IT HAS NOT BEEN EXPRESSLY STATED . FOR THE COURT HAS DECIDED, IN ITS JUDGMENT IN CASE 8/55, THAT AN ARGUMENT IN REVERSE IS ONLY ADMISSIBLE WHEN NO OTHER INTERPRETATION APPEARS APPROPRIATE AND COMPATIBLE WITH THE PROVISION AND ITS CONTEXT AND WITH THE PURPOSE OF THE SAME .
ANY OTHER DECISION WOULD RENDER IT DIFFICULT, IF NOT IMPOSSIBLE, FOR THE UNDERTAKINGS AND ASSOCIATIONS MENTIONED IN ARTICLE 48 TO EXERCISE THEIR RIGHT TO BRING ACTIONS, BECAUSE IT WOULD OBLIGE THEM TO SCRUTINIZE EVERY GENERAL DECISION UPON PUBLICATION THEREOF FOR PROVISIONS WHICH MIGHT LATER ADVERSELY AFFECT THEM OR BE CONSIDERED AS INVOLVING A MISUSE OF POWERS AFFECTING THEM .
IT WOULD ENCOURAGE THEM TO LET THEMSELVES BE ORDERED TO PAY THE PECUNIARY SANCTIONS OR PERIODIC PENALTY PAYMENTS FOR WHICH THE TREATY MAKES PROVISION SO AS TO BE ABLE, BY VIRTUE OF ARTICLE 36, TO PLEAD THE ILLEGALITY OF THE GENERAL DECISIONS AND RECOMMENDATIONS WHICH THEY WERE ALLEGED NOT TO HAVE OBSERVED .
P . 163
AN APPLICANT'S RIGHT, AFTER THE EXPIRATION OF THE PERIOD PRESCRIBED IN THE LAST PARAGRAPH OF ARTICLE 33, TO TAKE ADVANTAGE OF THE IRREGULARITY OF GENERAL DECISIONS OR RECOMMENDATIONS IN SUPPORT OF PROCEEDINGS AGAINST DECISIONS OR RECOMMENDATIONS WHICH ARE INDIVIDUAL IN CHARACTER CANNOT LEAD TO THE ANNULMENT OF THE GENERAL DECISION, BUT ONLY TO THE ANNULMENT OF THE INDIVIDUAL DECISION WHICH IS BASED ON IT .
ARTICLE 184 OF THE TREATY ESTABLISHING THE EUROPEAN ECONOMIC COMMUNITY EXPRESSLY ADOPTS A SIMILAR POINT OF VIEW AND PROVIDES THAT :
" NOTWITHSTANDING THE EXPIRY OF THE PERIOD LAID DOWN IN THE THIRD PARAGRAPH OF ARTICLE 173, ANY PARTY MAY, IN PROCEEDINGS IN WHICH A REGULATION OF THE COUNCIL OF THE COMMISSION IS IN ISSUE, PLEAD THE GROUNDS SPECIFIED IN THE FIRST PARAGRAPH OF ARTICLE 173 IN ORDER TO INVOKE BEFORE THE COURT OF JUSTICE THE INAPPLICABILITY OF THAT REGULATION . "
ARTICLE 156 OF THE TREATY ESTABLISHING THE EUROPEAN ATOMIC ENERGY COMMUNITY CONTAINS A PRECISELY SIMILAR PROVISION .
THE FACT THAT THE POSITION ADOPTED IS THE SAME DOES NOT CONSTITUTE A DECISIVE ARGUMENT BUT CONFIRMS THE REASONING SET OUT ABOVE BY SHOWING THAT THE AUTHORS OF THE NEW TREATIES REGARDED IT AS COMPELLING .
THE ANNULMENT OF AN INDIVIDUAL DECISION BASED ON THE IRREGULARITY OF THE GENERAL DECISIONS ON WHICH IT IS BASED ONLY AFFECTS THE EFFECTS OF THE GENERAL DECISION IN SO FAR AS THOSE EFFECTS TAKE CONCRETE SHAPE IN THE ANNULLED INDIVIDUAL DECISION .
TO CONTEST AN INDIVIDUAL DECISION CONCERNING HIM, ANY APPLICANT IS ENTITLED TO PUT FORWARD THE FOUR GROUNDS OF ANNULMENT SET OUT IN THE FIRST PARAGRAPH OF ARTICLE 33 . IN THESE CIRCUMSTANCES, THERE IS NO REASON WHY AN APPLICANT WHO IS CONTESTING AN INDIVIDUAL DECISION SHOULD NOT BE ENTITLED TO PUT FORWARD THE FOUR GROUNDS OF ANNULMENT SET OUT IN THE FIRST PARAGRAPH OF ARTICLE 33 SO AS TO QUESTION THE LEGALITY OF THE GENERAL DECISIONS AND RECOMMENDATIONS ON WHICH THE INDIVIDUAL DECISION IS BASED .
3 . THE DEFENDANT HAS CONTESTED THE ADMISSIBILITY OF THE APPLICATION FOR THE ANNULMENT OF THE DECISION OF THE HIGH AUTHORITY, DATED 24 OCTOBER 1956, BEING A DECISION ENFORCEABLE AGAINST THE APPLICANT WITHIN THE MEANING OF ARTICLE 92 OF THE TREATY, ON THE GROUND THAT THE APPLICANT, BY ITS LETTER OF 13 APRIL 1956, GAVE ITS CONSENT IN ADVANCE TO THE INDIVIDUAL DECISION OF 24 OCTOBER 1956 .
THE DEFENDANT HAS MADE IT CLEAR THAT IT " HAD NEVER INTENDED TO GIVE ITS CONSENT IN ADVANCE " OR TO RENOUNCE THE RIGHT TO BRING A LATER APPLICATION AGAINST THE STATEMENTS OF SUMS DUE FROM IT MADE AFTER 13 APRIL 1956, BUT THAT " IT CONSIDERS IT REASONABLE TO OBJECT THAT THE OFFER OF PAYMENT CONSTITUTED APPROVAL OF THE ACTUAL FUNCTIONING OF THE BRUSSELS AGENCIES AND THUS OF THE MEANS WHEREBY THE LATTER DETERMINED THE EQUALIZATION RATE ".
P . 164
THE APPLICANT'S LETTER OF 13 APRIL 1956 MAKES EXPRESS RESERVATIONS AS REGARDS THE CALCULATIONS RESULTING IN THE DETERMINATION OF ITS DEBT, AND THOSE RESERVATIONS CONCERN IN PARTICULAR THE CONDITIONS OF APPLICATION OF GENERAL DECISION NO 14/55 .
THOSE RESERVATIONS RENDER IT IMPOSSIBLE TO CONSIDER THE LETTER OF 13 APRIL 1956 AS CONSTITUTING RECOGNITION OF THE DEBT OR A RENUNCIATION OF THE RIGHT TO CONTEST IT, DESPITE THE OFFER OF PAYMENT BY INSTALMENTS WHICH IS CONTAINED THEREIN .
THEREFORE THE LETTER OF 13 APRIL 1956 DOES NOT RENDER THE APPLICATION INADMISSIBLE .
B - SUBSTANCE
FIRST SUBMISSION : INFRINGEMENT OF AN ESSENTIAL PROCEDURAL REQUIREMENT
THE APPLICANT SEES AN INFRINGEMENT OF AN ESSENTIAL PROCEDURAL REQUIREMENT IN THE FAILURE TO STATE REASONS IN THE DECISION IN DISPUTE .
THE APPLICANT SEES " A MANIFEST LACK OF REASONS " IN THE DECISION OF 24 OCTOBER 1956 . THE DECISION CONTAINS ONLY THE TWO FOLLOWING REASONS :
" WHEREAS THE LIMITED COMPANY MERONI AND CO ., INDUSTRIE METALLURGICHE, ERBA ( PROVINCE OF COMO ), AN UNDERTAKING WITHIN THE MEANING OF ARTICLE 80 OF THE TREATY, HAS FAILED TO PAY TO THE IMPORTED FERROUS SCRAP EQUALIZATION FUND THE CONTRIBUTIONS DUE FOR FERROUS SCRAP IMPORTED AFTER 1 APRIL 1954 IN CONFORMITY WITH THE DECISIONS MENTIONED ABOVE;
WHEREAS THE CONTRIBUTIONS DUE FOR THE PERIOD FROM 1 APRIL 1954 TO 30 JUNE 1956 AMOUNT TO THE SUM OF LIT 23 174 181 ".
TAKING INTO ACCOUNT THE CASE-LAW OF THE COURT, THOSE TWO PARAGRAPHS CANNOT CONSTITUTE A STATEMENT OF THE CONSIDERATIONS OF LAW AND OF FACT UPON WHICH THE DECISION OF 24 OCTOBER 1956 IS BASED .
IT THEREFORE LACKS THE SUPPORTING REASONS INDISPENSABLE FOR THE EXERCISE OF JUDICIAL REVIEW .
ACCORDINGLY, THE DECISION OF 24 OCTOBER 1956 DOES NOT COMPLY WITH THE REQUIREMENTS OF ARTICLE 15 OF THE TREATY, WHICH PROVIDES : " DECISIONS ... OF THE HIGH AUTHORITY SHALL STATE THE REASONS ON WHICH THEY ARE BASED ".
HOWEVER, IN ITS DEFENCE, THE HIGH AUTHORITY USES THE BRUSSELS AGENCIES AS A SHIELD :
" THE DECISION OF THE HIGH AUTHORITY DID NOTHING EXCEPT REPRODUCE THE DATA RESULTING FROM THE VARIOUS ABSTRACTS OF ACCOUNT SENT FROM TIME TO TIME TO THE APPLICANT, AND CLEARLY NO INDICATION OF REASONS IS REQUIRED FOR THAT ".
ACCORDING TO THE HIGH AUTHORITY, THE FAILURE TO STATE REASONS WHICH HAS BEEN OBSERVED IN THE DECISION OF 24 OCTOBER 1956 CANNOT CONSTITUTE AN INFRINGEMENT OF AN ESSENTIAL PROCEDURAL REQUIREMENT BECAUSE THAT DECISION HAS BEEN SUPPLIED WITH THE REASONS REQUIRED BY THE TREATY THROUGH THE INTERMEDIARY OF THE FUND .
FOR THE PURPOSES OF THE PRESENT APPLICATION, IT IS NOT NECESSARY TO EXAMINE WHETHER THE STATING OF APPROPRIATE REASONS IN THE NOTICES TO PAY ADDRESSED BY THE FUND TO THE APPLICANT VALIDLY ABSOLVED THE HIGH AUTHORITY FROM STATING ITS OWN REASONS FOR THE DECISION OF 24 OCTOBER 1956, SINCE THE REASONS WHICH APPEAR IN THE SAID NOTICES DO NOT CONSTITUTE REASONS FOR THE DEBT, ENFORCEMENT OF WHICH IS ORDERED BY THE DECISION OF 24 OCTOBER 1956 .
P . 165
IN FACT, THE PAYMENT REQUIRED BY THE DECISION OF THE HIGH AUTHORITY OF 24 OCTOBER 1956 FOR THE PERIOD FROM 1 AUGUST 1954 TO 30 JUNE 1956 IS NOT EQUAL TO THE TOTAL SHOWN IN THE NOTICES ADDRESSED BY THE FUND TO THE MERONI UNDERTAKING FOR THAT PERIOD .
IT DIFFERS THEREFROM IN PARTICULAR BY THE ADDITION OF INTEREST FOR LATE PAYMENT AND THE DEDUCTION OF CERTAIN PAYMENTS MADE BY THE MERONI COMPANY .
ALTHOUGH THE NOTICES TO PAY CARRIED A STATEMENT INFORMING THE DEBTOR THAT INTEREST FOR LATE PAYMENT WOULD BE CLAIMED FROM THE 25TH DAY FOLLOWING THE DATE OF THE NOTICE AND ALTHOUGH, IN HIS ORAL ARGUMENTS, THE AGENT FOR THE HIGH AUTHORITY SAID THAT MERONI HAD BEEN WARNED OF THAT PENALTY IN A LETTER OF 20 SEPTEMBER 1956, THE FIGURES APPEARING ON THE NOTICES DO NOT MENTION EITHER ANY EXTRA CHARGES DUE FOR LATE PAYMENT OR ANY DEDUCTIONS ON ACCOUNT OF EARLIER PAYMENTS .
IT IS IMPOSSIBLE TO FIND IN THE NOTICES TO PAY ADDRESSED BY THE FUND TO THE APPLICANT ANY STATEMENT OF THE REASONS FOR THE PAYMENT DEMANDED OF IT .
TO BE LEGAL, THE STATEMENT OF THE REASONS FOR THE DECISION OF 24 OCTOBER 1956 OUGHT TO HAVE INCLUDED AN EXACT AND DETAILED STATEMENT OF ALL THE INDIVIDUAL ITEMS COMPRISED IN THE CLAIM, PAYMENT OF WHICH WAS MADE ENFORCEABLE BY THE DECISION .
ONLY AN ACCOUNT OF THAT KIND COULD MAKE POSSIBLE A REVIEW OF THE SAID DECISION BY THE COURT .
THE REASONS ON WHICH THE DECISION OF 24 OCTOBER 1956 IS BASED HAVE NOT BEEN SUFFICIENTLY STATED TO COMPLY WITH THE LAW EITHER BY THE HIGH AUTHORITY IN THE TEXT NOTIFIED TO THE APPLICANT OR BY THE FUND IN THE NOTICES TO PAY WHICH THE LATTER ADDRESSED TO IT .
THIS FAILURE TO STATE REASONS IN CONNEXION WITH THE DECISION OF 24 OCTOBER 1956 CONSTITUTES AN INFRINGEMENT OF AN ESSENTIAL PROCEDURAL REQUIREMENT .
THEREFORE, IN APPLICATION OF ARTICLE 33 OF THE TREATY, THAT DECISION MUST BE ANNULLED .
SECOND SUBMISSION : MANIFEST FAILURE TO OBSERVE THE PROVISIONS OF THE TREATY
IN THIS SECOND SUBMISSION, THE APPLICANT COMPLAINS THAT THE HIGH AUTHORITY :
( A ) DID NOT INFORM IT OF " THE OBJECTIVE DATA ON WHICH THE ITALIAN UNDERTAKINGS WERE ASSESSED, IN MANIFEST CONTRADICTION WITH ARTICLE 47 OF THE TREATY, WHICH PROVIDES THAT THE HIGH AUTHORITY " SHALL PUBLISH SUCH DATA AS COULD BE USEFUL TO GOVERNMENTS OR TO ANY OTHER PARTIES CONCERNED " ";
( B ) ONLY SENT " PROVISIONAL ACCOUNTS TO THE INTERESTED PARTIES AFTER 18 MONTHS " AND ONLY APPLIED TO THEM " EQUALIZATION BONUSES ... WHICH WERE ALSO PROVISIONAL ".
P . 166
( I ) INSUFFICIENT INFORMATION
IN THE NUMEROUS COMMUNICATIONS WHICH IT ADDRESSED TO THE APPLICANT, THE FUND NEVER INFORMED IT OF ANYTHING MORE THAN THE TONNAGE ASSESSABLE AND THE RATE OF ASSESSMENT PER UNIT .
NO INFORMATION HAS BEEN PUBLISHED, EITHER BY THE HIGH AUTHORITY OR BY THE BRUSSELS AGENCIES, SO AS TO INFORM THOSE TO BE CHARGED OF THE METHODS WHEREBY THEIR OBLIGATIONS HAD BEEN WORKED OUT OR OF THE FACTS ON WHICH THE CALCULATIONS WERE BASED .
IT IS ONLY THROUGH " AN ADDENDUM TO THE ANSWER OF THE HIGH AUTHORITY TO THE QUESTIONS PUT BY THE COURT " THAT THE COURT AND, IT WOULD APPEAR, THE APPLICANT, HAVE BEEN INFORMED OF THE SUCCESSIVE FORMULAE WHEREBY THE EQUALIZATION RATE WAS CALCULATED .
ARTICLE 5 OF THE TREATY REQUIRES THE HIGH AUTHORITY TO " PUBLISH THE REASONS FOR ITS ACTIONS " AND ARTICLE 47 PROVIDES THAT ALTHOUGH
" THE HIGH AUTHORITY MUST NOT DISCLOSE INFORMATION OF THE KIND COVERED BY THE OBLIGATION OF PROFESSIONAL SECRECY, IN PARTICULAR INFORMATION ABOUT UNDERTAKINGS, THEIR BUSINESS RELATIONS OR THEIR COST COMPONENTS ... IT SHALL PUBLISH SUCH DATA AS COULD BE USEFUL TO GOVERNMENTS OR TO ANY OTHER PARTIES CONCERNED . "
IN THE REJOINDER, THE HIGH AUTHORITY HAS RETORTED TO THE APPLICANT THAT IT IS " REQUIRED TO SHOW AN ELEMENTARY RESPECT FOR PROFESSIONAL SECRECY ".
IN THE PRESENT CASE, INFORMATION COLLECTED BY COOPERATIVE BODIES REPRESENTING AT CERTAIN PERIODS, AND IN PARTICULAR ON 4 JULY 1955, UP TO 136 UNDERTAKINGS CHOSEN FROM AMONGST THE LARGER OF THE 240 UNDERTAKINGS ASSESSABLE TO THE EQUALIZATION LEVY CANNOT BE REGARDED AS SECRET WITHIN THE MEANING OF ARTICLE 47 OF THE TREATY . IN FAILING TO PUBLISH THE REASONS FOR ITS ACTIONS, AT LEAST IN GENERAL TERMS, AND IN FAILING TO PUBLISH THE DATA NOT COVERED BY PROFESSIONAL SECRECY AND OF POSSIBLE USE TO GOVERNMENTS OR TO ANY OTHER PARTIES CONCERNED, OR IN FAILING TO REQUIRE THE BRUSSELS AGENCIES TO PUBLISH THE SAME, THE HIGH AUTHORITY HAS INFRINGED ARTICLES 5 AND 47 OF THE TREATY .
FOR THIS REASON ALSO, IN APPLICATION OF ARTICLE 33 OF THE TREATY, THE DECISION OF 24 OCTOBER 1956 MUST BE ANNULLED .
( II ) THE PROVISIONAL NATURE OF THE NOTICES TO PAY ADDRESSED TO THE APPLICANT
THE APPLICANT COMPLAINS THAT THE HIGH AUTHORITY BASED THE DECISION OF 24 OCTOBER 1956 ON PROVISIONAL ACCOUNTS, AND THAT THE FUND HAS, UP TO THE DATE OF THE APPLICATION, NAMELY 18 MONTHS AFTER THE SYSTEM WAS INTRODUCED, NEVER SENT IT DEFINITIVE ACCOUNTS .
IT ASKS " WHETHER IT CAN HONESTLY BE CLAIMED THAT AN UNDERTAKING CAN SUCCEED IN RELIABLY WORKING OUT ITS OWN PRICES AND IN PUBLISHING ITS OWN PRICE-LIST IF IT IS NOT INFORMED ACCURATELY AND IN DUE TIME OF ITS EQUALIZATION DEBT ".
P . 167
AS AGAINST THE APPLICANT'S REQUIREMENT, THE DEFENDANT PUTS FORWARD THE VERY NATURE OF THE CONCEPT OF EQUALIZATION, WHICH REQUIRES " AN A POSTERIORI CALCULATION " IMPLYING KNOWLEDGE OF THE FACTUAL DATA IN RESPECT OF WHICH EQUALIZATION IS TO BE EFFECTED .
IT ADDS IN ITS REJOINDER THAT " ONLY SMALL-SCALE CORRECTIONS WILL EVER BE INVOLVED ". THE ORDER OF MAGNITUDE OF THE DEFINITIVE ADJUSTMENTS IS UNKNOWN, FOR THE CORRECTIONS NOTIFIED BY THE FUND, IN PARTICULAR IN ITS LETTER OF 31 OCTOBER 1955, ARE THEMSELVES DESCRIBED AS PROVISIONAL .
FOR THE PURPOSES OF THE PRESENT CASE IT WOULD ONLY HAVE BEEN POSSIBLE TO ESTABLISH THEM BY MEANS OF AN EXPERT'S REPORT .
HOWEVER, SUCH A REPORT IS NOT INDISPENSABLE IN THIS CASE, FOR THE DECISION OF 24 OCTOBER, WITH WHICH THE APPLICATION IS CONCERNED, MUST ALREADY, FOR THE REASONS SET OUT ABOVE, BE ANNULLED .
THIRD SUBMISSION : MISUSE OF POWERS
THE APPLICANT COMPLAINS THAT THE DEFENDANT HAS COMMITTED A MISUSE OF POWERS :
IN BASING THE DECISION OF 24 OCTOBER 1956, WHICH IS AN ENFORCEABLE DECISION, ON THE INACCURATE CALCULATIONS OF THE BRUSSELS AGENCIES;
IN FAILING TO OBSERVE THE RECOMMENDATIONS WHICH THE COUNCIL OF MINISTERS HAD APPENDED TO THE UNANIMOUS ASSENT GIVEN BY IT TO DECISION NO 14/55 OF THE HIGH AUTHORITY;
IN IRREGULARLY DELEGATING TO THE BRUSSELS AGENCIES POWERS CONFERRED ON IT BY THE TREATY .
( I ) INACCURACY OF THE CALCULATIONS MADE BY THE BRUSSELS AGENCIES
THE APPLICANT CLAIMS THAT THE BRUSSELS AGENCIES " ARTIFICIALLY TOOK AS THE AVERAGE PRICE FOR INTERNAL FERROUS SCRAP A PRICE WHICH WAS WELL KNOWN TO BE LOWER THAN THE REAL PRICE, WHEREAS, EQUALLY ARTIFICIALLY, THE AVERAGE PRICE TAKEN FOR IMPORTED FERROUS SCRAP WAS EXAGGERATED ". IT COMPLAINS THAT THE SAID AGENCIES THUS " MADE A TRAVESTY OF THE FACTS AND CREATED A SITUATION IN WHICH THE EFFECTS OF THE SYSTEM WERE NOT THE SAME FOR ALL THE INTERESTED PARTIES, SOME OF WHOM BENEFITED, WHEREAS OTHERS CONVERSELY SUFFERED LOSS ".
THE APPLICANT HAS ITSELF ADMITTED " THAT IT IS NOT IN A POSITION TO PROVE IS DOUBTS ", " THAT IT STILL DOES NOT KNOW HOW THE IMPORT OPERATIONS WERE CARRIED OUT AND WHAT WAS THE WEIGHTED AVERAGE RATE WHICH WAS CALCULATED ".
IT IS NOT POSSIBLE TO EXAMINE WHETHER THE APPLICANT'S ALLEGATIONS ARE WELL FOUNDED, IN VIEW OF THE INADEQUACY OF THE REASONS STATED FOR THE DECISION OF 24 OCTOBER 1956 AND THE LACK OF INFORMATION ON THE FACTORS USED BY THE BRUSSELS AGENCIES IN THEIR CALCULATIONS .
HOWEVER, FOR THE PURPOSES OF THE PRESENT APPLICATION, THAT EXAMINATION IS NOT NECESSARY, BECAUSE THE INADEQUACY OF THE REASONS STATED AND THE FAILURE TO PUBLISH THE DATA ON WHICH THE DECISION OF 24 OCTOBER 1956 IS BASED CONSTITUTE OF THEMSELVES INFRINGEMENTS OF THE TREATY OF A NATURE SUCH AS TO BRING ABOUT THE ANNULMENT OF THE SAID DECISION .
( II ) INFRINGEMENT OF THE RECOMMENDATIONS WHICH THE COUNCIL OF MINISTERS ALLEGEDLY APPENDED TO ITS UNANIMOUS ASSENT IN RESPECT OF DECISION NO 14/55
THE APPLICANT CLAIMS THAT THE HIGH AUTHORITY DID NOT OBSERVE AT LEAST THREE OF THE SIX RECOMMENDATIONS WHICH THE COUNCIL OF MINISTERS APPENDED TO THE ASSENT WHICH IT GAVE IN RESPECT OF DECISION NO 14/55 .
JOURNAL OFFICIEL NO 8 OF 30 MARCH 1955, P . 689, ONLY INDICATES THAT THE SAID ASSENT WAS " GIVEN UNANIMOUSLY IN THE TERMS SET OUT IN THE MINUTES OF THE PROCEEDINGS OF THE COUNCIL ".
THE MINUTES OF THE COUNCIL OF MINISTERS ARE NOT PUBLISHED .
SIX PRINCIPLES LAID DOWN BY THE COUNCIL OF MINISTERS AND THE HIGH AUTHORITY DURING THE MEETING OF THE COUNCIL OF MINISTERS OF 21 AND 22 MARCH 1955, BEING PRINCIPLES " ON WHICH GENERAL POLICY IN THE MATTER OF FERROUS SCRAP IS TO BE BASED ", WERE PUBLISHED IN THE THIRD GENERAL REPORT ON THE ACTIVITIES OF THE COMMUNITY ( P . 105 ) AND THOSE SIX PRINCIPLES APPEAR TO BE THE ONES WHICH THE APPLICANT HAS IN MIND . HOWEVER, FOR THE PURPOSES OF THE PRESENT APPLICATION, IT IS NOT NECESSARY TO EXAMINE THE LEGAL CONSEQUENCES WHICH PRINCIPLES PUBLISHED IN THOSE CIRCUMSTANCES MAY INVOLVE, BECAUSE FOR THE REASONS MENTIONED ABOVE THE DECISION OF 24 OCTOBER 1956 MUST BE ANNULLED .
( III ) ILLEGALITY OF THE DELEGATION OF POWERS RESULTING FROM DECISION NO 14/55
THE APPLICANT CLAIMS THAT IN THE MIND OF THE HIGH AUTHORITY " THE BRUSSELS ACCOUNTS ARE UNASSAILABLE AND ALMOST SACROSANCT AND ARE CERTAINLY OF GREATER WEIGHT AND AUTHORITY THAN ARE DECISIONS PROPER, WHICH CAN ALWAYS BE CONTESTED BEFORE THE COURT OF JUSTICE ". IN OTHER WORDS, THE APPLICANT COMPLAINS THAT THE HIGH AUTHORITY HAS DELEGATED TO THE BRUSSELS AGENCIES POWERS CONFERRED UPON IT BY THE TREATY, WITHOUT SUBJECTING THEIR EXERCISE TO THE CONDITIONS WHICH THE TREATY WOULD HAVE REQUIRED IF THOSE POWERS HAD BEEN EXERCISED DIRECTLY BY IT .
THE APPLICANT ALSO COMPLAINS THAT THE HIGH AUTHORITY HAS CREATED " A SITUATION IN WHICH THE LARGE AND MEDIUM-SIZED INDUSTRIES PREDOMINATE OVER THOSE OF LIMITED FINANCIAL MEANS, WHICH HAVE TO OBTAIN THEIR SUPPLIES ON THE INTERNAL MARKETS ", IN OTHER WORDS THAT IT HAS, BY ITS DECISION NO 14/55, DELEGATED POWERS TO AGENCIES ILL-QUALIFIED TO EXERCISE THEM .
THOSE TWO COMPLAINTS REFER TO THE DELEGATION OF POWERS WHICH GENERAL DECISION NO 14/55 GRANTED TO THE BRUSSELS AGENCIES . THE FIRST COMPLAINT IS CONCERNED WITH THE MANNER IN WHICH THE POWERS WERE DELEGATED, THE SECOND WITH THE ACTUAL PRINCIPLE OF DELEGATION .
HOWEVER, BEFORE EXAMINING THOSE COMPLAINTS, IT IS DESIRABLE TO EXAMINE WHETHER DECISION NO 14/55 DID IN FACT GRANT A DELEGATION OF POWERS TO THE BRUSSELS AGENCIES .
P . 169
( A ) DID DECISION NO 14/55 GRANT A DELEGATION OF POWERS TO THE BRUSSELS AGENCIES ".
IT IS DESIRABLE TO ESTABLISH WHETHER DECISION NO 14/55 " ESTABLISHING A FINANCIAL ARRANGEMENT FOR ENSURING A REGULAR SUPPLY OF FERROUS SCRAP FOR THE COMMON MARKET " CONSTITUTES A TRUE DELEGATION, TO THE BRUSSELS AGENCIES, OF POWERS WHICH HAD BEEN CONFERRED ON THE HIGH AUTHORITY BY THE TREATY, OR WHETHER IT ONLY GRANTS THOSE AGENCIES THE POWER TO DRAW UP RESOLUTIONS THE APPLICATION OF WHICH BELONGS TO THE HIGH AUTHORITY, THE LATTER RETAINING FULL RESPONSABILITY FOR THE SAME .
CERTAIN PROVISIONS OF DECISION NO 14/55 FAVOUR THE SECOND PROPOSITION, IN PARTICULAR :
THE RECITAL STATING THAT " THE HIGH AUTHORITY IS RESPONSIBLE FOR THE PROPER FUNCTIONING OF THE FINANCIAL ARRANGEMENTS AND THUS MUST BE IN A POSITION TO INTERVENE EFFECTIVELY AT ANY MOMENT ";
ARTICLE 1, WHICH STATES THAT : " THE OPERATION OF THE AFORESAID ARRANGEMENTS UNDER THE RESPONSIBILITY OF THE HIGH AUTHORITY SHALL BE GIVEN TO THE JOINT BUREAU OF FERROUS SCRAP CONSUMERS ( HEREINAFTER REFERRED TO AS " THE JOINT BUREAU ") AND TO THE IMPORTED FERROUS SCRAP EQUALIZATION FUND ( HEREINAFTER REFERRED TO AS " THE FUND "); "
THE SECOND PARAGRAPH OF ARTICLE 4, WHICH PROVIDES THAT " IF PAYMENT IS NOT EFFECTED IN DUE TIME, THE FUND SHALL REQUEST THE HIGH AUTHORITY TO INTERVENE, WHEN THE LATTER MAY " ( NOT " MUST " ) " TAKE AN ENFORCEABLE DECISION ";
ARTICLE 8, WHICH PROVIDES THAT : " THE HIGH AUTHORITY SHALL APPOINT A PERMANENT REPRESENTATIVE AND HIS DEPUTY TO WORK WITH THE JOINT BUREAU AND THE FUND .
THE PERMANENT REPRESENTATIVE OR HIS DEPUTY SHALL ATTEND ALL MEETINGS OF THE ADMINISTRATIVE COUNCIL AND OF THE GENERAL ASSEMBLY OF THE JOINT BUREAU AND OF THE FUND . THE PERMANENT REPRESENTATIVE OR HIS DEPUTY SHALL FORWARD IMMEDIATELY TO THE HIGH AUTHORITY THE DECISIONS TAKEN BY THE BODIES MENTIONED ABOVE AND SHALL INFORM THE HIGH AUTHORITY CONCERNING ALL MATTERS CALLING FOR A RULING BY IT UNDER ARTICLE 9 BELOW ";
ARTICLE 9, WHICH STATES THAT : " THE DECISIONS OF THE JOINT BUREAU AND OF THE FUND SHALL BE ADOPTED UNANIMOUSLY BY THE RESPECTIVE BOARDS IN REGARD TO MATTERS FALLING WITHIN THEIR OWN COMPETENCE AND BY THE TWO BOARDS JOINTLY FOR MATTERS IN WHICH THEY SHARE RESPONSABILITY . THE PERMANENT REPRESENTATIVE OF THE HIGH AUTHORITY OR HIS DEPUTY MAY HOWEVER SUBORDINATE THE DECISION TO THE APPROVAL OF THE HIGH AUTHORITY . WHERE NO UNANIMOUS DECISION IS TAKEN BY THE BOARDS OF THE JOINT BUREAU AND THE FUND REGARDING THE MEASURES PROVIDED FOR IN ARTICLES 3 AND 4 AND IN THE FIRST PARAGRAPH OF ARTICLE 5 ABOVE, THE DECISION SHALL BE TAKEN BY THE HIGH AUTHORITY . THE HIGH AUTHORITY, ITS PERMANENT REPRESENTATIVE OR THE LATTER'S DEPUTY MAY CALL UPON THE JOINT BUREAU AND THE FUND TO MEET WITHIN NOT MORE THAN TEN DAYS, AND NOTIFY THOSE BODIES OF ALL PROPOSALS ADVANCED . IF NO MEETING TAKES PLACE WITHIN TEN DAYS, THE HIGH AUTHORITY ITSELF MAY TAKE A DECISION RESPECTING THE PROPOSALS CONCERNED ".
P . 170
OTHER PROVISIONS OF DECISION NO 14/55 CONFIRM THE FIRST PROPOSITION, AND IN PARTICULAR THE FIRST PARAGRAPH OF ARTICLE 4 :
" THE FUND SHALL NOTIFY THE UNDERTAKINGS OF THE AMOUNT OF CONTRIBUTION PAYABLE AND OF THE DATES ON WHICH PAYMENT MUST BE MADE . IT IS AUTHORIZED TO COLLECT SUCH PAYMENTS . ", AND THE FIRST PARAGRAPH OF ARTICLE 6 :
" THE FUND SHALL BE THE EXECUTIVE BODY RESPONSIBLE FOR THE FINANCIAL ARRANGEMENTS ESTABLISHED BY THIS DECISION . "
FROM THOSE TWO INTERPRETATIONS, THE HIGH AUTHORITY HAS CHOSEN THE FIRST, SAYING IN ITS STATEMENT OF DEFENCE THAT :
" THE HIGH AUTHORITY ADOPTS THE DATA FURNISHED BY THE BRUSSELS AGENCIES WITHOUT BEING ABLE TO ADD ANYTHING THERETO . ANY OTHER SPECIFIC EXPLANATIONS WOULD MEAN UNAUTHORIZED INTERFERENCE IN ANOTHER BODY'S POWERS FOR THE PURPOSE OF EXPLAINING THE FACTORS INVOLVED IN THE ELABORATION OF ITS DECISIONS ... THE PRICES OF IMPORTS, THE QUALITIES OF THE FERROUS SCRAP IMPORTED AND THE WEIGHTED AVERAGE PRICE WITHIN THE COMMUNITY ARE FACTORS WHICH THE BRUSSELS AGENCIES TAKE INTO CONSIDERATION IN ORDER TO FIX THE EQUALIZATION RATE . THE CONTESTED DECISION DOES NO MORE THAN REPRODUCE THE RESULT OF THE APPLICATION BY THOSE AGENCIES OF THE EQUALIZATION RATE TO THE APPLICANT . THUS IF IT WERE TO BE ADMITTED THAT THE ERROR OF WHICH IT COMPLAINS CAN CONSTITUTE A MISUSE OF POWERS, THAT MISUSE OF POWERS WAS COMMITTED DURING DELIBERATIONS OF THE EQUALIZATION AGENCIES WHICH THE HIGH AUTHORITY CAN NO LONGER CONTEST IN VIEW OF THE FACT THAT ITS REPRESENTATIVE ON THE BRUSSELS AGENCIES DID NOT RESERVE THE FINAL DECISION TO THE HIGH AUTHORITY UNDER ARTICLE 9 OF DECISIONS NOS 22/54 AND 14/55 . FOR IT IS BEYOND THE BOUNDS OF REASON TO SUPPOSE THAT A DECISION OF THE COMPETENT AGENCIES IN BRUSSELS, ONCE ADOPTED UNANIMOUSLY AND WITHOUT RESERVATIONS ON THE PART OF THE REPRESENTATIVE OF THE HIGH AUTHORITY, REMAINS EXPOSED TO POSSIBLE CHANGES IMPOSED UNILATERALLY BY THE HIGH AUTHORITY ALONE . THE FACT THAT THE UNANIMOUS CONSENT OF ALL THE MEMBERS OF THE DELIBERATING AGENCIES HAS BEEN REQUIRED IN ORDER THAT THE DECISIONS SHALL BE BINDING IS OF VERY GREAT SIGNIFICANCE . HOWEVER EVEN IF, CONTRARY TO THE CLEAR WORDING OF THE ARTICLES ALREADY QUOTED AND TO THEIR LOGICAL INTERPRETATION, IT WERE TO BE ADMITTED THAT THE REPRESENTATIVE OF THE HIGH AUTHORITY CAN LATER, AT ANY TIME, VARY OR ANNUL THOSE DECISIONS, THE SUBMISSION UNDER DISCUSSION WOULD STILL BE IRRELEVANT AS REGARDS THE ANNULMENT OF THE CONTESTED DECISION . FOR WERE SUCH A MISUSE TO EXIST, IN ORDER TO BE ABLE TO CONTEST THE DECISION AT ISSUE BEFORE THE COURT, IT WOULD BE NECESSARY TO ALTER THE CONTENT THEREOF AND TO ATTRIBUTE TO IT AN EFFECT QUITE DIFFERENT FROM MERELY RENDERING A PRE-EXISTING OBLIGATION ENFORCEABLE . MOREOVER THE APPLICANT WOULD HAVE HAD TO DEMONSTRATE THAT IN THE CONTESTED DECISION THE HIGH AUTHORITY TOOK OVER AS ITS OWN THE DELIBERATIONS OF THE BRUSSELS AGENCIES WHICH LED TO THE FIXING OF THE EQUALIZATION RATE AND THAT THOSE DELIBERATIONS CONSTITUTE A DECISION OF THE HIGH AUTHORITY ITSELF AGAINST WHICH THE APPLICANT IS ENTITLED TO INSTITUTE PROCEEDINGS . "
P . 171
THE HIGH AUTHORITY COULD HAVE ARGUED THAT THE POWER OF ITS REPRESENTATIVE, PURSUANT TO ARTICLE 9 OF DECISION NO 14/55 TO " SUBORDINATE THE DECISION TO THE APPROVAL OF THE HIGH AUTHORITY " MEANT THAT IT REMAINED RESPONSIBLE FOR ANY DECISION OF THE BRUSSELS AGENCIES . HOWEVER THE ABOVE QUOTATION FROM THE STATEMENT OF DEFENCE RENDERS IT NECESSARY TO TAKE THE VIEW THAT THE HIGH AUTHORITY DOES NOT TAKE OVER AS ITS OWN THE DELIBERATIONS OF THE BRUSSELS AGENCIES LEADING TO THE FIXING OF THE EQUALIZATION RATE .
THEREFORE DECISION NO 14/55 BRINGS ABOUT A TRUE DELEGATION OF POWERS, AND THE QUESTION WHETHER SUCH DELEGATION ACCORDS WITH THE REQUIREMENTS OF THE TREATY MUST BE EXAMINED .
( B ) DETAILS OF THE APPLICATION OF DECISION NO 14/55
IF THE HIGH AUTHORITY HAD ITSELF EXERCISED THE POWERS THE EXERCISE OF WHICH IS CONFERRED BY DECISION NO 14/55 ON THE BRUSSELS AGENCIES, THOSE POWERS WOULD HAVE BEEN SUBJECT TO THE RULES LAID DOWN BY THE TREATY AND IN PARTICULAR THOSE WHICH IMPOSE UPON THE HIGH AUTHORITY :
THE DUTY TO STATE REASONS FOR ITS DECISIONS AND TO REFER TO ANY OPINIONS WHICH WERE REQUIRED TO BE OBTAINED ( ARTICLE 15 );
THE DUTY TO PUBLISH ANNUALLY A GENERAL REPORT ON ITS ACTIVITIES AND ITS ADMINISTRATIVE EXPENSES ( ARTICLE 17 );
THE DUTY TO PUBLISH SUCH DATA AS COULD BE USEFUL TO GOVERNMENTS OR TO ANY OTHER PARTIES CONCERNED ( ARTICLE 47 ).
ON THE SAME SUPPOSITION, ITS DECISIONS AND RECOMMENDATIONS WOULD HAVE BEEN SUBJECT TO REVIEW BY THE COURT OF JUSTICE ON THE CONDITIONS LAID DOWN BY ARTICLE 33 .
DECISION NO 14/55 DID NOT MAKE THE EXERCISE OF THE POWERS WHICH IT CONFERRED UPON THE BRUSSELS AGENCIES SUBJECT TO ANY OF THE CONDITIONS TO WHICH IT WOULD HAVE BEEN SUBJECT IF THE HIGH AUTHORITY HAD EXERCISED THEM DIRECTLY .
EVEN IF THE DELEGATION RESULTING FROM DECISION NO 14/55 APPEARED AS LEGAL FROM THE POINT OF VIEW OF THE TREATY, IT COULD NOT CONFER UPON THE AUTHORITY RECEIVING THE DELEGATION POWERS DIFFERENT FROM THOSE WHICH THE DELEGATING AUTHORITY ITSELF RECEIVED UNDER THE TREATY .
THE FACT THAT IT IS POSSIBLE FOR THE BRUSSELS AGENCIES TO TAKE DECISIONS WHICH ARE EXEMPT FROM THE CONDITIONS TO WHICH THEY WOULD HAVE BEEN SUBJECT IF THEY HAD BEEN ADOPTED DIRECTLY BY THE HIGH AUTHORITY IN REALITY GIVES THE BRUSSELS AGENCIES MORE EXTENSIVE POWERS THAN THOSE WHICH THE HIGH AUTHORITY HOLDS FROM THE TREATY .
P . 172
IN NOT MAKING THE DECISIONS OF THE BRUSSELS AGENCIES SUBJECT TO THE RULES TO WHICH THE DECISIONS OF THE HIGH AUTHORITY ARE SUBJECT UNDER THE TREATY, THE DELEGATION RESULTING FROM DECISION NO 14/55 INFRINGES THE TREATY .
THEREFORE THE DECISION OF 24 OCTOBER 1956, WHICH IS AN ENFORCEABLE DECISION IN RESPECT OF AN OBLIGATION ARISING FROM THE APPLICATION OF GENERAL DECISION NO 14/55 WHICH IS ILLEGAL, MUST BE ANNULLED .
( C ) EXTENT OF THE DELEGATION OF POWERS
THE APPLICANT COMPLAINS THAT THE HIGH AUTHORITY HAS, BY ITS DECISION NO 14/55, DELEGATED TO THE BRUSSELS AGENCIES POWERS WHICH THEY ARE ILL-QUALIFIED TO EXERCISE .
ARTICLE 8 OF THE TREATY REQUIRES THE HIGH AUTHORITY
" TO ENSURE THAT THE OBJECTIVES SET OUT IN THIS TREATY ARE ATTAINED IN ACCORDANCE WITH THE PROVISIONS THEREOF "
AND DOES NOT PROVIDE ANY POWER TO DELEGATE .
HOWEVER, THE POSSIBILITY OF ENTRUSTING TO BODIES ESTABLISHED UNDER PRIVATE LAW, HAVING A DISTINCT LEGAL PERSONALITY AND POSSESSING POWERS OF THEIR OWN, THE TASK OF PUTTING INTO EFFECT CERTAIN " FINANCIAL ARRANGEMENTS COMMON TO SEVERAL UNDERTAKINGS " AS MENTIONED IN SUBPARAGRAPH ( A ) OF ARTICLE 53 CANNOT BE EXCLUDED .
THE FINANCIAL ARRANGEMENTS MADE BY THE HIGH AUTHORITY ITSELF IN APPLICATION OF SUBPARAGRAPH ( B ) OF THE SAME ARTICLE MUST SERVE THE SAME PURPOSES AS THOSE AUTHORIZED IN APPLICATION OF SUBPARAGRAPH ( A ).
THEREFORE IT MUST BE POSSIBLE FOR THOSE ARRANGEMENTS TO BE SIMILAR IN FOR AND IN PARTICULAR TO USE THE AID OF BODIES HAVING A DISTINCT LEGAL PERSONALITY .
HENCE THE POWER OF THE HIGH AUTHORITY TO AUTHORIZE OR ITSELF TO MAKE THE FINANCIAL ARRANGEMENTS MENTIONED IN ARTICLE 53 OF THE TREATY GIVES IT THE RIGHT TO ENTRUST CERTAIN POWERS TO SUCH BODIES SUBJECT TO CONDITIONS TO BE DETERMINED BY IT AND SUBJECT TO ITS SUPERVISION .
HOWEVER, IN THE LIGHT OF ARTICLE 53, SUCH DELEGATIONS OF POWERS ARE ONLY LEGITIMATE IF THE HIGH AUTHORITY RECOGNIZES THEM . " TO BE NECESSARY FOR THE PERFORMANCE OF THE TASKS SET OUT IN ARTICLE 3 AND COMPATIBLE WITH THIS TREATY, AND IN PARTICULAR WITH ARTICLE 65 . "
ARTICLE 3 LAYS DOWN NO FEWER THAN EIGHT DISTINCT, VERY GENERAL OBJECTIVES, AND IT IS NOT CERTAIN THAT THEY CAN ALL BE SIMULTANEOUSLY PURSUED IN THEIR ENTIRETY IN ALL CIRCUMSTANCES .
IN PURSUIT OF THE OBJECTIVES LAID DOWN IN ARTICLE 3 OF THE TREATY, THE HIGH AUTHORITY MUST PERMANENTLY RECONCILE ANY POSSIBLE CONFLICT WHICH MAY BE IMPLIED BY THESE OBJECTIVES WHEN CONSIDERED INDIVIDUALLY, AND WHEN SUCH CONFLICT ARISES MUST GRANT SUCH PRIORITY TO ONE OR OTHER OF THE OBJECTIVES LAID DOWN IN ARTICLE 3 AS APPEARS NECESSARY HAVING REGARD TO THE ECONOMIC FACTS OR CIRCUMSTANCES IN THE LIGHT OF WHICH IT ADOPTS ITS DECISIONS .
P . 173
RECONCILING THE VARIOUS OBJECTIVES LAID DOWN IN ARTICLE 3 IMPLIES A REAL DISCRETION INVOLVING DIFFICULT CHOICES, BASED ON A CONSIDERATION OF THE ECONOMIC FACTS AND CIRCUMSTANCES IN THE LIGHT OF WHICH THOSE CHOICES ARE MADE .
THE CONSEQUENCES RESULTING FROM A DELEGATION OF POWERS ARE VERY DIFFERENT DEPENDING ON WHETHER IT INVOLVES CLEARLY DEFINED EXECUTIVE POWERS THE EXERCISE OF WHICH CAN, THEREFORE, BE SUBJECT TO STRICT REVIEW IN THE LIGHT OF OBJECTIVE CRITERIA DETERMINED BY THE DELEGATING AUTHORITY, OR WHETHER IT INVOLVES A DISCRETIONARY POWER, IMPLYING A WIDE MARGIN OF DISCRETION WHICH MAY, ACCORDING TO THE USE WHICH IS MADE OF IT, MAKE POSSIBLE THE EXECUTION OF ACTUAL ECONOMIC POLICY .
A DELEGATION OF THE FIRST KIND CANNOT APPRECIABLY ALTER THE CONSEQUENCES INVOLVED IN THE EXERCISE OF THE POWERS CONCERNED, WHEREAS A DELEGATION OF THE SECOND KING, SINCE IT REPLACES THE CHOICES OF THE DELEGATOR BY THE CHOICES OF THE DELEGATE, BRINGS ABOUT AN ACTUAL TRANSFER OF RESPONSIBILITY .
IN ANY EVENT UNDER ARTICLE 53 AS REGARDS THE EXECUTION OF THE FINANCIAL ARRANGEMENTS MENTIONED THEREIN, IT IS ONLY THE DELEGATION OF THOSE POWERS " NECESSARY FOR THE PERFORMANCE OF THE TASKS SET OUT IN ARTICLE 3 " WHICH MAY BE AUTHORIZED .
SUCH DELEGATIONS OF POWERS, HOWEVER, CAN ONLY RELATE TO CLEARLY DEFINED EXECUTIVE POWERS, THE USE OF WHICH MUST BE ENTIRELY SUBJECT TO THE SUPERVISION OF THE HIGH AUTHORITY .
THE OBJECTIVES SET OUT IN ARTICLE 3 ARE BINDING NOT ONLY ON THE HIGH AUTHORITY, BUT ON THE " INSTITUTIONS OF THE COMMUNITY ... WITHIN THE LIMITS OF THEIR RESPECTIVE POWERS, IN THE COMMON INTEREST ".
FROM THAT PROVISION THERE CAN BE SEEN IN THE BALANCE OF POWERS WHICH IS CHARACTERISTIC OF THE INSTITUTIONAL STRUCTURE OF THE COMMUNITY A FUNDAMENTAL GUARANTEE GRANTED BY THE TREATY IN PARTICULAR TO THE UNDERTAKINGS AND ASSOCIATIONS OF UNDERTAKINGS TO WHICH IT APPLIES .
TO DELEGATE A DISCRETIONARY POWER, BY ENTRUSTING IT TO BODIES OTHER THAN THOSE WHICH THE TREATY HAS ESTABLISHED TO EFFECT AND SUPERVISE THE EXERCISE OF SUCH POWER EACH WITHIN THE LIMITS OF ITS OWN AUTHORITY, WOULD RENDER THAT GUARANTEE INEFFECTIVE .
IN THE LIGHT OF THE CRITERIA SET OUT ABOVE, IT IS APPROPRIATE TO EXAMINE WHETHER THE DELEGATION OF POWERS GRANTED BY THE HIGH AUTHORITY TO THE BRUSSELS AGENCIES BY VIRTUE OF DECISION NO 14/55 SATISFIES THE REQUIREMENTS OF THE TREATY .
ARTICLE 5 OF DECISION NO 14/55 PROVIDES THAT :
" THE JOINT BUREAU MAY PROPOSE TO THE FUND :
( A ) THE TONNAGES OF SCRAP IMPORTED FROM THIRD COUNTRIES OR SCRAP TREATED AS SUCH WHICH MAY BE ENTITLED TO EQUALIZATION;
( B ) THE CONDITIONS TO WHICH THE ENTITLEMENT TO EQUALIZATION SUBSIDY IS SUBJECT ...;
( C ) THE MAXIMUM IMPORT PRICE;
( D ) THE EQUALIZATION PRICE, WHICH MAY BE FIXED EITHER FOR THE DATE OF ORDER OR FOR THE DATE OF DELIVERY;
( E ) THE CRITERIA FOR CALCULATING ECONOMY IN SCRAP DUE TO AN INCREASED USE OF PIG-IRON;
( F ) THE AMOUNT OF THE BONUS TO BE GRANTED IN REGARD TO THESE ECONOMIES . "
THE THIRD GENERAL REPORT ON THE ACTIVITIES OF THE COMMUNITY PUBLISHED ( P . 105 ) THE GENERAL PRINCIPLES DRAWN UP BY THE COUNCIL OF MINISTERS AND THE HIGH AUTHORITY " ON WHICH THE GENERAL POLICY IN THE MATTER OF FERROUS SCRAP IS TO BE BASED ".
THOSE GENERAL PRINCIPLES STATE IN PARTICULAR THAT
" THE COST OF FERROUS SCRAP FOR THE PRODUCER OF STEEL - THAT IS TO SAY THE SUM OF THE PURCHASE PRICE AND THE EQUALIZATION LEVY - MUST NOT EXCEED A REASONABLE LEVEL IN COMPARISON WITH THE LEVEL IN FACT BORNE BY PRODUCERS OF STEEL IN THE PRINCIPAL COMPETITOR COUNTRIES .
IN ORDER TO PREVENT COST PRICES FROM BECOMING TOO HIGH IN THE COMMUNITY AS A WHOLE, AND IN PARTICULAR TO PREVENT THE NET CHARGE BORNE AS A RESULT OF THE FUNCTIONING OF THE FUND IN CERTAIN REGIONS OF THE COMMUNITY FROM BEING INCREASED, THE AMOUNT OF THE EQUALIZATION LEVY MUST NOT BE INCREASED WITHOUT DUE CAUSE .
THE EFFORT MADE TO ENCOURAGE IMPORTS AND A REASONABLE LEVEL OF PRICES MUST NOT LEAD TO AN IMPROVIDENT INCREASE IN THE CONSUMPTION OF FERROUS SCRAP EITHER IN EXISTING PLANT OR BY THE CREATION OF NEW PLANT .
...
SO FAR AS IS TECHNICALLY AND ECONOMICALLY POSSIBLE, AND TO THE EXTENT TO WHICH OTHER RAW MATERIALS MAY BE AVAILABLE, EVERY EFFORT SHOULD BE MADE TO REDUCE THE CONSUMPTION OF FERROUS SCRAP BY AN INCREASED USE OF PIG-IRON . "
SEVERAL PROPOSALS WHICH, UNDER THE ABOVE-MENTIONED ARTICLE 5, THE COMPETENT OFFICE MUST SUBMIT TO THE FUND, IN PARTICULAR THE FIXING OF THE " MAXIMUM IMPORT PRICE ", THE " EQUALIZATION PRICE ", THE " CRITERIA FOR THE CALCULATION OF ECONOMY IN SCRAP " AND THE " AMOUNT OF THE BONUS TO BE GRANTED FOR SUCH ECONOMIES " CANNOT BE THE RESULT OF MERE ACCOUNTANCY PROCEDURES BASED ON OBJECTIVE CRITERIA LAID DOWN BY THE HIGH AUTHORITY .
THEY IMPLY A WIDE MARGIN OF DISCRETION AND ARE AS SUCH THE OUTCOME OF THE EXERCISE OF A DISCRETIONARY POWER WHICH TENDS TO RECONCILE THE MANY REQUIREMENTS OF A COMPLEX AND VARIED ECONOMIC POLICY .
IN STATING IN ITS THIRD GENERAL REPORT THAT " THE GENERAL POLICY CONCERNING FERROUS SCRAP MUST BE BASED ON THE GENERAL PRINCIPLES " DRAWN UP BY THE COUNCIL OF MINISTERS AND BY THE HIGH AUTHORITY, THE LATTER IMPLICITLY ADMITS THAT THOSE PRINCIPLES DO NOT SUFFICE FOR FORMULATING THE DECISIONS OF THE BRUSSELS AGENCIES .
P . 175
SINCE OBJECTIVE CRITERIA WHEREBY THEIR DECISIONS MAY BE FORMULATED ARE LACKING, THE BRUSSELS AGENCIES MUST EXERCISE A WIDE MARGIN OF DISCRETION IN CARRYING OUT THE TASKS ENTRUSTED TO THEM BY DECISION NO 14/55 .
HOWEVER ON TWO OCCASIONS, BY DECISIONS NOS 9/56 AND 34/56, THE HIGH AUTHORITY HAS ITSELF ADOPTED, IN THE PLACE AND STEAD OF THE BRUSSELS AGENCIES, DECISIONS WHICH IMPLY THE EXERCISE OF A DISCRETIONARY POWER .
IT MAY BE ASKED WHETHER, IN ALLOCATING TO ITS OWN JURISDICTION DECISIONS WHICH, IN APPLICATION OF DECISION NO 14/55, COULD HAVE BEEN ADOPTED BY THE BRUSSELS AGENCIES, THE HIGH AUTHORITY INTENDED TO RESERVE TO ITSELF THE ASSESSMENT OF THE ECONOMIC FACTS AND CIRCUMSTANCES RELEVANT TO THE FORMULATION OF THOSE DECISIONS .
HOWEVER, THERE IS NOTHING TO INDICATE THAT SUCH WAS THE CASE, BECAUSE THE HIGH AUTHORITY'S INTERVENTION WAS NOT BASED ON THE DISCRETIONARY NATURE OF THE DECISIONS IN QUESTION, BUT ON THE PROVISIONS OF THE SECOND PARAGRAPH OF ARTICLE 9 OF DECISION NO 22/54 WHICH PROVIDES THAT
" WHERE NO UNANIMOUS DECISION IS TAKEN BY THE BOARDS OF THE JOINT BUREAU AND THE FUND ... THE DECISION SHALL BE TAKEN BY THE HIGH AUTHORITY ".
ARTICLE 9 OF DECISION NO 14/55 OF THE HIGH AUTHORITY GIVES ITS PERMANENT REPRESENTATIVE ON THE BRUSSELS AGENCIES THE POWER TO MAKE ANY DECISION SUBJECT TO THE APPROVAL OF THE HIGH AUTHORITY .
IN RESERVING TO ITSELF THE POWER TO REFUSE ITS APPROVAL, THE HIGH AUTHORITY HAS NOT RETAINED SUFFICIENT POWERS FOR THE DELEGATION RESULTING FROM DECISION NO 14/55 TO BE CONTAINED WITHIN THE LIMITS DEFINED ABOVE .
IN THE PARAGRAPH OF THE STATEMENT OF DEFENCE SET OUT ABOVE THE HIGH AUTHORITY HAS MADE IT CLEAR THAT IT " ADOPTS THE DATA FURNISHED BY THE BRUSSELS AGENCIES WITHOUT BEING ABLE TO ADD ANYTHING THERETO ".
IN THOSE CIRCUMSTANCES THE DELEGATION OF POWERS GRANTED TO THE BRUSSELS AGENCIES BY DECISION NO 14/55 GIVES THOSE AGENCIES A DEGREE OF LATITUDE WHICH IMPLIES A WIDE MARGIN OF DISCRETION AND CANNOT BE CONSIDERED AS COMPATIBLE WITH THE REQUIREMENTS OF THE TREATY .
THE DECISION OF 24 OCTOBER 1956 IS BASED ON A GENERAL DECISION WHICH IS UNLAWFUL FROM THE POINT OF VIEW OF THE TREATY AND IT MUST, FOR THIS REASON ALSO, BE ANNULLED .
Decision on costs
THE DEFENDANT HAS FAILED IN ALL ITS SUBMISSIONS .
UNDER ARTICLE 60 ( 1 ) OF THE RULES OF PROCEDURE OF THE COURT, THE UNSUCCESSFUL PARTY SHALL BE ORDERED TO PAY THE COSTS .
Operative part
THE COURT
HEREBY :
1 . DECLARES THAT THE APPLICATION IS ADMISSIBLE;
2 . ANNULS THE DECISION OF THE HIGH AUTHORITY OF 24 OCTOBER 1956, NOTIFIED TO THE APPLICANT BY POST ON 14 NOVEMBER 1956, ACCORDING TO WHICH THE APPLICANT IS REQUIRED TO PAY TO THE IMPORTED FERROUS SCRAP EQUALIZATION FUND, 36, RUE RAVENSTEIN, BRUSSELS, THE SUM OF LIT 23 174 181 ( TWENTY-THREE MILLION, ONE HUNDRED AND SEVENTY-FOUR THOUSAND, ONE HUNDRED AND EIGHT-ONE ), THE SAID DECISION BEING AN ENFORCEABLE DECISION WITHIN THE MEANING OF ARTICLE 92 OF THE TREATY;
ORDERS THE DEFENDANT TO PAY THE COSTS . |
OPINION OF MR ADVOCATE-GENERAL ROEMER ( )
Summary
I — Facts
II — Conclusion and admissibility of the application
III — Infringement of essential procedural requirements
IV — Relationship between discrimination (Article 4 (b)) and restriction on competition (Article 65)
V — Restriction on competition within the meaning of Article 65 (I)
VI — Possibility of authorization under Article 65 (2)
VII — Discrimination
VIII — Result and conclusion
Mr President,
Members of the Court,
I — Facts
This case, brought before the Court by 19 mining undertakings of the Ruhr basin and the selling agency which they have set up in the form of a limited company under German law against the High Authority of the European Coal and Steel Community, in which the oral procedure will be brought to an end by the delivery of my opinion, does not involve assessing the facts and their legal consequences. Nor does it involve legal examination of concrete events. The case is about a clearly defined passage in the text of an agreement. That text sets out an arrangement made by the coal-producing undertakings of the Ruhr concerning the joint selling and the rules applicable thereto. The Court is called upon to examine whether that specific clause of the trading rules submitted for authorization at the same time as the articles of association of the company is compatible with the provisions of the Treaty concerning cartels.
The text of the trading rules and the content of the decision adopted by the High Authority on the request for an authorization submitted by the applicants at 1 are known to you from the written procedure. The Judge-Rapporteur has presented them to you in outline during the oral procedure. The representatives of the parties have reproduced or quoted what seems to them to matter.
This treatment of the subject-matter enables me to limit myself to a reference in general terms. But it seems to me necessary to emphasize that in order to assess this single clause the rejection of which is contested by the applicants, one cannot neglect the context into which it has to be put.
The articles of association and the trading rules contain agreements concerning the joint selling of fuels from the installations of the 19 mining undertakings concerned, who are the applicants at 1, within the Common Market. We know that previously almost all the mining undertakings of the Ruhr basin had cooperated within one joint-selling organization. Thus the creation of the three independent selling agencies, among them the applicant at 2, constitutes a compromise between the joint-selling organization in which all the mining undertakings of the Ruhr had participated and the system whereby each of the some fifty mining undertakings of the Ruhr basin carries out its own sales independently. Basically the High Authority has authorized these agreements relating to joint selling, each of which has been drawn up in identical terms, by about one third of the undertakings of the Ruhr basin. It acknowledged that such joint selling would make for an improved distribution of fuels, taking into account in particular the position of the coal mining undertakings and that it was both necessary and sufficient to ensure that sales would be profitable, that employment would be stable, and that supplies would be regular. In so far as that purpose required it, the High Authority also authorized certain organizations common to the three selling agencies for Ruhr coal or agreed that no authorization was necessary for their creation. However, it did not authorize agreements more restrictive than was required by that purpose, and it subjected the authorized agreements to certain limitations and conditions intended in particular to guarantee the independence of the three selling agencies, and to permit them to form their own sales and production policy.
It is in this perspective that consideration must be given to the refusal to authorize one of the criteria which the applicants had imposed as a condition for admission to direct purchases from a selling agency, that is to say for qualifying as a wholesale trader at first hand.
II — Conclusions and admissibility of the application
1.
The application is directed against the refusal to authorize that condition laid down in the trading rules. The authorization requested was refused by Article 8 of Decision No 5/56 of the High Authority of 15 February 1956, and the application claims that the said article should be annulled.
The High Authority as defendant did not raise any objection during the written procedure against the form or the admissibility of the application, but claimed that it should be rejected as unfounded.
During the oral procedure, the Advocate for the High Authority did indeed raise the question whether an application against just one article of a decision covering a complete set of facts is admissible. He was of the opinion that if the Court of Justice annulled the article in question in this case it would in practice be substituting itself for the High Authority as regards granting the authorization requested. He said that the subject-matter of the application could be interpreted differently and be extended to the whole of the decision.
However, such an interpretation would not do justice to the subject-matter of the application. The Court only has to rule on the question whether the refusal to authorize the clause at issue infringes essential procedural requirements or provisions of the Treaty. Nothing in the arguments of the applicants suggests that they also intend to contest other articles of the decision. Nor has the defendant shown that the decision only granted all the other authorizations subject to the clause at issue being prohibited. Thus in order to asses the dispute, it is necessary to start on the basis that the other parts of the decision have been accepted by the applicants. This limitation of the subject-matter of the application is admissible. Despite the wording of Article 4 of Decision No 5/56, the annulling of Article 8 thereof would not necessarily bring about the granting of the authorization. On the contrary, in accordance with Article 34 of the Treaty the High Authority could equally be required, depending on the wording of the grounds of judgment, to undertake a new examination, to make up for omissions of form or even to amend the article annulled.
2.
From the requisite formal examination as to admissibility the following facts appear: The partially contested decision was notified to the applicants on 22 February 1956. The application was lodged on 25 March 1956, and thus was lodged in due time as regards the provisions of the third paragraph of Article 33 of the Treaty in conjunction with Article 85 of the Rules of Procedure of the Court.
The applicants are, first, the 19 mining undertakings which are parties to the agreement, that is to say coal-producing undertakings, directly affected by the decision and thus entitled to bring an application. Secondly, the Geitling selling agency created by agreement between the 19 undertakings appears as applicant. In the decision many limitations, conditions and obligations are imposed on this company by name. After the creation of the said company, which must be considered as definitive in the absence of any evidence to the contrary, it is required to perform all the duties arising by way of joint selling on behalf of the 19 member undertakings. It is an undertaking engaged in distribution which, under Article 80 of the Treaty, equally has the right to bring an application based on Article 65 of the Treaty.
3.
In limiting the application of the clause at issue, Article 8 of Decision No 5/56 imposes an obligation not to act and thus constitutes a decision for the purposes of Article 33 of the Treaty.
Should Article 8 be annulled, this could have the effect of obliging the High Authority to authorize the clause at issue. On this point, the application can be considered as also claiming that the High Authority is required to take a decision — as provided by the first paragraph of Article 35 — granting the authorization requested.
At any rate, the decision is an individual decision concerning the applicants. The latter may therefore put forward all the grounds set out in the first paragraph of Article 33.
4.
Therefore the application is admissible.
It is based on the grounds of infringement of essential procedural requirements, infringement of the Treaty, and manifest failure to observe its provisions.
III — Infringement of essential procedural requirements
1.
The applicants argue that essential procedural requirements have been infringed in that the supporting reasons for Article 8 of Decision No 5/56 are inadequate. In their opinion, the reason to the effect that the clause is not necessary for establishing a rule concerning a certain volume of wholesale business could equally have been used to prohibit the other criteria, with the exception of one criterion which would be sufficient to establish such a rule. The applicants further argue that the reasons do not state any findings of fact showing that the clause restricts competition and is incompatible with Article 65 (2).
The High Authority replies that in order to assess whether sufficient reasons are given for its decision, it is necessary to start with its own view of the law. It has set out that view in the statement of reasons, and on that basis, sufficient reasons for the decision also appear as regards the facts.
2.
Two points should be stressed in assessing this submission.
First, we are concerned with only one of the 14 articles of the decision granting authorization. It was not possible to state separate and independent reasons for that article. On the contrary it is necessary to take into account all the factors in the reasons for the decision, as a coherent whole, which equally concern the article at issue. In view of the length of the text of the agreement, including the trading rules, the High Authority's obligation to state reasons for its decisions would be taken to unreasonable extremes were it to be said that it had to set out its general point of view over again exhaustively in respect of each limitation or refusal of authorization.
Secondly, an investigation whether requirements as to form have been observed must not trespass on the examination as to substance. The Court has already decided that in the reasons for a decision it is not necessary to refute opinions expressed to the contrary, but that the reasons must contain the essential elements and findings of fact on which the legal justification for the decision depends (so held in the judgments in Cases 4/54 and 6/54). Thus it does not suffice to reproduce the text of the Treaty in the reasons. On the contrary, it is necessary to give an adequate definition of the concrete facts on which the High Authority has applied the provision of the Treaty quoted.
Those requirements are necessary, but also sufficient for the purpose of meeting the obligation to state reasons: the interested, parties must know what the concrete circumstances are to which the High Authority has applied the provisions of the Treaty on which it has based its decision. Should litigation arise, the Court can examine whether those facts have been correctly found and whether they justify the application of the provisions of the Treaty put forward.
3.
As I have already said at the beginning, the present case does not involve assessing concrete events. It involves reviewing the admissibilty of a part of the trading rules, namely provisions relating to the admission of first-hand traders to the selling agency. The decisive elements of those provisions are stated in the reasons for the decision (JO No 6 of 13.3.1956, p. 33). Before examining them from the legal point of view, the High Authority drew certain conclusions of fact from them.
The first concerns all the criteria, including, therefore, the clause at issue. In the fixing of the conditions required for direct supplies, all traders who do not fulfil the conditions are precluded from obtaining supplies from the selling agency (JO No 6 of 13.3.1956, p. 33). In drawing this conclusion which is obvious and moreover is not contested in the application and taking into account the allocation of sales areas in accordance with the terms of the trading rules and the fixing of limits as to tonnage, the High Authority has legally assessed the factual situation as a sharing of customers and of markets within meaning of Article 4 (d) and of Article 65 (1) (for this see the reasons, JO No 6 of 13.3.1956, p. 33). When the applicants also claim that the repercussions of the rules as regards the restricting of competition should be indicated in detail, they are going too far, to my mind, having regard to the factual evidence. Above all, and still less than in the case of the terms of the trading rules themselves, it would certainly not be a question of findings of fact, but of a prediction of the consequences of a general set of rules of an economic character, which is closely bound up with the legal assessment. For all these reasons, it is necessary to await the examination as to substance in order to establish whether the findings of fact as stated justify the legal consequence which has been drawn from them, or whether they are incomplete or whether it will be possible for them to be developed more clearly during the course of the case.
I thus come to the conclusion that the restriction on competition resulting from the conditions for being admitted to direct supply, amongst which appears the clause at sue, constitutes sufficient reasons for the application of Article 65 (1) of the Treaty.
The second factual deduction that the High Authority drew from the terms of the trading rules only concerns the clause at issue and the remaining criteria relating to direct purchases. After having found that the other criteria fulfil the conditions set out in Article 65 (2), the High Authority continued (JO No 6 of 13.3.1956, p. 34):
‘The consequence of the clause at issue is that the trader — in order that he shall be assured of the advantage of direct purchases — will prefer to purchase fuels from the other two selling agencies for Ruhr coal up to an amount of 25000 metric tons per year and therefore, will defer the purchase of fuel from producers of other basins.’
The special feature of the criterion at issue compared to the other conditions authorized lies, in the opinion of the High Authority, in the fact that it leads to giving a preference to the other two selling agencies for Ruhr coal, as against the rest of the producers of the Community. This reason makes it clear that the decisive factor to be taken into account was that the clause at issue rendered it possible to make purchases from certain other agencies. The other clauses only mention a given volume of purchases from within the Community as a whole or from the applicants, but not from certain other given agencies. Therefore I cannot agree with the applicants when they argue that the reasons stated could equally have been used in order to prohibit any other clause. 1 shall leave to my examination as to substance the questions whether the High Authority has put a correct legal interpretation on this factual situation and in particular whether it was right to rely on the prohibition on discrimination in Article 4 (b) to which it refers.
4.
It appears that the reasons on which Article 8 of Decision No 5/56 is based emerged sufficiently from the general reasons for the said decision. And this is equally true both as regards the circumstances which led to applying the prohibition on principle of the restrictions of competition laid down by Article 56 (1) and as regards the circumstances which, more particularly, led to deciding that Article 65 (2) did not permit the clause at issue to be authorized.
I would add that a careful study of all the reasons renders it possible only to say that they were drafted with particular detail and care.
IV — Relationship between discrimination (Article 4 (b)) and restriction on competition (Article 65)
1.
Several grounds have been put forward in support of the complaint of infringement of the Treaty. The applicants are of the opinion that the clause at issue is not caught by the prohibition on discrimination in Article 4 (b), nor by the prohibition on cartels in Article 65. The applicants keep to this order in all their pleadings, although they
maintain, in advance, that the principle of the prohibition on discrimination is wholly immaterial as regards the procedure for authorization under Article 65. This raises the question of principle as to the relationship existing between Article 65 and Article 4 (b). That relationship can matter as to the order in which the questions are to be examined. In the applicants' way of thinking, it renders the examination as regards discrimination unnecessary. Thus this question must be gone into first to the extent required by the present case.
2.
The applicants are of the opinion that Article 65 constitutes a lex specialis in relation to Article 4. Apart from the special provision in Article 12 of the Convention on the Transitional Provisions, Article 65 (2) states the grounds of refusal exhaustively, so that Article 4, standing alone, has no significance. The applicants argue on the one hand that agreements involving discrimination cannot be authorized under Article 65 (2) (b), because they always go beyond what is necessary for their legitimate purpose and that conversely a set of rules which satisfies the conditions set out in Article 65 (2) does not constitute an infringement of Article 4. On the other hand, however, they affirm that discriminatory practices are covered by Article 65 (1) and that they can, therefore, be authorized under Article 65 (2).
The defendant seems to share this point of view in that it also proceeds on the basis that a discriminatory agreement is not essential to the purpose of a permissible restriction on competition and that such an agreement contains more extensive restrictions than are necessary. From this it deduces that in the examination required by Article 65 (2), it is always necessary, directly or indirectly, to examine whether the agreement involves discrimination. It matters but little therefore, whether the High Authority relies only on Article 65 (2) or whether in addition it expressly refers to Article 4 (b). As it has done both in the contested decision, the question raised by the applicants is of no consequence.
3.
A quick look at the works on cartels shows that the relationship between discrimination and the law on cartels has been under constant discussion. Undertakings participating in cartels claim in particular that some kinds of discrimination are inevitable if a cartel is to qualify for authorization. For their part, the authorities responsible start at the discrimination end with a view to prohibiting cartels. I shall not go into the vast literature, because I could only make an arbitrary and incomplete selection of items from it.
I would just like to mention the 1955 report of the British Monopolies Commission, which deals specialy with cases of collective discrimination.
I should be going far beyond the purpose of my task in the present case if I sought to take up a position of principle on these questions. Even in limiting myself to Community law it is necessary to consider the concept of discrimination and restriction on competition in the light of the Treaty, and where it is necessary to study and take into consideration the conditions proper to the basic industries thus combined, it is impossible to go into this problem in depth in the context of an opinion delivered in a case actually before the Court. All I can do, without claiming to be complete, is to state some general points of view and then to set out the problem exclusively in terms which enable the present case to be disposed of.
4.
The first proposition that can be established is as follows: not every restriction on competition within the meaning of Article 65 is necessarily discrimination prohibited by Article 4 (b).
An example consists in joint selling carried out on behalf of several producer undertakings. This does indeed restrict competition and must therefore first be authorized under Article 65 (2). But it is perfectly possible so to organize this joint selling that it does not involve discrimination in any way.
From this proposition the following conclusion may be drawn as regards the problem before us:
Even if the examination of an agreement setting up a cartel shows that it is not contrary to the prohibition in Article 4 (b), it is still necessary to examine whether the conditions in Article 65 (2) are fulfilled.
5.
Does the opposite hold good, namely can the following be said:
Not every discrimination which, taken in itself, is prohibited by Article 4 (b) automatically constitutes at the same time an illegal restriction on competition under Article 65?
Here, it is necessary to distinguish. There can indeed exist discriminatory practices which do not have an appreciable influence on competition. Such is the case, as a general rule, if the discrimination is exercised by undertakings which do not themselves have any significant influence on competition. However, cartels and undertakings having a dominant position on the market can also restrict competition by discrimination.
In any event, the obvious conclusion is that it does not suffice for an independent examination, made with reference to Article 4 (b), to show that discrimination exists in order to assert that there is a restriction on competition incompatible with Article 65 (2).
6.
The two considerations which I have just stated lead to the conclusion that the examination under Article 65 (2) can never be dispensed with. Therefore the authorization procedure must start with such an examination. Anyway it is doubtful whether a separate examination is possible.
The Court has already ruled (I am quoting the judgment in Case 1/54) that:
‘Articles 2, 3 and 4 of the Treaty… constitute fundamental provisions establishing the Common Market and the… objectives of the Community. Their importance is clear from Article 95. In authorizing the High Authority to define the prohibited practices, the Treaty obliges it to take into account all the aims laid down in Articles 2, 3 and 4.’ (Rec. 1954-1955, p. 23 under II, 1(a)).
The Court referred to that case in the judgment in Cases 7 and 9/54 and held in addition that:
‘Where the provisions of Article 4 are referred to, restated or elaborated on in other parts of the Treaty, the texts … must be considered as a whole and applied simultaneously.’
In my opinion in that case I said that the prohibition on discrimination takes effect ‘as provided in this Treaty’. It is possible, according to what I have said, that the prohibitions on discrimination and on cartels partially overlap so the two provisions can complement each other perfectly. I am therefore inclined to think that in the authorization procedure provided for by Article 65, it is necessary to start with the provisions of that article whilst nevertheless taking Article 4 (b) into account and referring to it so as to interpret Article 65 (2), but that, notwithstanding this, the prohibition on discrimination taken by itself does not constitute a particular ground of refusal under Article 65 (2).
7.
The High Authority somehow seems to share this conception, as appears from certain points in its statement of reasons.
The High Authority has clearly said that the trading rules involve a sharing of customers and of markets and that therefore they are caught not only by Article 65 (1) but also by Article 4 (d), which is another fundamental provision. But, despite this infringement of the fundamental prohibition laid down in Article 4, it has authorized the greater part of the said rules.
In the second place, the High Authority has established that the authorization for joint selling gives the participating mining undertakings a considerable influence on the market which in turn makes it possible to apply practices contrary to the provisions of Article 4 (b) and (d), particularly as regards the prohibition on discrimination and on the sharing of markets (JO No 6 of 13.3.1956, p. 32). That possibility of practising discrimination, which does not arise from the contents of the rules themselves which are submitted for authorization, did not result in the joint selling agreement being prohibited, but merely in a warning against practices in the application of the rules which the High Authority considered as discriminatory.
8.
The above examination makes it clear that in the present case the right approach is to start by examining whether the conditions in Article 65 (2) are fulfilled. This examination will show how far, at the time when it is carried out, the aspect of discrimination must be taken into account and whether it is possible or necessary to proceed thereafter to a separate examination of discrimination. The general considerations set out above on the relationship existing between the two prohibitions will thus be confirmed or completed to the extend required by the present case.
V — Restriction on competition within the meaning of Article 65 (1)
1.
Before the question whether the clause at issue fulfils the conditions in Article 65 (2) and whether it must therefore be authorized can be examined, it is first necessary to establish and to show in what way, directly or indirectly the clause prevents, restricts or distorts normal competition within the meaning of Article 65 (1).
Admittedly it was only in their reply that the applicants argued that the unauthorized clause does not establish any restriction on competition at all and therefore needs no authorization. If one were to see in this a new and independent submission made in support of the application, it would be impossible to declare it admissible, in view of the express provision in Article 22 of the Statute of the Court. However, such a ruling as to inadmissibility would only be of merely formal significance. In reality, a finding that the clause establishes a restriction on competition within the meaning of Article 65 (1) is a necessary pre-condition for examining whether the restriction, once found to exist, must be authorized under Article 65 (2). It may also be thought that since the relationship is in reality very close, this is not a new submission but simply the development and extension of a submission already raised in the application. In the latter, the applicants had argued that the clause is not more restrictive than is necessary for the purpose of the trading rules. After the defendant had stated in what circumstances it saw the restriction on competition, the applicants extended their line of argument in asserting that those alleged restrictions on competition simply did not exist.
Thus it is in any event necessary to proceed to an examination as to substance.
2.
In the statement of reasons for its decision, the High Authority reproduced the relevant part of the trading rules and then declared (I quote):
‘Whereas such agreements involved a sharing of customers and of the market within the meaning of Articles 4 (d) and 65 (1) of the Treaty.’
In its defence, the High Authority said that the clause at issue constitutes an element of an agreement having the effect of sharing the market and the customers. In addition, the clause restricts competition for acceptance between the three selling agencies; for, since the three agencies apply the same rules, they constitute, as a result, one economic entity (p. 38 of the defence). When a trader has reached the figure of 12500 metric tons of purchases from the agency by which he wishes to be accepted as a first-hand trader, the effect of the clause is to take away the interest which that trader might otherwise have had in purchasing 12500 extra metric tons from the said agency, that is to say in reaching a figure of 25000 metric tons. Finally, the clause involves an unjustified differentiation as regards the competitive situation of the traders because their ability to satisfy the requirements of the clause varies according to their sales area. In particular, the clause does not in practice affect German traders, whereas it is of decisive importance as regards the traders from the other countries of the Community.
The applicants reply with two arguments:
(a)
There is no sharing of customers of such a nature as to restrict competition, because some 400 wholesalers remain accepted and because in addition the corrective clause in Article 9 (4) of Decision No 5/56 prevents restrictions being imposed on competition.
(b)
In fact, without the clause, there is no competition between the three selling agencies because, with it or without it, in order to qualify as a wholesaler it does not matter from which of the three selling agencies for Ruhr coal the quantity exceeding 12500 metric tons is purchased. The clause is not intended to influence the market, and cannot do so; it only intended to ensure an adequate standard for acceptance as a wholesaler.
3.
If the arguments of the applicants are taken literally, and if they are interpreted as meaning that the clause is not caught by Article 65, it is not necessary to proceed to a long examination in order to refute this conception.
It is possible to observe, so to speak, several degrees of restrictions on competition in the agreements as a whole which are covered by Decision No 5/56. In the first place, the agreement on joint selling by 19 undertakings is caught by the very general prohibition of principle in Article 65 (1), because it restricts in particular the mutual competition existing between the individual undertakings participating. It is not necessary for an agreement on joint selling also to include a restrictive definition of first-hand wholesalers. So that is a supplementary restriction on competition, which arises from accepting certain traders to the exclusion of certain others and is of such a nature as to limit competition between traders. But as regards Article 65 (1) the number of wholesalers accepted is irrelevant. Nor does the corrective clause in Article 9 (4) of Decision No 5/56 affect the prohibition of principle in Article 65 (1) of the Treaty. Its purpose is only to ensure that the existing restrictions shall not go further that Article 65 (2) allows (cf. the statement of reasons for the decision, JO No 6 of 13.3.1956, p. 34, where as regards Article 65 (2) both the number of wholesalers likely to be doing business in the different sales areas and the effect of the corrective clause are taken into account).
As the clause at issue is an element of the trading rules which is concerned with defining the category of wholesalers accepted for direct supplies, the considerations set out above suffice to show that this clause also is caught by the prohibition of principle in Article 65 (1) and that it therefore requires authorization.
4.
In order to demonstrate this, it is not necessary to go further and examine what are the particular restrictions on competition which arise, in addition, from this clause. However, it seems that at this stage there should be an examination as to the particular point on which the clause affects competition, because the other restrictions on competition arising from the joint-selling agreement and from the trading rules have for the most part been authorized, unlike the clause at issue.
This examination will be a forerunner to the examination required under Article 65 (2). The latter will be concerned mainly with the question whether the specific extra restriction on competition, the existence of which has been established, goes too far. It is also possible to see in the argument of the applicants the assertion that the clause at issue does not have the effect of establishing particular restrictions on competition beyond those which have been authorized. The conception of the applicants to the effect that there does not seem to be any reason why the clause at issue was not approved, whereas the other clauses were, also points in the same direction.
During the oral procedure, the applicants' Advocate agreed that the trading rules, taken as a whole, required authorization; he merely contested the view that the clause contributed or even increased the restriction of competition.
5.
In examining whether the reasons for Decision No 5/56 are sufficient, I have already quoted the part of the reasons which is exclusively concerned with the clause at issue and not with the other criteria established in respect of direct supplies. The issue is one of a preference, resulting from the effects of that clause, given to the two other selling agencies for Ruhr coal as against the remaining producers of the Community, and of the taking into account of purchases made from certain agencies other than Geitling. Similarly, in examining the submission of infringement of essential procedural requirements, I have already said that this deduction made from the contents of the clause is not so much a finding of fact as an economic assessment of the probable consequences of a set of trading rules. That assessment is closely tied in with the legal assessment of the clause. Therefore, to elaborate on the assessment and to develop it during the hearing does not constitute the raising of fresh submissions. On the contrary, quite apart from the exposition of the parties, the Court has power to examine what are the particular restrictions on competition which arise from the clause at issue.
During the course of the oral procedure and as regards the extent of the powers of review vested in the Court, the applicants themselves emphasized that the decision whether discrimination or a restriction on competition exists has nothing to do with the economic facts but depends on the interpretation of the Treaty. Thus the Court is fully empowered to examine this question. But, in these circumstances, the Court must equally be free to assess the effects of the clause wholly independently, without being bound by the arguments which have been put forward by the High Authority in its decision or which have only been put forward for the first time in the course of the proceedings. It is only after having done this that the Court will be in a position to give a pertinent answer to the question whether the clause has the effect of increasing the restrictive character of the trading rules. On this, moreover, the issue is really one of arguments in the strict sense of the term, or more exactly deductions of fact or of law which can be drawn directly from the text of the trading rules without its being necessary to go into a new analysis of the facts for the purpose here considered.
6.
In order to examine the question, it is necessary to be clear about the contents of the clause. As regards this, two points call for consideration:
(a)
First the clause was not prohibited by reason of the quantity of 25000 metric tons required. The applicants rightly stress that the decision does not set out such considerations. As regards this, it would have been necessary for the purpose of the examination provided for by Article 65 (2), to determine what was in fact the number of traders remaining accepted. There is also relevant, here, the argument of the applicants that the corrective clause prevented an excessive reduction in the number of traders accepted. But given that the volume of purchases did not play a decisive part in the prohibition, there can be no taking into account of the extra restriction arising from the increase from 12500 to 25000 metric tons.
(b)
Secondly, the clause does not impose an obligation to obtain supplies from the two other selling agencies for Ruhr coal. On the contrary, the trader satisfies the requirements of the clause even if he purchases all the 25000 metric tons from Geitling.
I shall come back later to these two points in another connexion. As regards the restriction on competition, which I am examining at the moment, it is enough to note the following:
It cannot be claimed that in requiring a quantity of 25000 metric tons instead of 12500 metric tons, the clause involves an extra restriction on competition, because it is not on this point that the prohibition is based. Nor can it be claimed that the restriction on competition arises from the ostensible obligation also to obtain supplies from certain other agencies, because according to the wording of the clause no such obligation exists.
There only remains one element which may bring about a particular restriction on competition, namely the possibility that it gives the trader of having his purchases from the two other agencies taken into account up to a certain quantity.
7.
It is on this basis that it is now necessary to examine whether the clause has the effect of restricting competition and in what way.
These effects could arise: with the traders; in the relationship between the producers of the Ruhr and the other producers of the Community; and finally in respect of the relationship of the three agencies inter se.
(a)
The clause involves a further restriction on competition between traders who wish to be accepted as wholesalers by Geitling, but solely by reason of the quantity required. Whereas 12500 metric tons were sufficient according to the other conditions, 25000 metric tons are now necessary. This additional requirement for the traders is however, made less rigid by the fact that it is not necessary for the 25000 metric tons to come from Geitling, but that half that quantity may be purchased from the other two agencies.
Thus the possibility of having this amount taken into account — the only particular element of the clause that can be considered here — does not constitute a new restriction as regards the trader. On the contrary, its effect is to ease a restriction which itself follows from the fact that the tonnage limit has already been increased.
(b)
It would not appear that the clause affects competition between the producers of the Ruhr in general and the remainder of the producers of the Community. Since in this respect the producers of the Ruhr must be considered in any event as forming a single entity, the possibility of taking into account purchases made from the three agencies cannot alter the position. The most that can be said is that the competitive position of each of the agencies, and thus also of the applicants, vis-à-vis the remaining producers of the Community, is strengthened by this reciprocal arrangement and that normal competition between each agency and its competitors on the Common Market is thus distorted.
(c)
But the possibility of having this tonnage taken into account has repercussions principally in respect of the relationship between the three selling agencies for Ruhr coal inter se. As the volume of purchases required is not relevant, the requirements of ‘12500 metric tons from Geitling’ and ‘25000 metric tons from the Ruhr’ must not be compared. On the contrary, the particular nature of the possibility only appears when a comparison is made between ‘25000 metric tons from Geitling’ and ‘12500 metric tons from Geitling; 12500 metric tons obtained from other selling agencies for Ruhr coal’.
It is only when the second clause is applied instead of the first that a restriction on competition between the three agencies is to be found. This is why the applicants side-step the essence of the problem when they claim that with or without the clause it makes no difference from which of the agencies the excess over 12500 meric tons is purchased. The difference lies rather in the fact that without the clause all that is required is a certain volume of purchases from Geitling and that therefore the question from which agency the purchases are made is far from being of no consequence. The alternative is only offered by the clause at issue in this investigation, one can start by agreeing that acceptance as a wholesaler is a means of competition. The applicants have themselves indicated that as businessmen they are entitled to say to a trader: ‘if you make an effort for my coal, you will get special treatment’. This effort is required of the trader in applying the clause as to ‘25000 metric tons from Geitling’. That requirement is attenuated by the alternative and the possibility of having taken into account: ‘12500 metric tons from Geitling; 12500 metric tons from other selling agencies for Ruhr coal’. As we have seen, that can make the trader's position easier. But what is the significance of this as regards the relationships inter se of the three selling agencies?
The only possible significance is that Geitling does not require more than half the effort to be put into its own products and that it credits the trader with the trouble he has taken for other selling agencies for Ruhr coal. Thus Geitling partially gives up a means of competition that it claims for itself, and limits the sales competition of its own products in favour of the two other agencies.
The applicants require that their wholesalers must order 25000 metric tons of Ruhr coal. They claim that they use every possible means of ensuring that the 25000 metric tons are obtained from Geitling. But by reason of the taking into account of purchases, they partially give up one of those means. That suffices to distort competition between the three agencies, without its mattering whether competition remains possible in other respects.
The applicants have themselves said during the oral procedure that the clause must first enable Ruhr coal to break in to the market. Thereafter, the competition between the three agencies will itself intensify. But this is to say clearly that for reasons of common interests, the three agencies limit competition to the sale of their products and thus limit competition between themselves, and that they thus want above all to act as a single entity.
8.
Thus the possibility introduced by the clause has the effect, without the volume of purchases required playing a part, that Geitling partially sacrifices its own interests in selling its products in favour of the collective interests attaching to the sale, generally, of Ruhr coal. That involves partly giving up an independent sales policy, and doing so constitutes a restriction on competition as regards the two other selling agencies for Ruhr coal.
I shall have to examine hereafter whether, in the light of Article 65 (2) (b), that particular effect is essential to the purpose of the joint-selling agreement and to the trading rules and whether it is not more restrictive than is necessary for that purpose.
VI — Possibility of authorization under Article 65 (2)
1.
In the reasons for its decision, the High Authority has given a negative answer to this question in finding, apart from the matter of discrimination, that the criterion at issue is more restrictive than is required by the need to fix the volume of purchases, namely the establishment of a standard for a certain volume of wholesale trade. Thus the criterion did not meet the conditions of Article 65 (2), and accordingly could not be authorized (JO No 6 of 13.3.1956, p. 34).
In their application, the applicants say that the High Authority clearly did not proceed to the examination required by Article 65 (2), because it thought from the outset that it could not give its authorization by reason of the existence of discrimination. That argument is contradicted by the text of the statement of reasons, which expressly finds an infringement of Article 65 (2).
The applicants then state in detail that the clause was necessary for the clearly understood purpose of the trading rules. They alleged that the sale of 12500 metric tons of their coal is too low a figure in itself and that it is only enough for letting a trader qualify as a wholesaler on condition that 12500 metric tons of Ruhr coal be added. The applicants ought really to have required the sale of 25000 metric tons of their coal. However, in order not to set higher limits than necessary, they contented themselves with requiring that only half that amount had to come from their production. They consider that the taking into account of orders placed with the two other selling agencies is justified because what is involved is coal of the same quality, coming from the same basins, the sale of which is carried out under the same conditions, particularly as regards freight, insurance and storage. At the same time, this rule facilitates the obtaining of supplies in the case of a temporary shortage at one of the selling agencies. It also renders it easier for taders to be accepted simultaneously as first-hand traders by several selling agencies for Ruhr coal.
2.
In order to assess this argument, it is necessary to start with the special restriction on competition which has been found and which, by reason of the clause at issue, is additional to the restrictions which, for the most part, have been authorized. We must consider whether that special restriction is necessary for a proper choice of firsthand traders accepted by Geitling. As to this, I would observe that this defining of wholesale traders only forms of itself a part of the joint-selling agreement concluded by the 19 undertakings participating in Geitling and that the said agreement itself can only be authorized in so far as it contributes to a noticeable improvement in the distribution of the products of Geitling and is necessary for that purpose.
3.
Looked at from this angle, it clearly appears that none of the arguments of the applicants in favour of taking into account purchases made from the other two selling agencies shows that this contributes to a noticeable improvement in the distribution of their own coal. Their arguments, at most, show that the distribution of Ruhr coal taken as a whole, is favoured.
But the authorization granted to the applicants only covers the joint selling of their own products. The purpose of the general reorganization of the sale of Ruhr coal is the creation of three independent selling agencies, having their own production and sales policy (JO No 6 of 13.3.1956, p. 32). In this new system, the High Authority did not overlook the natural conditions which the applicants advocated in support of all coal from the Ruhr being treated as the same. On the contrary, certain organizations and certain measures common to the three selling agencies created were authorized. As regards the Ruhrkohlen-Exportgesellschaft, the Ruhrkohlen-Beratungsgesellschaft and the Ruhrkohle-Treuhandgesellschaft, the High Authority took the view that no authorization was necessary for these organizations, which do not perform any functions liable to restrict competition on the Common Market (JO No 6 of 13.3.1956, p. 31).
In Decision No 8/56, the High Authority authorized a common bureau, a commission on standards, and certain financial arrangements for the three selling agencies on the ground that the purpose of the three selling agencies can only be achieved if all the mining undertakings concerned and the three selling agencies for Ruhr coal work together within prescribed limits. The common measures and arrangements must, however, be restricted to what is necessary in order to achieve that purpose (JO No 6 of 13.3.1956, p. 71).
The applicants themselves say that the clause introduces an ‘element of competition’ where Ruhr coal is concerned. The High Authority rightly answers that publicity for Ruhr coal is the responsibility of the Ruhrkohlen-Beratungsgesellschaft (JO No 6 of 13.3.1956).
Where the applicants say that the clause facilitates obtaining supplies in cases of temporary shortages on the part of one selling agency, it must be pointed out that this has been taken into account in the tasks allotted to the Common Bureau (cf. JO No 6 of 13. 3. 1956, p. 71). Finally, Decision No 8/56 enumerates the rules the uniformity of which was recognized as necessary for the three selling agencies (JO No 6 of 13.3.1956, pp. 71 and 72). Amongst those rules, no criterion is to be found as regards the acceptance of wholesale traders by the various selling agencies.
4.
After the foregoing considerations, it is possible to give, a comprehensive answer to the question here considered, in so far as it is concerned with the taking into account of orders placed with the two other selling agencies.
The clause at issue restricts competition between the three agencies. The arguments of the applicants in favour of treating the coal of the three agencies as the same do not succeed in proving that the limitation is necessary for improving the distribution of their products and for proceeding to a proper choice of their wholesale traders. The applicants have not refuted the finding that the purchases from other selling agencies of the same basin, but independent of Geitling, are not an essential element as regards the qualifications of their own wholesale traders.
From the point of view of review by the Court, let me say again that the decision by the High Authority whether certain agreements are essential in order to achieve a purpose and are not more restrictive than is necessary for that purpose, constitutes a general economic evaluation for the purposes of the second sentence of the first paragraph of Article 33 of the Treaty. Therefore the applicants ought to have proved that the said evaluation was made with a ‘manifest’ failure to observe the provisions of the Treaty. To my mind, the arguments of the applicants on this point are inadequate.
5.
I must now come back once again to the argument of the applicants concerning the quantity of purchases necessary.
The applicants assert that the purchase of 12500 metric tons of their products is insufficient for qualification as a first-hand trader and that in reality they ought to have required 25000 metric tons. If one takes the view that the trading rules were drafted accordingly and that, in addition to the first two criteria, the rules only required the purchase of 25000 metric tons from the applicants, the restriction on competition found as between the three agencies does not arise. The High Authority held that the clause at issue involved an excessive restriction by reason of its special effect and not by reason of the quantity required.
In these circumstances it is necessary to consider whether the High Authority had the right purely and simply to strike out the clause at issue or whether it ought to have drawn different deductions from the reasons which it stated.
6.
In order that a trader might be accepted for direct purchase, the trading rules laid down as a third condition that a minimun of 25000 metric tons must be purchased ‘from the selling agencies for Ruhr coal’ and as a fourth condition ‘of which half at least must be from Geitling’. Thus the two conditions were both fulfilled where a trader simply purchased 25000 metric tons from Geitling. Should not the High Authority have also taken this possibility into account and should it not have amended the requirement of ‘25000 metric tons of coal from the Ruhr’ to ‘25000 metric tons from Geitling’, which would have rendered the fourth condition irrelevant?
And in order to arrive at the decision which it in fact adopted, should not the High Authority have established in the statement of reasons that the requirement of a purchase of 25000 metric tons from Geitling was excessive? In order to answer these questions, it is necessary to proceed in on the basis that the High Authority is only required to approve an agreement which is submitted to it for authorization, or to refuse it. The third subparagraph of Article 65 (2) of the Treaty provides that authorizations may be granted subject to specified conditions and for limited periods. The fourth subparagraph thereof only provides for the later amending of the terms of an authorization granted where there has been a change in circumstances. According to those provisions the High Authority thus has the right to impose conditions, but it does not have the right, or at least it is not required, to amend the terms of an agreement which is submitted to it in such away that it may be authorized.
In the present case, by reason of its nature and of its contents the clause ‘25000 metric tons from the selling agencies for Ruhr coal’ must be considered as different from the clause ‘25000 metric tons from Geitling’. That results from the very fact that it is only through the effect of the first of those clauses that there arises the restriction on competition which has been established. Thus the High Authority could confine itself to the quantity of purchase required from Geitling, whether the figure was clearly expressed or whether it was possible easily and certainly to determine it. If the High Authority did not criticize that figure as representing an excessive requirement, it had no reason to take into consideration what the required quantities were.
7.
Thus the applicants' assertion to the effect that the purchase of 25000 metric tons is necessary in order to qualify as their wholesalers cannot bring about the annulment of Article 8 of the decision, as they claim.
Nor can it be taken into consideration in the present case. The Court only has jurisdiction to examine whether a decision, under Article 65 (2) and in the prescribed form, responsibly adopted by the High Authority as a collegiate body, is legal and in accord with the provisions of the Treaty. I have in mind the second sentence of the first paragraph of Article 33. The Court cannot itself take a direct decision on a request for authorization addressed to it, and indeed the applicants have not submitted any such request, for their arguments go only to justifying the rules submitted. Nor can the defendant's Advocate make declarations during the hearing binding the High Authority as to how it would deal with a request that might be submitted to it.
I therefore draw the attention of the applicants to the possibility, which is open to them, of amending their trading rules and of submitting them to the High Authority, a possibility which, I should add, is provided for in Decision No 5/56 (Article 3 (10) (a), Articles 11 and 12).
8.
My examination leads me to the conclusion that it is impossible to see an infringement of Article 65 of the Treaty in the rejection of the clause at issue. Since the contested part of the decision is based on that article, especially paragraph (2) (b) thereof, and that it thus rests on a sufficient legal basis, the applications must already be rejected at this stage of the examination.
For the sake of completeness and in order to round off the general considerations which I have put on the relationships between the prohibition on discrimination and the prohibition on cartels, I shall add a few explanations on the question of discrimination, which the parties have treated as a primary issue.
VII — Discrimination
1.
In the statement of reasons for its decision, the High Authority says that in addition to having the effect of limiting competition to an extent more than necessary the criterion at issue also sets up discrimination, particularly as regards producers in other basins of the Community.
The applicants consider it as impossible at law for producers to discriminate as regards other producers. They are of the opinion that what is involved is a legitimate competitive practice in favour of Ruhr coal and assert that it would, on the contrary, be discriminatory to set up an artificial difference between the coals offered by the three agencies.
The High Authority sees the difference from a legitimate practice in the fact that the intention of the applicants is to establish an objectively unjustified difference in treatment not as between other producers and themselves, but as between several other producers.
2.
On the argument that it is not possible to conceive of discrimination between entities situated at one and the same economic level, it is to be said that any discrimination can have a number of different affects, some perhaps consciously intended in the first place, others following inevitably. The Treaty itself, in the second indent of Article 60 (1), supplies an example of discrimination on the part of producers, directed against competitors: it concerns local price reductions, called differential prices, which are intended to eliminate competitors situated in a certain area. As regards this it could be said that the purchasers in other areas are treated in a discriminatory way because the lower differential prices are not granted to them, but that is only a secondary consequence; the purpose is to encourage the purchasers situated in the area in question to give preference to the producer practising discrimination as against other producers, who are his competitors, It is always a fact that a differentiation at the same economic level can only be effected indirectly. But this indirectness does not give any indication whether the indirectly caused differentiation is objectively justified.
If one now considers the arguments of the parties, it appears that these have been largely taken into account in the examinations required under Article 65 (1) and (2). Here again, the applicants point out that the coal from the three agencies is of a comparable kind, and thus point to the concept of ‘Ruhr coal’ whereas the High Authority puts the emphasis on the fact that the other two agencies are autonomous and independent of the applicants.
The purpose of Geitling must provide the answer to the question whether treating all Ruhr coal as one and the same is objectively justified. Geitling's purpose is not the joint selling of Ruhr coal, but only the joint selling of the products of the 19 participating undertakings. The function of the trading rules is to establish the qualifications for Geitling's wholesalers, and not to require that traders shall be specialists in the Ruhr, which is the avowed purpose of the clause as the applicants themselves say. In reality, their argument that it is artificial and unjustified to make a distinction between the coals of the three agencies, calls back into question the principle of the creation of three independent agencies having their own sales policy and being unable to cooperate save to a limited extent. Thus the discrimination consists in the fact that the applicants credit their wholesalers with tonnages purchased from certain other agencies, although the latter ought to have as much independence in respect of the applicants concerning their policy on purchases and sales as the remaining producers of the Community, whose sales are not credited to the wholesalers by the applicants.
I thus reach the conclusion that the criterion at issue also establishes discrimination between the remaining producers of the Community and the producers of the Ruhr.
3.
The High Authority has explained during these proceedings that there is also discrimination between traders, namely as between those who satisfy the other conditions, and who therefore, in the opinion of the High Authority, are sufficiently qualified to be Geitling's wholesalers, and on the other hand those who also meet the condition at issue. That differentiation is not objectively justified, because the extra purchases from certain other agencies have nothing to do with the qualifications required for being accepted as a wholesaler by the applicant agency. In practice it even leads to national discrimination, since the prohibited criterion scarcely matters for traders situated in Germany, whereas it is decisive for the other traders.
The applicants doubt first whether the Treaty grants independent protection against discrimination to individual traders. They are of the opinion that the differentiation established by the clause is objectively justified because it was necessary for them to require a sufficient volume of trade in coal from the same source and to reserve the position of wholesalers to ‘specialists in Ruhr coal’.
4.
On this point again, we can say that for the most part the arguments raised have already been examined from the point of view of Article 65. They do not affect the substance of the case because the volume of purchases required cannot be taken into consideration, and because the clause does not have the effect of forcing the traders to obtain supplies from the other selling agencies for Ruhr coal. On the contrary, we have established that the decisive element is the possibility of crediting purchases introduced by the clause at issue. Thus it is necessary to compare the following two groups of traders:
the first group, which purchases the 25000 metric tons required exclusively from Geitling;
and the second group, which takes advantage of the alternative offered to it by the clause and which also, in part, obtains its supplies from the other two agencies.
Inorderto asses this situation, it is necessary to start with the fact that acceptance as a first-hand trader and the granting of discount which depends on it are intended to reward the trader for his efforts. The applicants have themselves indicated this.
The result is that the same discount is given to two traders although the first sells 25000 metric tons fom Geitling, whereas the second only sells 12500 metric tons. For the same discount, the trader who also sells coal from the other agencies is required to make less effort for the applicants than a trader who directs his energies exclusively to selling the applicants' products. Two traders who achieve the same result for Geitling, that is to say who wish to sell 12500 metric tons of its products, are treated differently depending on whether they in addition make purchases from President and Mausegatt or, on the contrary, from other producers of the Community. It thus clearly appears that the clause at issue enables traders to be treated differently.
In answer to the applicants' doubts in principle, whether the trader is entitled at all to independent protection against discrimination, the High Authority rightly referred to the text of Article 4 (b), which expressly mentions purchasers as well as prices and delivery terms. The parties are agreed that the word ‘purchasers’ must mean traders.
They must be right about that. The arguments which the applicants attempt to draw from Article 3 cannot be convincing. To a large extent, the access of users to the sources of production is only possible through the trade, and is influenced by it. The producers themelves have also shown a keen interest in the organization of outlets. It is enough to point to the examples of the selling agencies belonging to the mines. The applicants themselves admit that the traders must be protected when the position of the producer on the market is affected. We have observed that such is the case because the cause leads to a discrimination between producers and to a restriction on competition between the producers of the Ruhr.
Thus discrimination also exists between traders.
5.
In connexion with the general considerations on the relationship between the prohibition on discrimination and the prohibition on cartels, the present case affords confirmation that the two provisions can complement each other perfectly. The necessity or simply the suitability of examining, first, how far a restriction on competition is legitimate has appeared in the fact that, supposing different terms exist restricting competition, the question of their objective justification is closely bound up with the question whether the restriction on competition is essential and necessary for the legitimate purpose of the cartel.
VIII — Result and conclusion
I shall summarize the result of my exposition as follows:
1.
Sufficient reasons are stated for the contested Article 8 of Decision No 5/56 of the High Authority of 15 February 1956, both as regards the effect of the clause in limiting competition and as regards its being more restrictive than is necessary for its purpose.
2.
The clause at issue results in a special restriction on competition, and this effect goes beyond the effect of the other criteria.
3.
That special limitation is not necessary in order to determine the wholesalers to be accepted for direct supplies from Geitling, the applicant selling agency.
The question whether the remaining conditions authorized ensure a sufficient volume of trade for that purpose is of little relevance in deciding the case.
4.
The clause at issue also establishes discrimination as between producers. Furthermore, it establishes discrimination as between traders.
Therefore the submissions raised are not well founded.
I am accordingly of the opinion that the application should be dismissed and that the consequences laid down as to costs by Article 60 (1) of the Rules of Procedure of the Court of Justice should follow.
( ) Translated from the German. |
Judgment of the Court of 12 July 1957. - Dineke Algera, Giacomo Cicconardi, Simone Couturaud, Ignazio Genuardi, Félicie Steichen v Common Assembly of the European Coal and Steel Community. - Joined cases 7/56, 3/57 to 7/57.
European Court reports
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Summary
Parties
Subject of the case
Grounds
Decision on costs
Operative part
Keywords
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1 . INVALID ADMINISTRATIVE MEASURES - INDIVIDUAL MEASURES - ABSOLUTE NULLITY
2 . ADMINISTRATIVE MEASURES - MEASURES CREATING INDIVIDUAL RIGHTS - APPOINTMENT OF AN OFFICIAL - WITHDRAWAL - PERIOD OF TIME
3 . INVALID ADMINISTRATIVE MEASURES - PARTIALLY UNLAWFUL ADMINISTRATIVE MEASURES - WITHDRAWAL
4 . LIABILITY - LIABILITY OF THE COMMUNITY TOWARDS ITS OFFICIALS - STAFF REGULATIONS - UNLAWFUL WITHDRAWAL OF ESTABLISHMENT - WRONGFUL ACT OR OMISSION - INJURY - OBLIGATION TO MAKE GOOD
5 . SERVANTS OF THE COMMUNITY - PERIOD PRIOR TO THE STAFF REGULATIONS - CONTRACTS OF EMPLOYMENT - NATURE THEREOF AS PRECURSORS OF THE STAFF REGULATIONS
6 . OFFICIALS OF THE COMMUNITY - STAFF REGULATIONS - ESTABLISHMENT - COMPETENT AUTHORITY
7 . OFFICIALS OF THE COMMUNITY - FIXING OF SALARIES - COMPETENT AUTHORITY - PARTICIPATION OF THE COMMITTEE OF PRESIDENTS - DETAILED RULES
8 . OFFICIALS OF THE COMMUNITY - FIXING OF SALARIES - COMPETENT AUTHORITY - PARTICIPATION OF THE COMMITTEE OF PRESIDENTS - EXCEPTIONS - COMMON ASSEMBLY
9 . OFFICIALS OF THE COMMUNITY - STAFF REGULATIONS - ESTABLISHMENT IN A GIVEN GRADE AND STEP - INDIVIDUAL RIGHTS
10 . PROCEDURE - APPLICATION - DETAILS REQUIRED
Summary
1 . THE ADOPTION OF AN ADMINISTRATIVE MEASURE CREATES A PRESUMPTION AS TO ITS VALIDITY . THE ILLEGALITY OF AN INDIVIDUAL ADMINISTRATIVE MEASURE ENTAILS ITS COMPLETE NULLITY ONLY IN EXCEPTIONAL CASES . IN PRINCIPLE, SUCH AN ADMINISTRATIVE MEASURE CAN BE SET ASIDE ONLY BY MEANS OF ANNULMENT OR WITHDRAWAL, IN SO FAR AS THOSE MEASURES ARE LAWFUL .
2 . A LAWFUL ADMINISTRATIVE MEASURE CREATING INDIVIDUAL RIGHTS CANNOT IN PRINCIPLE BE UNILATERALLY WITHDRAWN . THIS RULE APPLIES IN PARTICULAR AS REGARDS THE APPOINTMENT OF AN OFFICIAL . NO PROVISION OF THE TREATY LAYS DOWN THE CONDITIONS UPON WHICH AN INSTITUTION OF THE COMMUNITY CAN LAWFULLY SET ASIDE AN ADMINISTRATIVE MEASURE CREATING INDIVIDUAL RIGHTS, WHICH WAS INVALIDLY ADOPTED . THEREFORE THE COURT OF JUSTICE MUST DECIDE THE QUESTION BY REFERENCE TO THE RULES ACKNOWLEDGED BY THE LEGISLATION, THE LEARNED WRITING AND THE CASE-LAW OF THE MEMBER STATES .
AT ALL EVENTS, THE WITHDRAWAL OF AN ILLEGAL MEASURE OF THE KIND STATED IS IN PRINCIPLE PERMISSIBLE WITHIN A REASONABLE PERIOD OF TIME .
3 . THE FACT THAT AN ADMINISTRATIVE MEASURE IS PARTIALLY UNLAWFUL DOES NOT JUSTIFY THE WITHDRAWAL OF THE MEASURE IN ITS ENTIRETY, UNLESS THE EFFECT OF THE WITHDRAWAL OF THE UNLAWFUL PART IS TO DEPRIVE THE MEASURE OF ITS JUSTIFICATION .
4 . IF A SERVANT HAS BEEN VALIDLY ESTABLISHED IN A POST IN ACCORDANCE WITH THE STAFF REGULATIONS OF THE COMMUNITY, THE UNLAWFUL WITHDRAWAL OF THAT MEASURE BY THE INSTITUTION CONCERNED CONSTITUTES A WRONGFUL ACT OR OMISSION WHICH ENTAILS AN OBLIGATION ON THE PART OF THAT INSTITUTION TO MAKE GOOD THE INJURY CAUSED TO THE SERVANT .
( TREATY, FIRST PARAGRAPH OF ARTICLE 40 ).
5 . CONTRACTS OF EMPLOYMENT CONCLUDED WITH SERVANTS BEFORE THE STAFF REGULATIONS ENTERED INTO FORCE RENDER THEM ELIGIBLE FOR ESTABLISHMENT WITHIN THE MEANING OF THE STAFF REGULATIONS .
THAT ELIGIBILITY IS PARTICULARLY MARKED WHEN THE SERVANT HAS BEEN GIVEN AN EXPRESS, FORMAL PROMISE THAT HE WILL BE BROUGHT WITHIN THE AMBIT OF THE STAFF REGULATIONS, ESPECIALLY WHEN THE ENTRY INTO FORCE OF THE LATTER IS IMMINENT
( CONVENTION ON THE TRANSITIONAL PROVISIONS, THIRD PARAGRAPH OF ARTICLE 7 ).
6 . ONLY THE INSTITUTIONS OF THE COMMUNITY ARE COMPETENT TO TAKE DECISIONS CONCERNING ESTABLISHMENT WITHIN THE MEANING OF THE STAFF REGULATIONS . THE TREATY DOES NOT PROVIDE FOR ANY PARTICIPATION BY THE COMMITTEE OF PRESIDENTS
( TREATY, FOURTH PARAGRAPH OF ARTICLE 6; ARTICLE 78 ( 3 )).
7 . THE SECOND SUBPARAGRAPH OF ARTICLE 78 ( 3 ), WHICH PROVIDES FOR THE PARTICIPATION OF THE COMMITTEE OF PRESIDENTS IN CERTAIN ADMINISTRATIVE MEASURES, CREATES AN EXCEPTION IN RELATION TO THE PRINCIPLE OF THE INDEPENDENCE ( FOURTH PARAGRAPH OF ARTICLE 6 OF THE TREATY ) AND THE AUTONOMY ( FIRST SUBPARAGRAPH OF ARTICLE 78 ( 3 ) OF THE TREATY ) OF THE INSTITUTIONS OF THE COMMUNITY; THEREFORE IT IS TO BE STRICTLY CONSTRUED .
NONE THE LESS, THE COMMITTEE MUST PARTICIPATE IN THE FIXING OF THE SALARIES OF SERVANTS
( ARTICLE 78 ( 3 )).
IN REACHING A DECISION ON THE FORM WHICH THIS PARTICIPATION MUST TAKE, THE COURT OF JUSTICE IS NOT BOUND EITHER BY THE POINT OF VIEW OF THE COMMITTEE OR BY THE PROVISIONS OF THE STAFF REGULATIONS . QUITE APART FROM THE QUESTION WHETHER THE INSTITUTION CONCERNED MUST OBTAIN IN ADVANCE THE CONSENT OR MERELY THE OPINION OF THE COMMITTEE, IN ANY CASE A CLASSIFICATION MEASURE ADOPTED WITHOUT ONE OR OTHER OF THESE FORMALITIES IS UNLAWFUL .
( TREATY, FOURTH PARAGRAPH OF ARTICLE 6; ARTICLE 31; FIRST AND SECOND SUBPARAGRAPHS OF ARTICLE 78 ( 3 )).
8 . THE EXCEPTION CONSTITUTED BY THE SECOND SUBPARAGRAPH OF ARTICLE 78 ( 3 ) TO THE PRINCIPLE OF THE PARTICIPATION OF THE COMMITTEE OF PRESIDENTS IN THE DETERMINATION OF THE SALARIES OF SERVANTS RELATES ONLY TO THOSE CASES IN WHICH A PROVISION OF THE TREATY LAYS DOWN A SPECIAL METHOD OF DETERMINATION AS WELL AS TO THE CASE WHERE THERE IS AN IMPLEMENTING REGULATION ADOPTED ON THE BASIS OF SUCH PROVISION . NOR CAN THE AUTONOMY WHICH THE COMMON ASSEMBLY DERIVES FROM ITS NATURE AS A PARLIAMENTARY INSTITUTION BE SAID TO CONFLICT WITH THE POWER WHICH ARTICLE 78 CONFERS ON THE COMMITTEE OF PRESIDENTS . THE FUNCTIONAL AUTONOMY OF THE ASSEMBLY EXISTS ONLY WITHIN THE LIMITS OF THE TASKS ASSIGNED TO IT BY THE TREATY
( TREATY, FOURTH PARAGRAPH OF ARTICLE 6; SECOND SUBPARAGRAPH OF ARTICLE 78 ( 3 )).
9 . AN ORDER WHICH IS LEGAL AND VALID IN LAW, BRINGING A SERVANT OF THE COMMUNITY WITHIN THE AMBIT OF THE STAFF REGULATIONS AND ASSIGNING HIM A DEFINITE GRADE AND STEP OF SENIORITY, CONFERS INDIVIDUAL RIGHTS ON THE PERSON CONCERNED .
10 . THE APPLICANT IS NOT BOUND TO CITE THE PROVISIONS ON WHICH HE RELIES; IT IS ENOUGH IF THE APPLICATION CONTAINS " THE FACTS AND SUBMISSIONS ON WHICH THE APPLICATION IS BASED " AND " THE CONCLUSIONS "
( PROTOCOL ON THE STATUTE OF THE COURT OF JUSTICE, ARTICLE 22; RULES OF PROCEDURE OF THE COURT, ARTICLE 29 ( 3 )).
Parties
IN JOINED CASES 7/56 AND 3 TO 7/57
( 1 ) DINEKE ALGERA ( 2 ) GIACOMO CICCONARDI ( 3 ) SIMONE COUTURAUD
( 4 ) IGNAZIO GENUARDI
( 5 ) FELICIE STEICHEN, ASSISTED BY PIERRE CHAREYRE, ADVOCATE AT THE CONSEIL D'ETAT AND THE COUR DE CASSATION, PARIS, WITH AN ADDRESS FOR SERVICE IN LUXEMBOURG AT THE CHAMBERS OF ME MARGUE, 6 RUE ALPHONSE MUENCHEN, APPLICANTS,
V
COMMON ASSEMBLY OF THE EUROPEAN COAL AND STEEL COMMUNITY, REPRESENTED BY JEAN COUTARD, ADVOCATE AT THE CONSEIL D'ETAT AND THE COUR DE CASSATION, PARIS, ACTING AS AGENT, WITH AN ADDRESS FOR SERVICE IN LUXEMBOURG AT ITS OFFICES, 19A RUE BEAUMONT, DEFENDANT,
Subject of the case
APPLICATION FOR THE ANNULMENT OF ADMINISTRATIVE DECISIONS, AND APPLICATIONS FOR DAMAGES,
Grounds
P . 54
A - APPLICATION FOR ANNULMENT 7/56
I - ADMISSIBILITY
IN THEIR CONCLUSIONS, THE APPLICANTS CLAIM THAT THE COURT SHOULD :
" ... FIND THAT THE DECISIONS ADOPTED WERE NOT LAWFULLY ADOPTED; ANNUL THE DECISIONS ADOPTED WITH ALL THE CONSEQUENCES THAT FOLLOW THEREFROM IN LAW ",
BUT THEY DO NOT SPECIFY WHICH DECISIONS ARE CONCERNED .
HOWEVER, THE FOLLOWING STATEMENT IS TO BE FOUND IN THE APPLICATION : " THE DECISIONS OF 12 JULY 1956 AND 15 OCTOBER 1956 CONSTITUTE THE CONTESTED DECISIONS ". THUS, ACCORDING TO THAT CLARIFICATION, THE DISPUTE CONCERNS THE LETTER OF 12 JULY 1956 FROM MR VANRULLEN, THE VICE-PRESIDENT OF THE COMMON ASSEMBLY, TO THE APPLICANTS, AND COMMUNICATION NO 56/13 OF 15 OCTOBER 1956 FROM THE DEPUTY SECRETARY-GENERAL TO THE STAFF OF THE COMMON ASSEMBLY .
IN THIS CONNEXION, THE COURT FINDS THAT MR VANRULLEN'S LETTER OF 12 JULY 1956 DOES CONSTITUTE A DECISION . THAT LETTER MAKES SUFFICIENTLY CLEAR THE ACTION WHICH THE COMMON ASSEMBLY INTENDED TO TAKE IN RELATION TO THE APPLICANTS' SITUATION IF THEY PERSISTED IN REFUSING TO ACCEPT THE PROPOSALS WHICH HAD PREVIOUSLY BEEN MADE TO THEM IN MR VANRULLEN'S LETTER OF 27 JUNE 1956 . THE APPLICANTS EXPRESSLY PERSISTED IN THAT REFUSAL .
MR VANRULLEN WAS EMPOWERED TO TAKE THAT DECISION, SINCE BY ITS DECISION OF 19 JUNE 1956 THE BUREAU HAD " DELEGATED ALL ITS (...) POWERS " TO HIM FOR THE PURPOSE OF " RESOLVING THE PROBLEM OF RECLASSIFICATION AND THE MEASURES RELATING THERETO, ON THE BASIS OF THE PROPOSALS MADE BY THE DELVAUX COMMITTEE AND ADOPTED BY THE COMMITTEE OF THE FOUR PRESIDENTS AT ITS MEETING ON 15 JUNE 1956 ". FURTHERMORE, THE DECISION CONTAINED IN THE LETTER WAS CONFIRMED BY THE DECISION OF THE BUREAU OF THE ASSEMBLY OF 1 OCTOBER 1956 .
IT MAY BE ASKED WHETHER COMMUNICATION NO 56/13 OF 15 OCTOBER 1956 CONSTITUTES A DECISION IN RELATION TO THE APPLICANTS OR ONLY A SOURCE OF INFORMATION FROM WHICH THEY COULD INFER THAT THEY WOULD NO LONGER RECEIVE THE SALARY TO WHICH THEY WERE ENTITLED UNDER THE ORDERS OF 12 DECEMBER 1955 . THE DECISION OF THE BUREAU OF THE ASSEMBLY NOT TO APPLY THE STAFF REGULATIONS TO THE APPLICANTS AND NOT TO GRANT THEM THE SALARY PROVIDED FOR BY THE ORDERS OF 12 DECEMBER 1955 WAS NOT EXPRESSLY COMMUNICATED TO THEM . HOWEVER, THIS BEHAVIOUR ON THE PART OF THE DEFENDANT CANNOT DEPRIVE THE APPLICANTS OF THEIR RIGHT OF APPEAL .
FOR THAT REASON, THE COURT ALSO ADMITS THE APPLICATION DIRECTED AGAINST COMMUNICATION NO 56/13 OF 15 OCTOBER 1956, SINCE IT IS ONLY BY THAT COMMUNICATION THAT THE APPLICANTS WERE INFORMED THAT MR VANRULLEN'S PROPOSALS HAD BEEN CONFIRMED BY THE BUREAU, WHICH COMMUNICATION NO 56/12 EXPRESSED ONLY INDIRECTLY . THUS, IN CLAIMING THE ANNULMENT OF THE " DECISION OF 15 OCTOBER 1956 ", THE APPLICANTS HAVE IN VIEW THE IMPLIED DECISION OF THE DEFENDANT NOT TO ALLOW THEM EITHER THE SALARY OR THE CLASSIFICATION WHICH HAD BEEN CONFERRED ON THEM BY THE ORDERS OF 12 DECEMBER 1955 .
THEREFORE BOTH HEADS OF THE APPLICATION ARE ADMISSIBLE .
II - THE JURISDICTION OF THE COURT
THE JURISDICTION OF THE COURT HAS NOT BEEN CHALLENGED BY EITHER PARTY, AND THERE ARE NO GROUNDS FOR THE COURT TO RAISE ANY OBJECTION OF ITS OWN MOTION .
III - THE REVOCABILITY OF ADMINISTRATIVE MEASURES GIVING RISE TO INDIVIDUAL RIGHTS
THE APPLICATIONS CONTEST THE WITHDRAWAL BY THE ASSEMBLY OF THE ORDERS OF 12 DECEMBER 1955 . THE APPLICANTS ARGUE THAT THE SAID ORDERS CONFERRED UPON THEM VESTED RIGHTS WHICH COULD HAVE BEEN WITHDRAWN ONLY WITH THEIR CONSENT . THEREFORE IT MUST BE CONSIDERED WHETHER IT IS LEGALLY POSSIBLE TO WITHDRAW SUCH MEASURES .
FIRST OF ALL, AN ERROR OF REASONING WHICH IS LIABLE TO LEAD IN THIS CONNEXION TO A VICIOUS CIRCLE MUST BE ELIMINATED : IT CONSISTS IN ASSERTING THE EXISTENCE OF A VESTED RIGHT, AND THEN INFERRING THEREFROM THAT THAT RIGHT CANNOT BE REVOKED . IN FACT, IF THE RIGHT CONFERRED BY AN ADMINISTRATIVE MEASURE CAN BE UNILATERALLY REVOKED BY THE ADMINISTRATION, THEN THE SIMPLE FACT IS THAT IT DOES NOT CONSTITUTE A VESTED RIGHT . THE ORDERS OF 12 DECEMBER 1955 DECLARE THAT THE APPLICANTS ARE BROUGHT WITHIN THE AMBIT OF THE STAFF REGULATIONS, APPOINT THEM TO CERTAIN " GRADES " AND FIX THEIR RANK AT CERTAIN STEPS OF SENIORITY .
IF THOSE ORDERS ARE LEGAL AND VALID IN LAW, THEY CONSTITUTE INDIVIDUAL ADMINISTRATIVE MEASURES GIVING RISE TO AN INDIVIDUAL RIGHT .
THE POSSIBILITY OF WITHDRAWING SUCH MEASURES IS A PROBLEM OF ADMINISTRATIVE LAW, WHICH IS FAMILIAR IN THE CASE-LAW AND LEARNED WRITING OF ALL THE COUNTRIES OF THE COMMUNITY, BUT FOR THE SOLUTION OF WHICH THE TREATY DOES NOT CONTAIN ANY RULES . UNLESS THE COURT IS TO DENY JUSTICE IT IS THEREFORE OBLIGED TO SOLVE THE PROBLEM BY REFERENCE TO THE RULES ACKNOWLEDGED BY THE LEGISLATION, THE LEARNED WRITING AND THE CASE-LAW OF THE MEMBER COUNTRIES .
IT EMERGES FROM A COMPARATIVE STUDY OF THIS PROBLEM OF LAW THAT IN THE SIX MEMBER STATES AN ADMINISTRATIVE MEASURE CONFERRING INDIVIDUAL RIGHTS ON THE PERSON CONCERNED CANNOT IN PRINCIPLE BE WITHDRAWN, IF IT IS A LAWFUL MEASURE; IN THAT CASE, SINCE THE INDIVIDUAL RIGHT IS VESTED, THE NEED TO SAFEGUARD CONFIDENCE IN THE STABILITY OF THE SITUATION THUS CREATED PREVAILS OVER THE INTERESTS OF AN ADMINISTRATION DESIROUS OF REVERSING ITS DECISION . THIS IS TRUE IN PARTICULAR OF THE APPOINTMENT OF AN OFFICIAL .
IF, ON THE OTHER HAND, THE ADMINISTRATIVE MEASURE IS ILLEGAL, REVOCATION IS POSSIBLE UNDER THE LAW OF ALL THE MEMBER STATES . THE ABSENCE OF AN OBJECTIVE LEGAL BASIS FOR THE MEASURE AFFECTS THE INDIVIDUAL RIGHT OF THE PERSON CONCERNED AND JUSTIFIES THE REVOCATION OF THE SAID MEASURE . IT SHOULD BE STRESSED THAT WHEREAS THIS PRINCIPLE IS GENERALLY ACKNOWLEDGED, ONLY THE CONDITIONS FOR ITS APPLICATION VARY .
P . 56
FRENCH LAW REQUIRES THAT THE WITHDRAWAL OF THE ILLEGAL MEASURE SHOULD BE PRONOUNCED BEFORE THE EXPIRY OF THE TIME-LIMIT FOR INSTITUTING LEGAL PROCEEDINGS AND, IF PROCEEDINGS HAVE BEEN INSTITUTED, BEFORE JUDGMENT IS DELIVERED; WITH CERTAIN SMALL DIFFERENCES, BELGIAN, LUXEMBOURG AND NETHERLANDS LAW SEEMS TO FOLLOW SIMILAR RULES .
GERMAN LAW, ON THE OTHER HAND, DOES NOT SET ANY TIME-LIMIT FOR THE EXERCISE OF THE RIGHT OF EVOCATION, EXCEPT WHERE SUCH A TIME-LIMIT IS LAID DOWN BY A SPECIAL PROVISION . THUS ARTICLE 13 OF THE BUNDESBEAMTENGESETZ ( FEDERAL LAW GOVERNING CIVIL SERVANTS ) ALLOWS THE WITHDRAWAL OF AN APPOINTMENT ONLY WITHIN A PERIOD OF SIX MONTHS . HOWEVER, IT IS GENERALLY ACKNOWLEDGED THAT UNDULY LATE WITHDRAWAL, OCCURRING CONSIDERABLY LATER THAN THE DATE ON WHICH WITHDRAWAL COULD HAVE BEEN PRONOUNCED, IS CONTRARY TO THE PRINCIPLE OF GOOD FAITH ( TREU UND GLAUBEN ). IN THIS CONNEXION, CASE-LAW AND LEARNED WRITING FOUND THEMSELVES ALSO UPON THE CONCEPTS OF WAIVER ( VERZICHT ) AND OF FORFEITURE ( VERWIRKUNG ) OF THE RIGHT OF REVOCATION .
ITALIAN LAW IS PARTICULARLY CLEAR ON THE QUESTION . ANY ADMINISTRATIVE MEASURE WHICH IS VITIATED BY LACK OF COMPETENCE, INFRINGEMENT OF THE LAW OR ABUSE OF POWERS ( ECCESSO DI POTERE ) MAY BE ANNULLED EX TUNC BY THE ADMINISTRATIVE AUTHORITY WHICH ISSUED IT, IRRESPECTIVE OF THE INDIVIDUAL RIGHTS TO WHICH IT MIGHT HAVE GIVEN RISE . SUCH WITHDRAWAL MAY BE DECLARED AT ANY TIME ( IN QUALSIASI MOMENTO ); THUS THERE IS NO TIME-LIMIT PRESCRIBED FOR WITHDRAWAL . HOWEVER, ACCORDING TO LEARNED WRITING AND CASE-LAW, UNDULY LATE WITHDRAWAL CAN CONSTITUTE ABUSE OF POWERS; MEASURES WHICH HAVE BEEN IN FORCE FOR A LONG TIME ( FATTI AVVENUTI DA LUNGA DATA ) SHOULD BE KEPT IN FORCE, EVEN IF THEY WERE CONTRARY TO THE LAW, UNLESS OVERRIDING REASONS REQUIRE THEIR WITHDRAWAL IN THE PUBLIC INTEREST .
THUS THE REVOCABILITY OF AN ADMINISTRATIVE MEASURE VITIATED BY ILLEGALITY IS ALLOWED IN ALL MEMBER STATES .
IN AGREEMENT WITH THE ADVOCATE-GENERAL'S OPINION, THE COURT ACCEPTS THE PRINCIPLE OF REVOCABILITY OF ILLEGAL MEASURES AT LEAST WITHIN A REASONABLE PERIOD OF TIME, SUCH AS THAT WITHIN WHICH THE DECISIONS IN QUESTION IN THE PRESENT DISPUTE OCCURRED .
IV - THE LEGALITY OF THE ORDERS OF 12 DECEMBER 1955
1 . IN RELATION TO THE RULES LAYING DOWN THE POWERS WITHIN THE COMMON ASSEMBLY, THE ORDERS OF 12 DECEMBER 1955 WERE ADOPTED VALIDLY : THEY WERE SIGNED BY THE PRESIDENT OF THE COMMON ASSEMBLY AND BY HIS SECRETARY GENERAL . THE PRESIDENT ACTED IN ACCORDANCE WITH THE DECISIONS OF THE BUREAU OF THE COMMON ASSEMBLY OF 25 NOVEMBER 1955 . THEREFORE THE ORDERS WERE ADOPTED VALIDLY PURSUANT TO THE PROVISIONS LAID DOWN IN THE RULES OF PROCEDURE OF THE COMMON ASSEMBLY ( JO NO 13 OF 9.6.1954, P . 402 ) - IN PARTICULAR IN ARTICLE 43 ( 3 ) THEREOF - AND IN THE RULES OF INTERNAL ADMINISTRATION OF THE COMMON ASSEMBLY OF 25 NOVEMBER 1955 - IN PARTICULAR IN ARTICLES 1, 2 AND 14 THEREOF .
P . 57
IF THE SECRETARIAT AND THE PRESIDENT OF THE COMMON ASSEMBLY HAD NOT CHOSEN THE APPROPRIATE MOMENT TO NOTIFY THE ORDERS TO THE PERSONS CONCERNED ( THE BUREAU HAD PROVIDED THAT THEY SHOULD BE NOTIFIED " IN GOOD TIME ") AND IF THE OBLIGATIONS LAID DOWN IN ARTICLE 43 ( 3 ) OF THE RULES OF PROCEDURE OF THE COMMON ASSEMBLY AND IN ARTICLE 2 ( 4 ) OF THE RULES OF INTERNAL ADMINISTRATION HAD NOT BEEN FULFILLED, THAT WOULD NOT HAVE PREJUDICED THE VALIDITY OF THE ORDERS OF 12 DECEMBER 1955, FROM THE POINT OF VIEW OF THE INTERNAL ORGANIZATION OF THE ASSEMBLY .
2 . AS REGARDS THE ORDERS OF 12 DECEMBER 1955, THIS DISPUTE RAISES THE QUESTION, IN RELATION TO THE PROVISIONS OF THE TREATY ESTABLISHING THE EUROPEAN COAL AND STEEL COMMUNITY, WHETHER THE DEFENDANT COULD VALIDLY BRING THE APPLICANTS WITHIN THE AMBIT OF THE STAFF REGULATIONS AND DETERMINE THEIR CLASSIFICATION WITHOUT THE CONSENT OR THE OPINION OF THE COMMITTEE OF PRESIDENTS PROVIDED FOR IN ARTICLE 78 OF THE TREATY, OR WHETHER IT COULD DO SO ONLY WITH THE SAID CONSENT OR THE SAID OPINION . IN THESE CIRCUMSTANCES, IT IS NOT NECESSARY TO RULE ON THE EXTENT OF THE OTHER POWERS WHICH THE SAID COMMITTEE HOLDS UNDER THE TREATY, NOR ON ITS AUTHORITY TO DRAW UP THE STAFF REGULATIONS PURSUANT TO THE LAST PARAGRAPH OF ARTICLE 7 OF THE CONVENTION ON THE TRANSITIONAL PROVISIONS .
( A ) THE APPLICATION OF THE STAFF REGULATIONS IS A MATTER FOR THE INSTITUTIONS, AND THE TREATY MAKES NO PROVISIONS FOR ANY PARTICIPATION BY THE COMMITTEE OF PRESIDENTS . IF THE ORDERS OF 12 DECEMBER 1955 DO INDEED BRING THE APPLICANTS WITHIN THE AMBIT OF THE STAFF REGULATIONS - A QUESTION WHICH WILL BE EXAMINED BELOW UNDER HEADING VI - THAT PART OF THE SAID ORDERS IS LEGAL AND VALID .
( B ) AS REGARDS THE CLASSIFICATION PROVIDED FOR IN THE ORDERS OF 12 DECEMBER 1955 THE SITUATION IS LESS CLEAR .
IT APPEARS FROM THE ORDERS OF 12 DECEMBER 1955 THAT THE APPLICANTS WERE APPOINTED TO CERTAIN GRADES AND WERE ASSIGNED RANK AT SPECIFIC STEPS OF SENIORITY . THAT ASSIGNMENT ENTAILS, AMONG OTHER EFFECTS, THAT OF FIXING THE SALARY OF THE APPLICANTS, AS EMERGES FROM THE WORDING OF THE DECISIONS ADOPTED BY THE BUREAU OF THE ASSEMBLY ON 25 NOVEMBER 1955 .
EXAMINATION OF THE PROBLEM AS TO WHETHER THE COMMON ASSEMBLY HAD AUTHORITY TO DETERMINE THE SALARY OF ITS OFFICIALS ON ITS OWN, OR WHETHER IT COULD DO SO ONLY WITH THE PARTICIPATION OF THE COMMITTEE OF PRESIDENTS PROVIDED FOR IN ARTICLE 78 OF THE TREATY, LEADS TO THE FOLLOWING CONSIDERATIONS :
( 1 ) THE INSTITUTIONS ARE AUTONOMOUS WITHIN THE LIMITS OF THEIR POWERS ( FOURTH PARAGRAPH OF ARTICLE 6 OF THE TREATY ). THUS, IN ITS JUDGMENT IN CASE 1/55 KERGALL V COMMON ASSEMBLY, THE COURT ACKNOWLEDGED THAT THE COMMON ASSEMBLY HAD AUTHORITY " TO ORGANIZE ITS SECRETARIAT AS IT WISHED AND IN THE INTERESTS OF THE SERVICE ". MOREOVER, THE SECOND SUBPARAGRAPH OF ARTICLE 78 ( 3 ) MERELY CREATES AN EXCEPTION TO THE RULE OF AUTONOMY LAID DOWN IN THE PREVIOUS SUBPARAGRAPH AND IS THEREFORE TO BE STRICTLY CONSTRUED .
HOWEVER, THAT DOES NOT PREVENT ARTICLE 78 ( 3 ) FROM GIVING THE COMMITTEE OF PRESIDENTS AUTHORITY OF ITS OWN AS REGARDS THE NUMBER OF SERVANTS AND THEIR SALARY SCALES : THOSE FACTORS MUST BE " DETERMINED IN ADVANCE " BY THE SAID COMMITTEE . THAT PROVISION CAN BE EXPLAINED BY THE FACT THAT ONLY THE COMMUNITY HAS LEGAL PERSONALITY, AND ITS INSTITUTIONS DO NOT . FROM THAT SPRINGS THE NEED TO HARMONIZE THE LIFE OF THE FOUR INSTITUTIONS AND TO PROVIDE FOR FINANCIAL AND BUDGETARY SUPERVISION, A TASK ENTRUSTED BY ARTICLE 78 OF THE TREATY TO THE COMMITTEE OF PRESIDENTS . IT SHOULD BE STRESSED THAT NO OTHER BODY HAS A POWER OF PRELIMINARY SUPERVISION IN FINANCIAL MATTERS .
P . 58
( 2 ) THE SECOND SUBPARAGRAPH OF ARTICLE 78 ( 3 ) OF THE TREATY CONFERS THE POWER TO DETERMINE THE NUMBER OF SERVANTS AND THEIR SALARY SCALES ON THE COMMITTEE OF PRESIDENTS ONLY TO THE EXTENT TO WHICH THEY HAVE NOT BEEN FIXED UNDER ANOTHER PROVISION OF THE TREATY OR OF AN IMPLEMENTING REGULATION . SUCH IS NOT THE CASE IN THIS INSTANCE .
THE SUPERVISION PROVIDED FOR BY THE TREATY WOULD BE INEFFECTIVE IF EACH OF THE INSTITUTIONS HAD POWER TO ISSUE INTERNAL REGULATIONS FIXING THE NUMBER OR THE SALARY SCALES OF ITS SERVANTS . SUCH AN INTERPRETATION WOULD LEAD TO AN ABSURD RESULT . THE INTERPOLATED CLAUSE OF THE SECOND SUBPARAGRAPH OF ARTICLE 78 ( 3 ) REFERS ONLY TO THOSE CASES FOR WHICH THE TREATY LAYS DOWN A SPECIAL METHOD FOR THE FIXING OF A SALARY AND TO THE EVENTUALITY OF AN IMPLEMENTING REGULATION BASED ON SUCH A PROVISION OF THE TREATY . ANY OTHER INTERPRETATION WOULD DEPRIVE ARTICLE 78 OF ITS CONTENT AND HENCE MUST BE REJECTED .
NOR CAN THE AUTONOMY OF THE COMMON ASSEMBLY, AS A PARLIAMENTARY ASSEMBLY, BE SAID TO CONFLICT WITH THE POWER CONFERRED ON THE COMMITTEE OF PRESIDENTS BY ARTICLE 78 OF THE TREATY . IN FACT, THAT ARTICLE APPLIES TO ALL THE INSTITUTIONS OF THE COMMUNITY WITHOUT DISTINCTION; THE FACT THAT THE COMMON ASSEMBLY HAS SPECIAL POWERS CHANGES NOTHING IN THAT RESPECT; ITS FUNCTIONAL AUTONOMY EXISTS ONLY WITHIN THE LIMITS OF ITS POWERS, AS LAID DOWN BY THE TREATY ( LAST PARAGRAPH OF ARTICLE 6 ).
( 3 ) THEREFORE, THE POWER ATTRIBUTED TO THE COMMITTEE OF PRESIDENTS BY ARTICLE 78 OF THE TREATY APPLIES IN THIS INSTANCE .
HOWEVER, TWO ARGUMENTS HAVE BEEN SUBMITTED TO THE COURT IN RELATION TO THE EXTENT OF THAT POWER .
( A ) ACCORDING TO THE FIRST ARGUMENT, IN ORDER TO CARRY OUT EFFECTIVE SUPERVISION, THE COMMITTEE OF PRESIDENTS MUST HAVE A RIGHT OF DECISION IN FINANCIAL MATTERS .
BOTH THE WORDING AND PURPOSE OF ARTICLE 78 HAVE BEEN PLEADED IN SUPPORT OF THIS ARGUMENT .
AS REGARDS THE WORDING, ARTICLE 78 ( 3 ) ENTRUSTS TO THE COMMITTEE OF PRESIDENTS THE TASK OF DETERMINING THE NUMBER OF SERVANTS AND THEIR SALARY SCALES, PRIOR TO THE DRAWING UP OF THE ESTIMATES . THE USE OF THE WORD " DETERMINE " IN THAT PROVISION CLEARLY INDICATES THE EXISTENCE OF A POWER OF DECISION .
AS REGARDS THE PURPOSE OF ARTICLE 78, WHICH IS OBVIOUSLY INTENDED TO ESTABLISH FINANCIAL SUPERVISION, IT IMPLIES THAT THE POWERS OF THE COMMITTEE ARE NOT RESTRICTED TO ESTABLISHING A TABLE OR SCALE OF SALARIES IN THE ABSTRACT . INDEED, IN ORDER FOR THAT POWER TO BE EFFECTIVE, THE COMMITTEE MUST HAVE AUTHORITY TO DETERMINE THE SALARY LAID DOWN IN ABSTRACTO FOR SERVANTS CARRYING OUT A PARTICULAR FUNCTION, THE DESCRIPTION OF WHICH ( " JOB-DESCRIPTION " ) IS DRAWN UP BY EACH INSTITUTION . IF NO SUCH AUTHORITY EXISTED, THERE WOULD BE NOTHING TO PREVENT AN INSTITUTION FROM CLASSIFYING ALL ITS SERVANTS IN THE HIGHEST STEP OF THE SCALE, AND THE SUPERVISION WOULD BE CIRCUMVENTED .
P . 59
FURTHERMORE, THE PROVISION SPEAKS OF THE DETERMINATION OF THE NUMBER OF EMPLOYEES AND OF THE SCALES OF " THEIR " SALARIES, NOT OF THE SCALES OF " THE " SALARIES .
ACCORDING TO THAT INTERPRETATION, THE SECOND SUBPARAGRAPH OF ARTICLE 78 ( 3 ) MUST BE CONSIDERED AS GIVING RISE TO AN IMPLIED POWER ENABLING FINANCIAL SUPERVISION TO BE EXERCISED OVER STAFF EXPENDITURE, IN THE SAME WAY AS THE THIRD AND FOURTH SUBPARAGRAPHS, WHICH PROVIDE FOR BUDGETARY SUPERVISION, AND THE SIXTH SUBPARAGRAPH, WHICH PROVIDES FOR ACCOUNTING SUPERVISION .
THE PRIOR DETERMINATION OF THE NUMBER OF SERVANTS IS INTENDED TO PREVENT AN UNJUSTIFIED INFLATION OF THE NUMBERS OF OFFICIALS OF THE INSTITUTIONS, WHILE THE DETERMINATION OF THE SCALES OF THEIR SALARIES IS TO PREVENT THE AWARD OF EXCESSIVE SALARIES .
( B ) ACCORDING TO ANOTHER OPINION, THE THEORY OF AN IMPLIED POWER DOES NOT NECESSARILY LEAD TO THE CONCLUSION THAT THE COMMITTEE OF PRESIDENTS SHOULD HAVE A RIGHT OF DECISION IN THE SENSE DESCRIBED ABOVE, SINCE IT ALSO HAS OTHER MEANS OF EXERCISING EFFECTIVE SUPERVISION .
NO PROVISION CONFERS ON THE COMMITTEE OF PRESIDENTS WITH A SUFFICIENT DEGREE OF PRECISION ANY RIGHTS OF DECISION EXCEEDING THE COMPETENCE OF A COORDINATING BODY . IN PARTICULAR, THE DUTY OF " DETERMINING " THE NUMBER OF SERVANTS AND THEIR SALARY SCALES DOES NOT DEPRIVE THE INSTITUTIONS OF THEIR ADMINISTRATIVE AUTONOMY AND CANNOT CONFER ON THE PRESIDENTS OF THE INSTITUTIONS, WHEN MEETING IN THE COMMITTEE OF PRESIDENTS, POWERS WHICH THEY DO NOT POSSESS IN THEIR CAPACITY AS PRESIDENTS OF THOSE INSTITUTIONS .
ACCORDING TO THIS ARGUMENT, THE COMMITTEE OF PRESIDENTS MUST BE INFORMED AND CONSULTED, BUT THE POWER OF DECISION IS RESERVED TO THE INSTITUTIONS, WHOSE GOOD FAITH HAS TO BE PRESUMED .
( 4 ) IT SEEMS THAT, ALTHOUGH IT DID NOT TAKE UP ANY DEFINITE POSITION, THE COMMITTEE OF PRESIDENTS ITSELF CONCURS RATHER IN THE SECOND OF THESE INTERPRETATIONS . THUS, AFTER DECIDING AT ITS MEETING OF 12 DECEMBER 1955 THAT AS REGARDS THE PROCEDURE TO BE FOLLOWED IN DRAWING UP THE ANNEXES " THE ADMINISTRATIONS OF THE INSTITUTIONS SHALL CONSULT EACH OTHER ", THE COMMITTEE STATES AT THE SAME TIME " THAT SUCH CONSULTATION SHALL BE DIRECTED TOWARDS HARMONIZING THE PROVISIONS, BUT THAT IT SHALL NOT PREJUDICE THE DISCRETIONARY NATURE OF THE ANNEXES ".
SIMILARLY, AT ITS MEETING OF 28 JANUARY 1956, THE COMMITTEE OF PRESIDENTS STATED : " SINCE THE ANNEXES TO THE STAFF REGULATIONS WERE SUBMITTED TO THE COMMITTEE OF PRESIDENTS ONLY FOR ITS OPINION, THE AMENDMENTS UPON WHICH THE COMMITTEE HAS AGREED DO NOT CONSTITUTE DECISIONS BUT ONLY PROPOSALS MADE TO THE INSTITUTIONS ".
P . 60
THE STAFF REGULATIONS ARE BASED ON THE SAME IDEAS : THEY PROVIDE ONLY THAT THE COMMITTEE SHOULD BE INFORMED OF THE NUMBER OF POSTS IN EACH GRADE, FIXED BY THE INSTITUTION ON THE BASIS OF THE COMPLEMENT DECIDED BY THE COMMITTEE OF PRESIDENTS ( SECOND PARAGRAPH OF ARTICLE 25 ); ARTICLE 62 OF THE STAFF REGULATIONS STATES THAT THE ANNEXES TO THE STAFF REGULATIONS " SHALL BE DRAWN UP BY EACH INSTITUTION ... AND SUBMITTED TO THE COMMITTEE OF PRESIDENTS FOR ITS OPINION BEFORE THEIR ENTRY INTO FORCE ". MOREOVER, THE FIRST PARAGRAPH OF ARTICLE 25 REFERS IN A QUITE GENERAL WAY TO ARTICLE 78 OF THE TREATY AS REGARDS THE TABLE OF CORRESPONDENCE BETWEEN GRADES AND POSTS .
ACCORDING TO THIS ARGUMENT, THEREFORE, THE COMMITTEE OF PRESIDENTS HAS ONLY TO BE CONSULTED AND GIVE ITS OPINION ON THE CLASSIFICATION OF SERVANTS, BUT DOES NOT HAVE ANY RIGHT OF DECISION OF ITS OWN, EXCEPT AS REGARDS THE NUMBER OF SERVANTS IN EACH INSTITUTION .
( 5 ) ACCORDING TO ARTICLE 31 OF THE TREATY, IT IS FOR THE COURT TO ENSURE THAT IN THE INTERPRETATION AND APPLICATION OF THE TREATY, AND OF RULES LAID DOWN FOR THE IMPLEMENTATION THEREOF, THE LAW IS OBSERVED . THEREFORE IT IS NOT BOUND EITHER BY THE POINT OF VIEW ADOPTED BY THE COMMITTEE OF PRESIDENTS OR BY THE WORDING OF THE STAFF REGULATIONS, IF IT APPEARS THAT A CHOICE BETWEEN THE TWO ABOVEMENTIONED ARGUMENTS IS NECESSARY TO REACH A DECISION IN THE PRESENT ACTION .
HOWEVER, THIS ACTION DOES NOT REQUIRE THE POINT TO BE DECIDED .
IN THE EVENT, THE CLASSIFICATION APPLIED TO THE APPLICANTS BY THE ORDERS OF 12 DECEMBER 1955 PROVES TO BE UNLAWFUL ACCORDING BOTH TO THE FIRST ARGUMENT AND TO THE SECOND : ACCORDING TO THE FIRST ARGUMENT, BECAUSE THE COMMON ASSEMBLY HAD NOT PREVIOUSLY OBTAINED THE CONSENT OF THE COMMITTEE OF PRESIDENTS; ACCORDING TO THE SECOND ARGUMENT, BECAUSE THE COMMON ASSEMBLY HAD NOT PREVIOUSLY SUBMITTED THE CLASSIFICATION TO THE COMMITTEE OF PRESIDENTS FOR ITS OPINION, WHICH IT SHOULD ALSO HAVE DONE PURSUANT TO THE FOURTH PARAGRAPH OF ARTICLE 2 OF ITS RULES OF INTERNAL ADMINISTRATION AS WELL AS ACCORDING TO ARTICLE 43 ( 3 ) OF ITS RULES OF PROCEDURE . THE DEFENDANT HAS NOT SOUGHT TO DENY THAT IT HAD NEVER RECEIVED OR EVEN REQUESTED BEFORE 12 DECEMBER 1955 THE AGREEMENT OR THE OPINION OF THE COMMITTEE OF PRESIDENTS .
IN THOSE CIRCUMSTANCES, IT WAS NOT EMPOWERED TO FIX THE CLASSIFICATION OF THE APPLICANTS WITHIN THE FRAMEWORK OF THE STAFF REGULATIONS, SO THAT THAT PART OF THE ORDERS OF 12 DECEMBER 1955 IS UNLAWFUL .
V - THE CONSEQUENCES OF THE UNLAWFUL NATURE OF THE PART OF THE ORDERS OF 12 DECEMBER 1955 CONTAINING THE CLASSIFICATION OF THE APPLICANTS
1 . COMPLETE NULLITY OR REVOCABILITY?
IN THE OPINION OF THE COURT, THE UNLAWFUL NATURE OF AN INDIVIDUAL ADMINISTRATIVE MEASURE ENTAILS ITS COMPLETE NULLITY ONLY IN CERTAIN CIRCUMSTANCES WHICH DO NOT OCCUR IN THE PRESENT ACTION . APART FROM THOSE EXCEPTIONAL CASES, THE THEORETICAL WRITING AND THE CASE-LAW OF THE MEMBER STATES ALLOW ONLY OF VOIDABILITY AND REVOCABILITY . THE ADOPTION OF AN ADMINISTRATIVE MEASURE CREATES A PRESUMPTION AS TO ITS VALIDITY . THAT VALIDITY CAN BE SET ASIDE ONLY BY MEANS OF ANNULMENT OR WITHDRAWAL, IN SO FAR AS THOSE MEASURES ARE PERMISSIBLE .
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2 . DOES THE REVOCABILITY OF THE ORDERS OF 12 DECEMBER 1955 EXTEND TO THE WHOLE OF THEIR CONTENTS OR ONLY TO THE UNLAWFUL PART?
IN HIS OPINION, THE ADVOCATE-GENERAL DECLARED THAT HE WAS IN FAVOUR OF THE VIEW THAT THE ELEMENTS OF THE ORDERS ARE INDISSOCIABLE, AND RELIED UPON ARTICLE 59 OF THE STAFF REGULATIONS WHICH PROVIDES THAT " SERVANTS MAY BE ESTABLISHED IN ANY GRADE OF A CATEGORY OR SERVICE REFERRED TO IN ARTICLE 24 OF THE STAFF REGULATIONS ". ACCORDING TO HIM, " SINCE ESTABLISHMENT ENTAILS THE SERVANTS " RENOUNCING THE BENEFIT OF THEIR CONTRACT, THEY ARE ENTITLED, IN ORDER TO BE ABLE TO EXERCISE THEIR OPTION WITH FULL KNOWLEDGE OF THE FACTS, TO BE ACQUAINTED WITH THE GRADE AND THE STEP IN SENIORITY TO WHICH THE ADMINISTRATION IS PROPOSING TO APPOINT THEM, AND NOT ONLY THE DECISION OF PRINCIPLE CONSIDERING THEM ELIGIBLE TO BECOME OFFICIALS UNDER THE STAFF REGULATIONS ... "
IT IS TRUE THAT EACH OF THE APPLICANTS DECLARED THAT HE AGREED TO BE BROUGHT WITHIN THE AMBIT OF THE STAFF REGULATIONS ON THE TERMS OFFERED TO HIM . HOWEVER, THE ESSENTIAL AND PREPONDERANT FACTOR IN THAT DECLARATION CONSISTS IN THE APPLICATION OF THE STAFF REGULATIONS, ENSURING THEM OF A STABLE POSITION WITH A RIGHT TO A RETIREMENT PENSION . AS TO SALARY, IT IS KNOWN THAT IT CAN SUBSEQUENTLY BE ALTERED BY WAY OF REGULATIONS, BUT ESTABLISHMENT UNDER THE STAFF REGULATIONS CANNOT BE AFFECTED THEREBY . ADOPTING THE INTERPRETATION FOLLOWED IN MOST MODERN LEGISLATIVE SYSTEMS, ACCORDING TO WHICH PARTIAL UNLAWFULNESS DOES NOT ENTAIL THE REVOCABILITY OF THE MEASURE IN ITS ENTIRETY, UNLESS THAT MEASURE IS DEPRIVED OF ITS RAISON D'ETRE IF THE UNLAWFUL PART IS REMOVED, THE COURT REJECTS THE ARGUMENT THAT THE VARIOUS ELEMENTS OF THE ORDERS ARE INDISSOCIABLE .
THIS DECISION IS ALSO JUSTIFIED BY THE FACT THAT IT HAS BEEN FOUND ABOVE ( UNDER HEADING III ) THAT ONLY UNLAWFUL ADMINISTRATIVE MEASURES ARE REVOCABLE, LAWFUL MEASURES REMAINING IRREVOCABLE . IN THE PRESENT CASE, THE ASSEMBLY WAS COMPETENT AS REGARDS THE APPLICATION OF THE STAFF REGULATIONS, SO THAT THE APPLICATION IS VALID AND IRREVOCABLE, WHEREAS THE CONFERRING OF THE GRADE AND THE CLASSIFICATION IN CERTAIN STEPS WAS UNLAWFUL AND REVOCABLE . IN THOSE CIRCUMSTANCES, THE APPLICATION OF THE STAFF REGULATIONS, WHICH WAS VALIDLY UNDERTAKEN, COULD NOT BE REVOKED .
THAT DECISION IS NOT CONTRARY TO THE PROVISIONS OF THE STAFF REGULATIONS . MOREOVER, THE COURT IS NOT HERE CONCERNED TO APPLY THE STAFF REGULATIONS, WHICH WERE NOT YET IN FORCE AT THE TIME OF THE NOTIFICATION OF THE ORDERS, BUT TO APPLY THE TREATY . ACCORDING TO THE TREATY, ADMISSION AS SUCH TO THE AMBIT OF THE STAFF REGULATIONS CAME WITHIN THE EXCLUSIVE JURISDICTION OF THE ASSEMBLY, WHEREAS THE LATTER WAS NOT EMPOWERED TO UNDERTAKE CLASSIFICATION WITHOUT THE PRIOR CONSENT OR OPINION OF THE COMMITTEE OF PRESIDENTS . IT MUST BE INFERRED FROM THE VERY FACT THAT THE TREATY ARRANGED THE POWERS IN THESE TWO AREAS IN DIFFERENT WAYS THAT THE CORRESPONDING ELEMENTS OF THE ORDERS CAN, AND INDEED MUST, BE DISSOCIATED FOR THE PURPOSES OF THE LAW .
P . 62
BE THAT AS IT MAY, ALTHOUGH IT IS TRUE THAT TO BRING AN OFFICIAL WITHIN THE AMBIT OF THE STAFF REGULATIONS INVOLVES ESTABLISHING HIM IN A GRADE OF A GIVEN CATEGORY OR SERVICE ( TRANSITIONAL PROVISIONS, ARTICLE 59 ), IT SHOULD ALSO BE POINTED OUT THAT THE STAFF REGULATIONS DISTINGUISH BETWEEN THE APPLICATION OF THE STAFF REGULATIONS AND CLASSIFICATION ( SEE FOR EXAMPLE ARTICLE 27, WHICH SPEAKS ONLY OF BRINGING OFFICIALS WITHIN THE AMBIT OF THE STAFF REGULATIONS, AND ARTICLE 36, WHICH PROVIDES FOR A REPORT RECOMMENDING " ESTABLISHMENT ").
MOREOVER, STILL FURTHER ARGUMENTS ARE IN FAVOUR OF THE DISSOCIABLE NATURE OF VARIOUS ELEMENTS OF THE ORDERS .
THUS, IT WOULD BE INEQUITABLE TO ALLOW THE ASSEMBLY TO FAIL TO RESPECT THE RIGHT TO THE BENEFIT OF THE STAFF REGULATIONS WHICH IT HAD INTENDED TO CONFER ON THE APPLICANTS, IN THE FORM OF THEIR APPOINTMENT AS ESTABLISHED OFFICIALS, SIMPLY BECAUSE IT HAD ALSO MADE UNLAWFUL PROMISES TO THEM WHICH IT WAS NOT EMPOWERED TO MAKE . IN THE COURSE OF THE ORAL PROCEDURE, THE AGENT FOR THE DEFENDANT GAVE AN AFFIRMATIVE ANSWER TO THE QUESTION WHETHER THE PARTIES CONCERNED WOULD ALSO HAVE BEEN IN AGREEMENT WITH APPOINTMENT ACCOMPANIED BY A LAWFUL CLASSIFICATION . IT MUST BE ACKNOWLEDGED THAT THE WILL OF THE APPLICANTS IS MORE DIFFICULT TO INTERPRET; BUT THE COURT TAKES THE VIEW THAT IT IS NOT POSSIBLE, ON THE PRETEXT OF NOT ASCRIBING TO THEM AN INTENTION WHICH THEY MIGHT NOT HAVE MADE EVIDENT, TO DEPRIVE THEM OF THE BENEFIT OF THE APPLICATION OF THE STAFF REGULATIONS, WHICH HAD BEEN VALIDLY GRANTED . MOREOVER, THE CONTINUED APPLICATION TO THEM OF THE STAFF REGULATIONS LEAVES THEM THE OPPORTUNITY OF ANSWERING THE ABOVEMENTIONED QUESTION IN A PRACTICAL MANNER : THEY MAY RESIGN IF THEY CONSIDER THAT THE SITUATION IN WHICH THEY ARE PLACED IS NOT SATISFACTORY .
VI
FOR THE PURPOSES OF THE PRECEDING PARAGRAPHS, IT HAS BEEN ACCEPTED THAT THE BRINGING OF THE APPLICANTS WITHIN THE AMBIT OF THE STAFF REGULATIONS WAS VALID AND IRREVOCABLE IF THE ORDERS OF 12 DECEMBER 1955 ACTUALLY CONTAINED SUCH A DECISION ( SEE HEADING IV, 2 ( A ) ABOVE ). ALTHOUGH THAT IS VERY PROBABLE, IT IS NOT CERTAIN .
THE CIRCUMSTANCES IN WHICH THE ORDERS OF 12 DECEMBER 1955 WERE NOTIFIED TO THE APPLICANTS MAKE IT QUITE CLEAR THAT THE DEFENDANT INTENDED TO ADMIT THE APPLICANTS TO A STABLE SITUATION UNDER THE STAFF REGULATIONS, AND THAT THE APPLICANTS AGREED TO THIS . THIS IS BORNE OUT BY THE WORDING OF THE ORDERS, WHICH UNRESERVEDLY EXTEND THE BENEFIT OF THE APPLICATION OF THE STAFF REGULATIONS, BY THE PRELIMINARY DECLARATIONS OF ACCEPTANCE OF THAT APPLICATION, SIGNED BY THE APPLICANTS, AS WELL AS BY THEIR ACKNOWLEDGEMENTS OF RECEIPT OF THE ORDERS . THE ORDERS WERE NOTIFIED ONLY AFTER THE COMMITTEE OF PRESIDENTS HAD, ON 12 DECEMBER 1955, DECIDED THAT THE STAFF REGULATIONS WERE " DEFINITIVELY ADOPTED ", AT ALL EVENTS AS FAR AS THE COMMON ASSEMBLY WAS CONCERNED, SO THAT ITS PRESIDENT, MR PELLA, WAS ABLE TO TAKE THE VIEW THAT THE STAFF REGULATIONS WERE DEFINITIVELY APPROVED AND WOULD ENTER INTO FORCE IN THE VERY NEAR FUTURE, AND THAT CONSEQUENTLY HE COULD BRING OFFICIALS WHO SO WISHED WITHIN THE AMBIT OF THE SAID STAFF REGULATIONS .
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HOWEVER, DOUBTS MAY ARISE FROM THE FACT THAT THE TRUE DEFINITIVE TEXT OF THE STAFF REGULATIONS WAS IN FACT DRAWN UP ONLY SUBSEQUENTLY, ON 28 JANUARY 1956, AND THAT IT WAS IMPLEMENTED BY THE COMMON ASSEMBLY ONLY IN OCTOBER 1956, WITH RETROACTIVE EFFECT FROM 1 JULY 1956 . IN VIEW OF THE FACT THAT PARAGRAPH ( 4 ) OF THE ORDERS OF 12 DECEMBER 1955 EXPRESSLY REFERS TO THE SUBSEQUENT ENTRY INTO FORCE OF THE STAFF REGULATIONS AND THE ANNEXES THERETO AND THAT THE APPLICANTS ACCEPTED ANY UNCERTAINTY AS TO THEIR CONTENTS, THE COURT INTERPRETS THE APPLICANTS'DECLARATIONS AND THE WORDING OF THE ORDERS OF 12 DECEMBER 1955 AS REFERRING TO THE APPLICATION OF THE FUTURE STAFF REGULATIONS, WHATEVER THEIR CONTENTS MIGHT BE .
MOREOVER, EVEN IF IT WERE ACCEPTED THAT THAT APPLICATION WAS OF NON-EXISTENT STAFF REGULATIONS AND WAS THEREFORE VOID AND DEVOID OF OBJECT, MR VANRULLEN'S LETTER AND THE COMMON ASSEMBLY'S REFUSAL TO BRING THE APPLICANTS WITHIN THE AMBIT OF THE STAFF REGULATIONS SHOULD BE ANNULLED, BECAUSE THAT DECISION DISREGARDS THE SERVANTS'VESTED ENTITLEMENT TO BE BROUGHT WITHIN THE AMBIT OF THE STAFF REGULATIONS ( JUDGMENT IN CASE 1/55, KERGALL V COMMON ASSEMBLY ). FOR, IF THE COURT FOUND THAT MR KERGALL WAS ELIGIBLE TO BE BROUGHT WITHIN THE AMBIT OF THE STAFF REGULATIONS, ALTHOUGH NO SOLEMN, FORMAL PROMISE TO THAT EFFECT HAD EVER BEEN MADE TO HIM AND ALTHOUGH THE ENTREY INTO FORCE OF THE STAFF REGULATIONS WAS AT THAT TIME LESS IMMINENT, A FORTIORI THE APPLICANTS MUST BE FOUND TO HAVE A SIMILAR, AND EVEN A STRONGER, RIGHT TO BE BROUGHT WITHIN THE AMBIT OF THE STAFF REGULATIONS .
VII
IN SO FAR AS THE DECISION CONTAINED IN MR VANRULLEN'S LETTER OF 12 JULY 1956 WITHDRAWS FROM THE APPLICANTS THE APPLICATION TO THEM OF THE STAFF REGULATIONS, IT MUST BE ANNULLED FOR THE REASONS SET OUT ABOVE .
FURTHERMORE, THE DECISION, CONTAINED IN THE SAME LETTER, TO REPLACE THE APPLICANTS UNDER THEIR FORMER CONTRACTS MUST ALSO BE ANNULLED, SINCE, WITHOUT FRESH EXPRESS CONSENT ON THEIR PART, THE CONTACT WHICH HAD COME TO AN END FOLLOWING THEIR RENUNCIATION, WHICH WAS ACCEPTED BY THE NOTIFICATION OF THE ORDERS OF 12 DECEMBER 1955, COULD NOT BE REVIVED, NOR COULD A FRESH CONTRACT BE IMPOSED ON THEM . THE COMMON ASSEMBLY WAS ENTITLED VALIDLY TO WITHDRAW THE CLASSIFICATION LAID DOWN IN THE SAID ORDERS, AND COULD ON ITS OWN INITIATIVE HAVE RECLASSIFIED THE APPLICANTS AT THE LEVEL RESULTING FROM THE HARMONIZATION MEASURES, ONCE IT HAD BEEN DETERMINED, BUT IT HAD NO RIGHT TO RE-IMPOSE THEIR FORMER CONTRACTUAL TERMS .
THEREFORE, THE COURT FINDS THAT THE FIRST HEAD OF THE APPLICATION, CLAIMING THE ANNULMENT OF THE DECISIONS CONTAINED IN MR VANRULLEN'S LETTER OF 12 JULY 1956, IS WELL FOUNDED .
COMMUNICATION NO 56/13 OF 15 OCTOBER 1956 MUST ALSO BE ANNULLED IN SO FAR AS IT IMPLIED WITHDRAWAL OF THE APPLICATION OF THE STAFF REGULATIONS AND THE RE-ESTABLISHMENT OF A TEMPORARY CONTRACTUAL STATUS, THE LATTER BEING INCOMPATIBLE WITH THE APPLICATION OF THE STAFF REGULATIONS AND THE CREATION OF A STABLE SITUATION WHICH WAS DECLARED TO HAVE BEEN ACQUIRED VALIDLY . ON THE OTHER HAND, THE SAID COMMUNICATION IS VALID IN SO FAR AS IT IMPLIES THE REVOCATION OF THE CLASSIFICATION AND THE SALARY PERTAINING THERETO .
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CONSEQUENTLY, THE COURT ALLOWS THE APPLICATION IN SO FAR AS THE SAID DECISION REFUSES TO ALLOW THE APPLICANTS TO REMAIN WITHIN THE AMBIT OF THE STAFF REGULATIONS AND REIMPOSES THEIR FORMER CONTRACT; ON THE OTHER HAND, THE APPLICATION AGAINST THE REFUSAL TO GRANT THEM THE SALARY REFERRED TO IN THE SAID ORDERS IS DISMISSED, FOR THE REASONS MENTIONED ABOVE UNDER HEADING IV ( 2 ) ( B ) AND ( 5 ) AND UNDER HEADING V . THE DEFENDANT WILL HAVE TO FIX THE APPLICANTS'SALARIES AFRESH .
IN THAT CONNEXION, FORMAL NOTE SHOULD BE TAKEN OF THE DEFENDANT'S DECLARATION, MADE AT THE HEARING BY ITS AGENT, THAT IT UNDERTAKES TO TAKE THE APPLICANTS BACK INTO ITS SERVICE ON THE GENERAL CONDITIONS CURRENTLY APPLICABLE TO ITS OFFICIALS, AN UNDERTAKING WHICH THE COURT INTERPRETS AS MEANING THAT THOSE CONDITIONS IMPLY THAT THE SAME COMPENSATORY ALLOWANCE WILL BE PAID IN FUTURE AS IS GRANTED TO OFFICIALS WHO ACCEPTED MR VANRULLEN'S PROPOSALS .
VIII - COSTS
IN APPLICATION OF ARTICLE 60 ( 2 ) OF ITS RULES OF PROCEDURE, THE COURT ORDERS THE DEFENDANT TO BEAR ITS OWN COSTS ENTIRELY AND FOUR-FIFTHS OF THE APPLICANTS'COSTS IN RESPECT OF THE APPLICATION FOR ANNULMENT, AND ORDERS THE APPLICANTS TO BEAR ONE FIFTH OF THEIR OWN COSTS, SINCE THEY WERE UNSUCCESSFUL ON ONE HEAD OF THEIR APPLICATION .
B - APPLICATIONS FOR DAMAGES 3 TO 7/57
I - ADMISSIBILITY
THERE IS NOTHING TO PREVENT AN APPLICANT, IN ONE AND THE SAME ACTION, FROM SUBMITTING CONCLUSIONS IN THE ALTERNATIVE IN CASE HIS PRINCIPAL CONCLUSIONS ARE REJECTED .
THEREFORE THE APPLICATIONS ARE ADMISSIBLE .
II - SUBSTANCE
1 . THE LEGAL BASIS OF LIABILITY
THE APPLICANTS HAVE NOT MADE CLEAR THE LEGAL PROVISIONS ON WHICH THEY BASE THEIR APPLICATIONS FOR DAMAGES . IT APPEARS THAT THEY ARE SEEKING THE APPLICATION BY ANALOGY OF THE PROVISIONS OF THE SEVENTH PARAGRAPH OF ARTICLE 34 OF THE STAFF REGULATIONS WHICH PROVIDES FOR THE AWARD OF COMPENSATION IN THE EVENT OF THE TERMINATION OF EMPLOYMENT " OWING TO THE REQUIREMENTS OF THE SERVICE ", BECAUSE THE MEASURES ADOPTED BY THE COMMON ASSEMBLY ALLEGEDLY AMOUNT TO A BREACH OF THE LEGAL TIES BETWEEN THE ASSEMBLY AND ITS SERVANTS .
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IN THE REJOINDER, THE DEFENDANT ARGUES THAT THE APPLICANTS HAVE NOT PLEADED ARTICLE 40 OF THE TREATY ( LIABILITY FOR A WRONGFUL ACT OR OMISSION ), THAT THEREFORE THAT SUBMISSION IS INADMISSIBLE AND THAT MOREOVER A MISTAKEN INTERPRETATION OF THE RATHER OBSCURE TEXT OF ARTICLE 78 OF THE TREATY CANNOT CONSTITUTE A WRONGFUL ACT OR OMISSION .
THE COURT FINDS THAT THERE IS IN THE PRESENT CASE NO LIABILITY IN CONTRACT, SINCE ON 12 DECEMBER 1955 THE NOTIFICATION OF THE ORDERS HAD REPLACED THE CONTRACTS BY THE APPLICATION OF THE STAFF REGULATIONS . THE SEVENTH PARAGRAPH OF ARTICLE 34 OF THE STAFF REGULATIONS IS NOT APPLICABLE IN THIS CASE BY ANALOGY, BECAUSE THE TIES BETWEEN THE ASSEMBLY AND THE APPLICANTS WERE NOT BROKEN .
ARTICLE 40 OF THE TREATY, ON THE OTHER HAND, CONSTITUTES THE LEGAL BASIS OF THE APPLICATIONS . IT IS TRUE THAT IT WAS NOT EXPRESSLY PLEADED BY THE APPLICANTS, BUT THE NATURE OF THE FACTS STATED BY THEM IN THEIR APPLICATIONS AND THEIR CONCLUSIONS JUSTIFIES ITS APPLICATION . THE STAFF REGULATIONS ( ARTICLE 22 ) AND THE RULES OF PROCEDURE OF THE COURT ( ARTICLE 29 ( 3 )) DO NOT REQUIRE THE APPLICANT TO CITE THE ARTICLES ON WHICH HE RELIES; IT IS SUFFICIENT THAT " THE FACTS, SUBMISSIONS AND CONCLUSIONS OF THE APPLICANT " SHOULD BE INCLUDED IN THE APPLICATION, A REQUIREMENT WHICH IS FULFILLED IN THE PRESENT CASE .
2 . IS THE COMMON ASSEMBLY GUILTY OF A WRONGFUL ACT OR OMISSION WITHIN THE MEANING OF ARTICLE 40 OF THE TREATY?
IN AGREEMENT WITH THE ADVOCATE GENERAL, THE COURT TAKES THE VIEW THAT THE ANSWER CAN ONLY BE IN THE AFFIRMATIVE . THE DEFENDANT KNEW THAT THE COMMITTEE OF PRESIDENTS WAS PROPOSING TO HARMONIZE THE SALARIES OF SERVANTS OF THE DIFFERENT INSTITUTIONS PERFORMING COMPARABLE DUTIES, AND IT HAD DECLARED ITSELF READY TO PARTICIPATE IN THAT HARMONIZATION . IN THOSE CIRCUMSTANCES THE NOTIFICATION OF THE ORDERS OF 12 DECEMBER 1955, ON THE VERY DAY ON WHICH THE COMMITTEE OF PRESIDENTS, AT A MEETING IN WHICH THE PRESIDENT OF THE COMMON ASSEMBLY WAS TAKING PART, HAD UNANIMOUSLY ACKNOWLEDGED THE NEED FOR THAT HARMONIZATION SHOULD NOT - EVEN IF IT SPRANG FROM THE DESIRE TO GIVE THE APPLICANTS A CLEARLY DEFINED STATUS - HAVE BEEN UNDERTAKEN BEFORE THE OUTCOME OF THE ATTEMPTED HARMONIZATION HAD BECOME KNOWN . THAT PREMATURE AND HASTY NOTIFICATION CONSTITUTES A WRONGFUL ACT OR OMISSION, IN THAT IT CREATED A FALSE SITUATION UNDER AN APPEARANCE OF LEGALITY . FURTHERMORE, SINCE THE WITHDRAWAL OF THE APPLICATION OF THE STAFF REGULATIONS WAS ILLEGAL, IT ALSO CONSTITUTES A WRONGFUL ACT OR OMISSION, WHICH ACCORDING TO ARTICLE 40 OF THE TREATY CONFERS A RIGHT TO REPARATION TO MAKE GOOD THE INJURY RESULTING FROM THAT MEASURE .
IN THE PRESENT ACTION IT IS NOT NECESSARY TO DECIDE THE QUESTION WHETHER A WRONGFUL ACT OR OMISSION WITHIN THE MEANING OF ARTICLE 40 OF THE TREATY PRESUPPOSES FRAUD OR AT LEAST CULPABLE NEGLIGENCE, OR WHETHER ANY ILLEGAL BEHAVIOUR - ALBEIT UNCONSCIOUS - ON THE PART OF AN INSTITUTION FALLS WITHIN THE SAID CONCEPT . FOR EVEN IF RELIANCE ON A MISTAKEN INTERPRETATION OF ARTICLE 78 OF THE TREATY DOES NOT NECESSARILY CONSTITUTE A WRONGFUL ACT OR OMISSION GIVING RISE TO LIABILITY, IN THIS INSTANCE SUCH WRONGFUL ACT OR OMISSION RESULTS FROM THE FACT THAT THE ASSEMBLY DID NOT SEEK EITHER THE CONSENT OR THE OPINION OF THE COMMITTEE OF PRESIDENTS, ALTHOUGH THAT DUTY WAS IMPOSED ON IT BOTH BY ARTICLE 43 OF ITS RULES OF PROCEDURE AND BY ARTICLE 2 ( 4 ) OF ITS RULES OF INTERNAL ADMINISTRATION . FURTHERMORE, THAT DUTY WAS STIPULATED IN ARTICLE 62 OF THE STAFF REGULATIONS, IN THE VERSION THEREOF ADOPTED ON 12 DECEMBER 1955 . FINALLY, THE COURT TAKES THE VIEW THAT THE TERGIVERSATIONS OF THE DEFENDANT WITH RESPECT TO THE APPLICANTS ALSO CONSTITUTE A WRONGFUL ACT OR OMISSION .
3 . THE DAMAGE RESULTING FROM THE WRONGFUL ACT OR OMISSIONS
A . MATERIAL DAMAGE
( A ) THE UNLAWFUL REVOCATION OF THE APPLICATION TO THEM OF THE STAFF REGULATIONS AND THE UNLAWFUL REIMPOSITION OF THEIR TEMPORARY CONTRACTS, WHICH ARE ANNULLED BY THIS JUDGMENT, DID NOT CAUSE THE APPLICANTS ANY PECUNIARY DAMAGE .
( B ) THE REVOCATION OF THEIR CLASSIFICATION DEPRIVES THEM OF THE RIGHT TO THE HIGHER SALARIES WHICH ARE PROVIDED FOR IN THE REVOKED ORDERS . HOWEVER, THAT FACT IS NOT THE CONSEQUENCE OF WRONGFUL ACTS OR OMISSIONS, SINCE THE REVOCATION OF THE CLASSIFICATION IS LAWFUL; CONSEQUENTLY, THE SAID DEPRIVATION DOES NOT CONFER ANY ENTITLEMENT TO COMPENSATION .
THIS CONCLUSION ALSO FOLLOWS FROM THE FINDING THAT THE APPLICANTS ARE NOT ENTITLED TO THE PRESERVATION OF AN UNLAWFUL SITUATION WHICH HAS BEEN VALIDLY WITHDRAWN .
( C ) IN THE WRITTEN PROCEDURE, THE APPLICANTS CLAIMED THAT THEY HAD REFUSED EXTERNAL OFFERS OF EMPLOYMENT, BECAUSE THEY PLACED RELIANCE UPON THE PROMISES OF THE COMMON ASSEMBLY . HOWEVER, NO EVIDENCE WAS PRODUCED OR EVEN OFFERED IN THAT CONNEXION . THEREFORE NO FINDING CAN BE MADE THAT THERE WAS ANY DAMAGE FROM THAT POINT OF VIEW .
THEREFORE IT IS NOT PROVED THAT THERE IS ANY PECUNIARY DAMAGE CAUSED BY WRONGFUL ACTS OR OMISSIONS ATTRIBUTABLE TO THE DEFENDANT .
B . NON-MATERIAL DAMAGE
HOWEVER, THE WRONGFUL BEHAVIOUR OF THE DEFENDANT, NAMELY THE UNLAWFUL WITHDRAWAL OF THE APPLICATION TO THE APPLICANTS OF THE STAFF REGULATIONS AND THE FACT OF HAVING NOTIFIED THE ORDERS OF 12 DECEMBER 1955 PREMATURELY, WHICH WAS TO LEAD TO THEIR SUBSEQUENT PARTIAL WITHDRAWAL, DID CAUSE THE APPLICANTS NON-MATERIAL DAMAGE .
( A ) PLACED IN A SITUATION TO WHICH THEY WERE SUITED BY THEIR PROFESSIONAL MERITS AND WHICH OFFERED THEM EVERY APPEARANCE OF STABILITY AND PERMANENCE, THE APPLICANTS FOUND THEMSELVES WITHOUT ANY FAULT ON THEIR PART CONFRONTED WITH THE PROSPECT OF A DISMISSAL WHICH MEANT THE END OF A CAREER WHICH THEY COULD LEGITIMATELY RELY ON . THE SHOCK CAUSED BY THIS ACTION, THE DISTURBANCE AND UNEASINESS WHICH RESULTED FROM IT FOR THOSE CONCERNED, THEREFORE CAUSED THE APPLICANTS NON-MATERIAL DAMAGE, FOR WHICH THEY CAN CLAIM COMPENSATION .
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( B ) ON THE OTHER HAND, THE COURT FINDS THAT A REDUCTION IN GRADE DOES NOT CONSTITUTE APPRECIABLE NON-MATERIAL DAMAGE AND CANNOT PREJUDICE THE APPLICANTS'SOCIAL STANDING .
( C ) AS TO THE AMOUNT WHICH SHOULD BE GRANTED IN COMPENSATION FOR THE NON-MATERIAL DAMAGE, IT MUST NOT BE FORGOTTEN THAT THE COMMON ASSEMBLY'S GESTURE IN GRANTING THEM THE MATERIAL BENEFIT OF THE ORDERS OF 12 DECEMBER 1955 UNTIL THE COURT HAS GIVEN ITS DECISION WAS ONLY THE RESULT OF THE COURT ACTION AND COULD NOT ELIMINATE APPREHENSION AS TO THE FUTURE .
IN THE LIGHT OF THESE CONSIDERATIONS, THE COURT SETS THE DAMAGES PAYABLE TO THE APPLICANTS AT 100 EPU UNITS OF ACCOUNT EACH .
Decision on costs
WITH REGARD TO THE COSTS, ACCOUNT SHOULD BE TAKEN OF THE FACT THAT FOLLOWING THE DECISION ON THE APPLICATION FOR ANNULMENT, THESE APPLICATIONS BECAME DEVOID OF OBJECT IN SO FAR AS DAMAGES WERE CLAIMED FOR WITHDRAWAL OF THE APPLICATION TO THE APPLICANTS OF THE STAFF REGULATIONS . HOWEVER, THAT RESULT IS THE CONSEQUENCE OF THE FACT THAT IN THE APPLICATION FOR ANNULMENT THE DEFENDANT WAS UNSUCCESSFUL ON THAT HEAD .
THEREFORE IT IS NO OBSTACLE TO THE DEFENDANT'S BEING ORDERED TO PAY THE COSTS IN THEIR ENTIRETY, IN ACCORDANCE WITH ARTICLE 60 ( 1 ) OF THE RULES OF PROCEDURE OF THE COURT .
Operative part
THE COURT
HEREBY :
DECLARES THE PRESENT APPLICATIONS ADMISSIBLE AND,
I - ON APPLICATION FOR ANNULMENT 7/56
( 1 ) ANNULS THE DECISIONS CONTAINED IN THE LETTER SENT TO THE APPLICANTS ON 12 JULY 1956 BY MR VANRULLEN, THE VICE-PRESIDENT OF THE COMMON ASSEMBLY .
( 2 ) ANNULS THE DECISION OF THE BUREAU OF THE COMMON ASSEMBLY, IN SO FAR AS IT WITHDRAWS FROM THE APPLICANTS THE APPLICATION OF THE STAFF REGULATIONS .
( 3 ) DISMISSES THE APPLICATION FOR THE ANNULMENT OF THE DECISION OF THE BUREAU OF THE COMMON ASSEMBLY IN SO FAR AS THAT DECISION WITHDRAWS FROM THE APPLICANTS THE GRADES AND RANKS WHICH HAD BEEN GRANTED TO THEM BY THE ORDERS OF 12 DECEMBER 1955 .
( 4 ) REMITS THE MATTER TO THE COMMON ASSEMBLY, IN SO FAR AS THE DECISIONS OF THE VICE-PRESIDENT, MR VANRULLEN, AND OF THE BUREAU OF THE COMMON ASSEMBLY HAVE BEEN ANNULLED .
( 5 ) ORDERS THAT THE APPLICANTS ARE ENTITLED TO THE REIMBURSEMENT OF FOUR-FIFTHS OF THEIR COSTS BY THE DEFENDANT, AND ORDERS THE DEFENDANT TO BEAR ITS OWN COSTS .
II - ON APPLICATIONS FOR DAMAGES 3 TO 7/57
ORDERS THE DEFENDANT TO PAY THE SUM OF 100 EPU UNITS OF ACCOUNT TO EACH OF THE APPLICANTS .
ORDERS THE DEFENDANT TO BEAR THE COSTS . |
OPINION OF MR ADVOCATE GENERAL LAGRANGE
of 12 June 1956 ( )
Summary
Introduction
I — The texts
II — The contested decisions
III — The conclusions contained in the applications
IV — The submissions relied on in the applications
V — The admissibility of the applications from the point of view of Article 33
Nature of the letter of 28 May 1955 as a decision in so far as it refers to the withdrawal of equalization
Nature of the contested decisions as ‘individual decisions concerning’ the applicants
Nature of the contested decisions as ‘decisions involving a misuse of powers affecting’ the applicants
General considerations
Application in this instance
VI — Discussion of the substance
The unilateral imposition of prices
The fixing of reduced prices
The severence of the relationship between prices and equalization payments, and the problem of selectivity
The threat to withdraw equalization payments
The determination of the ruling common market prices, the objective of alignment
The determination of estimated production costs at the end of the transitional period, the limit of alignment
Misuse of powers
VII — Final conclusions
Mr President,
Members of the Court,
Before beginning my consideration of the points at issue today allow me to express my sincere thanks to the lawyers who have spoken in this case, not only for their seriousness, conscientiousness and talent — which was to be excepted — but also for the really exceptional way in which they have succeeded, when presenting argument based on a file which is as dry as it is comprehensive and, as a result, in spite of the quality of the written statements, somewhat difficult to absorb, in clarifying the points at issue, enabling attention to be concentrated on the essential questions, reducing the number of points in dispute while defining them more clearly and, finally, and this I consider to be the most remarkable result, in bringing about a close and lasting confrontation between even the most profound legal arguments and the real nature of the problems by making the test of the value of those arguments their ability to adjust themselves to that reality. That is, as we are all aware, the role of the judge, whose task is not to put forward theories but to dispense justice. That somewhat worn expression ‘servants of justice’ has rarely been more merited than by the advisers of the two parties in this difficult case.
That ‘state of affairs’ which I am merely ‘noting’ — which does not prevent me from ‘acknowledging’ its true worth — will simplify my task considerably and, to begin with, will render it. unnecessary for me to give a general picture of the problem of the integration of the Belgian collieries into the common market.
I — The texts
By way of introduction I shall merely outline the principal provisions adopted in the Convention on the Transitional Provisions in order to deal with that problem, which include Article 26 (2)(a), the interpretation of which has given rise to the present case.
They are:
1.
The general provisions concerning readaptation contained in Article 23 which, in the first place, permit the financing of programmes for the conversion of undertakings or the creation of new activities and the provision of non-repayable aid towards the resettlement and vocational retraining of workers under conditions which are wider than those provided for by the Treaty and, secondly, in certain circumstances, provide non-repayable aid to undertakings which have to close as a result of the establishment of the common market.
2.
The special provisions applying to coal contained in Article 24 which, first, extend the scope of the rules concerning methods of quotation and allow zone prices to be applied in cases not covered by the Treaty and, secondly, authorize the retention or institution of national equalization schemes or arrangements financed by a levy on home production.
3.
Finally, the special provisions also applying to coal and of particular relevance to Belgium and Italy contained in Articles 25, 26 and 27. They may be summarized as follows:
(a)
an assurance given to Belgium that its net coal production need not be reduced each year by more than 3 % as compared with the level of the preceding year (unless a correction is made as a result of a reduction in the overall level of coal production in the Community brought about by the economic situation);
(b)
the possibility (but not an obligation) for the Belgian Government to decide to insulate the Belgian coal market by means of machinery operating under the supervision of the High Authority, which involves an obligation on the Belgian Government to decide, in agreement with the High Authority, what arrangements are to be made to cause the possible shifts in production levels recognized as possible by the High Authority to come about within the guaranteed limit of 3 %;
(c)
finally, the establishment of equalization machinery on a Community basis which is to be financed by a levy on the coal production of those countries whose average cost prices are below the weighted average of the Community, that is, on the German and Dutch collieries. The conditions of assessment of the levy are fixed by Article 25 but the conditions of its distribution are nowhere laid down. Its purpose is alone defined in a fairly precise manner by Article 26 (2) as regards Belgium and Article 27 (1) as regards Italy. It should be noted that here again the Convention indirectly but clearly subjects the working of the machinery to the agreement of the government concerned since, first, the “outside” aid, that is, aid derived from the equalization levy, cannot exceed the amount of the government subsidy which must be related to it and, secondly, “the Governments may, but need not grant subsidies”. If, therefore, the government pays nothing, there is no equalization.
The Court is aware that in fact the Belgian Government has so far not wished to resort to the insulation of its coal market but that by means of the payment of subsidies it has, on the other hand, allowed the equalization system to function to the benefit of Belgium, with the result that it became compulsory for the High Authority to continue the system.
The Court is also aware that, of the two types of “additional equalization payments” provided for in Article 26 (2) (which are known as the “equalization arrangements under subparagraphs (b) and (c)”), the “equalization arrangements under subparagraph (b)”, which are intended to enable the Belgian steel industry to enter the common market without suffering as a result of the special arrangements for Belgian coal, have not been applied and that the “equalization arrangements under subparagraph (c)” provided for in favour of exports of Belgian coal within the common market have alone been implemented, although in circumstances which are outside the scope of the present action. There remain, therefore, the “equalization arrangements under subparagraph (a)”, which “shall be designed, from the beginning of the transitional period… to enable all consumers of Belgian coal within the common market to be charged prices more nearly in line with the ruling common market prices, reducing Belgian prices to the approximate figure of the estimated production costs at the end of the transitional period”. The text adds that “the price list so fixed shall not be changed without the agreement of the High Authority”.
That is all I wish to say about the texts.
II — The decisions
I would also like to recall the essential points of the decisions.
A —
By Decision No 1/53 of 7 February 1953 (published in the Journal Officiel of 10 February 1953) the High Authority fixed the mode of assessment and collection of the equalization levy provided for in Article 25 of the Convention. By a letter of the same date published in the same copy of the Journal Officiel the High Authority informed the Governments of the Member States of the Community that the equalization scheme had been set up. Notification is a very important formality since, under Article 8 of the Convention, it marks the date of opening of the common market in coal and as a result, under the terms of Article 1 (4) of the same Convention, the beginning of the transitional period.
B —
The Journal Officiel of 13 March 1953 contains a series of decisions relating to the price of coal in the Community which fix maximum prices and, in certain cases, zone prices. Two of those decisions concern Belgian coal:
(a)
Decision No 24/53 of 8 March 1953“on the establishment of price lists for undertakings in the Belgian coalfields”. The decision is based both on Article 26 of the Convention and on Article 61 of the Treaty. It fixes a table of maximum prices per category on the dual ground, set out in the “recitals” of the preamble to the decision that “a price list making it possible to bring the price of Belgian coal into line with the prices in the common market, so as to reduce the latter to approximately the estimated production costs at the end of the transitional period, must be established in order to calculate the equalization required” and that “the equalization payments and related subsidies would not fulfil their purpose if the level of prices resulting from that list could be exceeded by the undertakings”;
(b)
A letter of 8 March 1953 addressed to the Belgian Government which indicates, in accordance with the results of the “conversations” which had taken place between the departments of the High Authority, the representatives of the producers and the Belgian authorities, the arrangements for the aids to the Belgian collieries which the High Authority proposes to apply. They “are made up, first, of subsidies amounting to 200 million francs granted with immediate effect by the Belgian Government to certain collieries” (the so-called “conventional” subsidies) and “secondly, of the sum of 29 francs per metric ton extracted, which represents the difference between the prices in the list of prices for accounting purposes, which would maintain the present level of receipts of the collieries, and those fixed in the list of selling prices at which the collieries will sell their production” (and which is merely the price list fixed by the first decision). A table annexed to the letter, drawn up in two columns for each category and type, illustrates the system which, let us note, showns wide variations in the differences between the prices of the various types. Thus, for bituminous schlamms there is a difference of 43 francs (378 francs on the list of prices for accounting purposes and 335 francs on the list of selling prices), while for a whole series of semi-bituminous and low volatile coals the difference between the prices falls to zero, which means that there is no equalization for those types, although a maximum price applies. The figure of 29 francs is, therefore, only an average. Furthermore, let us also note that in fact the figure of 29 francs represents a reduction for the consumer of only 19 francs since it is accompanied by the abolition of a double price incompatible with the Treaty.
That is the system within which, with the exception of a few minor modifications, the equalization scheme operated until it was profoundly modified by the entry into force of the decisions of 28 May 1955.
C —
Those decisions, which are published in the Journal Officiel of 31 May 1955, are, like those to which I have referred, two in number:
(a)
Decision No 22/55, on the establishment of price lists for undertakings in the Belgian coalfields, which on this occasion determines not maximum prices but fixed prices which are either unchanged or lower than the earlier prices (if one disregards a general increase of 3 francs intended to take account of a recent pay increase) and which — and this is another difference — is no longer based on Article 61 of the Treaty but solely on Article 26 (2)(a) of the Convention. Finally, the prices of certain types (house coals), many of which did not benefit from equalization payments, are simply liberalized;
(b)
A letter addressed to the Belgian Government “relating to the adjustment of the equalization system”.
The first paragraph of that letter recalls the setting-up, in agreement with the Belgian Government, of a “joint committee” which had been given the task of studying all aspects of the problem posed by the integration of the Belgian collieries into the common market at the end of the transitional period, the attitude of the Belgian Government to the conclusions of the committee and the agreement reached between that Government and the High Authority on the content of the measures to be adopted to bring about integration under the conditions and within the time-limits laid down by the Convention on the Transitional Provisions.
In the second paragraph the High Authority states that: “It is therefore recognized that the aid granted to the Belgian collieries through the equalization payments must be accompanied by a series of measures to be adopted by the Belgian Government. The High Authority considers in particular that revision of the equalization measures must be conditional upon action by your Government of the type described below …”. There follows a list of four measures of which the first two are financial in nature, the third relates to the creation or extension of pithead power stations and the fourth (which I shall quote, since it is one of the points in dispute) requires the Belgian Government to act:
“With the agreement of the High Authority, to withdraw equalization subsidies from undertakings which are not making the effort to re-equip considered possible and necessary, as well as from those which are refusing to carry out the transfers or exchanges of deposits which are regarded as indispensable for a better development of the mining areas”.
The third paragraph concerns the new rules for the adjustment of the equalization system. By a constant mixture of commentary and such provisions as properly speaking are in the nature of decisions, which together are characteristic of the “decisions” adopted in the form of letters and published only under the heading “Information” which are highly favoured by the High Authority, that body sets out the aims of its new policy: to bring the prices of Belgian coal more into line with those of the common market and to ensure a better utilization of the sums resulting from the equalization levy, which must diminish each year in accordance with the sliding scale referred to in Article 25 of the Convention. It explains why it has modified the price list, which was the purpose of Decision No 22/55, and why and how it intends to carry out the gradual abolition of equalization with respect, first, to certain types (house coals) for which demand, which is “constantly much higher than supply in the common market, ensures a lasting market without the need for any equalization payments” and, secondly, to certain undertakings, namely the mines in the Campine, “whose favourable situation and reserves which are workable for several years enable all the mining to be concentrated on one level and in one pit”. The mines in question are referred to by name “on the basis (according to the High Authority) of information provided by your Government” : they are the three applicant undertakings in Case 9/55.
Finally, after several more provisions, one of which brings to an end the special allocation of 200 million francs of conventional subsidy, the High Authority refers (in paragraph 4 of the letter) to Decision No 22/55 fixing selling prices and announces the table of equalization rates published in an annex to the letter. That table shows the abandonment of the earlier system under which equalization payments corresponded to the difference between the list of prices for accounting purposes and the list of selling prices. The new table merely fixes the rate of equalization per metric ton for each type and category. For the types released from the system and for the undertakings which receive no equalization, the figure falls to O.
Those are the two decisions submitted to you by way of an application for annulment under Article 33 of the Treaty by, first, the Federation Charbonnière de Belgique or Fédéchar (Application 8/55) and, secondly, the three companies referred to in paragraph 3 (b) of the letter of 28 May: the Société des Charbonnages de Beeringen, the Société des Charbonnages de Houthalen and the Société des Charbonnages de Helchteren et Zolder (Application 9/55).
III — Conclusions contained in the applications
A — Application 8/55 brought by the Federation Charbonnière de Belgique
claims:
1.
The annulment of Decision No 22/55 (and of the price list annexed thereto) “in so far as it fixes reduced prices for certain types of coal”;
2.
The annulment of the decision contained in the letter of 28 May 1955 (and in the table of equalization rates annexed to that letter), in so far as:
(a)
it leads to discrimination between producers of identical types of coal ;
(b)
it provides that in the future equalization payments will be or may be withdrawn from certain undertakings on the ground that they are not making the effort to re-equip considered possible and necessary or are refusing to carry out the transfers or exchanges of deposits which are regarded as indispensable for a better development of the mining areas ;
(c)
it fixes rates of equalization in accordance with the new price list.
B — Although the conclusions contained in Application 9/55 are rather different in form from those contained in Application 8/55 and emphasize that part of the decision which applies directly to the applicants, their subject-matter is in fact the same as those contained in the aforementioned application.
IV — The submissions relied on in the applications
I consider it unnecessary to refer in detail to the list of submissions contained in the application, especially as I will have to come back to them. Let me merely point out that one of them is very different in nature from all the others: it is a submission of misuse of powers based on the fact that the contested decision (that is, Decision No 22/55) was adopted “as a result of intervention by the Belgian Government in order to advance the aims of its own economic policy”. All the other submissions relate to the infringement of provisions of the Treaty or of the Convention and especially of Articles 24, 25 and 26 of the Convention, which, as we have seen, form the basis of the action, Articles 5 and 57 of the Treaty, under which the High Authority shall carry out its task with a limited measure of intervention and shall give preference to the indirect means of action at its disposal, and Article 4 (b) of the Treaty which prohibits discrimination. Those other submissions are also coupled with an allegation of misuse of powers which relates directly to a failure to observe the terms of the texts referred to.
I will, however, point out that among the submissions put forward two which appear in Application 8/55 do not appear in Application 9/55, that is:
1.
The submission based on the fact that, contrary to Article 26 (2)(a) of the Convention, the contested decision (that is, Decision No 22/55) fixed prices without taking account of the estimated production costs at the end of the transitional period (Application 8/55, I(3)).
2.
The submission of misuse of powers.
It was only in their reply that the applicant companies brought their position entirely into line with that of the Fédéchar and put those two submissions forward on their own account. In fact, as the Court is aware, a statement of the grounds on which the application is based, even if only of a summary nature, must appear with the conclusions in the application, which must be submitted within a strict time-limit (Article 22 of the Statute of the Court of Justice).
As regards the first of those two submissions, it is just possible to maintain (although it is still open to argument) that by relying on an infringement of the provisions of Article 26 (2)(a), even if in relation to other matters, the companies satisfied the formal requirements of Article 22. However, it is clear that such an argument cannot be put forward in relation to the submission of misuse of powers. I shall therefore suggest that you dismiss the latter submission as inadmissible as regards Application 9/55. That does not matter in practice, since you will have to deal with the same submission in the course of hearing Application 8/55.
As a final point in my consideration of the submissions I must refer briefly to a question raised by the High Authority in its defence to Application 9/55 (paragraph 9, page 12): the High Authority states that “The Court will observe that as regards Decision No 22/55 the applicants are content either to plead “the unlawful nature” of the decision — without its being possible to deduce therefrom which of the submissions referred to in Article 33 is involved — or to refer to the application brought by a third party, the Federation Charbonnière de Belgique, against the same decision. The admissibility of that part of the application from the point of view of Article 29 of the Rules of Procedure is therefore doubtful. The High Authority leaves that question to the wisdom of the Court”.
As regards the reference to Application 8/55 I consider that it is admissible in this instance. The two applications are in fact closely connected: they were lodged on the same day, have the same subject-matter and, subject to what I have just said, are based on the same submissions. Furthermore, the applicants in Application 9/55 form apart of the Federation Charbonnière de Belgique, which brought Application 8/55. The Court has itself ordered the joinder of the two cases for the purposes of the hearings and it is not impossible that that joinder may even extend to the judgment. That is merely a question of expediency and it is clear that there is no legal obstacle to it. It may therefore be accepted that a statement of submission may be replaced by a reference expressis verbis by one application to another, provided that a clear description of that submission appears in the application. On the other hand, where such a description does not even appear in the application, that is, where the application is entirely silent on that subject, there is a clear infringement of Article 22 of the Statute and of Article 29 of the Rules of Procedure of the Court which repeats it. However, as I have already said, it is my opinion that the foregoing only applies to the submission of misuse of powers and perhaps (although on that point I am very doubtful) to the submission that Decision No 22/55 did not take account of the estimated production costs at the end of the transitional period.
V — Admissibility of the applications from the point of view of Articles 33
I now come to the more important questions of admissibility which are raised in relation to the second paragraph of Article 33 of the Treaty.
Let me cite the text once again: ‘Undertakings or the associations referred to in Article 48 may, under the same conditions’ (that is, under the conditions which have just been fixed in the first paragraph), ‘institute proceedings against decisions or recommendations concerning them which are individual in character or against general decisions or recommendations which they consider to involve a misuse of powers affecting them’.
The three companies which are the applicants in Case 9/55 are undertakings within the meaning of Article 80 of the Treaty.
The Federation Charbonnière de Belgique is an association of undertakings within the meaning of Article 48. The capacity of the applicants to institute proceedings is thus well established. However, three questions must be considered which concern the admissibility of the applications, even if only in part. They are as follows:
1.
Is that part of the letter of 28 May which threatens to withdraw the equalization payments in the nature of a ‘decision’ or, at the least, of a ‘recommendation’?
2.
Are the two contested decisions wholly or in part in the nature of'individual decisions affecting the applicants?
3.
If they should not be regarded as being individual in character do they ‘involve a misuse of powers affecting them’?
If the first of those questions concerns only the present case, the same does not apply to the other two, which involve the interpretation of Article 33 in relation to points which have so far been only partially resolved by the case-law of the Court.
Is the passage contained in the letter of 28 May 1955 which threatens to withdraw equalization payments in the nature of a decision (or a recommendation)?
One might be surprised to learn that the High Authority, which, moreover, raised this question only at the hearing, is itself not very sure whether or not it intended to adopt a decision on that point. One is, however, less surprised that the lawyers who represent that body before the Court should have had certain doubts in that respect and should have expressed them, since it must be acknowledged that the question is very doubtful.
I consider, first, that it is at all events not a “recommendation” within the meaning given to that word by Article 14 of the Treaty, that is, a decision as to the aims to be pursued which leaves the choice of the appropriate methods for achieving those aims to those to whom it is addressed. In fact in this case the methods are clearly defined. Is it, however, a decision?
The form of the letter on this point would lead one to reply in the negative. You will remember that the sentence begins with the words: “The High Authority considers in particular that revision of the equalization measures must be conditional upon action by your Government of the type described below …”. Thus, on the one hand it is an opinion and on the other hand it concerns action to be taken by the Belgian Government.
Nevertheless, I consider that it is in reality a decision, that is, a measure involving or likely to involve legal consequences or, to adopt a phrase which is widely used in disputes involving administrative law, an act “adversely affecting” or capable of adversely affecting the applicant.
In tact, as the Court has observed, if it is an opinion, it contains the word “must” (must be conditional upon …). Furthermore, unlike the other modes of action indicated by the letter the fourth, which is at issue here, does not depend for its performance on the Belgian Government alone but on a measure to be implemented by that government acting “with the agreement of the High Authority”. Finally, in a later paragraph, the letter states that “The High Authority reserves the right to take up the matter with the Belgian Government in order to follow the implementation of current re-equipment programmes as well as of any measure intended to bring about the rationalization and improvement of the Belgian coal industry”. That clearly shows the intention of the High Authority to participate in reviewing the measures which the undertakings must carry out and whose proper implementation, in the opinion of the High Authority, is a condition for the payment of equalization to those undertakings. If, therefore, having carried out such a review, the High Authority was, at some future date, to consider it necessary to cease equalization payments and obtained the agreement of the Belgian Government to that effect, there is no doubt that it could find the legal basis for such action in that passage of the letter. If, therefore, one applies a material and not merely a procedural criterion, as I believe one must do, the letter in question clearly constitutes a “decision” within the meaning of Article 14 of the Treaty which may be contested by means of an application under Article 33.
Are the two contested decisions in the nature of “individual decisions concerning” the applicants?
As the Court is aware, the parties are in agreement on two points. First, the High Authority accepts, with the applicants, the individual nature of the decision contained in the letter of 28 May in so far as it withdraws equalization from, or makes only a reduced payment to, the three collieries of the Campine which are referred to by name therein. Secondly, the applicants have stated, at least in their pleadings, that they agree with the High Authority that the decision (if decision there is, which I believe) relating to the threat to withdraw equalization is general in nature.
It is, however, self-evident that the agreement of the parties on that point is not binding on the Court, which alone is empowered to define the true legal nature of the decisions submitted to it, and that the question must be considered as a whole.
On that point I find the recent judgment of 23 April 1956 in Joined Cases 7 and 9/54, Groupement des Industries Sidérurgiques Luxembourgeoises v High Authority, and the opinion of my colleague Advocate General Roemer in that case of interest.
The judgment is in part a judgment on the facts. Nevertheless, on one important point it constitutes a judgment on principle, when it decides that “in these circumstances, it is sufficient, in order that an undertaking or association may be able to institute proceedings against a decision or recommendation, for that decision or recommendation to be not general, but individual in character and it is not necessary for the decision to manifest this character in relation to the applicant.” In short, that is a wide interpretation of the expression “concerning them” which is not synonymous with “which is addressed to them”. As Mr Roemer had observed in his opinion, the narrow view would have led to unsatisfactory results because it disregards the material content of the decision. For example, the decision of annulment of a special charge is formally addressed to a person upon whom the charge has hitherto been imposed but it in fact concerns the person who has hitherto benefited therefrom. In that case the contrary situation obtained: the contested implied decision refused to abolish a charge which, in the applicant's view, was an unlawful special charge and to which it was one of the chief contributors: it is clear that the parties really concerned were those on whom the charge was imposed and not those who benefited therefrom. It is for that reason that the Court accepted that the decision, which was individual in nature, “concerned” the applicant although the latter was not the addressee.
A narrow and rigid interpretation of the text has thus been discounted and I do not think that on this occasion the applicants will make any complaint. It has been discounted in order to make way for an interpretation which seeks to emphasize the concept of legal interest which, as I recalled in my opinion in Cases 3/54 and 4/54 (Rec. 1954-1955, Vol. I at p. 174) is inherent in an application for annulment. It is clear that it is not simply any legal interest which is involved and, as I also said, rather than leave to the Court the task of establishing case-law which is suited to a variety of individual cases, the Treaty preferred to settle the question on its own authority. As Mr Roemer has shown in a penetrating analysis in the opinion already cited, it did so either by drawing up a list of persons entitled to bring actions (the first paragraph of Article 33 gives an unlimited right of action to the Member States and the Council) or by defining the legal interest, thereby giving it concrete form (as it did in the case of the undertakings or associations referred to in the second paragraph of the same article, which have such a legal interest only in relation to “decisions … concerning them which are individual in character”). My colleague recalled that the latter method is to be found in certain national legislative systems, in particular in German law (which goes so far as to re-quire that a right should have been adversely affected).
Although the Treaty has thus provided for the situation by means of a list or a definition in terms which bind the Court, nevertheless, in interpreting a text the latter is entitled — I will even say compelled — to have recourse to the underlying basic concept, that is, the concept of legal interest, in so far as any measure of uncertainty re-mains. I consider that that view remains within the limits of a sensible principle of textual interpretation — even of international texts — and is in line with your judgment of 23 April 1956.
The problem is therefore to know what constitutes an individual decision and what a general decision. As my colleague Advocate General Roemer — whose view I again fully share — observed in his opinion in the Luxembourg cases, it is only with extensive reservations that reference may be made to national systems of law, for the double reason that they generally take into account factors other than those with which the Treaty is concerned, and that under those same systems the criteria for arriving at that distinction are often obscure.
What is relatively clear is the distinction between, on the one hand, the regulation, that is, a measure which is intended to regulate a general and impersonal situation by means of legislative provisions and which, at least as regards the substance, resembles the law which it is generally intended to supplement, and, on the other hand, the individual measure, the purpose of which is to apply the rule to a specific person (for example, a sanction, an authorization or a refusal of authorization). The difficulty arises from the fact that between those two extremes there is a whole series of intermediate cases. For certain of those the choice is easy: for example, collective decisions are in reality only the juxtaposition of individual decisions (for example, a table governing the promotion of officials). In other cases, however, there is greater difficulty: for example, where a decision regulates a specific situation directly but without naming the persons to whom it refers, or without enabling those to whom it refers to be ascertained other than by a special examination of the individual cases.
In support of a narrow interpretation of the concept of an individual decision one might be tempted to appeal to Article 15 of the Treaty which states that: “Where decisions and recommendations are individual in character, they shall become binding upon being notified to the party concerned”, although “In all other cases, they shall take effect by the mere fact of publication”. However, I agree with Mr Roemer, who also considered that point, that the basic purpose of that provision is to make it clear when publication is sufficient for the decision to become binding. That concerns particularly the time limits for lodging applications.
I believe that in order to resolve the difficulty caused by what I have termed the “intermediate cases” it is necessary to apply, if only as a secondary consideration, a subjective criterion of relativity. By that I mean that a decision which, ex hypothesi, is not legislative in character and is intended to govern a specific situation directly may be regarded as an individual decision with regard to the persons (undertakings or associations) which are immediately and directly referred to by that decision considered as a whole. On the other hand, the same decision cannot be regarded as having individual character in relation to persons who are not directly concerned thereby or who are only partly concerned. The idea is to establish a correlation, not mathematical of course but nevertheless rather close, between the area of application of the decision and the area of interests represented by the person who institutes proceedings against it.
I consider such a procedure to be justified on two grounds. First, it enables the interpretation of Article 33 to be based essentially on the concept of legal interest which, as I have said, underlies the whole article and clearly also inspired your judgment of 23 April 1956. Moreover, the concept of interest is by its nature relative.
Secondly, that procedure opens the door of this Court to associations of producers under Article 48, and I regard that as necessary. Associations represent collective interests and too great a restriction of the concept of the individual decision would in most cases render it impossible for them to make use of the right of action which is available under Article 33. They would be able to institute proceedings against general decisions only in the case of a “misuse of powers affecting them” and they would not be able to contest individual decisions in the narrow sense (for example, a sanction or an authorization) since it is, as I believe, a generally accepted principle that a legal person such as an association or a union cannot take the place of one of its members in an action which should properly be brought by that member. At the most such a body has a right to intervene in support of such an action. On that point let me refer, for example, to the well established case-law of the French Conseil d'Etat (referred to by Odent in “Contentieux Administratif”, 1953-1954, Vol. III, pp. 542-543).
The associations of undertaking provided for in Article 48 play an important role in the Treaty, which is defined by Article 48 itself. It appears to me to be indispensable that that role should extend also to the defence before the Court of the collective interests for which they are responsible, in particular because, as experience has shown, certain of the decisions adopted by the High Authority may damage those interests without any Member State's considering it appropriate to bring proceedings. It may even be said that as regards coal that is almost the normal situation since, as a general rule and especially where prices are concerned, the interests of the coal-mining undertakings are in conflict with the High Authority, whose task is “to ensure the establishment of the lowest prices” (Article 3 (c)), with all consumers, especially the iron and steel producers, and with the governments, whose general economic policy also seeks, in most cases, to keep down the prices of that basic product. Let me now try to apply those few ideas to the present case.
First, I consider that, even from a legal point of view, Decision No 22/55 and the letter form an inseparable whole, since it is impossible to conceive of the one without the other. They both have the same aim, that is, to ensure the application of the provisions concerning equalization contained in Article 26 (2)(a), and the fixing of selling prices, which forms the subject-matter of Decision No 22/55, has no purpose if it is not accompanied by the determination of equalization rates which results from the table annexed to the letter.
Furthermore, the decision has no legislative function. A perfect example of a decision which is not a regulation but is nevertheless general in nature, in that it fixes the principles on which future implementing decisions are to be based, is to be found in Decision No 6/53 of 5 March 1953, regarding the principles for fixing maximum prices for coal within the common market. Such a decision is not a regulation, since its main object is to fix maximum prices for coal “under present circumstances”, but it is clearly a general decision of a legislative nature, which lays down on a general and impersonal level detailed rules for the operation of the scheme devised for the imposition of maximum prices and forms the basis of a whole series of implementing decisions for different coalfields and even for individual undertakings within the same coalfield. For that reason it could not be contested by an association even if a federation existed which incorporated all the collieries of the Community.
The situation in this case is quite different. The rules in force are to be found in the Convention, as is the very principle of the task to be carried out. It is merely a question of applying those rules to a situation which is specific and clearly defined as regards both area and time. The decision which performs that function (I am using the singular intentionally, since I consider that there is in fact only one decision) is clearly individual in nature in relation to all the Belgian collieries considered together and on that ground it clearly concerns the Federation, which incorporates precisely the undertakings operating those collieries whose interests it must defend. I therefore suggest that the Court should regard the two decisions as “ndividual decisions concerning” the Federation Charbonnière de Belgique.
As regards the three applicant undertakings in Case 9/55, the situation is somewhat different, and here it is necessary to draw a distinction. I have no doubt that, with regard to the abolition or reduction of the rates of equalization applied to the undertakings referred to by name in the decision contained in the letter of 28 May 1955 and the table annexed thereto, the individual character of that decision cannot be contested. That is, moreover, accepted by the High Authority. It is no less certain that, as regards those undertakings, the same individual character cannot be regarded as attaching to the provisions concerning the threat to withdraw equalization. A subsequent decision implementing that threat with regard to one of the undertakings would alone be individual in character as regards that undertaking.
The position as regards the price fixing resulting from Decision No 22/55 may be more doubtful. I consider, however, that that decision, the purpose of which is to fix prices for each type and category which are applicable without distinction to all the Belgian collieries, cannot be individual in relation to a specific undertaking.
I now come to the third and final question of admissibility.
If the contested decisions are not to be regarded as being individual in character do they involve a “misuse of powers affecting” the applicants?
That is in fact a question which concerns the substance of the action but it relates in part to the question of admissibility, at least if one follows the view which I took in my opinion in Cases 3/54.and 4/54 and which I was happy to see the parties accept.
(i) General considerations
As regards the question what must be understood by “misuse of powers” within the meaning of Article 33 and by “misuse of powers affecting them” within the meaning of the second paragraph of that article, let me refer to my opinion in Cases 3/54 and 4/54 (ASSIDER and ISA, Rec. 1954-1955, Vol. I, pp. 149 et seq.). In fact, I admit quite frankly that despite the very serious thought which, not only in the course of this action, I have given to that question and despite the very interesting observations which I have read and heard in the present cases, the conclusions at which I arrived in giving my opinion in Cases 3/54 and 4/54 are in no way modified. I would merely note that, depending on the particular circumstances involved, the parties refer to one or other part of that opinion, which they obviously regard as favourable to the argument which they are putting forward, but so far as I am aware no one has ever criticized it systematically. As regards self-criticism, even of a serious nature, I have just said that it has produced no result!
I shall, therefore, merely make a few additional observations.
1.
First, I cannot leave unanswered the observations made by one of the eminent lawyers of the applicants concerning the passage in the statement of grounds for the Luxembourg Law of Ratification. It is quite true that, just like the other documents which it is usual to place under the heading of “preparatory work”, the statement of grounds for a law or, more correctly, for a draft law, are in no way bindings as regards the interpretation of the text of that law and, in particular, can never be relied on as against the text itself where it is clear and unambigious. It is, however, universally accepted that the courts may have recourse to that statement for the purposes of information and, where appropriate, may extract from it such elements as will elucidate the intention of the legislature. It is also true that in doing so the courts have complete discretion. Of course, in the case of a Treaty internal documents relating to the ratification procedure can only ever concern the intention or thought of one of the signatory governments. However, one must not assume that when it submits a Treaty to its parliament for ratification a government will allow itself to express an opinion which it knows is not shared by the governments of the other signatory States and which, at least in its opinion, would not reflect their common agreement. As regards the Treaty of 18 April 1951 the preparatory documents are practically non-existent-or are secret (which amounts to the same thing). For that reason the grounds stated by the individual States have greater importance, particularly as a certain attempt was made to co-ordinate such statements in order to avoid contradictions between them, which would have been highly embarrassing.
Having made that point let me say that I referred to that argument solely in order to support an opinion which is essentially based on the text of Article 33, but the commentary in question so cleary reflects the firm intention of the authors of the Treaty that it seemed to me impossible not to recognize it as having a certain value.
2.
Contrary to the view put forward by the High Authority I consider that different interpretations cannot be put upon the words “misuse of powers” in the first and second paragraphs of Article 33. In the second paragraph there is simply an additional requirement: the misuse of powers alleged must have affected the applicant. The result of that view is undoubtedly a widening of the area of application of the second paragraph beyond the case of misuse of powers which consists in “camouflaging” an individual decision behind the external features of a general decision but, as I observed in my earlier opinion (Case 3/54 and 4/54, Rec, Vol. I, p. 172), although the camouflaged individual decision is to my mind the only plausible explanation, it cannot prevent the text from being applied as it stands since, in practical terms, a strict interpretation would deprive applications brought by associations against general decisions of their entire scope. It is true that if the Court were to follow my suggestions as to the nature of individual decisions concerning associations that difficulty would in practice diminish since the number of general decisions affecting associations would itself fall; nevertheless, the objection remains valid.
3.
The remaining observations which I would like to make concern the actual concept of misuse of powers contained in Article 33.
(a)
I noted with satisfaction that the parties were in agreement on the definition of misuse of powers as meaning the use of its powers by a public authority to an end other than that for which they were conferred. At most, counsel for the applicants tend to prefer the word “aim” or “objective” to the word “end”.
How then is it possible to explain the total disagreement which reappears when it is a case of application and not simply of definition? How is it possible to explain that the applicants manage in each case to put forward a submission of misuse of powers at the same time as a submission of illegality?
It is at this point that the theory of the socalled “objective misuse of powers”, as opposed to that which is said to be based solely on a criterion of intention, comes into play. I must confess that I find that theory mysterious and, despite great perseverance, fail to understand it.
When I say that I do not understand the socalled “objective” theory that means that I do not understand how it can be based upon the classic definition to which I referred a few minutes ago.
Let me refer to that definition again: an authority makes use of its power to an end (or if you prefer, for an aim or in the pursuit of an objective) other than that for which the power was conferred.
That assumes, first of all, that the authority in question has a power and that it is discretionary, at least within certain limits. First, if it has no such power it cannot misuse it in relation to its lawful purpose, and, secondly, if its power is conferred under such conditions that it is legally bound to exercise it in one particular way and not in another, the question of misuse of powers cannot arise. The latter case represents what is known as “circumscribed power” (competence liée).
As regards the criterion of intention, if that phrase shocks or dismays certain minds I will not cling to it. There is clearly no question of “searching the heart and soul” and discovering the secret thoughts or reservations which the author of the decision may have had when he adopted it. Such psychological research would be expecially ridiculous, since, as in this case, the decision may be adopted by a collegiate authority. It is necessary to discover what was the end (or the aim or the objective) actually pursued by the author of the decision when he adopted it, so that it may be compared with that which he should have pursued and, until evidence is brought to the contrary, that which he is said to have pursued. Such evidence is not constituted by the consequences of the decision, certainly not by its illegality and still less by showing that powers have been exceeded — or else words no longer have any meaning.
How, then, is evidence to be brought of the end actually pursued? Such evidence may result from one or more material facts (such as correspondence, statements, etc.) which are consequently of a strictly objective nature, which demonstrate that the author of the measure did not have the lawful end (or aim or objective) in view but another which is unlawful.
(b)
I would like to make two further observations :
(I)
I quite accept (and I have never stated the contrary) that a misuse of powers may exist even where the end or aim to be pursued by the authority is defined by the law itself. Such a situation often occurs in the Treaty and it is precisely the case of Article 26 (2)(a) of the Convention which we are considering today. Of course nothing would be more arbitrary than to exclude misuse of powers on the sole ground that the end to be pursued is defined by a text. But it is only in so far as a power exists and is discretionary in character that it can be misused. If its limits are exceeded there is an abuse of power rather than a misuse (eccesso di potere, not sviamento di potere), which in the system established by the Treaty amounts either to lack of competence or infringement of the law (or both, since the rules governing competence are generally fixed by the law).
(II)
In support of an extension of the classic concept of misuse of powers for the application of Article 33 it has often been maintained that in practice that concept is never given positive application by reason of the nature and role of the authority required to take action to implement the Treaty. It is asked how the High Authority could conceivably lower itself to commit what is referred to as a “base” misuse of powers? To do so would reduce it to the level of a rustic mayor.
In my opinion that objection is totally mistaken.
First of all, to accept it is to forget that the great have sometimes great weaknesses…
Above all, it is to forget two things: the first is that the classic concept of misuse of powers is in no way restricted to the “base” cases (in order to avoid that excessive word let us rather say the cases in which a particular or individual interest has taken the place of the general interest). In its traditional form misuse of powers is also to be found in cases in which the aim pursued is perfectly honest or even perfectly lawful but is not that which was intended. The classic example in this instance is that of the use of police powers to further a financial interest. There is also what is known as “misuse of procedure” which is the use of a more simple procedure in order to avoid having recourse to the more inconvenient formalities of the procedure actually applicable. The second observation is that if misuse of powers is considered from that point of view, one can see that the High Authority is particularly susceptible to it. For example, is it not in a position to use its powers (or to refuse to use them) to promote the general economic policy of a Member State while neglecting the interests for which it is responsible? Is that not precisely the allegation made against it in the present case and have we not seen an exactly similar criticism made of the High Authority in another case which also concerns coal? Reference has already been made to it before the Court so I feel free to mention it. To exercise its powers against the interests of coal producers in order to make concessions to the policy, thought to be perfectly honest and based on the purest considerations of general interest, of a dynamic Minister for Economic Affairs, whether Belgian or German, is that not, if I might be allowed to use such an expression, a misue of powers which is absolutely “made to measure” for the High Authority? Whether or not such a misuse of powers is established is another question. What I wish to show is that it is not correct to maintain that the classic concept of misuse of powers is almost inconceivable under the Treaty. I consider the contrary to be true.
(ii) Application in this instance.
I must now apply those principles to the present case, examining the real nature of each of the submissions put forward.
In order to do so I shall refer to the list of submissions as set out on p. 12 of the reply by the three Campine undertakings, since it is there that it is the most complete and the question is primarily of interest to those companies (even solely of interest to them, if the Court follows my suggestions with regard to the individual nature of the decisions concerning Fédéchar).
The first submission—“The High Authority has misused its powers, or acted outside the area of its competence and/or infringed the Treaty, by imposing a pricelist on its own authority”.
The discussion on this point only concerns the question whether or not the texts and, in particular, Article 26 of the Convention enable the High Authority to draw up a price list “on its own authority”, without the agreement of the producers. It is entirely a question of legality and has nothing to do with misuse of powers. Furthermore, it concerns Decision No 22/55 which, in my opinion, is not individual in nature as regards the three undertakings. The submission may not be pleaded as set out in Application No 9/55.
The second submission—“The High Authority has misused its powers, or acted outside the area of its competence and/or infringed the Treaty by imposing reduced prices”.
On that point the applicants, maintain, first, that a structual reform cannot be brought about by means of an artifical reduction in selling prices, since such a reduction must result from a lowering of cost prices through investment, rationalization and modernization of the machinery of production, which should leave the under takings free to profit from a favourable economic situation when one occurs — which was the case at that time.
It is therefore necessary to discover whether or not the High Authority is entitled to fix reduced prices without taking the economic situation into account. That is a question which is unconnected with the aim of the text, which is to bring prices into line. Since it is not contested that the High Authority did indeed have the alignment of prices in view this cannot constitute a misuse of powers.
In relation to that same submission, the applicants claim that the High Authority was wrong to equate prices in the common market with those in the Ruhr.
That is an allegation concerning a mistake of fact in the interpretation of the term “common market prices” within the meaning of Article 26 (2)(a) and not a misuse of powers.
Here again the submission may not be invoked in its entirety by the three applicant undertakings.
The third submission—“The High Authority has misused its powers, or acted outside the area of its competence and/or infringed the Treaty by imposing reduced prices which do not take account of estimated production costs at the end of the transitional period”.
I have already expressed my serious doubts concerning the admissibility in procedural terms of that submission which the three Campine undertakings formulated expressly only in their reply.
That submission must in any event receive the same reply as the two preceding ones. The failure to take account of the estimated production costs at the end of the transitional period is not a misuse of powers but rather an infringement of Article 26 (2)(a), which provides formally for the obligation to take them into account.
The fourth submission—“The High Authority has misused its powers by acting under pressure from the Belgian Government, or, at the least, in order to attain objectives which form part of the policy of the Belgian Government but are foreign to the Treaty”.
The nature of that submission is typical of a submission of misuse of powers. If the Court shares my view of the interpretation of the second paragraph of Article 33 it will naturally accept that, assuming it to be proved, the misuse of powers “affects” the three applicant companies, which are the real victims of the process of selection. I consider that to be true for the whole of both decisions since they are indivisible both in law and in fact; as a result, in addition to the submission of misuse of powers, the three companies may plead all the submissions concerning legality, at least if the Court inclines to the argument which I put forward in my opinion in Cases 3/54 and 4/54 (Rec. 1954-1955, Vol. I, p. 148) and which is accepted by the parties to the present actions. Let us note that that advantage need not be purely academic, at least as regards the consequences of the judgment if not as regards its operative part, which can only order annulment. However, let me remind the Court that that submission, which is clearly distinct from all the others, was not raised, even indirectly, in Application 9/55. It can therefore be considered only in relation to Application 8/55.
The fifth submission—“The High Authority has misused its powers, or acted outside the area of its competence and/or infringed the Treaty by threatening to withdraw equalization payments from undertakings which refused to undertake the investments considered necessary or to carry out the exchanges of deposits”.
I have already said that the letter of 28 May is not individual on that point as regards the three companies, as they themselves acknowledge. Furthermore, the essential question is whether or not the High Authority is empowered to adopt such a measure, not whether by so doing it pursued an aim other than the alignment of prices, which appears to be indisputable. It does not constitute a misuse of powers.
The sixth submission—“The High Authority misused its powers, or acted outside the area of its competence and/or infringed the Treaty by making the payment of equalization independent of the price list and by imposing a price list while refusing to pay equalization”.
I consider that that submission cannot be separated from the seventh and last, which is as follows:
The seventh submission—“The High Authority misused its powers, or acted outside the area of its competence and/or infringed the Treaty by refusing equalization or by granting reduced rates of equalization to the three applicants, while imposing on them the same price list for the same types of coal as on the other producers”.
That submission concerns a passage in the letter of 28 May which, by general agreement, is in the nature of an individual decision as regards the applicants. On that point there is no doubt as to the admissibility of the application and all the submissions referred to in Article 33 may be raised.
In conclusion, I consider that Application 9/55 is admissible only as regards the decision depriving the three applicant companies of equalization or granting them only reduced equalization while imposing a price list on them. Furthermore, they admit that it is that point which is of the greatest interest to them. As regards Application 8/55, I consider it to be admissible as regards all the points and submissions put forward on the basis of Article 33.
Before concluding my consideration of these questions of procedure, I should like to make a final observation.
My examination of the submissions raised in Application 9/55 shows strikingly that if too wide a concept of misuse of powers is accepted, it becomes in practice indentical with the submissions of infringement of the law or lack of competence, with the result that undertakings and their associations would acquire the same rights of recourse against general decisions as Member States and the Council, In my opinion a consequence so obviously and directly contrary to Article 33 is sufficient to condemn such a wide interpretation.
I consider, however, that in so far as the interpretation which I am suggesting to the Court derives from a view of the individual decision which is at once broad and yet based on relationships it does not conflict with Article 33 but remains within the spirit of that provision, since it refers to the essentially relative concept of legal interest which forms the basis of the application for annulment. I consider that the perfectly legitimate effort to open access to our Court to the largest number of those who are subject to its jurisdiction must be made in that direction rather than by what I am tempted to call the “disintegration” of a concept such as misuse of powers which is in itself difficult to apply and which, whatever its importance, has never played more than a somewhat marginal role in applications for annulment.
VI — Discussion of the substance
I come — finally — to a consideration of the substance of the case. I propose to consider, first, the submissions concerning the lawful nature of the decisions and then the submission of misuse of powers and to group the former in an order somewhat different from that in which they were put forward by the parties in their applications, their replies (to which I have just referred) or their pleadings. Moreover, it is better to call them “complaints” rather than submissions.
Here then is the new order:
1.
The unilateral imposition of prices. That is the first complaint in the replies and is essentially based upon infringement of Article 26 (2)(a) of the Convention;
2.
Fixing of reduced prices without taking the economic situation into account. That is the first part of the second complaint in the replies;
3.
Severing of the relationship between equalization payments and the price list. A price list cannot be imposed if, at the same time, equalization is refused, nor can the same price lists be imposed on certain undertakings for the same types of coal as on other undertakings if they are refused equalization or granted only reduced equalization. Those are the sixth and seventh complaints in the replies;
4.
The threat to withdraw equalization payments. That is the fifth complaint in the replies;
5.
Error of the High Authority in determining the ruling common market prices, which are not those of the Ruhr. That is the second part of the second complaint in the replies;
6.
Error in the determination of the estimated production costs at the end of the transitional period. That is the third complaint in the replies;
7.
The submission of misuse of powers. That is the fourth complaint in the replies.
The first complaint— The fixing of prices by the High Authority on its own authority.
It is maintained that neither Article 26 (2)(a) nor any other provision of the Treaty or of the Convention enables the High Authority to fix alone, on its own authority and without the agreement of the producers, the prices of Belgian coal for the purposes of equalization.
First of all, let me put forward a textual argument based on the wording of the last sentence of paragraph (2)(a): “The price list so fixed shall not be changed without the agreement of the High Authority”. That provision can make sense only if the price list is not drawn up by the High Authority. By whom then may it be drawn up? In the absence of any indication to the contrary, by the producer alone.
In fact — and here one embarks upon an interpretation of the Treaty — the latter established a market system and a market economy in which prices are, in principle, freely fixed by producers, the role of the public authority being limited to ensuring that competition within the market is normal and, in particular, that is is not subject to discrimination. The objectives assigned to the Community by the Treaty must be achieved naturally by means of such free competition and the powers of intervention must not be exercised except in cases of necessity and under procedural guarantees expressly provided for that purpose. As Article 26 provides for no exception to those principles, none can be put forward especially since Article 1 (5) of the Convention provides expressly that the provisions of the Treaty shall apply upon its entry into force “subject to the derogations allowed by this Convention and without prejudice to the supplementary provisions contained in this Convention”. The Convention is, therefore, particularly susceptible to a narrow interpretation and in so far as it does not expressly grant special powers to the High Authority that body possesses during the transitional period only those attributed to it by the Treaty. As regards prices, those powers are provided for by Article 61 and nowhere else. They involve the right to determine maximum or minimum prices, but not fixed prices, and only after certain formalities have been carried out.
Finally, according to the practice followed before international courts such as the Court at The Hague the principle of strict interpretation described above is that which must always prevail in the case of international treaties.
I shall not spend long on that last point. Of course, it could be objected that our Court is not an international court but the court of a Community created by six States on a model which is more closely related to a federal than to an international organization and that although the Treaty which the Court has the task of applying was concluded in the form of an international treaty and although it unquestionably is one, it is nevertheless, from a material point of view, the charter of the Community, since the rules of law which derive from it constitute the internal law of that Community. As regards the sources of that law, there is obviously nothing to prevent them being sought, where appropriate, in international law, but normally and in most cases they will be found rather in the internal law of the various Member States. Have the applicants themselves not followed that latter path in the present action with regard, for example, to the concept of misuse of powers, of which it has become apparent that the national laws constitute an infinitely richer source than the really rather summary theory of “abuse of power”?
I consider it unnecessary to begin an academic discussion on that point since, whether in relation to international treaties or to internal laws, there is a commonly accepted principle to which I have already referred, namely that it is necessary to interpret and seek the presumed intention of the authors of a text only when the latter is obscure or ambigious and that when the letter of the law is clear it must always prevail. Although I am in no way a specialist in international law — and it is therefore with modesty and caution that I venture into that area - I have the impression that there are not in fact two separate doctrines for the interpretation of internal texts and of international texts but that in practice international courts have a tendency to be more timid than national courts in departing from a literal interpretation, a fact which is easily explained. First, the common will (the common intention of the parties), which must form the basis for the interpretation of a contractual document, is in most cases difficult to establish with certainty in the case of documents such as international agreements, which are generally the result of compromises reached with more or less difficulty and in which the obscure or imprecise wording often only conceals fundamental disagreements. Secondly, the so-called general principles of law are necessarily much more vague when sought in a world-wide context than when appeal may be made to the traditions followed in a single country.
I am, therefore, in full agreement as to the method of interpretation.
The essential question is, however, whether the text is clear and requires no interpretation. In that respect, the very existence of the present action and the ramifications to which it has given rise are sufficient to show that it is not.
“The price list so fixed shall not be changed without the agreement of the High Authority”. The text lays down a procedural requirement as a precondition for any modification of the price list, but it fails to state by whom the price list shall be drawn up and the bases for it established. It is therefore necessary to interpret the text in order to fill that lacuna. Even though the Code Napoleon is not applicable here I cannot refrain from recalling Article 4, un der the terms of which “the judge who refused to judge on pretext of the silence, obscurity or insufficiency of the law, may be prosecuted as guilty of a denial of justice”. The Court is aware of the arguments in this case. I have recalled that put forward by the applicants. As regards the High Authority, it maintains that since it is responsible for the proper functioning of the equalization system, which is an authoritarian method of intervention imposed by the Convention to allow the Belgian coal market to be integrated into the common market by the end of the transitional period, it is alone qualified to fix prices to the extent necessary to achieve the end defined by the text. Such a measure can be adopted only by a public authority and it is impossible to leave responsibility for it to the initiative of producers.
In order for the picture to be complete I must also refer to a third argument. It derives from the statement of grounds for the Netherlands Law of Ratification which, in relation to Article 26, states that: “The equalization payments which Belgium is to receive from the equalization funds are to be used for three clearly defined purposes: the first relates to the aforementioned rationalization. It consists in allowing prices of Belgian coal to the consumer to be adjusted from the beginning of the transitional period to the level foreseeable at the end of that period. That level, which must necessarily be estimated, shall be fixed by the Belgian Government in the form of a price list which shall be valid for the whole of the transitional period unless the High Authority authorizes its modification999’.
I shall consider the substance of the argument of the High Authority in relation to the second complaint. For the moment, however, I am dealing with one problem alone: who has the power to fix the price list if there is no agreement between producers and the High Authority?
Let us note, first of all, that the parties agree in setting aside the application of Article 61. The High Authority acknowledges that it was wrong to refer to that provision in its first decision, No 24/53.
I share that point of view: the application of Article 26 (2)(a) concerns the establishment of fixed prices and not of maximum prices. That remains true whatever one's opinion as to the nature of the equalization system and the manner in which it must attain its objective, whether by the free play of economic forces or by supervisory action by the public authority.
Even if one accepts the first view, differences of opinion may exist as to the level at which selling prices must be fixed and it is impossible to imagine that those levels, which are necessarily related to the amount if not to the allocation of the equalization payments, should be freely fixed by the producers, while under Article 25 the High Authority is to determine the total amount of the levy to be actually charged ‘taking into account needs recognized by it’. Furthermore, the applicants do not hold that opinion. They claim (see the reply, p. 18) that ‘the fixing of a price must result from a joint consideration of the question, at the end of which the High Authority gives its agreement’.
However, the question immediately arises: what happens if there is no agreement? No reply was given to that question during the written procedure. However, one of the advisers of the Fédéchar gave us the reply during the hearings. He said that it is quite simple; if there is no agreement, no equalization payments are made, at least not to the undertaking which has refused its agreement. It follows that if all the undertakings refused their agreement there would be no equalization at all.
That result is sufficient to condemn the argument, since it cannot be accepted that the will of the producers alone may paralyse the operation of a system which was compulsorily established by the Treaty and is regarded by it as indispensable to the integration of the Belgian coal industry into the common market. As we have seen, the Convention provides expressly that the Belgian Government is alone empowered to oppose the operation of that system, which is quite understandable, since such an important decision may clearly be adopted only by the responsible political authorities of the country.
Thus, the power to take decisions can belong only to a public authority. Is that authority the High Authority or, following the argument which emerges from the statement of grounds for the Netherlands Law of Ratification, is it the Belgian Government? In the absence of any express provision conferring such a power upon it, I do not believe that it can be the Government. In my opinion it can only be the High Authority, since under Article 8 of the Treaty ‘it shall be the duty’ of that body ‘to ensure that the objectives set out in this Treaty are attained’ and under Article 84 the word ‘Treaty’ also covers the Convention on the Transitional Provisions. It is true, however, that Article 8 adds: ‘in accordance with the provisions thereof’, which refers to both procedural and material provisions. In this instance there are material provisions which define the aim of the equalization scheme but it clearly cannot be concluded from the fact that there are no specific procedural provisions that the decision-making power does not exist.
Then there remains the objection based on the wording of the last sentence of Article 26 (2) (a). If the price list “shall not be changed without the agreement of the High Authority” that implies that it is not established by that body or, at all events not by that objection is as follows: a distinction must be drawn between the price list and the bases on which it is fixed. The price list is the normal list which the undertakings are bound to make public in pursuance of Article 60. I shall not continue with a discussion of the concept of the price list, which the Court has had the opportunity to develop fully in another action. The very heading of Decision No 22/55 relates to “the establishment of price lists for the undertakings in the Belgian coal-fields”, which clearly refers to Article 60. In fact, there is only one price list for all the Belgian coal-mining undertakings, which is that established by the Comptoir Beige des Charbons (Belgian coal agency), a copy of which appears on the file. That fact clearly explains the use of the singular in Article 26 (2) (a), which states: “the price list so fixed…” As regards the bases on which that list is fixed, they are established by the High Authority on the basis of Article 8 of the Treaty for the reasons to which I have referred. It does so by drawing up a table of prices. The text therefore becomes clear: evidently, the undertakings' price list must set out all the prices which appear in the table drawn up by the High Authority but, as is shown by a comparison between the two documents, the undertakings' price list is much more detailed since, first, it determines the ‘conditions of sale’ which attach to the statement of prices and, secondly it fixes directly the prices of the types of coal which have been liberalized. Moreover, the copy produced states that expressly: ‘This price list (that is, the present price list) sets out the prices given in Journal Officiel No 12, which publishes Decision No 22/55 of the High Authority. Prices for the types not set out in that decision have been fixed by the producers concerned’. It is that price list established by the producers which cannot be changed without the agreement of the High Authority, at least (and this appears to go without saying) in so far as modification thereof affect the ‘bases’ which are fixed in the table of prices drawn up by the High Authority. In short, it constitutes an exception to the provisions of Article 60 which is intended to ensure that the undertakings' price list remains in accordance with the decisions of the High Authority.
The second complaint, which is in the nature of an alternative to the first: Even if it is accepted that the High Authority is empowered to fix prices of its own motion, it is not empowered to fix reduced prices without taking the economic situation into account.
It is on this point that the fundamental difference of opinion between the parties in terms of economics appears.
The applicants acknowledge that, like the other aids with which it is connected (loans under the Marshall plan, reduction of rates of interest, etc.), the equalization payments are intended to bring about indispensable structural reforms. They maintain, however, (reply, p. 21) that ‘structural reform is not brought about by an artifical reduction of selling prices but, by means of investment, rationalization and modernization of the machinery of production, by enabling cost prices to be reduced, which must under normal circumstances result in the reduction of selling prices, that is, in a strengthening of the competitive position’. They add that the High Authority acknowledges that at the time in question (that is, on 17 November 1955) Belgian coal could be marketed at the prices stated in the old list, or even at considerably higher prices. Furthermore, when the decision was adopted that coal was marketed in the common market at the prices fixed in the old list without the producers' having to apply for equalization under subparagraph (c) (which is reserved for exports). Where the economic situation is favourable, therefore, there is not reason to fix reduced prices; producers should be permitted to profit from such a situation, which will enable them to increase or at least to maintain their level of receipts and, consequently, to continue with their effort at modernization under the most favourable conditions. The desired reduction in cost prices will then come about by itself.
The defendant maintains, on the other hand, that purely short-term economic fluctuations must not be taken into account. It is the duty of the High Authority to act on its own authority to bring prices into line, so as to create gradually the proper conditions for the integration of the Belgian market in coal into the common market at the end of the transitional period. In doing so it cannot rely either on the goodwill of producers or on the unforeseeable circumstances of the economic situation.
I believe that the Court must choose between those two arguments.
The wording of Article 26 (2) (a) is entirely silent as regards the extent of the powers of the High Authority. It merely explains the purpose of what if refers to as ‘the equalization arrangements’, that is, in fact, the equalization payments. Thus the limit of the High Authority's powers are to be found solely in the requirements of the objective thus defined. The lawful nature of the decisions adopted is dependent upon those requirements, which means that in order to ensure the protection of the rights of those who are subject to its jurisdiction and who would otherwise be exposed to quite arbitrary treatment the Court must deal with the question — subject, of course, to the limitations set out in Article 33. As regards that point, I consider that the question so raised does not concern the ‘evaluation of the situation, resulting from economic facts or circumstances’ which formed the basis of the contested decisions: it is a question of principle and of legality.
My position is in accordance with that of the High Authority. I consider that the rules for the operation of the common market as defined in Articles 3 and 4 of the Treaty and in the light of which the provisions of the Treaty itself (such as Article 60) must be interpreted are no longer valid precisely when it is a question of bringing about the integration of an industry which is not in a state to meet competition on that common market. In such a case measures of State control — let us not retreat before that expression — become absolutely necessary. The aim of the Convention is to enable them to be adopted. Article 1 shows that clearly when it states that: ‘The purpose of this Convention … is to provide for the measures required in order to establish the common market and enable production to be progressively adapted to the new conditions, while helping to eliminate disequilibria arising out of the former conditions’. In short, the rules of a market economy are valid only in so far as the market exists. They are not sufficient to create it when it does not exist, or only at the risk of serious disturbances. In fact, the aim of the transitional provisions is precisely to avoid such disturbances by the adoption of appropriate protective measures, while enabling integration to be achieved within a certain period. It is quite clear that such a delicate operation can be undertaken only by a public authority. That emerges from the very wording of Article 26 (2) (a), which states that the equalization arrangements shall be designed, from the beginning of the transitional period, to bring the prices of Belgian coal more nearly into line with the ruling common market prices. Whether or not the prices have been fixed at a level below those of the common market (I shall consider that point shortly) is another question; but it is to my mind quite clear that the High Authority must attain the objective of bringing prices into line, without its having to take account of purely short-term fluctuations in the economic situation.
The third complaint — This is the question of the severing of the relationship between equalization payments and the price list and the problem of selectively.
The applicants maintain that there is a necessary connexion between the fixing of the prices and the amount of the equalization payments, whose aim is to maintain the undertakings' level of receipts so as to enable them to continue with their efforts to re-equip and modernize. The fixing of prices is justified only by the application of the equalization scheme. As is stated in the reply of the Fédéchar (at p. 35) ‘it is the right to equalization which is the decisive legal reason for the obligation on the undertakings not to modify their price list without the agreement of the High Authority’ and, clearly, that argument is even stronger if it is accepted that prices may be fixed by the High Authority without the agreement of the producers.
Furthermore, in the applicants' opinion it follows from the above that it is impossible to impose a price on an undertaking while at the same time refusing to pay equalization or to reduce or abolish equalization for one type of coal while maintaining a fixed price. The procedure known as ‘selectivity’ is thus said to be illegal.
That argument derives directly from the applicants' economic view of equalization which I have already analysed and which states that (see Fédéchar reply, at p. 37) ‘the aim of the equalization arrangements is therefore in principle to maintain the level of receipts of all the Belgian mines, despite the reductions in price which they are required to grant in the immediate future, and thus to ensure that those mines have available the financial means regarded as indispensable for the implementation of their programme of re-equipment, subject, of course, to the progressive reduction in equalization provided for by the Convention’. Thus, from the moment that the liberalization of prices is likely of itself to en sure the maintenance of the level of receipts, equalization may be abolished, and there is therefore no longer any legitimate reason for maintaining reduced prices artificially. The High Authority acknowledged that by liberalizing house coals at the same time as it abolished all equalization payments in their favour. How could it act differently in relation to the unclassified Category B high volatile bituminous coals extracted by the three applicant undertakings?
On all those grounds selectivity is said to be contrary to the provisions of Article 26 (2) (a), at least where it is not accompanied by a corresponding liberalization of prices. Furthermore, it infringes the fundamental rule against discrimination laid down in Article 4 of the Treaty.
It is also claimed that by its nature a system of equalization excludes any arbitrary or ‘selective’ power of distribution, as is the case as regards the national equalization schemes provided for by the Convention (Article 24 of the Convention). It is observed, finally, that the two other procedures for granting Belgian equalization, known as equalization under subparagraphs (b) and (c), apply generally which confirms the necessarily global character of that equalization, including that payable under paragraph (a).
I shall not spend time on those latter arguments, which have been convincingly refuted by the High Authority both in the written procedure and at the hearing. I shall merely observe that what is termed ‘equalization’ is never more than a financial arrangement, the basis of which is to be found in Article 53 of the Treaty.
That article in fact enables the High Authority either to ‘authorize the making, on conditions which it shall determine and under its supervision, of any financial arrangements common to several undertakings which it recognizes to be necessary for the performance of the tasks set out in Article 3’ or ‘itself [to] make any financial arrangements serving the same purposes’. In the first case it is required to consult the Consultative Committee and the Council; in the second case it must obtain the unanimous assent of the Council.
One must not be surprised at the fact that the Convention laid down no procedural requirements as regards the equalization arrangements introduced for the benefit of the Belgian and Italian collieries. Consultations or preliminary opinions were clearly superfluous since, in that specific case, the financial arrangements were made by the authors of the Convention themselves. The text in fact lays down the rules governing those arrangements, both as regards receipts (Article 25) and expenditure (Articles 26 and 27). However, the High Authority remains empowered to fix the conditions and review the wording of the arrangement; in other words, it is for the High Authority to fix the practical details for the application of rules thus laid down by the Convention in so far as is necessary to achieve the purpose defined by those rules.
Thus I return once more to the requirements of the objective to be pursued, which are regarded as a condition of the legality of the measures adopted.
As regards the principle of selectivity, I really have no doubts at all. Under Article 25, it is for the High Authority to determine periodically the amount of the equalization levy. It does so, according to the text, ‘taking into account needs recognized by it, in accordance with Articles 26 and 27’.
If one accepts what I have termed the ‘State control’ argument, it seems clear that the needs which must be taken into account by the High Authority are those involved in the modernization and re-equipment of undertakings which, by reason of their operating conditions, are not yet in a state to meet competition on the common market, although they may be so in the future. It is therefore quite proper for both those undertakings which do not or which no longer ‘need’ aid in order to make that effort and those which, on the other hand, have no chance of achieving integration, to be excluded from the equalization scheme. That is not discrimination but the application of distributive justice. I will even go so far as to say that if there is cause for surprise it is in the fact that the High Authority allowed a good part of the rather short transitional period to pass before taking that line of action.
But there then remains the question whether it is possible to deprive an undertaking of all equalization subsidies in respect of certain types of coal, while at the same time keeping it within the system of fixed prices for those same types. Is that not both a disregard of Article 26 (2)(a) which links the establishment of compulsory selling prices to the existence of equalization payments and an obvious contradiction, since to acknowledge that an undertaking no longer needs equalization is, it appears, to acknowledge thereby that it is in a state to meet competition in the common market, in other words that it has become competitive?
That is a difficult question and I confess that for a long time I hesitated over the solution to it. However, finally, I consider that the High Authority's argument is justified.
First — and this answers the first part of the argument — it must not be forgotten that Article 26 (2)(a) has a dual purpose: the first, which is the most important, concerns the fixing of prices which, from the beginning of the transitional period, must be brought into line with the ruling common market prices so that consumers of Belgian coal may immediately benefit from the prices on that market or from prices approaching them. In short, for Belgian and other consumers the problem is held to have been resolved. However, and this is the second purpose, that measure is accompanied by a safeguard clause in favour of producers to enable them not only to avoid bankruptcy but also to pursue their efforts at adjustment is such a way that, in conjunction with the effect of the other measures provided for, the Belgian market is integrated at the end of the transitional period when the aids cease.
The first and essential aim is not achieved if within the Belgian market all consumers cannot obtain for the same types of coal prices approximating to those ruling on the common market to which they are entitled. We are told, however — and this is the second part of the objection — that the common market price has been reached, since certain types of coal may be freely sold by certain undertakings without the aid of any equalization. At least, it has been reached as regards those types and in so far as they are produced by those undertakings. Why should the reasoning on that point be any different from the reasoning applied to house coals, the prices of which were entirely liberalized at the same time as they were deprived of all aid by way of equalization?
In reply one might say that it is impossible to allow a dual price to exist for the same types of coal within the Belgian market in which all sales are carried out by a single selling agency, which, as we have seen, publishes only one price list. That is the consequences of the uniformity of the Belgian coal market during the transitional period. However, I do not consider that reply to be conclusive.
In my opinion the correct reply and the one which has convinced me is that the types of coal for which fixed prices have been maintained, despite the fact that certain of the undertakings which produce them have been deprived of the equalization subsidies, are not yet competitive and that only the economic situation prevailing when the contested decision was adopted would have enabled them to be sold freely by those undertakings.
On the other hand, house coals may already be considered as integrated into the common market. Why? Because under normal conditions and apart from movements caused by the economic situation the Belgian producers of those have the largest exportable surplus of house coals available in the common market. For those types, therefore, the prices of Belgian house coal may in any event be considered as the market prices. There can therefore be no question of those prices being ‘brought into line’.
As regards industrial coals, on the other hand, it may be concluded from the same economic data that it is the Ruhr producers who, under normal circumstances, have the greatest exportable surplus available in the common market and who guide and determine the ‘market price’ for those types. The desire to make Belgian industrial coals structurally competitive (and not merely temporarily competitive as a result of the short-term economic situation) in relation to the ruling common market prices therefore requires their prices to be reduced to a level which enables them to withstand competition from the industrial coals of the Ruhr. Even if wages and social security charges are assumed to be equal, the differences in costs between those two categories shows the need to adopt measures which will bring Belgian industrial coals ‘into line’ since on this depends their final integration into the common market. It may therefore be said that Belgian house coals could legitimately be left off the price list, since their prices constitute the market price which is the ideal sought by Article 26 (2)(a), while the prices of Belgian industrial coals had properly to be kept on the list and reduced, without regard to the possible award of equalization to any given producer of those types, since the prices for those coals remain considerably higher than the market price, which is, in any event, represented by the price of industrial coals from the Ruhr.
To accept that the corollary of the abolition of equalization payments to the collieries of the Campine should have been to allow them to liberalize prices would be to fail to understand the exact nature of the aim of bringing ‘prices more nearly into line with the ruling common market prices’ which is a mandatory requirement of Article 26 (2)(a).
That is why I consider both the principle of selectivity and the maintenance of fixed prices for industrial coals to be justified, even as regards those undertakings which have been deprived of equalization as the result of the application of that principle. Of course, it is still necessary to discover whether harmonization of the prices has been correctly calculated: that is what I shall consider in my examination of the fifth and sixth complaints.
As regards the application of the principle of selectivity itself two questions arise:
1.
Are the acknowledged criteria correct? Let me remind the Court that, contrary to the proposals of the Joint Committee which were not followed on that point, the financial position of the undertakings was not considered. The criteria put forward were purely objective, namely, the concentration of mining operations on a single level and in a single pit. Perhaps other criteria could have been chosen in order to arrive at a greater degree of selectivity. The equalization payments could perhaps have been distributed between the undertakings according to criteria based on the urgency of their respective needs, rather than as before in proportion to the tonnages of each category and type of coal, with an exception in the case of only three undertakings. That would have been a logical application of the new system, based on selectivity. Those are, however, discretionary questions which in my opinion fall outside the power of review of the Court.
2.
In order for the system to remain lawful it is clearly necessary that the abolition of equalization payments or the reduction in the amount of those payments to certain undertakings, without any corresponding liberalization of prices, should not paralyse those undertakings' efforts to re-equip and modernize. If it did so, it would prove in effect that the decision adopted in their case was based upon an error of fact. However, no such error has been proved or, if the truth be told, formally alleged.
The fourth complaint— Threat to withdraw equalization payments.
I shall be brief in my consideration of this point.
If one accepts the legality of the principle of selectivity and the fact that equalization aid is paid on the basis of need — not the need of all the coalfields but that of each one individually in so far as that aid is intended to enable it to make the necessary efforts to re-equip and modernize — it is quite justifiable, in return, to provide for a power of review and for sanctions. Such sanctions are neither penal nor even administrative (the latter could not be introduced by a mere decision) but consist in depriving the undertaking which does not attain the objective for which that aid was granted of the benefits thereof. That is the normal rule as regards any machinery for the payment of subsidies.
I now come to the two final complaints concerning the legality of the decision. those based on the fact that the two lower limits fixed by Article 26 (2)(a) for the determination of prices — that is, the ruling common market prices and the estimated production costs at the end of the transitional period — were in fact exceeded.
The fifth complaint— Error committed by the High Authority in determining the ruling common market prices
A — The argument put forward by the applicants may be analysed as follows:
(a)
By equating prices in the Ruhr with those ruling within the common market, the latter being the final objective of the alignment of prices, the High Authority is committing an obvious error. The prices ruling in the Ruhr are only one of the prices at which industrial coals are sold on the market and furthermore it is not a price freely determined by the effect of supply and demand. Until 1 April 1956 a decision of the High Authority kept Ruhr prices at an artificially low level and even at a level below actual production costs. Although they have since been liberalized, action by the German Government has curbed their rise, limiting it to 2 German marks when it would normally have reached an average of 6 German marks if it had been able to react freely to pressure on a real competitive market.
Prices for industrial coals extracted in the Nord, Pas-de-Calais and Aix-la-Chapelle coalfields are comparable to the Belgian prices and apply to the same volume of output. It is therefore difficult to see why Belgian prices should be the only ones to be brought into line with those of the Ruhr.
(b)
It is, in fact, the standstill level at which Belgian prices were fixed in 1953 which reflects both estimated production costs for Belgian coal at the end of the transitional period and the ruling common market prices at that time, since the natural consequence of the free play of competitive forces in the market and, in particular, of the pressure of wages in Germany, must be to bring prices in the Ruhr to that level and thereby to achieve the alignment which is the objective of Article 26 (2)(a): alignment need not take place only in one direction.
(c)
The applicants maintain that their argument is justified by the statistics for the trend in prices of industrial coals between 1952 and 1956 both in the Ruhr and in Belgium. The table showing the comparative evaluation of the prices of coking smalls in the Community since 1952, which they produced at the hearing (and which they are asking the Court to substitute for the table produced by the High Authority) clearly shows that the prices of cleaned smalls from the Ruhr have increased considerably since 1952 (565 francs in 1952, 627 francs in 1956, thus rising from 100 points on the index to 111 points) while prices for the same types of coal produced by the Belgian coalfiels dropped from 716 francs to 691 francs (and even to 671 francs for cleaned fat coal A) which reduced the index fixed at 100 points in 1952 to 96 and 94 respectively. If the sum of 2 German marks borne by the German Treasury by way of tax refund and transport costs (2 German marks per metric ton) is also added to the Ruhr prices it appears that once the industrial coals from the Ruhr have entered Belgium they are sold at a price which is very little different from the Belgian prices and that therefore the High Authority's misgivings are without foundation.
B — What is the High Authority's reply to that?
(a)
As regards the choice of the Ruhr, the High Authority maintains that it never purely and simply equated Ruhr prices with the ruling common market prices as is alleged and it observes that such an equation is not mentioned anywhere in the contested decisions. As regards industrial coals, however, it appears to be the Ruhr producers who determine the market price, since in a normal economic situation or during a recession it is they who have available the largest exportable surplus capable of competing with the output of foreign mines on their own markets and, in particular, on the Belgian market on which they are the single most dangerous competitor.
In any economic situation the French market is traditionally a net importer (12 million metric tons per year). Its additional needs must be satisfied either by coal from the Ruhr or by Belgian coal. If, therefore, under normal conditions, Belgian coal is to be able to meet competition from the Ruhr on the French market, then the prices of that coal must clearly be brought into line with Ruhr prices.
In fact (and the Belgian producers recognize this themselves) of all the producers in the common market it is the Ruhr producers who compete most strongly in the Belgian market and will continue to do so. The ruling Ruhr prices must therefore be used as a point of reference when bringing prices into line, especially as regards industrial coals with which they are major competitiors on both the Belgian market and the external markets, in particular in France.
(a)
As regards the second argument, the High Authority states that it does not share the applicants' optimism. If German prices were to rise, a rise in Belgian prices could not be ruled out, at least if the information given out by the press agencies is to be believed.
(b)
At all events, the High Authority considers that it cannot rely entirely on the rise in German wages to bring prices into line. It has been calculated that if in 1952 wages and social security charges in the Ruhr had been brought up to the Belgian level, the labour costs per metric ton produced in the Ruhr would have reached only 66 % of those costs in Belgium. The rise in German wages is therefore a factor of limited importance as regards the alignment of prices, and even absolute equality of wages and social security charges is not alone sufficient to achieve it. Furthermore, the High Authority knows from experience that although wages have risen in the Ruhr, social security charges do not remain stationary in Belgium. It refers, for example, to the repercussions to be expected from the introduction of the five-day week in the Belgian mines.
(c)
As regards the figures, the High Authority states that if the decision in question is considered from the point of view of the period at which it was adopted and reference is made to the table produced by the applicants themselves, it can be seen that in the Ruhr in 1955 the price of coking smalls was, in absolute terms, 605 francs and that in Belgium it was 691 francs for fat coal A and 671 francs for fat coal B. As the High Authority adds, those ‘figures make further comment superfluous’.
C — What view is one to take of this discussion?
First, on the question what is to be understood by the term ‘ruling common market prices’ I consider, as I have already said, that as regards a specific type of coal the criterion based on the ‘greatest exportable surplus’ is valid.
As regards the application of that criterion to determine the level of market prices for industrial coals, it clearly depends on an assessment of a situation which arises out of economic facts and circumstances. Thus the Court can review that assessment only in so far as it reveals either the existence of a misuse of powers (which we shall see shortly) or ‘a manifest failure to observe’ a rule of law.
As the Court stated in its judgment of 21 March 1955 in Case 6/54 (Government of the Netherlands v High Authority of the European Coal and Steel Community, Rec. 1954, Vol. I, p. 201 at p. 225), ‘the term “manifest” presupposes that a certain degree is reached in the failure to observe legal provisions so that the failure to observe the Treaty appears to derive from an obvious error in the evaluation, having regard to the provisions of the Treaty, of the situation in respect of which the decision was taken’.
That is certainly not the case in this instance.
First, the Belgian producers themselves acknowledge (see the statement quoted by the High Authority in its rejoinder at p. 65 which is not disputed) that under normal conditions the Ruhr is traditionally ‘the’ dangerous competitor, both on the Belgian market and on the export markets, since it ‘makes’ the price on those markets. The structural integration of Belgian coal into the common market thus requires the adoption of the measures necessary to render Belgian industrial coals able to compete with Ruhr coal.
Secondly, the figures put forward by the High Authority — which have not been contested by the applicants' advisers — for the respective labour costs, wages being equal, in the cost price of Ruhr coal and Belgian coal, clearly show that merely to equalize wages is not sufficent to bring about the ‘lasting’ alignment which is to enable Belgian coal to be integrated into the common market.
As regards the difference in price between Belgian smalls and Ruhr smalls in 1955 as it appears from the table provided by the applicants, it can be disregarded only if dangerous assumptions are made as to the possible influence in the context of an ideal competitive market of the free exercise of the law of supply and demand aided by the short-term economic situation on the price of coking smalls from the Ruhr, it being understood that those assumptions may be proved false at the least fluctuation in the economic situation.
In short, the complaint cannot be accepted either as regards the role assigned to the Ruhr as the basis for determining the ‘ruling market prices’ for industrial coals, or as regards the assessment made of the level of those prices.
The sixth complaint— Error committed by the High Authority in determining the estimated production costs at the end of the transitional period.
A — The applicants claim that by imposing a further reduction in the prices of Belgian coal by Decision No 22/55 the High Authority went beyond the limit of the estimated production costs at the end of the transitional period and thereby infringed the provisions of Article 26 (2)(a). That argument may be summarized as follows:
(a)
The assessments made in 1953 of the estimated costs of producing Belgian coal at the end of the transitional period showed a possible reduction of 29 francs per metric ton in relation to 1952. A reduction of the same amount was immediately made in the system linking the price of coal to the payment of equalization which was set up in 1953. The price lists were thus brought to a ‘standstill level’ which was to remain unchanged until the end of the transitional period since that one reduction has reached the permitted limit.
(b)
It is true that the applicants acknowledge that the real increase in output noted in 1952 and 1955 exceeded the initial estimates. Nevertheless, they maintain that the reduction in costs which should normally have resulted did not take place as a result of the rises in wages and the cost of materials which took place during the same period. In fact, the real cost in 1955 is higher than the original estimates and that fact is sufficient to prevent any fresh reduction in price and even to justify an increase in the prices fixed in 1953.
The applicants regard it as quite reasonable that when costs were estimated in 1953 wages and social security charges and the prices of products and materials used in the mines were assumed to remain constant for five years. They maintain, however, that it is inconceivable that when the estimated costs were revised in 1955, the rises in salaries and in the price of products and materials which had taken place in the intervening period were not taken into account, since they were no longer unforeseeable factors but rather concrete information which had to be taken into account in estimating cost prices.
B — What is the High Authority's reply to that?
(a)
As regards the first point, it maintains that the Belgian producers themselves anticipated in 1952 that the increase in output to be expected in 1956 as a result of the implementation of the programme of reequipment would make possible a saving of 90 francs per metric ton extracted. With the agreement of the Belgian Government the High Authority preferred to hold provisionally to a price reduction of only 29 francs although it reserved to itself the power to make further reductions later if the gradual implementation of the programme confirmed its inital estimates. The reduction ordered in 1953 cannot, therefore, be regarded as having reduced Belgian prices to an unalterable standstill level below which it was accepted that prices would not further be reduced.
(b)
As regards the second point, the High Authority does not deny that wages rose between 1953 and 1955. Furthermore, it took that fact into account when it authorized a general increase of 3 francs in the price of Belgian coal in 1955. However, such increase in wages and the cost of materials, which are by their nature unforeseeable, are not included in the calculation of the estimated costs required by Article 26 (2)(a). The estimated costs within the meaning of that provision can be calculated only on the basis of the improvements in output which may be anticipated during the transitional period, all other factors (basically wages, social security charges and the cost of raw materials used in mining) remaining equal. To wish to take account at the outset of possible modifications in labour costs as a result of possible wage rises would prevent the preparation of the economic forecast which must be made at the beginning of the transitional period.
On that view, although the wage rises which took place between 1953 and 1955 could, where appropriate, have led the High Authority to order part of their effect to be devolved upon selling prices, they did not render it necessary to revise the estimates of production costs for 1958, which were based in 1953 on the progress to be expected, caeteris paribus, in the implementation of the re-equipment programme. On that basis, the figures put forward by the applicants in Column G of the table show that production costs, calculated on the assumption that wage levels would remain constant, fell between 1952 and the first quarter of 1955 from 452 to 409 francs per metric ton, which represents a real reduction of 43 francs. The cumulative effect of the reductions ordered in 1953 and 1955 (29 francs + 10 francs), that is, 39 francs, therefore remains within the limits of the cost reductions calculated at the date of the contested decisions. Fur thermore, the reduction in costs thus calculated on the basis of a constant level of wages takes account solely of the programme of re-equipment as implemented (which raised output from 753 kg. in 1952 to 826 kg in 1955) and disregards the expected beneficial results of the so-called ‘negative rationalization measures’ and the programme of modernization for the marginal mines. On the basis of the implementation of those measures and the fresh improvements in output which will take place between now and the end of the transitional period it may be maintained a fortiori that the reduction ordered in 1955 does not exceed the limit of estimated production costs at the end of that period.
C — Such are the two arguments put forward
There appear to me to be two questions involved in the complaint under consideration, one of which concerns the law and the other the facts.
(a)
The question of law concerns the meaning of the phrase ‘estimated production costs’ as used in Article 26 (2)(a) and, in particular, whether or not in determining those costs account must be taken of factors other than those which relate to output and are therefore likely to diminish as a direct consequence of the improvements in output brought about by the implementation of plans for re-equipment and modernization.
On that question I share the view taken by the High Authority. The single concept ‘production costs’ clearly includes all the elements of the cost price, among them wages and social security charges, and the price of raw materials. On that point the applicants could have relied on the authority of the President of the High Authority who, during a statement recently made at Strasbourg to the Joint Assembly, referred to ‘the rise in the price of coal, rendered necessary by the increase in production costs and, in particular by wage increases…’.
However, it is clear — and the parties agree in acknowledging this — that those factors can be included in the calculation of the production costs only as they exist at the moment when the calculation is made. As regards the estimate of the same costs in the future, no account can be taken of unpredictable factors or, at least, of their possible variations. Reductions in costs may be calculated only in so far as it is possible to draw up a plan based on concrete facts. Those factors whose variations are unpredictable will be taken into account only if all other factors remain equal.
I regard that interpretation as the only one compatible with Article 26 (2)(a), for two reasons. The first is the use of the word ‘estimated’ in that article. An ‘estimate’ can be made only in relation to ‘predictable’ factors (economics is certainly not an exact science but it is nevertheless not an occult one). The second is that the aim of the equalization arrangements is to reduce cost prices to the extent that such reduction is made possible by an improvement in output: it is therefore the production costs, in so far as they are capable of reduction as a result of the predictable improvement in output, which must form the basis for the estimate.
However,—and this appears to be in fact the only point on which the parties still disagree — what is to be done where one of the ‘unpredictable’ factors varies (for example, where there is a wage rise)? Must the estimate be remade, taking into account the modifications which have thereby taken place or, as the High Authority maintains, may those rises be compensated either by price increases or by the grant of subsidies, or by a combination of the two, but without affecting the estimates already prepared?
In the light of my remarks concerning the concept of ‘estimated production costs’ within the meaning of Article 26, which, from the beginning of the transitional period, must serve as the basis for the preparation of an estimate based solely on the reductions in cost prices to be expected from an increase in output, I consider that a logical application of the system requires that the estimate should not be revised each time that circumstances bring about changes in factors which are not connected with the improvement in output, that is, in unpredictable factors. To do so would be to risk applying prices which not only depart from those ruling in the common market but also no longer bear any relation to those prices, since they are linked to events affecting Belgium (such as variations in wages), that would be directly contrary to Article 26 (2)(a) whose prime object is, as I have said, to enable consumers to benefit immediately from prices in line with the ruling common market prices.
It is, of course, not unnatural for selling prices to be increased when a change occurs in the ‘unpredictable’ factors, but there must on no account be any change in the aim of bringing prices into line on the basis of an improvement in output in all the Belgian collieries. Only if errors are recognized in the assessment of predictable factors may they be corrected. That may, however, occur at any moment and quite independently of posssible changes in the unpredictable factors.
(b)
The question of fact concerns whether, in the light of the powers of the High Authority — the limits of which I have just attempted to trace — errors occurred in its assessment of the estimated production costs at the end of the transitional period.
On that point the replies given by the parties to the questions raised by the Judge-Rapporteur show that if my interpretation is accepted, the prices fixed in May 1955 remain in any event higher than the estimated production costs for 1958.
However, even if the applicants' method of preparing the estimate were followed in preference to my interpretation, I do not consider that they could be regarded as having produced proof that the limits were exceeded. In fact, the estimates provided by the applicants in the course of the proceedings have varied somewhat. Thus, for the first quarter of 1955 the real cost of fat and 3/4 fat coal is 669 francs, although the diagram produced in an annex to the application showed a figure of 699 francs for the same period, which represents a difference of 30 francs between the estimate and the real figure for a target period of less than one year! Can it be accepted that the sum of 10 francs at which, on the most favourable hypothesis, the applicants arrive when they compare actual prices with the estimated costs for 1958, that is, three years later, is not within the limits of the area of uncertainty inherent in such estimates? I do not think so.
In short, I consider that the applicants have not shown that the limits fixed by Article 26 (2)(a) for the reduction in prices have been infringed.
I therefore suggest that the Court should set the sixth complaint aside.
The seventh and final complaint — The submission of misuse of powers
The High Authority is alleged to have adopted the contested decisions ‘in order to advance the aims of the economic policy of the Belgian Government’.
What were the aims of the economic policy of the Belgian Government? To obtain, by means of a further adjustment of the equalization arrangements, a further reduction in the price of industrial coal. The adjustment of the equalization arrangements was thus only a pretext, and the real aim pursued consisted in fostering the economic policy of a Member State. In support of that point reference is made to a whole series of statements made in Parliament by the Belgian Minister for Economic Affairs, of which the Court is aware.
In order to set that ground of complaint aside one might be tempted merely to point to the fact that the final aim of the equalization scheme is the integration of the Belgian coal market into the common market within the shortest period and that the High Authority has never pursued any other aim. If it has erred, it is rather through excess of zeal than insufficiency of action. Far from being evidence of misuse of powers, the fact that the objectives of its action in that area largely coincided with those of the Belgian Government shows that it was directed towards the achievement of the lawful aim, since integration is the common objective of the High Authority and the Belgian Government and they share responsibility for it.
Such an answer would, however, be inadequate and in my opinion the question is more difficult.
In fact, if one accepts what I have called the‘classic’ concept of misuse of powers (on which the parties agree), but gives it its full meaning, misuse of powers must be assessed not only in relation to the final aim, (that is, in this instance, the integration of the Belgian coal market into the common market) but also on the basis of the objective of the equalization scheme itself as defined in Article 26 (2)(a), since equalization is only one of a series of means provided for by the Convention in order to achieve integration. That is precisely the argument put forward by the applicants. They allege that the High Authority used its powers under Article 26 (2)(a) to achieve ends other than those which it was required to achieve under the terms of that provision, that is, in order to favour a certain policy adopted by the Belgian Government. We are told that the Government sought to obtain from the High Authority, by means of equalization, the fixing of exaggeratedly and artificially low prices for Belgian coal, at least for industrial coal, in order to satisfy the demands of consumers while replying to criticisms from the countries which pay the equalization levy, and that the High Authority gave way that pressure, thereby losing sight of the true aims of the equalization arrangements.
As I have already said, misuse of powers may arise only in so far as an authority enjoys a discretionary power and within the limits in which it may be exercised.
I can therefore exclude from the discussion all the points on which I have accepted that the questions at issue were questions of law which had to be dealt with as such by the Court: there is no need for me to return to them.
Of all the points in dispute, in relation to which did the High Authority use its discretionary power?
(a)
First of all, I hesitate to include among those points the very principle of selectivity on which the contested decisions are based. In fact, I wonder whether the High Authority was not obliged to resort to it and whether the first arrangement (distribution effected exclusively in proportion to amounts extracted, without any consideration of ‘need’) was really lawful — in other words, whether the change of principle really resulted from the exercise of the discretionary power.
I consider, however, that the question is of no great importance and that even if one replies to it in the affirmative the misuse of powers alleged is in no way established. In order to accept that, it is sufficient to note that the Joint Committee, which was charged with examining the problem as a whole and particularly the possibility of a fresh adjustment of the equalization system, was set up on 18 February 1954, while the elections for the Belgian Parliament took place only on 11 April 1954 and the new Government was constituted only the following May. Those dates appear to me to render any comment superfluous.
(b)
As regards the assessment of the estimated production costs at the end of the transitional period, we have seen that in essence the action concerns the interpretation of the concept of ‘estimated production costs’ within the meaning of Article 26 (2)(a) and, to a certain extent, the findings of fact which result therefrom. There is no room in this instance for any misuse of powers.
(c)
There remains the price-fixing itself, carried out in accordance with the aim laid down by the text of bringing Belgian prices into line with the ruling common market prices.
On that point the High Authority clearly enjoyed a fairly wide measure of discretionary power within the limits that I have attempted to trace. First, it was required to make an effort merely ‘to bring prices into line’. Secondly, it was in no way obliged to do so all at once at the beginning of the transitional period. In the light of the necessarily approximate nature of the assessment of the various factors to be taken into account it was perfectly entitled to act with prudence, particularly at the beginning. In preserving a certain safety margin so as to avoid as far as possible having to raise once again the prices which had previously been reduced or to change the price table too often, it appears to have acted wisely. Nevertheless, in doing so, did it seek to sacrifice the legitimate interests of producers to the policy of the Belgian Government? None of the ‘objective factors’ appearing in the file allow it to be stated — I was going to say that it had such an intention but I shall now say: that such was the aim actually pursued by the High Authority. In that respect, the fact that long discussions took place between the Belgian Government and the High Authority is clearly not proof, especially since, as is noted in the rejoinder (at p. 38), ‘it is… a matter of common knowledge that, far from accepting, purely and simply, the views of the Belgian Government, the High Authority accepted only a reorganization of the equalization scheme which involved a smaller reduction in price than that proposed by the Belgian Government’. That statement has not been disputed.
In short, I consider that no proof has been produced of the existence of the misuse of powers alleged.
In conclusion, I propose that the Court should dismiss the applications and that the applicants should bear their own costs.
( ) Translated from the French. |
OPINION OF MR ADVOCATE GENERAL ROEMER ( )
Summary
Introduction
I — T he subject-matter of the application — The jurisdiction of the Court — The nature of the application and the extent of the power of review
1. The subject-matter of the application
2. The jurisdiction of the Court
(a) The arbitration clause
(b) The claim for a car allowance
(c) The claim for four months'remuneration
(d) Assessment of the failure to renew the contract
(e) The claim for damages
3. The nature of the application and the extent of the power of review
II — The claim for a car allowance
III — The claim for an additional grant of four months' remuneration
IV — The basis of the further claim for damages
1. The legal principles
2. The facts
3. The legal assessment
4. The liability of the defendant
V — The amount claimed as damages
VI — Costs
VII — Conclusions
Mr President,
Members of the Court,
You are called upon today to consider the application of a servant of the Common Assembly of our Community whose contract of employment was not renewed upon the expiry of the period which it covered, namely two years. You are in possession of the facts. When I come to examining them from the legal point of view, I shall bring certain details afresh to your attention only where it seems necessary to do so. Let me first of all give you some explanations concerning the subject-matter of the application. I shall then be in a position to assess the jurisdiction of the Court, and, having done so, I shall be able to say what the consequences are as regards the nature of the application and the extent of the power of review by the Court.
I — Subject-matter of the application — Jurisdiction of the Court — Nature of the application and extent of the power of review
1.
The applicant claims that the defendant should be ordered to make four payments to him, the reasons for them being different in each case.
In the first place, he claims an allowance for the use of his personal car in the course of his duties, and bases his claim on the First Internal Staff Rules of the Common Assembly of 12 January 1953.
Secondly, he claims a payment in respect of the termination of his contract equal to a further four months' remuneration, basing his claim on a decision of the Bureau of the Common Assembly, which was communicated to him on 3 November 1954.
Thirdly, he claims a payment equal to two years' remuneration, in order to enable him to establish himself in a new situation and to compensate him for the non-material loss which he claims to have suffered. Finally, the applicant believes that he is justified in claiming an additional payment of three million Belgian francs or the corresponding annuity as compensation for the difference between his new salary and the salary which, in his opinion, he would have received for a further fifteen years, namely until the age of seventy, from the Common Assembly.
In order to claim the last two payments. the applicant argues that the decision not to renew his contract of employment was irregular at law.
2.
It is necessary to keep the subject-matter of these claims in mind in examining, at this stage, whether the Court of Justice has jurisdiction to pass judgment in respect of them, and, if it has, in examining the basis for that jurisdiction. The said jurisdiction must arise under the Treaty itself.
(a)
Article 42 of the Treaty provides that the Court shall have jurisdiction to give judgment pursuant to any arbitration clause contained in a contract concluded by or on behalf of the Community, whether that contract be governed by public or private law. The applicant's contract of employment is such a contract governed by public law. The preamble to it refers expressly to the last paragraph of Article 6 of the Treaty, which provides that the Community shall be represented by its institutions. The contract of employment was therefore made on behalf of the Community, and it binds the Community. The Community is represented by the Common Assembly, itself represented by its President. The contract itself does not contain an arbitration clause. However, Article 17 thereof refers to the ‘Internal Rules’ in force as regards all matters not expressly covered in any clause. Provisional Rules of this type with respect to the Common Assembly were promulgated on 12 January 1953. In its final conclusions, the defendant states that that date was the date of actual publication, but that the definitive text had already been adopted on 16 December 1952. In any event, the said ‘Rules’ had been laid down by the institution and were applicable to its servants except where any provisions in their contracts expressly stated otherwise. The ‘Rules’ contained, at Article 27, an arbitration clause giving jurisdiction to the Court. Shortly thereafter, on 1 July 1953, fresh provisional Staff Rules entered into force. Article 52 thereof revoked all previous non-contractual provisions, including therefore Article 27 of the first Rules. Thus it is the arbitration clause contained in Article 50 of the Provisional Staff Rules of 1 July 1953 which is applicable. That article provides:
‘Where the appeals provided for within the Common Assembly against measures of the administration have been exhausted, any dispute to which the application of these Rules may give rise shall be submitted to the Court of Justice’.
(b)
As regards the first head of the applicant's claims, the car allowance, the point at issue is whether it is the first Rules, those of 12 January 1953, or the new ones, those of 1 July 1953, which are applicable. It thus involves a dispute as to the application of the Rules within the meaning of Article 50. This means that the Court has jurisdiction to deliver judgment in respect of this claim.
(c)
The second head of claim, the payment of four months' remuneration, is based directly on a decision of the Bureau of the Common Assembly. That decision was adopted by virtue of Article 15 of the contract which provides for the grant of a minimum of two months' remuneration, and not for a fixed amount, upon the termination of the contract. The Bureau applied that provision of the contract of employment in the case of the applicant. The arbitration clause contained in Article 27 of the First Rules of 12 January 1953 expressly covered the application and performance of the contract of employment. However, Article 50 of the Staff Rules of 1 July 1953, at present in force, only covers the application of those Rules. Nevertheless, I am of the opinion that the arbitration clause also covers the second head of claim. The applicant's contract of employment was very detailed. It contained provisions concerning the rights and obligations of the servant, family allowances, accident and sickness insurance, the residence allowance and the allowance to cover nonrenewal of the contract, all of which are questions which were covered in the Staff Rules which came into force subsequently. Therefore it has been possible for contracts of employment concluded thereafter to be limited to a small number of points, in particular to the post to be occupied and the fixing of the basic salary. As regards all other matters, such contracts have referred to the Staff Rules. This explains why the arbitration clause at present in force now merely mentions disputes concerning the application of those Staff Rules. Thus although certain questions have, since July 1953, been governed by general provisions contained in the Staff Rules, and are nevertheless dealt with in the applicant's contract of employment, this must not diminish the legal protection enjoyed by the applicant at the present time. Thus as regards the second head of claim also, the arbitration clause gives the Court jurisdiction in accordance with Article 42 of the Treaty.
(d)
The last two heads of claim are based on the ground that the decision not to renew the contract of employment was irregular. That question equally concerns the performance of the contract. But it also involves the application of the provisional Staff Rules, because the latter provide that until the publication of definitive Staff Regulations, personnel shall be engaged on a contractual basis. In my opinion, that must be understood as meaning not only the initial engagement under a contract of employment, but also the renewal of a contract which is about to expire. Therefore it may also be said, on the basis of the provisions mentioned above, that the Court has jurisdiction over this preliminary issue concerning the substance of the applicant's claims.
(e)
Until this moment, I have been able, as regards the two latter heads of the applicant's claims, to reach a finding that the Court has jurisdiction only in so far as the decision as to the question whether the failure to renew the contract of employment was irregular is concerned, that is to say, only in respect of an issue which is accessory to the substance of the claim. It is from this viewpoint that the applicant lodges his claim for damages.
Under Articles 34 and 40 of the Treaty, the Court may order damages to be paid by the Community in the case of irregular measures and wrongful acts or omissions on the part of the Community. The result of these provisions is that the general principle concerning the liability of public authorities, in force in the Member States, is also recognized in Community law. On the subject of the first paragraph of Article 40 of the Treaty, the report of the French delegation states:
‘Here we have the principle of the tortious liability of the Community, framed in such a way as to give scope for necessary developments in the case-law to adapt it to the nature of the new institutions …’ ( )
Since Article 42 of the Treaty mentions disputes arising from contracts concluded under public or private law, the arbitration clause covers both liability for a wrongful act or omission and civil claims for damages. In the present case the legal position of servants of the Community is involved. The engagement and dismissal of staff also relates to the implementation of the Treaty, and we shall see later that the conditions of service are similar to those of an established official. Therefore it is not only administrative measures adopted in respect of servants and covered by the arbitration clause whose validity may be assessed here; in the event of a wrongful act such as to render the Community liable the payment of appropriate damages may be ordered. Thus the Court also has jurisdiction to deliver judgment on the other claims for damages, which are based on the irregular character of an administrative measure. In doing so, it will have to apply the principles as to the Community's liability under public law.
3.
Therefore, if we are able to state that the Court has jurisdiction to deliver judgment on the claims which have been submitted to it, the following consequences concerning the nature of the application arise at the same time:
It is the application and interpretation of the provisions of the provisional Staff Rules or of the contract of employment concluded with the applicant which are primarily involved. In so far as the regularity of an administrative decision is at issue, review by the Court is subject to the same limits as for a direct application for annulment. The Court will therefore examine whether the measure was legal and whether the limits of the discretionary power were respected. But it is not also required to assess whether the administrative measure was appropriate. This principle has been set out in Article 36 of the Treaty which, as regards the objection of illegality, refers back to the first paragraph of Article 33. On the other hand, a decision concerning the liability of the Community constitutes a typical example of an ‘application in which the Court exercises unlimited jurisdiction’. Accordingly, as regards all matters which go beyond the mere review of the legality of an administrative decision, the Court enjoys the widest possible powers of assessment.
II — The claim for a car allowance
Let me now come to the first head of claim, the claim for a car allowance. This head of claim can be examined at this stage because it is concerned exclusively with a question concerning the application of the provisions of the provisional Staff Rules. The applicant's contract of employment does not make provision for any allowance of this kind. The applicant therefore bases his claim on Article 3 of Annex I to the provisional Staff Rules of 12 January 1953. The question of the car allowance was not expressly dealt with in the applicant's contract of employment; the provision upon which he relies was abolished upon the entry into force of Article 52 of the provisional Staff Rules of 1 July 1953 and replaced by Article 34. Paragraph (a) of the latter article requires a special decision of the Secretary General of the Common Assembly. The applicant has not maintained that any such decision was taken in his favour. It will therefore be seen that the claim is unfounded without going any further and without its even being necessary to examine whether the applicant in fact used his car for purposes connected with the service. Let me also point out that the applicant did not put in his claim immediately, in July 1953, when payment of the allowance was suspended, but only after his departure, on 8 December 1954.
III — The claim for an additional grant of four months' remuneration
Article 15 of the applicant's contract provides that he has the right, upon the expiry of his contract of employment, to a grant which ‘shall not be less than’ one-twelfth of his annual remuneration per year spent in the service of the Common Assembly. The contract thus sets a minimum rate. The administration may therefore grant a higher payment, taking particular situations into account. This is what the Bureau of the Common Assembly did. At its meetings of3 October 1954 (cf. Annexes 15 and 20 to the statement of defence), and of 27 October 1954 (cf. Annexes 17 and 21 to the statement of defence), it fixed this grant in the applicant's case at a total of six months' remuneration in excess of the minimum rate provided for by the contract. That decision was notified in writing to the applicant on 3 November 1954 (cf. Annexes 4 to the application and 9 to the statement of defence), and it was based on the fact that the Bureau had twice examined the social and financial consequences that the applicant would have to face by reason of the decision not to renew his contract. It took into account in the applicant's case his material difficulties, for he is the head of a large family, and it thus intended to facilitate his search for a new post.
The considerations thus invoked are justified by reason of the nature of the grant. The Bureau, in this case, did no more than correctly exercise its discretionary power. After receiving the applicant's letter of 24 November 1954 (Annex 11 to the statement of defence) and having unsuccessfully invited him to withdraw it within a given time, the Bureau decided to annul its decision (cf. Annexes 17, 20 and 21 to the statement of defence). It gave as its reasons the fact that the applicant had not formally accepted this special favour and that he had shown evidence of his intention to bring his case before the Court.
As regards this, it should be observed that the decision of the Bureau did not constitute an offer, in contract, made to the applicant which the latter ought to have accepted. Nor did that decision require the applicant to relinquish any other claims, even before the Court. At a considerably earlier stage, in the exercise of its discretionary powers, the Bureau had taken a decision as to the amount of the grant. The applicant was entitled on principle to the grant by virtue of his contract which, as regards the amount thereof, only set a minimum rate. The fact that the applicant believed himself to have other rights and intended to invoke them before the Court does not constitute legal grounds for modyfying that decision of the Bureau to the applicant's disadvantage, as was done in this case.
It cannot be objected that in making claims in respect of the termination of his contract the applicant has thus recognized that the decision not to renew his contract was legitimate, and has contradicted the reasons upon which he relies as regards the other heads of claim. In reality, the applicant accepts the termination of his contract of employment as a factual situation. He is not claiming that he should be reinstated, but claiming compensation. Such a claim is admissible and accepted in German and in French law, for example, where it appears that the continuation of the relationship of employment cannot be required. Thus, in his application, the applicant is claiming, by reason of the irregular character of the decision not to renew the contract, not merely that he should be paid the grants to which he is entitled under that contract and under the special decision of the Bureau adopted by virtue thereof; he is also putting forward other claims. If the Court takes the view that those claims are well founded it will have to take into account in calculating the payments concerned the grants which have already been made and which are laid down in respect of the regular termination of a contract of employment. In any event, the Bureau annulled its original decision for unjustified reasons. That measure is therefore void and the fact that it is void may, furthermore, be argued by way of an objection.
Since the applicant in fact received only the minimum rate of two months' remuneration, his claim for payment of the four additional months which were granted to him by the first decision of the Bureau of the Common Assembly in respect of this matter is well founded.
IV — The basis of the further claim for damages
The last two heads of the applicant's claims are based on the irregularity of the decision not to renew his contract. Thus these claims are not legally separated, but the applicant presents them from different angles in order to justify their amount. So these two heads may be joined. Let me first of all examine their legal basis.
1.
No particular formal provision and no special Community text are applicable here. Thus it is desirable first of all to examine what legal principles must be borne in mind in order to assess this case.
The parties defend opposing views on this point. The applicant is of the opinion that the contractual relationship of employment which exists between the Community and its servants entitles the latter to expect without doubt that they shall later be made established officials, unless a servant shows himself to be incompetent or unless the abolition of a post results in its being no longer in the interests of the service to employ him. To this the defendant replies that the contracts of employment are concluded for a limited period and make express provision for compensation should they not be renewed, such that the decision to renew or not to renew is in the discretion of the authority which has engaged the servant.
Article 7 of the Convention on the Transitional Provisions provides:
‘Until the Committee provided for in Article 78 of the Treaty has decided upon the size of the staff of the Community and has laid down staff regulations, the personnel required shall be engaged on a contractual basis’.
On the basis of this provision, the whole of the staff of the Community was engaged under contracts of varying length, not usually exceeding two years and, in certain cases, under contracts which were considered as monthly contracts. Provisionally, those contracts were very explicit on certain points and referred, on other questions, to Internal Rules established by the relevant institution of the Community for its staff. In February 1953 the Committee of Presidents created a committee to prepare the definitive Staff Regulations. That committee first of all drew up provisional Staff Rules which rendered uniform the previous Internal Rules of the different institutions. Those provisional Staff Rules were put into force in very similar forms at the Court of Justice and at the Common Assembly in July 1953, at the Council of Ministers in November 1953 and at the High Authority in March 1954. They are based on the necessity ‘to establish provisional Staff Rules until such time as the Staff Regulations of the Institutions of the Community shall come into force’. Article 2 provides for a probationary period of a maximum length of three months, during which the institution can terminate the contract on one month's notice. Once that period is over, the Rules no longer provide that the institution may proceed to a dismissal. Admittedly, Article 46 provides for removal from post, but only as the most serious disciplinary sanction, after a normal disciplinary procedure.
When, at the beginning of 1954, the expiry of a large number of contracts was imminent, whereas the implementation of definitive Staff Regulations did not seem immediately foreseeable, the Committee of Presidents adopted, at its sixth meeting on 19 March 1954, the following decision:
‘The Commission decides to extend to 31 December 1955 the contracts of all servants holding contracts of employment for a period of more than one year. Contracts for a lesser period shall be extended by one year only. Notwithstanding the above, the institutions shall retain the power not to grant the above-mentioned extension to any servants who may show themselves unsuited to their duties. The contracts of servants who are later brought within the ambit of the Staff Regulations shall cease to have effect upon the entry into force of the said Staff Regulations’.
That decision was adopted because it was considered useful for the contracts to expire so far as possible on the same date in order to facilitate a rapid changeover to the Staff Regulations. Consideration was even given to extending the contracts until the as yet undetermined date of entry into force of the definitive Staff Regulations.
It is common knowledge that the drafting of the definitive Staff Regulations has not yet been completed and that it is still the case that the whole staff are on contracts extended beyond their original expiry date. I think that the following conclusions may be drawn from this factual situation:
Staff occupying permanent butgetary posts — which means other than auxiliary and temporary servants — whose contracts do not contain any provision to the contrary, cannot be dismissed by the institution once the probationary period has expired. The fact that the contract refers to a large extent to provisional Staff Rules of itself means that there is a similarity with the situation of an established official. The main purpose of the limitation of the contracts in time is to permit a rapid changeover from the contractual system to the anticipated Staff Regulations. So long as it is not possible to bring the definitive Staff Regulations into force, the interests of the continuity of the service require that such contracts be extended by a general measure. According to the wording of the decision of the Committee of Presidents, the institutions ‘shall retain’ the power not to grant an extension of contract in the case of a lack of professional competence on the part of the servant. It may be thought that this power is the already existing power to remove a servant from his post. However, I think that there is a distinction and that the expiry of the contract makes a difference. While the contract is in force, removal from post may only occur as a result of serious misconduct followed by a formal disciplinary procedure. But when the contract expires the administration has a wider freedom of action; it can also take into account a lack of professional competence which has become apparent without its being necessary to establish any particular instance of misconduct against the servant. Nevertheless if, on this ground, a contract is not renewed, certain conditions must be respected and the person concerned must be offered legal guarantees simular to those connected with the disciplinary procedure. Thus the requisite reports by the servant's immediate superiors must be included in his personal file concerning his ability, efficiency and conduct in the service. Those reports — as also the whole of the personal file — must be brought to the notice of the person concerned, and he must be given an opportunity to submit his observations. The institution, acting on its own responsibility, may then adopt a reasoned decision not to renew the contract. This is the only means of reaching a state of affairs whereby on the one hand the administration can part company with an unsuitable servant and on the other hand the servant enjoys adequate protection against an arbitrary decision not to renew his contract, together with the possibility of inviting the Court to review that decision. The fundamental principle of equality of treatment requires, moreover, that where there is a general renewal of identical contracts, any exception to that general measure must be justified by an appropriate procedure. Therefore while it is true that a contractual servant does not have a right to be established and to be given a permanent post, he may nevertheless claim, first, the benefit of the rights of the defence and of equality of treatment and, secondly, that any exception made as against him to the general measures of renewal of the contracts must be enshrined in a reasoned decision adopted by the competent authority in accordance with an adequate procedure and subject to review by the Court.
Let me draw the attention of the Court to certain comparisons that may be made with the very recent decision of the Administrative Tribunal of the International Labour Organization, mentioned by the applicant. As you know, I have in mind the judgment delivered in Duberg v UNESCO. The Tribunal rejected UNESCO's argument to the effect that the said institution had the discretionary and sovereign power to refuse to extend certain contracts notwithstanding a general renewal to which it had proceeded. The Tribunal held that an engagement for a specified period could not be treated as a trial engagement and that reasons had to be stated for an exceptional decision not to renew so as to exclude arbitrary decisions and to enable the Tribunal to exercise its power to review the legality of the decision. More precisely, the Tribunal expressly stated in that judgment that it intended to proceed to a general review of the legality , which was its judicial function. In that case, it delivered judgment only on the question whether the reasons given could in general terms justify a decision not to renew a contract. I have no objection, either, to following the general principles of the case-law of the Conseil d'État. Nor would it appear to me that in the other judgments of international bodies, mentioned by the parties, it was the appropriateness of an administrative decision that was reviewed.
The principles mentioned above, namely, the right to defend oneself before a court or tribunal, equality before the law and equality before the courts, are fundamental rights recognized by the constitutions of all modern States. The fact that in the case of a decision not to renew a contract of this kind there is a condition that certain payments shall be made, subject to no further conditions, does not dispense the administrative authority from the obligation to respect these fundamental rights. It should be observed that the draft definitive Staff Regulations of the Community provide that servants dismissed at the end of the probationary period shall be paid three months' salary, but that nevertheless a precise procedure is laid down: the report on the ability of the probationary official must be communicated to him, he has the right to submit his comments in writing and it is only thereafter that the relevant appointing authority adopts its decision in full knowledge of the facts. ( ) Similarly in the case of dismissal for lack of professional competence ( ) on the part of a servant engaged on a definitive basis, the Staff Regulations provide both for a payment and for a procedure, the form of which is fixed by reference to the disciplinary procedure. It is upon the conclusion of that procedure that the appointing authority adopts a reasoned decision.
These principles are of use only in assessing whether, in the case of a general renewal of similar contracts, the decision not to renew one or several of those contracts has been taken regularly. But the question whether, in addition, there exists a possible wrongful act on the part of the administration involving the obligation to pay damages is still undecided. This question of the payment of damages still has to be examined.
2.
Let me now apply the principles thus advanced to the facts of the case.
The applicant was engaged for two years without a probationary period. Neither his contract nor the first Staff Rules of 12 January 1953 make provision for such a period. It emerges, moreover, from the preparatory inquiry that shortly after the applicant took up his duties, his hierarchical superior began to work directly with the Heads of Division placed under the applicant's orders and that a draft financial regulation prepared by the latter was rejected as unusable. When the applicant was engaged, the organization of the Secretariat was not yet settled. There were only sixteen servants. A first organizational plan was drawn up in April 1953. In June, the Bureau decided to abolish the post of Head of Administrative Services ‘upon the expiry of the contract of the present incumbent, Mr Kergall (5 December 1954)’, according to the minutes of the meeting of the Bureau on 15 June 1953, which have been produced. Such was the decision of 15 June 1953. No other task was confided to the applicant. When, in October 1953, on his own initiative, he attempted to take part in the preparation of the Budget of the Assembly, he was told that his work was unusable and that he must put an end to that activity. He was then instructed to undertake a study of the social security systems applicable to the staffs of the national parliaments of the Member States. Nine months afterwards, he was reminded of this task, which he then completed, so he says, in three weeks. His hierarchical superiors also refused this latter work, which was considered unusable in practice. After that date, he was not given anything further to do, a fact on which the parties are agreed.
3.
In this regard, let me emphasize the fact that the applicant was engaged immediately on a firm basis for a period of two years in the absence of any settled organization of the Secretariat and without a given post with precise duties being assigned to him. It may be that the following are matters of internal organization and of expediency which fall within the area of discretion of the Bureau of the Assembly and are not open to review by the Court: the fact that shortly after the applicant was engaged his post as Head of Administrative Services was in fact taken away from him because it seemed expedient to have a more simple organization, and the fact that thereafter the Bureau of the Assembly decided on 15 June 1953 formally to abolish that post. There is no point in examining whether the Bureau had the power to decide upon the abolition of the post or whether it only had a right to make a proposal, because in any event the abolition of the post cannot of itself justify the conclusion which was drawn from it, namely that ‘accordingly’ the applicant's contract, which was not to expire for one and a half years, could not be extended. We know that the applicant's contract did not refer to any particular post, and upon the expiry thereof it might have been possible to use him elsewhere. Taking into account the progressive expansion of the administration and the recruitment which took place, that would seem to have been possible at first sight, such that it is necessary to call upon the Common Assembly to prove the contrary.
The defendant attempts to produce that proof by raising two arguments: first, it could not offer the applicant a post as ‘head of division’ because that would have been equivalent to demotion; secondly, the applicant was not suited to a senior post.
The first argument does not seem decisive because it would have been reasonable to require of the defendant that, despite its alleged scruples, it should explain the problem to the applicant and make him a clear offer. Although there may have been some question of ‘capitis diminutio’, it scarcely seems to me that that results from another posting, even to an inferior post; it is rather to be found in the fact that the formal decision abolishing the applicant's post was to take effect only at the date of expiry of his contract, whereas in practice for at least eighteen months it was rendered impossible for him to carry out his duties. The defendant was responsible for this enforced inactivity on the part of the applicant. The defendant ought, not only in the interests of the service but also on account of its duty towards its servant, to have examined in all conscience whether it could have used the applicant to some worthwhile purpose in another post. The parties are unanimous in admitting that the defendant did not make that attempt.
In the present proceedings, the defendant justifies these facts by alleging that it considered the applicant's abilities to be inadequate. The assessment of professional competence, particularly that of a senior servant, belongs in the first place to the competent authority. Similarly, the question whether that competence can be definitively assessed after only six months and whether the applicant ought to have been offered the possibility of showing his worth in another service seems to me to be a question of expediency. But, on this point, the authority must take a clear decision on its own responsibility. Yet, in the file and particularly in the applicant's personal file, there is not to be found any written report made out by his superiors on his duties and on his ability. We find no written and reasoned decision of the Bureau explaining why the applicant was not used in some other way. I have explained that in my opinion these rules as to form must be respected, that the person concerned must be heard and that thus legal review must be rendered possible within certain limits.
Let me summarize the above: the reasons relied upon in support of the decision not to renew the contract do not justify that decision. The abolition of the post could only be relied upon if, at the same time, it were proved that it was impossible to use the applicant in some other capacity, despite the fact that a large number of people were being recruited. No such proof has been forthcoming.
For these reasons, the decision not to extend the applicant's contract seems to me to be defective.
4.
It now remains to examine whether, in adopting that decision, the administration has committed a wrongful act for which it is liable.
Article 34 of the Treaty is the basis for the principle that an illegal measure, even one that is annulled in response to an application for annulment, does not automatically involve an obligation to pay damages.
Similarly, in French law, ( ) the illegal character of a measure is indeed a necessary condition for liability, but that condition is not sufficient. In particular, an infringement of a procedural requirement is important only if it has had an influence on the content of the decision itself. Damages are not a penalty or a sanction imposed on the administration for failing to respect legal rules, but reparation for a loss resulting from a measure which is unjustified as to substance.
As regards the problem of damages, it is clear that where the content of the measure would have been identical even if the procedural requirements had been respected this fact makes a difference. Here one might consider what would have been the position if the applicant had immediately contested the decision of 15 June 1953 and if the Court had annulled that decision because the reasons given did not justify it. One could ask whether the defendant could then have adopted a new and regular decision with respect to the applicant, having the same content while stating other reasons and adhering to the rules of procedure applicable.
It is particularly difficult to answer this question a posteriori. It involves a factual assessment to which the Court will have to proceed. To my mind, the result of the preparatory inquiry does not with sufficient certainty permit of an answer in the affirmative. The existing evidence is open to the interpretation that it must have been possible to use the applicant in another post. The lack of professional competence raised today a posteriori could be ascertained only by respecting the rules of procedure which constitute substantial guarantees for the person concerned and which are intended to influence the material content of the decision.
For all these reasons, I am of the opinion that the defendant has committed a wrongful act such as to engage its liability.
V — The amount claimed as damages
As for the damages claimed, it is appropriate to discuss factors which, in my opinion, must be taken into consideration in order to fix the amount.
The applicant does not seem to me to be correct in claiming a difference in salary calculated on the basis of a period of fifteen years, because he had no right, allegedly infringed by the defendant in its decision, to a stable post at a fixed salary. As I have said, he had merely a reasonable expectation of occupying a permanent post, provided that the showed his worth and subject to the needs of the service. Other factors contributing to uncertainty, which relate to the future and which cannot be ascertained by the Court, must be taken into account here. In any event, the existence of ‘quantifiable damage’ cannot be accepted. There then remains a payment in respect of damages, the amount of which the applicant has himself assessed at two years' remuneration. But it is necessary first to take into account sums which the applicant has already received by way of a severance grant. For even though no condition other than departure was required in order that it be paid, it nevertheless constitutes ‘damages’ for the injurious consequences which result from the fact of departure. The applicant has received a payment equal to six months' remuneration and his removal expenses have been reimbursed. Thus the expenses of his return to his place of origin and a transitional payment corresponding to his two years' service have been taken into account. I suggest that he should also be paid the four months' remuneration which the Bureau granted him by reason of his family situation and of the difficulties of finding a new post at his age. The applicant will thus at this stage receive ten months' remuneration, although a servant subject to the provisions of the provisional Staff Rules would receive only four months' salary. If the Court has it in mind to take as a point of comparison the payment which was granted in the Duberg case, mentioned above, it must be observed that the plaintiff in that case had no right to any payment whether under contract or under Staff Regulations, that he had been in the service of UNESCO for five years and that he was held in high regard. I would also mention the provisions of Article 8 of a German Law of 1951 on protection against dismissal. In the case of unfair dismissal, that provision offers the possibility, instead of reinstatement, of a payment of up to a maximum of twelve months' salary.
Finally, it is necessary also to take the applicant's work and conduct into account. He did not make any objection in writing to the decision of the Bureau of 15 June 1953 which was communicated to him in writing, and it seems that he did not seriously attempt to obtain another posting. It is true that the said decision of the Bureau was to become effective only on the expiry of his contract, and admittedly it was in the first place for the administration to use the applicant to some advantage in another post following the aboliton of the post which he occupied. Therefore the wrongful act of the administration cannot be completely counterbalanced by the applicant's behaviour. But that behaviour must be looked at in this context. Above all, some significance must be attached to the fact that the applicant, who was a very well paid servant in a senior post, was willing, without serious efforts to change the situation, to spend at least eighteen months, as he himself has stated, without being able to work in a manner in accord with his rank and his abilities.
However, all these aspects of the question can do no more than act as pointers in fixing damages ex aequo et bono, and I admit that I have perhaps not mentioned them all. I will therefore refrain from giving an exact figure and I shall leave this point to the discretion of the Court.
VI — Costs
Finally, on the basis of my conclusions, I must adopt a position on the question of costs. In application of Article 60 (2) of the Rules of Procedure of the Court, and assuming that the Court agrees with my opinion, I consider it just to require the defendant to bear the whole or at least the greater part of the applicant's costs, should the latter succeed in his claim for a payment of four months' remuneration granted by the Bureau and should he succeed in convincing the Court that his claim for additional damages is well founded, despite the fact that he has no chance of obtaining the full amount claimed. In any event, I do not think that it would be just to require the applicant to bear a part of the fees of counsel for the defendant, because the latter was not required to be assisted and because, by reason of the nature of the dispute and of the risks concerning costs, which are risks of such a nature as to discourage any servant in an application of this kind, it would not be equitable to ascribe those fees to the applicant. It should be observed that this idea has also found expression in a legal provision: Article 61 (1) of the relatively recent German law on labour tribunals in effect denies the winning party in a labour dispute the right to reimbursement of the costs resulting from recourse to an agent or to counsel. In our procedure, this principle can be applied to the defendant, but not to the applicant, because under the provisions of Article 20 (2) of the Statute of the Court, the applicant was obliged to be assisted by a lawyer.
VII — Conclusions
In conclusion, I am of the opinion that:
1.
The applicant's claim for payment of a car allowance should be rejected;
2.
His claim for payment of four months' additional remuneration should be accepted;
3.
His claim for additional damages of such an amount as the Court shall consider fair should be accepted;
4.
The defendant should be ordered to bear the whole or the greater part of the costs.
( ) Translated from the German.
( ) P. 37 of the Official Publication, 1951, first part, Chapter 1, Section IV, paragraph 2A 1 a II.
( ) Doc. 1685 of 28 March 1955. Art. 41 to 43.
( ) Art. 82.
( ) Benoit — Juris-classeur administratif, Volume IV, part 720, No 27 et seq.; Odent. p. 477 et seq. |
Judgment of the Court of 29 November 1956. - N. V. Kolenmijnen van Beeringen, N.V. Kolenmijnen van Houthalen, N. V. Kolenmijnen van Helchteren en Zolder v High Authority of the European Coal and Steel Community. - Case 9/55.
European Court reports
French edition Page 00325
Dutch edition Page 00345
German edition Page 00333
Italian edition Page 00319
English special edition Page 00311
Danish special edition Page 00033
Greek special edition Page 00107
Portuguese special edition Page 00107
Summary
Parties
Subject of the case
Grounds
Decision on costs
Operative part
Keywords
++++
1 . PROCEDURE - APPLICATION FOR ANNULMENT - DECISION OF THE HIGH AUTHORITY - GENERAL OR INDIVIDUAL NATURE
( TREATY, ART . 33; CONVENTION ON THE TRANSITIONAL PROVISIONS, ART . 26 )
2 . PROCEDURE - LETTER OF THE HIGH AUTHORITY - IN THE NATURE OF A DECISION
( TREATY, ART . 14 )
3 . PROCEDURE - APPLICATION FOR ANNULMENT - CONNEXION - STATEMENT OF GROUNDS IN THE FORM OF A REFERENCE OR BELATEDLY - INADMISSIBILITY
( STATUTE OF THE COURT, ART . 22, RULES OF PROCEDURE, ART . 29 )
4 . PROCEDURE - APPLICATION FOR ANNULMENT - GENERAL DECISION - UNDERTAKINGS - ADMISSIBILITY LIMITED TO THE SUBMISSION BASED ON MISUSE OF POWERS
( TREATY, ART . 33 )
5 . TRANSITIONAL PERIOD - BELGIAN COAL - EQUALIZATION - REDUCTION AND WITHDRAWAL
( CONVENTION, ART . 26 )
6 . TRANSITIONAL PERIOD - BELGIAN COAL - EQUALIZATION - AMOUNT
( CONVENTION, ART . 26 )
7 . TRANSITIONAL PERIOD - BELGIAN COAL - THREAT TO WITHDRAW EQUALIZATION
( CONVENTION, ART . 26 )
8 . TRANSITIONAL PERIOD - BELGIAN COAL - PRICES - COMPULSORY FIXING WITHOUT EQUALIZATION
( CONVENTION, ART . 26 )
Summary
( CF . PARA . 1 OF SUMMARY IN CASE 8/55 OF 16 JULY 1956 ):
1 . DECISION NO 22/55, ADOPTED WITHIN THE CONTEXT OF A SPECIAL SYSTEM PROVIDED FOR IN RELATION TO BELGIUM FOR THE DURATION OF THE TRANSITIONAL PERIOD BY ARTICLE 26 OF THE CONVENTION WHICH APPLIES IN ACCORDANCE WITH SPECIFIC RULES, HOWEVER DETAILED AND VARIED THEY MAY BE, TO ALL UNDERTAKINGS AND TRANSACTIONS GOVERNED BY THAT SYSTEM, IS IN THE NATURE OF A GENERAL DECISION . IN THIS INSTANCE, THE FACT THAT ALL THE UNDERTAKINGS REFERRED TO BY THE CONTESTED DECISION ARE GROUPED WITHIN THE APPLICANT ASSOCIATION DOES NOT AFFECT THE GENERAL NATURE OF THAT DECISION . THE TERRITORIAL LIMITATION OF THE AREA OF APPLICATION OF THE CONTESTED DECISION DOES NOT IMPLY INDIVIDUAL IDENTIFICATION; THE FACT THAT A GENERAL DECISION HAS SPECIFIC CONSEQUENCES DOES NOT AFFECT ITS NATURE AS A GENERAL DECISION . THE QUESTION WHETHER A DECISION IS INDIVIDUAL OR GENERAL IN NATURE MUST BE DECIDED ON THE BASIS OF OBJECTIVE CRITERIA; IT DOES NOT DEPEND UPON ITS FORM BUT ON ITS SCOPE .
*/ 655J0008 /*.
( CF . PARA . 2 OF SUMMARY IN CASE 8/55 OF 16 JULY 1956 ):
2 . THE PASSAGE IN THE LETTER OF THE HIGH AUTHORITY OF 28 MAY 1955, DETERMINING UNEQUIVOCALLY THE ATTITUDE WHICH IT HAS DECIDED TO TAKE SHOULD CERTAIN CIRCUMSTANCES MENTIONED IN THE LETTER ARISE, IS IN THE NATURE OF A DECISION WITHIN THE MEANING OF ARTICLE 14 OF THE TREATY .
*/ 655J0008 /*.
3 . IN SPITE OF AN UNQUESTIONABLE LINK BETWEEN TWO APPLICATIONS, A GENERAL REFERENCE TO A STATEMENT MADE IN THE OTHER CASE IS NOT SUFFICIENT FOR THE APPLICATION TO BE IN ACCORDANCE WITH THE PROVISIONS OF ARTICLE 22 OF THE STATUTE OF THE COURT OF JUSTICE AND OF ARTICLE 29 OF THE RULES OF PROCEDURE OF THE COURT . THE GROUNDS RELIED UPON FOR THE FIRST TIME IN THE REPLY, IN THE ABSENCE OF ANY REFERENCE TO THEM IN THE APPLICATION, ARE INADMISSIBLE .
( CF . PARA . 3 OF SUMMARY IN CASE 8/55 OF 16 JULY 1956 ):
4 . IF THE TREATY PROVIDES THAT PRIVATE UNDERTAKINGS ARE ENTITLED TO SEEK THE ANNULMENT OF A GENERAL DECISION ON THE GROUND OF MISUSE OF POWERS AFFECTING THEM, THAT IS BECAUSE THEY HAVE NO RIGHT OF ACTION ON ANY OTHER GROUND . THERE IS NOTHING IN THE TREATY FROM WHICH IT MAY BE CONCLUDED THAT PRIVATE UNDERTAKINGS HAVE BEEN GRANTED SUCH A RIGHT TO REVIEW THE " CONSTITUTIONALITY " OF GENERAL DECISIONS, SINCE THEY ARE QUASI-LEGISLATIVE MEASURES ADOPTED BY A PUBLIC AUTHORITY WITH LEGISLATIVE EFFECT " ERGA OMNES ". IF ARTICLE 33 ACCEPTS THE EXISTENCE OF A RIGHT TO BRING AN APPLICATION FOR THE ANNULMENT OF A GENERAL DECISION ON THE GROUND OF MISUSE OF POWERS AFFECTING AN UNDERTAKING, THAT IS AN EXCEPTION WHICH IS EXPLAINED BY THE FACT THAT, IN THIS CASE, IT IS STILL THE INDIVIDUAL FACTOR WHICH PREVAILS . IN ORDER FOR AN APPLICATION FOR THE ANNULMENT OF A GENERAL DECISION TO BE ADMISSIBLE IT IS SUFFICIENT FOR THE APPLICANT TO CLAIM FORMALLY THAT THERE HAS BEEN A MISUSE OF POWERS AFFECTING IT, INDICATING CONVINCINGLY THE REASONS WHICH, IN ITS OPINION, GIVE RISE TO THE PRESUMPTION OF A MISUSE OF POWERS; EXAMINATION OF THE JUSTIFICATION FOR THE SUBMISSION OF MISUSE OF POWERS THUS RELIED ON IS A QUESTION OF SUBSTANCE .
*/ 655J0008 /*.
( CF . PARA . 8 OF SUMMARY IN CASE 8/55 OF 29 NOVEMBER 1956 ):
5 . THE PAYMENT OF DIFFERING RATES OF EQUALIZATION ON THE BASIS OF PHYSICAL CONDITIONS OF PRODUCTION TENDS TO ENSURE THAT COMPARABLE CASES RECEIVE COMPARABLE BENEFIT AND, THEREFORE, TO AVOID DISCRIMINATION . EQUALIZATION NEED NOT NECESSARILY COVER THE ENTIRE DIFFERENCE BETWEEN THE REDUCED SELLING PRICES AND RECEIPTS AT THE BEGINNING OF THE TRANSITIONAL PERIOD, SINCE IT IS ONLY A NECESSARY PROTECTIVE MEASURE TO AVOID HURRIED AND DANGEROUS SHIFTS IN PRODUCTION LEVELS . THE CONVENTION DOES NOT PROVIDE FOR ANY GUARANTEE THAT ORIGINAL LEVELS OF RECEIPTS WILL BE MAINTAINED .
*/ 655J0008 /*.
6 . AMOUNTS OF EQUALIZATION VARY NECESSARILY FROM ONE CASE TO ANOTHER, BUT THE MERE EXISTENCE OF VARIATIONS IS NOT PROOF THAT THE HIGH AUTHORITY FIXED THOSE AMOUNTS ARBITRARILY AND IN A MANNER EXTRANEOUS TO THE AIM OF ARTICLE 26 OF THE CONVENTION .
( CF . PARA . 9 OF SUMMARY IN CASE 8/55 OF 29 NOVEMBER 1956 ):
7 . IF CERTAIN UNDERTAKINGS WERE NOT CARRYING OUT THE WORK OF REORGANIZATION AND RE-EQUIPMENT, SUCH THAT THEY INCURRED LIABILITY, THEY WOULD THUS HAVE DEPRIVED THEMSELVES BY THEIR OWN FAULT OF THE RIGHT TO BENEFIT FROM EQUALIZATION .
*/ 655J0008 /*. ( CF . PARA . 7 OF SUMMARY IN CASE 8/55 OF 29 NOVEMBER 1956 ):
8 . THE REDUCTION OR EVEN WITHDRAWAL OF EQUALIZATION IN ONLY CERTAIN INDIVIDUAL CASES DOES NOT RESULT IN THE TYPES REFERRED TO IN THOSE EXCEPTIONAL CASES BEING PLACED OUTSIDE THE PRICE LIST, SINCE THERE CAN BE ONLY ONE PRICE LIST RESULTING FROM THE APPLICATION OF ARTICLE 26 ( 2 ) FOR ALL CONSUMERS OF BELGIAN COAL .
*/ 655J0008 /*.
Parties
IN CASE 9/55
SOCIETE DES CHARBONNAGES DE BEERINGEN,
SOCIETE DES CHARBONNAGES DE HOUTHALEN,
SOCIETE DES CHARBONNAGES DE HELCHTEREN ET ZOLDER,
REPRESENTED BY ROGER JAUMET, PAUL RENDERS, EDOUARD LEBLANC, IVAN ORBAN AND PAUL CULOT, ASSISTED BY HENRI ROLIN, PROFESSOR AT THE UNIVERSITY OF BRUSSELS AND ADVOCATE AT THE COUR D'APPEL, BRUSSELS, AND J . MERTENS DE WILMARS, ADVOCATE AT ANTWERP, WITH AN ADDRESS FOR SERVICE IN LUXEMBOURG AT 6, RUE HENRI HEINE, APPLICANTS,
V
HIGH AUTHORITY OF THE EUROPEAN COAL AND STEEL COMMUNITY, REPRESENTED BY ITS LEGAL ADVISER, WALTER MUCH, ACTING AS AGENT, ASSISTED BY G . VAN HECKE, ADVOCATE AT THE COUR D'APPEL, BRUSSELS, PROFESSOR AT THE UNIVERSITY OF LOUVAIN, WITH AN ADDRESS FOR SERVICE AT ITS OFFICES, 2, PLACE DE METZ, DEFENDANT,
Subject of the case
APPLICATION FOR THE ANNULMENT OF CERTAIN DECISIONS OF THE HIGH AUTHORITY RESULTING FROM ITS LETTER OF 28 MAY 1955 TO THE GOVERNMENT OF THE KINGDOM OF BELGIUM CONCERNING THE ADJUSTMENT OF THE EQUALIZATION SYSTEM AND OF DECISION NO 22/55 OF THE HIGH AUTHORITY OF 28 MAY 1955 ( JOURNAL OFFICIEL OF 31 MAY 1955, PP . 753 - 758 ),
Grounds
P . 323
A - THE ADMISSIBILITY OF THE APPLICATION
THE APPLICATION SEEKS THE ANNULMENT OF :
1 . DECISION NO 22/55 OF THE HIGH AUTHORITY OF 28 MAY 1955 AND THE PRICE LIST ANNEXED THERETO, PUBLISHED IN THE JOURNAL OFFICIEL, NO 12, OF 31 MAY 1955, IN SO FAR AS THEY FIX REDUCED PRICES FOR CERTAIN TYPES OF COAL;
2 . THE DECISIONS CONTAINED IN THE LETTER ADDRESSED BY THE HIGH AUTHORITY TO THE BELGIAN GOVERNMENT ON 28 MAY 1955 AND IN THE TABLE OF RATES OF EQUALIZATION ANNEXED THERETO IN SO FAR AS :
( A ) THE WITHDRAWAL OR REDUCTION OF EQUALIZATION PAYMENTS IN THE CASE OF CERTAIN COLLIERIES LEADS TO DISCRIMINATION BETWEEN PRODUCERS OF IDENTICAL TYPES OF COAL;
( B ) THE LETTER STATES THAT IN FUTURE EQUALIZATION PAYMENTS WILL BE OR MAY BE WITHDRAWN FROM CERTAIN UNDERTAKINGS ON THE GROUND THAT THEY ARE NOT MAKING THE EFFORT TO RE-EQUIP CONSIDERED POSSIBLE AND NECESSARY OR ARE REFUSING TO CARRY OUT THE TRANSFERS OR EXCHANGES OF DEPOSITS WHICH ARE REGARDED AS INDISPENSABLE FOR A BETTER DEVELOPMENT OF THE MINING AREAS .
P . 324
AS REGARDS DECISION NO 22/55, THE APPLICANTS CLAIM THAT IT IS INDIVIDUAL IN NATURE . THE DEFENDANT, ON THE OTHER HAND, MAINTAINS THAT IT IS A GENERAL DECISION . IN THE OPINION OF THE APPLICANTS, THE INDIVIDUAL NATURE OF THE DECISION MAY BE DEDUCED FROM THE FACT THAT, BY REASON OF THE INDISSOLUBLE LINK BETWEEN EQUALIZATION AND THE FIXING OF PRICES, THE EFFECTS OF THE PRICE LIST ON THE THREE COLLIERIES OF THE CAMPINE ARE DIFFERENT FROM ITS EFFECTS ON THE OTHER BELGIAN MINES, IN SO FAR AS THE EQUALIZATION GRANTED TO THE THREE CAMPINE COLLIERIES IS NOT THE SAME AS THAT RECEIVED BY THE OTHER MINES .
WITHOUT DENYING THAT THE EFFECTS OF THE PRICE LIST WILL VARY TO THE EXTENT TO WHICH EQUALIZATION ITSELF VARIES, THE COURT REJECTS THE APPLICANTS'ARGUMENT THAT THE VARIATIONS IN THE EFFECTS OF THE PRICE LIST DETERMINE THE NATURE OF DECISION NO 22/55 . THAT DECISION WAS ADOPTED WITHIN THE CONTEXT OF A SPECIAL SYSTEM PROVIDED FOR IN RELATION TO BELGIUM FOR THE DURATION OF THE TRANSITIONAL PERIOD BY ARTICLE 26 OF THE CONVENTION WHICH APPLIES IN ACCORDANCE WITH SPECIFIC RULES, HOWEVER DETAILED AND VARIED THEY MAY BE, TO ALL UNDERTAKINGS AND TRANSACTIONS GOVERNED BY THAT SYSTEM .
WITHIN THE CONTEXT OF THAT SYSTEM THE DECISION CONCERNS THE UNDERTAKINGS ONLY IN SO FAR AS THEY ARE PRODUCERS OF COAL AND IT IN NO WAY IDENTIFIES THEM . IF NEW DEPOSITS WERE DISCOVERED IN BELGIUM THE COMPANY WORKING THEM WOULD BE BOUND TO SELL AT THE PRICES FIXED BY THE DECISION . FURTHERMORE, THE TERRITORIAL LIMITATION DOES NOT IMPLY INDIVIDUAL IDENTIFICATION AND IT IS JUSTIFIED BY THE FACT THAT THE BELGIAN INDUSTRY IS IN NEED OF EQUALIZATION .
THE FACT THAT DECISION NO 22/55 LAYS DOWN SPECIFIC AND DETAILED RULES WHICH ARE APPLICABLE IN DIFFERENT SITUATIONS DOES NOT CONFLICT WITH THE GENERAL NATURE OF THE DECISION . ARTICLE 50 ( 2 ) OF THE TREATY IN FACT PROVIDES THAT THE MODE OF ASSESSMENT AND COLLECTION SHALL BE DETERMINED BY A GENERAL DECISION OF THE HIGH AUTHORITY, WHICH SHOWS THAT THE FACT THAT SUCH A DECISION HAS DOES NOT ACCSEQUENCES WHICH ARE INDIVIDUAL AND VARIED SPECIFIC CONSEQUENCES WHICH ARE INDIVIDUAL AND VARIED DOES NOT AFFECT ITS NATURE AS A GENERAL DECISION .
AS REGARDS THE DECISIONS CONTAINED IN THE LETTER OF 28 MAY 1955, THE PARTIES CONSIDER THAT THE FIRST, WHICH RELATES TO THE REDUCTION AND WITHDRAWAL OF EQUALIZATION, IS INDIVIDUAL IN NATURE AND THAT THE SECOND, WHICH RELATES TO THE THREAT TO WITHDRAW THE EQUALIZATION, IS GENERAL IN NATURE . ON THAT POINT THE COURT ACCEPTS THE POSITION ADOPTED BY THE PARTIES .
DURING THE ORAL PROCEDURE THE DEFENDANT RAISED THE QUESTION WHETHER IT IS POSSIBLE TO REGARD THE LATTER MEASURE AS A DECISION CAPABLE OF FORMING THE SUBJECT - MATTER OF AN APPLICATION FOR ANNULMENT IN ACCORDANCE WITH ARTICLE 33 OF THE TREATY . IN ITS LETTER OF 28 MAY 1955 THE HIGH AUTHORITY ACCEPTED THAT EQUALIZATION AID MUST BE ACCOMPANIED BY A SERIES OF MEASURES TO BE ADOPTED BY THE BELGIAN GOVERNMENT . FURTHERMORE, IT CONSIDERS THAT THE BELGIAN GOVERNMENT OUGHT TO APPLY FOUR MEASURES, INDICATED AT POINTS ( A ), ( B ), ( C ) AND ( D ). THE ACTION REFERRED TO UNDER ( D ) IS, THEREFORE, ONE OF THE SERIES OF MEASURES WHICH THE BELGIAN GOVERNMENT WOULD BE OBLIGED TO TAKE, IF THE CIRCUMSTANCES SO REQUIRED . THE HIGH AUTHORITY HAS THUS UNEQUIVOCALLY DETERMINED THE ATTITUDE WHICH IT HAS DECIDED TO TAKE HENCEFORTH SHOULD THE CIRCUMSTANCES MENTIONED UNDER 2 ( D ) OF THE LETTER ARISE IN OTHER WORDS, IT HAS LAID DOWN A RULE TO BE APPLIED IF NECESSARY . IT MUST THEREFORE BE SEEN AS A DECISION WITHIN THE MEANING OF ARTICLE 14 OF THE TREATY .
P . 325
SINCE THE INDIVIDUAL OR GENERAL NATURE OF EACH OF THE DECISIONS HAS BEEN ESTABLISHED, THE APPLICANTS ARE ENTITLED TO SEEK THE ANNULMENT OF THE REDUCTION OR WITHDRAWAL OF THE EQUALIZATION - THE INDIVIDUAL DECISION CONTAINED IN THE LETTER OF 28 MAY 1955 - BY PUTTING FORWARD ALL THE SUBMISSIONS REFERRED TO IN ARTICLE 33 OF THE TREATY . IN SO FAR AS THE APPLICANTS CONSIDER THAT THE TWO OTHER DECISIONS INVOLVE A MISUSE OF POWERS AFFECTING THEM, THEY MAY LODGE AN APPLICATION FOR THEIR ANNULMENT, SINCE THEY ARE GENERAL IN NATURE .
IN ORDER FOR AN APPLICATION FOR THE ANNULMENT OF A GENERAL DECISION TO BE ADMISSIBLE IT IS SUFFICIENT FOR THE APPLICANTS TO CLAIM FORMALLY THAT THERE HAS BEEN A MISUSE OF POWERS AFFECTING THEM, INDICATING CONVINCINGLY THE REASONS WHICH, IN THEIR OPINION, GIVE RISE TO THE PRESUMPTION OF A MISUSE OF POWERS .
AS REGARDS THE FIFTH AND SIXTH COMPLAINTS, THE DEFENDANT RAISED THE QUESTION WHETHER THE APPLICATION BROUGHT BY THE APPLICANTS SATISFIES THE REQUIREMENTS OF ARTICLE 22 OF THE STATUTE OF THE COURT OF JUSTICE AND OF ARTICLE 29 OF THE RULES OF PROCEDURE OF THAT COURT, IN PARTICULAR AS REGARDS THE STATEMENT OF THE GROUNDS RELIED ON AND THE BRIEF DESCRIPTION OF THEM .
THE CONCLUSIONS OF THE PARTIES IN THE APPLICATION INDICATE THE GROUNDS RELIED ON IN SUPPORT OF THOSE COMPLAINTS, WHICH IS SUFFICIENT TO SATISFY THE AFOREMENTIONED PROVISIONS . SIMILARLY, A BRIEF DESCRIPTION OF THOSE GROUNDS MAY BE REGARDED AS INCORPORATED WITHIN THE APPLICATION IN SUPPORT OF THE FIFTH COMPLAINT, BUT NOT AS REGARDS THE FOURTH . IN FACT, THE FOURTH COMPLAINT CONSISTS SOLELY OF A REFERENCE TO " THE STATEMENT CONTAINED IN THE APPLICATION LODGED BY FEDECHAR THAT THE DECISION OF THE HIGH AUTHORITY IS UNLAWFUL IN SO FAR AS IT IMPOSES REDUCED PRICES FOR CERTAIN TYPES OF COAL ". IN SPITE OF THE UNQUESTIONABLE LINK BETWEEN THE TWO APPLICATIONS A GENERAL REFERENCE TO A STATEMENT MADE IN ANOTHER CASE IS NOT SUFFICIENT FOR THE APPLICATION TO BE IN ACCORDANCE WITH THE AFOREMENTIONED PROVISIONS, IN PARTICULAR AS THE REFERENCE - AS IS THE CASE AS REGARDS THE FOURTH COMPLAINT IN THE PRESENT APPLICATION - WAS NOT ACCOMPANIED BY AN APPLICATION FOR THE AFFAIRS TO BE JOINED . THAT APPLICATION WAS MADE ONLY AT THE BEGINNING OF THE ORAL PROCEDURE . THE FOURTH COMPLAINT IS THEREFORE INADMISSIBLE .
P . 326
SIMILARLY, THE GROUNDS UPON WHICH THE PARTIES RELIED FOR THE FIRST TIME IN THEIR REPLY WITHOUT HAVING MENTIONED THEM IN THE APPLICATION MUST ALSO BE DECLARED INADMISSIBLE . THAT APPLIES THEREFORE TO THE RELATIONSHIP BETWEEN SELLING PRICES AND ESTIMATED PRODUCTION COSTS AND TO THE INTERVENTION BY THE BELGIAN GOVERNMENT . SUBJECT TO THE FOREGOING, THE APPLICATION IS ADMISSIBLE .
HOWEVER, THE PARTIES DISAGREE OVER THE EXACT SCOPE OF ARTICLE 33 OF THE TREATY IN RELATION TO THE ADMISSIBILITY OF CERTAIN SUBMISSIONS MADE BY THE APPLICANTS AGAINST THE GENERAL DECISIONS .
THE DEFENDANT MAINTAINS THAT AN UNDERTAKING CANNOT PUT FORWARD A SUBMISSION OF MISUSE OF POWERS AFFECTING IT UNLESS THE HIGH AUTHORITY HAS CAMOUFLAGED AN INDIVIDUAL DECISION " AFFECTING " THAT UNDERTAKING BENEATH THE EXTERNAL APPEARANCE OF A MEASURE LAYING DOWN GENERAL RULES .
THAT ARGUMENT MUST BE REJECTED . A DISGUISED INDIVIDUAL DECISION REMAINS AN INDIVIDUAL DECISION, SINCE ITS NATURE DEPENDS ON ITS SCOPE RATHER THAN ON ITS FORM . FURTHERMORE, SUCH AN INTERPRETATION OF ARTICLE 33 AND ESPECIALLY OF THE WORDS " AFFECTING THEM " CANNOT BE ACCEPTED, SINCE THE PHRASE " ACCEPTING THEM " CAN BE UNDERSTOOD ONLY IN THE SENSE OF THE WORDS WHICH EXPRESS IT, THAT IS, WHERE IT CONCERNS AN UNDERTAKING WHICH IS THE SUBJECT OR AT ANY RATE THE VICTIM OF THE MISUSE OF POWERS ALLEGED BY THAT UNDERTAKING . THE COURT CONSIDERS THAT ARTICLE 33 CLEARLY STATES THAT ASSOCIATIONS AND UNDERTAKINGS MAY CONTEST NOT ONLY INDIVIDUAL DECISIONS BUT ALSO GENERAL DECISIONS IN THE TRUE SENSE OF THE TERM .
THE DEFENDANT MAINTAINS IN THE ALTERNATIVE THAT THE APPLICANTS ARE ENTITLED TO PUT FORWARD ONLY THE SUBMISSION OF MISUSE OF POWERS AND THAT ALL THE OTHER SUBMISSIONS MUST BE SET ASIDE . THE APPLICANTS, ON THE OTHER HAND, CONSIDER NOT ONLY THAT THEY ARE ENTITLED TO PUT FORWARD ALL THE GROUNDS FOR ANNULMENT, PROVIDED THAT THEY PLEAD A MISUSE OF POWERS CONVINCINGLY, BUT ALSO THAT THEY MAY BRING PROOF OF THE OTHER DEFECTS IN ORDER TO SUPPORT THE SUBMISSION OF MISUSE OF POWERS . THEY CONSIDER THAT THE TREATY HAS ESTABLISHED A LEGAL SYSTEM IN WHICH, IN ORDER FOR THEIR ACTIONS TO BE ADMISSIBLE, PRIVATE UNDERTAKINGS MAY ONLY PLEAD A MISUSE OF POWERS AFFECTING THEM; IT WOULD THEREFORE BE ILLOGICAL TO REGARD THAT SUBMISSION AS BEING MERELY EXCEPTIONAL AND SECONDARY IN NATURE .
THAT ARGUMENT MUST BE DISMISSED . IF THE TREATY PROVIDES THAT PRIVATE UNDERTAKINGS ARE ENTITLED TO SEEK THE ANNULMENT OF A GENERAL DECISION ON THE GROUND OF MISUSE OF POWERS AFFECTING THEM, THAT IS BECAUSE THEY HAVE NO RIGHT OF ACTION ON ANY OTHER GROUND .
IF THE APPLICANTS'ARGUMENT WERE CORRECT, UNDERTAKINGS WOULD HAVE A RIGHT OF ACTION AS EXTENSIVE AS THAT OF THE STATES AND THE COUNCIL AND IT WOULD BE DIFFICULT TO EXPLAIN WHY, INSTEAD OF SIMPLY TREATING ACTIONS BROUGHT BY UNDERTAKINGS IN THE SAME WAY AS THOSE BROUGHT BY STATES OR THE COUNCIL, ARTICLE 33 INTRODUCED A CLEAR DISTINCTION BETWEEN INDIVIDUAL DECISIONS AND GENERAL DECISIONS, WHILE RESTRICTING THE ANNULMENT OF GENERAL DECISIONS IN THE CASE OF UNDERTAKINGS TO THE SUBMISSION OF MISUSE OF POWERS AFFECTING THEM . THE PHRASE " UNDER THE SAME CONDITIONS " CANNOT BE INTERPRETED AS MEANING THAT, AFTER ESTABLISHING A CASE OF MISUSE OF POWERS AFFECTING THEM, UNDERTAKINGS ARE ENTITLED TO PUT FORWARD IN ADDITION THE OTHER GROUNDS FOR ANNULMENT, SINCE ONCE THE MISUSE OF POWERS AFFECTING THEM IS ESTABLISHED THE DECISION IN QUESTION IS ANNULLED, AND THAT ANNULMENT DOES NOT HAVE TO BE PRONOUNCED AGAIN ON OTHER GROUNDS .
P . 327
THE FOREGOING CONSIDERATIONS CLEARLY CONTRADICT THE APPLICANTS'ILLOGICAL VIEW THAT THE INTERPRETATION OF THE TREATY MUST BE SUBORDINATED TO THE DESIRE TO GRANT TO PRIVATE UNDERTAKINGS A RIGHT OF ACTION WHICH IS ALMOST IDENTICAL TO THAT AVAILABLE TO THE STATES AND TO THE COUNCIL . ALTHOUGH SUCH A WISH IS UNDERSTANDABLE, THERE IS NOTHING IN THE TREATY FROM WHICH IT MAY BE CONCLUDED THAT PRIVATE UNDERTAKINGS HAVE BEEN GRANTED SUCH A RIGHT TO REVIEW THE " CONSTITUTIONALITY " OF GENERAL DECISIONS, THAT IS, THEIR CONFORMITY WITH THE TREATY, SINCE THEY ARE QUASI - LEGISLATIVE MEASURES ADOPTED BY A PUBLIC AUTHORITY WITH LEGISLATIVE EFFECT " ERGA OMNES ".
ALTHOUGH IT IS TRUE THAT ARTICLE 33 ACCEPTS THE EXISTENCE OF A RIGHT TO BRING AN APPLICATION FOR THE ANNULMENT OF A GENERAL DECISION ON THE GROUND OF MISUSE OF POWERS AFFECTING AN UNDERTAKING, THAT IS AN EXCEPTION WHICH IS EXPLAINED BY THE FACT THAT, IN THIS CASE, IT IS STILL THE INDIVIDUAL FACTOR WHICH PREVAILS .
AS AGAINST THE GENERAL DECISIONS, THEREFORE, THE APPLICANTS MAY RELY ONLY ON THE SUBMISSION OF MISUSE OF POWERS AFFECTING THEM . AS REGARDS THE INDIVIDUAL DECISION, SINCE THE PARTIES ARE AGREED THAT IT MAY BE SO DESCRIBED, THE APPLICANTS MAY RELY ON ALL THE SUBMISSIONS SET OUT IN THE FIRST PARAGRAPH OF ARTICLE 33 .
B - SUBSTANCE
THE FIRST COMPLAINT - REDUCTION OR WITHDRAWAL OF EQUALIZATION AS REGARDS CERTAIN UNDERTAKINGS
THE APPLICANTS MAINTAIN, FIRST, THAT THE INTRODUCTION INTO THE EQUALIZATION SCHEME OF A SELECTIVE CRITERION, THAT IS, THE ADJUSTMENT OF THE EQUALIZATION PAYMENTS TO THE INDIVIDUAL SITUATION OF THE UNDERTAKINGS, CONSTITUTES DISCRIMINATION WHICH IS PROHIBITED BY THE TREATY .
THAT ARGUMENT MUST BE REJECTED . AS A RESULT OF THE DECISION CONTAINED IN THE LETTER OF 28 MAY 1955 EQUALIZATION PAYMENTS ARE REDUCED OR EVEN ABOLISHED WHERE THE DISADVANTAGES RESULTING FROM LESS FAVOURABLE GEOLOGICAL CONDITIONS, WHICH ARE INDEED ONE OF THE PREMISES OF THE SPECIAL PROVISIONS APPLYING TO THE BELGIAN COAL INDUSTRY, NO LONGER EXIST . IT FOLLOWS THEREFROM THAT THE PAYMENT OF DIFFERING RATES OF EQUALIZATION ON THE BASIS OF PHYSICAL CONDITIONS OF PRODUCTION IS EVIDENCE OF A DESIRE TO ACKNOWLEDGE DIFFERENCES WHICH ACTUALLY EXIST, SO AS TO ENSURE THAT COMPARABLE CASES RECEIVE COMPARABLE BENEFIT AND, THEREFORE, TO AVOID DISCRIMINATION . THE APPLICANTS'ARGUMENT WOULD BE CONVINCING ONLY IF THE HIGH AUTHORITY HAD NOT APPLIED AN OBJECTIVE AND UNIFORM CRITERION IN ORDER TO CHECK WHETHER THE INDIVIDUAL SITUATION OF THE UNDERTAKINGS SATISFIED THE CONDITIONS FIXED FOR THE AWARD OF EQUALIZATION . THE DECISION CONTAINED IN THE LETTER IN FACT LAID DOWN SUCH A CRITERION AND IT HAS NOT BEEN DISPUTED THAT THE SITUATION OF THE THREE COLLIERIES IS IN ACCORDANCE THEREWITH .
P . 328
SECONDLY, THE APPLICANTS CONSIDER THAT AS ARTICLE 26 ( 2 ) ( A ) REFERS TO " BELGIAN COAL " AND THE EQUALIZATION PAYMENTS PROVIDED FOR UNDER SUBPARAGRAPHS ( B ) AND ( C ) ARE GENERAL IN NATURE, THE EQUALIZATION PROVIDED FOR UNDER SUBPARAGRAPH ( A ) MUST ALSO BE GENERAL IN NATURE .
THAT ARGUMENT IS NOT CONCLUSIVE, SINCE THE EQUALIZATION PAYMENTS PROVIDED FOR UNDER SUBPARAGRAPHS ( B ) AND ( C ) ARE CLEARLY INTENDED TO PUT BOTH THE BELGIAN IRON AND STEEL INDUSTRY AND EXPORTERS OF COAL IN A POSITION TO MEET COMPETITION IN THE COMMON MARKET IF THE LIMIT REPRESENTED BY THE ESTIMATED PRODUCTION COSTS IS TOO FAR ABOVE THE LEVEL OF THE RULING COMMON MARKET PRICES . FOR THOSE REASONS THE AIMS PURSUED BY THE EQUALIZATION PAYMENTS UNDER SUBPARAGRAPHS ( B ) AND ( C ) ARE DIFFERENT FROM THAT PURSUED BY EQUALIZATION UNDER SUBPARAGRAPH ( A ). FURTHERMORE, SUBPARAGRAPHS ( B ) AND ( C ) CONTAIN A NUMBER OF PROVISIONS WHICH ARE INTENDED TO GOVERN THE DISTRIBUTION OF THE EQUALIZATION PAYMENTS MADE THEREUNDER, WHILE THERE ARE NO SUCH RULES FOR THE EQUALIZATION PAYMENTS MADE UNDER SUBPARAGRAPH ( A ). IN THE LIGHT OF THOSE DIFFERENCES BETWEEN SUBPARAGRAPHS ( A ), ( B ) AND ( C ) AND OF THE FACT THAT THE PHRASE " BELGIAN COAL " ADMITS OF EITHER INTERPRETATION, IT CANNOT BE CONCLUDED ON THE BASIS OF THE TEXT OF ARTICLE 26 ALONE THAT THE EQUALIZATION PROVIDED FOR UNDER SUBPARAGRAPH ( A ) MUST BE GENERAL IN NATURE .
ON THE ASSUMPTION THAT EQUALIZATION PAYMENTS MADE UNDER SUBPARAGRAPH ( A ) WERE THE SAME FOR ALL UNDERTAKINGS WITHOUT REGARD TO DIFFERENCES IN THEIR CONDITIONS OF PRODUCTION, EQUALIZATION WOULD BECOME DISCRIMINATORY AND ITS EXISTENCE UNJUSTIFIED SINCE, IN SO FAR AS IT WAS AWARDED TO UNDERTAKINGS WHOSE CONDITIONS OF PRODUCTION DO NOT SUFFER THE DISADVANTAGES WHICH ARE THE VERY REQUIREMENTS OF THE AWARD, IT WOULD BECOME A SUBSIDY . IT FOLLOWS THAT EQUALIZATION MUST NECESSARILY TAKE ACCOUNT OF THE INDIVIDUAL POSITION OF THE UNDERTAKINGS AS REGARDS THEIR CONDITIONS OF PRODUCTION .
IN SUPPORT OF THEIR ARGUMENT THE APPLICANTS AGAIN REFER TO THE EXISTENCE OF A GUARANTEE TO MAINTAIN PREVIOUS LEVELS OF RECEIPTS .
DESPITE THE FACT THAT THE CONVENTION DOES NOT REFER TO THE EXISTENCE, WHERE APPROPRIATE, OF A RELATIONSHIP BETWEEN EQUALIZATION AND RECEIPTS, THE LATTER BEING MENTIONED ONLY IN ARTICLE 25 IN RELATION TO THE BASIS OF ASSESSMENT OF THE LEVY, SUCH AN INTERPRETATION WOULD BE ADMISSIBLE ONLY IF EQUALIZATION HAD NECESSARILY AND IN ALL CIRCUMSTANCES TO COVER THE ENTIRE DIFFERENCE BETWEEN THE REDUCED SELLING PRICES AND RECEIPTS AT THE BEGINNING OF THE TRANSITIONAL PERIOD . THAT IS NOT THE CASE, SINCE EQUALIZATION IS ONLY A NECESSARY PROTECTIVE MEASURE TO AVOID HURRIED AND DANGEROUS SHIFTS IN PRODUCTION LEVELS . IN ACCORDANCE WITH ARTICLE 24 OF THE CONVENTION THE SPECIAL SYSTEM ESTABLISHED FOR THAT PURPOSE MUST TAKE ACCOUNT OF SITUATIONS EXISTING WHEN THE COMMON MARKET IS ESTABLISHED . HOWEVER, IT IS NOT POSSIBLE TO INTERPRET THAT PROVISION WIDELY, AS GUARANTEEING THE MAINTENANCE OF THE ORIGINAL LEVEL OF RECEIPTS . THE INTRODUCTION OF A SPECIAL SYSTEM, SUCH AS THE EQUALIZATION SCHEME, IS TO BE EXPLAINED BY THE EXISTENCE IN BELGIUM OF CERTAIN CONDITIONS OF PRODUCTION WHICH ARE INHERENTLY DIFFERENT FROM THOSE IN OTHER COUNTRIES PARTICIPATING IN THE COMMON MARKET . EQUALIZATION MUST, THEREFORE, NOT EXCEED THE LIMITS OF WHAT IS STRICTLY NECESSARY IN ORDER TO NEUTRALIZE TO A CERTAIN EXTENT THE EFFECTS OF THE DISADVANTAGE RESULTING FROM THOSE DIFFERENCES, WHICH DOES NOT IMPLY A GUARANTEE THAT THE ORIGINAL LEVEL OF RECEIPTS WILL BE MAINTAINED . THE QUESTION OF THE EXTENT TO WHICH THE TOTAL OF SELLING PRICES AND EQUALIZATION PAYMENTS - WHICH DETERMINES THE RECEIPTS OF THE UNDERTAKINGS - MUST VARY DURING THE TRANSITIONAL PERIOD IS A QUESTION WHICH THE HIGH AUTHORITY MUST EXAMINE IN THE LIGHT OF THE PROGRESS OF THE PROGRAMMES FOR THE RE-EQUIPMENT AND REORGANIZATION OF THE BELGIAN MINES .
P . 329
FURTHERMORE, IF THE PURPOSE OF EQUALIZATION WAS TO GUARANTEE THE MAINTENANCE OF ORIGINAL LEVELS OF RECEIPTS, IT WOULD BE IN CONTRADICTION WITH THE PRINCIPLE OF THE DECREASE OF THE EQUALIZATION LEVY LAID DOWN IN ARTICLE 25 OF THE CONVENTION . IN ADDITION, ARTICLE 1 OF THE CONVENTION REFERS TO PRODUCTION BEING PROGRESSIVELY ADAPTED TO THE NEW CONDITIONS RESULTING FROM THE ESTABLISHMENT OF THE COMMON MARKET AND NOT TO THE NEW CONDITIONS BEING ADAPTED TO THE MAINTENANCE OF SITUATIONS EXISTING AT THE BEGINNING OF THE TRANSITIONAL PERIOD .
MOREOVER, IF, AS THE APPLICANTS MAINTAIN, EQUALIZATION WAS INTENDED TO ENSURE THAT THE COLLIERIES HAVE THE FINANCIAL RESOURCES AVAILABLE WHICH ARE REGARDED AS INDISPENSABLE TO THE IMPLEMENTATION OF THEIR RE-EQUIPMENT PROGRAMMES, THE AIM OF THE EQUALIZATION SCHEME WOULD GREATLY EXCEED THE REASONS FOR ITS ESTABLISHMENT AND WOULD TRANSFORM IT INTO A MEASURE INTENDED TO CONTRIBUTE ACTIVELY AND DIRECTLY TO THE REORGANIZATION OF THE BELGIAN MINES, WHICH WOULD BE CONTRARY TO THE RATHER PASSIVE NATURE OF A PROTECTIVE MEASURE .
FINALLY, THE APPLICANTS MAINTAIN THAT EQUALIZATION PAYMENTS MUST BE THE SAME FOR ALL COLLIERIES SINCE THE TREATY AND THE CONVENTION PROVIDE, IN PARTICULAR IN THE FOURTH PARAGRAPH OF ARTICLE 5 AND ARTICLE 62 OF THE TREATY AND IN ARTICLES 24 ( B ) AND 26 ( 4 ) OF THE CONVENTION, FOR SPECIAL MEASURES INTENDED TO IRON OUT THE DIFFERENCES EXISTING BETWEEN THE COLLIERIES CONSIDERED INDIVIDUALLY .
THAT ARGUMENT IS NOT VALID, SINCE ALTHOUGH THE AFOREMENTIONED PROVISIONS PROVIDE FOR MEASURES OTHER THAN EQUALIZATION IN ORDER TO BRING TO AN END DIFFERENCES EXISTING BETWEEN THE COLLIERIES, THAT DOES NOT IN ANY WAY PREVENT EQUALIZATION ALSO TAKING INDIVIDUAL DIFFERENCES INTO ACCOUNT IN THE CASE OF BELGIUM, IN SO FAR AS THE EQUALIZATION SCHEME ESTABLISHED FOR THAT COUNTRY PERMITS .
THE PRESENT COMPLAINT IS THEREFORE UNFOUNDED .
THE SECOND COMPLAINT - FIXING OF THE NEW RATES OF EQUALIZATION AT A FLAT RATE
THIS COMPLAINT ALLEGES THAT THE NEW METHOD, WHICH CONSISTS IN FIXING THE NEW RATES OF EQUALIZATION AT A FLAT RATE WITHOUT ANY INDICATION OF THE PRICE LIST " FOR ACCOUNTING PURPOSES ", IS ARBITRARY AND BASED ON REASONS WHICH ARE EXTRANEOUS TO ARTICLE 26 OF THE CONVENTION .
IT SHOULD BE OBSERVED, FIRST, THAT THE SELLING PRICE FIXED FOR EACH TYPE OF COAL TOGETHER WITH THE EQUALIZATION PAYMENTS IS EQUIVALENT TO WHAT WAS PREVIOUSLY CALLED THE PRICE " FOR ACCOUNTING PURPOSES " AND THAT THE TOTAL OF THOSE TWO ELEMENTS IS LOWER IN FOUR CASES AND HIGHER IN FIFTY-TWO CASES THAN THE PRICE " FOR ACCOUNTING PURPOSES " PREVIOUSLY IN FORCE .
BEFORE CONSIDERING WHETHER THE NEW RATES OF EQUALIZATION WHICH ARE ADDED TO THE NEW SELLING PRICES ARE ARBITRARY IN NATURE IT SHOULD BE NOTED THAT THE NATURE OF THE EQUALIZATION ARRANGEMENTS CANNOT BE ASCERTAINED IN TERMS OF THE VARIATIONS RESULTING FROM THE " PRINCIPLE OF SELECTIVITY " WHICH THE HIGH AUTHORITY WAS ENTITLED TO APPLY .
P . 330
AS REGARDS THE FIXING OF RATES OF EQUALIZATION FOR THE VARIOUS TYPES AND CATEGORIES OF COAL, THE COURT CONSIDERS THAT THE VERY NATURE OF THE EQUALIZATION SCHEME OBLIGED THE HIGH AUTHORITY TO ADJUST THE PAYMENTS TO THE NEEDS OF THE UNDERTAKINGS . IT SHOULD BE ADDED THAT THE HIGH AUTHORITY MUST TAKE PARTICULAR ACCOUNT OF THE GRADUAL DECREASE IN THE EQUALIZATION FUNDS AVAILABLE AND THE PROGRESS MADE OR CONSIDERED POSSIBLE AS REGARDS THE EFFORT TO RE-EQUIP AND REORGANIZE THE BELGIAN COLLIERIES .
IT RESULTS FROM THE FOREGOING CONSIDERATIONS THAT THE AMOUNTS OF EQUALIZATION WILL NECESSARILY VARY FROM ONE CASE TO ANOTHER, BUT THAT THE MERE EXISTENCE OF VARIATIONS IS NOT PROOF THAT THE HIGH AUTHORITY FIXED THOSE AMOUNTS ARBITRARILY AND IN A MANNER EXTRANEOUS TO THE AIM OF THE CONVENTION . THE PRESENT COMPLAINT MUST THEREFORE BE DISMISSED .
THE THIRD COMPLAINT - THE THREAT TO WITHDRAW EQUALIZATION
SINCE EQUALIZATION IS A PROTECTIVE MEASURE ENABLING BELGIAN COAL TO BE INTEGRATED INTO THE COMMON MARKET FROM THE BEGINNING OF THE TRANSITIONAL PERIOD DURING WHICH THE PROCESS OF REORGANIZATION AND RE-EQUIPMENT MUST BE IMPLEMENTED, IT IS NOT INTENDED TO MAKE ANY DIRECT AND ACTIVE CONTRIBUTION TO THAT PROCESS . IT IS CLEAR THAT EQUALIZATION IS GRANTED ON THE ASSUMPTION THAT THE REORGANIZATION AND RE-EQUIPMENT OF THE BELGIAN COLLIERIES MAY BE ACHIEVED TO A SUFFICIENT DEGREE TO ENABLE THE FINAL INTEGRATION OF BELGIAN COAL INTO THE COMMON MARKET AT THE END OF THE TRANSITIONAL PERIOD .
THE AIM OF THE EQUALIZATION SCHEME IS NOT TO FINANCE THE RE-EQUIPMENT AND REORGANIZATION OF THE COLLIERIES . FURTHERMORE, IF IT WERE TO APPEAR THAT CERTAIN UNDERTAKINGS WERE NOT CARRYING OUT THE WORK OF REORGANIZATION AND RE-EQUIPMENT, SUCH THAT THEY INCURRED LIABILITY, IT WOULD HAVE TO BE ACKNOWLEDGED THAT THERE WAS NO LONGER ANY BASIS OR JUSTIFICATION FOR EQUALIZATION . THOSE UNDERTAKINGS WOULD THUS HAVE DEPRIVED THEMSELVES BY THEIR OWN FAULT OF THE RIGHT TO BENEFIT FROM EQUALIZATION .
THE HIGH AUTHORITY MUST TAKE SUCH A POSSIBILITY INTO ACCOUNT . IT DID SO CONDITIONALLY AT POINT 2 ( D ) OF ITS LETTER OF 28 MAY 1955, WHEN IT AUTHORIZED THE BELGIAN GOVERNMENT TO WITHDRAW EQUALIZATION WHERE APPROPRIATE, SUBJECT TO THE PRIOR AGREEMENT OF THE HIGH AUTHORITY . IT CANNOT BE CONCLUDED FROM THE WORDING OF THE LETTER THAT THE HIGH AUTHORITY WOULD HAVE MADE ITS AGREEMENTS DEPENDENT UPON NON-OBJECTIVE CRITERIA WHICH ARE NOT JUSTIFIED BY THE FACTS . THE HIGH AUTHORITY IS NOT THEREFORE GUILTY OF A MISUSE OF POWERS AND THE APPLICATION IS WITHOUT FOUNDATION ON THAT POINT .
P . 331
THE FIFTH COMPLAINT - FIXING OF SELLING PRICES IN CERTAIN CASES WITHOUT PROVISION FOR EQUALIZATION
THE DEFENDANT ALLEGES THAT THE EXCLUSION FROM THE BENEFIT OF EQUALIZATION OF UNCLASSIFIED BITUMINOUS COALS FROM THE CAMPINE IN NO WAY IMPLIES THAT THOSE TYPES ARE ALREADY SUFFICIENTLY INTEGRATED INTO THE COMMON MARKET TO BE PLACED OUTSIDE THE SYSTEM OF EQUALIZATION . IT CONSIDERS THAT ACCOUNT MUST BE TAKEN OF THE FACT THAT IT MAY BE NECESSARY TO MAKE A FURTHER REDUCTION IN BELGIAN PRICES AND, WHERE APPROPRIATE, TO RECOMMENCE PAYMENT OF EQUALIZATION TO THE COLLIERIES IN THE CAMPINE AS WELL .
IN FACT, THE LETTER OF 28 MAY 1955 LEAVES UNCHANGED THE TYPES OF COAL IN QUESTION WITHIN THE EQUALIZATION SYSTEM IN SPITE OF THE MODIFICATIONS WHICH IT MAKES TO THE RULES WHICH DETERMINE THE AMOUNT OF THE EQUALIZATION PAYMENTS TO CERTAIN UNDERTAKINGS . THE SYSTEM LAID DOWN IN ARTICLE 26 ( 2 ) ( A ) OF THE CONVENTION IS THEREFORE APPLICABLE TO THOSE TYPES, IN PARTICULAR AS REGARDS THE NEED TO ENSURE THAT THAT SYSTEM TAKES FULL EFFECT THROUGH THE FIXING OF PRICES BY THE HIGH AUTHORITY .
THE FIXING OF PRICES IS A GENERAL MEASURE WHICH IS NECESSARY TO THE APPLICATION OF THE EXCEPTIONAL SYSTEM LAID DOWN IN ARTICLE 26 ( 2 ) FOR THE ENTIRE BELGIAN COAL PRODUCTION .
THE QUESTION WHETHER THAT SYSTEM ENABLES EQUALIZATION TO BE REDUCED OR EVEN WITHDRAWN ON THE BASIS OF THE CONDITIONS OF PRODUCTION OF CERTAIN INDIVIDUAL UNDERTAKINGS FORMS THE SUBJECT OF THE COMPLAINT RELATING TO THE APPLICATION OF THE PRINCIPLE OF SELECTIVITY HAS BEEN ESTABLISHED IN RELATION TO ALL THE PROVISIONS OF THE LETTER OF 28 MAY 1955 FROM THE HIGH AUTHORITY TO THE BELGIAN GOVERNMENT . HOWEVER, IT MAY BE STATED THAT IT IS IMPOSSIBLE TO CONCEIVE EITHER OF THE EXISTENCE OF SEVERAL PRICE LISTS APPLYING TO CONSUMERS OF BELGIAN COAL OR OF THE COEXISTENCE OF BOTH LIBERALIZED AND FIXED PRICES FOR COALS OF THE SAME TYPE .
IT FOLLOWS THAT IN THE FOREGOING CASE THE REDUCTION OR EVEN WITHDRAWAL OF EQUALIZATION IN RESPECT OF CERTAIN TYPES AND IN CERTAIN INDIVIDUAL CASES DOES NOT RESULT IN THOSE TYPES BEING PLACED OUTSIDE THE PRICE LIST, SINCE THERE CAN BE ONLY ONE PRICE LIST RESULTING FROM THE APPLICATION OF ARTICLE 26 ( 2 ) FOR ALL CONSUMERS OF BELGIAN COAL .
DECISION NO 22/55 IS THEREFORE TO BE EXPLAINED BY THE NORMAL APPLICATION OF THE SYSTEM REFERRED TO IN ARTICLE 26 AND THE NORMAL EXERCISE OF A POWER WHICH IS NECESSARY FOR THE IMPLEMENTATION OF THAT SYSTEM . THE SUBMISSION OF MISUSE OF POWERS IS THEREFORE UNFOUNDED .
Decision on costs
UNDER THE TERMS OF ARTICLE 60 OF THE RULES OF PROCEDURE OF THE COURT THE UNSUCCESSFUL PARTY SHALL BE ORDERED TO PAY THE COSTS . THE APPLICANTS MUST THEREFORE BE ORDERED TO BEAR THE COSTS OF THE ACTION .
Operative part
THE COURT
HEREBY :
1 . DISMISSES THE APPLICATION FOR THE ANNULMENT OF CERTAIN DECISIONS OF THE HIGH AUTHORITY RESULTING FROM ITS LETTER OF 28 MAY 1955 TO THE GOVERNMENT OF THE KINGDOM OF BELGIUM CONCERNING THE ADJUSTMENT OF THE EQUALIZATION SYSTEM AND OF DECISION NO 22/55 OF THE HIGH AUTHORITY OF 28 MAY 1955;
2 . ORDERS THE APPLICANTS TO BEAR THE COSTS . |
Judgment of the Court of 19 July 1955. - M. Antoine Kergall v Common Assembly of the European Coal and Steel Community. - Case 1/55.
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Summary
Parties
Subject of the case
Grounds
Decision on costs
Operative part
Keywords
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1 . SERVANTS OF THE COMMUNITY - DISPUTES WITH THE INSTITUTIONS - JURISDICTION OF THE COURT
( TREATY, ARTICLE 42 )
2 . SERVANTS OF THE COMMUNITY - PERIOD PRIOR TO THE ADOPTION OF THE STAFF REGULATIONS - CONTRACT OF EMPLOYMENT - PRECURSOR OF THE STAFF REGULATIONS - INTERPRETATION
( CONVENTION ON THE TRANSITIONAL PROVISIONS, THIRD PARAGRAPH OF ARTICLE 7 ).
3 . SERVANTS OF THE COMMUNITY - PROFESSIONAL ABILITY - ASSESSMENT BY THE ADMINISTRATION - REVIEW BY THE COURT
4 . SERVANTS OF THE COMMUNITY - ABOLITION OF A POST - POWERS OF THE ADMINISTRATION - REASSIGNMENT OF THE SERVANT
( TREATY, ARTICLE 31 ).
5 . LIABILITY OF THE COMMUNITY - WRONGFUL ACT ON THE PART OF THE ADMINISTRATION - INJURY - OBLIGATION TO MAKE GOOD
( TREATY, ARTICLE 40 ).
Summary
1 . THE JURISDICTION OF THE COURT IN DISPUTES INVOLVING SERVANTS OF THE COMMUNITY IS BASED ON ARTICLE 42 OF THE TREATY, TOGETHER WITH THE ARBITRATION CLAUSE CONTAINED IN THE CONTRACT OF EMPLOYMENT AND THE PROVISIONS OF THE STAFF RULES APPLICABLE .
2 . CONTRACTS OF EMPLOYMENT CONCLUDED WITH SERVANTS UNDER THE THIRD PARAGRAPH OF ARTICLE 7 OF THE CONVENTION ON THE TRANSITIONAL PROVISIONS ARE CONTRACTS GOVERNED BY PUBLIC LAW WHICH ARE THE PRECURSORS OF THE STAFF REGULATIONS AND RENDER SERVANTS ELIGIBLE FOR STABILITY OF EMPLOYMENT . THOSE CONTRACTS MUST BE INTERPRETED WITH REGARD TO WHAT WAS CONTEMPLATED BY THE PARTIES AND TO THE INTENTIONS OF THE COMMUNITY IN RESPECT OF ITS SERVANTS .
3 . IT IS NORMALLY THE ADMINISTRATION WHICH ASSESSES THE PROFESSIONAL COMPETENCE OF SERVANTS . A FINDING AS TO THE PROFESSIONAL INADEQUACY OF A SERVANT MUST BE REACHED BY MEANS OF A REGULAR PROCEDURE SUCH AS MUST BE FOLLOWED BY ANY ADMINISTRATION .
4 . THE ADMINISTRATION HAS THE POWER TO ORGANIZE ITS SERVICES AS IT WISHES AND IN THE INTERESTS OF THE SERVICE . IT ACTS IN THE FULL EXERCISE OF ITS POWERS WHEN IT ABOLISHES A POST WHICH IT CONSIDERS UNNECESSARY .
THE ABOLITION OF A GIVEN POST CANNOT, ON THAT COUNT ALONE, RESULT IN THE DISMISSAL OF THE SERVANT WHO OCCUPIED IT . RATHER, IT RENDERS THAT SERVANT FREE TO OCCUPY ANOTHER POST .
5 . WHERE, IN CIRCUMSTANCES WHICH ARE IRREGULAR, A CONTRACT OF EMPLOYMENT IS NOT RENEWED, THIS MAY CONSTITUTE A WRONGFUL ACT ON THE PART OF THE ADMINISTRATION IN THE PERFORMANCE OF ITS DUTIES ENTAILING LIABILITY WHICH INVOLVES THE OBLIGATION TO MAKE GOOD THE INJURY CAUSED .
Parties
IN CASE 1/55
ANTOINE KERGALL, REPRESENTED BY PIERRE CHAREYRE, ADVOCATE AT THE CONSEIL D'ETAT AND AT THE COUR DE CASSATION, PARIS, WITH AN ADDRESS FOR SERVICE IN LUXEMBOURG AT THE CHAMBERS OF G . MARGUE, 6 RUE ALPHONSE MUENCHEN, APPLICANT,
V
COMMON ASSEMBLY OF THE EUROPEAN COAL AND STEEL COMMUNITY, REPRESENTED BY ITS SECRETARY GENERAL, M.F.F.A . DE NEREE TOT BABBERICH, ACTING AS AGENT, ASSISTED BY JEAN COUTARD, ADVOCATE AT THE CONSEIL D'ETAT AND AT THE COUR DE CASSATION, PARIS, WITH AN ADDRESS FOR SERVICE IN LUXEMBOURG AT ITS OFFICES, 19A RUE BEAUMONT, DEFENDANT,
Subject of the case
APPLICATION FOR DAMAGES FOLLOWING FAILURE TO RENEW THE APPLICANT'S CONTRACT OF EMPLOYMENT,
Grounds
P . 155
1 . JURISDICTION
THE COURT HAS JURISDICTION TO HEAR THE PRESENT CASE .
THE JURISDICTION OF THE COURT IS BASED ON ARTICLE 42 OF THE TREATY, RELIED ON BY THE APPLICANT IN HIS APPLICATION, TOGETHER WITH ARTICLE 17 OF THE CONTRACT OF EMPLOYMENT AND ARTICLE 27 OF THE INTERNAL STAFF RULES OF THE COMMON ASSEMBLY OF 12 JANUARY 1953 . ARTICLE 17 OF THE CONTRACT OF EMPLOYMENT PROVIDES THAT ALL THE CLAUSES OF THE INTERNAL RULES IN FORCE ARE APPLICABLE TO THE RELATIONSHIP BETWEEN THE SERVANT AND THE COMMON ASSEMBLY IN SO FAR AS THEY ARE NOT CONTRARY TO THE PROVISIONS OF THE CONTRACT OF EMPLOYMENT . ARTICLE 27 OF THE INTERNAL STAFF RULES PROVIDES THAT ANY DISPUTE OF AN INDIVIDUAL CHARACTER TO WHICH THE APPLICATION OF THE RULES OR THE PERFORMANCE OF CONTRACTS OF EMPLOYMENT MAY GIVE RISE SHALL BE BROUGHT BEFORE THE COURT OF JUSTICE . ARTICLE 50 OF THE PROVISIONAL STAFF RULES OF 1 JULY 1953 CONTAINS AN ANALOGOUS PROVISION .
THE COURT ALSO FINDS THAT THE ARGUMENT WITH WHICH THE ADVOCATE GENERAL SUPPORTED HIS OPINION, BASED ON THE GENERAL PRINCIPLE OF LIABILITY LAID DOWN BY ARTICLE 40 OF THE TREATY, IS WELL FOUNDED . THAT ARTICLE WAS ALSO RELIED ON BY COUNSEL FOR THE APPLICANT DURING THE ORAL PROCEDURE .
THE COURT NOTES THAT THE DEFENDANT HAS NOT RAISED ANY OBJECTION OF INADMISSIBILITY . THE COURT RULES THAT THE PRESENT APPLICATION IS ADMISSIBLE .
2 . SUBSTANCE
AT ITS MEETING ON 15 JUNE 1953, THE BUREAU OF THE COMMON ASSEMBLY DECIDED " TO ABOLISH THE POST OF HEAD OF ADMINISTRATIVE SERVICES UPON THE EXPIRY OF THE CONTRACT OF THE PRESENT INCUMBENT, MR KERGALL ( 5 DECEMBER 1954 ) " ( SEE THE MINUTES OF THE MEETING ).
THAT DECISION TO ABOLISH THE SAID POST DID NOT, AT THAT MOMENT, EXPRESSLY INVOLVE THE NON-RENEWAL OF THE APPLICANT'S CONTRACT OF EMPLOYMENT . ON 16 JUNE 1953, THE SECRETARY GENERAL OF THE COMMON ASSEMBLY WROTE TO THE APPLICANT : " I REGRET TO INFORM YOU THAT THE BUREAU, AT ITS MEETING ON 15 JUNE, DECIDED TO ABOLISH THE POST WHICH YOU OCCUPY WITHIN THE SECRETARIAT OF THE COMMON ASSEMBLY . ACCORDINGLY, IT WILL NOT BE POSSIBLE FOR ME TO RENEW YOUR CONTRACT ". AT A NUMBER OF MEETINGS HELD BY THE BUREAU OF THE COMMON ASSEMBLY ON 3 AND 27 OCTOBER AND 29 NOVEMBER 1954, THE LATTER CONFIRMED THE DECISION NOT TO RENEW TAKEN BY THE SECRETARY GENERAL, AND REFUSED TO GRANT THE APPLICANT AN EXTENSION OF HIS CONTRACT AS REQUESTED BY HIM .
WITHOUT CLAIMING THAT THE DECISION NOT TO RENEW HIS CONTRACT SHOULD BE ANNULLED, THE APPLICANT CLAIMS THAT THE COURT SHOULD RULE THAT THE SAID DECISION WAS ADOPTED IN IRREGULAR CIRCUMSTANCES AND THAT IT SHOULD THEREFORE RULE THAT THE SAID MEASURE HAS CAUSED HIM INJURY, AND THAT THIS SHOULD BE MADE GOOD .
P . 156
A - ON THE REGULARITY OF THE DECISIONS OF THE DEFENDANT NOT TO RENEW THE APPLICANT'S CONTRACT OF EMPLOYMENT
( A ) THE COURT IS OF THE OPINION THAT ALTHOUGH THE CONTRACT OF EMPLOYMENT ENTERED INTO ON 10 JANUARY 1953 BETWEEN THE COMMON ASSEMBLY AND THE APPLICANT IS ON THE FACT OF IT MERELY A CONTRACT OF EMPLOYMENT FOR A LIMITED PERIOD, IT NEVERTHELESS CONSTITUTES A CONTRACT SUI GENERIS .
THAT CONTRACT MUST BE INTERPRETED NOT ONLY IN THE LIGHT OF THE PROVISIONS OF THE TREATY AND OF THE INTERNAL RULES IN FORCE TO WHICH IT REFERS, BUT ALSO WITH REGARD TO WHAT WAS CONTEMPLATED BY THE PARTIES AND TO THE INTENTIONS OF THE COMMUNITY IN RESPECT OF ITS SERVANTS .
1 . THE PREAMBLE TO THE SAID CONTRACT OF EMPLOYMENT REFERS TO THE THIRD PARAGRAPH OF ARTICLE 7 OF THE CONVENTION ON THE TRANSITIONAL PROVISIONS, WHICH PROVIDES : " UNTIL THE COMMITTEE PROVIDED FOR IN ARTICLE 78 OF THE TREATY HAS DECIDED UPON THE SIZE OF THE STAFF OF THE COMMUNITY AND HAS LAID DOWN STAFF REGULATIONS, THE PERSONNEL REQUIRED SHALL BE ENGAGED ON A CONTRACTUAL BASIS ". THE REFERENCE TO THAT PROVISION CLEARLY ESTABLISHES THE FACT THAT THE CONTRACT OF EMPLOYMENT WAS THE PRECURSOR OF THE STAFF REGULATIONS .
2 . ARTICLES 1 AND 2 OF THE CONTRACT OF EMPLOYMENT PROVIDE THAT " MR KERGALL SHALL ENTER THE SERVICE OF THE COMMON ASSEMBLY . THIS CONTRACT SHALL TAKE EFFECT ON 6 DECEMBER 1952 AND IS VALID FOR TWO YEARS ".
THE WORDS " ENTER THE SERVICE " AND THE FACT THAT THE APPLICANT WAS ENGAGED AS A SERVANT IN THE FIRST GRADE - WHICH INCLUDED THE SECRETARY GENERAL, THE ASSISTANT SECRETARY GENERAL, THE HEADS OF SERVICE AND PERSONS HOLDING SIMILAR POSTS - INDICATE, OR IN ANY EVENT, CONSTITUTE REASONABLE GROUNDS FOR TAKING THE VIEW THAT WHAT WAS INVOLVED HERE CAN ONLY HAVE BEEN THE APPLICANT'S ENGAGEMENT AS AN OFFICIAL WHO WAS ELIGIBLE, SUBJECT TO CERTAIN CONDITIONS, FOR STABILITY OF EMPLOYMENT, THAT IS TO SAY FOR ESTABLISHMENT UNDER THE STAFF REGULATIONS .
3 . FURTHERMORE, THE LIMITATION OF THE DURATION OF THE SAID CONTRACT TO A PERIOD OF TWO YEARS DOES NOT NECESSARILY MEAN THAT THE PARTIES INTENDED THAT THE ENGAGEMENT UNDER THE CONTRACT SHOULD BE OF LIMITED DURATION .
RATHER, IT MEANS THAT THEY SHARED THE GENERAL OPINION OF THE INSTITUTIONS OF THE COMMUNITY WHICH, AT THAT TIME, CONSIDERED THAT TWO YEARS WOULD SUFFICE IN ORDER TO PREPARE AND ADOPT THE STAFF REGULATIONS OF OFFICIALS .
ACCORDINGLY, THE COURT TAKES THE VIEW THAT THE ENGAGEMENT OF THE APPLICANT CREATED A LEGAL RELATIONSHIP WHICH IS WIDER THAN THAT ARISING UNDER A CONTRACT OF EMPLOYMENT GOVERNED BY PRIVATE LAW .
4 . MOREOVER, ARTICLE 15 OF THE APPLICANT'S CONTRACT OF EMPLOYMENT PROVIDES THAT SERVANTS SHALL RECEIVE A GRANT UPON THE EXPIRY OF THE CONTRACT IF THEY ARE NOT ESTABLISHED UNDER THE DEFINITIVE STAFF REGULATIONS OF OFFICIALS, AND ARTICLE 51 OF THE PROVISIONAL STAFF RULES OF 1 JULY 1953 PROVIDES THAT THE SAID RULES SHALL BE " AUTOMATICALLY " REPLACED BY THE STAFF REGULATIONS UPON THE ADOPTION OF THE LATTER . THUS THE CONTRACT OF EMPLOYMENT AND THE PROVISIONAL STAFF RULES MAKE PROVISION FOR AND ANTICIPATE THE APPLICATION OF STAFF REGULATIONS, AND THEREFORE RENDER THE APPLICANT'S EXPECTATIONS REASONABLE .
P . 157
FINALLY, THE APPLICANT'S CONTRACT OF EMPLOYMENT IS A CONTRACT GOVERNED BY PUBLIC LAW . IT IS A CONTRACT CONCERNING ENTRY INTO THE SERVICE OF A PUBLIC AUTHORITY, IN WHICH SERVICE THE APPLICANT WAS CALLED UPON TO PERFORM DUTIES APPERTAINING TO PUBLIC LAW, AND THE CONTRACT REFERS TO INTERNAL RULES ESTABLISHED BY THAT AUTHORITY .
IT FOLLOWS THAT THE LEGAL POSITION OF THE APPLICANT IS THAT OF A PUBLIC OFFICIAL ENGAGED ON A TEMPORARY BASIS .
5 . THERE IS NOTHING TO SUGGEST THAT THE DUTIES WHICH THE APPLICANT WAS TO PERFORM IMPLIED A TEMPORARY ASSIGNMENT LIKELY TO BE TERMINATED IN TWO YEARS . MOREOVER, THE ENGAGEMENT DID NOT INVOLVE A PROBATIONARY PERIOD, AND THE APPLICANT WAS NOT REQUIRED TO SERVE ANY SUCH PERIOD . FURTHERMORE, THE STAFF RULES OF 1 JULY 1953, WHICH WERE THE FIRST TO INTRODUCE THE SYSTEM OF A PROBATIONARY PERIOD OF 3 MONTHS, DO NOT PROVIDE THAT AFTER THE PROBATIONARY PERIOD HAS BEEN COMPLETED THE INSTITUTION MAY STILL PROCEED TO A DISMISSAL OTHERWISE THAN AS A DISCIPLINARY MEASURE .
6 . AS REGARDS THE PROFESSIONAL INADEQUACY ALLEGED BY THE DEFENDANT, THE COURT IS OF THE OPINION THAT IT IS NORMALLY THE ADMINISTRATION WHICH ASSESSES PROFESSIONAL COMPETENCE, BUT IT NOTES THAT NO DECISION OF THE BUREAU OF THE COMMON ASSEMBLY MENTIONS ANY PROFESSIONAL INADEQUACY ON THE PART OF THE APPLICANT . FURTHERMORE, THE APPLICANT WAS NOT GIVEN THE OPPORTUNITY OF PROVING HIS PROFESSIONAL COMPETENCE, SINCE HE OCCUPIED THE POST IN QUESTION ONLY FOR A VERY LIMITED PERIOD . MOREOVER, NO COMPLAINTS WERE EVER MADE TO THE APPLICANT . THE FIRST COMMENT CONCERNING THE QUALITY OF HIS WORK WAS ADDRESSED TO HIM ON 11 JUNE 1953 . A FURTHER POINT IS THAT HIS PERSONAL FILE DOES NOT CONTAIN ANY COMMENTS EITHER ON HIS PROFESSIONAL ABILITY, OR ON HIS CONDUCT FROM THE DISCIPLINARY POINT OF VIEW . PROFESSIONAL INCOMPETENCE HAS NOT BEEN PUT FORWARD IN RESPECT OF THE APPLICANT AS A REASON FOR THE DECISIONS NOT TO RENEW HIS CONTRACT OF EMPLOYMENT . NO FINDING AS TO PROFESSIONAL INADEQUACY HAS BEEN REACHED BY MEANS OF A REGULAR PROCEDURE SUCH AS MUST BE FOLLOWED BY ANY ADMINISTRATION . IN THESE CIRCUMSTANCES, THE ALLEGATION AS TO PROFESSIONAL INCOMPETENCE MADE FOR THE FIRST TIME BY THE DEFENDANT IN ITS STATEMENT OF DEFENCE IN ORDER TO JUSTIFY ITS DECISION NOT TO RENEW THE CONTRACT CANNOT BE TAKEN INTO CONSIDERATION .
7 . FINALLY, THE COURT FINDS THAT THE INTENTIONS OF THE COMMUNITY IN RESPECT OF ITS SERVANTS ARE CLEARLY EVIDENT IN THE PROPOSED DEFINITIVE STAFF REGULATIONS OF THE COMMUNITY, DRAFTED BY MUTUAL AGREEMENT BY THE COMMITTEE OF PRESIDENTS OF THE FOUR INSTITUTIONS . THE TEXT OF THE DRAFT DISTRIBUTED IN SEPTEMBER 1954 ALREADY INCLUDED PROVISIONS CONCERNING NON-ACTIVE STATUS .
P . 158
THOSE PROVISIONS, WHICH ARE ANALOGOUS TO THOSE WHICH EXIST IN THE NATIONAL ADMINISTRATIONS OF SEVERAL COUNTRIES AND WHICH HAVE BEEN RETAINED IN ALL SUBSEQUENT DRAFTS WITHOUT ANY OBJECTIONS AS TO SUBSTANCE BEING RAISED ON THE PART OF THE INSTITUTIONS, CONTAIN TWO POINTS : " ABSOLUTE PRIORITY TO OCCUPY ANY POST IN HIS GRADE WHICH MAY FALL VACANT OR BE CREATED IN THE SERVICE TO WHICH HE BELONGS ", AND PAYMENT " OF A SUM EQUAL TO HIS TOTAL REMUNERATION FOR A PERIOD OF ONE YEAR ", AND TO HALF HIS REMUNERATION FOR A PERIOD OF TWO YEARS ".
( B ) AS REGARDS THE POWER OF THE BUREAU OF THE COMMON ASSEMBLY TO ABOLISH THE POST OF HEAD OF ADMINISTRATIVE SERVICES, THE COURT REJECTS THE APPLICANT'S ARGUMENT . IT FINDS THAT THE BUREAU HAS THE POWER TO ORGANIZE ITS SECRETARIAT AS IT WISHES AND IN THE INTERESTS OF THE SERVICE, AND THAT IT ACTED IN THE FULL EXERCISE OF ITS POWERS IN ABOLISHING A POST WHICH IT CONSIDERED UNNECESSARY .
( C ) HOWEVER, THE COURT FINDS THAT THE ABOLITION OF A GIVEN POST CANNOT, ON THAT COUNT ALONE, RESULT IN THE DISMISSAL OF THE SERVANT WHO OCCUPIED THAT POST, PARTICULARLY WHERE, AS IN THE PRESENT CASE, THE CONTRACT OF EMPLOYMENT DOES NOT EXPRESSLY APPOINT THE SERVANT TO THE POST ABOLISHED . RATHER, IT RENDERS THAT SERVANT FREE TO OCCUPY ANOTHER POST .
IT APPEARS FROM THE PREPARATORY INQUIRY THAT THE DEFENDANT DID NOT TAKE ANY INITIATIVE IN THAT RESPECT AND, MOREOVER, THAT THE APPLICANT WOULD HAVE ACCEPTED NOT ONLY A POST EQUIVALENT TO THAT WHICH HAD BEEN ABOLISHED, BUT EVEN A POST OF LESSER IMPORTANCE .
( D ) ON THE BASIS OF THE FOREGOING CONSIDERATIONS, THE COURT CONCLUDES THAT THE BUREAU OF THE COMMON ASSEMBLY, HAVING DECIDED IN THE CIRCUMSTANCES ESTABLISHED BY THE PROCEDURE BEFORE THE COURT NOT TO EXTEND THE APPLICANT'S CONTRACT OF EMPLOYMENT, HAS PUT FORWARD IN SUPPORT OF ITS DECISION A REASON WHICH CANNOT OF ITSELF, JUSTIFY THAT DECISION, AND THAT THE BUREAU HAS NOT TAKEN SUFFICIENT ACCOUNT OF THE LEGAL POSITION OF THE APPLICANT .
MOREOVER, THE COURT IS OF THE OPINION THAT IN ADOPTING ITS DECISIONS AND QUANTIFYING THE GRANT PROVIDED FOR BY ARTICLE 15 OF THE APPLICANT'S CONTRACT OF EMPLOYMENT, THE BUREAU OF THE COMMON ASSEMBLY OUGHT TO HAVE HAD REGARD TO THE PROVISIONS OF THE DRAFT STAFF REGULATIONS OF THE COMMUNITY GOVERNING THE CONSEQUENCES OF ASSIGNMENT TO NON-ACTIVE STATUS .
ACCORDINGLY, THE COURT FINDS THAT THE CIRCUMSTANCES IN WHICH THE APPLICANT'S CONTRACT OF EMPLOYMENT WAS NOT RENEWED APPEAR TO BE IRREGULAR, AND THAT THE BUREAU OF THE COMMON ASSEMBLY HAS COMMITTED A WRONGFUL ACT IN THE PERFORMANCE OF ITS DUTIES AS REGARDS THE EXECUTION OF THE SAID CONTRACT . THE COMMON ASSEMBLY IS LIABLE AS THE RESULT OF THAT WRONGFUL ACT, WHICH CAUSED THE APPLICANT DAMAGE WHICH MUST BE MADE GOOD .
P . 159
B - ON THE PAYMENTS CLAIMED BY THE APPLICANT
1 . THE SO-CALLED CAR ALLOWANCE
THE COURT FINDS THAT IT IS NOT THE APPLICANT'S CONTRACT OF EMPLOYMENT BUT ARTICLE 3 OF ANNEX I TO THE INTERNAL STAFF RULES OF 12 JANUARY 1953 WHICH MAKES PROVISION FOR THIS ALLOWANCE . THOSE RULES WERE REPLACED ON 1 JULY 1953 BY THE PROVISIONAL STAFF RULES, ARTICLE 34 OF WHICH REQUIRES A SPECIAL DECISION OF THE SECRETARY GENERAL OF THE COMMON ASSEMBLY FOR THE GRANT OF THAT ALLOWANCE . NO SUCH DECISION WAS TAKEN IN RESPECT OF THE APPLICANT .
THE COURT REJECTS THE APPLICANT'S ARGUMENT THAT THE SUPPLEMENTARY ADVANTAGES WHICH EXISTED WHEN HE ENTERED THE SERVICE OF THE COMMUNITY MUST BE REGARDED AS ADDITIONAL REMUNERATION FORMING PART OF WHAT IS LAID DOWN BY THE CONTRACT AND NOT CAPABLE OF BEING ALTERED UNILATERALLY .
THE COURT FINDS, IN AGREEMENT WITH THE ADVOCATE GENERAL ON THIS POINT, THAT THE APPLICANT'S CLAIM FOR THE PAYMENT OF A CAR ALLOWANCE IS UNFOUNDED .
2 . THE PAYMENTS IN RESPECT OF DAMAGES CLAIMED BY THE APPLICANT
THE APPLICANT CLAIMS A FIRST PAYMENT EQUAL TO TWO YEARS' REMUNERATION FOR THE DIFFICULTIES AND DELAYS INHERENT IN ESTABLISHING HIMSELF ELSEWHERE, AND FOR THE INCONVENIENCES OF ALL KINDS RESULTING THEREFROM .
THE APPLICANT IS OF THE OPINION THAT HE IS ALSO ENTITLED TO A SECOND PAYMENT IN COMPENSATION FOR DAMAGE SUFFERED BY REASON OF HIS DISMISSAL . HE CALCULATES THAT PAYMENT TO BE 3 000 000 BELGIAN FRANCS, THAT IS TO SAY THE LOSS OF 200 000 BELGIAN FRANCS ( DIFFERENCE IN REMUNERATION BETWEEN A NEW POST AND THAT WHICH HE HAS LEFT ) OVER 15 YEARS .
THE COURT CANNOT ACCEPT THESE CLAIMS . IT IS OF THE OPINION THAT THE CHANGE OF RESIDENCE AND THE COSTS INVOLVED THEREIN ARE COVERED BY THE SEVERANCE GRANT FOR WHICH ARTICLE 9 ( A ) OF THE CONTRACT OF EMPLOYMENT MAKES PROVISION, AND WHICH HAS BEEN PAID TO THE APPLICANT . IN SO FAR AS THE FIRST CLAIM FOR PAYMENT IS IN EXCESS OF THOSE COSTS, THE COURT WILL TAKE THIS FACTOR INTO ACCOUNT IN THE REMAINDER OF ITS JUDGMENT .
AS REGARDS THE SECOND PAYMENT, THE COURT TAKES THE VIEW, IN AGREEMENT WITH THE OPINION OF THE ADVOCATE GENERAL, THAT THE APPLICANT HAD ONLY A LIMITED EXPECTATION OF A PERMANENT POST AND THAT OTHER FACTORS MAY HAVE CONTRIBUTED TO INCREASE THE UNCERTAINTY, SUCH THAT THE EXISTENCE OF QUANTIFIABLE DAMAGE CANNOT BE ACCEPTED .
3 . THE GRANT PROVIDED FOR BY ARTICLE 15 OF THE APPLICANT'S CONTRACT OF EMPLOYMENT
THE COURT FINDS THAT ARTICLE 15 OF THE APPLICANT'S CONTRACT OF EMPLOYMENT FIXED THE MINIMUM AMOUNT OF THIS GRANT, THUS GIVING THE BUREAU OF THE COMMON ASSEMBLY THE POWER TO ESTABLISH THE AMOUNT IN EACH CASE . IN EXERCISE OF THAT POWER, THE SAID BUREAU FIXED THE GRANT DUE TO THE APPLICANT AT SIX MONTHS' REMUNERATION . BY A DECISION OF THE BUREAU OF THE COMMON ASSEMBLY OF 3 DECEMBER 1954, THAT GRANT WAS REDUCED TO TWO MONTHS' REMUNERATION . IN JUSTIFICATION OF THAT MEASURE IT HAS BEEN ALLEGED THAT THE APPLICANT DID NOT ACCEPT THE ADDITIONAL FOUR MONTHS' REMUNERATION AND THAT HE HAD SHOWN EVIDENCE OF HIS INTENTION TO BRING AN APPLICATION BEFORE THE COURT OF JUSTICE .
P . 160
IT IS THE COURT'S VIEW, IN AGREEMENT ON THIS POINT WITH THE OPINION OF THE ADVOCATE GENERAL, THAT IT DOES NOT APPEAR FROM THE DOCUMENTS THAT THE APPLICANT REFUSED THAT GRANT, AND THAT THE FACT THAT HE INTENDED TO BRING A CASE BEFORE THE COURT IS NOT A VALID REASON FOR ALTERING THE DECISION OF THE BUREAU OF THE COMMON ASSEMBLY TO THE APPLICANT'S DISADVANTAGE, AS HAS HAPPENED IN THE PRESENT CASE . THE COURT CONCLUDES THAT THE APPLICANT'S CLAIM FOR PAYMENT OF THE FOUR ADDITIONAL MONTHS' REMUNERATION WHICH HAD BEEN GRANTED BY THE BUREAU OF THE COMMON ASSEMBLY IS WELL FOUNDED .
FURTHERMORE, THE COURT FINDS THAT THE BUREAU OF THE COMMON ASSEMBLY FIXED THE AMOUNT OF THE SAID GRANT AT FOUR-TWELFTHS OF HIS REMUNERATION IN ADDITION TO THE TWO-TWELFTHS LAID DOWN BY ARTICLE 15 OF THE CONTRACT AS A MINIMUM, BY TAKING INTO ACCOUNT THE FOLLOWING FACTORS :
( A ) THE MATERIAL DIFFICULTIES WHICH THE PERSON CONCERNED WOULD HAVE TO FACE AS THE HEAD OF A LARGE FAMILY AFTER LEAVING THE SERVICE OF THE COMMON ASSEMBLY;
( B ) THE EXPENSES THAT HE WOULD HAVE TO MEET IN LOOKING FOR A NEW POST .
THOSE FACTORS ARE, WITHOUT DOUBT, VERY IMPORTANT, BUT A FAIR ASSESSMENT OF THE CONSEQUENCES WHICH THEY INVOLVE SHOWS THAT THE SIX MONTHS' REMUNERATION GRANTED IS NOT SUFFICIENT COMPENSATION FOR THE DIFFICULTIES AND EXPENSES TO WHICH THE APPLICANT IS EXPOSED . MOREOVER, THEY ARE NOT THE ONLY FACTORS INVOLVED IN THE SITUATION . THERE ARE OTHERS, WHICH MUST ALSO BE TAKEN INTO CONSIDERATION .
THE BUREAU OF THE COMMON ASSEMBLY WAS AWARE OF THE DRAFTS OF THE STAFF REGULATIONS DRAWN UP BY THE COMMITTEE OF PRESIDENTS . THOSE DRAFTS MADE PROVISION, IN ACCORDANCE WITH THE PRINCIPLES GENERALLY ACCEPTED IN ADMINISTRATIVE LAW, FOR A SERVANT TO BE ASSIGNED NON-ACTIVE STATUS . THE COURT IS OF THE OPINION THAT THE BUREAU OF THE COMMON ASSEMBLY OUGHT TO HAVE TAKEN ALL THOSE FACTORS INTO ACCOUNT AND, HAVING REGARD TO THOSE DRAFTS, TO HAVE GRANTED AN ANALOGOUS PAYMENT TO THE APPLICANT .
NO SUCH PAYMENT HAVING BEEN GRANTED, TAKING INTO CONSIDERATION THE CIRCUMSTANCES OF THE PRESENT CASE AND HAVING REGARD TO THE IRREGULARITY OF THE DECISIONS TAKEN BY THE DEFENDANT, THE COURT RULES THAT THE APPLICANT IS ENTITLED TO PAYMENT, BY THE DEFENDANT, OF AN AMOUNT EQUAL TO ONE YEAR'S REMUNERATION .
THAT PAYMENT IS TO BE ADDED TO THE PAYMENT OF TWO-TWELFTHS ALREADY PAID AND TO THE FOUR-TWELFTHS WRONGLY WITHHELD BY THE BUREAU, SUCH THAT THE ORDER IS FOR PAYMENT OF A SUM EQUAL TO SIXTEEN MONTHS' REMUNERATION .
Decision on costs
THE DEFENDANT, HAVING FAILED ON A NUMBER OF ITS CONCLUSIONS, IS ORDERED, IN ACCORDANCE WITH ARTICLE 60 OF THE RULES OF PROCEDURE OF THE COURT, TO PAY THE APPLICANT TWO-THIRDS OF THE COSTS WHICH THE LATTER HAS INCURRED . THE DEFENDANT SHALL BEAR ITS OWN COSTS .
Operative part
THE COURT
HEREBY :
ORDERS THE DEFENDANT TO PAY THE APPLICANT A SUM EQUAL TO SIXTEEN MONTHS' REMUNERATION, CALCULATED ACCORDING TO THE METHOD USED BY THE COMMON ASSEMBLY IN ORDER TO FIX THE AMOUNT OF THE TWO MONTHS PAID TO THE APPLICANT AS COMPENSATION FOR THE TERMINATION OF HIS CONTRACT .
DECLARES THAT THE APPLICANT IS ENTITLED TO REIMBURSEMENT OF TWO-THIRDS OF HIS COSTS BY THE DEFENDANT, AND ORDERS THE LATTER TO BEAR ITS OWN COSTS . |
OPINION OF MR ADVOCATE GENERAL LAGRANGE
Index
I — Claims in the application
II — Jurisdiction
III — Admissibility
Expiry of the time-limits
Acquiescence
IV — Substance
Main claims
Alternative claims
Irregularity of the probationary period
Misuse of powers
V — Consequences of the solution proposed
Law
Facts
VI — Final observations
VII — Opinion
Mr President,
Members of the Court,
I shall refrain in this case from beginning with a statement of the facts not only because these have been stated in full before you and moreover perfectly summarized in the report of the Judge-Rapporteur but because the case depends largely on the facts themselves so that an introductory summary would require a position to be adopted at that stage on important aspects of the case.
I — Claims in the application
Let me confine myself first of all to reminding you of the applicant's claims. In this respect I refer to the ‘final written claims’ lodged on 16 August 1956 in accordance with Article 45 of the Rules of Procedure of the Court following the preparatory inquiries ordered and which only define, without altering or extending them, the claims in the application.
The main claim is for a declaration that Miss Mirossevich was appointed permanently and definitively on 9 December 1952 as an interpreter/translator with the language department (former category H) at an annual salary of Bfrs 300000 in addition to local allowance and in consequence for the annulment of the notice of 8 January 1953‘relating to an alleged trial period as amounting to ultra vires acts in the form of a misuse of powers in that it misrepresented the facts or at the least that it was based on an error of fact’.
Miss Mirossevich further claims a declaration that she is ‘entitled to reinstatement in her career bracket and back payment of salary equal to the difference between what she has received and what she was entitled to receive by virtue of the “status” of the post in question (with legal interest)’.
Alternatively she seeks a declaration ‘that Miss Mirossevich was duly engaged on a trial basis on 9 December 1952 as an interpreter/translator’ on the same conditions; and that the probationary period was completed only partially and inadequately but that it was terminated successfully after subsequent linguistic services'.
In consequence she seeks a declaration that the notice of 8 January 1953 relating to an uncompleted and inadequate probationary period is null and void because the notice was vitiated as based on misrepresentation of the facts and so forth (there follow the same claims as previously in relation to the reinstatement in the career bracket and back payment of salary).
The applicant finally claims that ‘in any event the pseudo-contract of 12 October 1953 should be declared null and void’ on the grounds of lack of consent, fraud and so forth and the award of ‘proper’ compensation for non-material injury and that the High Authority be ordered to bear the costs.
As will be seen, the claims are solely of a contractual nature. The Court is not being asked to annul administrative decisions but to recognize that they are null and void as regards the obligations entered into towards the applicant, to define their precise scope and to prescribe sanctions for their disregard both by recognizing the right to ‘reinstatement in the career bracket’ and the grant of monetary compensation.
II — Jurisdiction
The position I have described appears to me sufficient to establish the Court's jurisdiction in the present case on the basis of Article 42 of the Treaty which provides that ‘the Court shall have jurisdiction to give judgment pursuant to any arbitration clause contained in a contract concluded by or on behalf of the Community, whether that contract be governed by public or private law’. I think that with regard to what the applicant calles the ‘pseudo-contract’ of 12 October 1953 to which her signature is appended there is at least one clause which she recognizes as valid, namely: ‘Any disputes of an individual nature arising from the application of the provisions of this letter of appointment or the regulations and decisions relating to staff shall be brought before the Court of Justice’. The contract was retroactive to 9 December 1952, that is to say, the date on which the applicant actually entered the service of the High Authority. Whether the applicant is considered, as she maintains, to have been appointed on that day, and on a definitive basis, as an interpreter/translator or whether on the contrary, as the High Authority maintains, on 9 December 1952 Miss Mirossevich was accepted only ‘on a trial basis’, it is clear that there is a dispute here relating to the nature and scope of a contractual relationship between the applicant and the High Authority, for the fact that there is such a relationship is uncontestable; consequently the validity of an arbitration clause giving jurisdiction to the Court in this respect cannot be denied. Neither of the parties, moreover, does so.
III — Admissibility
Since the position of the action is thus clarified as far as jurisdiction is concerned I must now consider the question of admissibility.
(a)
The High Authority objects first of all to admissibility on the ground that the time-limit has expired. It claims that since the action was brought more than one month after the notification of the decision of 8 January 1953 it is not admissible. It adds that this is so even if it is accepted, as is done in particular by the French Conseil d'Etat, that the making of a claim through official channels — to one's superior officer or direct to the author of the act complained of — results in the time-limit's being extended. Such an extension only takes effect if the claim through official channels was itself presented within the time-limit. That is not the position in the present case, for the claim by Miss Mirossevich to the Administrative Committee was made more than a month after the notification of the decision of 8 January 1953.
This claim of inadmissibility must be dismissed. This is so for a very simple reason, namely that there is no provision either in the contract or the Treaty or any of the protocols, annexes or the Convention specifying a strict time-limit as against officials or other servants who wish to bring actions before the Court relating to their relationship with one of the institutions of the Community. The High Authority cites Article 33 of the Treaty and Article 39 of the Statute of the Court of Justice. Article 33 concerns only applications for annulment brought against decisions of the High Authority by Member States, the Council and undertakings or associations. Article 39 of the Statute states that ‘the proceedings provided for in Articles 36 and 37 of this Treaty’ must be instituted within the time-limit of one month provided for in Article 33: these are proceedings relating to pecuniary sanctions involving undertakings and proceedings relating to fundamental and persistent disturbances involving States. It is clear that a time-limit such as that in Article 33 cannot be applied simply by analogy. If moreover there were such a time-limit the question would arise whether an official under contract such as Miss Mirossevich who is not asking for the annulment of certain adminsitrative decisions cannot nevertheless claim that these decisions are unlawful although she has not contested them within the time-limit. However, I repeat, there is no time-limit. There is not even any period of limitation applicable to the action because the arbitration clause does not contain any such. No doubt there is a serious lacuna here since the independent nature of law arising from the Treaty of course prevents the application of general provisions borrowed from national laws: it will be for the Rules of Procedure which the Court is to draw up in application of Article 58 of the Staff Regulations to repair this lacuna.
(b)
The second claim of inadmissibility based on aquiescence is more difficult.
The High Authority maintains that Miss Mirossevich's conduct following the decision of 8 January 1953 implies ‘acquiescence’ in this measure involving the inadmissibility of any subsequent action either through official channels or before the Court against the said measure. It cites in support Italian and German case-law and theory. It recognizes that French case-law is ‘indecisive’ (the truth is that the doctrine of acquiescence is not recognized in France in relation to actions alleging ultra vires acts) but it adds that this shows the counterpart of the existence of strict time-limits for it can be maintained that the only form of ‘acquiescence’ consists in allowing the time-limits to pass without bringing an action.
This analysis seems to me correct in law. It is clear that the absence of a time-limit to which I have just drawn attention in the present state of positive Community law takes away much of the weight from the argument which denies the possibility of acquiescence in the legal relationships between an official and the administration: if the employee can at any time challenge the validity of administrative acts concerning him it must be recognized that for its part the administration is entitled to rely on circumstances which show acceptance by the person concerned of these acts and his implied waiver of his rights to sue in respect of them. This should be recognized more readily where, as in the present case, the relationship is contractual.
It is right however to remember that even if it is based on a contract the relationship between an official and the administration is ofa special nature: it is usually regarded as being a ‘contract governed by public law’ (this term is used in Article 42 ofthe Treaty). This means that the administration retains certain prerogatives under public law in respect of even its contractual staff where they are part ofthe public service. I do not wish to enter into a theroretical discussion of this question which is very difficult even in national law (see, for example, in French law a very good summary of the question: Duez and Debeyre, Droit Administratif, 1952, p. 744) and which is certainly even more so in comparative law. Let me just make this common-sense observation, namely that a public official, whether his appointment is a contractual one or not, is subject to special constraints vis-a-vis the administration. He is required to obey, subject to raising the matter subsequently, according to the old principle obtaining both for civilians and soldiers (I leave aside, naturally, the question of obedience to orders contrary to the criminal law and to fundamental moral and legal principles). In other words and more colloquially the State is not a master just like others: the parties are not on equal terms.
From this it follows in my opinion that extreme caution must be exercised in deducing ‘acquiescence’ in certain measures from the conduct even of a contractual official from the sole fact that he has not protested or ‘made reservations’ as do private persons anxious to protect their interests. From this point of view what value must be attributed to the various acts relied on by the High Authority as proof of acquiescence in the decision of 8 January 1953? This value is uneven. I do not think that much attention can be paid in this respect to the various postings which the applicant received during 1953: typing pool, library and so forth. The High Authority itself recognizes (rejoinder, page 12 of the French translation) that ‘Miss Mirossevich had been promised that her position would be improved’. It is clear that efforts were made in this direction and this is not a matter for complaint against the High Authority but it is no less certain that the applicant did not cease herself to endeavour to improve her situation retaining the hope of returning to the position which she had at the beginning; in any event the fact of having accepted successive transfers to which she was subject cannot be regarded as acquiescence in the measure of 8 January implying a waiver of the right to challenge the regularity of that measure.
On the other hand serious doubts may be entertained with regard to the contract of 12 October 1953. On that day Miss Mirossevich signed a ‘letter of appointment’ for the period extending from 9 December 1952 (which is the date when she entered the service of the High Authority as an interpreter/translator) to 8 December 1953. This letter refers to a posting ‘until further order to the Staff, Finance and General Administration, documentation and files division’ and adds: ‘During this period you will receive an annual salary of 2200 units of account of the European Payments Union and a local allowance equal to 25 % of this salary’. In view of the retroactive nature of this contract, must it not be thought that the acceptance by the applicant of the conditions which it contained, in particular with regard to salary, involved a waiver of any claim in respect of the financial position in relation to the period in question? I admit that it is very reasonable to maintain this.
Nevertheless as far as I am concerned I am inclined not to accept this. It appears from the inquiry that at this period as previously and afterwards, Miss Mirossevich was not satisfied with her position. This appears from various pieces of evidence and in particular that of Mr Balladore-Pallieri, Director of Administration of the High Authority who was a witness at the inquiry. ‘She (Miss Mirossevich) signed the contract when I was already a Director’, he said at the hearing on 15 May 1956 (p. 31 of the Minutes). ‘I myself insisted on this. At the time she told me that she had been promised a higher position’. Thus it appears well established that the applicant even at that time had not lost hope of regaining a higher position. This does not in any way mean that there is proof that a promise was made to her in this respect: what would such a promise have been worth and who would have been entitled to make it? Nor does it provide proof of fraud or force vitiating the contract for nullity as is claimed But I think these circumstances suffice to prevent the signature to this contract (which was the first written contract and was intended essentially to regularize the administrative position of the applicant) from being seen as an acquiescence in the measure of 8 January 1953 involving a waiver of any action intended to question the lawfulness of this measure.
IV — Substance
I come now to to consideration of the substance, that is to say, basically the lawfulness of the decision of 8 January 1953.
Main claims
The first question which concerns the main claims of the application is under what conditions Miss Mirossevich entered the service of the High Authority on 9 December 1952. Was she appointed then, as she claims, on a definitive basis as interpreter/translator in which case the decision of 8 January was obviously unlawful? Or was she merely accepted for a trial as the High Authority maintains or as a probationer, the probationary period being one month (alternative argument of the High Authority)?
An appointment on a definitive basis would appear at least for such a position as quite unusual. Mr Decombis, secretary of the Personnel Division of the High Authority, alleges in a statement dated 9 August 1955 placed in the file that 'during the period in which the High Authority was being set up the summoning of assistants and the conditions of work were generally fixed orally. With regard to assistants in the language department he adds “one of the terms of the oral agreements was a trial period of one month”. The file contains a similar statement by Mr Kohnstamm, secretary of the High Authority, entrusted at the time with staff matters. It is necessary therefore for evidence in rebuttal to be produced in this respect. This has not been done: no obligation was entered into to this effect by the Italian Government; had it done so moreover it would not have bound the High Authority but would have simply involved that government in liability vis-a-vis the applicant. Reference to the theory of business adminstration which was made at the Bar appears to me somewhat strained. No evidence either has been forthcoming from the High Authority. This is moreover how the applicant herself puts the case in her complaint to the Administrative Committee: “On 9 December a diplomat from the Italian Legation introduced me to the reviser of the Italian section of the language department of the High Authority: I was engaged for the probationary period provided for and I was set to work as a translator”. A little further, complaining that she had not been warned before being the subject of the measure in question she adds: “From this point of view no distinction seems to be made between staff who have already signed their contract and those completing their trial period”. Thus on 10 February 1955, the date of this complaint to the Administrative Committee, the applicant was not yet thinking of contesting that she had been engaged as a probationer or for a trial period: she even recognized it expressly.
As regards the actual question whether it was a probationary period or a trial period I can scarcely see the legal or practical interest in the distinction involving as it does an employee under contract. I think that the concept of a probationary period is legally more correct and is more in accordance with the actual position: the term probationary period moreover occurs three times in the opinion of the Administrative Committee given in respect of the complaint by the applicant. It is there stated that “the High Authority is no longer bound by the first proposal of employment made to Miss Mirossevich since the results of her probationary period were unsatisfactory”. Thus in the mind of the High Authority itself, the entry into service of the applicant was the result of a “proposal of employment” subject to her successfully accomplishing a probationary period. By her actual and immediate entry into employment (evidenced in particular by the fact of her having signed on the same day a form relating to preservation of official secrecy) Miss Mirossevich must be. regarded as having accepted that proposal of employment and the contract, albeit oral, was thus concluded. As for the wording used in the letter of 8 January 1953 (“since your ability does not meet the requirements of the department, it is impossible to consider offering you a contract of employment as a translator”) it does not means that an oral proposal of employment involving a probationary period was not made a month previously.
Alternative claims
I must now consider the alternative claims which are based on the alleged defectiveness of the statement of reasons on which the decision of 8 January 1953 was based, namely. “Your ability does not meet the requirements of the department”.
In this respect the claim is twofold: on the one hand it is alleged that the probationary period was conducted irregularly and on the other that the decision is vitiated for misuse of powers.
Irregularity of the probationary period. The applicant alleges that she was not given an opportunity of showing her ability. She says she was given only three translations to do in a month and these related to current matters and did not involve any special linguistic knowledge in the legal, economic or technical sphere: it was impossible for the administration to judge her on such a brief trial.
The Court knows how the High Authority replies to this argument: it insists first of all forcefully on the discretionary nature of the assessment which it has made. Secondly it recognizes that the applicant was entrusted during her month's probation with only three or at most four translations, all relating to current matters; but adds that although these documents were easy, they were not translated satisfactorily by the applicant: it was therefore useless to give her more important and more difficult texts. In support of this observation the High Authority, with the intent of providing proof (which it maintains it is not required to do) of the patent inability of the applicant has produced one of the translations made, it not being possible to find the others.
The question must therefore be considered from the legal and factual point of view.
The question of lawis quite simple if it is recognized that there are two aspects:
1.
The question of the applicant's ability to do her work. There is no doubt that this question is essentially one of those which the administration has a discretion in assessing: this appears to me obvious and it is unnecessary to labour the point.
2.
The question whether the applicant has been given an opportunity to show her ability during the period provided for this purpose. Here on the contrary there can and must be a review by the Court for it is a question of checking whether the probationary period has been conducted regularly and whether it has even taken place. The Concilio di Stato recognizes in a similar case a review of legality (for example the decision of 5 February 1951 cited in the reply). The serving of a probationary period is provided for by the contract and is one of the conditions of it. No doubt it is required mainly in the interests of the administration which before definitely committing itself wishes legitimately to be assured of the ability of the person concerned; but it is also in the interests of the individual, who has an “interest” in being definitively employed and cannot be deprived arbitrarily of this interest if he has satisfied the obligations required of him. If therefore it were shown that during the period provided for and by act of the administration the person concerned was not given an opportunity of proving his ability without its being possible to make any complaint against him in this respect (for example, and to take an extreme case, if an employee had been given no work of any kind at all) it would be necessary to recognize that the administration had disregarded its contractual obligations and for the purpose of refusing a definitive appointment could not rely on the employee's lack of ability or insufficient ability having regard to the requirements of the department.
From the factual point of view the first question therefore is whether the mere fact that during her month's probationary period Miss Mirossevich was entrusted with only three or four translations must cause the probationary period to be regarded as not having been properly conducted.
Let us note first of all that there seem to have been only three translations: this is what the applicant claims and it is what appears from the register which has been produced. It is not contested further that these translations were of little importance either from the point of view of length or difficulty.
Although this is not proof I think it gives rise to a serious presumption in support of the claim that the applicant was not given an opportunity of showing her ability and consequently the probationary period was not properly conducted: to do a few hours of work during a month is not, a priori, to serve a month's probationary period. It is claimed, it is true, that the number of translations required of the language department during December 1952 was not very great. I was inquisitive enough to look at the departmental register in the file and I saw that the average number of pages translated during the period from 9 December 1952 to 8 January 1953 came to a little more than 100 per translator (to 95 for the Italian section).
I therefore think that evidence in rebuttal by the High Authority is in no way excessive or superfluous: it is in my opinion essential.
This evidence in rebuttal consists, as the Court will remember, in showing by the production of one of the three translations the applicant's patent inability to do her work having regard to the requirements of the department.
In these circumstances it was necessary: 1. To arrive at a decision on the authenticity of the document, which was contested by the applicant at least inasmuch, as, according to her, the document was not drafted by her: she claims that her part was limited to making certain manuscript corrections as practice on a typewritten draft made by someone else (whom she does not name moreover); 2. In the event of these allegations of the applicant not being upheld, to obtain an expert's opinion on the quality of the translation, the only proper means of putting the Court in a position to assess the merits of the evidence in rebuttal submitted by the High Authority. This seemed all the more indispensable since among the fiveerrors mentioned by the High Authority as particularly inexcusable in this work was the translation of the French word “neerlandais” by the word “neerlandese” which, the defendantmaintains, (rejoinder, p. 34) “does not exist in Italian” and should have been translated by “olandese”. Having the curiosity to look in the dictionary what was my surprise to find the word “neerlandese” there! An expert's opinion was there fore called for and I am glad that the Second Chamber, which was entrusted with the inquiries, agreed to order one.
(a)
As regards what has been wrongly called the “challenge to the authenticity” the Court is aware that the applicant in the final form of her claims declared that she withdrew this challenge and regarded the three translations (including the one in question) attributed to her as “legally authentic”. She consequently stated that she agreed to an expert's opinion “so that it may be shown that the reviser Verderame lacked the linguistic and technical ability to form a judgment on the translator Miss Mirossevich”. There is here no question of the ability of the reviser but only that of the translator which must be assessed on its own. Further, the applicant, before coming to this conclusion goes into a long discussion in which various hypotheses are advanced from which it appears that she does not accept as established as a fact the High Authority's claim that it was a translation actually required of the applicant for the purposes of the department and was done and submitted by her. It is therefore necessary to arrive at a decision on this subject.
It is moreover easy: the documents produced by the High Authority establish in an irrebuttablemannerand to someextent substantially that the document in question is the translation made into Italian by Miss Mirossevich and revised by the reviser Mr Verderame from an original French text; it was a translation which had been requested from the language department into the three other languages of the Community and entrusted by that department as regards Italian to the applicant. The witnesses could obviously not contradict and did not contradict the findings resulting in this respect from the documents produced.
(b)
I now come to the quality of the translationassessed by the expert Mr Bedarida, Professor at the Sorbonne.
Let us rememberthat the order of the Second Chamber ordering an expert's opinion was in these terms: “An expert's opinion shall be obtained in order to determine, independently of the corrections made by the reviser, the quality of he translation produced as Document No 10 annexed to the rejoinderin the above-mentioned case having regard to the time-limit of two hours imposed on the language department to do the translation and the nature of the task normally falling on a translator, which is to keep as close as possible to the original”. Let us remember also that the expert, as a result of a special provision of the same order, received a copy of the document containing the manuscript corrections made by the applicant and “excluding all others”, that is to say excluding those which had been made by the reviser, of which theexpert therefore had no knowledge.
The expert fulfilled his task precisely according to the terms enjoined upon him.
He has pointed out a number of mistakes or errors of diverse magnitude. The most serious in his opinion is in the following sentence : “Des que l'experience des faits aura demontre ce qu'elle doit être, nous informerons nos abonnés de la cadence à laquelle paraîtra le Journal Officiel de la Communauté”. The translator did not notice that the pronoun “elle” relates to the word “cadence”, although the latter followed it.
In addition the expert pointed out the folio wing mistakes:
1.
“Dès que l'expérience des faits aura démontre … (sentence already quoted) has been translate by words giving the sense of'après que l'expérience des faits, etc …”;
2.
(Still in the same sentence): the word “cadence” is translated by a word meaning “terme” (“termine”);
3.
“Souscrit” (in speaking of subscription) is translated by “firmato” which means “signé”; the correct word is “sottoscritto”. Here I must quote the comments of the expert: “The choice of “firmato” appears all the more curious in that elsewhere the same translator shows a keen concern for the purity of the Italian language. She should be given credit, for example, for having translated the word “experts” by “periti” which is more customary then “esperiti” adopted as a noun recently under French or English influence”.
4.
“Reglements” is translated by “norme” instead of “regolamenti”: the expert says that the latter word is both more specific and more the language of the administration then “norme”. I must say that the observations which the applicant has made on this subject in one of her pleadings although perhaps having a certain pertinence in relation to the criticism of the original are not in my opinion convincing on the subject of the translation.
5.
“Autrement dit” as meaning “c'est-à-dire” has been translated by “nominati altrimenti” instead of “cioè a dire” or more simply “cioè”. It was a question of indicating the contents of one of the three parts of the Journal Officiel and the sentence to be translated was: “Textes, purement juridiques, autrement dit, decisions, règlements, etc”.
6.
“Premiere manifestation d'unité européenne” is translated as “premiere mainfestation d'une unite européenne”.
7.
The phrase “de prendre chaque jour plus de réalité” is translated by “di essere ogni giorno più aggiomata” this word means “mettre à jour” or “ajourner”.
8.
Finally a whole line has been omitted.
After analysing the errors made the expert adds:
“In addition to these detailed observations certain general remarks should be made.
'On the one hand the most serious mistakes are towards the end of the translation. They may be due to the fact that the translator was running short of time. In this respect it is necessary to clarify the following question. In the two hours which were allotted to her for her work did the translator also have to type her Italian text? If so, it would be proper to deduct the time for the transcription from the total allowed for the test. And the transcription might to a certain extent explain the above-mentioned omission of one line of the original.
'Further, if the translation department of the European Coal and Steel Community includes one or several revisers it may be asked whether the translator in question was not entitled to think that only the basic and as it were mechanical work of translation was required of her while others with more time at their disposal would subsequently be required to complete, correct and perfect it.
'In both cases I would regard these as factors capable of lessening the translator's responsibility and the scope of the imperfections of the work which I have been required to consider and assess”.
With regard to the second point I think the expert appears to go a little too far: the existence of the reviser does not exonerate the translator from his own responsibility for the correctness of the translation. In other words in so far as the mistakes pointed out by the expert relate to the meaning and not to the elegance or style there can be no “lessening of responsibility” by reason of the fact that there is a reviser.
The first observation however concerns a very important issue namely whether the time which the applicant actually had was sufficient. What was that time? It is of course difficult to determine it precisely. What we do know from the precise particulars in the register is that the document for translation was delivered to the language department at 11 a.m. and that the translation had to be delivered at 1 p.m. We know also that it was not delivered until 1.30 p.m., that is, half an hour late. But we also know that the Dutch and German translations of the same document which also had to be delivered at the same time were not delivered until 2 p.m. and 2.30 p.m. respectively. If account is taken of the fact that the time-limit covered five operations (rough draft by the translator, typing of the said draft, correcting of the typed copy by the translator, revision by the reviser, and typing of the revised translation) the time-limit fora document of two pages of even moderate difficulty was probably a little short. It is possible that the Italian reviser, paying more respect to the time-limit than did his German and Dutch colleagues took the translation before the translator has finished checking it which would explain, as the expert observes, why the most serious faults are on the second page where there is only a single correction in the applicant's handwriting. Having said this I must now answer the question: is the document produced by the defendant, in the light of the expert's explanations, of such a nature as to reveal on its own inability on the part of Miss Mirossevich to do the work of translator with the High Authority so that the latter was entitled to refuse to entrust her with any more difficult work without being in breach of its obligations in relation to the probationary period? If account is taken of the nature and requirements of the tasks to be performed at the time both as regards accuracy and speed at that feverish period of organization when the High Authority, bound by the strict time-limits of the Treaty, had both to set up its own organization and establish the Common Market, I recognize that there may be a temptation to reply in the affirmative to this question. Nevertheless, having regard to what I have just said I do not think that a negative judgment can be based on this single test; I do not think that the probationary period was conducted properly.
It remains to consider in so far as it may be of use the claim of misuse of powers: it is alleged that the real reason for the decision of 8 January 1953 dismissing Miss Mirossevich from the language department was the reviser's desire to replace her by a friend the name of which the High Authority even considered itself bound to give us: it is Mr Delli Paoli who was actually employed in the language department of the High Authority immediately after the applicant's departure.
I am now touching on a particularly disagreeable aspect of this case: I shall explain myself without passion but unequivocally.
I shall dispose first of all of a controversy which arose between the parties relating to the presence of Mr Delli Paoli in Luxembourg in December 1952: according to the applicant he then came to endeavour to find employment with the Community. Having failed to secure an appointment with the Court of Justice he applied to the High Authority and to make room for him his friend Mr. Verderame is alleged to have caused the applicant's establishment to be refused. The High Authority denies that Mr Delli Paoli even came to Luxembourg in December and has offered to produce his passport “stamped”, it says, “by the Customs with the dates of his crossing the frontier at Thionville” (in January 1953 and not December 1952).
Besides the fact that production of the passport would prove nothing (for it is well known that at that time the passport stamp was very often omitted in respect of Italians entering the Grand Duchy), the fact is unimportant for I do not see how it would establish the alleged collusion: this could have taken place just as well if the person concerned were in Rome or Luxembourg in December. This is why moreover the Second Chamber refused to extend the inquiry to cover this issue.
Apart from that the following facts are established:
1.
The fact (which I have already mentioned) that the applicant's departure from the language department and Mr Delli Paoli's arrival in the same department were simultaneous.
2.
The fact that the two decisions were taken on the proposal of Mr Verderame, the reviser of the Italian section.
3.
The fact that since the head of the department, Dr Thomik, was not sufficiently acquainted with Italian he relied on the reviser in both cases, that is to say, both with regard to the inability of the one and the ability of the other.
4.
The fact that Mr Delli Paoli was appointed to replace Miss Mirossevich. The High Authority denies this in its rejoinder (French translation, p. 25); at least it claims that it was not necessary to remove Miss Mirossevich from her post in order to appoint Mr Delli Paoli. This is quite true in law for there was no fixed number of staff and it was not necessary for a vacancy to occur to allow the recruitment of a new employee. But in fact it was a replacement. This appears from the statement of Dr Thomik, head of the department, at the inquiry (Minutes of Hearing of 15 May 1956, p. 26 of the French translation) which is as follows:
“Question put by the President:
Are there any facts or circumstances showing, or capable of showing, that the applicant was dismissed from her post because the reviser of the Italian section wished to replace her by a friend?”
Witness's answer:
“When it appeared that the applicant did not meet the requirements I wondered who could replace her. However I did not know any translator whose mother tongue was Italian and I therefore asked Mr Verderame whether he knew anyone. As far as I remember Mr Verderame had not mentioned the name of Mr Delli Paoli previously”.
On being questioned by the Judge-Rapporteur:
“I did not have an Italian translator in reserve”.
5.
Finally the last issue, the applicant alleges that her successor did not have the qualifications for a translator. This is what she says in the written procedure on three occasions:
(a)
Application, p. 3:“… further, Miss Mirossevich (who knows four languages) saw herself replaced by a friend of the reviser although he is not even a qualified translator (although officially stated to be a translator from French and English). Having obtained his contract of employment without any examination the new arrival was then transferred as a head of a newly created branch (the Conference Services branch)”.
(b)
Reply (French translation, p. 36):
“What would he have done (Dr Thomik), if he had known, on signing the letter of appointment of Mr Delli Paoli as a translator from French and English into Italian that Mr Paoli, as is well known, had only a very mediocre knowledge of French and none at all of English?”
(c)
Final submissions (French translation, p. 12): “The linguistic knowledge of Mr Delli Paoli was, as was well known, very limited, to such an extent that he was obliged to seek assistance from a colleague and was transferred, as soon as Mr Balla-dore took over as head of the Personnel Department, to another branch”.
This is what the applicant alleges on the issue. It is not contested by the High Authority.
In these circumstances must misuse of powers be regarded as being established? I think that the bringing together of the five factors which I have just mentioned is a very substantial beginning to evidence in support of misuse of powers. But I do not think that the evidence is complete.
In fact we are not concerned with judging here the legality of Mr Delli Paoli's appointment: we are concerned with the propriety of the dismissal of Miss Mirossevich.
No doubt it is possible that the true reason, the motive determining the dismissal, was the desire to replace the applicant by a friend of the reviser; but this is not certain. In other words the fact that the reviser took advantage of the departure of Miss Mirossevich to propose the appointment of one of his friends does not prove that the real reason for the dismissal was the desire to make that appointment possible: such behaviour cannot be presumed of the part of an official and there is no reason in the present case for doing so.
Nevertheless one observation is required. I mentioned a little while ago the special requirements of the department at the time and this is a consideration which was insisted on at the inquiry. However it is not possible to fail to observe that the attitude of the administration has revealed that it had in fact at that very time a somewhat “elastic” conception of the requirements of the department. That is why the facts which I have just mentioned appear to constitute one further ground for making a strictly objective review of the regularity of the probationary period.
I therefore propose that the court should declare that the probationary period of Miss Mirossevich was not conducted regularly.
V — Consequences of the solution proposed
If the Court agrees with me on this solution it is necessary to draw the consequences. This raises certain tricky problems in law and in practice.
Law
In law we are, it should be remembered, in the realm of contract but it is a contract concerned with public law. Under the general law of contract in civil law the principle is that an infringement by one of the parties of his obligations does not automatically discharge the contract but allows the other party to require performance of the contract if performance is possible (in France, Article 1184 of the Code Civil). I think the same rule applies in all our countries.
But the same is not everywhere true with regard to contracts of employment (still in private law).
Thus in France when it is a question of individual disputes relating to employment the case-law has always refused to order the reinstatement of a wrongly dismissed employee: wrongful breach of contract sounds in damages. This case-law has been criticized (Durand, Traité de droit du Travail 1950, T. II, p. 903). On the other hand in the case of collective labour disputes the courts of arbitration called upon to settle these disputes have used their powers to order reinstatement, “The only exception made”, says Mr Durand, “is in respect of management staff who are closely associated with the exercise of the employers' prerogatives and whose retention in the establishment is no longer possible once the necessary confidence has gone”.
In Germany the general law of contracts which allows each party to compel the other to perform his obligations applies in principle to contracts of employment: a worker who is dismissed can require his reinstatement under a judgment declaring his dismissal to be wrongful and in consequence the contract of employment not to have been discharged. However, both the worker and the employer can claim that it is in fact impossible for them, the former to take up his work again and the latter to continue any co-operation with the employee of use to the undertaking. It is only when such grounds are relied on and accepted by the court that the court will declare that the contract of employment has been discharged in spite of the wrongful dismissal and order the employer to pay damages.
In Italy the general law of contracts is very similar to the French law: Article 1453 of the Italian Codice Civile contains with very slight variations the same rule as Article 1184 of the French Code Civil. As for the contract of employment it is subject to very special rules one of which allows an arbitration tribunal (which has jurisdiction where a dismissal is a disciplinary measure) to keep a contract in force in spite of its being against the employer's wishes where the dismissal is unjustified (Mazzoni and Grechi on labour law, Bologna, 1951, p. 207).
In the Netherlands the position is the same as in France.
Let us now turn to public law. I see no reason here for it not applying the general law of contracts, that is to say, to allow each party in principle at least to require the performance of the obligation contracted by the other in so far as performance is not impossible either in law or in fact. On the contrary, this right is only the counterpart in contractual law of the right to reinstatement which is the normal consequence of annulment in relation to officials subject to staff regulations: what the law, which forms the basis of the regulations, allows, contract, which is the law of the parties, must also allow. However, I did say ‘in principle’; I should be tempted to recognize an exception in respect of certain posts — either ones very high up in the hierarchy or ones involving direct collaboration with the ultimate authority: there is here the element of ‘necessary confidence’ which is at the root of case-law in relation to arbitration in France as we have seen. Moreover the reason why administrations have recourse to contract in filling such posts is often to facilitate possible termination of the relationship and thus to avoid the maintenance of collaboration which may turn out to be impossible.
In practice
If we now pass to the application of this decision it goes without saying that the present case is not such as I have just been referring to. The solution therefore is, once the irregularity of the probationary period and in consequence of the decision which terminated it has been recognized, to order that the oral contract concluded on 9 December 1952 between the High Authority and Miss Mirossevich be now performed by the serving of a probationary period of one month in the language department. Of course at the conclusion of this probationary period and whatever the result the applicant's position must be considered and determined in accordance with the provisions of the recent staff regulations.
There remains the question of compensation for the past damage. In this respect I do not think it is right to order a ‘reinstatement in career bracket’ as was claimed. Such a reinstatement of a retroactive nature has a legal basis in my opinion only in respect of officials subject to the Staff Regulations who obtain the annulment of a decision of removal from post or dismissal: this is the result of the retroactive effect of the decision of annulment itself and of the legal fiction under which the person concerned is regarded as never having left his post. This is where the essential difference lies between the position under the Staff Regulations and the contractual position: no doubt the contract has never ceased to exist but the obligations which it involves and which in the event of not being performed must be performed now: performance of an obligation cannot be retroactive. Further the contract did not give a right to a career bracket nor to stability of employment, but simply an expectancy (cf. judgment in Kergall). Finally in any event the right to reinstatement in a career bracket even as regards an official subject to the Staff Regulations arises only as a result of establishment, that is to say after the probationary period provided for has been served and this must first be served properly and with a satisfactory result. With regard to the right to back payment of salary which the applicant is also claiming there is no such right for the same reasons and in addition because (and this applies to all officials even those subject to the Staff Regulations) no ‘service has been rendered’.
There can therefore only be compensation in relation to the damage suffered.
What is the quantum of damages?
It is obviously difficult to assess. I think it must be done independently of the results of the future probationary period which we cannot wait for: it is moreover a question of damages for past injury.
I do not think I can do better in this respect than to leave the matter to the Court as my colleague Advocate General Roemer did in the case of Kergall where there was also a large element of uncertainty. I shall confine myself to the two following observations relating to the attitude of the applicant and that of the administration.
The administration which could have parted company with the applicant endeavoured to find her other posts compatible with her ability and persisted in such endeavours. No doubt it may be thought that it was not solely by reason of philanthropy that it acted thus but because it was also aware of the disagreeable circumstances in which the applicant had been replaced in the language department. Nevertheless it seems to me that there is here a factor capable of lessening somewhat the wrong and consequently the liability of the administration.
As for the applicant it does not seem that she has made a great effort to endeavour to find a better position in the High Authority in so far as she had the opportunity. In particular she refused a posting to the division concerned with labour problems with the prospects of improvement which very likely this posting involved and which was in no way incompatible with her claim before the administrative Committee. ‘God helps those who help themselves’, says the proverb. The Court will have to consider how far the applicant's attitude is also capable of diminishing the administration's liability.
VI — Final observations
Before ending I should like to be allowed to say some words which go outside the legal sphere and that of the case.
At the end of the last hearing learned Counsel for the applicant has referred to the material and above all emotional position of his client and what he said moved me. The representative of the High Authority for his part stated in substance that leaving aside the legal sphere there was nothing further for him to say to accept in advance the loss of his case.
He was perfectly correct so far as the case is concerned. But now it will be a question of carrying out your judgment. If, as I hope very much, you adopt a solution which will basically return the parties to the status quo I hope that the second attempt will be made in complete fairness and that both parties will completely forget all that may have contributed to poison the case. And here I know that I am not making a vain appeal to the representatives of the High Authority who will be concerned with the matter. They are, as they have shown, perfectly conscious of the true role of a public administration which, far from being a blind machine, owes to itself more than any other employer to act fairly and not simply legally, honestly and not simply in accordance with the law, humanely and not simply as an institution. This is the price to be paid for the authority which is legitimately entrusted to it and which, truth to tell, has no real existence except at this price.
I should also like the applicant for her part to make an effort to rid herself of a certain paranoia which seems to afflict her to some extent, although I know that there are good reasons for this, and I hope that, confident in the wisdom and impartiality of her superiors, she will unreservedly accept the results of the new probationary period even if by ill-chance they should be unfavourable.
VII — Opinion
My opinion is as follows:
The decision of 8 January 1953 should be declared null and void together with the decision of the Administrative Committee which confirmed it.
The oral contract of 9 December 1952 should be performed by Miss Mirossevich's serving a probationary period of one month in the linguistic department of the High Authority as a translator and at the expiry of such probationary period, whatever the result, the position of the applicant should be determined in accordance with the provisions of the Staff Regulatons of the Community at present in force.
Miss Mirossevich should be awarded damages for the injury she has suffered by reason of the delay on the part of the High Authority in performing its contractual obligations with regard to her, the amount of which should be in the discretion of the Court.
The other claims in the application should be dismissed.
The High Authority should bear the costs of the proceedings save those relating to the dispute regarding the authenticity of the translation, which must be borne by Miss Mirossevich. |
Judgment of the Court of 12 December 1956. - Miranda Mirossevich v High Authority of the European Coal and Steel Community. - Case 10/55.
European Court reports
French edition Page 00365
Dutch edition Page 00391
German edition Page 00381
Italian edition Page 00361
English special edition Page 00333
Danish special edition Page 00037
Greek special edition Page 00111
Portuguese special edition Page 00113
Summary
Parties
Subject of the case
Grounds
Decision on costs
Operative part
Keywords
++++
1 . EMPLOYEES OF THE COMMUNITY - ACTIONS AGAINST INSTITUTIONS - JURISDICTION OF THE COURT
( TREATY, ART . 42 )
2 . EMPLOYEES OF THE COMMUNITY - ACTIONS AGAINST INSTITUTIONS - APPLICATIONS - ADMISSIBILITY - NO TIME-LIMIT
( TREATY, ART . 33, STATUTE OF THE COURT OF JUSTICE, ART . 39 )
3 . EMPLOYEES OF THE COMMUNITY - APPOINTMENT - PROBATIONARY PERIOD - ASSESSMENT BY THE ADMINISTRATION - REVIEW BY THE COURT
4 . PROCEDURE - PROOF - BURDEN OF PROOF
5 . DAMAGE - UNCERTAIN DAMAGE - NO COMPENSATION
Summary
1 . THE JURISDICTION OF THE COURT DERIVES FROM ARTICLE 42 OF THE TREATY IN CONJUNCTION WITH THE ARBITRATION CLAUSE IN THE CONTRACT OF EMPLOYMENT AND THE PROVISIONS OF THE RELEVANT STAFF REGULATIONS .
2 . SINCE THERE IS NO PROVISION FOR TIME-LIMITS EITHER IN RESPECT OF APPLICATIONS THROUGH OFFICIAL CHANNELS OR OF APPLICATIONS TO THE COURT, A TIME-LIMIT SIMILAR TO THAT IN ARTICLE 33 OF THE TREATY AND IN ARTICLE 39 OF THE STATUTE OF THE COURT OF JUSTICE CANNOT BE APPLIED BY ANALOGY HAVING REGARD TO THE PROVISIONS CONTAINED IN THE AFOREMENTIONED ARTICLES .
3 . IT IS FOR THE ADMINISTRATIVE AUTHORITY TO EVALUATE IN ITS DISCRETION THE CAPACITY OF CANDIDATES TO CARRY OUT GIVEN DUTIES AND FOR THE COURT WHERE APPROPRIATE TO REVIEW THE WAYS AND MEANS WHICH MAY HAVE LED TO THIS EVALUATION . AN UNFAVOURABLE ASSESSMENT OF THE CAPACITY OF A CANDIDATE TO BE EMPLOYED AS A TRANSLATOR CANNOT REASONABLY BE MADE AS A RESULT OF A SINGLE TRANSLATION .
4 . WHERE THERE IS A STRONG PRESUMPTION IN SUPPORT OF AN ARGUMENT IT IS FOR THE OTHER PARTY TO REBUT IT .
5 . UNCERTAINTY WITH REGARD TO THE OUTCOME WHICH A PROBATIONARY PERIOD WOULD HAVE HAD IF IT HAD DULY TAKEN PLACE RULES OUT CERTAIN DAMAGE . NON-MATERIAL DAMAGE BY REASON OF THE IMPROPER NATURE OF THE DECISION TO REFUSE A DEFINITIVE APPOINTMENT MAY BE COMPENSATED BY SUCCESSIVE OFFERS OF A NEW POST INVOLVING POSSIBILITIES OF PROMOTION .
Parties
IN CASE 10/55
MIRANDA MIROSSEVICH, REPRESENTED BY PROFESSOR FEDERICO A . PERINI-BEMBO, OF THE TRIESTE BAR, ADVOCATE OF THE CORTE DI CASSAZIONE, AND OTHER SUPERIOR COURTS, WITH AN ADDRESS FOR SERVICE IN LUXEMBOURG AT 83, RUE DE LA SEMOIS, APPLICANT,
V
HIGH AUTHORITY OF THE EUROPEAN COAL AND STEEL COMMUNITY, REPRESENTED BY ITS LEGAL ADVISER, PROFESSOR GIULIO PASETTI, ACTING AS AGENT, WITH AN ADDRESS FOR SERVICE IN LUXEMBOURG AT ITS OFFICES, 2, PLACE DE METZ, DEFENDANT,
Subject of the case
APPLICATION FOR THE REVOCATION AND AMENDMENT OF CERTAIN INTERNAL ADMINISTRATIVE MEASURES OF THE HIGH AUTHORITY RELATING TO THE APPLICANT,
Grounds
P . 340
1 . JURISDICTION
THE COURT HAS JURISDICTION IN THE PRESENT CASE ON THE BASIS OF ARTICLE 42 OF THE TREATY IN CONJUNCTION WITH THE SECOND PARAGRAPH OF ARTICLE 12 OF THE LETTER OF APPOINTMENT DATED 12 OCTOBER 1953 WHICH PROVIDES THAT DISPUTES OF AN INDIVIDUAL NATURE ARISING FROM THE APPLICATION OF THE PROVISIONS OF THE LETTER OF APPOINTMENT OR THE REGULATIONS AND DECISIONS RELATING TO STAFF SHALL BE BROUGHT BEFORE THE COURT OF JUSTICE AND ALSO IN CONJUNCTION WITH ARTICLE 50 OF THE PROVISIONAL STAFF REGULATIONS WHICH CONTAINS A SIMILAR PROVISION .
2 . ADMISSIBILITY
THE DEFENDANT CONTEST THE ADMISSIBILITY OF THE APPLICATION BECAUSE IT IS OUT OF TIME AND BECAUSE THE APPLICANT HAS TACITLY ACCEPTED THE MEASURES TAKEN IN RESPECT OF HER .
THE COURT FINDS AGAINST THE ALLEGATION THAT THE APPLICATION IS OUT OF TIME SINCE NO TIME-LIMIT IS SPECIFIED IN ANY PROVISION APPLICABLE IN THIS CASE EITHER FOR A COMPLAINT THROUGH OFFICIAL CHANNELS OR FOR AN APPLICATION TO THE COURT . THE COURT REJECTS THE DEFENDANT'S ARGUMENT THAT A TIME-LIMIT SIMILAR TO THAT IN ARTICLE 33 OF THE TREATY AND ARTICLE 39 OF THE STATUTE OF THE COURT OF JUSTICE MUST BE APPLIED BY WAY OF ANALOGY . ARTICLE 33 CONCERNS ONLY APPLICATIONS FOR ANNULMENT AGAINST DECISIONS OF THE HIGH AUTHORITY BROUGHT BY MEMBER STATES, THE COUNCIL, UNDERTAKINGS AND THEIR ASSOCIATIONS . ARTICLE 39 OF THE STATUTE FURTHER DECLARES THE TIME LIMIT OF ONE MONTH IN ARTICLE 33 OF THE TREATY APPLICABLE TO ACTIONS RELATING TO PECUNIARY SANCTIONS TAKEN AGAINST UNDERTAKINGS AND ACTIONS IN RELATION TO FUNDAMENTAL AND PERSISTENT DISTURBANCES AFFECTING THE STATES .
THE COURT FURTHER DECLARES THAT THE APPLICANT'S ATTITUDE FOLLOWING THE DECISION OF 8 JANUARY 1953 CANNOT BE REGARDED AS ACQUIESCENCE IN THAT MEASURE INVOLVING A WAIVER OF ANY ACTION TO QUESTION THE LEGALITY OF THE SAID MEASURE .
PERFORMANCE BY THE APPLICANT OF SUCCESSIVE TASKS REQUIRED OF HER BY THE HIGH AUTHORITY IS NO GROUND FOR DEDUCING THAT SHE ACCEPTED THE CONTESTED MEASURE WITHOUT RESERVATION . MOREOVER THE SIGNING BY THE APPLICANT ON 12 OCTOBER 1953 OF THE LETTER OF APPOINTMENT WITH RETROACTIVE EFFECT TO 9 DECEMBER 1952 DOES NOT IN THE OPINION OF THE COURT CONSTITUTE A MANIFESTATION OF ACQUIESCENCE EXCLUDING ANY SUBSEQUENT ACTION . IT APPEARS FROM THE DOCUMENTS IN THE FILE THAT FOR THE HIGH AUTHORITY ITSELF THIS LETTER OF APPOINTMENT WAS ONLY OF A PROVISIONAL NATURE AND NOT INTENDED TO GOVERN FINALLY THE LEGAL POSITION OF THE APPLICANT SINCE HER RECLASSIFICATION WAS EXPECTED . FINALLY IT APPEARS FROM THE INQUIRIES WHICH THE SECOND CHAMBER HAS MADE THAT THE APPLICANT HAS CONSTANTLY MADE OBSERVATIONS ABOUT HER POSITION . THE STATEMENT OF THE DIRECTOR OF ADMINISTRATION OF THE HIGH AUTHORITY CONFIRMS IN PARTICULAR THE APPLICANT'S STATEMENT THAT WHEN SIGNING THE SAID LETTER OF APPOINTMENT SHE HAD MAINTAINED HER RESERVATIONS ABOUT HER CLASSIFICATION .
P . 341
THE COURT IN CONSEQUENCE DECLARES THE PRESENT APPLICATION ADMISSIBLE .
3 . SUBSTANCE
A . THE CONDITIONS UPON WHICH THE APPLICANT ENTERED THE SERVICES OF THE HIGH AUTHORITY
THE COURT REJECTS THE APPLICANT'S ARGUMENT, PUT FORWARD FOR THE FIRST TIME IN THE REPLY, THAT SHE WAS DEFINITIVELY ENGAGED BY THE HIGH AUTHORITY WHEN SHE ENTERED INTO SERVICE ON 9 DECEMBER 1952 .
THE EVIDENCE ADDUCED BY THE APPLICANT IN SUPPORT OF HER CLAIM IS IN NO WAY CONCLUSIVE . ON THE ONE HAND THE EXAMINATION TAKEN AT THE MINISTRY FOR FOREIGN AFFAIRS IN ROME AND THE TELEGRAM FROM THE SAID MINISTRY INVITING THE APPLICANT TO GO TO LUXEMBOURG FOR THE PURPOSE OF HER EMPLOYMENT BY THE HIGH AUTHORITY COULD NOT, WITHOUT INSTRUCTIONS TO THIS EFFECT, GIVE RISE TO AN OBLIGATION ON THE PART OF THE LATTER TOWARDS THE APPLICANT . THE APPLICANT'S SIGNATURE TO AN UNDERTAKING TO PRESERVE OFFICIAL SECRECY WITH REGARD TO ANYTHING WHICH MIGHT COME TO HER KNOWLEDGE DURING HER EMPLOYMENT AND THE NOTE FROM THE HEAD OF THE TRANSLATION DEPARTMENT SENT TO THE ADMINISTRATION TO INFORM IT OF THE APPLICANT'S ENTRY INTO SERVICE DO NOT CONSTITUTE PROOF OF A DEFINITIVE APPOINTMENT .
FURTHER, BOTH IN THE APPLICATION MADE ON 10 FEBRUARY 1955 TO THE ADMINISTRATIVE COMMITTEE OF THE HIGH AUTHORITY AND IN THE APPLICATION TO THE COURT THE APPLICANT REFERS ON SEVERAL OCCASIONS TO A PROBATIONARY PERIOD AND THUS RECOGNIZES THAT HER EMPLOYMENT WAS NOT OF A DEFINITIVE NATURE .
THE COURT ALSO REJECTS THE DEFENDANT'S ARGUMENT THAT THE APPLICANT WAS SIMPLY ADMITTED FOR A TRIAL PERIOD : THIS, AS DISTINCT FROM AN APPOINTMENT ON PROBATION, WOULD GIVE RISE TO NO LEGAL RELATIONSHIP BETWEEN THE PERSON ADMITTED AND THE ADMINISTRATION SINCE THE TRIAL PERIOD WOULD NOT PROVIDE CONFIRMATION BUT SIMPLY BE A SUBSTITUTE FOR ANY OTHER MEANS OF RECRUITMENT SUCH AS AN EXAMINATION, A COMPETITION BASED ON QUALIFICATIONS AND SO FORTH .
ENTRY INTO SERVICE UNDER SUCH CONDITIONS WOULD APPEAR AT THE VERY LEAST TO BE EXCEPTIONAL AND HAS NOT BEEN PROVIDED FOR BY ANY OF THE REGULATIONS IN FORCE UNTIL NOW IN THE COMMUNITY . IT MOREOVER APPEARS FROM THE EVIDENCE OF THE SECRETARY OF THE HIGH AUTHORITY THAT INSTRUCTIONS WERE GIVEN TO EXERCISE CAUTION IN ENGAGING STAFF : THE PROBATIONARY PERIOD WAS MEANT AS A SAFEGUARD . THE FACT THAT THE PROBATIONARY PERIOD WAS CUSTOMARY WITH THE HIGH AUTHORITY IS CONFIRMED BY THE STATEMENTS OF THE DIRECTOR AND AN OFFICIAL IN THE ADMINISTRATIVE DEPARTMENT OF THE HIGH AUTHORITY UNCONTRADICTED BY OTHER WITNESSES .
P . 342
THE DEFENDANT HAS PUT FORWARD NO ARGUMENT TO SUBSTANTIATE ITS CLAIM OF ADMISSION FOR A TRIAL PERIOD . IT ALLEGES THAT THE ABSENCE OF ANY DOCUMENT IS CONFIRMATION OF ITS STATEMENT . HOWEVER, IT APPEARS FROM THE DOCUMENTS IN THE FILE AND FROM THE INQUIRY THAT DURING THE PERIOD WHEN THE HIGH AUTHORITY WAS BEING SET UP THE CONVENING OF THOSE ENGAGED TO ORGANIZE THE WORK AND THEIR TERMS OF REFERENCE WERE GENERALLY FIXED ORALLY . THE FACT THAT THE APPLICANT ENTERED INTO SERVICE PURELY ON THE BASIS OF AN ORAL AGREEMENT THEREFORE DOES NOT PROVE THAT SHE WAS ACCEPTED ONLY ON A TRIAL BASIS .
FINALLY IN THE " MEMORANDUM TO THE DIRECTOR OF THE STAFF AND ADMINISTRATION DIVISION " OF 31 MAY 1955 WHICH CONSTITUTES THE DECISION OF THE ADMINISTRATIVE COMMITTEE TAKEN AS A RESULT OF THE APPLICANT'S COMPLAINT THROUGH OFFICIAL CHANNELS, THE COMMITTEE ITSELF DOES NOT MENTION THAT THE APPLICANT WAS ADMITTED ON A TRIAL BASIS BUT FINDS THAT HER ENTRY INTO THE SERVICE WAS AS A RESULT OF A PROPOSAL TO EMPLOY HER SUBJECT TO THE RESULTS OF A PROBATIONARY PERIOD PROVING SATISFACTORY . THERE WAS THUS AN ORAL PROPOSAL BY THE HIGH AUTHORITY TO THE APPLICANT TO APPOINT HER FOR A PROBATIONARY PERIOD AS AN INTERPRETER/TRANSLATOR AND BY HER ACTUAL AND IMMEDIATE ENTRY INTO SERVICE THE APPLICANT ACCEPTED THIS PROPOSAL OF EMPLOYMENT AND THUS AN ORAL CONTRACT OF EMPLOYMENT WAS CONCLUDED SUBJECT TO THE RESULTS OF A PROBATIONARY PERIOD PROVING SATISFACTORY .
THE COURT FINDS THAT IT FOLLOWS FROM THE ABOVE-MENTIONED FACTS THAT ON 9 DECEMBER 1952 THE LEGAL POSITION OF THE APPLICANT WAS THAT OF A PROBATIONER .
B . THE DECISION OF 8 JANUARY 1953
THE APPLICANT BASES HER ALTERNATIVE CLAIMS ON THE IRREGULARITIES WHICH, SHE ALLEGES, VITIATE THE STATEMENT OF THE REASONS ON WHICH THE DECISION OF 8 JANUARY 1953 WAS BASED, NAMELY : " YOUR ABILITY DOES NOT MEET THE REQUIREMENTS OF THE DEPARTMENT ".
THE IRREGULARITIES ALLEGED ARE ON THE ONE HAND IRREGULARITY IN THE CONDITIONS UNDER WHICH THE PROBATIONARY PERIOD TOOK PLACE AND ON THE OTHER HAND THE MISUSE OF POWERS, THE REAL REASON FOR HER DISMISSAL BEING THE REVISER'S DESIRE TO REPLACE HER BY A FRIEND .
THE TWO CLAIMS MUST BE CONSIDERED SEPARATELY .
( A ) THE CLAIM RELATING TO THE IRREGULARITY OF THE PROBATIONARY PERIOD
THE COURT CONSIDERS THAT IT IS FOR THE COMPETENT ADMINISTRATIVE AUTHORITY TO EVALUATE IN ITS DISCRETION THE CAPACITY OF THE CANDIDATES TO CARRY OUT GIVEN DUTIES . HOWEVER, IT IS FOR THE COURT WHERE APPROPRIATE TO REVIEW THE WAYS AND MEANS WHICH MAY HAVE LED TO THIS EVALUATION .
IN THE PRESENT CASE THE COURT MUST CONSIDER WHETHER THE APPLICANT HAS BEEN GIVEN THE OPPORTUNITY TO SHOW HER CAPACITY DURING THE PROBATIONARY PERIOD .
THE COURT FINDS THAT DURING THE MONTH SPENT BY THE APPLICANT IN THE TRANSLATION DEPARTMENT SHE WAS ENTRUSTED WITH ONLY THREE TRANSLATIONS, THE FIRST TWO OF WHICH CONTAINED ONLY TWO PAGES EACH AND THE THIRD OF WHICH, OF SEVEN PAGES, WAS DONE IN COLLABORATION WITH THE ITALIAN REVISER . FURTHER THE DOCUMENTS TO BE TRANSLATED IN THE OPINION OF BOTH PARTIES PRESENTED NO SERIOUS DIFFICULTY .
P . 343
THE DEFENDANT JUSTIFIES THE SMALL NUMBER OF TASKS REQUIRED OF THE APPLICANT DURING HER PROBATIONARY PERIOD EITHER BY THE LACK OF WORK IN THE DEPARTMENT OR THE OBVIOUS INCAPACITY OF THE APPLICANT FOR HER DUTIES, WHICH THE DEFENDANT SEEKS TO PROVE BY PRODUCING ONE OF THE THREE TRANSLATIONS MADE BY THE APPLICANT DURING HER PROBATIONARY PERIOD . THE IMPERFECTION OF THESE THREE TRANSLATIONS IS ALLEGED TO HAVE CONVINCED THE DEFENDANT THAT THERE WAS NO NEED TO SUBJECT THE APPLICANT TO ANY OTHER TESTS .
AS FOR THE FIRST ARGUMENT IT APPEARS FROM THE DOCUMENTS IN THE FILE THAT DURING THE PERIOD 9 DECEMBER 1952 TO 8 JANUARY 1953 THE AVERAGE NUMBER OF PAGES TRANSLATED WAS SOME 95 PER TRANSLATOR FOR THE ITALIAN SECTION . THIS ARGUMENT CANNOT THEREFORE BE ACCEPTED .
AS TO THE TRANSLATION OF 18 DECEMBER 1952 PRODUCED BY THE DEFENDANT, THE APPLICANT BY NOTICE DATED 3 JANUARY 1956, REGISTERED ON 12 JANUARY 1956, CONTESTED ITS AUTHENTICITY AND CLAIMED NOT TO BE THE AUTHOR .
HOWEVER, BY NOTICE DATED 22 MAY 1956, REGISTERED ON 24 MAY 1956, THE APPLICANT NOTIFIED THE COURT THAT SHE ACCEPTED THE SAID DOCUMENT AS " LEGALLY AUTHENTIC " ALTHOUGH IT DID NOT REFLECT THE TRUE POSITION .
THE COURT MUST RULE ON THE AUTHENTICITY OF THE SAID DOCUMENT .
THE DOCUMENTS PRODUCED BY THE DEFENDANT SHOW THAT THE DOCUMENT IN QUESTION IS IN FACT THE TRANSLATION MADE INTO ITALIAN BY THE APPLICANT FROM A FRENCH ORIGINAL . THE EVIDENCE OF WITNESSES GIVEN AT THE INQUIRY CONDUCTED BY THE SECOND CHAMBER CORROBORATES THE FINDINGS RESULTING FROM THE DOCUMENTS PRODUCED .
THE EXPERT'S OPINION ORDERED BY THE SECOND CHAMBER WITH REGARD TO THIS DOCUMENT HAS NOT CONFIRMED THE DEFENDANT'S ALLEGATION THAT THIS TRANSLATION CONSTITUTED BY ITS INFERIOR QUALITY PATENT EVIDENCE OF THE APPLICANT'S INABILITY .
HAVING REGARD TO THE OPINION OF THE EXPERT AND TAKING ACCOUNT OF THE FACT THAT THE TIME-LIMIT GIVEN FOR THE TRANSLATION WAS VERY SHORT, THE COURT CONSIDERS THAT AN UNFAVOURABLE EVALUATION COULD NOT REASONABLY HAVE BEEN MADE AS A RESULT OF THIS SINGLE TEST WHICH HAS BEEN PRODUCED IN VIEW OF THE FACT THAT THE QUALITY OF THE TRANSLATION IS NOT SUCH AS TO REVEAL BY ITSELF MARKED INABILITY ON THE PART OF THE APPLICANT FOR THE WORK OF TRANSLATOR WITH THE HIGH AUTHORITY .
THE TWO OTHER TRANSLATIONS MADE BY THE APPLICANT HAVE NOT BEEN PRODUCED SO THAT IT HAS NOT BEEN SHOWN THAT THEY REVEAL INABILITY ON THE PART OF THE APPLICANT . FURTHER THE APPLICANT, HAVING ENTERED A DEPARTMENT WHICH WAS STRANGE TO HER AND WHICH REQUIRED A CERTAIN ASSIMILATION TO ADAPT HERSELF TO IT, COULD LEGITIMATELY EXPECT A GREATER AMOUNT OF WORK WHICH WOULD HAVE ALLOWED HER TO SHOW HER CAPACITY .
FOR ALL THESE REASONS THE COURT CONSIDERS THAT THE EXCEPTIONALLY LIMITED NUMBER OF TRANSLATIONS REQUIRED OF THE APPLICANT DURING HER PROBATIONARY PERIOD CONSTITUTES A SERIOUS PRESUMPTION IN SUPPORT OF THE CLAIM THAT THE PROBATIONARY PERIOD OF THE APPLICANT WAS NOT REGULARLY CONDUCTED . IN THE CIRCUMSTANCES IT WAS FOR THE DEFENDANT TO REBUT THIS PRESUMPTION . SUFFICIENT EVIDENCE IS THE FORM OF TRANSLATIONS MADE UNDER APPROPRIATE CONDITIONS BY THE APPLICANT SHOWING HER PATENT INCAPACITY TO DO HER WORK WITH THE HIGH AUTHORITY HAS NOT BEEN ADDUCED AND IN CONSEQUENCE THE PROBATIONARY PERIOD MUST BE REGARDED AS NOT HAVING BEEN PROPERLY CONDUCTED .
P . 344
( B ) MISUSE OF POWERS
THE APPLICANT HAS ALLEGED THAT THE DECISION OF 8 JANUARY 1953 WAS VITIATED FOR MISUSE OF POWERS SINCE THE REAL GROUND FOR HER DISMISSAL WAS THE REVISER'S DESIRE TO REPLACE HER BY A FRIEND .
WITHOUT DWELLING ON THE FACT THAT THERE IS A CONNEXION BETWEEN THE DEPARTURE OF THE APPLICANT AND THE ARRIVAL IN THE TRANSLATION DEPARTMENT OF THE REVISER'S FRIEND, THAT THE LATTER DID REPLACE THE APPLICANT AND THAT THE DECISIONS TO DISMISS AND APPOINT WERE PROPOSED BY THE SAME PERSON, THE COURT FINDS THAT MISUSE OF POWERS HAS NOT BEEN SUFFICIENTLY PROVED . THIS CLAIM CAN THEREFORE NOT BE UPHELD .
THE COURT CONCLUDES THAT THE APPLICANT'S PROBATIONARY PERIOD WAS NOT CONDUCTED UNDER PROPER CONDITIONS AND THAT THE DECISION OF THE PERSONNEL DEPARTMENT OF 8 JANUARY 1953, INFORMING THE APPLICANT THAT HER ABILITY DID NOT ACCORD WITH THE REQUIREMENTS OF THE DEPARTMENT, AND THE DECISION OF THE ADMINISTRATIVE COMMITTEE WHICH CONFIRMED IT MUST BE ANNULLED .
IN CONSEQUENCE, SINCE THE ORAL CONTRACT CONCLUDED BETWEEN THE APPLICANT AND THE HIGH AUTHORITY ON 9 DECEMBER 1952 WAS NOT DULY PERFORMED, IT MUST NOW BE PERFORMED : THE APPLICANT MUST SERVE THE PROBATIONARY PERIOD PROVIDED FOR IN THE SAID CONTRACT UNDER PROPER CONDITIONS .
THE DURATION OF THIS PROBATIONARY PERIOD WAS ACCORDING TO BOTH PARTIES A MONTH IN ACCORDANCE WITH THE RULE USUALLY APPLIED BY THE HIGH AUTHORITY AT THAT TIME . IT APPEARS FROM THE STATEMENT OF THE SECRETARY OF THE HIGH AUTHORITY THAT THAT PERIOD WAS CONSIDERED TOO SHORT AND THAT AS A RESULT APPLICANTS WERE REQUIRED TO SERVE A PROBATIONARY PERIOD OF THREE MONTHS AS FROM THE BEGINNING OF 1953 . THE PROVISIONAL STAFF REGULATIONS OF 16 MARCH 1954 PROVIDED FOR A SIMILAR PROBATIONARY PERIOD AND IN JULY 1956 THE STAFF REGULATIONS OF THE COMMUNITY EXTENDED THE PERIOD TO SIX MONTHS . IN THESE CIRCUMSTANCES THE COURT CONSIDERS THAT THE APPLICANT SHOULD SERVE HER NEW PERIOD OF PROBATION FOR A PERIOD IN ACCORDANCE WITH THAT PROVIDED FOR IN ARTICLE 36 OF THE STAFF REGULATIONS .
4 . COMPENSATION CLAIMED BY THE APPLICANT
THE APPLICANT CLAIMS COMPENSATION EQUAL TO THE DIFFERENCE BETWEEN THE SALARY ACTUALLY RECEIVED BY HER AND THAT OF STAFF IN THE SECOND CATEGORY .
THE COURT FINDS THAT IN VIEW OF THE UNCERTAINTY REGARDING THE RESULT WHICH THE FIRST PROBATIONARY PERIOD WOULD HAVE LED TO HAD IT BEEN DULY CONDUCTED AND IN CONSEQUENCE REGARDING THE APPLICANT'S POSSIBLE APPOINTMENT IN THE SECOND CATEGORY, THERE CAN BE NO QUESTION IN THE PRESENT CASE OF ANY CLEAR DAMAGES SUFFERED BY HER .
FURTHER THE APPLICANT HAS CLAIMED FOR THE FIRST TIME IN HER REPLY NON-MATERIAL DAMAGE BY REASON OF THE IMPROPER NATURE OF THE DECISION OF 8 JANUARY 1953; THE COURT DOES NOT THINK IT RIGHT TO GRANT THE APPLICANT COMPENSATION UNDER THIS HEAD . IN THIS RESPECT ALSO ACCOUNT MUST BE TAKEN OF THE UNCERTAINTY OF THE RESULTS OF THE PROBATIONARY PERIOD AND THE SUCCESSIVE OFFERS OF NEW OPPORTUNITIES OF PROMOTION MADE BY THE HIGH AUTHORITY TO THE APPLICANT AFTER SHE HAD LEFT THE TRANSLATION DEPARTMENT .
IT FOLLOWS THAT THE APPLICANT IS NOT ENTITLED TO DAMAGES .
Decision on costs
SINCE THE DEFENDANT HAS FAILED ON SEVERAL ISSUES IT MUST, IN ACCORDANCE WITH ARTICLE 60 OF THE RULES OF PROCEDURE OF THE COURT, BE ORDERED TO PAY THE APPLICANT FOUR-FIFTHS OF HER COSTS . FURTHER, THE DEFENDANT MUST PAY TO THE COURT FOUR-FIFTHS OF THE COSTS INCURRED BY THE COURT IN THE FORM OF LEGAL AID GRANTED TO THE APPLICANT FOR PART OF THE TRIAL BY ORDER OF THE FIRST CHAMBER OF 21 OCTOBER 1955 .
THE DEFENDANT MUST BEAR ITS OWN COSTS .
Operative part
THE COURT
HEREBY :
DECLARES THE PRESENT APPLICATION ADMISSIBLE;
ANNULS THE DECISION OF THE HIGH AUTHORITY OF 8 JANUARY 1953 AND THE DECISION OF THE ADMINISTRATIVE COMMITTEE OF 29 MARCH 1955, WHICH CONFIRMED IT;
ORDERS THAT THE APPLICANT SHALL COMPLETE A PROBATIONARY PERIOD OF SIX MONTHS AS A TRANSLATOR IN THE LANGUAGE DEPARTMENT OF THE HIGH AUTHORITY;
ORDERS THE HIGH AUTHORITY TO BEAR FOUR-FIFTHS OF THE APPLICANT'S COSTS AND ALL ITS OWN COSTS .
ORDERS THE HIGH AUTHORITY TO REIMBURSE TO THE COURT FOUR-FIFTHS OF THE COSTS INCURRED BY IT AS LEGAL AID . |
OPINION OF MR ADVOCATE GENERAL LAGRANGE ( )
Mr President,
Members of the Court.
The Court has before it an application by the Associazione Industrie Siderurgiche Italiane (ASSIDER) for the interpretation of point 11 in Section II of Part A of the grounds under the heading ‘Law’ of the judgment in Case 2/54 (judgment given in an application by the Italian Government) ‘to the whole of which’ passage, it is alleged, ‘the judgment in Case 3/54 refers’ (that is to say, the judgment in the action brought by ASSIDER itself).
The part of the judgment in Case 2/54 which the Court is asked to interpret is that where it was held that the claim by the Italian Government of infringement, by Article 1 of Decision No 2/54, of Article 30 of the Convention on the Transitional Provisions was well founded.
After setting out its point of view, the applicant association concludes as follows:
‘We are confident that the Court will interpret the judgment referred to above as meaning that Article 30 (2) of the Convention on the Transitional Provisions prohibits alignment by non-Italian undertakings on the Italian market; and that, on the other hand, it does not prohibit within the Italian market alignment by Italian undertakings on the prices of other Italian undertakings or alignment by Italian undertakings on the prices of other non-Italian but Community undertakings.’
The application, which satisfies the requirements of Articles 20 and 22 of the Statute and Article 29 of the Rules of Procedure is in due form. There is no prescribed period for making the application.
I
The question however is whether the application is admissible under the terms of Article 37 of the Statute which has expressly provided for an application for interpretation.
It is worded as follows: ‘If the meaning or scope of a judgment is in doubt, the Court shall construe it on application by any party or any institution of the Community establishing an interest therein.’
ASSIDER was not a ‘party’ to the action which gave rise to the judgment in Case 2/54, the interpretation of which is requested; that judgment was given in an action between the Italian Government and the High Authority. ASSIDER was a party to Case 3/54 and, contrary to what it alleges, it is not true that the matter ‘refers to the whole of point 11 of the judgment in Case 2/54.’ In truth it does not even make reference to that judgment, at least on the issue with which we are concerned, namely the application for annulment of Article 1 of Decision No 2/54. In this respect it is limited to declaring the application to have no purpose on the ground that Article 1 of Decision No 2/54 was ‘for all purposes annulled by judgment of 21 December 1954’ in Case 1/54. That judgment was given in Case 1/54 brought by the French Government in which there is only a short reference to Article 30. The reasoning which has given rise to the present application for interpretation is not referred to there, which is quite understandable since the French Government had made no allegation of the infringement of this provision, which specifically concerns the Italian market.
Should, then, the application by ASSIDER be dismissed as inadmissible on the sole ground that ASSIDER was not a party to the action which gave rise to the judgment the interpretation of which it is requesting, namely that in Case 2/54?
I do not think so.
It must not be forgotten that we are concerned here with applications for annulment which are subject to special rules, in particular as regards the authority of res judicata. If the general principle of the relative authority of res judicata continues to apply where an application is dismissed there is an exception in the case of annulments expressed to be ‘for all purposes’. This is precisely what the Court stated in its judgment in Case 3/54 and this is what enabled the Court to declare ASSIDER's application for annulment as having no purpose in so far as there had been a declaration of annulment when the first action, that by the French Government, was considered. There is no doubt that in strict law the Court could perfectly well have given the same judgment in Case 2/54 since there had been no order joining the cases. It obviously did not depend on ASSIDER that another course, just as lawful, was adopted by the Court with regard to it. It therefore seems to me that where there are a number of applications made against the same decision and, where on one of those applications the decision is annulled, the other applicants may be regarded as ‘parties’ within the meaning of Article 37 of the Statute and must be allowed to ask for the interpretation of a judgment which was in fact given with regard to them even though the Court simply stated that it was ‘not necessary to give a ruling’. (It would have been otherwise, of course, if the application had been dismissed as inadmissible). It seems to me also that, in the very special case where, although not being bound to do so legally, the Court has given an express decision on an application for annulment made by a party in spite of the fact that a declaration of annulment has already been made in an earlier application, every other party who duly applied for the annulment of the same decision is entitled to ask for the interpretation of either of the judgments accepting the applications for annulment (and to the extent to which they were so accepted). This in any event ought to be so in a case such as the present where the claim for annulment recognized as well founded by the Court was likewise made by the party in respect of whom it was said there was no need to give a ruling.
II
However, although ASSIDER appears to me to have overcome this initial obstacle and may be considered (with a rather considerable effort of interpretation, it is true, but one which I consider justified) as ‘a party’ within the meaning of Article 37 of the Statute, on the other hand, I do not think its application satisfies another condition required by the article, namely that ‘the meaning or scope of a judgment is in doubt’.
The application for interpretation is a special legal remedy making it possible to obtain an interpretation of an obscure or ambiguous provision contained in a judgment from the very court which gave that judgment: it is one of the rare applications in modern law of the maxim ‘ejus est interpretari cujus est condere’ and is an exception to the principle according to which the Court is functus officio — that it has exhausted its jurisdiction — once it has given judgment.
In the national law of the countries of the Community the application for interpretation is known as such only in France and Belgium; in both countries too it is purely the offspring of case-law. In the other Member States difficulties which may arise on the enforcement of a judgment can be resolved only by bringing a new action whereby the court having jurisdiction (which may well be, and usually is, a different court) will have, if need be, to interpret the judgment in order to apply it as if it were the wording of a law or regulation.
The application for interpretation exists likewise before certain international courts where it is expressly provided for. This is the case in particular with Article 60 of the Statute and Article 79 of the Rules of Court of the International Court of Justice.
Whether, however, it be in national or international law the principles are the same. They may be summarized as follows:
1.
There must be a doubt. This doubt must be specific and of such a nature as to interfere with the enforcement of the judgment (the word ‘enforcement’ is here understood in the widest sense and not as meaning ‘means of enforcement’). The courts are not there to give consultations of an academic nature on the judgments which they have given. On the other hand, it is not necessary that there should be a true action involving conflicting claims by the parties. At least this is not required in this Court since Article 37 of the Statute states ‘if the meaning or scope of a judgment is in doubt’ and does not mention ‘dispute’ as does the Statute of the Court at the Hague (the word ‘dispute’ calls forth more strongly the idea of an action) and, further, Article 37 allows the institutions of the Community to apply even though they were not parties to the main action. It may well be that in such a case the two parties are in full agreement. The first condition is therefore that there should be a specific doubt and that it must relate to the enforcement of the judgment.
2.
The doubt must relate to an issue decided by the judgment without reopening what was decided. This is very important. It is not possible to attack what was decided under the pretext of interpretation.
From this it follows that the Court cannot, for the benefit of an application for interpretation, restrict, extend or amend the rights arising out of its judgment and must limit itself to giving an interpretation where, as a result of some ambiguity in the wording, the judgment has left the extent of the consequences of what it involves in doubt:
French Cour de Cassation, Req. 10 December 1902; ( ) Civ. 15 July 1902; ( ) Civ. 23 June 1924; ( ) French Conseil d'Etat, Héritiers Berton,8 August 1895. ( )
It also follows from this that the application for interpretation can relate only to the part of the judgment which has the authority of res judicata, that is to say, in principle, the operative part. This is indeed the rule that only the operative part has the authority of res judicata although it may be clarified by the grounds; this rule is commonly recognized, to my knowledge, in our six countries. Allow me to cite a particularly clear judgment in France to this effect: Tribunal des Conflits, 12 December 1942, de Murard. ( )
It follows further from this that the court which has given the judgment, the interpretation of which is sought, cannot substitute itself for the court which has jurisdiction with regard to means of enforcement. (In this sense a contrario French Cour de Cassation, 7 May 1946). ( ) This is understandable since, on the one hand, the procedure of the application for an interpretation must not interfere with the system of jurisdiction or, consequently, prejudice the jurisdiction of the court having jurisdiction to enforce the judgment and, on the other hand, the main if not the only use of this rather special procedure is to try to avoid, by anticipating them, subsequent difficulties and a new action regarding enforcement.
So much for national law.
We find a very interesting precedent in international law, namely the judgment of the Permanent Court of International Justice given on 16 December 1927 between the German Government and the Polish Government in the case called Chorzów Factory Case. The Court at The Hague in that case gave an interpretation of a passage in a previous judgment on the meaning and scope of which the parties disagreed.
On that occasion the Court defined the conditions of admissibility of an application for interpretation and it clearly made such admissibility subject to the existence of a dispute between the parties as to what the judgment under interpretation decided with binding force. It also recognized that it was within its jurisdiction, where appropriate, to give a ruling on the question whether one or other part of the judgment did or did not have binding force.
One of the judges, Judge Anzilotti, who was in the minority, gave a dissenting opinion; but in fact it appeared that, albeit with greater legal strictness, Judge Anzilotti adopts the same legal principles as the majority of the Court and parts company from them in the application to the particular case. He took the view that on one issue there was no true dispute between the parties and therefore no doubt and that on the other issue the application for interpretation in fact sought judgment on a new question which was at that time pending before the court. He thus concluded that the application was not admissible.
3.
There must be a real obscurity or ambiguity in the judgment.
If the judgment is clear there is obviously nothing to interpret and the application must be dismissed.
Let me cite for example in France: Conseil d'Etat, Dame Veuve Guillemain9 July 1926; ( ) Conseil d'Etat, Secrétaire d'Etat à la Présidence du Conseil, 7 July 1950. ( ) The latter judgment is interesting because it relates to the interpretation of a judgment given on an application for annulment and it is the only such instance of which I know.
Sometimes the judgment declaring that there is neither obscurity nor ambiguity is accompanied by various remarks which are nevertheless useful. For example, Conseil d'Etat, Ville de Bagnères de Luchon,28 November 1934. ( )
In international law I should like to refer once again to the judgment of 16 December 1927 of the Permanent Court of International Justice which did not hesitate to give an interpretation of its previous judgment setting out extensive grounds therefor and thus recognizing that the previous judgment was ambiguous.
These, therefore, I think are the three conditions which are required for admissibility of an application for interpretation.
As to the procedure, it must, in my view, involve adversary proceedings in spite of the rather special nature of the action and in particular of the fact that it does not necessarily require that there should be a true ‘dispute’.
It is indispensable for the parties to meet face to face: the parties to the first action must be cited whatever their claims or observations. Further if the application is declared to be admissible and the interpretation is given it can only be in the very form in which the judgment under interpretation was given. It is necessary that the judgment giving the interpretation should have the same force of res judicata as the judgment interpreted of which it must henceforth form part. It is a matter of principle that the judgment of a court given gratuitously does not have the force of res judicata (Solus, Cour de Droit Judiciaire Privé, 1953-1954, No 646; Cuche, Précis de Procédure Civile, Tenth Edition, No 77).
I do not think there are any valid reasons for the Court to depart from these generally recognized principles. As regards procedure in particular the Court has already, in my opinion, clearly adopted the position as indicated by deciding that in an application for interpretation ‘the Court shall give its decision in the form of a judgment’ (Article 78 of the Rules of Procedure).
III
If these principles are accepted, it is necessary to apply them to the case now before the Court. Here my comments will be brief.
First of all I think that the first condition, namely the existence of a doubt, is fulfilled. It is clear that, as drafted, Article 30 of the Convention leaves open the issue whether it intended to prohibit the practice referred to as alignment, that is to say, the application of the provisions of Article 60 (2) (b) of the Treaty, even to Italian undertakings within the Italian market. This is a problem. Further the doubt is a specific one since the High Authority, after adopting a favourable attitude to the existence of the right of alignment between Italian undertakings, thought it right to adopt a contrary position as a result of the first judgments of the Court.
On the other hand, I do not think that the application before the Court fulfils the second condition since the application for interpretation does not relate to an issue which was decided.
What did the Court decide in the judgment the interpretation of which is requested?
It decided that Article 1 of Decision No 2/54 was contrary not only to Article 60 but also to Article 30 of the Convention on the Transitional Provisions. Why? Because (I quote): ‘Even if it is thought that Article 30 of the Transitional Provisions is particularly intended to prevent prices from being aligned on those of Italian undertakings it does not necessarily follow that this provision does not give other protection as well. To claim the contrary would really be begging the question, for in the absence of clear and precise provision it is quite legitimate to accept that the Convention intended to give the Italian undertakings temporarily and by way of exception the unlimited advantage of the protection which it provides for these undertakings. The actual objective of this provision is therefore to prevent the non-Italian undertakings from competing with the Italian undertakings on the Italian market by undercutting their own price-lists.’
It is thus solely a question of the protection of the Italian market against non-Italian undertakings.
It is true that the judgment then uses very general wording but at no time does it state that the objective of Article 30, apart from the protection of the Italian market against external markets which this provision has just been recognized to have, is also to achieve certain measures of protection purely internal to the Italian market. That is quite another question which was not the subject of any argument during the trial, did not have to be settled and was not settled.
For that reason I think the application is inadmissible.
Article 60 of the Rules of Procedure provides that ‘in contentious matters the unsuccessful party shall be ordered to pay the costs’. This provision is mandatory. I am sorry to say that it prevents the Court from taking into account any considerations of fairness and in particular the fact that in the present case it was at the instigation of the High Authority that ASSIDER decided to bring an application for interpretation.
My opinion is that:
The application should be dismissed and ASSIDER be ordered to bear the costs.
( ) Translated from the French
( ) Dalloz p. 109.
( ) Sirey 1907, 1. 162.
( ) Sirey 1925, 1. 337.
( ) Recueil, 1895, p. 666.
( ) Recueil, 1943 p. 319.
( ) Dalloz. 1947 Jurisprudence p. 3.
( ) Recueil, 1926, p. 730.
( ) Recueil, 1950. p. 427.
( ) Recueil, 1934, p. 1122. |
Judgment of the Court of 28 June 1955. - Associazione Industrie Siderurgiche Italiane (ASSIDER) v High Authority of the European Coal and Steel Community. - Interpretation of the judgment in Case 2/54. - Case 5-55.
European Court reports
French edition Page 00263
Dutch edition Page 00285
German edition Page 00277
Italian edition Page 00267
English special edition Page 00135
Danish special edition Page 00017
Greek special edition Page 00017
Portuguese special edition Page 00025
Summary
Parties
Subject of the case
Grounds
Decision on costs
Operative part
Keywords
++++
1 . INTERPRETATION OF JUDGMENT - ADMISSIBILITY - RIGHT OF ACTION
( STATUTE, ART . 37 ).
2 . INTERPRETATION OF JUDGMENT - ADMISSIBILITY - CONCEPT OF " IN DOUBT "
( STATUTE, ART . 37 ).
3 . INTERPRETATION OF JUDGMENT - ADMISSIBILITY - PARTS OF A JUDGMENT CAPABLE OF BEING INTERPRETED
( STATUTE, ART . 37 ).
4 . INTERPRETATION OF JUDGMENT - WELL FOUNDED - OBSCURITIES IN THE JUDGMENT TO BE INTERPRETED
( STATUTE, ART . 37 ).
5 . INTERPRETATION OF JUDGMENT - WELL-FOUNDED - LIMITS OF RIGHT OF INTERPRETATION
( STATUTE, ART . 37 ).
Summary
1 . IN THE EVENT OF SEVERAL APPLICATIONS MADE AGAINST THE SAME DECISION OF THE HIGH AUTHORITY AND WHERE AS A RESULT OF ONE OF THESE APPLICATIONS THE DECISION IS ANNULLED, THE OTHER APPLICANTS HAVE EACH THE RIGHT TO ASK FOR THE INTERPRETATION OF THE JUDGMENT IN SO FAR AS THE LATTER HAS RULED ON THE LEGAL QUESTION WHICH THEY HAVE ALSO RAISED .
THIS IS ALSO SO WHERE ONE OF THE PREVIOUS APPLICATIONS AGAINST THE DECISION HAS BEEN DECLARED WELL FOUNDED .
2 . IT IS ENOUGH FOR IT TO BE SAID TO BE " IN DOUBT " WITHIN THE MEANING OF ARTICLE 37 OF THE STATUTE THAT THE PARTIES SHOULD INTERPRET THE JUDGMENT DIFFERENTLY .
3 . APART FROM THE OPERATIVE PART, THE GROUNDS WHICH DETERMINE IT MAY BE THE SUBJECT OF INTERPRETATION . THIS IS NOT SO OF PASSAGES WHICH ARE ANCILLARY AND COMPLETE OR EXPLAIN THE BASIC GROUNDS .
4 . THE APPLICATION FOR INTERPRETATION OF A JUDGMENT IS NOT WELL FOUNDED WHERE THE JUDGMENT OF WHICH INTERPRETATION IS SOUGHT CONTAINS NO OBSCURITIES .
5 . IN A JUDGMENT OF INTERPRETATION THE COURT CAN ONLY MAKE CLEAR THE MEANING AND SCOPE OF A PREVIOUS JUDGMENT; IT CANNOT DEAL WITH PROBLEMS WHICH HAVE NOT BEEN SETTLED BY THIS JUDGMENT .
Parties
IN CASE 5/55,
ASSOCIAZIONE INDUSTRIE SIDERURGICHE ITALIANE ( ASSIDER ), A COMPANY WHOSE REGISTERED OFFICE IS IN MILAN, REPRESENTED BY ITS PRESIDENT, DANDOLO FRANCESCO REBUA, ASSISTED BY CESARE GRASSETTI, PROFESSOR AT THE UNIVERSITY OF MILAN, OF THE MILAN BAR AND THE CORTE DI CASSAZIONE, ROME, WITH AN ADDRESS FOR SERVICE IN LUXEMBOURG CARE OF GUIDO RIETTI, 15 BOULEVARD ROOSEVELT, APPLICANT,
V
HIGH AUTHORITY OF THE EUROPEAN COAL AND STEEL COMMUNITY, REPRESENTED BY ITS LEGAL ADVISER, NICOLA CATALANO, ACTING AS AGENT, WITH AN ADDRESS FOR SERVICE IN LUXEMBOURG AT ITS OFFICES, 2 PLACE DE METZ, DEFENDANT,
Subject of the case
APPLICATION FOR AN INTERPRETATION OF THE JUDGMENT OF THE COURT OF JUSTICE OF 21 DECEMBER 1954 IN CASE 2/54,
Grounds
P . 140
1 . ADMISSIBILITY
I . THE APPLICATION, FOR THE BRINGING OF WHICH NO TIME-LIMIT IS PRESCRIBED, COMPLIES WITH THE REQUIREMENTS OF ARTICLE 77 OF THE RULES OF PROCEDURE OF THE COURT .
II . ARTICLE 37 OF THE PROTOCOL ON THE STATUTE OF THE COURT OF JUSTICE PROVIDES THAT IF THE MEANING OR SCOPE OF A JUDGMENT IS " IN DOUBT ", THE COURT SHALL CONSTRUE IT ON APPLICATION BY ANY PARTY OR ANY INSTITUTION OF THE COMMUNITY ESTABLISHING AN INTEREST THEREIN .
ARE THESE CONDITIONS FULFILLED IN THE PRESENT CASE?
1 . HAS THE APPLICANT ESTABLISHED AN INTEREST IN THE INTERPRETATION?
IN ITS LETTER OF 28 FEBRUARY 1955 TO THE APPLICANT THE HIGH AUTHORITY REFERRED EXPRESSLY TO THE JUDGMENT GIVEN IN CASE 2/54 TO JUSTIFY ITS INTERPRETATION OF ARTICLE 30 OF THE CONVENTION ON THE TRANSITIONAL PROVISIONS, CLAIMING THAT ITALIAN UNDERTAKINGS WITHIN THE ITALIAN MARKET MAY APPLY ONLY THEIR OWN PRICE-LIST AND MAY NOT ALIGN THEIR PRICES EITHER ON THE PRICES OF OTHER UNDERTAKINGS IN THE COMMUNITY OR EVEN ON THE PRICES OF THEIR NATIONAL COMPETITORS .
P . 141
THE APPLICANT CONSIDERS THAT THE HIGH AUTHORITY WRONGLY DREW THESE CONCLUSIONS FROM THE JUDGMENT IN CASE 2/54 SINCE THE JUDGMENT WAS CONCERNED ONLY WITH THE PROTECTION OF ITALIAN UNDERTAKINGS AGAINST COMPETITION FROM NON-ITALIAN UNDERTAKINGS IN THE COMMUNITY .
THE QUESTION WHICH OF THESE TWO INTERPRETATION ACCORDS WITH THE JUDGMENT IN CASE 2/54 DIRECTLY CONCERNS THE UNDERTAKINGS WHICH BELONG TO THE APPLICANT ASSOCIATION . THE ANSWER TO THIS QUESTION CAN BE GIVEN ONLY BY WAY OF INTERPRETATION OF THE JUDGMENT AND THE APPLICANT HAS NO OTHER MEANS OF ASCERTAINING THE CORRECT INTERPRETATION .
THE APPLICANT HAS THUS ESTABLISHED ITS INTEREST IN ASKING FOR AN INTERPRETATION OF THE JUDGMENT IN QUESTION .
2 . WAS THE APPLICANT A " PARTY " TO CASE 2/54 OF THE JUDGMENT IN WHICH IT SEEKS INTERPRETATION?
APART FROM THE INSTITUTIONS OF THE COMMUNITY THE PARTIES TO AN ACTION HAVE THE RIGHT TO REQUEST AN INTERPRETATION OF THE JUDGMENT WHICH DECIDES THE ACTION .
THE APPLICANT WAS A " PARTY " IN CASE 3/54 AGAINST THE HIGH AUTHORITY BUT IT IS NOT AN INTERPRETATION OF THE JUDGMENT GIVEN IN THAT ACTION WHICH IS SOUGHT .
THE APPLICANT IS SEEKING AN INTERPRETATION OF THE JUDGMENT GIVEN IN CASE 2/54 ( GOVERNMENT OF THE ITALIAN REPUBLIC V HIGH AUTHORITY ), AN ACTION IN WHICH THE APPLICANT WAS NOT A PARTY BUT THE JUDGMENT IN WHICH IS ALLEGED BY THE APPLICANT TO HAVE BECOME AN INTEGRAL PART OF THE JUDGMENT GIVEN IN CASE 3/54 WHICH TERMINATED ITS ACTION .
THIS CLAIM BY THE APPLICANT IS NOT VALID . THE JUDGMENT IN CASE 3/54 ( SECTION 2 ( 1 ) OF THE GROUNDS OF JUDGMENT ) REFERS SOLELY TO THE JUDGMENT GIVEN IN CASE 1/54 ( FRENCH GOVERNMENT V HIGH AUTHORITY ): IT STATES WITH REFERENCE TO ARTICLE 1 OF DECISION NO 2/54 OF THE HIGH AUTHORITY THAT NO DECISION WAS CALLED FOR BECAUSE THE JUDGMENT IN CASE 1/54 HAD ALREADY ANNULLED THAT ARTICLE FOR ALL PURPOSES . THE JUDGMENT IN CASE 3/54 REFERS TO CASE 2/54, ITALIAN GOVERNMENT V HIGH AUTHORITY, ONLY IN SECTION 2, NOS 3 AND 4 OF THE GROUNDS OF JUDGMENT, BUT THIS REFERENCE DOES NOT RELATE TO THE GROUNDS CONTAINED IN THE JUDGMENT IN CASE 2/54 IN SECTION II, NO 11 OF THE GROUNDS OF JUDGMENT ON THE NULLITY OF ARTICLE 1 OF DECISION NO 2/54 OF THE HIGH AUTHORITY BY REASON OF INFRINGEMENT OF ARTICLE 30 OF THE CONVENTION ON THE TRANSITIONAL PROVISIONS . THE JUDGMENT IN CASE 3/54 THEREFORE DOES NOT REFER TO THESE GROUNDS, THE INTERPRETATION OF WHICH IS ALONE IN QUESTION HERE .
THE COURT HOWEVER CONCURS IN PRINCIPLE WITH THE OPINION OF THE ADVOCATE GENERAL AND RECOGNIZES THAT THE APPLICANT IS ENTITLED TO ASK FOR AN INTERPRETATION OF THE JUDGMENT IN CASE 2/54 ITALIAN GOVERNMENT V HIGH AUTHORITY FOR THE FOLLOWING REASONS :
WHERE SEVERAL ACTIONS ARE BROUGHT AGAINST THE SAME DECISION OF THE HIGH AUTHORITY AND WHERE, AS THE RESULT OF ONE OF THOSE ACTIONS, THE DECISION IS ANNULLED, THE APPLICANTS IN THE OTHER ACTIONS MAY BE REGARDED AS " PARTIES " TO THE ACTION WITHIN THE MEANING OF ARTICLE 37 OF THE PROTOCOL ON THE STATUTE OF THE COURT, SUBJECT EXPRESSLY TO THE CONDITION THAT THE APPLICANT HAS CITED IN HIS PREVIOUS APPLICATION THE SAME GROUND ON WHICH THE JUDGMENT TO BE INTERPRETED HAS ANNULLED THE DECISION OR AS IN THE PRESENT CASE HAS DECLARED THE APPLICATION WELL FOUNDED . EACH OF THESE PARTIES IS THUS ENTITLED TO ASK FOR THE INTERPRETATION OF THE JUDGMENT WHICH ANNULS THE DECISION OR DELCARES ONE OF THE OTHER ACTIONS WELL FOUNDED .
P . 142
CASE 2/54, ITALIAN GOVERNMENT V HIGH AUTHORITY, WAS DECLARED WELL FOUNDED AS FAR AS ARTICLE 1 OF DECISION NO 2/54 OF THE HIGH AUTHORITY WAS CONCERNED BECAUSE THAT ARTICLE INFRINGED ARTICLE 30 ( 2 ) OF THE CONVENTION ON THE TRANSITIONAL PROVISIONS . THE APPLICANT MADE THE SAME CLAIM IN CASE 3/54, AN APPLICATION FOR ANNULMENT WHICH IT HAD PREVIOUSLY BROUGHT . IN ITS JUDGMENT IN CASE 3/54 THE COURT ACCEPTED THE ADMISSIBILITY OF THE APPLICATION WITHOUT CONSIDERING OR DECIDING UPON THE VALIDITY OF THE CLAIM OF MISUSE OF POWERS RELIED ON BY THE APPLICANT OR, MOREOVER, THE QUESTION WHETHER THE APPLICANT WAS ENTITLED TO RELY ON AN INFRINGEMENT OF THE LAW . THE FACT THAT THE COURT DID NOT RESOLVE THESE QUESTIONS CANNOT PREJUDICE THE RIGHT OF THE APPLICANT TO MAKE ITS APPLICATION FOR AN INTERPRETATION .
THE APPLICANT MAY THEREFORE BE REGARDED AS BEING A PARTY TO THE JUDGMENT IN QUESTION .
3 . IS THE MEANING OR SCOPE OF THE JUDGMENT " IN DOUBT "?
ACCORDING TO ARTICLE 37 OF THE PROTOCOL ON THE STATUTE OF THE COURT OF JUSTICE, AN APPLICATION FOR INTERPRETATION OF A JUDGMENT ASSUMES THAT THE MEANING OR SCOPE OF A JUDGMENT IS IN DOUBT . THE TERM " IN DOUBT " IS GENERAL; IT IS LESS NARROW THAN THE TERM " CONTESTATION " IN THE FRENCH VERSION OF ARTICLE 60 OF THE STATUTE OF THE INTERNATIONAL COURT OF JUSTICE . FOR AN APPLICATION FOR INTERPRETATION TO BE ADMISSIBLE IT IS ENOUGH THAT THE PARTIES IN QUESTION GIVE DIFFERENT MEANINGS TO THE WORDING OF THAT JUDGMENT . THIS IS THE POSITION IN THE PRESENT CASE .
4 . WHICH ARE THE PARTS OF THE TEXT OF A JUDGMENT WHICH MAY BE THE SUBJECT OF INTERPRETATION?
IT IS NECESSARY TO DEFINE THE PARTS OF THE TEXT OF A JUDGMENT WHICH MAY BE THE SUBJECT OF INTERPRETATION . OBVIOUSLY THEY CAN ONLY BE THOSE WHICH EXPRESS THE DECISION OF THE COURT ON THE MATTER SUBMITTED TO IT : THE OPERATIVE PART AND SUCH OF THE GROUNDS AS DETERMINE IT AND ARE ESSENTIAL FOR THAT PURPOSE; THOSE ARE THE PARTS OF THE JUDGMENT WHICH CONSTITUTE THE ACTUAL DECISION .
ON THE OTHER HAND, THE COURT IS NOT CALLED UPON TO INTERPRET ANCILLARY MATTER WHICH SUPPLEMENTS OR EXPLAINS THOSE BASIC GROUNDS .
IN THE PRESENT CASE ALL THE GROUNDS STATED IN SECTION II, NO 11, OF THE GROUNDS OF JUDGMENT IN CASE 2/54 MUST BE REGARDED AS BEING ESSENTIAL AND ON THIS ACCOUNT CAPABLE OF FORMING THE SUBJECT OF AN INTERPRETATION .
P . 143
FOR ALL THESE REASONS THE APPLICATION IS ADMISSIBLE .
2 . SUBSTANCE
THE COURT CONCOURS WITH THE OPINION OF THE ADVOCATE GENERAL IN FINDING THAT THE GROUNDS OF JUDGMENT IN QUESTION CONTAIN NO OBSCURITIES AND THAT ACCORDINGLY THERE IS IN PRINCIPLE NOTHING TO BE INTERPRETED .
IT APPEARS FROM THE FACTS SET OUT IN THE JUDGMENT IN CASE 2/54 AND REPRODUCED ABOVE THAT THE PARTIES SUBMITTED TO THE COURT ONLY THE QUESTION WHETHER ARTICLE 1 OF DECISION NO 2/54 OF THE HIGH AUTHORITY INFRINGED ARTICLE 30 OF THE CONVENTION ON THE TRANSITIONAL PROVISIONS BECAUSE IT ALLOWED NON-ITALIAN COMMUNITY STEEL PRODUCERS TO GRANT DISCOUNTS ON THEIR PRICE-LISTS ON THE ITALIAN MARKET . IT FOLLOWS THAT THE COURT HAD BEFORE IT ONLY THE QUESTION WHETHER NON-ITALIAN STEEL PRODUCERS IN THE COMMUNITY WERE NOT ONLY PREVENTED UNDER ARTICLE 30 OF THE CONVENTION ON THE TRANSITIONAL PROVISIONS FROM ALIGNING THEIR PRICES ON THOSE OF ITALIAN PRODUCERS BUT WERE PREVENTED GENERALLY FROM SELLING ON THE ITALIAN MARKET AT PRICES LOWER THAN THOSE SET OUT IN THEIR PRICE-LISTS .
THE THIRD PARAGRAPH OF NO 11 OF THE GROUNDS OF JUDGMENT, IN SECTION II, EXPLAINS THE OBJECTIVE PURSUED BY ARTICLE 30 OF THE CONVENTION ON THE TRANSITIONAL PROVISIONS : ACCORDING TO THAT PARAGRAPH NON-ITALIAN UNDERTAKINGS MUST BE PREVENTED FROM COMPETING WITH ITALIAN UNDERTAKINGS ON THE ITALIAN MARKET BY QUOTING PRICES LOWER THAN THOSE IN THEIR PRICE-LISTS . THE FOLLOWING AND LAST PARAGRAPH OF NO 11 OF THE GROUNDS OF JUDGMENT, WHICH GIVES REASONS FOR THIS INTERPRETATION ACCORDING TO ITS CONTENT AND STATES THAT NOT ONLY ALIGNMENT BUT GENERALLY SPEAKING ANY QUOTATION LOWER THAN THE PRICES CONTAINED IN THE PRICE-LISTS IS UNLAWFUL, REFERS ONLY TO THE PROTECTION OF THE ITALIAN MARKET AGAINST COMPETITION BY NON-ITALIAN UNDERTAKINGS IN THE COMMUNITY : THERE IS A CLOSE LINK BETWEEN THAT PARAGRAPH OF THE GROUNDS OF JUDGMENT AND THE EXPLANATIONS GIVEN IN THE THIRD PARAGRAPH . THE HIGH AUTHORITY IS THEREFORE WRONG IN THINKING THAT IT CAN FIND IN THE JUDGMENT IN CASE 2/54 ANY JUSTIFICATION FOR ITS POSITION ON THE QUESTION WHETHER ARTICLE 30 ( 2 ) OF THE CONVENTION ON THE TRANSITIONAL PROVISIONS ALSO PROHIBITS ALIGNMENT BY THE ITALIAN UNDERTAKINGS INTER SE OR ALIGNMENT BY ITALIAN UNDERTAKINGS ON THE PRICES OF NON-ITALIAN UNDERTAKINGS IN THE COMMUNITY . THE COURT DID NOT HAVE THIS QUESTION BEFORE IT IN CASE 2/54 AND DID NOT GIVE A DECISION ON THIS ISSUE . THE JUDGMENT IN CASE 2/54 DID NOT DECLARE THAT SUCH ALIGNMENTS WERE ALLOWED; NOR DID IT DECLARE THAT THEY WERE PROHIBITED . THIS QUESTION CANNOT THEREFORE BE ANSWERED BY MEANS OF INTERPRETATION . FOR THESE SAME REASONS THE COURT CANNOT ACCEPT THE SECOND PART OF THE REQUEST BY THE APPLICANT TO INTERPRET THE JUDGMENT IN CASE 2/54 AS MEANING THAT ARTICLE 30 ( 2 ) OF THE CONVENTION ON THE TRANSITIONAL PROVISIONS DOES NOT PREVENT ALIGNMENT WITHIN THE ITALIAN MARKET BY THE ITALIAN UNDERTAKINGS ON THE PRICES OF OTHER ITALIAN UNDERTAKINGS OR ALIGNMENT BY THE ITALIAN UNDERTAKINGS ON THE PRICES OF OTHER NON-ITALIAN UNDERTAKINGS IN THE COMMUNITY .
IN A JUDGMENT GIVING AN INTERPRETATION THE COURT CAN ONLY DEFINE THE MEANING AND SCOPE OF A PREVIOUS JUDGMENT; IT CANNOT GIVE JUDGMENT ON MATTERS WHICH HAVE NOT BEEN DECIDED BY THAT JUDGMENT . THE PARTIES MAY NOT, BY MEANS OF A REQUEST FOR INTERPRETATION, ASK FOR A NEW DECISION ON NEW DISPUTES .
P . 144
NEVERTHELESS, SINCE BOTH PARTIES HAVE EXPRESSLY STATED THAT THEY WOULD LIKE AN INTERPRETATION OF THE JUDGMENT TO WHICH THEY ATTACH DIFFERENT MEANINGS, THE COURT CONSIDERS IT APPROPRIATE TO SET OUT IN THE OPERATIVE PART BELOW THE SCOPE OF ITS JUDGMENT IN CASE 2/54 .
Decision on costs
NEITHER OF THE PARTIES HAS ASKED FOR COSTS BUT NEVERTHELESS THE COURT MUST ADJUDICATE IN THIS RESPECT UNDER ARTICLE 32 OF THE PROTOCOL ON THE STATUTE .
ON THE ONE HAND, BY ITS LETTER OF 28 FEBRUARY 1955 WHICH WRONGLY RELIES ON THE JUDGMENT IN CASE 2/54, THE HIGH AUTHORITY HAS CAUSED THE PRESENT APPLICATION FOR AN INTERPRETATION . IT WRONGLY BASED ITS INTERPRETATION OF ARTICLE 30 OF THE CONVENTION ON THE TRANSITIONAL PROVISIONS ON THE JUDGMENT IN QUESTION . ON THE OTHER HAND, THE APPLICATION IS NOT WELL FOUNDED IN SEEKING FROM THE COURT A DECISION ON THE LAWFUL OR UNLAWFUL NATURE OF ALIGNMENT BY ITALIAN UNDERTAKINGS .
APPLYING ARTICLE 60 ( 2 ) OF THE RULES OF PROCEDURE OF THE COURT IT IS RIGHT THAT THE PARTIES BE ORDERED TO BEAR THEIR OWN COSTS .
Operative part
THE COURT
HEREBY :
DECLARES THAT THE SCOPE OF THE JUDGMENT IN CASE 2/54 IS DEFINED IN THE JUDGMENT ITSELF IN THE THIRD PARAGRAPH OF NO 11 OF PART II OF THE GROUNDS OF JUDGMENT BY THE WORDS : " THE ACTUAL OBJECTIVE OF THIS PROVISION ( OF THE CONVENTION ) IS THEREFORE TO PREVENT THE NON-ITALIAN UNDERTAKINGS FROM COMPETING WITH THE ITALIAN UNDERTAKINGS ON THE ITALIAN MARKET BY UNDERCUTTING THEIR OWN PRICE-LISTS " AND THAT THE NEXT PARAGRAPH OF THE JUDGMENT REFERS SOLELY TO SALES MADE IN ITALY BY NON-ITALIAN UNDERTAKINGS REFERRED TO IN THE SAID DEFINITION, WHEREAS THE QUESTION OF ALIGNMENT BY ITALIAN UNDERTAKINGS ON THE PRICES OF OTHER ITALIAN UNDERTAKINGS AND ALIGNMENT BY ITALIAN UNDERTAKINGS ON THE PRICES OF OF OTHER NON-ITALIAN UNDERTAKINGS IN THE COMMUNITY IS NOT DECIDED BY THE JUDGMENT IN CASE 2/54;
ORDERS THE PARTIES TO BEAR THEIR OWN COSTS;
ORDERS, IN ACCORDANCE WITH ARTICLE 78 OF THE RULES OF PROCEDURE, THAT THE ORIGINAL OF THIS JUDGMENT BE ANNEXED IN THE FILES TO THE ORIGINAL OF THE JUDGMENT INTERPRETED ( CASE 2/54 ) AND THAT A NOTE OF THE INTERPRETING JUDGMENT BE MADE IN THE MARGIN OF THE ORIGINAL OF THE JUDGMENT INTERPRETED .
JUDGE RUEFF TOOK PART IN THE DELIBERATIONS IN THE DELIBERATION ROOM DURING WHICH THE DECISION WAS ARRIVED AT . AT THE END OF THE DELIBERATIONS ON 6 JUNE 1955 HE SIGNED THE OPERATIVE PART OF THE JUDGMENT WHICH WAS PUT IN THE FILE OF THE CASE AT THE CONCLUSION OF THE DELIBERATIONS
HE WAS PREVENTED FROM SIGNING THE JUDGMENT BY REASON OF HIS JUSTIFIED ABSENCE WHEN THE JUDGMENT WAS READ IN OPEN COURT . |
Judgment of the Court of 16 July 1956. - Fédération Charbonnière de Belgique v High Authority of the European Coal and Steel Community. - Case 8-55.
European Court reports
French edition Page 00201
Dutch edition Page 00211
German edition Page 00199
Italian edition Page 00197
English special edition Page 00245
Danish special edition Page 00027
Greek special edition Page 00035
Portuguese special edition Page 00043
Spanish special edition Page 00001
Summary
Parties
Subject of the case
Grounds
Operative part
Keywords
++++
1 . PROCEDURE - APPLICATION FOR ANNULMENT - DECISIONS OF THE HIGH AUTHORITY - GENERAL OR INDIVIDUAL NATURE
( TREATY, ART . 33; CONVENTION ON THE TRANSITIONAL PROVISIONS, ART . 26 ).
2 . PROCEDURE - LETTER OF THE HIGH AUTHORITY - IN THE NATURE OF A DECISION
( TREATY, ART . 14 )
3 . PROCEDURE - APPLICATION FOR ANNULMENT - GENERAL DECISION - UNDERTAKINGS - ADMISSIBILITY LIMITED TO THE SUBMISSION BASED ON MISUSE OF POWERS
( TREATY, ART . 33 ).
4 . TRANSITIONAL PERIOD - BELGIAN COAL - ESTIMATED PRODUCTION COSTS
( CONVENTION ON THE TRANSITIONAL PROVISIONS, ART . 26 ).
Summary
1 . DECISION NO 22/55, ADOPTED WITHIN THE CONTEXT OF A SPECIAL SYSTEM PROVIDED FOR IN RELATION TO BELGIUM FOR THE DURATION OF THE TRANSITIONAL PERIOD BY ARTICLE 26 OF THE CONVENTION WHICH APPLIES IN ACCORDANCE WITH SPECIFIC RULES, HOWEVER DETAILED AND VARIED THEY MAY BE, TO ALL UNDERTAKINGS AND TRANSACTIONS GOVERNED BY THAT SYSTEM, IS IN THE NATURE OF A GENERAL DECISION . IN THIS INSTANCE, THE FACT THAT ALL THE UNDERTAKINGS REFERRED TO BY THE CONTESTED DECISION ARE GROUPED WITHIN THE APPLICANT ASSOCIATION DOES NOT AFFECT THE GENERAL NATURE OF THAT DECISION . THE TERRITORIAL LIMITATION OF THE AREA OF APPLICATION OF THE CONTESTED DECISION DOES NOT IMPLY INDIVIDUAL IDENTIFICATION; THE FACT THAT A GENERAL DECISION HAS SPECIFIC CONSEQUENCES DOES NOT AFFECT ITS NATURE AS A GENERAL DECISION . THE QUESTION WHETHER A DECISION IS INDIVIDUAL OR GENERAL IN NATURE MUST BE DECIDED ON THE BASIS OF OBJECTIVE CRITERIA; IT DOES NOT DEPEND UPON ITS FORM BUT ON ITS SCOPE .
2 . THE PASSAGE IN THE LETTER OF THE HIGH AUTHORITY OF 28 MAY 1955, DETERMINING UNEQUIVOCALLY THE ATTITUDE WHICH IT HAS DECIDED TO TAKE SHOULD CERTAIN CIRCUMSTANCES MENTIONED IN THE LETTER ARISE, IS IN THE NATURE OF A DECISION WITHIN THE MEANING OF ARTICLE 14 OF THE TREATY .
3 . IF THE TREATY PROVIDES THAT PRIVATE UNDERTAKINGS ARE ENTITLED TO SEEK THE ANNULMENT OF A GENERAL DECISION ON THE GROUND OF MISUSE OF POWERS AFFECTING THEM, THAT IS BECAUSE THEY HAVE NO RIGHT OF ACTION ON ANY OTHER GROUND . THERE IS NOTHING IN THE TREATY FROM WHICH IT MAY BE CONCLUDED THAT PRIVATE UNDERTAKINGS HAVE BEEN GRANTED SUCH A RIGHT TO REVIEW THE " CONSTITUTIONALITY " OF GENERAL DECISIONS, SINCE THEY ARE QUASI-LEGISLATIVE MEASURES ADOPTED BY A PUBLIC AUTHORITY WITH LEGISLATIVE EFFECT " ERGA OMNES ". IF ARTICLE 33 ACCEPTS THE EXISTENCE OF A RIGHT TO BRING AN APPLICATION FOR THE ANNULMENT OF A GENERAL DECISION ON THE GROUND OF MISUSE OF POWERS AFFECTING AN UNDERTAKING, THAT IS AN EXCEPTION WHICH IS EXPLAINED BY THE FACT THAT, IN THIS CASE, IT IS STILL THE INDIVIDUAL FACTOR WHICH PREVAILS . IN ORDER FOR AN APPLICATION FOR THE ANNULMENT OF A GENERAL DECISION TO BE ADMISSIBLE IT IS SUFFICIENT FOR THE APPLICANT TO CLAIM FORMALLY THAT THERE HAS BEEN A MISUSE OF POWERS AFFECTING IT, INDICATING CONVINCINGLY THE REASONS WHICH, IN ITS OPINION, GIVE RISE TO THE PRESUMPTION OF A MISUSE OF POWERS; EXAMINATION OF THE JUSTIFICATION FOR THE SUBMISSION OF MISUSE OF POWERS THUS RELIED ON IS A QUESTION OF SUBSTANCE .
4 . WHEN, DURING THE TRANSITIONAL PERIOD, THERE IS A CHANGE IN THE ESTIMATED LEVEL OF PRODUCTION COSTS AT THE END OF THAT PERIOD, A NEW ASSESSMENT MUST BE MADE WHICH TAKES THAT FACTOR INTO ACCOUNT . ADDITIONAL INFORMATION AS TO THE ESTIMATED LEVEL OF PRODUCTION COSTS FOR EACH CATEGORY AND TYPE ARE NECESSARY IN ORDER TO GIVE JUDGMENT IN THIS INSTANCE .
Parties
IN CASE 8/55
FEDERATION CHARBONNIERE DE BELGIQUE, REPRESENTED BY LOUIS DEHASSE AND LEON CANIVET, ASSISTED BY PAUL TSCHOFFEN, ADVOCATE AT THE COUR D'APPEL, LIEGE, AND BY HENRI SIMONT, ADVOCATE AT THE COUR DE CASSATION OF BELGIUM, PROFESSOR AT THE FREE UNIVERSITY OF BRUSSELS, WITH AN ADDRESS FOR SERVICE IN LUXEMBOURG AT 6, RUE HENRI HEINE, APPLICANT,
V
HIGH AUTHORITY OF THE EUROPEAN COAL AND STEEL COMMUNITY, REPRESENTED BY ITS LEGAL ADVISER, WALTER MUCH, ACTING AS AGENT, ASSISTED BY G . VAN HECKE, ADVOCATE AT THE COUR D'APPEL, BRUSSELS, PROFESSOR AT THE UNIVERSITY OF LOUVAIN, WITH AN ADDRESS FOR SERVICE IN LUXEMBOURG AT ITS OFFICES, 2, PLACE DE METZ, DEFENDANT,
Subject of the case
APPLICATION FOR THE ANNULMENT OF DECISION NO 22/55 OF THE HIGH AUTHORITY OF 28 MAY 1955 AND OF CERTAIN DECISIONS OF THE HIGH AUTHORITY RESULTING FROM ITS LETTER OF 28 MAY 1955 TO THE GOVERNMENT OF THE KINGDOM OF BELGIUM CONCERNING THE ADJUSTMENT OF THE EQUALIZATION SYSTEM ( JOURNAL OFFICIEL OF 31 MAY 1955, PP . 753-758 ),
Grounds
P . 255
A - THE ADMISSIBILITY OF THE APPLICATION
THE APPLICATION SEEKS THE ANNULMENT OF :
1 . DECISION NO 22/55 OF THE HIGH AUTHORITY OF 28 MAY 1955 AND THE PRICE LIST ANNEXED THERETO, PUBLISHED IN THE JOURNAL OFFICIEL OF 31 MAY 1955, IN SO FAR AS THEY FIX REDUCED PRICES FOR CERTAIN TYPES OF COAL;
2 . THE DECISIONS CONTAINED IN THE LETTER ADDRESSED BY THE HIGH AUTHORITY TO THE BELGIAN GOVERNMENT ON 28 MAY 1955 AND IN THE TABLE OF RATES OF EQUALIZATION ANNEXED THERETO IN SO FAR AS :
( A ) THE WITHDRAWAL OR REDUCTION OF EQUALIZATION PAYMENTS IN THE CASE OF CERTAIN COLLIERIES LEADS TO DISCRIMINATION BETWEEN PRODUCERS OF IDENTICAL TYPES OF COAL;
( B ) THE LETTER STATES THAT IN FUTURE EQUALIZATION PAYMENTS WILL BE OR MAY BE WITHDRAWN FROM CERTAIN UNDERTAKINGS ON THE GROUND THAT THEY ARE NOT MAKING THE EFFORT TO RE-EQUIP CONSIDERED POSSIBLE AND NECESSARY OR ARE REFUSING TO CARRY OUT THE TRANSFERS OR EXCHANGES OF DEPOSITS WHICH ARE REGARDED AS INDISPENSABLE FOR A BETTER DEVELOPMENT OF THE MINING AREAS .
P . 256
AS REGARDS DECISION NO 22/55, THE APPLICANT CLAIMS THAT IT IS INDIVIDUAL IN NATURE . THE DEFENDANT, ON THE OTHER HAND, MAINTAINS THAT IT IS A GENERAL DECISION . IN THE OPINION OF THE APPLICANT, THE INDIVIDUAL NATURE OF THE DECISION MAY BE DEDUCED FROM THE FACT THAT, BY REASON OF THE INDISSOLUBLE LINK BETWEEN EQUALIZATION AND THE FIXING OF PRICES, THE EFFECTS OF THE PRICE LIST ON THE THREE COLLIERIES OF THE CAMPINE ARE DIFFERENT FROM ITS EFFECTS ON THE OTHER BELGIAN MINES, IN SO FAR AS THE EQUALIZATION GRANTED TO THE THREE CAMPINE COLLIERIES IS NOT THE SAME AS THAT RECEIVED BY THE OTHER MINES .
WITHOUT DENYING THAT THE EFFECTS OF THE PRICE LIST WILL VARY TO THE EXTENT TO WHICH EQUALIZATION ITSELF VARIES, THE COURT REJECTS THE APPLICANT'S ARGUMENT THAT THE VARIATIONS IN THE EFFECTS OF THE PRICE LIST DETERMINE THE NATURE OF DECISION NO 22/55 . THAT DECISION WAS ADOPTED WITHIN THE CONTEXT OF A SPECIAL SYSTEM PROVIDED FOR IN RELATION TO BELGIUM FOR THE DURATION OF THE TRANSITIONAL PERIOD BY ARTICLE 26 OF THE CONVENTION WHICH APPLIES IN ACCORDANCE WITH SPECIFIC RULES, HOWEVER DETAILED AND VARIED THEY MAY BE, TO ALL UNDERTAKINGS AND TRANSACTIONS GOVERNED BY THAT SYSTEM .
WITHIN THE CONTEXT OF THAT SYSTEM THE DECISION CONCERNS THE UNDERTAKINGS ONLY IN SO FAR AS THEY ARE PRODUCERS OF COAL AND IT IN NO WAY IDENTIFIES THEM . IF NEW DEPOSITS WERE DISCOVERED IN BELGIUM THE COMPANY WORKING THEM WOULD BE BOUND TO SELL AT THE PRICES FIXED BY THE DECISION . FURTHERMORE, THE TERRITORIAL LIMITATION DOES NOT IMPLY INDIVIDUAL IDENTIFICATION AND IS JUSTIFIED BY THE FACT THAT THE BELGIAN INDUSTRY IS IN NEED OF EQUALIZATION .
THE FACT THAT DECISION NO 22/55 LAYS DOWN SPECIFIC AND DETAILED RULES WHICH ARE APPLICABLE IN DIFFERENT SITUATIONS DOES NOT CONFLICT WITH THE GENERAL NATURE OF THE DECISION . ARTICLE 50 ( 2 ) OF THE TREATY IN FACT PROVIDES THAT THE MODE OF ASSESSMENT AND COLLECTION SHALL BE DETERMINED BY A GENERAL DECISION OF THE HIGH AUTHORITY, WHICH SHOWS THAT THE FACT THAT SUCH A DECISION HAS SPECIFIC CONSEQUENCES WHICH ARE INDIVIDUAL AND VARIED DOES NOT AFFECT ITS NATURE AS A GENERAL DECISION .
THE FACT THAT ALL THE UNDERTAKINGS REFERRED TO BY THE DECISION - AND ONLY THEY - ARE GROUPED WITHIN THE APPLICANT ASSOCIATION DOES NOT LEAD TO A DIFFERENT RESULT . IF IT WERE OTHERWISE NOT EVEN A DECISION APPLYING TO ALL THE UNDERTAKINGS OF THE COMMUNITY COULD BE HELD TO BE GENERAL IN NATURE IF THOSE UNDERTAKINGS WERE GROUPED WITHIN ONE SINGLE ASSOCIATION . THE QUESTION WHETHER A DECISION IS INDIVIDUAL OR GENERAL IN NATURE MUST BE DECIDED ON THE BASIS OF OBJECTIVE CRITERIA, WITH THE RESULT THAT IT IS IMPOSSIBLE TO DRAW DISTINCTIONS ACCORDING TO WHETHER THE APPLICANT IS AN ASSOCIATION OR AN UNDERTAKING .
AS REGARDS THE DECISIONS CONTAINED IN THE LETTER OF 28 MAY 1955, THE PARTIES CONSIDER THAT THE FIRST, WHICH RELATES TO THE REDUCTION AND WITHDRAWAL OF EQUALIZATION, IS INDIVIDUAL IN NATURE AND THAT THE SECOND, WHICH RELATES TO THE THREAT TO WITHDRAW THE EQUALIZATION, IS GENERAL IN NATURE . ON THAT POINT THE COURT ACCEPTS THE POSITION ADOPTED BY THE PARTIES .
P . 257
DURING THE ORAL PROCEDURE THE DEFENDANT RAISED THE QUESTION WHETHER IT IS POSSIBLE TO REGARD THE LATTER MEASURE AS A DECISION CAPABLE OF FORMING THE SUBJECT-MATTER OF AN APPLICATION FOR ANNULMENT IN ACCORDANCE WITH ARTICLE 33 OF THE TREATY . IN ITS LETTER OF 28 MAY 1955 THE HIGH AUTHORITY ACCEPTED THAT EQUALIZATION AID MUST BE ACCOMPANIED BY A SERIES OF MEASURES TO BE ADOPTED BY THE BELGIAN GOVERNMENT . FURTHERMORE, IT CONSIDERS THAT THE BELGIAN GOVERNMENT OUGHT TO APPLY FOUR MEASURES, INDICATED AT POINTS ( A ), ( B ), ( C ) AND ( D ). THE ACTION REFERRED TO UNDER ( D ) IS, THEREFORE, ONE OF THE SERIES OF MEASURES WHICH THE BELGIAN GOVERNMENT WOULD BE OBLIGED TO TAKE IF THE CIRCUMSTANCES SO REQUIRED . THE HIGH AUTHORITY HAS THUS UNEQUIVOCALLY DETERMINED THE ATTITUDE WHICH IT HAD DECIDED TO TAKE HENCEFORTH SHOULD THE CIRCUMSTANCES MENTIONED UNDER POINT 2 ( D ) OF THE LETTER ARISE . IN OTHER WORDS, IT HAS LAID DOWN A RULE TO BE APPLIED IF NECESSARY . IT MUST THEREFORE BE SEEN AS A DECISION WITHIN THE MEANING OF ARTICLE 14 OF THE TREATY .
SINCE THE INDIVIDUAL OR GENERAL NATURE OF EACH OF THE DECISIONS HAS BEEN ESTABLISHED, THE APPLICANT IS ENTITLED TO SEEK THE ANNULMENT OF THE REDUCTION OR WITHDRAWAL OF THE EQUALIZATION - THE INDIVIDUAL DECISION CONTAINED IN THE LETTER OF 28 MAY 1955 - BY PUTTING FORWARD ALL THE SUBMISSIONS REFERRED TO IN ARTICLE 33 OF THE TREATY .
IN SO FAR AS THE APPLICANT CONSIDERS THAT THE TWO OTHER DECISIONS INVOLVE A MISUSE OF POWERS AFFECTING IT, IT MAY LODGE AN APPLICATION FOR THEIR ANNULMENT, SINCE THEY ARE GENERAL IN NATURE .
IN ORDER FOR AN APPLICATION FOR THE ANNULMENT OF A GENERAL DECISION TO BE ADMISSIBLE IT IS SUFFICIENT FOR THE APPLICANT TO CLAIM FORMALLY THAT THERE HAS BEEN A MISUSE OF POWERS AFFECTING IT, INDICATING CONVINCINGLY THE REASONS WHICH, IN ITS OPINION, GIVE RISE TO THE PRESUMPTION OF A MISUSE OF POWERS .
THE APPLICATION SATISFIES THE AFOREMENTIONED CONDITIONS AND IS, THEREFORE, ADMISSIBLE .
HOWEVER, THE PARTIES DISAGREE OVER THE EXACT SCOPE OF ARTICLE 33 OF THE TREATY IN RELATION TO THE ADMISSIBILITY OF CERTAIN SUBMISSIONS MADE BY THE APPLICANT AGAINST THE GENERAL DECISIONS .
THE DEFENDANT MAINTAINS THAT AN UNDERTAKING CANNOT PUT FORWARD A SUBMISSION OF MISUSE OF POWERS AFFECTING IT UNLESS THE HIGH AUTHORITY HAS CAMOUFLAGED AN INDIVIDUAL DECISION " AFFECTING " THAT UNDERTAKING BENEATH THE EXTERNAL APPEARANCE OF A MEASURE LAYING DOWN GENERAL RULES .
THAT ARGUMENT MUST BE REJECTED . A DISGUISED INDIVIDUAL DECISION REMAINS AN INDIVIDUAL DECISION, SINCE ITS NATURE DEPENDS ON ITS SCOPE RATHER THAN ON ITS FORM . FURTHERMORE, SUCH AN INTERPRETATION OF ARTICLE 33 AND ESPECIALLY OF THE WORDS " AFFECTING THEM " CANNOT BE ACCEPTED, SINCE THE PHRASE " AFFECTING THEM " CAN BE UNDERSTOOD ONLY IN THE SENSE OF THE WORDS WHICH EXPRESS IT, THAT IS, WHERE IT CONCERNS AN UNDERTAKING WHICH IS THE SUBJECT OR AT ANY RATE THE VICTIM OF THE MISUSE OF POWERS ALLEGED BY THAT UNDERTAKING . THE COURT CONSIDERS THAT ARTICLE 33 CLEARLY STATES THAT ASSOCIATIONS AND UNDERTAKINGS MAY CONTEST NOT ONLY INDIVIDUAL DECISIONS BUT ALSO GENERAL DECISIONS IN THE TRUE SENSE OF THE TERM .
P . 258
THE DEFENDANT MAINTAINS IN THE ALTERNATIVE THAT THE APPLICANT IS ENTITLED TO PUT FORWARD ONLY THE SUBMISSION OF MISUSE OF POWERS AND THAT ALL THE OTHER SUBMISSIONS MUST BE SET ASIDE . THE APPLICANT, ON THE OTHER HAND, CONSIDERS NOT ONLY THAT IT IS ENTITLED TO PUT FORWARD ALL THE GROUNDS FOR ANNULMENT, PROVIDED THAT IT PLEADS A MISUSE OF POWERS CONVINCINGLY, BUT ALSO THAT IT MAY BRING PROOF OF THE OTHER DEFECTS IN ORDER TO SUPPORT THE SUBMISSION OF MISUSE OF POWERS . IT CONSIDERS THAT THE TREATY HAS ESTABLISHED A LEGAL SYSTEM IN WHICH, IN ORDER FOR THEIR ACTIONS TO BE ADMISSIBLE, PRIVATE UNDERTAKINGS MAY ONLY PLEAD A MISUSE OF POWERS AFFECTING THEM; IT WOULD THEREFORE BE ILLOGICAL TO REGARD THAT SUBMISSION AS BEING MERELY EXCEPTIONAL AND SECONDARY IN NATURE .
THAT ARGUMENT MUST BE DISMISSED . IF THE TREATY PROVIDES THAT PRIVATE UNDERTAKINGS ARE ENTITLED TO SEEK THE ANNULMENT OF A GENERAL DECISION ON THE GROUND OF MISUSE OF POWERS AFFECTING THEM, THAT IS BECAUSE THEY HAVE NO RIGHT OF ACTION ON ANY OTHER GROUND .
IF THE APPLICANT'S ARGUMENT WERE CORRECT, UNDERTAKINGS WOULD HAVE A RIGHT OF ACTION AS EXTENSIVE AS THAT OF THE STATES AND THE COUNCIL AND IT WOULD BE DIFFICULT TO EXPLAIN WHY, INSTEAD OF SIMPLY TREATING ACTIONS BROUGHT BY UNDERTAKINGS IN THE SAME WAY AS THOSE BROUGHT BY STATES OR THE COUNCIL, ARTICLE 33 INTRODUCED A CLEAR DISTINCTION BETWEEN INDIVIDUAL DECISIONS AND GENERAL DECISIONS, WHILE RESTRICTING THE ANNULMENT OF GENERAL DECISIONS IN THE CASE OF UNDERTAKINGS TO THE SUBMISSION OF MISUSE OF POWERS AFFECTING THEM . THE PHRASE " UNDER THE SAME CONDITIONS " CANNOT BE INTERPRETED AS MEANING THAT, AFTER ESTABLISHING A CASE OF MISUSE OF POWERS AFFECTING THEM, UNDERTAKINGS ARE ENTITLED TO PUT FORWARD IN ADDITION THE OTHER GROUNDS FOR ANNULMENT, SINCE ONCE THE MISUSE OF POWERS AFFECTING THEM IS ESTABLISHED THE DECISION IN QUESTION IS ANNULLED, AND THAT ANNULMENT DOES NOT HAVE TO BE PRONOUNCED AGAIN ON OTHER GROUNDS .
THE FOREGOING CONSIDERATIONS CLEARLY CONTRADICT THE APPLICANT'S ILLOGICAL VIEW THAT THE INTERPRETION OF THE TREATY MUST BE SUBORDINATED TO THE DESIRE TO GRANT TO PRIVATE UNDERTAKINGS A RIGHT OF ACTION WHICH IS ALMOST IDENTICAL TO THAT AVAILABLE TO THE STATES AND TO THE COUNCIL . ALTHOUGH SUCH A WISH IS UNDERSTANDABLE, THERE IS NOTHING IN THE TREATY FROM WHICH IT MAY BE CONCLUDED THAT PRIVATE UNDERTAKINGS HAVE BEEN GRANTED SUCH A RIGHT TO REVIEW THE " CONSTITUTIONALITY " OF GENERAL DECISIONS, THAT IS, THEIR CONFORMITY WITH THE TREATY, SINCE THEY ARE QUASI-LEGISLATIVE MEASURES ADOPTED BY A PUBLIC AUTHORITY WITH LEGISLATIVE EFFECT " ERGA OMNES ".
ALTHOUGH IT IS TRUE THAT ARTICLE 33 ACCEPTS THE EXISTENCE OF A RIGHT TO BRING AN APPLICATION FOR THE ANNULMENT OF A GENERAL DECISION ON THE GROUND OF MISUSE OF POWERS AFFECTING AN UNDERTAKING, THAT IS AN EXCEPTION WHICH IS EXPLAINED BY THE FACT THAT, IN THIS CASE, IT IS STILL THE INDIVIDUAL FACTOR WHICH PREVAILS .
AS AGAINST THE GENERAL DECISIONS, THEREFORE, THE APPLICANT MAY RELY ONLY ON THE SUBMISSION OF MISUSE OF POWERS AFFECTING IT . AS REGARDS THE INDIVIDUAL DECISION, SINCE THE PARTIES ARE AGREED THAT IT MAY BE SO DESCRIBED, THE APPLICANT MAY RELY ON ALL THE SUBMISSIONS SET OUT IN THE FIRST PARAGRAPH OF ARTICLE 33 .
P . 259
B - SUBSTANCE
BEFORE CONSIDERING THE QUESTIONS RELATING TO DECISION NO 22/55 IN PARTICULAR THOSE WHICH ASK WHETHER THE HIGH AUTHORITY IS EMPOWERED TO FIX SELLING PRICES, AND THE GROUNDS OF COMPLAINT RELATING TO THE LETTER OF 28 MAY 1955, IT IS APPROPRIATE, FIRST, TO CONSIDER THE METHOD OF FIXING OF THE LEVEL OF ESTIMATED PRODUCTION COSTS .
AS REGARDS THE ASSESSMENT OF THAT LEVEL THE APPLICANT HAS MAINTAINED, FIRST, THAT THE HIGH AUTHORITY IS NOT ENTITLED TO MODIFY THE INITIAL ASSESSMENT OF ESTIMATED PRODUCTION COSTS, SINCE IT CONSTITUTES A " STANDSTILL LEVEL " WHICH WAS TO BE DETERMINED AT THE BEGINNING OF THE TRANSITIONAL PERIOD AND WAS TO REMAIN UNALTERABLE UNLESS MODIFIED BY COMMON AGREEMENT .
THAT ARGUMENT OF THE APPLICANT MUST BE REJECTED, SINCE ARTICLE 26 OF THE CONVENTION PROVIDES THAT THE INEVITABLE REDUCTION IN BELGIAN PRICES SHALL BE DETERMINED BY THE LEVEL OF ESTIMATED PRODUCTION COSTS AT THE END OF THE TRANSITIONAL PERIOD . IT FOLLOWS THAT WHEN THERE IS A CHANGE IN THE ESTIMATED LEVEL OF PRODUCTION COSTS A NEW ASSESSMENT MUST BE MADE WHICH TAKES THAT FACTOR INTO ACCOUNT .
SECONDLY, THE PARTIES DIFFER IN LAW AS TO THE METHOD TO BE FOLLOWED IN ASSESSING THE LEVEL OF ESTIMATED PRODUCTION COSTS . THE COURT CONSIDERS THAT, BEFORE GIVING A RULING, IT IS NECESSARY TO ESTABLISH WHAT MIGHT REASONABLE BE REGARDED AS " THE APPROXIMATE FIGURE OF PRODUCTION COSTS AT THE END OF THE TRANSITIONAL PERIOD " ON THE BASIS OF ESTIMATES FOR EACH TYPE AND CATEGORY OF COAL PREPARED IN THE LIGHT OF THE FACTS AND CIRCUMSTANCES KNOWN WHEN THAT ASSESSMENT IS MADE .
TO THAT END, THE REPLIES GIVEN BY THE PARTIES TO THE QUESTIONS RAISED BY THE JUDGE-RAPPORTEUR ARE NOT SUFFICIENT .
AS THE PARTIES HAVE STATED IN THEIR JOINT REPLY THAT SUCH FURTHER DETAILS CANNOT BE SUBMITTED TO THE COURT WITHIN THE TIME LIMITS PROVIDED, IT IS APPROPRIATE TO FIX A NEW TIME LIMIT FOR THAT PURPOSE .
Operative part
THE COURT
HEREBY :
1 . DECLARES THAT THE APPLICATION IS ADMISSIBLE;
2 . REOPENS THE ORAL PROCEDURE . IT WILL BE EXCLUSIVELY CONCERNED WITH THE LEVEL OF ESTIMATED PRODUCTION COSTS FOR EACH TYPE AND CATEGORY OF BELGIAN COAL AT THE END OF THE TRANSITIONAL PERIOD AND THEIR SIGNIFICANCE IN RELATION TO THE PRICES FIXED BY DECISION NO 22/55;
3 . FIXES THE DATE ON WHICH THE PARTIES MUST LODGE AT THE COURT REGISTRY THE ADDITIONAL INFORMATION AND SPECIFICATIONS INDICATED IN THE PRESENT JUDGMENT AT 1 SEPTEMBER 1956 AND THAT OF THE ORAL PROCEDURE AT 20 SEPTEMBER 1956 AT 10.30 A.M .;
4 . RESERVES THE COSTS . |
Order of the Court of 24 November 1955. - Groupement des Industries Sidérurgiques Luxembourgeoises v High Authority of the European Coal and Steel Community. - Joined cases 7-54 and 9-54.
European Court reports
French edition Page 00145
Dutch edition Page 00153
German edition Page 00143
Italian edition Page 00141
English special edition Page 00222
Parties
Grounds
Operative part
Parties
++++
HAVING REGARD TO THE APPLICATION SUBMITTED BY THE LUXEMBOURG GOVERNMENT ON 30 SEPTEMBER 1955 TO INTERVENE IN THE ACTIONS PENDING BEFORE THE COURT OF JUSTICE OF THE EUROPEAN COMMUNITIES
BETWEEN
GROUPEMENT DES INDUSTRIES SIDERURGIQUES LUXEMBOURGEOISES
AND
HIGH AUTHORITY OF THE EUROPEAN COAL AND STEEL COMMUNITY
( JOINED CASES 7 AND 9/54 );
Grounds
HAVING REGARD TO THE WRITTEN OBSERVATIONS AND CONCLUSIONS SUBMITTED ON 24 OCTOBER 1955 BY THE HIGH AUTHORITY, THE DEFENDANT IN THE MAIN ACTION;
HAVING REGARD TO THE WRITTEN OBSERVATIONS AND CONCLUSIONS SUBMITTED ON THE SAME DATE BY THE GROUPEMENT DES INDUSTRIES SIDERURGIQUES LUXEMBOURGEOISES, THE APPLICANT IN THE MAIN ACTION;
UPON HEARING THE PARTIES;
UPON HEARING THE OPINION OF THE ADVOCATE GENERAL;
WHEREAS THE FIRST PARAGRAPH OF ARTICLE 34 OF THE STATUTE OF THE COURT OF JUSTICE OF THE ECSC PROVIDES THAT NATURAL OR LEGAL PERSONS ESTABLISHING AN INTEREST IN THE RESULT OF ANY CASE SUBMITTED TO THE COURT MAY INTERVENE IN THAT CASE;
WHEREAS THE SECOND PARAGRAPH OF THE ABOVE-MENTIONED ARTICLE SPECIFIES THAT SUBMISSIONS MADE IN AN APPLICATION TO INTERVENE SHALL BE LIMITED TO SUPPORTING OR REQUESTING THE REJECTION OF THE SUBMISSIONS OF ONE OF THE PARTIES;
WHEREAS THE INTEREST OF THE LUXEMBOURG GOVERNMENT IN INTERVENING IN THE CASE IS INCONTESTABLE AND HAS NOT BEEN CONTESTED;
WHEREAS THE SUBMISSIONS MADE IN THE APPLICATION TO INTERVENE REQUEST ONLY THAT THE APPLICATION LODGED BY THE GROUPEMENT DES INDUSTRIES SIDERURGIQUES LUXEMBOURGEOISES SHOULD BE DISMISSED AND FOR THAT REASON COMPLY WITH THE PROVISIONS OF THE SECOND PARAGRAPH OF ARTICLE 34 OF THE STATUTE OF THE COURT OF JUSTICE OF THE ECSC;
Operative part
THE COURT
COMPOSED OF : M . PILOTTI, PRESIDENT, L . DELVAUX AND A . VAN KLEFFENS ( PRESIDENTS OF CHAMBERS ), P.J.S . SERRARENS, O . RIESE, J . RUEFF, CH.L . HAMMES, JUDGES,
ADVOCATE GENERAL : K . ROEMER
REGISTRAR : A . VAN HOUTTE
HEREBY ORDERS :
THE LUXEMBOURG GOVERNMENT IS GIVEN LEAVE TO INTERVENE .
THE EXAMINATION OF THE SUBMISSIONS AND ARGUMENTS PUT FORWARD IN THE APPLICATION TO INTERVENE AND OF THEIR ADMISSIBILITY IS RESERVED FOR THE FINAL JUDGMENT .
THE COSTS ARE RESERVED . |
Judgment of the Court of 23 April 1956. - Association des Utilisateurs de Charbon du Grand-Duché de Luxembourg v High Authority of the European Coal and Steel Community. - Joined cases 8-54 and 10-54.
European Court reports
French edition Page 00159
Dutch edition Page 00167
German edition Page 00157
Italian edition Page 00155
English special edition Page 00227
Danish special edition Page 00025
Greek special edition Page 00031
Portuguese special edition Page 00039
Summary
Parties
Subject of the case
Grounds
Operative part
Keywords
++++
PROCEDURE - ABSTENTION OF THE HIGH AUTHORITY - CAPACITY TO LODGE AN ADMINISTRATIVE COMPLAINT
( ECSC TREATY, ART . 35 )
Summary
( CF . PARA . 1, SUMMARY, JUDGMENT IN JOINED CASES 7 AND 9/54 ):
THE EXPRESSION " AS THE CASE MAY BE " MUST BE CONSIDERED AS GIVING THE POWER TO RAISE A MATTER WITH THE HIGH AUTHORITY TO THE PERSONS SPECIFIED IN ARTICLE 35 WHO HAVE AN INTEREST IN THE DECISION WHICH THE HIGH AUTHORITY IS REQUIRED TO TAKE OR IN THE RECOMMENDATION WHICH IT IS REQUIRED TO MAKE .
THE ASSOCIATIONS REFERRED TO IN ARTICLE 35 MAY ONLY BE ASSOCIATIONS OF UNDERTAKINGS WITHIN THE MEANING GIVEN TO THE WORD " UNDERTAKING " BY ARTICLE 80 OF THE TREATY FOR THE PURPOSES OF THE WHOLE TREATY .
*/ 654J0007 /*.
Parties
IN JOINED CASES 8 AND 10/54
ASSOCIATION DES UTILISATEURS DE CHARBON DU GRAND-DUCHE DU LUXEMBOURG, REPRESENTED BY ITS ADMINISTRATIVE BOARD, ASSISTED BY ALEX BONN, ADVOCATE IN LUXEMBOURG, WITH AN ADDRESS FOR SERVICE IN LUXEMBOURG AT ITS REGISTERED OFFICE, 8, AVENUE DE L'ARSENAL, APPLICANT,
V
HIGH AUTHORITY OF THE EUROPEAN COAL AND STEEL COMMUNITY, REPRESENTED BY ITS LEGAL ADVISER, NICOLA CATALANO, ACTING AS AGENT, ASSISTED BY ERNEST ARENDT, ADVOCATE IN LUXEMBOURG, WITH AN ADDRESS FOR SERVICE IN LUXEMBOURG AT ITS OFFICES, 2, PLACE DE METZ, DEFENDANT,
GOVERNMENT OF THE GRAND DUCHY OF LUXEMBOURG, REPRESENTED BY PIERRE PESCATORE, LEGAL ADVISER TO THE MINISTRY FOR FOREIGN AFFAIRS WITH AN ADDRESS FOR SERVICE IN LUXEMBOURG AT THE MINISTRY FOR FOREIGN AFFAIRS, 5, RUE NOTRE-DAME, INTERVENER,
Subject of the case
APPLICATION FOR, FIRST, THE ANNULMENT OF THE IMPLIED DECISION OF REFUSAL RESULTING, UNDER ARTICLE 35 OF THE TREATY, FROM THE SILENCE OF THE HIGH AUTHORITY WITH REGARD TO THE LETTER OF 20 JULY 1954 IN WHICH THE APPLICANT REQUESTED IT TO TAKE A DECISION OR MAKE A RECOMMENDATION CONCERNING THE ACTIVITIES OF THE OFFICE COMMERCIAL DU RAVITAILLEMENT OF THE GRAND DUCHY OF LUXEMBOURG ( COMMERCIAL SUPPLY OFFICE ) AND CONCERNING THE CAISSE DE COMPENSATION ( EQUALIZATION FUND ) ATTACHED TO THAT OFFICE BY THE MINISTERIAL ORDER OF 8 MARCH 1954 ( CASE 8/54 );
SECONDLY, FOR THE ANNULMENT " IN SO FAR AS IS NECESSARY " OF THE DECISION OF REFUSAL OF THE HIGH AUTHORITY, FOLLOWING FROM ITS LETTER OF 27 NOVEMBER 1954, OF THE REQUEST CONTAINED IN THE LETTER OF 20 JULY 1954 ( CASE 10/54 ),
Grounds
P . 239
THE COURT
FOR THE PURPOSE OF GIVING JUDGMENT IN THE PRESENT CASES, PUTS FORWARD THE FOLLOWING CONSIDERATIONS IN LAW :
1 . ADMISSIBILITY OF APPLICATIONS 8/54 AND 10/54
A - CAPACITY OF THE APPLICANT TO RAISE THE MATTER WITH THE HIGH AUTHORITY IN APPLICATION OF ARTICLE 33 OF THE TREATY
ARTICLE 35 ENABLES " UNDERTAKINGS OR ASSOCIATIONS " TO RAISE A MATTER WITH THE HIGH AUTHORITY .
THE ASSOCIATIONS REFERRED TO IN THIS EXPRESSION MAY ONLY BE ASSOCIATIONS OF UNDERTAKINGS WITHIN THE MEANING GIVEN TO THE WORD " UNDERTAKING " BY ARTICLE 80 OF THE TREATY FOR THE PURPOSES OF THE WHOLE TREATY .
IF IN FACT THIS WERE NOT SO, AN ASSOCIATION COULD FIND ITSELF IN A POSITION TO INSTITUTE PROCEEDINGS WHERE NONE OF THE INDIVIDUAL MEMBERS OF WHICH IT IS FORMED COULD HAVE DONE SO ON ITS OWN .
IN THE ABSENCE OF ANY INDICATION TO THE CONTRARY, THE TREATY DOES NOT ESTABLISH SUCH DIFFERENCES IN THE TREATMENT OF AN ASSOCIATION AND THE MEMBERS OF WHICH IT IS FORMED .
P . 240
IT IS NECESSARY TO INQUIRE WHETHER THE APPLICANT FULFILS THE ABOVE-MENTIONED CONDITION .
THE ASSOCIATION DES UTILISATEURS DE CHARBON DU GRAND-DUCHE DE LUXEMBOURG HAS BEEN FORMED BETWEEN :
THE FEDERATION DES INDUSTRIELS LUXEMBOURGEOIS
THE GROUPEMENT DES INDUSTRIES SIDERURGIQUES LUXEMBOURGEOISES
THE GROUPEMENT DES NEGOCIANTS DE COMBUSTIBLES EN GROS
THE SOCIETE NATIONALE DES CHEMINS DE FER LUXEMBOURGEOIS AND MR LEON BRASSEUR, ENGINEER, REPRESENTING THE GAS WORKS OF THE GRAND DUCHY OF LUXEMBOURG .
UNDER ARTICLE 1 OF ITS STATUTE, ITS OBJECTS ARE :
( A ) TO DEFEND AND REPRESENT THE INTERESTS OF COAL CONSUMERS WITHIN THE FRAMEWORK OF THE OBJECTIVES PURSUED BY THE EUROPEAN COAL AND STEEL COMMUNITY;
( B ) TO GIVE OPINIONS ON QUESTIONS OF INTEREST TO COAL CONSUMERS WHICH ANY ORGAN OF THE EUROPEAN COAL AND STEEL COMMUNITY OR ANY OTHER AUTHORITY MAY SUBMIT TO IT .
IT IS ALSO, AS ITS TITLE EXPRESSLY INDICATES, AN ASSOCIATION OF COAL CONSUMERS .
THE FACT THAT THE GROUPEMENT DES INDUSTRIES SIDERURGIQUES LUXEMBOURGEOISES IS ONE OF ITS MEMBERS DOES NOT ALTER THIS CHARACTER AND, MOREOVER, THAT BODY HAS ALREADY LODGED ON ITS OWN ACCOUNT AN APPLICATION WITH THE SAME PURPOSE .
ARTICLE 1 OF THE STATUTE OF THE ASSOCIATION LEAVES NO DOUBT THAT ITS OBJECT IS TO DEFEND AND TO REPRESENT THE INTERESTS OF ITS MEMBERS IN THEIR CAPACITY AS COAL CONSUMERS AND TO GIVE OPINIONS ON QUESTIONS OF INTEREST TO COAL CONSUMERS .
FOR THOSE REASONS, WITHOUT THIS FINDING PREJUDGING THE NECESSARY CAPACITY TO LODGE AN APPLICATION UNDER OTHER ARTICLES OF THE TREATY, THE ASSOCIATION DES UTILISATEURS DE CHARBON DU GRAND-DUCHE IS NOT ONE OF THE ASSOCIATIONS ENABLED TO RAISE THE MATTER WITH THE HIGH AUTHORITY IN APPLICATION OF THE PROVISIONS OF ARTICLE 35 .
FOR THAT REASON, APPLICATIONS 8/54 AND 10/54 ARE INADMISSIBLE .
IN THOSE CIRCUMSTANCES, THE APPLICANT MUST BE ORDERED TO BEAR THE COSTS .
Operative part
THE COURT
HEREBY :
DISMISSES THE APPLICATIONS IN JOINED CASES 8 AND 10/54;
ORDERS THE APPLICANT TO BEAR THE COSTS INCLUDING THOSE OF THE INTERVENER . |
OPINION OF MR ADVOCATE GENERAL ROEMER ( )
Contents
Introductory Remarks
A. Facts
B. Legal Assessment
I. Infringement of the Treaty
(1) Establishment of the facts
(2) Formation of the value judgment as to the necessity of fixing a maximum price
(3) Manifest failure to observe the Treaty
(4) Method of fixing the maximum prices
II Misuse of powers
(1) The Ruhr coalfield
(2) The Nord and Pas-de-Calais coalfield
III. Infringement of essential procedural requirements
C. Summary and conclusions
Mr President,
Members of the Court,
In the case of the Royal Dutch Government against the High Authority the language of the procedure is Dutch. I regret that my knowledge of that language is not adequate. I shall therefore deliver my opinion in my mother tongue, German, which, however will simultaneously be interpreted into the other official languages of the Community.
It is my duty ‘acting with complete impartiality and independence, to make’ in open court ‘reasoned submissions’ on the case brought before the Court. May I make some general preliminary remarks before presenting a statement of the facts which constitute the subject of the present proceedings.
In the course of the oral proceedings the applicant frequently referred to international law, the law of nations, in accordance with the principles of which the Treaty establishing the European Coal and Steel Community is to be interpreted. In my view it has put forward exceptions under the law of nations in which individual persons — not only the classic subjects of the law of nations, the States — possess rights and obligations under the law of nations; similarly, with regard to the Treaty it referred to exceptions of a more international nature such as cases where the unanimous consent of the Council of Ministers is necessary. I do not believe that it is necessary for me to examine this in any greater detail. On the one hand I do not think that it is relevant to the judgment in the present case. Secondly in its defence the High Authority clarified matters properly. Perhaps it is necessary to point in addition to the position of this Court which does not have ad hoc judges, takes no account of nationality, has no dissenting opinions but only judges of a European Community whose judgments are directly enforceable without any reexamination of the merits and which thus ensures compliance with Community law. Finally, the applicant itself refers to ‘droit communautaire’ (Community law) and in its submissions as to the term ‘détournement de pouvoir’ (misuse of powers) made references to the law of the individual Member States which is of decisive importance in the interpretation of our Community law.
The question to be decided here concerns without any doubt the application of the economic law laid down in the Treaty. Legislating on economic factors is a difficult task in which it is not possible to dispense with the use of terms which entail a value judgment and whose definition presupposes knowledge and appreciation of the economic situation. The Treaty went a very long way in legislating on economic factors; in particular it laid down legal preconditions for general decisions of the High Authority which in part are comparable to the statutory instruments of national law. The possibility of legal control which is thereby given is not as a rule intended to have the result that the Court of Justice substitutes its own economic value judgment for the assessment of the High Authority. Consequently in the application and interpretation of the Treaty it would be dangerous only to rely on the text of the Treaty. In order to recognize the economic objectives of individual provisions the general aims and principles of the Treaty must be taken into consideration. The Court has already stressed the importance of the general objectives in its first judgments. My learned colleague Mr Lagrange emphasized in his opinions that in the exercise of an individual power the High Authority must bear in mind all the objectives of the Treaty, that in achieving the aim envisaged by an individual provision it must not act in conflict with any superior general objective and that the same principles must apply to interpretation by the Court.
These general objectives only acquire real meaning when they are set against the factual situation. Every decision in general matters and also in economic matters is based ultimately on the fact that an existing situation must be altered or influenced in the most appropriate way to achieve a future objective. Without giving a comprehensive examination here I therefore believe it is necessary as a starting point to refer to certain important factors about the coal market which may be of relevance in the present case. They must be considered against the background of the objectives of the Treaty; subsequently it will be necessary to examine briefly how the High Authority, faced with the situation as it then was, tried, by means of its decisions at the time of the opening of the Common Mar ket, to act in accordance with those objectives and finally how, because of the changed position at the beginning of the second coal marketing year it altered its price system for the coal market and in particular adopted the decisions which have been contested and which are at issue in the present proceedings. Only when the decisions at issue have been set within the system of dynamic development, when they are considered on this basis and in that context can an appropriate legal evaluation and examination of their compatibility with the Treaty be undertaken.
A — Facts
I thus come to a statement of the facts which are well known to the Court and which I may therefore outline briefly. The national markets in coal were more or less strictly organized. For decades prices had been regulated by the authorities. In so far as competition was possible it did not exist between individual mines but between groupings of them organized by the respective coalfields for joint selling. Finally the costs of production in the coal producing countries of the Community were very varied.
Account had to be taken of this situation existing at the time when the Common Market was established; the Convention on the Transitional Provisions emphasized that fact on a number of occasions and stated that the principal task of the High Authority for the preparatory period was the collecting of information in order to acquire actual knowledge of the general position and the particular circumstances within the Community. A transitional period of five years, one year of which had elapsed at the time of the adoption of the contested decisions, was provided for the establishment of the Common Market and normal competitive conditions.
The decisions of the High Authority at the beginning of the transitional period must be seen in this light. An equalization levy was imposed to benefit the Belgian and Italian coalfields. The alignment provided for in the Treaty with the prices of competitors within the Community (Article 60 (2) (b)) was not at first permitted (Decision No 3/53, Journal Officiel, p. 21); instead for certain coalfields zone prices were permitted. The level of prices then existing was maintained by fixing maximum prices for coalfields in general with an initial relaxation: only the most important fields were included and undertakings were allowed a certain freedom of action with regard to the price structure in that not all grades were restricted and for grades which were not directly tied only two limits had to be complied with: the absolute maximum limit for the whole category of coal and a maximum limit for the average of all grades of one type.
At the beginning of the second coal marketing year the measures ‘for the progressive integration of the Belgian coal mines into the Common Market’ as the High Authority stated in its general report were continued: measures were also continued ‘which were to enable the mines in Sulcis to meet competition from the Common Market after the expiry of two years’. The decision prohibiting price alignment was extended without a time-limit. The system of area prices was altered in that, according to the position of the selling market, alignment with the delivered price for comparable combustible fuels from the Ruhr coalfield or from the coalfield of the Nord and Pas-de-Calais was generally permitted while previously only in respect of sales from the Saar and Lorraine to the Federal Republic of Germany had reference been made to the prices in the Ruhr, but for the rest prices were determined independently. Finally, fixed prices were laid down for Belgium.
It was in this context that the contested decisions were adopted. They maintained maximum prices but with the omission of one of the three previous limits, namely the average maximum price for all grades of one type and were solely applicable to the two largest fields in the Community, the Ruhr coalfield and the coalfield of the Nord and Pas-de-Calais. In respect of the Ruhr coalfield the price limit for one type, for the coalfield of northern France the price limit for four types was omitted. On the other hand the price limits for certain grades were altered and in part extended. It is however true that the restrictions for three or two grades have been omitted but three or four grades which earlier had been unrestricted are now restricted.
For the fixing of the maximum prices at the time of the opening of the Common Market Decision No 6/53 laying down the principle stated that ‘in order to avoid disturbances in the economy of the Member States’ they had to be based on the level resulting from the maximum prices fixed in all the Member States; the fixing of particular maximum prices for certain grades of coal was justified on the grounds of supply difficulties.
In general terms the High Authority referred to the fact ‘that in accordance with the general objectives of the Treaty maximum prices in the Community may only be fixed when and in so far as the maintenance of the present level of prices is not ensured by competition between coalfields and that the fixing of maximum prices must be carried out by a method which permits progressive development of the free play of forces in the Common Market’. At the beginning of the second coal marketing year the High Authority was of the opinion ‘that in view of the development of the Common Market for coal a further continuation of maximum prices for undertakings in all the coalfields of the Community is no longer necessary; however, in view of the present structure of the Common Market if maximum prices are not fixed by the High Authority the prices for coal will be determined by the selling agency of the Ruhr coalfield and by the Houillères du Nord et du Pas-de-Calais and it is therefore necessary in order to achieve the objectives set out in Article 3 to maintain for the time being the maximum prices for undertakings in both these coalfields’.
That is the development which led to the contested decisions, to the detailed contents of which I shall return, in my examination now of the grounds of action relied on by the applicant.
B— Legal assessment
May I first make a number of observations with regard to the procedure:
Decisions Nos 19 and 20/54
The action seeks the annulment of three decisions. In its judgments in Cases 1 and 2/54 the Court of Justice has already ruled that that is admissible if there is evident factual connexion. Such a connexion exists in the present instance: Decision No 18/54 extends the validity of the basic decision, No 6/53, with the above-mentioned amendments for a further year and on the basis of that decision Decisions Nos 19/54 and 20/54 fix the price-limits for the undertakings of both coalfields.
Decisions Nos 19 and 20/54 are not separately challenged by the applicant. It is true that the applicant states that the new maximum prices are not substantially lower than the previous maximum prices; this argument, however merely serves to support its view that Decision No 18/54 could not have had as its object a reduction in price. In other words the applicant denies altogether the admissibility of the fixing of maximum prices but if they are admissible it does not apply for an examination of the level of prices thereby established.
In those circumstances Decisions Nos 19/54 and 20/54 can only be annulled as a result of the annulment of Decision No 18/54.
The examination of the grounds of action relied on by the applicant may therefore be restricted to Decision No 18/54.
Decision No 18/54
The applicant bases its action on infringement of the Treaty, manifest failure to observe the provisions of the Treaty, misuse of powers and the infringement of essential procedural requirements.
Both parties rightly assume that the manifest failure to observe Treaty rules is not an individual ground of action.
Rather it is the degree of infringement of the Treaty which can only be determined in the course of an evaluation of the situation within the meaning of the second sentence of the first paragraph of Article 33. In such an evaluation of the situation the review by the Court in respect of infringement of the Treaty only extends to determining whether it constitutes a manifest failure to observe provisions of the Treaty. The examination of manifest failure to observe the Treaty consists in the examination of infringement of the Treaty as restricted by the second sentence of the first paragraph of Article 33 to the instances set out in that provision and it must therefore be carried out in that context. It is not possible to accept the view of the High Authority that the proof of manifest failure to observe the Treaty is a pre-condition for the Court's undertaking an examination of the overall evaluation of the situation. As the applicant correctly pointed out if such proof were given the decision would have to be annulled without the necessity for further examination. The phrase ‘save where the High Authority is alleged…’ merely means that the manifest failure to observe the Treaty — as every other ground of action — must be invoked by the applicant and must state the reasons on which it is based. There then follows the thus limited — and always limited — further examination. Accordingly, three grounds of action have been relied on which will now be examined in turn.
I. Infringement of the Treaty
The applicant alleges an infringement of Article 61 (a) of the Treaty and puts forward the view that in the given circumstances the fixing of maximum prices was not admissible and that the prices should have been completely freed.
Article 61 requires that, on the basis of studies and after consulting the Consultative Committee and the Council of Ministers, the High Authority should find that maximum prices are necessary to attain the objectives set out in Article 3 and particularly in paragraph (c) thereof; then it may fix maximum prices within the Common Market for one or more of the products within its jurisdiction. The factual situation justifying that legal consequence is therefore so to speak composed of two stages: studies must be made as to the existing economic facts and circumstances on the basis of which the High Authority makes an overall evaluation of the situation, that is, a value judgment.
Accordingly the arguments of the applicant can be distinguished as to whether they relate to the finding of the underlying economic facts and circumstances or the formation of the value judgment made on the basis of those facts.
(1) Establishment of the facts
With regard to the first point the parties are only in disagreement in one respect. The High Authority alleges that if prices had been freed they would not have fallen substantially while in the view of the applicant prices would have fallen after some time even without intervention by the authorities.
There are two reports of the Market Division of the High Authority of 3 February 1954 (No 728) and of 15 February 1954 (No 6523) with regard to this question and we must accept them as evidence. According to those reports there were no prospects of a reduction in prices from the German and French coalfields. The representative of the Charbonnages de France stated that the market would not allow of higher prices than those existing at present from which it may rather be deduced that the undertakings were seeking an increase in price. The representatives of the Ruhr coalfield at first stated that a certain rebate could be granted but later they requested an examination of their costs of production and withdrew their previous proposals.
Against this the view of the applicant is supported by no facts and, as the High Authority correctly pointed out solely constitutes a forecast based on economic theory. In addition the applicant itself did not maintain that an immediate reduction in price would have occurred. In the course of the oral proceedings it merely stated that the prices would have fallen of their own accord after a certain time if the economy had further weakened and the import of cheaper coals from third countries had continued. As the Court is aware the position has changed in both respects and at the present moment a price increase is already being discussed. The clarification sought as to how the undertakings reacted to the extent of the reduction finally fixed by the High Authority was given in the
course of the oral proceedings by the High Authority which stated that a reduction of 0.50 DM had been proposed for coke. Therefore there exists no incorrect finding of fact such as to reveal infringement of the Treaty.
(2) Formation of the value judgment as to the necessity of fixing maximum prices
The applicant contests the formation of the value judgment of the High Authority as to the necessity of fixing maximum prices from two points of view.
(a)
First the applicant regards it as an infringement of Article 61 in conjunction with Article 5 of the Treaty that the High Authority accepted the possibility that one of the objectives of Article 3 would not be achieved instead of setting out in detail what effects would have been produced by freeing prices and what objectives would not thereby have been achieved. However, the High Authority specified those effects in the second recital in the preamble to Decision No 18/54 in saying that in the absence of the fixing of maximum prices by the High Authority the prices for coal would be determined by the selling agencies of the Ruhr coalfield and the Houillères du Nord et du Pas-de-Calais. That can only be interpreted to the effect that in such a case prices would have been artificially maintained at a high level or even increased out of line with the market situation. The High Authority therefore based its decision directly on the effects on prices, contrary to Article 3 (c). It shares the view of the applicant in so far as it too does not regard as sufficient an equivocal and dubious possibility that detrimental effects might occur. However, in view of what has been said it cannot further be deduced from the fact that the preamble to the decision uses a more prudent and broader formulation in the fourth recital that the High Authority regards the mere possibility as sufficient.
(b)
The second argument raised in this respect is to the effect that in its assessment of the necessity for maximum prices the the High Authority took account of and thereby recognized a market structure which is contrary to the Treaty. That was not permissible because the Treaty provided measures for such a situation in Articles 65 and 66; the failure to apply such measures cannot constitute the grounds for the exercise of a power which is directly intended for other purposes and which applies for a market situation which is not distorted by unauthorized cartels and concentrations.
The applicant considers that as regards the Ruhr coalfield the market structure contrary to the Treaty consists in the existence of the Gemeinschaftsorganisation Ruhrkohle and its six sales companies which, in the opinion of the applicant, infringe Article 65 of the Treaty.
In this respect it may be stated that it is still by no means certain whether and to what extent those organizations infringe Article 65 of the Treaty and that at any event at the present moment the prohibition contained in Article 65 is not yet applicable to those organizations. This arises unequivocally from the second paragraph of Article 12 of the Convention on the Transitional Provisions and Decision No 37/53 of 11 July 1953 based on that convention. Under Article 1 of the Convention on the Transitional Provisions the implementation of the Treaty is to be effected in two stages, a preparatory period and a transitional period. During the transitional period which is running at present — it expires on 9 February 1958 — the Treaty is only to apply subject to the derogations arising from the Convention on the Transitional Provisions. Article 12 of that Convention constitutes such a derogation for the application of Article 65. It provides that where the High Authority does not grant the authorization provided for in Article 65 (2) which under that provision may be applied for by existing cartels, reasonable time-limits shall be set after which the prohibitions contained in Article 65 shall apply. By Decision No 37/53 the High Authority provided that in principle the prohibitions laid down in Article 65 of the Treaty would enter into force on 31 August 1953 (Article 2). Under Article 3 of the decision however that did not apply for agreements in respect of which a written reasoned application for authorization had been submitted before that date. In such cases only when the procedure for authorization is concluded without authorization being granted will the time at which the prohibition under Article 65 takes effect be fixed in the decision refusing the authorization. The Gemeinschaftsorganisation Ruhrkohle and its six sales companies lodged such an application within the time-limits and the procedure for authorization has not yet been concluded. The position is set out in the Report of November 1974, No 75, on the situation of the Community. Although it was stated in the course of the oral proceedings that the handling of this question of vital importance for a country of the Community with consequences of both economic and social nature without true parallel in the Community has wrongly been delayed it is in my opinion not a serious charge giving rise to legal consequences.
It cannot reasonably be assumed that the applicant also wishes to challenge Decision No 37/53 by indirect means. It must certainly be admitted that the fixing of prices by the Gemeinschaftsorganisation Ruhrkohle — the sole activity of several of these organizations in issue — cannot be authorized. Is it necessary to dissolve the whole organization for that reason? The applicant itself states that in the event of a winding-up the liquidators would have to determine prices on instructions from the High Authority and that this state of liquidation could last for years. What did the High Authority do in the present instance? It fixed prices, that is exactly what would have had to happen in the view of the applicant even in the event of a winding-up. Winding-up concerns “prohibited” organizations; subject to a decision by the Court of Justice the High Authority is exclusively competent to issue the prohibition.
The applicant is therefore anticipating the decision of the High Authority against which an appeal could be lodged at the Court and it appears to me this anticipation is inadmissible. At the present stage and in the present proceedings it appears to me incorrect to refer to an illegitimate or unlawful existence of these institutions which regulate the market.
In the present context the circumstances in which the Gemeinschaftsorganisation Ruhrkohle was created may be recalled as the facts may perhaps facilitate understanding of this substantial problem. The syndicates which regulated the entire sales for coal or lignite in wide areas such as for example Upper Silesia or the Rhine-Ruhr including the Ruhr, the Lower Rhine, Aachen and the Saar were followed after the summer of 1945 by selling agencies of the Allied occupation and administrative authorities. By virtue of a decision of the Allies in the Control Commission in Berlin they were replaced in 1947 by the “Deutscher Kohlenverkauf” a subdivision of the “Deutsche Kohlenbergbauleitung”. There subsequently followed a de-cartelization of this body by the institution established by the Allies; as with the creation of the six sales companies it is based on an express measure of the Allied High Commission which, by Law No 27, ordered the dissolution of the previously existing Deutscher Kohlenverkauf and which in Durchfuhrungsverordnung (implementing regulation) No 17/20 regulated in detail the formation of the organizations replacing it, the Gemeinschaftsorganisation Ruhrkohle and the six sales companies. That implementing regulation made provision for the jurisdiction of the High Authority which was intended to step into the shoes of the Allied authorities as soon as it had commenced activities and opened the Common Market in coal. The attendant problems played a considerable role in the negotiations concerning a Treaty creating the European Community and were the direct reason for the insertion of the fifth paragraph of the oft-mentioned Article 12 of the Convention on the Transitional Provisions. Although in principle the second paragraph of Article 1 (5) of the Convention on the Transitional Provisions provides that the rules for the transitional period shall cease to apply on its expiry, in this instance, in particular as regards the selling agencies of the Ruhr coalfield, provision was made for the transformation and for the creation of permanent organizations with the words “recourse to these … bodies need not be confined to the transitional period”. Therefore the provisional existence of these organizations must be regarded as a factual circumstance which the High Authority not only could but had to take into account in its decision on coal prices. That by no means entails recognition that the facts accord with the Treaty. On the contrary the High Authority has clearly stated that fixing of prices by these organizations could not be tolerated and for this reason in particular it fixed maximum prices itself.
In the coalfield of the Nord and Pas-de-Calais the structure contrary to the Treaty is constituted according to the applicant by the fact that that coalfield exercises a determining influence on the French market which for its part is not yet fully exposed to the competition of the Common Market because the present marketing arrangements for trade in coal between the countries of the Community and the international transport tariffs which are still provisionally in force prevent effective competition. The studies and work of the High Authority in this field are well known; there exist obstacles to the Common Market, provision for the dismantling of which during the transitional period was made by Article 10 of the Convention on the Transitional Provisions. So long as such a position exists it must like all other factual circumstances be taken into account by the High Authority.
Thus it is understandable that Article 61 solely subjects the fixing of maximum prices to the pre-condition that they must be necessary to attain the objectives set out in Article 3 and particularly in paragraph (c) thereof without insisting on a particular state of the market or of competition. On the establishment of the Common Market the fixing of maximum prices was justified on the grounds that “to avoid disturbances in the economies of the Member States the level of coal prices in the Community must be equated to the level resulting from the maximum prices at present fixed in all the Member States”. Equally account can and must be taken of every other factual situation even if it does not yet comply with the requirement of an ideal common market. No infringement of the Treaty can be found to exist so long as the conditions laid down in Article 61 have been satisfied and the general objectives of the Treaty have been complied with. The fact that account was taken of the existing situation with regard to competition and distribution does not prove the contrary; it was rather an obligation.
(3) Manifest failure to observe the Treaty
In the arguments which were examined and refuted above the applicant contested the formation of the judgment of the High Authority as to the necessity of fixing maximum prices; it objected that the High Authority took into account considerations which were legally inadmissible and which therfore infringed the Treaty. Examination of that point was unrestricted. However, the applicant also contests the correctness of the decision itself by formulating factual considerations which differ from those of the High Authority. The applicant alleges that it was incorrect to fix maximum prices when the market situation did not give reason to expect increases in prices; to do so was in fact detrimental because it served to freeze the level of prices. In other words the applicant argues that where there exists a surplus of supplies and large pit-head stocks it is manifestly unnecessary and is even detrimental to fix a maximum and not a minimum limit for prices. The High Authority takes the contrary view and replies that in spite of the fact that no increase in the prices applicable was threatened the fixing of maximum prices was necessary in order to impose on undertakings an appropriate price reduction which they would not have introduced on their own account.
In the examination of the necessity of price fixing a large number of economic facts and circumstances must be taken into consideration and the resultant situation must be evaluated in its entirety. It is evident from the words “if it finds” in Article 61 that this evaluation of the situation is in princeple reserved to the High Authority. In the oral proceedings contradictory conclusions were drawn from the words “si elle reconnaît”: the High Authority claims on that basis a discretionary power while the applicant contests the subjective nature and demands objective correspondence of the facts and the judgment. This contradiction of views is however merely apparent. If it must be determined whether reality and the judgment correspond a second judgment as to the reality must be taken, as is done by the applicant which with its own judgment opposes that of the High Authority. That judgment is nothing more than the conclusion, the result of an evaluation and assessment of all factors which are necessarily subjectively coloured which includes a certain discretion, a margin of freedom of assessment — it is not merely a finding of fact which must only be taken into account and in respect of which there exist no differing views. Whether an economic measure is necessary is very largely a question which can be answered neither by mere observations nor by logical conclusion. Accordingly the word “finds” describes the result of an assessment of numerous circumstances, factors and tendencies.
Under the second sentence of the first paragraph of Article 33 the Court can not just examine such an evaluation of the situation with regard to infringement of the Treaty; it can only do so on the ground of manifest failure to observe the provisions of the Treaty. If the evaluation of the situation by the High Authority constitutes such a manifest failure the Court must annul the decision of the High Authority based on that evaluation. If such a manifest failure to observe the Treaty is not found to exist the Court must regard the evaluation of the situation by the High Authority as proper without more ado and subject to investigation for misuse of powers.
The concept of manifest failure to observe the Treaty must first be clarified in so far as it is necessary for deciding the question whether the arguments adduced by the applicant reveal such a manifest failure.
(a)
In interpreting this concept the reasons for restricting judicial control must be of importance.
The statement of reasons by the German Government ( ) says in this regard:
“In respect of the extent of administrative judicial control the problem was raised as to the extent of the powers of the Court to include in its judicial evaluation the numerous economic factors in the provisions of the Treaty. The principle of the separation of powers prevailing in the provisions of the Treaty relating to institutions required that the judicial control by the Court should not make it the supreme body representing the will of the Community in economic questions in place of the High Authority. Therefore in general terms the Court can only extend its examination to the situation arising out of the economic facts or circumstances when the High Authority is charged with misuse of powers or where it has manifestly failed to observe the provisions of the Treaty; on the other hand examination of economic facts or circumstances is admissible without restriction”.
Reference may also be made to the report of the French delegation:
“… it was considered that most decisions of the High Authority were by the very provisions of the Treaty made subject to the realization of factual conditions or the existence of situations of an economic nature and examination by the Court of the “legality” of decisions taken by the High Authority would have had the effect in reality of letting the Court judge whether those decisions were well founded. Consequently the actions of the High Authority could be paralysed by the total control of the Court which would have produced complete confusion of powers”.
There then follows the text of the second sentence of the first paragraph of Article 33 which is described in that report as the result of a fundamental examination of the problem and is appraised with the following words:
“Thus it has been possible to achieve the indispensable reconciliation of the concern to maintain within legal limits the action of the High Authority and the necessity which is no less great of not obstructing that action in a field where economic, political or social considerations require a continuous appraisal of the factual circumstances which normally fall outside the jurisdiction of a judge”.
In my opinion the Court should examine the statement of reasons laid before the parliaments of the other countries. In my view they would not reveal any divergent views.
These reasons have also been recognized by legal writers. For example Ule in his article “Verwaltungsgerichte überstaatlicher und internationaler Organisationen” (Deutsches Verwaltungsblatt 1953, pages 491-497) admits despite some doubts that no other solution is conceivable; economic policy must be adapted to changing circumstances and cannot therefore be subject to a long-term fixed legal ruling and a judge cannot be allowed to determine economic policy.
From the ratio legis it may be deduced in respect of the concept of manifest failure to observe the Treaty that the judge must be in a position to find it without substituting his own economic policy for that pursued by the High Authority; it was intended that this should be avoided by the restrictions on the Court's powers of review.
Under the Treaty a control is provided for the economic policy of the High Authority; it is contained in Article 24 of the Treaty which obliges the High Authority to submit a general report to the Assembly each year on its activities. If a motion of censure is adopted with the requisite majority against this general report — that is a motion which disapproves of the general economic policy of the High Authority — the High Authority must resign as a body. This control of a political nature which cannot be implemented by juridical means was in my opinion deliberately denied to the Court.
The restriction of judicial control is particularly relevant in respect of the question of the necessity and appropriateness of a measure which, as Steindorff, who has often been cited in the course of the proceedings, stated in his report on an action for annulment, in general can not be answered by means of a logical conclusion. Although Steindorff thought that the French word“patent” must have a weaker meaning than the French word “manifeste”, a word which had at first been chosen for the text of the second sentence of the first paragraph of Article 33, and although that article in general does not require undeniable and obvious unlawfulness but regards a serious deviation of the administrative decision from the view of the Court as “méconnaissance patente” Steindorff believes that for the question whether a measure was necessary or appropriate, the term must only be accepted subject to strict conditions and that in this respect the view of the Court must differ very widely from that of the High Authority.
In my view it is superfluous to seek an exhaustive definition beyond these points of reference. The progressive development and clarification must be left to subsequent practice; the application to the present instance will reveal whether it is necessary to define the limits more closely.
(b)
The question whether the fixing of maximum prices with a weakening economy is detrimental if it results in a freezing of the price structure is a question of abstract economic theory. The applicant supports its view with psychological considerations and itself admits that it can never be proved. It ignores the fact that the prices fixed could be adapted to an economy which is weakening further if the undertakings do not do so themselves in which case the maximum prices will certainly not stand in their way. The whole system of prices established by the High Authority in March 1954 has been again further relaxed in comparison with earlier provisions so that the general tendency is by no means towards a freezing of the price structure. Finally, actual developments contradict the arguments of the applicant: to a certain extent the Ruhr coalfield has given considerable rebates and the coalfield of the Nord and Pas-de-Calais has also made price reductions.
By their very nature economic decisions such as those contested here, adopted for a limited period in the future must be justifiable not only at the time of their adoption but also in the context of economic developments after their adoption and having
regard to the objectives of the Treaty. Thus the adoption of a decision entails the evaluation of anticipated factors. The decision, seen in retrospect from the time when the evaluation of the situation existing at its adoption is being judicially examined, can be said to have proved satisfactory, having regard to the aims of the Treaty, in particular in ensuring the lowest prices and continued employment. In brief, as is well known to the Court, pit-head stocks have fallen, supply difficulties are said to exist for certain grades of coal and, because of inter alia the increase in sea freight charges, imported coal has become more expensive; these are all market factors pointing away from reduced or unchanged prices for coal. After decades of the fixing of prices by administrative action it must not be overlooked that by means of the second decision of the High Authority after only the first year of the five year transitional period the freeing of prices has to a large extent already been achieved. In so far as the Common Market is achieved and normal competitive conditions are established complete freeing of prices may become the general rule and the fixing of price limits restricted to exceptional cases. In my opinion these considerations are sufficient to support the conclusion that the arguments of the applicant certainly do not suffice to prove the existence of manifest failure to observe the general objectives of the Treaty and the requirements of Article 61 in particular.
(c)
There remains for consideration the view of the applicant that where there is an over-supply prices cannot be expected to increase and that for that reason maximum prices were not necessary.
The first conclusion is shared by the High Authority which also did not expect price increases for those grades of coal in plentiful supply. However, it was of the opinion that in view of the market situation that was not sufficient and that a reduction in prices was required. It concluded from inquiries made of the undertakings that they were not prepared to introduce a reduction in prices themselves. I have already stated that this factual basis has not been contradicted by the the applicant (supra, p. 122).
The applicant also appears to admit that in this respect maximum prices may be necessary — it only contested this on the grounds that the fall in prices would occur of its own accord after a certain time. However, the applicant does not believe that the High Authority fixed maximum prices for that purpose; it reaches this conclusion from the fact that the maximum prices are not substantially lower than the prices which were actually applied previously. In other words the applicant believes that maximum prices are not necessary in so far as they were fixed at the level of the prices applied previously in spite of the plentiful supplies available. If this is in fact the position then it calls for an examination whether the High Authority manifestly failed to observe the requirement of “necessity”. It is therefore necessary to undertake first of all a factual comparison of prices. In this comparison of prices it must be borne in mind that the maximum prices for types of coal merely constitute absolute limits below which the prices for grades of coal must lie. Consequently the specific limits for grades are important. As has already been stated limits have been fixed for grades which were previously subject to no maximum prices and therefore in general terms only the list prices can be compared. In the answer given by the High Authority to the second question put to it by the Court it was rightly stated that the level of prices of a coalfield as a whole must be considered. A further point was mentioned which up till then had been neglected, namely production costs.
Article 3 (c) does not merely prescribe the lowest prices but imposes two conditions: the prices fixed must not be so low that they ‘result in higher prices charged by the same undertakings in other transactions or in a higher general price level at another time’; furthermore the prices fixed must allow ‘necessary amortization and normal return on invested capital’. In this connexion reference may also be made to Article 3 (d) which requires ‘the maintenance of conditions which will encourage undertakings to expand and improve their production potential’.
(d)
In respect of the Ruhr coalfield the comparison reveals that the list prices of all five grades for which price limits were fixed have fallen by DM 2. That is a reduction of around 4 % or for blast furnace coke a reduction of around 3 %. Taking account of the production costs which in the view of the undertakings only reveal a reduction of DM 0.50 this amount can certainly not be regarded as insignificant. In the course of the oral proceedings the High Authority stated that the intended stimulus for the steel industry has occurred as a result of this reduction and this statement was not disputed.
As against this, in the case of the grades which were restricted until 31 March 1954 and have since been freed the list price is unaltered for two grades while for one grade it has increased by DM 2.
This development appears to confirm the expectation of the High Authority that without its intervention prices would not have fallen and to confirm also its intention to effect a reduction in prices. In any event it may not be deduced from this that maximum prices were clearly unnecessary for the Ruhr coalfield.
(e)
In respect of the coalfield of the Nord and Pas-de-Calais the comparison reveals the following situation:
The list price of three grades has fallen by between 2 and 4 %. The price of three other grades has remained unchanged and the price of one grade has risen by about 2 %. On the contrary, in the case of the two grades which have been freed the price of one has remained unchanged and that of the other has increased by 220 French francs.
In respect of the coalfield of the Nord and Pas-de-Calais it may therefore be asked whether the fixing of a maximum price was necessary for the three grades the prices of which have remained unchanged. If one first examines the fourth grade, the price of which has even increased — it is the ‘Braisettes 10/20’ of the ‘demi-gras’ type — it is found that the maximum price was reduced from 6540 French francs to 6000 French francs. While use was made of the maximum price of 6540 French francs only to the extent of 5880 French francs the list price of 6000 French francs has now been increased to the upper limit. From this it may be concluded that there was for this grade a tendency to increase in price and this tendency had to be checked; in this respect also then the fixing of a maximum price was necessary.
The example equally shows that the price trends of individual grades may be contrary to the general trend. The same applies to availability: even if there are large overall stocks there may be shortages of certain grades. These factors must be taken into account for the remaining three grades. Further the above-mentioned observations as to production costs should be borne in mind as should also the necessity to prevent undertakings from compensating for a prescribed reduction by increases for other grades by means of fixing the existing level of prices.
In respect of one grade, ‘fines brutes’ no price limit had previously been set. It may therefore be assumed that the price level attained at the time had to be maintained and that it was necessary to prevent the increase which might be expected so that here too the fixing of maximum prices was justified in spite of the identical list prices. May I refer again to the above-mentioned report of Charbonnages de France to the effect that the market would allow of no higher prices than the current ones and also to the Second General Report of the High Authority (p. 75, No 54) to the effect that in the opinion of the High Authority a reduction in prices for Ruhr coal and the maintenance of the level of prices for the coalfield of the Nord and Pas-de-Calais was in closest accord with the market situation and was therefore taken as the basis for the contested decisions.
(f)
I may therefore summarize this part of my examination as follows:
Even if the concept of manifest failure to observe the Treaty is widely interpreted it cannot be held that in the present case the High Authority has fixed maximum prices which were manifestly not necessary. Otherwise it would be hardly possible to see why three members of the Council of Ministers and, having regard to the still incomplete functioning of the Common Market and especially of competition, 15
members of the Consultative Committee should have seen the necessity for further maintenance of maximum prices for a limited period. Accordingly the High Authority is by no means alone in its judgment as to the necessity of the decision but it is backed by eminent experts who share its opinion. In these circumstances I do not believe that there exists manifest failure to observe provisions of the Treaty.
(4) Method of fixing maximum prices
In the context of my examination with regard to the infringement of the Treaty I should like to examine the legal scope of Article 61 whereby the High Authority may fix maximum prices for one or more of the products subject to its jurisdiction within the Common Market.
In this connexion the applicant did not allege an infringement of the Treaty in the course of the written procedure but in the oral proceedings raised the question whether it was admissible to fix prices solely for individual undertakings. As Counsel for the applicant pointed out the question must be examined of the Court's own motion as in certain circumstances there could exist an infringement of Article 61 (a).
Article 61 provides for the fixing of prices for one or more of the products subject to the jurisdiction of the High Authority within the Common Market. From this it could be concluded that the fixing must be comprehensive, that it must be a general decision which has the aim of determining the level of prices for the whole of the Common Market. Accordingly the Treaty prescribes prior studies made jointly with undertakings and associations of undertakings and consultation of the Consultative Committee and the Council in which all Member States and all the principal producer and labour organizations of the Community are represented. That article may be contrasted with provisions such as Article 66 (7) which provides for fixing of prices for an individual undertaking. Under the latter article recommendations are sent directly to the undertaking; if they are not implemented the High Authority can determine inter alia the prices and conditions of sale to be applied by the undertaking in question in which respect consultation with the government concerned is the sole requirement.
The question is thus raised whether, by means of the contested decision, the High Authority in fact undertook a general fixing of maximum prices and determined the level of prices of the common market for coal.
Such fixing of the level of prices in the Common Market does not need to include all undertakings down to the smallest producers in the same way as it does not need to include all products. This is clear from the principle of Article 5 which prescribes limited measures of intervention and expressly restricts measures of intervention on the market with the requirement that the circumstances must require such measures. Thus in its preamble to Decision No 6/53 which I have already mentioned at the beginning of my opinion the High Authority correctly stated ‘that in accordance with the general objectives of the Treaty maximum prices in the Community may only be fixed if and in so far as the maintenance of the present level of prices’ — and there should here be added the establishment of a level of prices in accordance with the market — ‘is not ensured by competition between coalfields; the fixing of maximum prices must be achieved by a method which allows the progressive development of the free play of forces on the Common Market’.
In an examination of the methods whereby the prices were fixed in the present instance the actual circumstances and the whole situation must be taken into account. I can here give a brief resume of the situation: the Belgian and Italian coal undertakings are not yet fully subjected to the competition of the Common Market; special fixed prices are laid down for the Belgian undertakings. There remain the German coalfields of the Ruhr, Aachen and Lower Saxony, the French coalfields of the Nord and Pas-de-Calais, Lorraine and Centre-Midi, the coalfield of the Saar and the Dutch coalfield in Limburg. Even at the beginning of the transitional period no maximum prices were fixed for the Lower Sax ony and Centre-Midi coalfields. For the Aachen (9/54) and Lower Saxony (7/54) coalfields and for sales to the Federal Republic of Germany from the Saar (11/54) and Lorraine (10/54) there exist zone prices which allow alignment with the prices for comparable fuels from the Ruhr. In respect of sales from the coalfields of the Saar (13/54) and Lorraine (12/54) to certain areas of France alignment is prescribed with the corresponding prices of the Nord and Pas-de-Calais coalfield. In practice those coalfields have to apply the zone prices in order to find a market for their products.
From this the following conclusion may be drawn: in so far as the High Authority regarded a maximum price limit for certain types and grades of coal within the Common Market as necessary it implemented it, having regard to competition and marketing, in the simplest manner and the one which entailed the least interference by setting upper limits for the prices concerned for both the largest coalfields of the Community. Those two coalfields together provide approximately 60 % of the coal production of the Community; Belgium, for which prices are fixed, produces a further 13 %. Therefore in conjunction with the zone prices a general measure was taken which has the result of controlling the level of prices throughout the Common Market to the necessary extent.
In view of the circumstances existing at the time of adoption of the contested decisions therefore Decision No 18/54 does not infringe Article 61 of the Treaty by the manner in which it fixed maximum prices. In any event the High Authority will have to examine whether in view of changing circumstances and the progressive development of the Common Market it will not have to change to another method when it undertakes any fixing of prices which may be necessary.
II. Misuse of powers
It only remains for me to examine whether and to what extent misuse of powers can be established. The arguments brought by the applicant in support of this second ground of action, in particular in the learned speeches of the professors and counsel for the applicant in the course of the oral proceedings, may be summarized as follows: The High Authority was able to and was under an obligation to proceed against the selling organizations of the Ruhr coalfield and the Houillères du Nord et du Pas-de-Calais under Articles 65 and 66 of the Treaty.
In order to be able to avoid that procedure the High Authority applied Article 61. It negotiated with the cartels and capitulated to them; it countered the detrimental effects of its failure to act, which constituted a breach of its duty, by fixing maximum prices under Article 61 which was not intended for that purpose. In this respect I may quote in French a passage from the submissions of Professor Verzijl taken from the French text which has been given to us:
‘La Haute Autorité s'est avisée de faire intervenir les cartels interdits par le Traité comme conseillers pour les “études (à faire) en liaison avec les entreprises et les associations d'entreprises” visées au début de l'art. 61, et elle est même entrée en négociations avec eux sur le niveau de leurs prix…’
(The High Authority decided to admit the participation of cartels prohibited by the Treaty as advisers in the ‘studies made jointly with undertakings and associations of undertakings’ referred to at the commencement of Article 61 and it even opened negotiations with them on the level of their prices…)
The applicant further stated that there is evidence that the ostensible intention of effecting a reduction in prices was not the true reason for the decision. This may be concluded from the fact that the maximum prices which were fixed were only in part and only to an insignificant extent below the list prices which had previously been applied.
In view of the preceding examination it is barely necessary in my opinion to state that this allegation is without foundation.
(1) The Ruhr coalfield
In respect of the Ruhr coalfield it has already been stated that the prohibition contained in Article 65 is not yet applicable to the selling agencies of the Ruhr. The question whether the High Authority could have concluded the authorization procedure before March 1954 — the date of the adoption of the contested decisions — is not the issue in the present proceedings. In this instance it is only possible to examine whether the High Authority exercised the powers granted to it by Article 61 (a) of the Treaty in pursuit of an aim for which those powers were not authorized so that its decision, the results of which is not open to objection, is based on extraneous and unlawful considerations. It has already been stated that the taking into account of the existing market structure does not constitute such a wrongful consideration and was moreover required of the High Authority. From the end of the first trading year for coal and the expiry of the decisions relating to prices which were limited to that period the High Authority was under a duty to form a fresh judgment as to the necessity for maximum prices. To ensure a correct judgment the participation and consultation of various bodies was prescribed in which, as is evident from the documents submitted, opinions on this question were divided. The fact that the High Authority answers the question in the affirmative but has relaxed and substantially limited the system of maximum prices in comparison with the former system reveals clearly the ground on which the decision was based: that so far as possible account must be taken of all the considerations raised.
As regards the objective pursued by the decision it has already been stated that in conjunction with the remaining decisions as to prices, in particular the zone prices, which have been adapted to the new method of price fixing, the decision set an upper limit for the level of Common Market prices to the extent deemed necessary; however that was the purpose laid down by the Treaty of the powers of the High Authority under Article 61 (a). Finally, comparison of the maximum prices fixed with the list prices which had been applied up till that time reveals that the latter are generally 3 % to 4 % lower. So from that no indication of any other intention can be derived.
In its first two judgments the Court has already ruled that the inclusion of a reason for a measure which in itself is open to objection does not constitute misuse of powers if the decision is primarily based on lawful reasons and does not abandon the essential object. In the present instance it cannot even be said that the additional reason of gaining time for a fundamental examination of the question of cartels was open to objection. In the view of the applicant the High Authority should have prohibited the cartel completely and should have had prices fixed by the liquidators, certainly one of the most far-reaching measures of intervention for which the Treaty makes provision. By applying the less far-reaching Article 61 the High Authority in fact achieved the same result and it avoided the dropping, without replacement, of activities of those organizations which could be authorized. Reference may be made to the regulations which established those organizations, the purposes of the organizations as defined there and their obligations. The applicant, which frequently and quite correctly emphasized the liberal nature of the Community, demands here, on the contrary, a drastic action without compromise. I may say that its arguments lack concern for the economic consequences and the other objectives of Article 3 of the Treaty. Responsibility therefore is however borne by the High Authority which must justify its economic policy to the Assembly. I believe that as provided in Articles 46 and 48 of the Treaty undertakings may form associations and negotiate with the High Authority. It can be established from the documents submitted by the applicant that it was with the association of undertakings of the Ruhr that the High Authority negotiated, as was also said by Professor Verijn Stuart in his submissions in the French text before me:
‘… Ainsi qu'il est permis de le conclure des pièces du procès, elle s'est davantage livrée à des négotiations avec les producteurs de la Ruhr…’
(…it may be concluded from the documents submitted that it (the High Authority) also entered into négotiations with the producers of the Ruhr …)
I therefore believe that it is erroneous to speak of capitulating to the cartels.
(2) The Nord and Pas-de-Calais coalfield
I may now turn to the coalfield of the Nord and Pas-de-Calais. The same reference points apply but certain special features must be borne in mind.
If it is assumed as was done by the parties that this coalfield constitutes an undertaking with a dominant position in the Common Market within the meaning of Article 66 (7) because the coalfield is not yet fully exposed to competition by reason of the sales system which still exists between the countries of the Community, the particular the international transport tariffs, it must be recognized first of all, in agreement with the applicant, that this factual situation for which the undertaking is not to blame does not exclude application of Article 66 (7). That provision could rather have been applied in the case of an abuse of the dominant position on the market for example by demanding unjustifiably high prices. The fact that the High Authority did not wait for such abuse does not signify that the decision taken was a misuse of powers. The considerations on which it is based and the objective which is thereby pursued have already been specified. The fact that the High Authority included that coalfield in its general fixing of maximum prices because it deemed such action necessary in view of the still insufficient competition constitutes an admissible reason for such a decision. The alterations in prices in that coalfield are not uniform. It has, however, already been stated that the maximum prices which were fixed at the previous level, and in one case above the previous level, can be justified so no indication of misuse of powers can thus be deduced.
The allegation of misuse of powers is therefore without foundation.
III — Infringement of essential procedural requirements
1.
The last allegation concerning the breach of essential procedural requirements is justified by the applicant on the grounds that the High Authority did not specify the true reasons for its decision with the result that the decision does not state the reasons on which it is based or at least does so insufficiently. It challenges the fourth recital in the preamble where it is stated that by virtue of the market structure ‘there could result within the Community effects contrary to the objectives laid down for the High Authority by Article 3 of the Treaty either with regard to prices or production or the employment of labour’. In agreement with the applicant it must be admitted that this formulation is imprecise. In Decision No 6/53 the High Authority particularly specified Article 3 (c) and similarly it expressly based that decision on the first paragraph under letter (a) of Article 61 while Decision No 18/54 simply states its basis to be Article 61. It should, however, be borne in mind that the part of the preamble which has been reproduced concerns the reference to the abstract circumstance set out in the Treaty which can be interpreted in the light of the concrete factual situation. From the fact that in its second recital the High Authority states that in the absence of the fixing of maximum prices, the prices of coal would in fact be determined by the selling agency of the Ruhr coalfield, and by the Houillères du Nord et du Pas-de-Calais it is clear, as has already been pointed out in the course of the examination of the allegation of infringement of the Treaty, that the High Authority regarded the formation or maintenance of unjustifiably high prices as imminent and wished to prevent this by means of its decision. The fact that the High Authority now states these reasons in its written submissions is to be regarded as providing further details to the formal statement of reasons contained in its decision which could have been deduced by interpreting that statement of reasons and therefore it does not constitute a belated and inadmissible act. It is also evident from the facts in the present case that the High Authority was not satisfied with an uncertain possibility of effects which had to be countered — a hypothesis in which the High Authority would have relied on legally incorrect considerations.
There cannot be found to exist an infringement of essential procedural requirements in this respect.
2.
However, it is necessary for the Court of its own motion to examine this ground of action from another aspect. Under Article 61 the High Authority must make the finding that maximum prices are necessary; in this question of suitability and economic policy it possesses a wide discretion in its appraisal which can only to a limited extent be re-examined by the Court. To counter-balance that the High Authority has a particularly extensive duty of examination and consultation which is intended to ensure the formation of a proper judgment in this respect. For that reason correspondingly strict requirements apply to compliance with this obligation.
There is a need for such an examination because at the meeting of the Council of Ministers of 13 March 1954 one member put forward the view that the negotiations which had taken place had merely been a repetition of the exchange of views of 27 February 1954 and did not constitute formal consultation as the High Authority had made no concrete suggestions; consequently the maximum prices could not lawfully be maintained in force (Document 347/5 of the Council of Ministers, pp. 37 and 38 and p. 55). It is correct that at the meeting on 13 March 1954 the High Authority did not expressly indicate the position it would adopt on the questions raised. However, in the present instance it did not need to take a new decision in order to free prices as the time-limit for the existing decisions was set at 31 March 1954 and on that date they automatically became inoperative. Therefore the consultations requested pointed to the possibility of maintaining the system of maximum prices. The grounds which the High Authority intended to rely on for such a decision may be deduced from the individual questions which the High Authority submitted both to the Council of Ministers and the Consultative Committee. As my learned colleague indicated in his opinion in Case 2/54 in respect of the Consultative Committee, that committee is not a body that must give its opinion on a text but consists of experts who are concerned in the matter and who can give the High Authority information and advice on economic problems so that it has to hand all the elements of the problem facing it. In its judgment in that case the Court of Justice ruled that the High Authority together with the Consultative Committee could rightly consider as an opinion the minutes of a meeting reflecting a collection of opinions. This consideration is applicable by analogy to the Council of Ministers whose main task according to the Treaty, is ‘to harmonize the action of the High Authority and that of the governments, which are responsible for the general economic policies of their countries’. Although in general it is necessary or at least appropriate that the High Authority produces for consultation an opinion with the statement of reasons, in the present case it appears that the Council was so well informed as to all questions and all possibilities of this complex problem that there was sufficient consultation. The Council of Ministers itself, with one member dissenting, expressed that view. As regards the question of the level of prices, which moreover was not challenged in the application, the Council expressly restricted itself to a general opinion and refused to enter into specific problems such as the prices of various grades as this was a matter for the High Authority. As to the question of the suitability of continued fixing of maximum prices the consultation could not have been more extensive if the High Authority had unequivocally stated that it intended to maintain the system of maximum prices for the reasons which were evident from its individual questions. From this point of view as well there cannot be said to be an infringement of essential procedural requirements.
C — Summary and conclusions
I may summarize my views as follows:
(1)
Decision No 18/54 does not infringe the Treaty. The High Authority did not base its decision either on incorrect facts or considerations which were legally inadmissible. In its judgment as to the necessity of fixing maximum prices there cannot be found to exist manifest failure to observe the provisions of the Treaty. Finally, in the circumstances existing at the time of adoption of the decision and taking account of the price system as a whole, the method of fixing maximum prices is not open to objection.
(2)
In exercising the powers conferred on it by Article 61 the High Authority was not guided by extraneous and unlawful considerations nor was an objective, the pursuit of which was not authorized by Article 61 a decisive factor.
(3)
Furthermore, no essential procedural requirements have been infringed as the statement of reasons for the decision and the degree of prior consultation were sufficient.
For those reasons I conclude:
that the application should be dismissed and the decision on costs made pursuant to Article 60 (1) of the Rules of Procedure.
( ) Translated from the German.
( ) Translator's note: This is the statement of reasons for the draft law authorizing the ratification of the Treaty. |
OPINION OF MR ADVOCATE GENERAL LAGRANGE ( )
Summary
General considerations
‘Improponibilità’ and admissibility
Misuse of powers in general
French law
Belgian law.
Luxembourg law
Italian law
Netherlands law
German law
Conclusion
Misuse of powers under the Treaty
Application to present case
Mr President,
Members of the Court,
It remains for me to express my views on the last two applications and, I think with the agreement of the parties, I should like to be allowed to consider them together. As the Court will be aware, I am referring to Application No 3/54 from the Associazione Industrie Siderurgiche Italiane (ASSIDER) and to Application No 4/54 from the Associazione Industrie Siderurgiche Associate (I.S.A.). ( )
I regard it as essential to deal jointly with these two applications which, like the two earlier ones, not only impugn the same decisions but are based on precisely the same grounds, rely with slight variations on almost the same arguments, and call for a decision on the same issues as to both admissibility and substance.
General considerations
I must begin by quoting the words of the second paragraph of Article 33 of the Treaty:
‘Undertakings or the associations referred to in Article 48 may, under the same conditions, institute proceedings against decisions or recommendations concerning them which are individual in character or against general decisions or recommendations which they consider to involve a misuse of powers affecting them.’
The words ‘under the same conditions’ refer to the first paragraph, which is concerned with actions brought by Member States or the Council: this means that applications by undertakings or associations are also actions for annulment on grounds of lack of competence, infringement of an essential procedural requirement, infringement of the Treaty or of any rule of law relating to its application, or misuse of powers, and that the restrictions imposed on the jurisdiction of the Court relating to the evaluation of the situation resulting from economic facts or circumstances are equally applicable to actions by undertakings or associations.
But in the case of the latter there is a further restriction based on the nature of the decisions or recommendations which may be impugned: they may institute proceedings only ‘against decisions or recommendations concerning them which are individual in character’or ‘against general decisions or recommendations which they consider to involve a misuse of powers affecting them’.
It is not disputed that the two associations before the Court are associations of undertakings within the meaning of Article 48 of the Treaty; nor, for their part, do they dispute that the three decisions which they are contesting are ‘general decisions’ but they contend that those decisions ‘involve a misuse of powers affecting them ’ — affecting each of them. These applications would, therefore, appear to be admissible.
‘Improponibilita’ and admissibility
Nevertheless there is some dispute on this point. The High Authority considers that both applications are not only inadmissible but ‘improponibile’. I use the Italian word which, despite all their expertise, the Court's interpreters have stated that they are unable to translate.
‘Improponibilita’ appears to be a legal concept peculiar to Italian law, specifically administrative law. As I understand it, it is a kind of absolute inadmissibility which is an automatic, independent and absolute bar to proceedings. In French administrative law, with which I am more familiar, there can be traced suggestions of a similar concept which is, however, far less clearly defined. What are more easily recognized are cases of an absolute bar to proceeding with a case (‘fins de non-recevoir d'ordre public’) — a matter which the Court must raise even of its own motion — and those in which the bar may be defeated. Some of the former no doubt resemble the concept of ‘improponibilita’; I refer for example to an application which is not submitted on stamped paper or which has not been submitted for the fiscal formality of registration, and which must be automatically set aside without even being read. But this is of course only a legal fiction because, to take the example I gave, the possibility may arise in a particular case that the application may specifically fall into a category which is exempt from the formality of stamping or of registration and this can only be established by reading it.
I have no wish to go further into this subject especially because, as the High Authority itself recognized without difficulty in its rejoinder, there is no question here of applying either Italian or French law or that of any other country of the Community but of applying the law of the Treaty and it is solely for the purposes of construing the law of the Treaty that, whenever it appears necessary to that end, reference must be made to the position in national law.
In the present case this does not appear necessary. In my view, a study of the reference in Article 33 to actions for annulment makes it abundantly clear that there are, on the one hand, conditions for admissibility and, on the other hand, what are in French administrative law called ‘cas d'ouverture’ but which may be given any other name and which are the four grounds for annulment set out in the article.
As regards the question with which we are concerned, namely the admissibility of the proceedings instituted by an undertaking or an association of undertakings against a general decision, the wording of Article 33 appears to me to be perfectly clear: undertakings and associations ‘may… institute’ such proceedings ‘against general decisions or recommendations which they consider to involve a misuse of powers affecting them’.
This does not of course mean that they are necessarily right: does the general decision involve or not involve a misuse of powers and a misuse of powers affecting them? It is for them to prove it. Nor, on the other hand is it enough to plead a misuse of powers and to add that it was committed in relation to the applicant, in order to invoke the other grounds of action: lack of competence, infringement of an essential procedural requirement, infringement of the Treaty or of any rule of law relating to its application. Those grounds may be relied upon if, in addition, the decision involves one or more of these defects (the Treaty in no way prevents it and such a case might easily arise) but it must first be established that a misuse of powers affecting the applicant has been committed. This is one of those cases, recognized by national law, in which admissibility is linked to the substance.
I can find no place in the system tor an additional concept of absolute inadmissibility or of ‘improponibilita’. On the contrary, since admissibility in all cases depends upon consideration of the substance, it follows that the normal rules of procedure must be observed and that, for example, there can be no question of setting aside the application on sight without notifying the defendant, which would, however, be the only practical justification for reference to a concept such as that of ‘improponibilita’.
Misuse of powers in general
At the same time the dual question of what is to be understood by ‘misuse of powers’ within the meaning of the Treaty and by the words ‘affecting them’ as a special requirement imposed on undertakings and associations remains unanswered and, in my view, deserves detailed examination.
On the first of these two aspects I think reference must be made to national law. The concept of misuse of powers was obviously not invented by the authors of the Treaty and, in making an attempt to reach a conclusion on what ought to constitiute misuse of powers in terms of the Treaty (a conclusion which in any case must, of necessity, be open to revision and to adjustments commensurate with the evolution of case-law), the first task is to establish what it consists of in the law of each of our six countries. I must immediately add, however, that I do not intend at this juncture to embark upon a proper, scholarly study of comparative law because this is not part of my duties and would certainly take me too far afield. All I wish to do is to try to cover the essentials as concisely and objectively as possible.
French law
I take the liberty of beginning with French law because French administrative law and, in particular, proceedings for excès de pouvoir played a predominant part in the drafting of the Treaty. The ‘Report of the French Delegation’ on the Treaty has this to say on this subject:
‘The Treaty reflects the classic distinction in French administrative law between proceedings for annulment (actions for excès de pouvoir) and proceedings in which the Court has so-called 'unlimited jurisdiction’;
and a little further on:
‘Three of the four traditional grounds for proceedings for excès de pouvoir (lack of competence, infringement of an essential procedural requirement, and misuse of powers) were accepted without difficulty: the concept of misuse of powers was, in particular, very well understood and readily accepted by our foreign partners’
And this is what was said in the preamble to the German law authorizing ratification of the Treaty:
‘Any undertaking or association coming within the jurisdiction of the Community has the right to bring an action in the same way as a Member State or the Council of Ministers. The grounds on which an action may be based are set out in the first paragraph the terms of which have been borrowed from French theory of excès de pouvoir, the basic features of which are the same as those of German theory on wrongful acts or omissions by an administrative authority’.
In French law misuse of powers is very generally defined as the action of an administrative authority in ‘using its powers for a purpose other than that for which those powers were conferred upon it’. This is the form of words used in a large number of judgments of the Conseil d'Etat. It is reproduced verbatim by Alibert in Le contrôle juridictionnel de l'Administration au moyen du recours pour excès de pouvoir 1926, p. 236. In Droit Administratif (p. 389) de Laubadère states: ‘There is a misuse of powers whenever an administrative authority properly carries out an act within its powers but for a purpose other than that for which the act may lawfully be performed’. In his Cours de Contentieux Administratif (latest edition) Volume III, p. 615, Odent writes as follows: ‘The defect of misuse of powers arises when a power has been deflected from the objective for which it was instituted and has been used for purposes other than those for which it was intended’. And a little further on he adds: ‘Misuse of powers arises when the spirit of the legal rule is ignored. In order to detect a misuse of powers the Court … cannot restrict itself to appraising the external or even merely the objective legality of the decision referred to it; it must establish the reasons which motivated the author of the decision and determine whether those reasons were sound in law’.
This is what distinguishes misuse of powers from the other grounds, excès de pouvoir (ultra vires acts), and in particular infringement of the law: it means establishing the real aim pursued by the author of the decision, in other words, it involves an essentially subjective enquiry into intent.
Historically, misuse of powers arises directly from lack of competence. As the Court will be aware, until 1872 the only legal basis for an action for excès de pouvoir (which in its entirety, is in fact purely a judge-made doctrine evolved by the Conseil d'Etat), was a revolutionary law dictated by expediency, the law of 7 to 14 October 1790; moreover the Conseil d'Etat discovered it only in 1832. Prior to that date it refrained from referring to any legislative provision whatsoever. The 1790 law was the consequence of a disagreement which arose between the ‘directoire’, that, is to say, the executive authority for the Department of the Haute Saône, and the municipality of Gray but which, in keeping with the methodical disposition peculiar to people of that period, had been solved on a basis of principle. The law read as follows: ‘Claims of want of competence on the part of administrative bodies shall in no circumstances be entertained by the courts; they shall be brought before the King as the head of the general administration’. Accordingly, excès de pouvoir was the act of a public authority in going beyond the limits of its powers. But Alibert continues (op. cit. same page): ‘On close examination misuse of powers is a kind of want of competence. A decision which involves misuse of powers is to a certain extent vitiated by want of competence if not on account of the provisions which it lays down at least on account of the aim which it seeks to achieve. It can be understood therefore that the concept of misuse of powers was at an early date developed by case-law, which very logically deduced this ground for the annulment of administrative acts from the earlier ground, namely, want of competence properly so-called or usurpation of powers: to use a power for other than its lawful purpose is in fact to act without competence’.
In fact this is where we find the rule which governs the whole of administrative law, the principle of the purpose pursued. In contrast to the rights of private individuals the exercise of which, at least in a free system, is (apart from restrictions laid down by the law) limited only by the need to respect the rights of other private individuals, the rights of public authorities which are in fact powers, may be exercised only for the purposes for which they have been vested with those powers. Obviously these purposes are, in the first place, the public interest, what is called the ‘good of the service’ for which the Administration was created and which is nothing other than the embodiment of the common good which is the foundation of social order. But to this must be added a concept of specialization which is quite simply dictated by the need for order and organization. The Administration has many, varied duties and each of the public services has a specific task to fulfil, a specific aim to pursue.
There are in fact administrations within the Administration with a capital A. The powers vested in each one of them are therefore themselves limited (even if no legislative provision so specifies) by a purpose which is peculiar to it. And, to return to misuse of powers, this can accordingly be present also in cases where the objective pursued is not in itself unlawful or in conflict with the public interest but where the authority has not acted for the purposes which within its special province it was obliged to pursue. We are here still nearer to want of competence properly so-called. To conclude this brief analysis of French law in the matter of misuse of powers it must be borne in mind that case-law accepts this plea on fairly strict conditions. The concept of proof is, generally speaking handled with considerable flexibility and, if I may say so, tact, by an administrative court, which follows the principle of judicial investigation. When, on the other hand, it is dealing with misuse of powers it requires proof to be supplied by the plaintiff or to be clearly forthcoming from the file. The reason for this is the need for inquiry into subjective intention, which must not be the subject of a priori suspicion; until the contrary is proved the Administration must be presumed to have acted in the interests of the service for which it is responsible.
Finally I ought to add that we have in France for a number of years and, in particular, since the last war witnessed a marked decline in misuse of powers which, so to speak, reached its peak roughly in the period from 1890 to 1920. I cannot develop this point because it would require a detailed study of judicial precedents. In any case this study has in my view been adequately made by Mr Letourneur, Maître des Requêtes in the Conseil d'Etat in L'Appréciation du fait par le Conseil d'Etat de France (Recueil de Jurisprudence du Droit Administratif et du Conseil d'Etat, Brussels, 1952, p. 81 et seq.).
I confine myself to saying that this ‘decline’ is explained at least in part by the parallel development of the concept of infringement of the law, that is to say, in short, by recourse to an objective review, which the Conseil d'Etat seems increasingly to prefer to the subjective examination which the misuse of powers involves. This is brought out very clearly in the study to which I have just referred.
Belgian law
From France I turn to Belgium. In this case my comments will be shorter not because the creation of the Belgian Conseil d'Etat is still too recent to have enabled case-law to be established (on the contrary a substantial number of judgments makes it possible to obtain a fairly clear idea of the trend of that case-law) but because, on the point with which we are concerned, namely the concept of misuse of powers, its formulation in French law has been precisely and deliberately reproduced in the Belgian Law.
The Law expressly refers to it. This is done in Article 9 of the Law of 23 December 1946‘under which “the section d'administration” (of the Conseil d'Etat) shall deliver judgment in proceedings for annulment for infringement either of an essential procedural requirement or of procedural requirements prescribed on pain of nullity, for ultra vires acts or for misuse of powers (excès ou détournement de pouvoir) which may be brought against the acts and regulations of the various administrative authorities or against contested administrative decisions’.
Reference to the preparatory documents reveals the following in the statement of grounds:
‘It is quite understandable that any public authority is liable to misdirect itself either in assessing its own powers or in applying the provisions of law which it is under a duty to enforce. The law vests it with these powers for specific purposes. If it uses its powers for purposes other than those laid down, expressly or by implication, by the legislature, it disregards the will of the latter and this disregard amounts to acting ultra vires (excès de pouvoir) or even, “to use a term which is common in France, “détournement de pouvoir” (misuse of powers)”.’
As far as the parliamentary debates are concerned, I take the following passage from the discussion which took place in the Senate:
‘As regards excès de pouvoir (ultra vires acts)’, said Mr Devèze, Minister of the Interior, ‘one understands immediately what is meant: “I, as Minister, go beyond the scope of the powers which I possess under the law. I exceed my powers”. That is the excès. But what, then, is misuse of powers? The Rapporteur states that it is the performance of an act required by one's office and in the prescribed form but producing a result other than that envisaged by the Law. In contravening the spirit of the law one has diverted from its true object the power with which one has been vested: in the guise of police regulations, a municipal authority in fact restricts freedom of trade, the freedom of the press, the freedom of opinion and of religion, or the right of association. Those are the words of the Rapporteur. In my view misuse of powers is, in short, the act of an administrative authority which, while performing an act within its powers, fulfilling the procedural requirements prescribed by the law and acting in conformity with the letter of the law nevertheless uses its powers for a purpose other than that for which those powers were conferred upon it.’
The Court will recognize the classic definition repeated word for word from French case-law and theory.
To turn now to legal writers I should like first to quote Henri Velge, one of the founders of the Belgian Conseil d'Etat and its first President. In 1930 he defined excès de pouvoir in these terms:
‘The act issues from an authority lacking competence or else the essential procedural requirements for the act have not been fulfilled or the act infringes or wrongly interprets the law’. And on misuse of powers he wrote: ‘The act is in due form; its extrinsic legality is respected; it issues from a competent authority but that authority has diverted the powers vested in it from their true purpose’. In such a case ‘the validity of an act is to be judged not on the basis of its subject-matter but on the basis of the underlying objective which motivated it. The objective thus becomes an element of competence’.
Finally I must quote from Pierre Wigny's excellent work, Le Droit Administratif (which is a summary of Belgian administrative law). In Droit Administratif, Principes Généraux, Brussels, 1953, p. 375, Pierre Wigny writes as follows:
‘The activities of the Administration are governed by the principle of purpose; this principle means that authority may be exercised only for the purpose for which it was conferred. An act carried out by an official in exercising his powers but for a purpose other than that for which he received those powers is vitiated for misuse of powers’.
‘The powers (of the Administration) are no longer unlimited and even when they are discretionary, the justification for their exercise may nevertheless be examined by the courts (No 69-91-506)’.
I need go no further. It is clear that the French system has been incorporated into the Belgian Law. Of course this does not mean that case-law will not develop independently and perhaps in different ways from that of the French Conseil d'Etat but that the basic legal concept is a common one.
I draw attention to a procedural peculiarity which seems of interest. Because of the seriousness of the case, a submission of misuse of powers may be entertained only before the contentious proceedings division of the Conseil d'Etat in plenary session. The case is automatically referred to it if the chamber before which the proceedings are brought finds that there may have been a misuse of powers (see the Law of 23 December 1946, Article 46).
This clearly demonstrates that misuse of powers is regarded as an instrument to be handled with care since its use has been conditioned by special safeguards for the benefit of the Administration. However, the Conseil d'Etat has not hesitated to use it and there have already been several annulments under the heading of misuse of powers.
Luxembourg law
From Brussels we go to Luxembourg. As the Court will be aware, the Grand Duchy has its own Conseil d'Etat, which has been established for a much longer time than its Belgian neighbour and is still today governed by a basic Law of 1866. In the context of adversary proceedings it recognizes an action for annulment but for various reasons this action did not develop to such an extent as in France. For this reason legislative amendment appeared to be necessary. This was the Law of 20 July 1939.
I cannot resist the temptation to quote the following passage from the statement of the grounds for the draft prepared in 1936 which became the Law of 20 July 1939:
‘Our administrative jurisdiction has remained unchanged and out of date; the admirable development as a result of which the French Conseil d'Etat became the highest court for the review of administrative morality has not been emulated here. Many of our legislative provisions are the same as in France. While we note that there has been a bold and forward-looking interpretation by our neighbours which has opened wide the doors of the administrative courts to those within the jurisdiction, there has been no change at all in Luxembourg, where we remain bogged down in out- of-date concepts and petitioners are received in a forbidding manner and, moreover, their course is fraught with snares and difficulties’.
After this soul-searching, which is no doubt unduly pessimistic and, in my view, rather unfair concerning the work of the Luxembourg Conseil d'Etat in the past, those who drew up the draft law accept that the administrative courts of the Grand Duchy ‘scarcely have the same importance as the administrative courts of France’ mainly on account of the fact that in Luxembourg, as in Belgium, public authorities are commonly called to account before the ordinary courts. They add:
‘It was the concept of excès de pouvoir which gave rise to the happy evolution of French administrative law. By adopting some French legislation and enshrining the decisions of the French courts in our own, we can, without difficulty, make our law similar and draw without hindrance on that inexhaustible source of the purest judge-made law which is daily developed by the French Conseil d'Etat’.
‘The first task of all is to define the concept of excès de pouvoir by stating in the law that it includes the misuse of powers which, timid to a fault, our supreme administrative court has refused to include in it. The concept of misuse is above all that of the defence of administrative morality and, in view of the often very serious nature of the circumstances which abuses of power can conceal, it is really difficult to understand how the Conseil d'Etat could imagine that it had no authority to intervene and prevent them.’
On the point with which we are concerned in this case there can be no doubt: the concept of excès de pouvoir in general and of the misuse of powers in particular in the Grand Duchy is the French one. If we needed to be convinced of this it would be sufficient to read this passage from the report of the Section Centrale of the Conseil d'Etat on the draft law: ‘Finally an extension of the jurisdiction of the Conseil d'Etat in certain cases was considered necessary in order to complete assimilation with the French institution.’
Italian law
We now go to Italy. As the Court will be aware, Italian law on the supervision of the administration by the courts is essentially based on the distinction between the protection of diritti soggettivi (subjective rights) and that of interessi legittimi (legitimate interests). This distinction is also known in French administrative law where it takes the form of a distinction between cases in which the court has unlimited jurisdiction and those in which the action involves annulment or excès de pouvoir. But the essential difference is that, whereas in France, both these types of proceedings come within the jurisdiction of the administrative courts, in Italy, on the other hand, the latter are responsible only for the protection of interessi legittimi. In principle and apart from exceptions formally provided for by the law (when one speaks of ‘exclusive jurisdiction’) disputes involving diritti soggettivi are brought before the ordinary courts; from this point of view the rule seems to me to be very similar to that which applies in Belgium.
Interessi legittimi are protected by the jurisdiction ‘on legality’(di legittimità) and by the jurisdiction on the substance (di merito). The first arises under ordinary law, the second arises only under a jurisdiction which is specially conferred (for example cases relating to the civil service staff regulations). When the Consiglio is adjudicating in merito it deals with issues of fact and of law and even adjudicates on policy; it can revise the measure contested and not merely declare it void. When it is exercising jurisdiction di legittimità it cannot go into policy but can only annul; it is therefore in this action di legittimità that we get closest to the action for annulment under Article 33 of the Treaty.
Article 24 of the Law of 31 March 1889, which is the relevant enactment, designates ‘want of competence, infringement of the law and eccesso di potere’ (ultra vires acts) as the three defects which can lead to annulment. This demonstrates the point of main difference from the French system: in France, whatever the importance attached to the ground of infringement of the law, which has gradually converted the action for excès de pouvoir into proceedings relating to the validity of administrative acts, it is nevertheless the concept of excès de pouvoir which, in terms of legislation, covers everything, as is clear from the words of the enactment (Order of 31 July 1945, Article 32): ‘The Conseil d'Etat is the court of last instance in contentious “actions for the annulment for excès de pouvoir”of acts of the various administrative authorities; the expression “actions for excès de pouvoir” is synonymous with “actions for annulment”.’ In Italy, eccesso di potere is regarded only as one ground for bringing proceedings on the same basis as want of competence and infringement of the law. The outcome of this has been a rather independent development of the concept of eccesso di potere as such, within the context of the action di legittimità and independently of the two other concepts of want of competence and infringement of the law which are different from that of eccesso di potere; this is so although the concept of eccesso di potere was borrowed direct from French administrative law. The result is that the field of infringement of the law seems more restricted than in France, where infringement of the law has really become synonymous with‘infringement of a legal rule’. In this way for example review of the legality of the reasons on which an enactment is based, that is, a review relating to any error of law or of fact which such a statement may contain is in France regarded as illegality whereas in Italy this type of defect belongs to the concept of eccesso di potere.
As for misuse of powers, to which I must now turn, this is only one example of excès de pouvoir in general and has not the status of a ground of action. In other words, it is difficult to find in the decisions of the Italian Consiglio di Stato clearly defined boundaries between misuse of powers and the other possible causes of annulment on the ground of eccesso di potere.
Nevertheless, the concept of misuse of power is fully developed and used in case-law although the expression itself is only rarely used. Examples of expressions used are ‘misconception and distortion of the final purpose of the law’, ‘conflict with the intention of the law’, ‘act undertaken for a purpose other than the public interest’ and ‘use of a power for a purpose other than that provided for by the law’. As the Court will observe, these last two expressions accord with the classic definition in French law of misuse of powers. It clearly involves a defect affecting the objective which, contrary to appearances, is in reality being pursued and the discovery of which demands subjective investigation into intent. I dare not embark on a review of legal theory because it would take me too far afield. All I need say is that several authors regard the concept of misuse of powers as being at the heart of that of eccesso di potere.
For example, in his Corso di Diritto Amministrativo, Milan, 1952, Zanobini writes, on page 252, that ‘eccesso di potere is generally an indication of absolute want of competence as well as the want of competence which emerges when an administrative body has encroached on the competence of a non-administrative authority and which may be described as eccesso di potere but above all misuse of powers occurs when, in taking a decision, an authority is motivated by a consideration other than that by which it should have been motivated in the performance of the act’.
In his Trattato di Diritto Amministrativo, Volume III, 1901 Edition, pages 800 to 815, Orlando maintains that ‘in Italian legislation referring expressly to eccesso di potere, want of competence and infringement of the law, the essential meaning of eccesso di potere is that of misuse of powers, which is an infringement of the law which may lead to an inquiry into the motives which inspired the discretionary act of the public administration’.
Finally, Salemi states that ‘misuse of powers goes to the intent of the author of the act, that is to say, that if, “through the exercise of a discretionary power, objectives which are unlawful or wrongly described are pursued, the acts in question although issuing from competent bodies and although in conformity with the letter of the law, are illegal in that they have been carried out for a purpose, private or public, other than that for which discretionary power was granted and thus compromise the objective sought by the law. To compromise it in this way is a misuse of powers” .’
This rather short excursion into the Peninsula shows that in Italy the concept of misuse of powers appears to be very much the same as it is in France, Belgium and Luxembourg but that it is incorporated in the wider concept of eccesso di potere, itself clearly distinguishable from infringement of the law.
Netherlands law
Continuing our journey, we now go to the Netherlands.
This is the first country which we have visited where there is no general enactment on actions for annulment. The action nevertheless exists since it is provided for under a number of special laws. On the other hand, although there is a Council of State (Raad van State) before which proceedings may be brought, justice is not delegated; the Council does no more than deliver an opinion which is forwarded to the Government, which may, though it is not bound to, submit it for the approval of the Sovereign. There are in any case administrative courts separate from the Raad van State, which are not subject to it such as, for example, the public service courts, from which there is an appeal to a central appeal court (Centraal Ambtenarengerecht). Finally, some administrative cases come under the ordinary law courts even in the case of disputes relating to the validity, in a wide sense of this term, of administrative acts: as such they are subject to review by the Supreme Court (Hoge Raad).
This in no way impedes the exercise in the Netherlands of supervision of the administration by the courts. Indeed, this supervision is carried out de jure as well as de facto under conditions which are very similar to those we have discussed so far. Both the law and the decisions of the courts have closely followed the principles of administrative law in the countries of Western Europe — the Continental ones of course — which has enabled legal commentators to evolve some interesting formulas.
In the absence of a general law, as always happens in such cases, it is special laws which have constituted the corner-stone both of case-law and of learned opinion. As for misuse of powers this is a very familiar concept.
The provision most commonly referred to on this subject is Article 58 of the 1929 civil service law (Ambtenarenwet), the first article of which reads as follows:
‘An action may be brought in the case of a decision, act or refusal (to take a decision or perform an act) in respect of an official, his survivors or successors in title which has been adopted, performed or announced by an administrative body and which de facto or de jure conflicts with the relevant generally mandatory requirements in force or when, in adopting, performing or announcing it, the administrative body has manifestly exercised its powers for a purpose other than that of achieving the objectives for which those powers were vested in it’.
That is the perfectly orthodox definition of misuse of powers. The definition is generally regarded as the expression in a specific field of an unwritten general rule, a true rule of law on which the exercise of administrative power is based. However, reference to the preparatory work on the Law reveals that it followed the adoption by the Second Chamber of the States General of an amendment the author of which writes as follows:
‘The amendment is intended to give an official a right of action against decisions which appear to be lawful in terms of the letter but not in terms of the spirit of the law. The amendment is intended to give an official a right of action in cases where the administration has been guilty of misuse of powers or an abuse of power, that is to say, in cases in which it has exercised its power for purposes other than those for which that power was vested in it’.
During subsequent discussions on the amendment the Minister for Justice quoted as a typical example of misuse of powers the transfer of an official effected not in the interests of the service but in order to discipline him without specific reference to any penalty.
Case-law appears to have applied the Law with absolute fidelity to its spirit though with a degree of caution which no doubt explains the use of the word ‘manifestly’ appearing in the text.
The question of requisitioning of property, which is dealt with by the ordinary courts, has also given rise to judgments based on the misuse of powers, taken in the same sense. As examples I refer to two judgments of the Supreme Court, on 14 January and on 24 June 1949.
In the first case the mayor of a town had requisitioned a dwelling for a police inspector who had urgent need of it. As the ground for the requisition the mayor referred to the fact that the requisitioned accommodation was let at a much higher rent than that permitted.
In its judgment the Hoge Raad stated: ‘The object of the order on the requisitioning of accommodation was to ensure a fair allocation of living accommodation and it follows from the tenor of the order that if the mayor wishes to exercise his power to requisition a dwelling for civilians who have urgent need of it he must, in designating a particular house, have regard to what is necessary to ensure an appropriate allocation of dwellings’.
‘As the Court has already declared, if he allows himself to be influenced by motives — even though in the public interest — other than those which, according to the object of the law, ought to be taken into account when he selects the property to be requisitioned he is exercising his power of requisition to achieve objectives other than those for the purpose of which that power was vested in him’.
In its judgment of 24 June 1949 (N.J. 1949, No 559) on the subject of a requisition of alluvial land at Groningen under the general order of 1940 on requisitions, the Hoge Raad held: ‘The question whether in a specific case the requisition accords with the public interest is usually a matter for decision by the requisitioning authority and it is in consequence not within the purview of the court but the court may nevertheless intervene if it finds that the said authority manifestly requisitioned in order to achieve an objective other than that for the purposes of which that power was vested in it’.
Among legal writers Van der Pot, for example, writes: ( )
‘The content and the purpose of the decision must correspond to the general rules on which that decision is based.
If, as far as the purpose is concerned, those conditions are not fulfilled, in other words, if the power to take a decision has not been exercised in order to achieve the purpose for which the power was conferred, this is a misuse of powers.’
Another writer deserves special mention. This is de Brom, who devoted a whole book to misuse of powers. In his view, it is possible to read into Article 58 of the civil service law, treated as an expression of a general rule, both an objective concept of misuse of powers and a subjective concept or, again, a concept which he calls ‘semi-subjective’.
If I have correctly understood this idea it means that in the so-called ‘objective’ concept, the only thing taken into account is the act as it appears in comparison with the object sought by the law, regardless of the true intention, actual or presumed, of the person performing the act. The subjective concept is concerned only with the motive, the aim actually pursued, regardless of appearances. The semi-subjective concept is also concerned with motive but, in addition, with the question whether, on the assumption that the contested act was based on motives other than those envisaged by the law, it is nevertheless justified for other reasons which are themselves perfectly legal and consistent with the lawful objective, in which case the submission of misuse of powers will be set aside. I ought to interpolate here that this latter concept certainly seems to be the one which at the present time forms the basis of French case-law, one of the most typical examples of which is the judgment of the Conseil d'Etat in Sociéte des Automobiles Berliet of 22 July 1949, Rec. p. 367, quoted by Letourneur (op. cit. p. 2) and with which all practitioners in administrative law are very familiar. It is, in short, the introduction of the change of purpose in the doctrine of misuse of powers. Obviously, it appreciably reduces the field to which the purely subjective concept applies.
As for the so-called ‘objective’ concept, I take the view that it is incompatible with the actual concept of misuse of powers as we have hitherto witnessed it evolving. If the act can only be considered objectively on the basis of what it appears to be, without any inquiry into intent, all that remains to enquire into is whether the act is or is not in accordance with the law: there can no longer be any question of a power which is misused (or diverted from its purpose). At least this is what applies in legal systems which accept a broad concept of infringement of the law. In those where such a concept is not accepted, reference is made not to the concept of misuse of powers but to that of excès de pouvoir, as we have seen it in Italy and as it was once known in France.
The Netherlands appear to be moving more and more towards a wide and even the widest concept of infringement of the law, which is currently defined as being infringement of the rule of law. This is clearly only a tendency but it seems very pronounced, to the extent that certain writers not only assimilate to formal law what are called ‘the general principles of law’, such as for example the principle of the equality of citizens in matters of taxation, but would readily go so far as to regard them as including misuse of powers itself. This is what Donner, for example, does in ‘Bestuursrecht’ (1953) General Section, p. 249:
‘The concept of infringement of the law (strijd met de wet) must be given a wide interpretation so that it covers not only written but also unwritten rules. In a way it is possible to speak of a conflict between the content of an administrative act and the rules of law. In this way this concept can be made to cover the infringement of the general principles of sound administration. Interpretation in this wide sense has the advantage of making it no longer necessary to be involved in a sterile debate as to whether “détournement de pouvoir” ought or ought not to be treated as an infringement of the law.’
German law
I now reach the last stage. Let us go back up the Rhine into Germany.
As the Court will be aware, administrative law has deep roots in that country and the administrative courts play a very important role. The action for annulment has been established for a long time. Nevertheless it has in recent years received a new lease of life as a result of the reorganization of administrative tribunals both in the Bund and in the Lander. There are therefore a number of laws or regulations to help us. I refer in particular to:
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Article 15 of the Law on the Bundesverwaltungsgericht (Federal Administrative Court):
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Paragraph 23 of Ordinance No 165 of the British Military Government;
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Article 36 of the Law on the administrative courts of the South German Länder; and
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The Law of 14 April 1950 on the organization of administrative jurisdiction in Rheinland-Pfalz (Articles 15 and 23).
In addition there are studies and commentaries of writers whom, in Germany more than anywhere else, it is essential to consult in order to have an accurate idea of the legal concepts employed by the legislature and the courts. This is all the more necessary in the present case since there is a wealth of terms which are not always uniform either in legislation or in case-law.
Among the ‘defects’ which may invalidate an administrative act within the meaning of German law are those relating to the exercise of discretionary power (Ermessensfehler).
In his Lehrbuch des Verwaltungsrechts (Treatise on Administrative Law) 1953, page 68, Forsthoff defines discretionary power as ‘the field in which there is freedom of action and of decision, a choice between several equally valid courses of action’. If such a field is not open to the administration and if, in consequence, it has merely to interpret and apply the law there can, of course, be no question of Ermessensfehler but only of a ‘violation de la loi’, an infringement of the law, what in France is called ‘competence liée’ (circumscribed powers), a concept with which the Germans are also familiar. If, on the other hand, subject to prescribed limits, the administration were ‘free to adopt a measure which it considers to be expedient’ the administrative measure which it adopts comes within the purview of the courts only from a double standpoint:
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If it was adopted outside the field in which the authority has freedom of decision this generally involves Ermessensüberschreitung (exceeding discretionary powers);
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or If it was taken within the limits of that field but was motivated by considerations of which the legal system disapproves or if regard has not been paid to the considerations prescribed by the legal order, this is referred to as Ermessensfehlgebrauch (erroneous use of discretion);
Ermessensüberschreitung and Ermessensfehlgebrauch together constitute the concept of Ermessensfehler (defective use of discretion).
I must now attempt to give some indication of the general tenor of the concept of Ermessensfehlgebrauch and I should like to refer to a classification which seemed to me to be clear and in accordance with general opinion and is given by Schunck and de Clerck in their Kommentar zum Landesgesetz über die Verwaltungsgerichtsbarkeit für Rheinland-Pfalz (Commentary on the law on administrative jurisdiction in the Rhineland-Palatinate), 1952.
Dealing with the whole of the doctrine of defects relating to the exercise of discretionary power by the administration, that is to say, Ermessensfehler, these writers, like Forsthoff, begin with the difference between Ermessensüberschreitung and Ermessensfehlgebrauch.
Ermessensüberschreitung‘in the strict sense of the term’is the action of the Administration in going beyond the limitations imposed by law on its discretion: for example, the refusal to issue a pedlar's licence on grounds not provided for by the law.
The Ermessensfehlgebrauch includes defects intrinsic to the appraisal made by the Administration, which are essentially acts which conflict with the objective laid down by the law. According to Schunck and de Clerck, the Ermessensfehlgebrauch consists of the following:
(a)
Ermessensfehler aus Rechtsirrtum
This means ‘Defective use of discretion arising from a mistake of law’. That is: the Administration has allowed itself to be influenced by considerations which were wrong in law.
(b)
Ermessenswillkür
This means ‘arbitrary exercise of discretionary power’. This refers to infringements of the principle of equality, the principle of continuity (the tradition on the basis of which the Administration customarily resolves similar questions in the same way) as well as decisions taken as the Administration ‘sees fit’.
(c)
Ermessensmissbrauch
This means ‘abuse of discretion’. This defect consists in the Administration's basing its action on considerations which are, in fact, unconnected with the purpose which in law it should be furthering. On this subject Schunk and Clerck state that ‘French administrative law refers in this connexion to “détournement de pouvoir” (they use the French expression) and covers the situation in which an administrative authority completes an act within its powers, complies with the procedural requirements, commits no formal infringement of the law but exercises its powers for reasons other than those for the purpose of which powers were conferred upon it’.
Moreover, the authors state that ‘practice tends to go beyond this narrow definition’ and extends it to include cases coming under the category of decisions based on Ermessenswillkür (acting as one pleases), listed above.
As examples of Ermessensmissbrauch they quote:
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A refusal to act as a result of personal animosity;
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Prohibition of an agency in order to avoid the competition which it would provide for a combine;
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Pressure by a housing authority with the intention of forcing a householder to sell his house to the Administration.
From this survey which again, it seems to me, reflects generally accepted views, it appears clear that it is the word Ermessensmissbrauch which comes nearest to the French concept of misuse of powers based on subjective inquiry into the aim which the person performing the act is really pursuing compared with the aim which in law he should be pursuing. Moreover it is this word Ermessensmissbrauch which is used in the German text of the Treaty in order to translate the words ‘misuse of powers’ which appear in Article 33; although, as the Court will be aware, the French version is the only authentic text, I am sure the German word was chosen with care. One might, perhaps, merely add that certain of the cases covered by the concept of Ermessenswillkür, the concept of arbitrary decision, might be punished in France by an annulment under the heading of misuse of powers. But a majority of the other cases of Ermessensfehlgebrauch and certainly all cases of Ermessensüberschreitung would, in France, be subject to objective review under the heading of infringement of the law, whether it was a matter of a mistake of law in the statement of reasons on which the act was based, of a material mistake of fact or of a violation of the general principles of law.
Furthermore it should be noted that even in Germany the concept of infringement of the law is often extended to mean something wider than formal infringement and thus tends to encroach to a certain extent on the field to which the Ermessensfehler applies, which does nothing to simplify the position.
From this review, which is far too superficial but which I nevertheless hope will not give rise to any accusation of Ermessensmissbrauch or of Ermessenswillkür, because my motives are pure, I conclude:
1.
That, as we found in the other five countries of the Community, Germany also has a concept of misuse of powers the subject of which is virtually the same;
2.
But that, as in Italy, it is only one aspect, a specific case, of a wider concept: exceeding the limits of discretionary power, in short, excès de pouvoir.
Conclusion
I have now come to the end of this journey through the countries of the Community, which was too rapid for my liking, although Members of the Court will no doubt have found it too long, but I am sure that the Court will agree that it was reassuring. In my view, it provides striking confirmation that, in our six countries, the legal principles which underlie control of the administration by the courts are in fact the same. These principles are based on the same conception of administrative acts, which are regarded as having to be performed within the limits of the law and on the basis of the same conception of the function of the court in considering those acts, which is to determine whether those limits have been observed. Their similarity extends even to the procedure chosen to make this review possible, namely, the action for annulment.
As for the differences, which certainly exist, they seem to me to amount in fact to a mere difference of presentation. Sometimes the main emphasis is placed on the idea of powers and the limits of those powers; this is the conception which France originally had of this action which was specifically called ‘action for excès de pouvoir’; it is the conception to which Germany and Italy adhered while developing considerable extensions to it. Sometimes there is special emphasis on the idea of ‘infringement of the law’ in the sense of neglect of the rule of law as the latter emerges, objectively, not only from the written law but also from the general principles underlying it. This is the present conception in France, Belgium and Luxembourg and, as I think I have shown, the Netherlands. But it is clear that the two ideas are basically the same since it is obvious that a misconception by a public authority concerning the extent of its powers necessarily constitutes an infringement of a rule of law, on the assumption that the rule has previously been defined. These are two aspects of the same concept.
Nevertheless there are clearly certain differences in the legal technique used in one system or the other although the same results can be obtained under each. That is why it is necessary to determine which solution is provided by the Treaty.
Misuse of powers under the Treaty
We have only to read Article 33 to realize that it enshrines a system which is half way between the two extreme conceptions and which is virtually the same as the present ‘Franco-Benelux’ system, if it can be so described, that is to say, one which provides for a broad conception of infringement of the law and treats it as the main but not the only ground for an action. This does not of course mean that, in its decisions, the Court must follow the precedents established in one or other country, in particular, French case-law, which is at present very restrictive (there may be alignment of prices but, fortunately, there is, under the Treaty, no alignment of case-law). There are, certainly, many reasons which tend to point in the opposite direction; this merely means that the Treaty appears to correspond more or less to the legal concepts at present applied in the four countries in question.
In my view, this is supported at three points in the actual wording of Article 33:
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In the first place the text expressly refers to misuse of powers as a moyen (ground) or if a less procedural term is preferred, as a legal reason for annulment on the same footing as infringement of the Treaty (that is to say, of the law) without actually using the expression ‘excès de pouvoir’.
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Secondly, Article 33 refers to ‘infringement of this Treaty or of any rule of law relating to its application’, which indicates that it is the concept of infringement of the law in the wide sense which is embodied here. Indeed, the expression ‘rule of law’ is expressly used; nothing would be clearer. If necessary, there is, thirdly, proof to be found in the sentence beginning ‘The Court’ which reads: ‘The Court may not, however, examine the evaluation of the situation, resulting from economic facts or circumstances, in the light of which the High Authority took its decisions or made its recommendations’ save where there is misuse of powers or manifest infringement of the rule of law. This is an exception which as such confirms the rule that in so far as this is necessary to review the legality of the reasons on which a decision is based, it is normally for the Court to evaluate the facts. The intention was that this review should be fully exercised only in cases where a decision does not depend upon an evaluation of a situation as a whole but only on specific facts: in cases where a situation is evaluated, the intention was that there should only be a review which took place in the specific context of a misuse of powers or of a manifest infringement, in short, subjective or objective check on abuse.
—
In his study Die Nichtigkeitsklage im Recht der Europäischen Gemeinschaft für Kohle und Stahl (Actions for annulment in the law of the European Coal and Steel Community), Frankfurt, 1952, Steindorff writes: ‘To attempt at this stage, in the law of the Community, to bring under the heading of misuse of powers cases which are covered in France by the ground of infringement of the law would mean deliberately ignoring the intention of the authors of the Treaty regarding the extent of the powers of review which they conferred on the Court’. In my view this statement has all the more weight since it comes from a writer who has been especially aware of the restrictions imposed by the Treaty on the subject of an individual's right to bring an action before the Court.
Those are the three reasons why, in my view, the wording makes it quite impossible in any way to extend the meaning of the words ‘misuse of powers’ used in the Treaty, apart from the fact that, as I hope I have demonstrated, those words express a concept which is common to the six countries of the Community.
In addition to these comments on the concept of misuse of powers, which I trust have not been too extensive, I must now go into the meaning of those words as they appear in the second paragraph of Article 33, where they are followed by the words ‘affecting them’.
First, as I have said, there can be no question of envisaging a wider concept of misuse of powers in the second paragraph than in the first. The only question is, what is meant by the words ‘affecting them’?
The parties entered into lengthy explanations of the words ‘affecting them’ both in their written and in their oral submissions. My own comments will be brief.
The rule laid down in the second paragraph of Article 33 is that undertakings or associations may institute proceedings only against ‘decisions or recommendations concerning them which are individual in character’. What is the reason for the addition of the words ‘or against general decisions or recommendations which they consider to involve a misuse of powers affecting them’ ? There seems to me to be only one acceptable explanation: this is that, having just included misuse of powers among the grounds for annulment, the authors of the Treaty thought of the situation where a decision which, while in fact individually affecting an undertaking, is ‘disguised’ (‘camouflaged’, to use the word employed without hesitation in the written submissions) as, to all appearances, a general decision and is, in consequence, clearly invalidated as a misuse of powers. It is true that at that time it was perhaps unnecessary to add these words because case-law would probably have managed, in such circumstances, to accept that, since the decision was in fact an individual one, the action was admissible. It was no doubt thought that if this did not need to be said, it was even clearer when put into words, although, as we realize today, that is not always true.
In any case as Counsel for the defence have very rightly pointed out, it is not clear why the ground of misuse of powers has been given a position of privilege compared with other grounds, in particular that of lack of competence which is undoubtedly the most ‘radical’ in the hierarchy of grounds for annulment if indeed such a hierarchy exists.
Finally, if need be, I can refer to a passage in the preamble to the Luxembourg ratification law which is couched in the following terms:
‘Actions for annulment will be brought by the Member States or the Council of Ministers. Only individual decisions of the High Authority or those which are general but which the concept of misuse of powers makes it possible to treat as individual decisions can be directly contested by the undertakings or associations against which they are directed’.
The intention of the authors of the Treaty seems therefore to be beyond doubt.
Nevertheless I do not think that there is any need to be as strict as the High Authority. Although it is true that the only reasonable explanation of the wording is that of the ‘camouflaged individual decision’, the wording still stands; its meaning must not be forced, nor must it be made to say less than it does. On the other hand, if the restrictive interpretation were taken to its limit this would result in making the field of application of the action practically non-existent as far as associations were concerned. The latter represent collective interests which are usually prejudiced by decisions which are not individual. This would have the consequence that associations could not bring an action against decisions affecting their own position in the Community in their capacity as associations, for example, a decision refusing to ‘normally call upon’ an association on the ground that it does not fulfil the conditions laid down for that purpose under Article 48 of the Treaty, which would be a curious restriction of their right to bring proceedings. All that in practice would remain to them would be the right to intervene. Not even the High Authority goes as far as that. In my opinion the words ‘affecting them’ must, in the case of an association, be interpreted as embracing the collective interests which that association exists to protect, or even wider interests which are directly related to those interests. This is exemplified by a decision which involved a misuse of powers because although, to all appearances, it was taken in the general interests of the Common Market and under the general powers of the High Authority, it was really intended to affect the Italian market, whereas direct intervention on that market would be contrary to the Treaty; such a decision could, in my opinion, be impugned by an association such as the I.S.A. which represents not only a category but an important category of the Italian steel undertakings. It is a question of degree.
On the other hand, there could be no question of the admissibility of an action by an association against a decision involving a misuse of powers the direct purpose of which was not to attack the interests protected by the association since this would not have amounted to the commission of a misuse of powers affecting that association. In other words, it seems to me impossible for an association to dissolve the connexion, as it were, by establishing:
1.
That it has a mere interest in securing the annulment of the decision, on the same footing as any other undertaking in the Common Market;
2.
That the decision involves a misuse of powers of one kind or another even though it has no specific connexion with the interests which the association in question is responsible for representing.
This is the most which, in my view, can be read into the wording of Article 33. To go any further would be tantamount to reversing the rules laid down in that article on the conditions of admissibility of an action for annulment.
As was to be expected, we are in fact witnessing efforts by the undertakings to widen the breach, narrow as it is, through which the Treaty allows them to seek a decision from the Court. This very close restriction of the action for annulment in the case of private parties is undoubtedly the one which, in the legal field, has given most cause for criticism since the Treaty came into force. There are, however, reasons for it: the main one is undoubtedly due to the great importance of the decisions involved, which has given rise to the belief that it is necessary for the legal interest to be commensurate with that importance and that the State, being by definition representative of the public interest, should alone be considered to fulfil that condition. This is what learned Counsel for the Italian Government explained so clearly to us in Case 2/54 when he pointed out that Article 33 generally vested in the governments of the Member States responsibility for safeguarding the interests of their nationals. We have also been able to note that, in certain cases, undertakings have the advantage of indirect but nevertheless valuable guarantees which enable them to have decisions of the High Authority declared illegal. I am thinking in this connexion of the third paragraph of Article 36 concerning penalties, which provides for a genuine objection of illegality when a fine is imposed, and which was referred to at the Bar. I am also referring to Article 41, under which the Court is granted jurisdiction to give preliminary rulings on the validity of acts of the High Authority and of the Council where their validity is impugned in proceedings brought before a national court or tribunal. This rule may be very useful to undertakings and even to third parties.
I believe that there is in fact an ambiguity concerning the role of the concept of interest in Article 33 and the other related provisions of the Treaty (Article 36 for example). This ambiguity is, however, very easily explained and, in my view, was certainly not created deliberately for the purposes of an argument as often happens during proceedings. It is true that the concept of legal interest is the foundation of an action for annulment under Article 33 because it is inherent in the special action known as the action for annulment. It could therefore be expected that the authors of the Treaty would confine themselves to introducing the concept of interest in explicit terms by making it a condition of admissibility of an action and by making the Court responsible for defining it by way of case-law. But the Treaty did not do so. The intention was that it should settle the question itself; in the case of each category of decision it was intended to indicate authoritatively who had access to the Court. In restricting, as it did, the conditions under which private parties have access by making other indirect channels open to them, it no doubt did so for the reasons which I have indicated: in any event, it did so.
Nevertheless it is as well to recognize that, useful as the protection thus granted may prove, whether it be that under Article 36 or that under Article 41, it is only indirect and incomplete and is not the same as the general and direct access which would have been created by the assignment to undertakings and to other private parties concerned of the same rights as to Member States in connexion with actions for annulment.
On the grounds of fairness, should an attempt be made to force the door open, if not wide at least wider? That is an issue which is truly a question of conscience for the Court. Nothing is more difficult for a court, especially a court of last instance, than to resist the temptation to square the law with equity. In the present case, however, I do not think that this is possible. The Treaty is perfectly clear on the point; although it may be criticized de lege ferenda, the system which it lays down is a coherent one and I do not believe that its meaning can be forced on any ground, however commendable.
Application to present case
In the circumstances, the application to the present case need not take up much time. It has in no way been established, in fact it has not even been alleged, that, under the guise of the general interest of the Common Market, the contested decisions were really adopted for the purpose of damaging the Italian steel industry or affecting it in particular. The Court is now aware of the real objective of the contested decisions: the considerations involved are all concerned with problems relating to the Common Market as a whole.
Even if, against my advice, the Court were to place a wider interpretation on Article 33 either as regards the meaning of the words ‘affecting them’ or as regards the content of the concept of misuse of powers, I should in those circumstances call attention to the observations which I made on the substance of the other actions. If the Court finds itself in agreement with those observations it will also have to set aside the actions of the two associations.
My opinion is that the applications should be rejected.
( ) Translated from the French.
( ) See Opinion in Case 1/54, supra.
( ) C.W. van der Pot: Handboek van het Nederlandse Staatsrecht (1953) p. 354. |
Judgment of the Court of 21 December 1954. - Italian Republic v High Authority of the European Coal and Steel Community. - Case 2-54.
European Court reports
French edition Page 00073
Dutch edition Page 00081
German edition Page 00081
Italian edition Page 00077
English special edition Page 00037
Danish special edition Page 00005
Greek special edition Page 00005
Portuguese special edition Page 00005
Summary
Parties
Subject of the case
Grounds
Decision on costs
Operative part
Keywords
++++
1 . PROCEDURE
( TREATY, ART . 33 )
2 . PRICES
( A ) PUBLICATION - DISCRIMINATION
( TREATY, ART . 60 ).
( B ) COMPARABILITY OF TRANSACTIONS - NON-DISCRIMINATION - CRITERIA
( TREATY, ART . 60 ( 1 ); ART . 4 ).
( C ) PUBLICATION - SYSTEM OF PUBLICATION - NATURE OF THE PRICES PUBLISHED
( TREATY, ART . 60 ( 2 )).
( D ) PUBLICATION - SYSTEM OF PUBLICATION - HIGH AUTHORITY'S LEGISLATIVE POWERS - LIMITS THEREOF
( TREATY, ART . 60 ( 2 )).
( E ) PUBLICATION - SYSTEM OF PUBLICATION - EXTENT OF PUBLICATION
( TREATY, ART . 60 ( 2 )).
( F ) PUBLICATION - SYSTEM OF PUBLICATION - NON-DISCRIMINATION - SUPERVISION - INFORMATION
( TREATY, ARTS . 47 AND 60 ( 2 )).
( G ) PUBLICATION - SYSTEM OF PUBLICATION - NON-DISCRIMINATION - HIGH AUTHORITY'S LEGISLATIVE POWERS - GENERAL OBJECTIVES OF THE TREATY
( TREATY, ARTS . 60, 61, 65 ).
3 . MISUSE OF POWERS
( TREATY, ART . 33 ).
4 . PRICES - STEEL PRODUCTS - ITALIAN MARKET - PROHIBITION ON VARIATIONS IN RELATION TO PRICE-LISTS
( CONVENTION ON THE TRANSITIONAL PROVISIONS, ART . 30 ( 2 )).
5 . PROCEDURE - DEFENDANT INSTITUTION - DOCUMENTS RELATING TO THE CASE - PRODUCTION
( STATUTE, ART . 23 ).
Summary
( CF . SUMMARY OF JUDGMENT IN CASE 1/54, PARA . 1 ):
1 . SEVERAL RELATED DECISIONS MAY BE CONTESTED IN A SINGLE APPLICATION .
*/ 654J0001 /*.
( CF . SUMMARY OF JUDGMENT IN CASE 1/54, PARA . 2 ):
2 . ( A ) NOWHERE DOES THE TREATY PRESCRIBE THAT ANY INFRINGEMENT OF THE RULES GOVERNING PRICE PUBLICATION AMOUNTS IN ITSELF TO ONE OF THE PRACTICES PROHIBITED UNDER ARTICLE 60 ( 1 ).
( B ) THE ABSENCE OF ANY PRECISE DEFINITION BY THE HIGH AUTHORITY OF THE MEANING OF EXCEPTIONAL TRANSACTIONS AND COMPARABLE TRANSACTIONS DOES NOT MAKE THE CONCEPT OF DISCRIMINATION MEANINGLESS . THE COMPARABILITY-LIKE THE EXCEPTIONAL NATURE-OF A TRANSACTION CAN ONLY BE ASSESSED IN THE LIGHT OF THE STATE OF THE MARKET .
( C ) THE DUTY TO MAKE THE PRICE-LISTS AND CONDITIONS OF SALE PUBLIC ALLOWS OF NO EXCEPTION . THE PRICE-LISTS MUST PRECEDE ANY SALE EFFECTED IN THE COMMON MARKET . THE TREATY REQUIRES THE PUBLICATION OF EXACT PRICES . IT IS NOT ENOUGH TO PUBLISH AVERAGE OR APPROXIMATE PRICES .
( D ) THE POWERS CONFERRED ON THE HIGH AUTHORITY BY THE WORDS CONTAINED IN ARTICLE 60 ( 2 ) " TO THE EXTENT AND IN THE MANNER PRESCRIBED BY THE HIGH AUTHORITY " ARE POWERS TO PRESCRIBE THE EXTENT, THAT IS TO SAY, THE SCOPE, OF PUBLICATIONS, IN SO FAR AS IT IS A QUESTION OF SETTLING THEIR DETAILS . ON THE OTHER HAND, THEY DO NOT MAKE IT POSSIBLE TO SET UP A SYSTEM PROVIDING FOR MEAN VARIATIONS FROM PUBLISHED PRICES, WHICH WOULD HAVE THE EFFECT OF AUTHORIZING DISREGARD OF PUBLISHED PRICE-LISTS .
( E ) THE EXTENT OF THE PUBLICATION OF PRICE-LISTS IS INSUFFICIENT IF THEY ARE COMMUNICATED ONLY TO THE HIGH AUTHORITY; THE HIGH AUTHORITY MUST ENSURE THAT THE PRICE-LISTS ARE MADE AVAILABLE TO ANYONE INTERESTED .
( F ) THE POWER TO OBTAIN INFORMATION PROVIDED FOR IN ARTICLE 47 OF THE TREATY CAN LAWFULLY BE USED IN ORDER INTER ALIA TO SUPERVISE THE OBSERVANCE OF THE RULES ON NON-DISCRIMINATION AND ON THE PUBLICATION OF PRICE-LISTS .
( G ) WHEN ADOPTING THE MEASURES NECESSARY FOR THE IMPLEMENTATION OF ARTICLE 60, THE HIGH AUTHORITY HAS NOT MERELY A RIGHT BUT A DUTY TO TAKE INTO ACCOUNT ALL THE AIMS LAID DOWN IN ARTICLES 2, 3 AND 4, SUCH AS THE FIXING OF PRICES AT AS LOW A LEVEL AS POSSIBLE AND THE ATTEMPT TO PREVENT PROHIBITED AGREEMENTS . CONSEQUENTLY, IN ORDER TO ACHIEVE THE LATTER TWO AIMS, THE HIGH AUTHORITY IS NOT BOUND TO CONFINE ITSELF EXCLUSIVELY TO THE MEASURES PROVIDED FOR IN ARTICLES 61 AND 65 .
*/ 654J0001 /*.
( CF . SUMMARY OF JUDGMENT IN CASE 1/54, PARA . 3 )*
3 . WHERE MORE THAN ONE AIM IS BEING PURSUED, EVEN IF THE GROUNDS FOR A DECISION INCLUDE IMPROPER GROUNDS IN ADDITION TO THE VALID ONES, THIS WOULD NOT MAKE THE DECISION INVALID FOR MISUSE OF POWERS, PROVIDED THAT THE DECISION DOES NOT SACRIFICE THE MAIN AIM .
*/ 654J0001 /*.
4 . THE OBJECTIVE OF ARTICLE 30 ( 2 ) OF THE CONVENTION ON THE TRANSITIONAL PROVISIONS IS TO PREVENT NON-ITALIAN UNDERTAKINGS FROM COMPETING WITH ITALIAN UNDERTAKINGS ON THE ITALIAN STEEL MARKET BY UNDERCUTTING THEIR OWN PRICE-LISTS . A DECISION OF THE HIGH AUTHORITY, WITHOUT THE AGREEMENT OF THE ITALIAN GOVERNMENT, AUTHORIZING VARIATIONS FROM THE PRICE-LISTS OF NON-ITALIAN UNDERTAKINGS IS CONSEQUENTLY CONTRARY TO ARTICLE 30 .
5 . WHEN A DECISION OF THE HIGH AUTHORITY IS CONTESTED, THE HIGH AUTHORITY MUST TRANSMIT TO THE COURT ITS MINUTES RELATING TO THE DECISION; THE COURT MAY AUTHORIZE THE OMISSION OF THE NAMES OF SPEAKERS . THE COURT MAY, NEVERTHELESS, WAIVE PRODUCTION OF SUCH DOCUMENTS IF IT CONSIDERS THAT THEY ARE NOT INDISPENSABLE FOR DECIDING THE ISSUE .
Parties
IN CASE 2/54
GOVERNMENT OF THE ITALIAN REPUBLIC
REPRESENTED BY PROFESSOR RICCARDO MONACO, LEGAL ADVISER TO THE ITALIAN MINISTRY FOR FOREIGN AFFAIRS, ACTING AS AGENT, ASSISTED BY CESARE ARIAS, SOSTITUTO AVVOCATO GENERALE DELLO STATO, ROME, WITH AN ADDRESS FOR SERVICE IN LUXEMBOURG AT THE ITALIAN LEGATION, APPLICANT,
V
HIGH AUTHORITY OF THE EUROPEAN COAL AND STEEL COMMUNITY, REPRESENTED BY ITS LEGAL ADVISER, NICOLA CATALANO, ACTING AS AGENT, ASSISTED BY JEAN COUTARD, ADVOCATE AT THE CONSEIL D'ETAT AND THE COUR DE CASSATION, PARIS, WITH AN ADDRESS FOR SERVICE IN LUXEMBOURG AT ITS OFFICES, 2 PLACE DE METZ, DEFENDANT,
Subject of the case
APPLICATION FOR THE ANNULMENT OF DECISIONS NO 1/54, 2/54 AND 3/54 OF THE HIGH AUTHORITY OF 7 JANUARY 1954,
Grounds
P . 43
THE COURT'S JUDGMENT IN THE PRESENT CASE HAS TAKEN THE FOLLOWING CONSIDERATIONS INTO ACCOUNT :
1 . ADMISSIBILITY
THE PARTIES RAISE NO OBJECTION OF INADMISSIBILITY . THE COURT IS OF THE OPINION THAT THERE ARE NO GROUNDS FOR IT TO RAISE THE POINT OF ITS OWN MOTION . THE COURT AGREES WITH THE ADVOCATE GENERAL'S VIEW THAT THE THREE DECISIONS MAY BE CONTESTED IN A SINGLE ACTION; IN THESE CIRCUMSTANCES IT WILL EXAMINE THE ARGUMENTS PUT FORWARD INASMUCH AS, IN THE OPINION OF THE COURT, THEY COVER EACH OF THE THREE DECISIONS .
2 . THE SUBSTANCE OF THE CASE
THE APPLICANT CONTESTS DECISIONS NOS 1/54, 2/54 AND 3/54 ON THE GROUNDS OF INFRINGEMENT OF THE TREATY AND MISUSE OF POWERS .
A . THE SUBMISSION OF INFRINGEMENT OF THE TREATY
I . DECISION NO 1/54
( 1 ) DECISION NO 1/54 INTRODUCES A CLEAR DISTINCTION BETWEEN PUBLICATION AND DISCRIMINATION, THEREBY CREATING TWO KINDS OF INFRACTION, NAMELY THE MORE SERIOUS ONE OF DISCRIMINATION AND THE LESS SERIOUS ONE OF INFRINGING THE RULES AS TO PRICE PUBLICATION . HOWEVER, WHILST RECOGNIZING THAT THE TWO PARAGRAPHS OF ARTICLE 60 ARE LINKED AS REGARDS PURPOSE, THE COURT DOES NOT CONSIDER THAT DISTINCTION AMOUNTS TO AN INFRINGEMENT OF THE TREATY . IN FACT, NOWHERE DOES THE TREATY PRESCRIBE THAT ANY INFRINGEMENT OF THE RULES GOVERNING PRICE PUBLICATION AMOUNTS IN ITSELF TO ONE OF THE PRACTICES PROHIBITED UNDER ARTICLE 60 ( 1 ). AS REGARDS THE PROHIBITION OF DISCRIMINATORY PRACTICES IN PARTICULAR, IT CANNOT BE DISPUTED THAT THE FACT OF DEPARTING, TO WHATEVER EXTENT, FROM THE PRICES OR CONDITIONS LAID DOWN IN THE PRICE-LIST OF AN UNDERTAKING DOES NOT AMOUNT TO DISCRIMINATION WHEN IT IS A CASE OF AN EXCEPTIONAL TRANSACTION OR WHEN THE SAME VARIATION IS MADE IN THE CASE OF ALL COMPARABLE TRANSACTIONS . ON THIS POINT, DECISION NO 1/54 IS THEREFORE CONSISTENT WITH THE TREATY . ON THE OTHER HAND, IT MIGHT BE OBJECTED THAT DECISION NO 30/53 WAS OPEN TO CRITICISM, SINCE WITHOUT EXPRESSLY ADMITTING EVIDENCE TO THE CONTRARY IT HELD CERTAIN TRANSACTIONS TO BE DISCRIMINATORY WHICH, IN FACT, WERE NOT .
THE CRITICISM THAT THE ABSENCE OF ANY PRECISE DEFINITION OF EXCEPTIONAL TRANSACTIONS AND COMPARABLE TRANSACTIONS OPENS THE DOOR TO DISCRIMINATORY PRACTICES AND FACILITATES THEM INSTEAD OF COUNTERING THEM, AND SO MAKES THE CONCEPT OF A DISCRIMINATORY PRACTICE MEANINGLESS, IS LIKEWISE UNFOUNDED . IT IS TRUE THAT THE OLD SYSTEM OF STRICT ADHERENCE TO PUBLISHED PRICES SEEMS TO HAVE BEEN INTENDED TO PREVENT ANY KIND OF DISCRIMINATION, SAVE WHERE AN UNDERTAKING KNOWINGLY FAILED TO FULFIL ITS OBLIGATIONS; ON THE OTHER HAND, UNDER THE NEW SYSTEM, IT IS THEORETICALLY POSSIBLE FOR AN UNDERTAKING TO DISCRIMINATE IN GOOD FAITH THROUGH BEING MISTAKENLY OF THE OPINION THAT IT IS DEALING WITH A NON-COMPARABLE OR EXCEPTIONAL TRANSACTION; IN FACT, THE NEW SYSTEM LEAVES IT TO THE UNDERTAKING ITSELF TO DECIDE WHETHER A TRANSACTION IS OF AN EXCEPTIONAL OR NON-COMPARABLE KIND . HOWEVER DECISION NO 1/54 PLACES THE BURDEN OF PROOF ON THE UNDERTAKINGS; IF THESE CANNOT PROVE THAT THE TRANSACTION IS AN EXCEPTIONAL OR NON-COMPARABLE ONE, THEY WILL BE RESPONSIBLE FOR THEIR MISTAKE AND LIABLE TO THE PENALTIES PROVIDED BY ARTICLE 64 . FINALLY, IT MUST BE ADMITTED THAT THE CONCEPT OF AN EXCEPTIONAL OR NON-COMPARABLE TRANSACTION DOES NOT LEND ITSELF TO AN ABSTRACT DEFINITION . TRANSACTIONS ENTERED INTO AT ONE DAY'S INTERVAL MAY, IN FACT, BE NON-COMPARABLE TRANSACTIONS, IF, IN THE MEANTIME, THE MARKET HAS COMPLETELY CHANGED; ON THE OTHER HAND TWO TRANSACTIONS MAY BE COMPARABLE EVEN THOUGH ENTERED INTO WITHIN SEVERAL WEEKS OF EACH OTHER, IF THE MARKET HAS REMAINED STABLE DURING THIS PERIOD . COMPARABILITY CAN THEREFORE ONLY BE ASSESSED IN THE LIGHT OF THE STATE OF THE MARKET; MOREOVER A TRANSACTION CAN ONLY BE HELD TO BE AN EXCEPTIONAL ONE IN THE LIGHT OF ITS PARTICULAR CIRCUMSTANCES . THE TWO FACTORS - COMPARABILITY AND EXCEPTIONAL NATURE - CAN BE OBJECTIVELY ASSESSED BY THE UNDERTAKINGS AND BY THE HIGH AUTHORITY, SO THAT THE SYSTEM WHICH IS CONTESTED DOES NOT IN FACT MAKE THE CONCEPT OF DISCRIMINATION MEANINGLESS; ON THE CONTRARY IT HELPS TO CURB ANY DISCRIMINATORY PRACTICE . IT ALSO FOLLOWS FROM WHAT HAS BEEN SAID THAT THERE IS NOTHING IN THE APPLICANT'S CONTENTION THAT THE DUTY TO CHARGE IDENTICAL PRICES AND LAY DOWN IDENTICAL CONDITIONS OF SALE WOULD ONLY APPLY TO SIMULTANEOUS TRANSACTIONS .
P . 44
( 2 ) DECISION NO 1/54 IN NO WAY DOES AWAY WITH THE DUTY TO PUBLISH PRICES : ON THE CONTRARY, IT EXPRESSLY RETAINS IT . THERE IS THEREFORE NOTHING IN THE OBJECTION THAT THE DECISION IS CONTRARY TO THE RULES GOVERNING PRICE PUBLICATION AND THAT IT SACRIFICES THE PRINCIPLE OF PUBLICATION AS A MEANS OF PREVENTING PROHIBITED PRACTICES . THE COURT, WHEN IT INVESTIGATES DECISION NO 2/54, WILL CONSIDER WHETHER THE FACT OF PERMITTING VARIATIONS AND, WITHIN CERTAIN LIMITS, EXEMPTING UNDERTAKINGS FROM MAKING A NEW PUBLICATION IS IN ACCORDANCE WITH THE TREATY; IN ANY CASE THIS IS NOT A FACT WHICH CAN BE RELIED ON IN CONTESTING DECISION NO 1/54, WHICH IN NO WAY AFFECTS THE PRINCIPLE OF PUBLICATION .
( 3 ) DECISION NO 1/54 IN NO WAY PREVENTS THE IMPOSITION OF PENALTIES IF THERE IS DISCRIMINATION . IF COMPARABLE TRANSACTIONS ARE ENTERED INTO AT DIFFERENT PRICES AND UNDER DIFFERENT CONDITIONS OF SALE, THE PENALTIES PROVIDED FOR BY ARTICLE 64 STILL APPLY .
( 4 ) LASTLY, THERE IS NOTHING IN THE APPLICANT'S ARGUMENT THAT DECISION NO 1/54, INSTEAD OF DEFINING PROHIBITED PRACTICES, IN FACT LEGALIZES CERTAIN PRACTICES WHICH WERE ILLEGAL UNDER THE OLD SYSTEM . IT HAS BEEN SHOWN ABOVE THAT DECISION NO 1/54 GIVES A NEW DEFINITION OF PROHIBITED PRACTICES BY DISTINGUISHING BETWEEN THE RULES AS TO NON-DISCRIMINATION AND THE PROVISIONS GOVERNING PUBLICATION . IF THE NEW DEFINITION PERMITS PRACTICES, WHICH WERE PREVIOUSLY PROHIBITED, NAMELY DEPARTURES FROM PUBLISHED PRICES, IT ALSO LAYS IT DOWN THAT PRICES OR CONDITIONS MUST BE DEPARTED FROM UNIFORMITY IN ALL COMPARABLE TRANSACTIONS, APART FROM ANY EXCEPTIONAL TRANSACTION WHICH CANNOT GIVE RISE TO DISCRIMINATION . THE PRINCIPLE OF PROHIBITING ANY DISCRIMINATORY PRACTICE IS THEREFORE STRICTLY OBSERVED; DECISION NO 1/54, WHILST DOING AWAY WITH THE FORMER AUTOMATIC SYSTEM, STAYS WITHIN THE DEFINITION OF PROHIBITED PRACTICES .
P . 45
THE COURT THEREFORE HOLDS THAT DECISION NO 1/54 DOES NOT AMOUNT TO INFRINGEMENT OF THE TREATY . THE APPLICATION TO ANNUL THAT DECISION, INASMUCH AS IT IS BASED ON AN ALLEGATION OF INFRINGEMENT OF THE TREATY, MUST THEREFORE BE DISMISSED .
II . DECISION NO 2/54
THE COURT HOLDS THAT ARTICLE 1 OF DECISION NO 2/54 IS INCONSISTENT WITH THE TREATY IN SO FAR AS IT ALLOWS UNDERTAKINGS TO MAKE A MEAN VARIATION UPWARD OR DOWNWARD BETWEEN ACTUAL MARKET PRICES AND PUBLISHED PRICES WITHOUT PRIOR PUBLICATION OF AMENDMENTS TO PRICE-LISTS . THE GROUNDS FOR REGARDING THIS AS AMOUNTING TO AN INFRINGEMENT OF THE TREATY ARE AS FOLLOWS :
( 1 ) BEFORE ARTICLE 60 ( 2 ) OF THE TREATY IS INTERPRETED IN DETAIL, IT IS PROPER TO EXAMINE WHAT THE HIGH AUTHORITY'S OBJECTIVES MUST BE WHEN IT DEFINES PROHIBITED PRACTICES AND REGULATES THE PUBLICATION OF PRICES AND CONDITIONS OF SALE .
( A ) ARTICLES 2, 3 AND 4 OF THE TREATY, REFERRED TO AT THE BEGINNING OF ARTICLE 60 ( 1 ), CONSTITUTE FUNDAMENTAL PROVISIONS ESTABLISHING THE COMMON MARKET AND THE COMMON OBJECTIVES OF THE COMMUNITY . THEIR IMPORTANCE IS CLEAR FROM ARTICLE 95 . IN AUTHORIZING THE HIGH AUTHORITY TO DEFINE PROHIBITED PRACTICES, THE TREATY OBLIGES IT TO TAKE INTO ACCOUNT ALL THE AIMS LAID DOWN IN ARTICLES 2, 3 AND 4 . THIS FOLLOWS CLEARLY FROM THE EXPRESS REFERENCE TO THE SAID ARTICLES AT THE BEGINNING OF ARTICLE 60 . THE HIGH AUTHORITY THEREFORE HAS NOT MERELY A RIGHT, BUT A DUTY, WHEN DEFINING PROHIBITED PRACTICES, TO BEAR IN MIND THE ATTEMPT TO PREVENT AGREEMENTS BETWEEN PRODUCERS AND TO BE CONCERNED TO HELP PRICES TO BE FIXED AS LOW AS POSSIBLE, UNDER THE CONDITIONS REFERRED TO IN ARTICLE 3 OF THE TREATY, AS WELL AS THE ATTEMPT TO PREVENT UNFAIR COMPETITIVE PRACTICES AND DISCRIMINATORY PRACTICES . FOR THESE REASONS, THE COURT CANNOT ACCEPT THE APPLICANT'S CONTENTION THAT ARTICLE 60 ONLY REFERS TO THE ATTEMPT TO PREVENT DISCRIMINATORY PRACTICES, THAT THE ATTEMPT TO PREVENT AGREEMENTS IS SOLELY GOVERNED BY ARTICLE 65, AND THAT THE ATTEMPT TO HELP PRICES TO BE FIXED AS LOW AS POSSIBLE IS GOVERNED BY ARTICLE 61 . IT IS TRUE THAT ARTICLES 65 AND 61 OF THE TREATY GIVE THE HIGH AUTHORITY DIRECT MEANS OF ACTION TO COUNTER AGREEMENTS AND INCREASES IN PRICES, BUT THE TREATY MAKES IT CLEAR ( INTER ALIA IN ARTICLE 57 WHICH DEALS WITH THE FIELD OF PRODUCTION ) THAT THE HIGH AUTHORITY, BEFORE USING DIRECT MEANS OF ACTION, MUST GIVE PREFERENCE TO " THE INDIRECT MEANS OF ACTION AT ITS DISPOSAL ". THUS THE HIGH AUTHORITY MAY ALSO EXERCISE ITS RIGHT TO DEFINE PROHIBITED PRACTICES AS REGARDS PRICES, WITH A VIEW TO FORESTALLING PRACTICES WHICH ARE CONTRARY TO ANY OF THE OBJECTIVES REFERRED TO IN ARTICLE 60 .
P . 46
FURTHERMORE, THE WORDS " IN PARTICULAR " ( ARTICLE 60 ( 1 )) SHOW THAT ARTICLE 60 DEALS MAINLY WITH UNFAIR COMPETITIVE PRACTICES AND DISCRIMINATORY PRACTICES .
( B ) WITH PARTICULAR REFERENCE TO THE PART WHICH UNDER THE TREATY IS TO BE PLAYED BY THE PUBLICATION OF PRICE-LISTS, THE COURT ACCEPTS THE ADVOCATE GENERAL'S VIEW THAT COMPULSORY PUBLICATION IS PROVIDED FOR IN THE TREATY IN ORDER TO ATTAIN THE THREE FOLLOWING OBJECTIVES :
( 1 ) AS FAR AS POSSIBLE TO PREVENT PROHIBITED PRACTICES; ( 2 ) TO ENABLE PURCHASERS TO LEARN EXACTLY WHAT PRICES WILL BE CHARGED AND BE ABLE THEMSELVES TO CHECK WHETHER ANY DISCRIMINATION HAS TAKEN PLACE;
( 3 ) TO ENABLE UNDERTAKINGS TO HAVE AN ACCURATE KNOWLEDGE OF THE PRICES OF THEIR COMPETITORS SO AS TO ENABLE THEM TO ALIGN THEIR PRICES .
WHILST PUBLICATION IS INTENDED TO MEET THE ABOVE-MENTIONED OBJECTIVES, THE TREATY DOES NOT CONSIDER THAT THIS ALONE WILL SUFFICE TO ENSURE THE ATTAINMENT OF THESE OBJECTIVES; PUBLICATION IS BUT ONE OF THE MEANS PROVIDED FOR BY THE TREATY . THE PUBLICATION OF PRICE-LISTS IS A MATTER OF PUBLIC LAW, SINCE THE RESULTS UNDER PRIVATE LAW HAVE NOT BEEN DEALT WITH BY THE TREATY . HOWEVER, THIS PUBLIC LAW CHARACTERISTIC, WHICH THE ADVOCATE GENERAL HAS RIGHTLY EMPHASIZED, IS NOT INCONSISTENT WITH THE APPLICANT GOVERNMENT'S CONTENTION THAT THE PUBLICATION OF PRICE-LISTS MUST ALSO PRODUCE LEGAL CONSEQUENCES FOR THIRD PARTIES, IN PARTICULAR UNDERTAKINGS WISHING TO ALIGN THEIR PRICES WITH THOSE OF THEIR COMPETITORS . IT IS THIS RESULT, WHICH IS INHERENT IN THE VERY PUBLICATION OF THE PRICE-LISTS, WHICH DISTINGUISHES THAT PUBLICATION BOTH FROM THE MERE INFORMATION COLLECTED BY THE HIGH AUTHORITY UNDER ARTICLE 47 AS WELL AS FROM THE PUBLICATION OF STATISTICAL DOCUMENTS COMPILED BY THE HIGH AUTHORITY IN ACCORDANCE WITH ARTICLE 46 . IF PUBLICATION WAS NOT INTENDED TO KEEP THE GENERAL PUBLIC INFORMED, IT IS DIFFICULT TO UNDERSTAND WHY THE TREATY DID NOT MERELY DECLARE " THAT THE PRICE-LISTS MUST BE COMMUNICATED TO THE HIGH AUTHORITY ".
( 2 ) ARTICLE 60 ( 1 ) DIRECTLY AND CATEGORICALLY PROHIBITS CERTAIN PRACTICES; THE HIGH AUTHORITY IS AUTHORIZED TO DEFINE THEM BUT IT MAY NOT DEROGATE FROM THE RULE THAT THEY ARE PROHIBITED .
ARTICLE 60 ( 2 ) PROVIDES FOR THE COMPULSORY PUBLICATION OF THE PRICE-LISTS " FOR THESE PURPOSES ". THESE WORDS CLEARLY SHOW THE INSTRUMENTAL NATURE OF THE SUBSEQUENT PROVISIONS AS TO THE PUBLICATION OF PRICES . THIS IS CATEGORICALLY PROVIDED FOR; IT IS REGARDED AS AN APPROPRIATE MEANS OF ATTAINING THE OBJECTIVES SET OUT IN THE PREVIOUS PARAGRAPH . IT IS THUS ONLY A MEANS, BUT A MEANS CATEGORICALLY LAID DOWN BY THE TREATY AND NOT A MEANS WHICH MAY BE REPLACED BY ANY OTHER MEANS WHICH MIGHT POSSIBLY ACHIEVE THE SAME RESULTS .
P . 47
THE MANDATORY NATURE OF THE DUTY TO PUBLISH THE PRICE-LISTS IS ALSO MADE CLEAR BY THE WORDS " MUST BE MADE PUBLIC ". THUS THE COURT COMES TO THE CONCLUSION THAT THE DUTY TO MAKE THE PRICE-LISTS AND CONDITIONS OF SALE PUBLIC MUST BE INTERPRETED AS A STRICT RULE OF LAW, WHICH ALLOWS OF NO EXCEPTION . THE DUTY IS AN ABSOLUTE ONE AND MUST BE FULFILLED IN ITS ENTIRETY .
THE COURT DOES NOT AGREE WITH THE DEFENDANT'S VIEW THAT THE EXPRESSION " ETRE RENDUS PUBLICS " ( " BE MADE PUBLIC " ) IS LESS STRONG THAN IF THE TREATY HAD SAID " ETRE PUBLIES " ( " BE PUBLISHED " ). IN FACT, IN THE LAST TWO PARAGRAPHS OF ARTICLE 46, THE TREATY USES THESE TWO TERMS ( BOTH RENDERED BY THE WORD " PUBLISH " IN THE ENGLISH VERSION OF THE TREATY ) AS HAVING THE SAME MEANING . IN ANY CASE, PUBLICATION MUST BE EFFECTED IN SUCH A WAY THAT ALL THOSE WHO OPERATE ON THE MARKET ( POSSIBLE FUTURE PURCHASERS AND COMPETITORS ) MAY KNOW THE PRICES; ONLY SUCH PUBLICITY MEETS THE OBJECTIVES TO ATTAIN WHICH THE RULE WAS MADE .
( 3 ) ARTICLE 60 ( 2 ) ( A ) DOES NOT EXPRESSLY STATE THE TIME WHEN PRICE-LISTS AND CONDITIONS OF SALE MUST BE PUBLISHED . ONE ONLY HAS TO READ SUBPARAGRAPH ( 2 ) ( B ) ON THE METHODS OF QUOTATION TO UNDERSTAND THAT THE PRICE-LISTS MUST PRECEDE ANY SALE EFFECTED IN THE COMMON MARKET .
IN FACT, ARTICLE 60 ( 2 ) ( B ) STATES THAT THE METHODS OF QUOTATION USED MUST NOT HAVE THE EFFECT THAT PRICES CHARGED RESULT IN INCREASES OVER THE PRICE " SHOWN IN THE PRICE-LISTS " - WHICH AGAIN CONFIRMS THAT THE PRICE-LISTS CONTAIN A LIST OF THE PRICES AT WHICH GOODS ARE OFFERED FOR SALE, WHICH ENABLES ANY LAWFUL TRANSACTION TO BE PRECISELY CALCULATED, AND THAT THESE PRICE-LISTS MUST BE PUBLISHED BEFORE BEING APPLIED .
MOREOVER, ARTICLE 30 ( 2 ) OF THE CONVENTION ON THE TRANSITIONAL PROVISIONS STATES THAT THE PRICES CHARGED BY UNDERTAKINGS FOR SALES OF STEEL ON THE ITALIAN MARKET MAY NOT BE LOWER THAN THE PRICES SHOWN IN THE PRICE-LISTS FOR COMPARABLE TRANSACTIONS . THIS PROVISION CONFIRMS THAT THE PRICE-LIST IS ONLY A LIST OF THE PRICES AT WHICH GOODS ARE OFFERED FOR SALE PRIOR TO ANY CONTRACT OF SALE .
MOREOVER THE TREATY IS VERY PRECISE IN ITS WORDING WHEN IT REFERS TO " THE PRICE-LISTS " AND NOT " PRICE-LISTS ". THE PRICE-LISTS IN QUESTION ARE THEREFORE NOT DOCUMENTS RELATED TO THE TREATY ALONE AND SPECIALLY DRAWN UP WITH A VIEW TO THE TREATY'S OBJECTIVES, BUT DOCUMENTS OF A TYPE WHICH HAS BEEN ESTABLISHED BY PREVIOUS COMMERCIAL PRACTICE AND WHICH, ACCORDING TO SUCH PRACTICE, ALWAYS AMOUNT - ALBEIT SOMETIMES GENERALLY AND SOMETIMES PROVISIONALLY - TO AN OFFER TO DO BUSINESS ON THE BASIS OF THE PRICE STATED IN THEM .
PRICE-LISTS DO NOT CEASE TO BE OFFERS TO DO BUSINESS EVEN THOUGH THE TREATY ASCRIBES TO THEM OBJECTIVES OF PUBLIC INTEREST WHICH ARE RECOGNIZED BY ITS PROVISIONS . THERE CAN THEREFORE BE NO DOUBT THAT THE EXPRESSION " PRICE-LIST " RETAINS ITS USUAL MEANING IN THE TREATY AND MEANS THE PRICES ON THE BASIS OF WHICH UNDERTAKINGS STATE THEIR WILLINGNESS TO SELL THEIR PRODUCTS .
THIS INTERPRETATION IS MOREOVER CONFIRMED ( AND ON THIS POINT THE COURT ACCEPTS THE ADVOCATE GENERAL'S ARGUMENT ) BY THE FACT THAT ARTICLE 60 ( 2 ) DISTINGUISHES BETWEEN PRICES APPLIED AND PRICES CHARGED, INASMUCH AS THIS LATTER EXPRESSION WHICH APPEARS IN ARTICLE 60 ( 2 ) ( B ) MEANS THE PRICES AT WHICH TRANSACTIONS ARE IN FACT CONCLUDED . CONSEQUENTLY, IT WOULD SEEM THAT THE EXPRESSION " PRIX APPLIQUES " ( PRICES APPLIED ) MEANS THE PRICES AT WHICH GOODS ARE OFFERED BY VENDORS, ALTHOUGH IT WOULD HAVE BEEN CLEARER HAD THE TREATY USED THE TERM " PRICES TO BE APPLIED " FOR THIS PURPOSE .
P . 48
MOREOVER, BOTH IN ITS PREVIOUS DECISIONS AND IN DECISION NO 2/54, THIS IS THE MANNER IN WHICH THE HIGH AUTHORITY ALWAYS SEEMS TO HAVE INTERPRETED THE TREATY, FOR ARTICLE 4 OF DECISION NO 31/53 AND ARTICLE 3 OF DECISION NO 2/54 BOTH CONTAIN THE STATEMENT THAT THE PRICE-LISTS AND CONDITIONS OF SALE SHALL APPLY NOT EARLIER THAN " FIVE CLEAR DAYS " ( ONE DAY, ACCORDING TO ARTICLE 3 OF DECISION NO 2/54 ) " AFTER THEY HAVE BEEN ADDRESSED IN PRINTED FORM TO THE HIGH AUTHORITY ".
THE PREAMBLE TO DECISION NO 2/54 ALSO SHOWS THAT THE HIGH AUTHORITY ITSELF ASSUMES THAT THE PRICE-LISTS WILL HAVE BEEN PUBLISHED BEFOREHAND : AFTER THE SECOND RECITAL STATES THAT THE PRICE-LISTS MUST REFLECT THE PRICE-LEVEL EXISTING ON THE MARKET, THE THIRD RECITAL REFERS TO CERTAIN CONCESSIONS GRANTED TO UNDERTAKINGS, AND, TO THESE CONCESSIONS, THE FOURTH RECITAL ADDS YET ANOTHER CONSISTING OF MAKING THE TIME-LIMITS SET FOR APPLYING A NEW PRICE-LIST AS SHORT AS POSSIBLE . IT WOULD BE REALLY DIFFICULT TO REGARD THIS AS A CONCESSION IF THE PRICE-LISTS MERELY REFLECTED PRICE MOVEMENTS ON THE MARKET AFTER THEY HAD OCCURRED . ONLY IF THERE IS PREVIOUS PUBLICATION CAN THIS BE REGARDED AS A CONCESSION, FOR THIS IS THE ONLY CIRCUMSTANCE UNDER WHICH UNDERTAKINGS WILL HAVE AN INTEREST IN NOT HAVING TO WAIT SEVERAL DAYS BEFORE BEING IN A POSITION TO CONCLUDE SALES CONTRACTS BASED ON NEW PRICES .
IT MUST THEREFORE BE CONCLUDED THAT THE PUBLICATION OF PRICE-LISTS MUST NECESSARILY BE EFFECTED BEFORE UNDERTAKINGS MAY APPLY NEW PRICES .
MOREOVER, IT FOLLOWS FROM THE FOREGOING CONSIDERATIONS THAT THE WORD " PRICE-LIST " ALWAYS MEANS PUBLISHED PRICE-LISTS . ON THIS POINT ALSO, THE COURT ACCEPTS THE ADVOCATE GENERAL'S ARGUMENT . THE COURT CANNOT ACCEPT THE DEFENDANT'S SUGGESTION THAT THE TERM " PRICE-LIST " DOES NOT NECESSARILY BEAR THIS MEANING .
( 4 ) NOW THAT IT IS ESTABLISHED THAT THE PRICE-LISTS AND CONDITIONS OF SALE MUST BE PUBLISHED BEFORE THEY ARE APPLIED ON THE COMMON MARKET, IT REMAINS TO BE DECIDED WHETHER THE TREATY REQUIRES THE PUBLICATION OF EXACT PRICES OR WHETHER IT IS ENOUGH TO PUBLISH AVERAGE OR APPROXIMATE PRICES . THERE IS NO DOUBT THAT THE TREATY REQUIRES THE PUBLICATION OF EXACT PRICES IN THE FORM OF PRICE-LISTS . THIS FOLLOWS FROM THE OBJECTIVES TO WHICH THE PRINCIPLE OF PRICE PUBLICATION IS INTENDED TO LEAD : THE INFORMATION AQUIRED BY PURCHASERS IS ONLY OF VALUE TO THEM IF IT INFORMS THEM OF THE EXACT PRICES AT WHICH THEY CAN BUY . LIKEWISE PUBLICATION MUST MAKE ALIGNMENT POSSIBLE AND THIS MUST BE BASED ON A COMPETITOR'S EXACT PRICES . ALIGNMENT IS A RIGHT GRANTED TO UNDERTAKINGS BY THE TREATY, NOT A MERE POSSIBILITY TO WHICH EFFECT COULD ONLY BE GIVEN IF UNDERTAKINGS WERE IN A POSITION TO GAIN INFORMATION BY OTHER MORE OR LESS FORTUITOUS MEANS AS TO PRICES CHARGED BY THEIR COMPETITORS .
P . 49
IF THEREFORE, FOR THE ABOVE-MENTIONED REASONS, THE TREATY CATEGORICALLY REQUIRES THE PRIOR PUBLICATION OF EXACT PRICES, IT FOLLOWS THAT THE POWER ACCORDED TO THE HIGH AUTHORITY TO LAY DOWN THE EXTENT AND THE MANNER OF PUBLICATION DOES NOT ALLOW IT TO WEAKEN THE PRINCIPLE OF THE COMPULSORY PUBLICATION OF EXACT PRICES . SINCE ARTICLE 60 ( 2 ) ( A ) IS A STRICT RULE OF LAW AND IN THE ABSENCE OF ANY PROVISION TO THE CONTRARY, THE POWERS CONFERRED ON THE HIGH AUTHORITY BY THE WORDS " TO THE EXTENT AND IN THE MANNER PRESCRIBED BY THE HIGH AUTHORITY ", CANNOT BE READ AS AUTHORIZING THE HIGH AUTHORITY NOT TO PUBLISH PRICE-LISTS . THE WORDS JUST QUOTED MUST BE UNDERSTOOD TO MEAN THAT THE HIGH AUTHORITY IS ENTITLED TO DETERMINE THE CONTENT OF THE PRICE-LISTS . BUT THIS CONTENT MUST FULFIL A PUBLIC NEED, SO THAT THE HIGH AUTHORITY IS CONFINED TO LAYING DOWN THE MINIMUM INFORMATION TO BE INCLUDED IN THE PRICE-LISTS .
IN OTHER WORDS, THE PHRASE " TO THE EXTENT AND IN THE MANNER PRESCRIBED BY THE HIGH AUTHORITY " ENTITLES THE HIGH AUTHORITY TO PRESCRIBE THE EXTENT, THAT IS TO SAY, THE SCOPE, OF PUBLICATIONS, IN SO FAR AS IT IS A QUESTION OF SETTLING THEIR DETAILS; THE HIGH AUTHORITY MAY, FOR INSTANCE, AS IT HAS ALREADY DONE, DECIDE THE PERIOD AFTER WHICH A NEW PRICE-LIST SHALL COME INTO FORCE, LAY DOWN THAT CERTAIN DISCOUNTS ( SUCH AS DISCOUNTS FOR SECONDS, AND SO ON ) MUST BE MENTIONED IN THE PRICE-LISTS, AND DECIDE WHETHER PACKING COSTS SHOULD OR SHOULD NOT BE PUBLISHED . ON THE OTHER HAND, IN ACCORDANCE WITH THE SYSTEM CREATED BY THE TREATY EVERY PRICE-LIST MUST CONTAIN ALL INFORMATION REQUIRED TO SHOW THE EXACT PRICE . THE FACT THAT THE TREATY REQUIRES THE PUBLICATION OF PRICE-LISTS TO BE MADE WITH DUE REGARD TO THE PURPOSES WHICH IT IS TO SERVE MAKES IT IMPOSSIBLE TO ACCEPT THE HIGH AUTHORITY'S ARGUMENT THAT IT HAS POWER TO LAY DOWN WHAT SHALL AND WHAT SHALL NOT BE PUBLISHED, ACCORDING TO ITS OWN UNFETTERED JUDGMENT . IF THIS ARGUMENT, WHICH THE COURT REJECTS, WERE ACCEPTED THERE WOULD BE NO LIMIT TO THE INFORMATION WHICH MIGHT BE EXEMPTED FROM THE DUTY OF PUBLICATION . THE HIGH AUTHORITY WOULD THEN BE ABLE TO LAY DOWN FAR WIDER MARGINS, AND IT IS IMPOSSIBLE TO SAY WHERE THIS WOULD END; IT MIGHT LAY DOWN MERE PUBLICATION IN SCALES ( FOR EXAMPLE " PRICE 80 TO 120 " ) OR EVEN THE NON-PUBLICATION OF PRICES OF WHOLE CATEGORIES OF PRODUCTS - IN SHORT, IT MIGHT DISCARD THE PRINCIPLE OF COMPULSORY PUBLICATION LAID DOWN IN THE TREATY .
LASTLY WHILST IT IS TRUE THAT THE HIGH AUTHORITY'S POWERS ARE TO REGULATE THE MINIMUM REQUIREMENTS WITH WHICH THE PRICE-LISTS MUST COMPLY, ITS POWERS ARE ALSO TO REGULATE THE SCOPE OF THE PUBLICATION ITSELF . IT IS THUS NOT ENOUGH TO ENSURE THAT THE PRICE-LISTS ARE TRANSMITTED TO THE HIGH AUTHORITY; IF THIS WERE THE CASE, THE TREATY WOULD MERELY HAVE SO PROVIDED . THE PRICE-LISTS MUST BE MADE PUBLIC AND THE HIGH AUTHORITY'S POWER TO PRESCRIBE " THE EXTENT AND THE MANNER " IMPLIES THAT IT HAS A DUTY TO SEE THAT THE EXTENT TO WHICH AND THE MANNER IN WHICH THE PRICE-LISTS ARE PUBLISHED AND MADE AVAILABLE TO THE PUBLIC ADEQUATELY MEET THE NEEDS OF THE PUBLIC INTEREST .
THE TEXT OF DECISION NO 31/53 WAS DRAFTED WITH EXTREME CARE; ARTICLE 1 STATES THAT UNDERTAKINGS IN THE STEEL INDUSTRIES MUST PUBLISH THEIR PRICE-LISTS AND CONDITIONS OF SALE, AND ANY SUBSEQUENT AMENDMENTS MUST ALSO BE PUBLISHED IN ACCORDANCE WITH THE PROVISIONS OF THE DECISION; ARTICLE 2 THEN STATES WITH GREAT PRECISION WHAT INFORMATION THE PRICE-LISTS MUST CONTAIN, PUTTING A REASONABLE INTERPRETATION ON THE WORDS " EXTENT " AND " MANNER " WHICH APPEAR IN THE TREATY; ARTICLE 4 PROVIDES THAT PRICE-LISTS ARE TO APPLY NOT EARLIER THAN FIVE CLEAR DAYS AFTER THEY HAVE BEEN ADDRESSED TO THE HIGH AUTHORITY AND THAT THE SELLER MUST COMMUNICATE THEM UPON REQUEST TO ANYONE INTERESTED .
P . 50
ON THE OTHER HAND, WHAT IS LAID DOWN IN ARTICLE 1 OF DECISION NO 2/54 IS NOT THE EXTENT TO WHICH THE PRICE-LISTS MUST BE MADE PUBLIC BY UNDERTAKINGS, BUT RATHER THE EXTENT TO WHICH THE HIGH AUTHORITY AUTHORIZES THE NON-OBSERVANCE OF THE PUBLISHED PRICE-LISTS . THIS IS CONTRARY TO ARTICLE 60 ( 2 ) OF THE TREATY .
IT IS TO BE ADDED THAT THE INTERPRETATION ADOPTED BY THE COURT IS SUPPORTED BY THE FACT THAT THE HIGH AUTHORITY MAY DETERMINE THE EXTENT OF PUBLICATION AFTER MERELY CONSULTING THE CONSULTATIVE COMMITTEE WHEREAS, BEFORE DEFINING PROHIBITED PRACTICES, IT MUST ALSO CONSULT THE COUNCIL OF MINISTERS . THIS IS UNDERSTANDABLE IF THE HIGH AUTHORITY WHEN DETERMINING THE EXTENT OF PUBLICATION MUST STRICTLY ADHERE TO THE RULE THAT THE EXACT PRICES AND CONDITIONS OF SALE MUST BE PUBLISHED . HAD THE TREATY WISHED TO GIVE THE HIGH AUTHORITY GREATER FREEDOM AND THE RIGHT TO DEROGATE FROM THIS RULE, IT WOULD HAVE BEEN LOGICAL FOR SUCH POWERS ALSO TO BE SUBJECT TO CONSULTATION WITH THE COUNCIL .
( 5 ) IT NOW REMAINS TO CONSIDER WHETHER THE CONCLUSION TO WHICH THE COURT HAS COME AS A RESULT OF ITS EXAMINATION OF THE WORDS USED AND THE REASONS UNDERLYING THEM IS CONTRARY TO THE TREATY'S OTHER OBJECTIVES, OR WHETHER IT MAY BE INVALIDATED BY OTHER CONSIDERATIONS . THIS IS NOT THE CASE . IT MUST FIRST BE REPEATED THAT THE METHOD OF PRIOR PUBLICATION OF THE EXACT PRICES IS THE MANDATORY RULE LAID DOWN BY ARTICLE 60 ( 2 ). IT FOLLOWS THAT THIS RULE CANNOT BE DISREGARDED, EVEN IF THIS WOULD FACILITATE SOME OTHER METHOD WHICH MIGHT BETTER ATTAIN THE AIMS IN VIEW . IT IS NOT FOR THE COURT TO EXPRESS A VIEW AS TO THE DESIRABILITY OF THE METHOD LAID DOWN BY THE TREATY, OR TO SUGGEST A REVISION OF THE TREATY, BUT IT IS BOUND, IN ACCORDANCE WITH ARTICLE 31, TO ENSURE THAT IN THE INTERPRETATION AND APPLICATION OF THE TREATY AS IT STANDS THE LAW IS OBSERVED .
( A ) THE OBJECTION THAT PURCHASERS CANNOT CHECK ON PRICES WHEN THESE ARE COMING DOWN IS IRRELEVANT, AS THIS IS NOT THE SOLE OBJECT OF PUBLICATION, WHICH IS ALSO INTENDED TO ENABLE PURCHASERS TO OBTAIN INFORMATION AS TO THE EXACT PRICES AND TO ENABLE UNDERTAKINGS TO ALIGN THEIR PRICES . THIS OBJECTION IS THEREFORE NOT SUFFICIENT TO JUSTIFY ABANDONING THE RULE AS TO PUBLICATION WHICH IS LAID DOWN IN THE TREATY .
( B ) THE DEFENDANT STRESSED THE DANGER OF AGREEMENTS BETWEEN PRODUCERS, A DANGER WHICH IS SAID TO BE INHERENT IN THE OLD SYSTEM . HOWEVER THERE IS NO EVIDENCE THAT THE INTRODUCTION OF AN AVERAGE MARGIN WOULD OBVIATE THIS DANGER . EVEN IF THE NEW SYSTEM WERE TO SOME EXTENT INSTRUMENTAL IN LESSENING THIS RISK, THIS WOULD NOT BE ANY JUSTIFICATION FOR NEGLECTING THE OTHER OBJECTIVES AT WHICH PUBLICATION IS AIMED . MOREOVER, THE TREATY ENABLES THE HIGH AUTHORITY TO INTERVENE BY OTHER MEANS, AS SOON AS IT LEARNS THAT ANY AGREEMENTS HAVE BEEN CONCLUDED .
P . 51
( C ) THE STATE OF THE MARKET, IN PARTICULAR THE REALIZATION THAT THERE IS A TREND TO LOWER PRICES, IS LIKEWISE NO GROUND FOR ABOLISHING THE RULE THAT PRICES ARE TO BE PUBLISHED, SINCE SUCH PUBLICATION IS PROVIDED FOR BY THE TREATY . IN THE EVENT OF A CRISIS OR DISTURBANCES ON THE MARKET, THE TREATY CONFERS VARIOUS POWERS ON THE HIGH AUTHORITY - IN PARTICULAR UNDER ARTICLE 60 ( 2 ) ( B ) LAST LINE, ARTICLE 61, ARTICLE 63, ARTICLES 58 AND 59 - BUT NOWHERE THE POWER TO DISPENSE WITH THE COMPULSORY PUBLICATION OF PRICE-LISTS . MOREOVER, THE RULE AS TO COMPULSORY PUBLICATION, LAID DOWN BY THE TREATY, IS OF A GENERAL NATURE AND IN NO WISE DEPENDS ON CURRENT MARKET TRENDS .
( D ) THE COURT HAS BEEN PARTICULARLY CONCERNED THAT PRICES SHALL BE ALLOWED TO FIND THEIR OWN LEVEL; BUT THIS CANNOT JUSTIFY ITS REACHING ANOTHER DECISION . THE TREATY IS BASED ON THE ASSUMPTION THAT THE FREEDOM GIVEN TO UNDERTAKINGS TO FIX THEIR OWN PRICES AND TO PUBLISH NEW PRICE-LISTS WHENEVER THEY WISH TO AMEND THEM WILL ENSURE THAT PRICES FIND THEIR OWN LEVEL . IF CURRENT MARKET TRENDS CHANGE PRODUCERS WILL HAVE TO AMEND THEIR PRICE-LISTS ACCORDINGLY, AND IN THIS WAY " THE MARKET MAKES THE PRICE ". BUT NOTWITHSTANDING THE BASIC ASSUMPTION THAT PRICES ARE TO BE ALLOWED TO FIND THEIR OWN LEVEL, IT MUST NOT BE FORGOTTEN THAT THE TREATY FORBIDS ANY KIND OF DISCRIMINATION AND THAT IT PROVIDES FOR THE RIGHT TO ALIGN PRICES . THIS IS WHY THE TREATY HAS LAID DOWN THE RULE THAT THERE SHOULD BE COMPULSORY AND PRIOR PUBLICATION OF PRICE-LISTS AND CONDITIONS OF SALE . IT IS NOT FOR THE COURT TO EXPRESS A VIEW AS TO THE DESIRABILITY OF THIS SYSTEM; IT CAN ONLY RECORD THAT THIS RULE IS LAID DOWN BY THE TREATY WHICH ( WHETHER RIGHTLY OR WRONGLY ) DOES NOT CONTAIN ANY WORDS WHICH MIGHT PERMIT A CERTAIN FLEXIBILITY IN THE PRICE-LISTS IN THE EVENT OF MINOR OR TEMPORARY FLUCTUATIONS .
6 . THE APPLICANT HAS CLAIMED FOR THE FIRST TIME IN ITS REPLY THAT THE NEW SYSTEM ALLOWS UNDERTAKINGS TO CONCEAL DISCRIMINATORY TRANSACTIONS FOR 60 DAYS . THE DEFENDANT CONSIDERS THIS TO BE A NEW SUBMISSION WHICH IS INADMISSIBLE UNDER ARTICLE 29 ( 3 ) OF THE RULES OF PROCEDURE .
THE COURT CONSIDERS THAT THIS IS AN ARGUMENT IN SUPPORT OF THE SUBMISSION OF INFRINGEMENT OF THE TREATY ALREADY MADE IN THE APPLICATION AND THAT IT SHOULD NOT BE DECLARED INADMISSIBLE . ON THE OTHER HAND THIS ARGUMENT IS UNFOUNDED IN VIEW OF THE OBLIGATION CONTAINED IN DECISION NO 3/54 TO SEND FORTNIGHTLY REPORTS .
THE APPLICANT HAS FURTHER MADE THE FOLLOWING SUBMISSIONS :
7 . SUBMISSION THAT THE CONSULTATIVE COMMITTEE HAS NOT BEEN CONSULTED IN ACCORDANCE WITH LEGAL REQUIREMENTS :
THE DEFENDANT ASKS THE COURT TO DECLARE THIS SUBMISSION INADMISSIBLE ON THE GROUND THAT IT IS NOT CONTAINED IN THE APPLICATION . THE COURT CONSIDERS THAT IT IS RIGHT TO CONSIDER THIS SUBMISSION OF ITS OWN MOTION IN VIEW OF THE FACT THAT IF IT WERE WELL-FOUNDED THE COURT WOULD BE JUSTIFIED IN ANNULLING THE DECISION OF ITS OWN MOTION ON THE GROUND OF INFRINGEMENT OF THE TREATY OR OF AN ESSENTIAL PROCEDURAL REQUIREMENT .
P . 52
THE MINUTES OF THE CONSULTATIVE COMMITTEE, FORWARDED TO THE COURT IN PURSUANCE OF THE ORDER OF 6 NOVEMBER 1954, SHOW THAT THE CONSULTATIVE COMMITTEE HAS BEEN DULY CONSULTED, THAT IT HAS GIVEN AN OPINION ON CERTAIN AMENDMENTS WHICH WERE TO BE MADE TO DECISIONS NOS 30/53 AND 31/53 AND THAT THE ONLY ISSUES ON WHICH THE CONSULTATION HAS NOT BEEN CONCLUDED, NAMELY THE DEFINITION AND THE EXEMPTION FROM PUBLICATION IN PRICE-LISTS OF LONG-TERM CONTRACTS AND OPEN TENDERS DO NOT COME INTO QUESTION IN EXAMINING THE LEGALITY OF THE CONTESTED DECISIONS .
THE MINUTES REFLECT A COLLECTION OF OPINIONS WHICH THE HIGH AUTHORITY, TOGETHER WITH THE CONSULTATIVE COMMITTEE, COULD RIGHTLY CONSIDER AS AN OPINION .
ON THIS ISSUE THE COURT CONCURS WITH THE OPINION OF THE ADVOCATE GENERAL .
8 . SUBMISSION THAT THE CONTESTED DECISIONS CONTAINED AN INSUFFICIENT STATEMENT OF THE REASONS ON WHICH THEY WERE BASED IN VIEW OF THE OMISSION OF CONTRARY OPINIONS :
THIS SUBMISSION, ALLEGING A DEFECT OF FORM, HAS BEEN MADE ONLY IN THE REPLY . FOR THIS REASON SINCE PUBLIC POLICY DOES NOT REQUIRE THE COURT TO CONSIDER IT OF ITS OWN MOTION, THE COURT, AD IDEM WITH THE ADVOCATE GENERAL, DECLARES THE SUBMISSION INADMISSIBLE UNDER ARTICLE 29 ( 3 ) OF THE RULES OF PROCEDURE .
9 . MOREOVER, THE COURT OF ITS OWN MOTION HAS EXAMINED THE QUESTION WHETHER ARTICLE 1 OF DECISION NO 2/54 AMOUNTS TO AN INFRINGEMENT OF AN ESSENTIAL PROCEDURAL REQUIREMENT . ACCORDING TO ITS WORDING THIS ARTICLE ONLY DEFINES THE CONDITIONS UNDER WHICH NEW PRICE-LISTS MUST BE PUBLISHED . IT MAY, NEVERTHELESS, BE ASKED WHETHER THE SAID ARTICLE, READ IN CONJUNCTION WITH DECISION NO 1/54, DOES NOT INDIRECTLY SUPPLEMENT THE DEFINITION OF PROHIBITED PRACTICES . IF THIS WERE THE CASE, THEN THE COUNCIL SHOULD HAVE BEEN CONSULTED, UNDER THE TERMS OF ARTICLE 60 ( 1 ). YET SUCH CONSULTATION DID NOT TAKE PLACE OFFICIALLY, AND COULD NOT BE REPLACED BY A MERE NOTIFICATION TO THE COUNCIL BY THE HIGH AUTHORITY SO THAT ARTICLE 60 ( 1 ) WOULD BE INFRINGED . HOWEVER, THE COURT IS OF OPINION THAT ARTICLE 1 OF DECISION NO 2/54 DOES NOT SUPPLEMENT THE DEFINITION OF PROHIBITED PRACTICES AND DOES NOT EVEN CONTAIN AN INDIRECT DEFINITION, BUT MERELY LAYS DOWN HOW PRICE-LISTS ARE TO BE PUBLISHED .
10 . THE REFERENCE, IN ARTICLE 2 OF DECISION NO 2/54, TO ARTICLE 1 THEREOF, DOES NOT JUSTIFY THE ANNULMENT OF ARTICLE 2 AS THAT REFERENCE BECOMES POINTLESS AS A RESULT OF THE ANNULMENT OF ARTICLE 1 .
THE APPLICANT CLAIMS THE ANNULMENT OF ARTICLE 3 OF DECISION NO 2/54 . FOR THE REASONS STATED ABOVE THE COURT TAKES THE VIEW THAT THAT ARTICLE IS CONSISTENT WITH THE TREATY .
P . 53
THE APPLICANT DID NOT CONTEST THE REMAINING ARTICLES OF DECISION NO 2/54, AND THERE IS THEREFORE NO REASON FOR CONSIDERING THIS POINT .
11 . THE APPLICANT SEEKS THE ANNULMENT OF ARTICLES 1, 2 AND 3 OF DECISION NO 2/54 ON THE GROUNDS OF INFRINGEMENT OF ARTICLE 30 OF THE CONVENTION ON THE TRANSITIONAL PROVISIONS . AS REGARDS ARTICLES 2 AND 3 OF DECISION NO 2/54 THIS APPLICATION MUST BE REJECTED ON THE ABOVE-MENTIONED GROUNDS . ALTHOUGH THE PROVISION OF ARTICLE 3 OF DECISION NO 2/54 REDUCING THE PERIOD PROVIDED FOR THE APPLICATION OF THE NEW PRICE-LISTS FORCES THE ITALIAN UNDERTAKINGS TO REACT MORE QUICKLY TO ANY ALTERATIONS IN THE PRICE-LISTS OF THEIR COMPETITORS, IT DOES NOT, HOWEVER, SERIOUSLY AFFECT THE SPECIAL PROTECTION GIVEN TO THEM .
ON THE OTHER HAND, AS REGARDS ARTICLE 1 OF THE DECISION THE APPLICANT'S CLAIM IS JUSTIFIED FOR THE FOLLOWING REASONS :
EVEN IF IT IS THOUGHT THAT ARTICLE 30 OF THE TRANSITIONAL PROVISIONS IS PARTICULARLY INTENDED TO PREVENT PRICES FROM BEING ALIGNED ON THOSE OF ITALIAN UNDERTAKINGS IT DOES NOT NECESSARILY FOLLOW THAT THIS PROVISION DOES NOT GIVE OTHER PROTECTION AS WELL . TO CLAIM THE CONTRARY WOULD REALLY BE BEGGING THE QUESTION, FOR IN THE ABSENCE OF ANY CLEAR AND PRECISE PROVISION IT IS QUITE LEGITIMATE TO ACCEPT THAT THE CONVENTION INTENDED TO GIVE THE ITALIAN UNDERTAKINGS TEMPORARILY AND BY WAY OF EXCEPTION THE UNLIMITED ADVANTAGE OF THE PROTECTION WHICH IT PROVIDES FOR THESE UNDERTAKINGS . THE ACTUAL OBJECTIVE OF THIS PROVISION IS THEREFORE TO PREVENT THE NON-ITALIAN UNDERTAKINGS FROM COMPETING WITH THE ITALIAN UNDERTAKINGS ON THE ITALIAN MARKET BY UNDERCUTTING THEIR OWN PRICE-LISTS .
THE COURT SEES IN ARTICLE 30 OF THE TRANSITIONAL PROVISIONS A PROHIBITION ON ANY SALE IN ITALY BELOW THE PRICES PROVIDED FOR BY THE PRICE-LISTS . THIS PROHIBITION CAN HAVE A MEANING ONLY IF IN THE OTHER COUNTRIES OF THE COMMUNITY SALES BELOW THE PRICES IN THE PRICE-LISTS ARE ALLOWED BY WAY OF EXCEPTION UNDER SPECIAL PROVISIONS . THIS IS THE CASE WITH THE RIGHT TO ALIGN PROVIDED FOR BY ARTICLE 60 ( 2 ) ( B ). THE CONTESTED DECISIONS CREATE A NEW SYSTEM APPLICABLE TO THE WHOLE OF THE COMMON MARKET UNDER WHICH SALE BELOW THE PRICES CONTAINED IN THE PRICE-LISTS IS LAWFUL . THIS SYSTEM REMAINS SUBJECT TO THE PROHIBITION PROVIDED FOR IN ARTICLE 30, ESPEICALLY AS THAT ARTICLE DOES NOT EXPRESSLY MENTION ALIGNMENT BUT USES VERY GENERAL TERMS . ARTICLE 30 MUST THEREFORE BE INTERPRETED AS FOLLOWS : EVEN IF SALE BELOW THE PRICES SHOWN IN THE PRICE-LISTS WERE BY WAY OF EXCEPTION LAWFUL, IT WOULD NOT BE SO ON THE ITALIAN MARKET . IN THE PRESENT CASE ARTICLE 30 PROHIBITS VARIATIONS FROM THE PRICE-LISTS FROM BEING EXTENDED TO THE ITALIAN MARKET . SINCE DECISION NO 2/54 DISREGARDS THIS PROHIBITION IT INFRINGES A LEGAL RULE ON THE APPLICATION OF THE TREATY .
III - DECISION NO 3/54
DECISION NO 3/54, WHICH IS INTENDED TO INTRODUCE A METHOD OF COLLECTING INFORMATION AND ENABLING SUPERVISION TO TAKE PLACE, IS BASED ON ARTICLE 47 OF THE TREATY . THAT ARTICLE EMPOWERS THE HIGH AUTHORITY TO OBTAIN THE INFORMATION IT REQUIRES IN ORDER TO CARRY OUT ITS TASKS; DECISION NO 3/54 IS THEREFORE CONSISTENT WITH THE TREATY . THE FACT THAT THE HIGH AUTHORITY COMBINED THIS METHOD OF COLLECTING INFORMATION WITH THE SUPERVISION OF THE SYSTEM OF PUBLICATION PROVIDED FOR IN ARTICLE 60 DOES NOT MAKE IT IN ANY WAY OBJECTIONABLE .
P . 54
EVEN THOUGH DECISION NO 3/54 IS APPARENTLY INTENDED TO COMPLETE THE SYSTEM OF VARIATIONS INTRODUCED BY ARTICLE 1 OF DECISION NO 2/54 WHICH HAS ALREADY BEEN DECLARED TO BE INCONSISTENT WITH THE TREATY, IT IS HOWEVER NOT IN ITSELF CONTRARY TO THE TREATY; THERE IS THEREFORE NO REASON TO ANNUL IT, ALTHOUGH THE ANNULMENT OF ARTICLE 1 OF DECISION NO 2/54 MAKES IT INOPERATIVE AND DEPRIVES IT OF ANY POINT .
B . THE SUBMISSION OF MISUSE OF POWERS
THE COURT SHARES THE ADVOCATE GENERAL'S OPINION, TO WHICH IT REFERS, THAT THE ALLEGATION THAT BY REASON OF THE CONTESTED DECISIONS THE DEFENDANT HAS MISUSED ITS POWERS HAS NOT BEEN MADE OUT .
IT HAS BEEN STATED ABOVE THAT THE HIGH AUTHORITY, IN CARRYING OUT ITS DUTY TO ATTEMPT PRIMARILY TO PREVENT UNFAIR COMPETITIVE PRACTICES AND DISCRIMINATORY PRACTICES, IS ENTITLED AND REQUIRED TO TAKE ACCOUNT ALSO OF THE PROHIBITIONS RESULTING FROM ARTICLES 2, 3 AND 4; IT CANNOT BE CRITICIZED FOR HAVING DONE SO .
EVEN IF THE CONTESTED DECISIONS WERE PARTLY BASED ON THE IDEA OF INTRODUCING A SYSTEM WHICH UNDERTAKINGS WOULD BE MORE LIKELY TO RESPECT THAN THE OLD ONE, THIS CANNOT LEAD TO THE CONCLUSION THAT THE NEW SYSTEM WAS INTENDED TO LEGALIZE INFRACTIONS PREVIOUSLY COMMITTED . IN ANY CASE, IT IS OBVIOUS THAT THE DECISIONS WERE SPECIALLY INTENDED TO ATTAIN THE TREATY'S AIMS . EVEN IF THE GROUNDS FOR THE HIGH AUTHORITY'S DECISIONS INCLUDED, IN ADDITION TO PROPER GROUNDS, AN IMPROPER ONE SUCH AS AVOIDING THE IMPOSITION OF PENALTIES ON GUILTY UNDERTAKINGS, THIS WOULD NOT MAKE THOSE DECISIONS INVALID FOR MISUSE OF POWERS, SINCE THEY DO NOT SACRIFICE THE MAIN AIM, WHICH IS THE PROHIBITION OF UNFAIR COMPETITIVE PRACTICES AND DISCRIMINATION . THE COURT CONSIDERS, FOR THE REASONS EXPLAINED ABOVE, THAT THEY DO NOT SO SACRIFICE THEM .
C . PRODUCTION OF DOCUMENTS UNDER ARTICLE 23 OF THE STATUTE OF THE COURT .
THE APPLICANT APPLIED AT THE HEARING ON 3 NOVEMBER FOR THE DEFENDANT TO BE INVITED TO PRODUCE ALL THE DOCUMENTS RELATING TO THE CASE IN ACCORDANCE WITH ARTICLE 23 OF THE PROTOCOL ON THE STATUTE OF THE COURT . BY ORDER DATED 6 NOVEMBER 1954 THE COURT ORDERED THE HIGH AUTHORITY TO FORWARD TO THE COURT THE MINUTES AND OPINIONS OF THE CONSULTATIVE COMMITTEE RELATING TO THE CASE AND RESERVED THE RIGHT TO DECIDE SUBSEQUENTLY ON THE POSSIBLE PRODUCTION OF THE MINUTES OF THE COUNCIL OF MINISTERS AND THE HIGH AUTHORITY . ALTHOUGH THE PRODUCTION OF THESE MINUTES WAS NOT EXPRESSLY REQUIRED IT WAS NEVERTHELESS INCLUDED BY IMPLICATION IN THE APPLICATION FOR THE PRODUCTION OF ALL THE DOCUMENTS RELATING TO THE CASE . THE COURT CONSIDERS THIS APPLICATION ADMISSIBLE; THE APPLICANT WAS ENTITLED TO THINK THAT COMPLIANCE WITH THE OBLIGATIONS UNDER ARTICLE 23 OF THE STATUTE WOULD BE ENSURED; MOREOVER IT WAS NOT UNTIL THE ORAL PROCEDURE WAS OPENED THAT IT WAS ABLE TO SEE THAT THE HIGH AUTHORITY HAD NOT FORWARDED ALL THE DOCUMENTS TO THE COURT .
P . 55
THE COURT FINDS THAT THE DEFENDANT WAS BOUND TO FORWARD THE MINUTES OF THE HIGH AUTHORITY IN ACCORDANCE WITH ARTICLE 23 OF THE STATUTE OF THE COURT OF JUSTICE . THE COURT, HAD APPLICATION BEEN MADE, WOULD HAVE AUTHORIZED THE NAMES OF THE SPEAKERS TO BE OMITTED AND IF NECESSARY WOULD HAVE ORDERED THESE DOCUMENTS TO BE EXAMINED IN CAMERA . HOWEVER, THE COURT DOES NOT CONSIDER IT NECESSARY TO ORDER THE PRODUCTION OF THESE MINUTES, OR THOSE OF THE COUNCIL OF MINISTERS : THE DOCUMENTS PRODUCED BY THE DEFENDANT ARE SUFFICIENT FOR THE COURT IN THE PRESENT CASE TO CLARIFY THE OBJECTIVES PURSUED BY THE HIGH AUTHORITY .
Decision on costs
( 1 ) UNDER THE TERMS OF ARTICLE 60 OF THE RULES OF PROCEDURE OF THE COURT, IN ANY CONTENTIOUS MATTER THE UNSUCCESSFUL PARTY SHALL BE ORDERED TO PAY THE COSTS . NEVERTHELESS THE COURT MAY, IN ACCORDANCE WITH PARAGRAPH ( 2 ) OF THAT ARTICLE, ORDER THAT THE PARTIES BEAR THEIR OWN COSTS WHOLLY OR IN PART, WHERE EACH PARTY SUCCEEDS ON SOME AND FAILS ON OTHER HEADS .
IN THIS CASE, THE APPLICANT HAS SUCCEEDED IN PART OF THE CASE AND ON AN IMPORTANT POINT, NAMELY THE ANNULMENT OF ARTICLE 1 OF DECISION NO 2/54 WHICH INTRODUCED THE SYSTEM OF MEAN VARIATIONS FROM THE PRICES PUBLISHED IN THE PRICE-LISTS . IN THESE CIRCUMSTANCES THE COURT CONSIDERS THAT IT WOULD BE RIGHT TO GRANT THE APPLICANT THE RIGHT TO THE REIMBURSEMENT BY THE DEFENDANT OF HALF ITS COSTS .
( 2 ) UNDER ARTICLE 34 OF THE TREATY, IF THE COURT DECLARES A DECISION VOID, IT SHALL REFER THE MATTER BACK TO THE HIGH AUTHORITY, WHICH MUST TAKE THE NECESSARY STEPS TO COMPLY WITH THE JUDGMENT .
IN SO FAR AS THE ACTION IS RECOGNIZED TO BE WELL-FOUNDED AND BECAUSE OF THE INTEREST WHICH THE APPLICANT HAS IN A DECISION ON THE SUBMISSIONS MADE, THIS PROVISION REMAINS APPLICABLE NOTWITHSTANDING THE FACT THAT ARTICLE 1 OF DECISION NO 2/54 CANNOT BE FORMALLY ANNULLED SINCE IT HAS ALREADY BEEN ANNULLED PRIOR TO THE PRESENT JUDGMENT, ALBEIT ON THE SAME DATE .
Operative part
THE COURT
HEREBY :
DECLARES THE ACTION FOR ANNULMENT OF ARTICLE 1 OF DECISION NO 2/54 WELL-FOUNDED AS REGARDS THE INFRINGEMENT OF THE TREATY AND THE CONVENTION ON THE TRANSITIONAL PROVISIONS AND REFERS THE MATTER BACK TO THE HIGH AUTHORITY FOR THE NECESSARY ACTION;
DISMISSES THE APPLICATION FOR THE ANNULMENT OF DECISIONS NO 1/54 AND 3/54 AND OF ARTICLES 2 AND 3 OF DECISION NO 2/54;
ORDERS THE DEFENDANT TO BEAR ITS OWN COSTS AND HALF THE COSTS OF THE APPLICANT . |
OPINION OF MR ADVOCATE GENERAL ROEMER ( )
Mr President,
Members of the Court,
I have the honour to deliver my opinion on the application to intervene lodged by the Government of the Grand Duchy of Luxembourg in the cases of
1.
Groupement des Industries Sidérurgiques Luxembourgeoises, applicant, v High Authority of the European Coal and Steel Community, defendant,
2.
Association des Utilisateurs de Charbon du Grand-Duché de Luxembourg, applicant, v High Authority, defendant.
The Government of the Grand Duchy of Luxembourg applied shortly before the closure of the written procedure, as the Judge-Rapporteur points out, to intervene in support of the defendant in these cases, which are pending before the Court. The question of admissibility arises in the same way in respect of both applications to intervene. By order of today's date the Court has permitted the joint discussion of the cases by the parties. Therefore I may also treat both applications jointly.
The only substantial condition for the admissibility of an application to intervene is, under Article 34 of the Statute of the Court of Justice of the ECSC, an interest in the result of the case. The French text describes this with the words: ‘Les personnes … justifiant d'un intérêt à la solution d'un litige soumis à la Cour’; the official German text uses the words: ‘… Personen, die ein berechtigtes Interesse am Ausgang eines bei dem Gerichtshof anhängigen Rechtsstreites haben…’; the official Netherlands text the words: ‘… Personen die kunnen bewijzen, dat zij belang hebben …’; the Italian text corresponds to the French. The Luxembourg Government has explained its interest in supporting the submissions of the defendant, the High Authority, requesting that the application be dismissed and in helping the defendant to win the case. The two applicants and the defendant have acknowledged that this interest in the result of the main action has been established. Since the question which must be decided in the main action is whether the system for the subsidizing of domestic fuel introduced by the Luxembourg Government is in acordance with the Treaty or whether this system should have prompted the High Authority to intervene, the interest of the intervener has evidently been established.
So far as the form of the applications to intervene is concerned, the High Authority as defendant has raised no objections. In this respect the applicant associations merely refer to the absence of a schedule of the documents annexed in support of the application. This objection is unfounded since in fact there are no documents annexed to the application.
The restriction of an application to intervene to the support of a main party which is laid down in the second paragraph of Article 34 of the Statute of the Court of Justice of the ECSC and in Article 71 (2) of the Rules of Procedure must be more closely examined. Although they acknowledge the necessary interest as the condition for an application to intervene the applicant associations consider the application to be inadmissible because in their view submissions are put forward which were not invoked by the main party which the intervener is supporting. The applicants consider that such conduct is in breach of the second paragraph of Article 34 of the Statute of the Court of Justice of the ECSC which provides that the submissions of the intervener may only support or request the rejection of the submissions of one of the parties; the submissions must be viewed and understood only in relation to the arguments which have already been put forward.
It is necessary to state first in this connexion that the submissions of the Luxembourg Government, just as those of the High Authority, the defendant, request that the application be dismissed and therefore to that extent fulfil the conditions laid down in the second paragraph of Article 34. The provision of the Statute of the Court of Justice of the ECSC to which reference was made does not govern the admissibility of the application to intervene itself but the admissibility of the submissions put forward in the application to intervene which it limits so as to make it a subordinate and voluntary application to intervene. That provision thus defines the framework within which the intervener in the case may act by putting forward its own submissions. If the intervener puts forward certain arguments in the application to intervene for the purpose of justifying its submissions, which are admissible, the applicants themselves consider that at this stage of the proceedings arguments on the substance of the case are irrelevant. In my opinion this view of the applicants is contradictory to their pleading which consists in singling out arguments put forward by the intervener, contesting them and attempting to deduce therefrom that the application to intervene itself is inadmissible. The objection of the applicants to these arguments just put forward by the Luxembourg Government therefore constitutes an opinion on the substance of the case which, however, can only be dealt with in an examination of the substance of the case in the judgment in the main action. In my opinion a superfluous argument on the substance of the case put forward by the intervener at this stage of the proceedings is not capable of affecting the admissibility of the intervention as a step in the procedure.
However, the folio wing must be said with regard to this problem: the question raised here is whether the intervener is limited, within the framework of admissible submissions, to the ‘moyens’ (arguments), ‘exceptions’ (objections), and arguments of the party in support of which it is intervening or whether it is limited to the ‘moyens’ and ‘exceptions’ of the main party whereas it may put forward in addition new arguments or whether it is free to invoke fresh ‘moyens’, fresh ‘exceptions’ and fresh arguments. The Court of Justice will have to come to a decision thereon. It will also have to bear in mind that the lack of capacity to institute proceedings and the fact that there is no need to proceed to judgment on the substance of the case which is involved here in concreto must also be considered of the Court's own motion. This also applies if the submission that the application has become purposeless is regarded as a fresh submission tending to a finding in the judgment that there is no need to proceed to judgment on the substance of the case.
The problems which have been set out here must not be examined when deciding whether the applications to intervene are admissible but when reaching a decision in the final judgment. It is therefore certain that the applications to intervene which have lodged are admissible, which is the only question which must be decided today. The further question arises whether it is necessary to reach a decision concerning the two alternative submissions put forward by the applicants if the applications to intervene are found admissible.
The applicants primarily claim that in that case the submission which the intervener has put forward in relation to the main action must be dismissed. It is, as I have already said, correct that such arguments are only relevant during the subsequent oral procedure on the substance of the case. On the other hand it is in my opinion unnecessary formally to dismiss these arguments which relate to the substance of the case.
Secondly, the applicants claim that the Court should fix a period within which written replies may be made to these arguments put forward by the intervener. This request is in my opinion purposeless with regard to the decision as to the admissibility of the applications to intervene because at the present stage of the proceedings the arguments on the substance of the case put forward by the intervener will not be considered. If this request were granted it would delay the main action. The written procedure would have to be reopened. This would naturally have to be open to all parties to the case in the same way.
The intervener wishes to be granted leave to intervene in this case on the date which it has freely chosen at the stage of the proceedings which has developed between the main parties. In the meantime the written procedure has been closed. Accordingly it is of course possible to take the view that the submissions of the intervener can only be understood as anticipating the submissions which it will put forward in the oral procedure. The consequence would be that the reply of the other parties would also have to be dealt with in the oral procedure on the substance of the case before the final judgment is delivered.
In my opinion neither of the alternative submissions put forward by the applicants requests the Court to give a decision on the dispute but seeks the adoption of procedural measures. Therefore they do not give rise to an express decision of the Court of Justice in the decision which is requested today on the admissibility of the applications to intervene. The possibility still remains, if the Court of Justice does not agree with my view as to the subsequent course of the procedure and the inappropriateness of reopening the written procedure, of giving the parties the opportunity of presenting written observations by means of an order of the President of the Court.
I therefore reach the conclusion that the applications to intervene lodged by the Government of the Grand Duchy of Luxembourg are admissible. The decision must be taken in accordance with Article 71 (5) of the Rules of Procedure by order of the Court which need not state the reasons upon which it is based. In accordance with Article 71 (6) of the Rules of Procedure the intervener receives a copy of all the pleadings sent to the parties. A decision will have to be made on the submissions of the intervener concerning the substance of the case and in addition on the costs of these proceedings which will be closed by order of this Court in the judgment on the main action. The order of the Court need make no express decision on the alternative conclusions of the applicants.
In these circumstances I conclude that the applications to intervene are admissible.
( ) Translated from the German |
Judgment of the Court of 21 December 1954. - French Republic v High Authority of the European Coal and Steel Community. - Case 1-54.
European Court reports
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Dutch edition Page 00007
German edition Page 00007
Italian edition Page 00007
English special edition Page 00001
Danish special edition Page 00001
Greek special edition Page 00001
Portuguese special edition Page 00001
Summary
Parties
Subject of the case
Grounds
Decision on costs
Operative part
Keywords
++++
1 . PROCEDURE - APPLICATION FOR ANNULMENT
( TREATY, ART . 33 ).
2 . PRICES
( A ) PUBLICATION - DISCRIMINATION
( TREATY, ART . 60 ).
( B ) COMPARABILITY OF TRANSACTIONS - NON-DISCRIMINATION - CRITERIA
( TREATY, ART . 60 ( 1 ); ART . 4 )
( C ) PUBLICATION - SYSTEM OF PUBLICATION - NATURE OF THE PRICES PUBLISHED
( TREATY, ART . 60 ( 2 )).
( D ) PUBLICATION - SYSTEM OF PUBLICATION - HIGH AUTHORITY'S LEGISLATIVE POWERS - LIMITS THEREOF
( TREATY, ART . 60 ( 2 )).
( E ) PUBLICATION - SYSTEM OF PUBLICATION - EXTENT OF PUBLICATION
( TREATY, ART . 60 ( 2 )).
( F ) PUBLICATION - SYSTEM OF PUBLICATION - NON-DISCRIMINATION - SUPERVISION - INFORMATION
( TREATY, ARTS . 47 AND 60 ( 2 )).
( G ) PUBLICATION - SYSTEM OF PUBLICATION - NON-DISCRIMINATION - HIGH AUTHORITY'S LEGISLATIVE POWERS - GENERAL OBJECTIVES OF THE TREATY
( TREATY, ARTS . 60, 61, 65 ).
3 . MISUSE OF POWERS
( TREATY, ART . 33 ).
Summary
1 . SEVERAL RELATED DECISIONS MAY BE CONTESTED IN A SINGLE APPLICATION .
2 . ( A ) NOWHERE DOES THE TREATY PRESCRIBE THAT ANY INFRINGEMENT OF THE RULES GOVERNING PRICE PUBLICATION AMOUNTS IN ITSELF TO ONE OF THE PRACTICES PROHIBITED UNDER ARTICLE 60 ( 1 ).
( B ) THE ABSENCE OF ANY PRECISE DEFINITION BY THE HIGH AUTHORITY OF THE MEANING OF EXCEPTIONAL TRANSACTIONS AND COMPARABLE TRANSACTIONS DOES NOT MAKE THE CONCEPT OF DISCRIMINATION MEANINGLESS . THE COMPARABILITY-LIKE THE EXCEPTIONAL NATURE-OF A TRANSACTION CAN ONLY BE ASSESSED IN THE LIGHT OF THE STATE OF THE MARKET .
( C ) THE DUTY TO MAKE THE PRICE-LISTS AND CONDITIONS OF SALE PUBLIC ALLOWS OF NO EXCEPTION . THE PRICE-LISTS MUST PRECEDE ANY SALE EFFECTED IN THE COMMON MARKET . THE TREATY REQUIRES THE PUBLICATION OF EXACT PRICES . IT IS NOT ENOUGH TO PUBLISH AVERAGE OR APPROXIMATE PRICES .
( D ) THE POWERS CONFERRED ON THE HIGH AUTHORITY BY THE WORDS CONTAINED IN ARTICLE 60 ( 2 ) " TO THE EXTENT AND IN THE MANNER PRESCRIBED BY THE HIGH AUTHORITY " ARE POWERS TO PRESCRIBE THE EXTENT, THAT IS TO SAY, THE SCOPE, OF PUBLICATIONS, IN SO FAR AS IT IS A QUESTION OF SETTLING THEIR DETAILS . ON THE OTHER HAND, THEY DO NOT MAKE IT POSSIBLE TO SET UP A SYSTEM PROVIDING FOR MEAN VARIATIONS FROM PUBLISHED PRICES, WHICH WOULD HAVE THE EFFECT OF AUTHORIZING DISREGARD OF PUBLISHED PRICE-LISTS .
( E ) THE EXTENT OF THE PUBLICATION OF PRICE-LISTS IS INSUFFICIENT IF THEY ARE COMMUNICATED ONLY TO THE HIGH AUTHORITY; THE HIGH AUTHORITY MUST ENSURE THAT THE PRICE-LISTS ARE MADE AVAILABLE TO ANYONE INTERESTED .
( F ) THE POWER TO OBTAIN INFORMATION PROVIDED FOR IN ARTICLE 47 OF THE TREATY CAN LAWFULLY BE USED IN ORDER INTER ALIA TO SUPERVISE THE OBSERVANCE OF THE RULES ON NON-DISCRIMINATION AND ON THE PUBLICATION OF PRICE-LISTS .
( G ) WHEN ADOPTING THE MEASURES NECESSARY FOR THE IMPLEMENTATION OF ARTICLE 60, THE HIGH AUTHORITY HAS NOT MERELY A RIGHT BUT A DUTY TO TAKE INTO ACCOUNT ALL THE AIMS LAID DOWN IN ARTICLES 2, 3 AND 4, SUCH AS THE FIXING OF PRICES AT AS LOW A LEVEL AS POSSIBLE AND THE ATTEMPT TO PREVENT PROHIBITED AGREEMENTS . CONSEQUENTLY, IN ORDER TO ACHIEVE THE LATTER TWO AIMS, THE HIGH AUTHORITY IS NOT BOUND TO CONFINE ITSELF EXCLUSIVELY TO THE MEASURES PROVIDED FOR IN ARTICLES 61 AND 65 .
3 . WHERE MORE THAN ONE AIM IS BEING PURSUED, EVEN IF THE GROUNDS FOR A DECISION INCLUDE IMPROPER GROUNDS IN ADDITION TO THE VALID ONES, THIS WOULD NOT MAKE THE DECISION INVALID FOR MISUSE OF POWERS, PROVIDED THAT THE DECISION DOES NOT SACRIFICE THE MAIN AIM .
Parties
IN CASE 1/54
GOVERNMENT OF THE FRENCH REPUBLIC, REPRESENTED BY PAUL REUTER, PROFESSOR AT THE FACULTY OF LAW, PARIS, LEGAL ADVISER TO THE MINISTRY FOR FOREIGN AFFAIRS, PARIS, ACTING AS AGENT, WITH AN ADDRESS FOR SERVICE IN LUXEMBOURG AT THE FRENCH LEGATION, APPLICANT,
V
HIGH AUTHORITY OF THE EUROPEAN COAL AND STEEL COMMUNITY, REPRESENTED BY ITS LEGAL ADVISER MICHEL GAUDET, ACTING AS AGENT, ASSISTED BY JEAN COUTARD, ADVOCATE AT THE CONSEIL D'ETAT AND THE COUR DE CASSATION, PARIS, WITH AN ADDRESS FOR SERVICE IN LUXEMBOURG AT ITS OFFICES, 2 PLACE DE METZ, DEFENDANT,
Subject of the case
APPLICATION FOR THE ANNULMENT OF DECISIONS NOS 1/54, 2/54 AND 3/54 OF THE HIGH AUTHORITY OF 7 JANUARY 1954,
Grounds
P . 6
THE COURT'S JUDGMENT IN THE PRESENT CASE HAS TAKEN THE FOLLOWING POINTS OF THE LAW INTO ACCOUNT :
1 - ADMISSIBILITY
THE PARTIES RAISE NO OBJECTION OF INADMISSIBILITY . THE COURT IS OF OPINION THAT THERE ARE NO GROUNDS FOR IT TO RAISE THE POINT OF ITS OWN MOTION .
THE COURT AGREES WITH THE ADVOCATE GENERAL'S VIEW THAT THE THREE DECISIONS MAY BE CONTESTED IN A SINGLE ACTION; IN THESE CIRCUMSTANCES, IT WILL EXAMINE THE ARGUMENTS PUT FORWARD INASMUCH AS, IN THE OPINION OF THE COURT, THEY COVER EACH OF THE THREE DECISIONS .
2 - THE SUBSTANCE OF THE CASE
THE APPLICANT CONTESTS DECISIONS NOS 1/54, 2/54 AND 3/54 ON THE GROUNDS OF INFRINGEMENT OF THE TREATY AND MISUSE OF POWERS .
A - THE SUBMISSION OF INFRINGEMENT OF THE TREATY
I - DECISION NO 1/54
( 1 ) DECISION NO 1/54 INTRODUCES A CLEAR DISTINCTION BETWEEN PUBLICATION AND DISCRIMINATION, THEREBY CREATING TWO KINDS OF INFRACTION, NAMELY THE MORE SERIOUS ONE OF DISCRIMINATION AND THE LESS SERIOUS ONE OF INFRINGING THE RULES AS TO PRICE PUBLICATION . HOWEVER, WHILST RECOGNIZING THAT THE TWO PARAGRAPHS OF ARTICLE 60 ARE LINKED AS REGARDS PURPOSE, THE COURT DOES NOT CONSIDER THAT THIS DISTINCTION AMOUNTS TO AN INFRINGEMENT OF THE TREATY . IN FACT, NOWHERE DOES THE TREATY PRESCRIBE THAT ANY INFRINGEMENT OF THE RULES GOVERNING PRICE PUBLICATION AMOUNTS IN ITSELF TO ONE OF THE PRACTICES PROHIBITED UNDER ARTICLE 60 ( 1 ). AS REGARDS THE PROHIBITION OF DISCRIMINATORY PRACTICES IN PARTICULAR, IT CANNOT BE DISPUTED THAT THE FACT OF DEPARTING, TO WHATEVER EXTENT, FROM THE PRICES OR CONDITIONS LAID DOWN IN THE PRICE-LIST OF AN UNDERTAKING DOES NOT AMOUNT TO DISCRIMINATION WHEN IT IS A CASE OF AN EXCEPTIONAL TRANSACTIONS . ON THIS POINT, DECISION NO 1/54 IS THEREFORE CONSISTENT WITH THE TREATY . ON THE OTHER HAND, IT MIGHT BE OBJECTED THAT DECISION NO 30/53 WAS OPEN TO CRITICISM, SINCE WITHOUT EXPRESSLY ADMITTING EVIDENCE TO THE CONTRARY IT HELD CERTAIN TRANSACTIONS TO BE DISCRIMINATORY WHICH, IN FACT, WERE NOT .
P . 7
THE CRITICISM THAT THE ABSENCE OF ANY PRECISE DEFINITION OF EXCEPTIONAL TRANSACTIONS OPENS THE DOOR TO DISCRIMINATORY PRACTICES AND FACILITATES THEM INSTEAD OF COUNTERING THEM, AND SO MAKES THE CONCEPT OF A DISCRIMINATORY PRACTICE MEANINGLESS, IS LIKEWISE UNFOUNDED . IT IS TRUE THAT THE OLD SYSTEM OF STRICT ADHERENCE TO PUBLISHED PRICES SEEMS TO HAVE BEEN INTENDED TO PREVENT ANY KIND OF DISCRIMINATION, SAVE WHERE AN UNDERTAKING KNOWINGLY FAILED TO FULFIL ITS OBLIGATIONS; ON THE OTHER HAND, UNDER THE NEW SYSTEM, IT IS THEORETICALLY POSSIBLE FOR AN UNDERTAKING TO DISCRIMINATE IN GOOD FAITH THROUGH BEING MISTAKENLY OF THE OPINION THAT IT IS DEALING WITH A NON-COMPARABLE OR EXCEPTIONAL TRANSACTION; IN FACT, THE NEW SYSTEM LEAVES IT TO THE UNDERTAKING ITSELF TO DECIDE WHETHER A TRANSACTION IS OF AN EXCEPTIONAL OR NON-COMPARABLE KIND . HOWEVER, DECISION NO 1/54 PLACES THE BURDEN OF PROOF ON THE UNDERTAKINGS; IF THESE CANNOT PROVE THAT THE TRANSACTION IS AN EXCEPTIONAL OR NON-COMPARABLE ONE, THEY WILL BE RESPONSIBLE FOR THEIR MISTAKE AND LIABLE TO THE PENALTIES PROVIDED BY ARTICLE 64 . FINALLY, IT MUST BE ADMITTED THAT THE CONCEPT OF AN EXCEPTIONAL OR NON-COMPARABLE TRANSACTION DOES NOT LEND ITSELF TO AN ABSTRACT DEFINITION . TRANSACTIONS ENTERED INTO AT ONE DAY'S INTERVAL MAY, IN FACT, BE NON-COMPARABLE TRANSACTIONS, IF, IN THE MEANTIME, THE MARKET HAS COMPLETELY CHANGED; ON THE OTHER HAND TWO TRANSACTIONS MAY BE COMPARABLE EVEN THOUGH ENTERED INTO WITHIN SEVERAL WEEKS OF EACH OTHER, IF THE MARKET HAS REMAINED STABLE DURING THIS PERIOD . COMPARABILITY CAN THEREFORE ONLY BE ASSESSED IN THE LIGHT OF THE STATE OF THE MARKET; MOREOVER A TRANSACTION CAN ONLY BE HELD TO BE AN EXCEPTIONAL ONE IN THE LIGHT OF ITS PARTICULAR CIRCUMSTANCES . THE TWO FACTORS - COMPARABILITY AND EXCEPTIONAL NATURE - CAN BE OBJECTIVELY ASSESSED BY THE UNDERTAKINGS AND BY THE HIGH AUTHORITY, SO THAT THE SYSTEM WHICH IS CONTESTED DOES NOT IN FACT MAKE THE CONCEPT OF DISCRIMINATION MEANINGLESS; ON THE CONTRARY IT HELPS TO CURB ANY DISCRIMINATORY PRACTICE . IT ALSO FOLLOWS FROM WHAT HAS BEEN SAID THAT THERE IS NOTHING IN THE APPLICANT'S CONTENTION THAT THE DUTY TO CHARGE IDENTICAL PRICES AND LAY DOWN IDENTICAL CONDITIONS OF SALE WOULD ONLY APPLY TO SIMULTANEOUS TRANSACTIONS .
P . 8
( 2 ) DECISION NO 1/54 IN NO WAY DOES AWAY WITH THE DUTY TO PUBLISH PRICES : ON THE CONTRARY, IT EXPRESSLY RETAINS IT . THERE IS THEREFORE NOTHING IN THE OBJECTION THAT THE DECISION IS CONTRARY TO THE RULES GOVERNING PRICE PUBLICATION AND THAT IT SACRIFICES THE PRINCIPLE OF PUBLICATION AS A MEANS OF PREVENTING PROHIBITED PRACTICES . THE COURT, WHEN IT INVESTIGATES DECISION NO 2/54, WILL CONSIDER WHETHER THE FACT OF PERMITTING VARIATIONS AND, WITHIN CERTAIN LIMITS, EXEMPTING UNDERTAKINGS FROM MAKING A NEW PUBLICATION IS IN ACCORDANCE WITH THE TREATY; IN ANY CASE THIS IS NOT A FACT WHICH CAN BE RELIED ON IN CONTESTING DECISION NO 1/54, WHICH IN NO WAY AFFECTS THE PRINCIPLE OF PUBLICATION .
( 3 ) DECISION NO 1/54 IN NO WAY PREVENTS THE IMPOSITION OF PENALTIES IF THERE IS DISCRIMINATION . IF COMPARABLE TRANSACTIONS ARE ENTERED INTO AT DIFFERENT PRICES AND UNDER DIFFERENT CONDITIONS OF SALE, THE PENALTIES PROVIDED FOR BY ARTICLE 64 STILL APPLY .
( 4 ) LASTLY, THERE IS NOTHING IN THE APPLICANT'S ARGUMENT THAT DECISION NO 1/54, INSTEAD OF DEFINING PROHIBITED PRACTICES, IN FACT LEGALIZES CERTAIN PRACTICES WHICH WERE ILLEGAL UNDER THE OLD SYSTEM . IT HAS BEEN SHOWN ABOVE THAT DECISION NO 1/54 GIVES A NEW DEFINITION OF PROHIBITED PRACTICES BY DISTINGUISHING BETWEEN THE RULES AS TO NON-DISCRIMINATION AND THE PROVISIONS GOVERNING PUBLICATION . IF THE NEW DEFINITION PERMITS PRACTICES, WHICH WERE PREVIOUSLY PROHIBITED, NAMELY DEPARTURES FROM PUBLISHED PRICES, IT ALSO LAYS IT DOWN THAT PRICES OR CONDITIONS MUST BE DEPARTED FROM UNIFORMITY IN ALL COMPARABLE TRANSACTIONS, APART FROM ANY EXCEPTIONAL TRANSACTION WHICH CANNOT GIVE RISE TO DISCRIMINATION . THE PRINCIPLE OF PROHIBITING ANY DISCRIMINATORY PRACTICE IS THEREFORE STRICTLY OBSERVED; DECISION NO 1/54, WHILST DOING AWAY WITH THE FORMER AUTOMATIC SYSTEM, STAYS WITHIN THE DEFINITION OF PROHIBITED PRACTICES .
THE COURT THEREFORE HOLDS THAT DECISION NO 1/54 DOES NOT AMOUNT TO INFRINGEMENT OF THE TREATY . THE APPLICATION TO ANNUL THAT DECISION, INASMUCH AS IT IS BASED ON AN ALLEGATION OF INFRINGEMENT OF THE TREATY, MUST THEREFORE BE DISMISSED .
II - DECISION NO 2/54
THE COURT HOLDS THAT ARTICLE 1 OF DECISION NO 2/54 IS INCONSISTENT WITH THE TREATY IN SO FAR AS IT ALLOWS UNDERTAKINGS TO MAKE A MEAN VARIATION UPWARD OR DOWNWARD BETWEEN ACTUAL MARKET PRICES AND PUBLISHED PRICES WITHOUT PRIOR PUBLICATION OF AMENDMENTS TO PRICE-LISTS . THE GROUNDS FOR REGARDING THIS AS AMOUNTING TO AN INFRINGEMENT OF THE TREATY ARE AS FOLLOWS :
( 1 ) BEFORE ARTICLE 60 ( 2 ) OF THE TREATY IS INTERPRETED IN DETAIL, IT IS PROPER TO EXAMINE WHAT THE HIGH AUTHORITY'S OBJECTIVES MUST BE WHEN IT DEFINES PROHIBITED PRACTICES AND REGULATES THE PUBLICATION OF PRICES AND CONDITIONS OF SALE .
P . 9
( A ) ARTICLES 2, 3 AND 4 OF THE TREATY, REFERRED TO AT THE BEGINNING OF ARTICLE 60 ( 1 ), CONSTITUTE FUNDAMENTAL PROVISIONS ESTABLISHING THE COMMON MARKET AND THE COMMON OBJECTIVES OF THE COMMUNITY . THEIR IMPORTANCE IS CLEAR FROM ARTICLE 95 . IN AUTHORIZING THE HIGH AUTHORITY TO DEFINE PROHIBITED PRACTICES, THE TREATY OBLIGES IT TO TAKE INTO ACCOUNT ALL THE AIMS LAID DOWN IN ARTICLES 2, 3 AND 4 . THIS FOLLOWS CLEARLY FROM THE EXPRESS REFERENCE TO THE SAID ARTICLES AT THE BEGINNING OF ARTICLE 60 . THE HIGH AUTHORITY THEREFORE HAS NOT MERELY A RIGHT, BUT A DUTY, WHEN DEFINING PROHIBITED PRACTICES, TO BEAR IN MIND THE ATTEMPT TO PREVENT AGREEMENTS BETWEEN PRODUCERS AND TO BE CONCERNED TO HELP PRICES TO BE FIXED AS LOW AS POSSIBLE, UNDER THE CONDITIONS REFERRED TO IN ARTICLE 3 OF THE TREATY, AS WELL AS THE ATTEMPT TO PREVENT UNFAIR COMPETITIVE PRACTICES AND DISCRIMINATORY PRACTICES . FOR THESE REASONS, THE COURT CANNOT ACCEPT THE APPLICANT'S CONTENTION THAT ARTICLE 60 ONLY REFERS TO THE ATTEMPT TO PREVENT DISCRIMINATORY PRACTICES, THAT THE ATTEMPT TO PREVENT AGREEMENTS IS SOLELY GOVERNED BY ARTICLE 65, AND THAT THE ATTEMPT TO HELP PRICES TO BE FIXED AS LOW AS POSSIBLE IS GOVERNED BY ARTICLE 61 . IT IS TRUE THAT ARTICLES 65 AND 61 OF THE TREATY GIVE THE HIGH AUTHORITY DIRECT MEANS OF ACTION TO COUNTER AGREEMENTS AND INCREASES IN PRICES, BUT THE TREATY MAKES IT CLEAR ( INTER ALIA IN ARTICLE 57 WHICH DEALS WITH THE FIELD OF PRODUCTION ) THAT THE HIGH AUTHORITY, BEFORE USING DIRECT MEANS OF ACTION, MUST GIVE PREFERENCE TO " THE INDIRECT MEANS OF ACTION AT ITS DISPOSAL ". THUS THE HIGH AUTHORITY MAY ALSO EXERCISE ITS RIGHT TO DEFINE PROHIBITED PRACTICES AS REGARDS PRICES, WITH A VIEW TO FORESTALLING PRACTICES WHICH ARE CONTRARY TO ANY ONE OF THE OBJECTIVES REFERRED TO IN ARTICLE 60 .
FURTHERMORE, THE WORDS " IN PARTICULAR " ( ARTICLE 60 ( 1 )) SHOW THAT ARTICLE 60 DEALS MAINLY WITH UNFAIR COMPETITIVE PRACTICES AND DISCRIMINATORY PRACTICES .
( B ) WITH PARTICULAR REFERENCE TO THE PART WHICH UNDER THE TREATY IS TO BE PLAYED BY THE PUBLICATION OF PRICE-LISTS, THE COURT ACCEPTS THE ADVOCATE GENERAL'S VIEW THAT COMPULSORY PUBLICATION IS PROVIDED FOR IN THE TREATY IN ORDER TO ATTAIN THE THREE FOLLOWING OBJECTIVES :
( 1 ) AS FAR AS POSSIBLE TO PREVENT PROHIBITED PRACTICES;
( 2 ) TO ENABLE PURCHASERS TO LEARN EXACTLY WHAT PRICES WILL BE CHARGED AND BE ABLE THEMSELVES TO CHECK WHETHER ANY DISCRIMINATION HAS TAKEN PLACE;
( 3 ) TO ENABLE UNDERTAKINGS TO HAVE AN ACCURATE KNOWLEDGE OF THE PRICES OF THEIR COMPETITORS SO AS TO ENABLE THEM TO ALIGN THEIR PRICES .
WHILST PUBLICATION IS INTENDED TO MEET THE ABOVE-MENTIONED OBJECTIVES, THE TREATY DOES NOT CONSIDER THAT THIS ALONE WILL SUFFICE TO ENSURE THE ATTAINMENT OF THESE OBJECTIVES; PUBLICATION IS BUT ONE OF THE MEANS PROVIDED FOR BY THE TREATY .
THE PUBLICATION OF PRICE-LISTS IS A MATTER OF PUBLIC LAW, SINCE THE RESULTS UNDER PRIVATE LAW HAVE NOT BEEN DEALT WITH BY THE TREATY . HOWEVER, THIS PUBLIC LAW CHARACTERISTIC, WHICH THE ADVOCATE GENERAL HAS RIGHTLY EMPHASIZED, IS NOT INCONSISTENT WITH THE APPLICANT GOVERNMENT'S CONTENTION THAT THE PUBLICATION OF PRICE-LISTS MUST ALSO PRODUCE LEGAL CONSEQUENCES FOR THIRD PARTIES, IN PARTICULAR UNDERTAKINGS WISHING TO ALIGN THEIR PRICES WITH THOSE OF THEIR COMPETITORS . IT IS THIS RESULT, WHICH IS INHERENT IN THE VERY PUBLICATION OF THE PRICE-LISTS, WHICH DISTINGUISHES THAT PUBLICATION BOTH FROM THE MERE INFORMATION COLLECTED BY THE HIGH AUTHORITY UNDER ARTICLE 47 AS WELL AS FROM THE PUBLICATION OF STATISTICAL DOCUMENTS COMPILED BY THE HIGH AUTHORITY IN ACCORDANCE WITH ARTICLE 46 . IF PUBLICATION WAS NOT INTENDED TO KEEP THE GENERAL PUBLIC INFORMED, IT IS DIFFICULT TO UNDERSTAND WHY THE TREATY DID NOT MERELY DECLARE " THAT THE PRICE-LISTS MUST BE COMMUNICATED TO THE HIGH AUTHORITY ".
P . 10
( 2 ) ARTICLE 60 ( 1 ) DIRECTLY AND CATEGORICALLY PROHIBITS CERTAIN PRACTICES; THE HIGH AUTHORITY IS AUTHORIZED TO DEFINE THEM BUT IT MAY NOT DEROGATE FROM THE RULE THAT THEY ARE PROHIBITED .
ARTICLE 60 ( 2 ) PROVIDES FOR THE COMPULSORY PUBLICATION OF THE PRICE-LISTS " FOR THESE PURPOSES ". THESE WORDS CLEARLY SHOW THE INSTRUMENTAL NATURE OF THE SUBSEQUENT PROVISIONS AS TO THE PUBLICATION OF PRICES . THIS IS CATEGORICALLY PROVIDED FOR; IT IS REGARDED AS AN APPROPRIATE MEANS OF ATTAINING THE OBJECTIVES SET OUT IN THE PREVIOUS PARAGRAPH . IT IS THUS ONLY A MEANS, BUT A MEANS CATEGORICALLY LAID DOWN BY THE TREATY AND NOT A MEANS WHICH MAY BE REPLACED BY ANY OTHER MEANS WHICH MIGHT POSSIBLY ACHIEVE THE SAME RESULTS .
THE MANDATORY NATURE OF THE DUTY TO PUBLISH THE PRICE-LISTS IS ALSO MADE CLEAR BY THE WORDS " MUST BE MADE PUBLIC ". THUS THE COURT COMES TO THE CONCLUSION THAT THE DUTY TO MAKE THE PRICE-LISTS AND CONDITIONS OF SALE PUBLIC MUST BE INTERPRETED AS A STRICT RULE OF LAW, WHICH ALLOWS OF NO EXCEPTION; THE DUTY IS AN ABSOLUTE ONE AND MUST BE FULFILLED IN ITS ENTIRETY .
THE COURT DOES NOT AGREE WITH THE DEFENDANT'S VIEW THAT THE EXPRESSION " ETRE RENDUS PUBLICS " ( " BE MADE PUBLIC " ) IS LESS STRONG THAN IF THE TREATY HAD SAID " ETRE PUBLIES ". IN FACT, IN THE LAST TWO PARAGRAPHS OF ARTICLE 46, THE TREATY USES THESE TWO TERMS ( BOTH RENDERED BY THE WORD " PUBLISH " IN THE ENGLISH VERSION OF THE TREATY ) AS HAVING THE SAME MEANING . IN ANY CASE, PUBLICATION MUST BE EFFECTED IN SUCH A WAY THAT ALL THOSE WHO OPERATE ON THE MARKET ( POSSIBLE FUTURE PURCHASERS AND COMPETITORS ) MAY KNOW THE PRICES; ONLY SUCH PUBLICITY MEETS THE OBJECTIVES TO ATTAIN WHICH THE RULE WAS MADE .
( 3 ) ARTICLE 60 ( 2 ) ( A ) DOES NOT EXPRESSLY STATE THE TIME WHEN PRICE-LISTS AND CONDITIONS OF SALE MUST BE PUBLISHED . ONE ONLY HAS TO READ SUBPARAGRAPH ( 2 ) ( B ) ON THE METHODS OF QUOTATION TO UNDERSTAND THAT THE PRICE-LISTS MUST PRECEDE ANY SALE EFFECTED IN THE COMMON MARKET .
IN FACT, ARTICLE 60 ( 2 ) ( B ) STATES THAT THE METHODS OF QUOTATION USED MUST NOT HAVE THE EFFECT THAT PRICES CHARGED RESULT IN INCREASES OVER THE PRICE " SHOWN IN THE PRICE-LIST " - WHICH AGAIN CONFIRMS THAT THE PRICE-LISTS CONTAIN A LIST OF THE PRICES AT WHICH GOODS ARE OFFERED FOR SALE, WHICH ENABLES ANY LAWFUL TRANSACTION TO BE PRECISELY CALCULATED, AND THAT THESE PRICE-LISTS MUST BE PUBLISHED BEFORE BEING APPLIED .
P . 11
MOREOVER, ARTICLE 30 ( 2 ) OF THE CONVENTION ON THE TRANSITIONAL PROVISIONS STATES THAT THE PRICES CHARGED BY UNDERTAKINGS FOR SALES OF STEEL ON THE ITALIAN MARKET MAY NOT BE LOWER THAN THE PRICES SHOWN IN THE PRICE-LISTS FOR COMPARABLE TRANSACTIONS . THIS PROVISION CONFIRMS THAT THE PRICE-LIST IS ONLY A LIST OF THE PRICES AT WHICH GOODS ARE OFFERED FOR SALE PRIOR TO ANY CONTRACT OF SALE .
MOREOVER THE TREATY IS VERY PRECISE IN ITS WORDING WHEN IT REFERS TO " THE PRICE-LISTS " AND NOT " PRICE-LISTS ". THE PRICE-LISTS IN QUESTION ARE THEREFORE NOT DOCUMENTS RELATED TO THE TREATY ALONE AND SPECIALLY DRAWN UP WITH A VIEW TO THE TREATY'S OBJECTIVES, BUT DOCUMENTS OF A TYPE WHICH HAS BEEN ESTABLISHED BY PREVIOUS COMMERCIAL PRACTICE AND WHICH, ACCORDING TO SUCH PRACTICE, ALWAYS AMOUNT - ALBEIT SOMETIMES GENERALLY AND SOMETIMES PROVISIONALLY - TO AN OFFER TO DO BUSINESS ON THE BASIS OF THE PRICE STATED IN THEM .
PRICE-LISTS DO NOT CEASE TO BE OFFERS TO DO BUSINESS EVEN THOUGH THE TREATY ASCRIBES TO THEM OBJECTIVES OF PUBLIC INTEREST WHICH ARE RECOGNIZED BY ITS PROVISIONS . THERE CAN THEREFORE BE NO DOUBT THAT THE EXPRESSION " PRICE-LISTS " RETAINS ITS USUAL MEANING IN THE TREATY AND MEANS THE PRICES ON THE BASIS OF WHICH UNDERTAKINGS STATE THEIR WILLINGNESS TO SELL THEIR PRODUCTS .
THIS INTERPRETATION IS MOREOVER CONFIRMED ( AND ON THIS POINT THE COURT ACCEPTS THE ADVOCATE GENERAL'S ARGUMENT ) BY THE FACT THAT ARTICLE 60 ( 2 ) DISTINGUISHES BETWEEN PRICES APPLIED AND PRICES CHARGED, INASMUCH AS THIS LATTER EXPRESSION WHICH APPEARS IN ARTICLE 60 ( 2 ) ( B ) MEANS THE PRICES AT WHICH TRANSACTIONS ARE IN FACT CONCLUDED . CONSEQUENTLY, IT WOULD SEEM THAT THE EXPRESSION " PRIX APPLIQUES " ( PRICES APPLIED ) MEANS THE PRICES AT WHICH GOODS ARE OFFERED BY VENDORS, ALTHOUGH IT WOULD HAVE BEEN CLEARER HAD THE TREATY USED THE TERM " PRICES TO BE APPLIED " FOR THIS PURPOSE .
MOREOVER, BOTH IN ITS PREVIOUS DECISIONS AND IN DECISION NO 2/54, THIS IS THE MANNER IN WHICH THE HIGH AUTHORITY ALWAYS SEEMS TO HAVE INTERPRETED THE TREATY, FOR ARTICLE 4 OF DECISION NO 31/53 AND ARTICLE 3 OF DECISION NO 2/54 BOTH CONTAIN THE STATEMENT THAT THE PRICE-LISTS AND CONDITIONS OF SALE SHALL APPLY NOT EARLIER THAN " FIVE CLEAR DAYS " ( ONE DAY, ACCORDING TO ARTICLE 3 OF DECISION NO 2/54 ) " AFTER THEY HAVE BEEN ADDRESSED IN PRINTED FORM TO THE HIGH AUTHORITY ".
THE PREAMBLE TO DECISION NO 2/54 ALSO SHOWS THAT THE HIGH AUTHORITY ITSELF ASSUMES THAT THE PRICE-LISTS WILL HAVE BEEN PUBLISHED BEFOREHAND : AFTER THE SECOND RECITAL STATES THAT THE PRICE-LISTS MUST REFLECT THE PRICE-LEVEL EXISTING ON THE MARKET, THE THIRD RECITAL REFERS TO CERTAIN CONCESSIONS GRANTED TO UNDERTAKINGS, AND, TO THESE CONCESSIONS, THE FOURTH RECITAL ADDS YET ANOTHER CONSISTING OF MAKING THE TIME-LIMITS SET FOR APPLYING A NEW PRICE-LIST AS SHORT AS POSSIBLE . IT WOULD BE REALLY DIFFICULT TO REGARD THIS AS A CONCESSION IF THE PRICE-LISTS MERELY REFLECTED PRICE MOVEMENTS ON THE MARKET AFTER THEY HAD OCCURRED . ONLY IF THERE IS PREVIOUS PUBLICATION CAN THIS BE REGARDED AS A CONCESSION, FOR THIS IS THE ONLY CIRCUMSTANCE UNDER WHICH UNDERTAKINGS WILL HAVE AN INTEREST IN NOT HAVING TO WAIT SEVERAL DAYS BEFORE BEING IN A POSITION TO CONCLUDE SALES CONTRACTS BASED ON NEW PRICES .
P . 12
IT MUST THEREFORE BE CONCLUDED THAT THE PUBLICATION OF PRICE-LISTS MUST NECESSARILY BE EFFECTED BEFORE UNDERTAKINGS MAY APPLY NEW PRICES .
MOREOVER, IT FOLLOWS FROM THE FOREGOING CONSIDERATIONS THAT THE WORD " PRICE-LIST " ALWAYS MEANS PUBLISHED PRICE-LISTS . ON THIS POINT ALSO, THE COURT ACCEPTS THE ADVOCATE GENERAL'S ARGUMENT . THE COURT CANNOT ACCEPT THE DEFENDANT'S SUGGESTION THAT THE TERM " PRICE-LIST " DOES NOT NECESSARILY BEAR THIS MEANING .
( 4 ) NOW THAT IT IS ESTABLISHED THAT THE PRICE-LISTS AND CONDITIONS OF SALE BE PUBLISHED BEFORE THEY ARE APPLIED ON THE COMMON MARKET, IT REMAINS TO BE DECIDED WHETHER THE TREATY REQUIRES THE PUBLICATION OF EXACT PRICES OR WHETHER IT IS ENOUGH TO PUBLISH AVERAGE OR APPROXIMATE PRICES . THERE IS NO DOUBT THAT THE TREATY REQUIRES THE PUBLICATION OF EXACT PRICES IN THE FORM OF PRICE-LISTS . THIS FOLLOWS FROM THE OBJECTIVES TO WHICH THE PRINCIPLE OF PRICE PUBLICATION IS INTENDED TO LEAD : THE INFORMATION QCQUIRED BY PURCHASERS IS ONLY OF VALUE TO THEM IF IT INFORMS THEM OF THE EXACT PRICES AT WHICH THEY CAN BUY . LIKEWISE PUBLICATION MUST MAKE ALIGNMENT POSSIBLE AND THIS MUST BE BASED ON A COMPETITOR'S EXACT PRICES . ALIGNMENT IS A RIGHT GRANTED TO UNDERTAKINGS BY THE TREATY, NOT A MERE POSSIBILITY TO WHICH EFFECT COULD ONLY BE GIVEN IF UNDERTAKINGS WERE IN A POSITION TO GAIN INFORMATION BY OTHER MORE OR LESS FORTUITOUS MEANS AS TO PRICES CHARGED BY THEIR COMPETITORS .
IF THEREFORE, FOR THE ABOVE-MENTIONED REASONS, THE TREATY CATEGORICALLY REQUIRES THE PRIOR PUBLICATION OF EXACT PRICES, IT FOLLOWS THAT THE POWER ACCORDED TO THE HIGH AUTHORITY TO LAY DOWN THE EXTENT AND THE MANNER OF PUBLICATION DOES NOT ALLOW IT TO WEAKEN THE PRINCIPLE OF THE COMPULSORY PUBLICATION OF EXACT PRICES . SINCE ARTICLE 60 ( 2 ) ( A ) IS A STRICT RULE OF LAW AND IN THE ABSENCE OF ANY PROVISION TO THE CONTRARY, THE POWERS CONFERRED ON THE HIGH AUTHORITY BY THE WORDS " TO THE EXTENT AND IN THE MANNER PRESCRIBED BY THE HIGH AUTHORITY ", CANNOT BE READ AS AUTHORIZING THE HIGH AUTHORITY NOT TO PUBLISH PRICE-LISTS . THE WORDS JUST QUOTED MUST BE UNDERSTOOD TO MEAN THAT THE HIGH AUTHORITY IS ENTITLED TO DETERMINE THE CONTENT OF THE PRICE-LISTS . BUT THIS CONTENT MUST FULFIL A PUBLIC NEED, SO THAT THE HIGH AUTHORITY IS CONFINED TO LAYING DOWN THE MINIMUM INFORMATION TO BE INCLUDED IN THE PRICE-LISTS .
IN OTHER WORDS, THE PHRASE " TO THE EXTENT AND IN THE MANNER PRESCRIBED BY THE HIGH AUTHORITY " ENTITLES THE HIGH AUTHORITY TO PRESCRIBE THE EXTENT, THAT IS TO SAY, THE SCOPE, OF PUBLICATIONS, IN SO FAR AS IT IS A QUESTION OF SETTLING THEIR DETAILS; THE HIGH AUTHORITY MAY, FOR INSTANCE, AS IT HAS ALREADY DONE, DECIDE THE PERIOD AFTER WHICH A NEW PRICE-LIST SHALL COME INTO FORCE, LAY DOWN THAT CERTAIN DISCOUNTS ( SUCH AS DISCOUNTS FOR SECONDS, AND SO ON ) MUST BE MENTIONED IN THE PRICE-LISTS, AND DECIDE WHETHER PACKING COSTS SHOULD OR SHOULD NOT BE PUBLISHED . ON THE OTHER HAND, IN ACCORDANCE WITH THE SYSTEM CREATED BY THE TREATY EVERY PRICE-LIST MUST CONTAIN ALL INFORMATION REQUIRED TO SHOW THE EXACT PRICE . THE FACT THAT THE TREATY REQUIRES THE PUBLICATION OF PRICE-LISTS TO BE MADE WITH DUE REGARD TO THE PURPOSES WHICH IT IS TO SERVE MAKES IT IMPOSSIBLE TO ACCEPT THE HIGH AUTHORITY'S ARGUMENT THAT IT HAS POWER TO LAY DOWN WHAT SHALL AND WHAT SHALL NOT BE PUBLISHED, ACCORDING TO ITS OWN UNFETTERED JUDGMENT . IF THIS ARGUMENT, WHICH THE COURT REJECTS, WERE ACCEPTED THERE WOULD BE NO LIMIT TO THE INFORMATION WHICH MIGHT BE EXEMPTED FROM THE DUTY OF PUBLICATION . THE HIGH AUTHORITY WOULD THEN BE ABLE TO LAY DOWN FAR WIDER MARGINS, AND IT IS IMPOSSIBLE TO SAY WHERE THIS WOULD END; IT MIGHT LAY DOWN MERE PUBLICATION IN SCALES ( FOR EXAMPLE " PRICE 80 TO 120 ") OR EVEN THE NON-PUBLICATION OF PRICES OF WHOLE CATEGORIES OF PRODUCTS - IN SHORT, IT MIGHT DISCARD THE PRINCIPLE OF COMPULSORY PUBLICATION LAID DOWN IN THE TREATY .
P . 13
LASTLY WHILST IT IS TRUE THAT THE HIGH AUTHORITY'S POWERS ARE TO REGULATE THE MINIMUM REQUIREMENTS WITH WHICH THE PRICE-LISTS MUST COMPLY, ITS POWERS ARE ALSO TO REGULATE THE SCOPE OF THE PUBLICATION ITSELF . IT IS THUS NOT ENOUGH TO ENSURE THAT THE PRICE-LISTS ARE TRANSMITTED TO THE HIGH AUTHORITY; IF THIS WERE THE CASE, THE TREATY WOULD MERELY HAVE SO PROVIDED . THE PRICE-LISTS MUST BE MADE PUBLIC AND THE HIGH AUTHORITY'S POWER TO PRESCRIBE " THE EXTENT AND THE MANNER " IMPLIES THAT IT HAS A DUTY TO SEE THAT THE EXTENT TO WHICH AND MANNER IN WHICH THE PRICE-LISTS ARE PUBLISHED AND MADE AVAILABLE TO THE PUBLIC ADEQUATELY MEET THE NEEDS OF THE PUBLIC INTEREST .
THE TEXT OF DECISION NO 31/53 WAS DRAFTED WITH EXTREME CARE; ARTICLE 1 STATES THAT UNDERTAKINGS IN THE STEEL INDUSTRIES MUST PUBLISH THEIR PRICE-LISTS AND CONDITIONS OF SALE, AND ANY SUBSEQUENT AMENDMENTS MUST ALSO BE PUBLISHED IN ACCORDANCE WITH THE PROVISIONS OF THE DECISION; ARTICLE 2 THEN STATES WITH GREAT PRECISION WHAT INFORMATION THE PRICE-LISTS MUST CONTAIN, PUTTING A REASONABLE INTERPRETATION ON THE WORDS " EXTENT " AND " MANNER " WHICH APPEAR IN THE TREATY; ARTICLE 4 PROVIDES THAT PRICE-LISTS ARE TO APPLY NOT EARLIER THAN FIVE CLEAR DAYS AFTER THEY HAVE BEEN ADDRESSED TO THE HIGH AUTHORITY AND THAT THE SELLER MUST COMMUNICATE THEM UPON REQUEST TO ANYONE INTERESTED .
ON THE OTHER HAND, WHAT IS LAID DOWN IN ARTICLE 1 OF DECISION NO 2/54 IS NOT THE EXTENT TO WHICH THE PRICE-LISTS MUST BE MADE PUBLIC BY UNDERTAKINGS, BUT RATHER THE EXTENT TO WHICH THE HIGH AUTHORITY AUTHORIZES THE NON-OBSERVANCE OF THE PUBLISHED PRICE-LISTS . THIS IS CONTRARY TO ARTICLE 60 ( 2 ) OF THE TREATY . IT IS TO BE ADDED THAT THE INTERPRETATION ADOPTED BY THE COURT IS SUPPORTED BY THE FACT THAT THE HIGH AUTHORITY MAY DETERMINE THE EXTENT OF PUBLICATION AFTER MERELY CONSULTING THE CONSULTATIVE COMMITTEE WHEREAS, BEFORE DEFINING PROHIBITED PRACTICES, IT MUST ALSO CONSULT THE COUNCIL OF MINISTERS . THIS IS UNDERSTANDABLE IF THE HIGH AUTHORITY WHEN DETERMINING THE EXTENT OF PUBLICATION MUST STRICTLY ADHERE TO THE RULE THAT THE EXACT PRICES AND CONDITIONS OF SALE MUST BE PUBLISHED . HAD THE TREATY WISHED TO GIVE THE HIGH AUTHORITY GREATER FREEDOM AND THE RIGHT TO DEROGATE FROM THIS RULE, IT WOULD HAVE BEEN LOGICAL FOR SUCH POWERS ALSO TO BE SUBJECT TO CONSULTATION WITH THE COUNCIL .
( 5 ) IT NOW REMAINS TO CONSIDER WHETHER THE CONCLUSION TO WHICH THE COURT HAS COME AS A RESULT OF ITS EXAMINATION OF THE WORDS USED AND THE REASONS UNDERLYING THEM IS CONTRARY TO THE TREATY'S OTHER OBJECTIVES, OR WHETHER IT MAY BE INVALIDATED BY OTHER CONSIDERATIONS . THIS IS NOT THE CASE . IT MUST FIRST BE REPEATED, THAT THE METHOD OF PRIOR PUBLICATION OF THE EXACT PRICES IS THE MANDATORY RULE LAID DOWN BY ARTICLE 60 ( 2 ). IT FOLLOWS THAT THIS RULE CANNOT BE DISREGARDED, EVEN IF THIS WOULD FACILITATE SOME OTHER METHOD WHICH MIGHT BETTER ATTAIN THE AIMS IN VIEW . IT IS NOT FOR THE COURT TO EXPRESS A VIEW AS TO THE DESIRABILITY OF THE METHODS LAID DOWN BY THE TREATY, OR TO SUGGEST A REVISION OF THE TREATY, BUT IT IS BOUND, IN ACCORDANCE WITH ARTICLE 31, TO ENSURE THAT THE INTERPRETATION AND APPLICATION OF THE TREATY AS IT STANDS THE LAW IS OBSERVED .
P . 14
( A ) THE OBJECTION THAT PURCHASERS CANNOT CHECK ON PRICES WHEN THESE ARE COMING DOWN IS IRRELEVANT, AS THIS IS NOT THE SOLE OBJECT OF PUBLICATION, WHICH IS ALSO INTENDED TO ENABLE PURCHASERS TO OBTAIN INFORMATION AS TO THE EXACT PRICES AND TO ENABLE UNDERTAKINGS TO ALIGN THEIR PRICES . THIS OBJECTION IS THEREFORE NOT SUFFICIENT TO JUSTIFY ABANDONING THE RULE AS TO PUBLICATION WHICH IS LAID DOWN IN THE TREATY .
( B ) THE DEFENDANT STRESSED THE DANGER OF AGREEMENTS BETWEEN PRODUCERS, A DANGER WHICH IS SAID TO BE INHERENT IN THE OLD SYSTEM . HOWEVER THERE IS NO EVIDENCE THAT THE INTRODUCTION OF AN AVERAGE MARGIN WOULD OBVIATE THIS DANGER . EVEN IF THE NEW SYSTEM WERE TO SOME EXTENT INSTRUMENTAL IN LESSENING THIS RISK, THIS WOULD NOT BE ANY JUSTIFICATION FOR NEGLECTING THE OTHER OBJECTIVES AT WHICH PUBLICATION IS AIMED . MOREOVER, THE TREATY ENABLES THE HIGH AUTHORITY TO INTERVENE BY OTHER MEANS, AS SOON AS IT LEARNS THAT ANY AGREEMENTS HAVE BEEN CONCLUDED .
( C ) THE STATE OF THE MARKET, IN PARTICULAR THE REALIZATION THAT THERE IS A TREND TO LOWER PRICES, IS LIKEWISE NO GROUND FOR ABOLISHING THE RULE THAT PRICES ARE TO BE PUBLISHED, SINCE SUCH PUBLICATION IS PROVIDED FOR BY THE TREATY . IN THE EVENT OF A CRISIS OR DISTURBANCES ON THE MARKET, THE TREATY CONFERS VARIOUS POWERS ON THE HIGH AUTHORITY - IN PARTICULAR UNDER ARTICLE 60 ( 2 ) LAST LINE, ARTICLE 61, ARTICLE 63, ARTICLES 58 AND 59 - BUT NOWHERE THE POWER TO DISPENSE WITH THE COMPULSORY PUBLICATION OF PRICE-LISTS . MOREOVER, THE RULE AS TO COMPULSORY PUBLICATION, LAID DOWN BY THE TREATY, IS OF A GENERAL NATURE AND IN NO WISE DEPENDS ON CURRENT MARKET TRENDS .
( D ) THE COURT HAS BEEN PARTICULARLY CONCERNED THAT PRICES SHALL BE ALLOWED TO FIND THEIR OWN LEVEL; BUT THIS CANNOT JUSTIFY ITS REACHING ANOTHER DECISION . THE TREATY IS BASED ON THE ASSUMPTION THAT THE FREEDOM GIVEN TO UNDERTAKINGS TO FIX THEIR OWN PRICES AND TO PUBLISH NEW PRICE-LISTS WHENEVER THEY WISH TO AMEND THEM WILL ENSURE THAT PRICES FIND THEIR OWN LEVEL . IF CURRENT MARKET TRENDS CHANGE PRODUCERS WILL HAVE TO AMEND THEIR PRICE-LISTS ACCORDINGLY, AND IN THIS WAY " THE MARKET MAKES THE PRICE ". BUT, NOTWITHSTANDING THE BASIC ASSUMPTION THAT PRICES ARE TO BE ALLOWED TO FIND THEIR OWN LEVEL, IT MUST NOT BE FORGOTTEN THAT THE TREATY FORBIDS ANY KIND OF DISCRIMINATION AND THAT IT PROVIDES FOR THE RIGHT TO ALIGN PRICES . THIS IS WHY THE TREATY HAS LAID DOWN THE RULE THAT THERE SHOULD BE COMPULSORY AND PRIOR PUBLICATION OF PRICE-LISTS AND CONDITIONS OF SALE . IT IS NOT FOR THE COURT TO EXPRESS A VIEW AS TO THE DESIRABILITY OF THIS SYSTEM; IT CAN ONLY RECORD THAT THIS RULE IS LAID DOWN BY THE TREATY WHICH ( WHETHER RIGHTLY OR WRONGLY ) DOES NOT CONTAIN ANY WORDS WHICH MIGHT PERMIT A CERTAIN FLEXIBILITY IN THE PRICE-LISTS IN THE EVENT OF MINOR OR TEMPORARY FLUCTUATIONS .
P . 15
ON ALL THESE GROUNDS, THE COURT FINDS THAT ARTICLE 1 OF DECISION NO 2/54 INFRINGES THE TREATY, AND IT MUST THEREFORE BE ANNULLED .
MOREOVER, THE COURT OF ITS OWN MOTION HAS EXAMINED THE QUESTION WHETHER ARTICLE 1 OF DECISION NO 2/54 AMOUNTS TO AN INFRINGEMENT OF AN ESSENTIAL PROCEDURAL REQUIREMENT . THE WORDING OF THIS ARTICLE STATES THAT IT ONLY LAYS DOWN THE FRESH CONDITIONS UNDER WHICH NEW PRICE-LISTS MUST BE PUBLISHED . IT MAY, NEVERTHELESS, BE ASKED WHETHER THE SAID ARTICLE, READ IN CONJUNCTION WITH DECISION NO 1/54, DOES NOT IN ACTUAL FACT CONSTITUTE, IN DISGUISED FORM, AN ADDITION TO THE DEFINITION OF PROHIBITED PRACTICES . IF THIS WERE THE CASE, SO THAT IT AMOUNTED TO AN INDIRECT AND SUPPLEMENTARY DEFINITION OF PROHIBITED PRACTICES, THEN THE COUNCIL SHOULD HAVE BEEN CONSULTED, UNDER THE TERMS OF ARTICLE 60 ( 1 ). YET SUCH OFFICIAL CONSULTATION DID NOT TAKE PLACE, AND UNOFFICIAL INFORMATION SUPPLIED TO THE COUNCIL BY THE HIGH AUTHORITY DOES NOT MEET THIS REQUIREMENT . HOWEVER, THE COURT IS OF OPINION THAT ARTICLE 1 OF DECISION NO 2/54 DOES NOT CONTAIN A DEFINITION OF PROHIBITED PRACTICES, BUT MERELY LAYS DOWN HOW PRICE-LISTS ARE TO BE PUBLISHED .
THE REFERENCE, IN ARTICLE 2 OF DECISION NO 2/54, TO ARTICLE 1 THEREOF, DOES NOT JUSTIFY THE ANNULMENT OF ARTICLE 2, AS THAT REFERENCE BECOMES POINTLESS AS A RESULT OF THE ANNULMENT OF ARTICLE 1 . THE APPLICANT DID NOT CONTEST THE REMAINING ARTICLES OF DECISION NO 2/54, AND THE COURT CONSIDERS THAT THERE ARE NO GROUNDS FOR ANNULLING THEM .
III - DECISION NO 3/54
DECISION NO 3/54 WHICH IS INTENDED TO INTRODUCE A METHOD OF COLLECTING INFORMATION AND ENABLING SUPERVISION TO TAKE PLACE, IS BASED ON ARTICLE 47 OF THE TREATY . THAT ARTICLE EMPOWERS THE HIGH AUTHORITY TO OBTAIN THE INFORMATION IT REQUIRES IN ORDER TO CARRY OUT ITS TASKS; DECISION NO 3/54 IS THEREFORE CONSISTENT WITH THE TREATY . THE FACT THAT THE HIGH AUTHORITY COMBINED THIS METHOD OF COLLECTING INFORMATION WITH THE SUPERVISION OF THE SYSTEM OF PUBLICATION PROVIDED FOR IN ARTICLE 60 DOES NOT MAKE IT IN ANY WAY OBJECTIONABLE .
EVEN THOUGH DECISION NO 3/54 IS APPARENTLY INTENDED TO COMPLETE THE SYSTEM OF VARIATIONS INTRODUCED BY ARTICLE 1 OF DECISION NO 2/54 WHICH HAS ALREADY BEEN DECLARED TO BE INCONSISTENT WITH THE TREATY, IT IS HOWEVER NOT IN ITSELF CONTRARY TO THE TREATY; THERE IS THEREFORE NO REASON TO ANNUL IT, ALTHOUGH IT OBVIOUSLY BECOMES INOPERATIVE AND POINTLESS AS A RESULT OF THE ANNULMENT OF ARTICLE 1 OF DECISION NO 2/54 .
P . 16
B - THE SUBMISSION OF MISUSE OF POWERS
THE COURT SHARES THE ADVOCATE GENERAL'S OPINION THAT THE ALLEGATION THAT BY REASON OF THE CONTESTED DECISIONS THE DEFENDANT HAS MISUSED ITS POWERS HAS NOT BEEN MADE OUT .
IT HAS BEEN STATED ABOVE THAT THE HIGH AUTHORITY, IN CARRYING OUT ITS DUTY TO ATTEMPT PRIMARILY TO PREVENT UNFAIR COMPETITIVE PRACTICES AND DISCRIMINATORY PRACTICES, IS ENTITLED TO TAKE ACCOUNT OF THE PROHIBITIONS RESULTING FROM ARTICLES 2, 3 AND 4, SO THAT IT CANNOT BE CRITICIZED FOR HAVING DONE SO .
EVEN IF THE CONTESTED DECISIONS WERE PARTLY BASED ON THE IDEA OF INTRODUCING A NEW SYSTEM WHICH UNDERTAKINGS WOULD BE MORE LIKELY TO RESPECT THAN THE OLD ONE, THIS CANNOT LEAD TO THE CONCLUSION THAT SUCH A SYSTEM WAS INTENDED TO LEGALIZE OFFENCES PREVIOUSLY COMMITTED . IN ANY CASE, IT IS OBVIOUS THAT THE DECISIONS WERE ABOVE ALL INTENDED TO FURTHER THE TREATY'S AIMS . EVEN IF THE GROUNDS FOR THE HIGH AUTHORITY'S DECISIONS INCLUDED, IN ADDITION TO PROPER GROUNDS, THE IMPROPER ONE OF AVOIDING SUBJECTING GUILTY UNDERTAKINGS TO PENALTIES, THIS WOULD NOT MAKE THE DECISIONS INVALID FOR MISUSE OF POWERS, IN SO FAR AS THEY DO NOT DETRACT FROM THE MAIN AIM, WHICH IS THE PROHIBITION OF UNFAIR COMPETITIVE PRACTICES AND DISCRIMINATION . THE COURT CONSIDERS THAT THIS IS NOT THE CASE, FOR THE REASONS SET OUT UNDER I ABOVE .
Decision on costs
( 1 ) UNDER THE TERMS OF ARTICLE 60 OF THE RULES OF PROCEDURE OF THE COURT, IN ANY CONTENTIOUS MATTER THE UNSUCCESSFUL PARTY SHALL BE ORDERED TO PAY THE COSTS . NEVERTHELESS THE COURT MAY, IN ACCORDANCE WITH PARAGRAPH ( 2 ) OF THAT ARTICLE, ORDER THAT THE PARTIES BEAR THEIR OWN COSTS WHOLLY OR IN PART, WHERE EACH PARTY SUCCEEDS ON SOME AND FAILS ON OTHER HEADS .
IN THIS CASE, THE APPLICANT HAS SUCCEEDED IN PART OF THE CASE AND ON AN IMPORTANT POINT, NAMELY THE ANNULMENT OF ARTICLE 1 OF DECISION NO 2/54 WHICH INTRODUCED THE SYSTEM OF MEAN VARIATIONS FROM THE PRICES PUBLISHED IN THE PRICE-LISTS . IN THESE CIRCUMSTANCES THE COURT CONSIDERS THAT IT WOULD BE RIGHT TO ORDER THE DEFENDANT TO PAY HALF THE APPLICANT'S COSTS . HOWEVER, SINCE THE APPLICANT EXPRESSLY STATED THAT IT DID NOT SEEK REPAYMENT OF ANY OF ITS EXPENSES AND DID NOT ASK FOR COSTS IN ITS PLEADING, THE COURT TAKES FORMAL NOTE OF THAT DECLARATION AND DECIDES THAT EACH PARTY SHALL BEAR ITS OWN COSTS .
( 2 ) UNDER ARTICLE 34 OF THE TREATY, IF THE COURT DECLARES A DECISION VOID, IT SHALL REFER THE MATTER BACK TO THE HIGH AUTHORITY, WHICH MUST TAKE THE NECESSARY STEPS TO COMPLY WITH THE JUDGMENT .
Operative part
THE COURT
HEREBY :
ANNULS ARTICLE 1 OF DECISION NO 2/54 AND ON THAT POINT REFERS THE MATTER BACK TO THE HIGH AUTHORITY;
DISMISSES THE APPLICATION FOR THE ANNULMENT OF DECISIONS NOS 1/54 AND 3/54 AND ARTICLE 2 OF DECISION NO 2/54;
TAKES FORMAL NOTE THAT THE APPLICANT HAS NOT ASKED FOR COSTS IN ITS PLEADING AND ORDERS EACH PARTY TO BEAR ITS OWN COSTS . |
Judgment of the Court of 11 February 1955. - Associazione Industrie Siderurgiche Italiane (ASSIDER) v High Authority of the European Coal and Steel Community. - Case 3-54.
European Court reports
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English special edition Page 00063
Danish special edition Page 00009
Greek special edition Page 00009
Portuguese special edition Page 00011
Summary
Parties
Subject of the case
Grounds
Decision on costs
Operative part
Keywords
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APPLICATION FOR ANNULMENT - GENERAL DECISION OF THE HIGH AUTHORITY - APPLICANT UNDERTAKINGS AND ASSOCIATIONS OF UNDERTAKINGS - ADMISSIBILITY
( TREATY, ART . 33 )
Summary
FOR AN APPLICATION BY AN UNDERTAKING OR BY AN ASSOCIATION OF UNDERTAKINGS AGAINST A GENERAL DECISION OF THE HIGH AUTHORITY TO BE ADMISSIBLE IT IS ENOUGH FOR THE APPLICANT FORMALLY TO ALLEGE THAT THERE HAS BEEN A MISUSE OF POWERS AFFECTING IT . THE ALLEGATION MUST INDICATE THE REASONS FOR WHICH THE APPLICANT CONSIDERS THAT THERE HAS BEEN A MISUSE OF POWERS AFFECTING IT . IF THE APPLICANT IS AN ASSOCIATION OF UNDERTAKINGS, IT IS SUFFICIENT FOR IT TO CLAIM THAT THERE HAS BEEN A MISUSE OF POWERS AFFECTING ONE OR MORE UNDERTAKINGS WHICH ARE MEMBERS OF THE ASSOCIATION . THE TREATY DOES NOT IMPOSE ANY FURTHER CONDITION FOR AN APPLICATION TO BE ADMISSIBLE SUCH AS, FOR EXAMPLE, PROOF THAT A MISUSE OF POWERS AFFECTING THE APPLICANT HAS ACTUALLY BEEN COMMITTED, SINCE THIS LATTER QUESTION GOES TO THE SUBSTANCE .
Parties
IN CASE 3/54
ASSOCIAZIONE INDUSTRIE SIDERURGICHE ITALIANE ( ASSIDER ), WHOSE REGISTERED OFFICE IS IN MILAN, REPRESENTED BY ITS PRESIDENT, DANDOLO FRANCESCO REBUA, ASSISTED BY CESARE GRASSETTI, PROFESSOR AT THE UNIVERSITY OF MILAN, OF THE MILAN BAR AND THE CORTE DI CASSAZIONE, ROME, WITH AN ADDRESS FOR SERVICE IN LUXEMBOURG, CARE OF GUIDO RIETTI, 15, BOULEVARD ROOSEVELT, APPLICANT,
V
HIGH AUTHORITY OF THE EUROPEAN COAL AND STEEL COMMUNITY, REPRESENTED BY ITS LEGAL ADVISER, NICOLA CATALANO, ACTING AS AGENT, ASSISTED BY JEAN COUTARD, ADVOCATE AT THE CONSEIL D'ETAT AND THE COUR DE CASSATION, PARIS, WITH AN ADDRESS FOR SERVICE IN LUXEMBOURG AT ITS OFFICES, 2, PLACE DE METZ, DEFENDANT,
Subject of the case
APPLICATION FOR THE ANNULMENT OF DECISIONS NOS 1/54, 2/54 AND 3/54 OF THE HIGH AUTHORITY OF 7 JANUARY 1954,
Grounds
P . 69
THE COURT'S JUDGMENT IN THE PRESENT CASE HAS TAKEN THE FOLLOWING POINTS OF THE LAW INTO ACCOUNT :
1 . ADMISSIBILITY
( A ) THE COURT FINDS THAT BY VIRTUE OF ARTICLE 2 OF ITS ARTICLES OF ASSOCIATION THE APPLICANT IS AN ASSOCIATION OF UNDERTAKINGS FULFILLING THE CONDITIONS REQUIRED BY THE SECOND PARAGRAPH OF ARTICLE 33 AND BY ARTICLE 48 OF THE TREATY .
( B ) THE CONTESTED DECISIONS ARE GENERAL DECISIONS . THE COURT REJECTS THE DEFENDANT'S ARGUMENT THAT THE ADMISSIBILITY OF PROCEEDINGS BROUGHT BY UNDERTAKINGS OR ASSOCIATIONS OF UNDERTAKINGS AGAINST GENERAL DECISIONS IS SUBJECT TO PROOF OF THE EXISTENCE OF A MISUSE OF POWERS AFFECTING THEM . UNDER THE PROVISIONS OF THE SECOND PARAGRAPH OF ARTICLE 33 OF THE TREATY, UNDERTAKINGS OR ASSOCIATIONS OF UNDERTAKINGS " MAY ... INSTITUTE PROCEEDINGS ... AGAINST GENERAL DECISIONS ... WHICH THEY CONSIDER TO INVOLVE A MISUSE OF POWERS AFFECTING THEM ". FROM THIS WORDING, WHICH IS PERFECTLY CLEAR, FOR AN APPLICATION TO BE ADMISSIBLE IT IS ENOUGH FOR THE APPLICANT FORMALLY TO ALLEGE THAT THERE HAS BEEN A MISUSE OF POWERS AFFECTING IT JUST AS IT IS SUFFICIENT, AS REGARDS THE ADMISSIBILITY OF AN APPLICATION FROM A STATE, FOR IT TO ALLEGE THE EXISTENCE OF ONE OF THE FOUR GROUNDS FOR ANNULMENT SET OUT IN THE FIRST PARAGRAPH OF ARTICLE 33 OF THE TREATY . THE ALLEGATION MUST INDICATE THE REASONS FOR WHICH THE APPLICANT CONSIDERS THAT THERE HAS BEEN A MISUSE OF POWERS AFFECTING IT . THOSE CONDITIONS HAVE BEEN FULFILLED IN THIS CASE . IN THE CASE OF PROCEEDINGS INSTITUTED BY AN ASSOCIATION OF UNDERTAKINGS IT IS SUFFICIENT FOR IT TO CLAIM THAT THERE HAS BEEN A MISUSE OF POWERS AFFECTING ONE OR MORE UNDERTAKINGS WHICH ARE MEMBERS OF THE ASSOCIATION . IN THE PRESENT CASE THE APPLICANT CLAIMS, WITH SUPPORTING ARGUMENTS, THAT THERE HAS BEEN A MISUSE OF POWERS AFFECTING THE UNDERTAKINGS WHICH IT REPRESENTS IN TERMS OF ARTICLE 30 OF THE CONVENTION ON THE TRANSITIONAL PROVISIONS AS WELL AS OF ARTICLES 4 ( B ), 60 AND 64 OF THE TREATY, AND AS A CONSEQUENCE ALSO OF THE UNREASONABLENESS OF THE DECISIONS IN QUESTION .
THE COURT DOES NOT CONSIDER THAT THE TREATY PROVIDES FOR OR IMPOSES ANY FURTHER CONDITION FOR AN APPLICATION TO BE ADMISSIBLE SUCH AS, FOR EXAMPLE, PROOF THAT A MISUSE OF POWERS AFFECTING THE APPLICANT HAS ACTUALLY BEEN COMMITTED . SUCH PROOF IS NECESSARY TO ESTABLISH THAT THE APPLICATION IS WELL FOUNDED BUT THIS QUESTION GOES TO THE SUBSTANCE AND DOES NOT AFFECT ADMISSIBILITY .
( C ) THE COURT AGREES WITH THE ADVOCATE GENERAL'S VIEW THAT THE THREE DECISIONS IN DISPUTE MAY BE CONTESTED IN A SINGLE ACTION .
P . 70
2 . SUBSTANCE
FOR THE FOREGOING REASONS THE COURT CONSIDERS THAT THE ACTION HAS LOST ITS PURPOSE AS REGARDS THE APPLICATION FOR ANNULMENT OF THE FIRST ARTICLE OF DECISION NO 2/54 OF THE HIGH AUTHORITY AND ALSO AS REGARDS THE APPLICATION FOR ANNULMENT OF DECISION NO 3/54 . AS FOR THE APPLICATION FOR ANNULMENT OF DECISION NO 1/54 AND OF ARTICLES 2 TO 5 OF DECISION NO 2/54 IT IS WITHOUT FOUNDATION .
IN THESE CIRCUMSTANCES THE COURT IS NOT CALLED UPON TO GIVE A DECISION ON THE DEFINITION OF MISUSE OF POWERS WITHIN THE MEANING OF THE SECOND PARAGRAPH OF ARTICLE 33 OF THE TREATY OR ON THE INTERPRETATION OF THE WORDS, " TO INVOLVE A MISUSE OF POWERS AFFECTING THEM ", EMPLOYED THEREIN .
1 . SINCE ARTICLE 1 OF DECISION NO 2/54 OF THE HIGH AUTHORITY WAS FOR ALL PURPOSES ANNULLED BY JUDGMENT OF 21 DECEMBER 1954 IN THE CASE OF THE FRENCH GOVERNMENT V THE HIGH AUTHORITY, THIS APPLICATION FOR ANNULMENT HAS ON THIS POINT NO LONGER ANY PURPOSE .
IN THESE CIRCUMSTANCES IT IS NOT NECESSARY TO CONSIDER WHETHER, ON THIS POINT, THE APPLICATION IS OR IS NOT WELL FOUNDED OR TO GIVE AN EXPRESS RULING THEREON IN THE JUDGMENT SINCE A DECISION WHICH HAS ALREADY BEEN ANNULLED OR WITHDRAWN IN THE MEANTIME CANNOT COMPROMISE THE RIGHTS OR INTERESTS OF THE APPLICANT . IN CONSEQUENCE, THE PRESENT JUDGMENT MUST BE CONFINED TO STATING THAT NO DECISION IS CALLED FOR ON THE APPLICATION FOR ANNULMENT OF ARTICLE 1 OF DECISION NO 2/54 OF THE HIGH AUTHORITY .
2 . THE SAME CONCLUSION MUST BE REACHED AS REGARDS DECISION NO 3/54 SINCE THE HIGH AUTHORITY WITHDREW IT BY ITS DECISION NO 1/55 OF 4 JANUARY 1955 ( JOURNAL OFFICIEL OF 11 JANUARY 1955, P . 542 ). IT MUST IN CONSEQUENCE ALSO BE STATED THAT NO DECISION IS NECESSARY IN RESPECT OF DECISION NO 3/54 OF THE HIGH AUTHORITY .
3 . AS REGARDS DECISION NO 1/54 OF THE HIGH AUTHORITY, THE APPLICANT RELIED ON THE SAME GROUNDS AS THOSE INVOKED AGAINST THE HIGH AUTHORITY BY THE GOVERNMENT OF THE ITALIAN REPUBLIC IN CASE NO 2/54 . THE COURT REJECTED THOSE GROUNDS IN THE JUDGMENT WHICH IT DELIVERED IN THAT CASE WHEN IT HELD THAT THE PROVISIONS IN QUESTION INFRINGED NEITHER THE TREATY NOR THE CONVENTION ON THE TRANSITIONAL PROVISIONS AND DID NOT CONSTITUTE A MISUSE OF POWERS . NO NEW GROUND HAS BEEN ADDUCED CAPABLE OF LEADING THE COURT TO A DIFFERENT DECISION, WHATEVER INTERPRETATION MIGHT BE PLACED ON THE CONCEPT OF " A MISUSE OF POWERS AFFECTING THEM " WITHIN THE MEANING OF ARTICLE 33 OF THE TREATY .
WHILE DECISION NO 1/54 OF THE HIGH AUTHORITY DECLARED NOT TO BE DISCRIMINATORY VARIATIONS FROM THE PRICES CONTAINED IN THE PRICE-LIST OF AN UNDERTAKING IN THE CASE OF AN EXCEPTIONAL TRANSACTION OR WHEN SIMILAR VARIATIONS ARE APPLIED TO ALL COMPARABLE TRANSACTIONS, IT EXPRESSLY MAINTAINS THE OBLIGATION TO COMPLY WITH THE RULES CONCERNING THE PUBLICATION OF PRICE-LISTS; THIS PROVISION IN NO WAY COMPROMISES THE LEGAL POSITION OF THE ITALIAN STEEL INDUSTRY AND DOES NOT TEND TO LEGITIMIZE PREVIOUS INFRINGEMENTS .
P . 71
4 . IN THE JUDGMENT DELIVERED ON 21 DECEMBER 1954 IN THE CASE OF THE ITALIAN GOVERNMENT V THE HIGH AUTHORITY IT WAS HELD THAT ARTICLES 2 AND 3 OF DECISION NO 2/54 OF THE HIGH AUTHORITY CONSTITUTE NEITHER AN INFRINGEMENT OF THE TREATY OR OF THE CONVENTION ON THE TRANSITIONAL PROVISIONS NOR A MISUSE OF POWERS .
WHILE THE PROVISION IN ARTICLE 3 OF DECISION NO 2/54 WHICH REDUCES TO ONE DAY THE PERIOD WITHIN WHICH NEW PRICE-LISTS MAY BECOME APPLICABLE, OBLIGES ITALIAN UNDERTAKINGS TO REACT MORE QUICKLY TO CHANGES IN THE PRICE-LISTS OF THEIR COMPETITORS, IT DOES NOT SERIOUSLY UNDERMINE THE SPECIAL PROTECTION PROVIDED FOR THEIR BENEFIT .
ARTICLES 4 AND 5 OF DECISION NO 2/54 OF THE HIGH AUTHORITY ARE OF WHOLLY GENERAL APPLICATION AND CONSTITUTE NO THREAT WHATEVER TO ITALIAN STEEL UNDERTAKINGS OR ASSOCIATIONS OF UNDERTAKINGS . THE SUBJECT-MATTER OF THOSE ARTICLES HAS NOTHING TO DO WITH THE PRESENT CASE; MOREOVER THE APPLICANT, WHICH HAS SUBMITTED NO ARGUMENTS ON THE SUBJECT, DID NOT REFER TO IT . THE SAID ARTICLES CANNOT IN CONSEQUENCE BE VITIATED BY MISUSE OF POWERS AS THE APPLICANT ALLEGES .
5 . IT IS CLEAR FROM THE FOREGOING CONSIDERATIONS THAT NONE OF THE CONTESTED PROVISIONS REFERRED TO IN 3 . AND 4 . ABOVE INFRINGES THE TREATY OR THE CONVENTION ON THE TRANSITIONAL PROVISIONS .
THERE IS IN CONSEQUENCE NO NEED TO DEAL WITH THE QUESTION WHETHER AND UNDER WHAT CONDITIONS UNDERTAKINGS AND ASSOCIATIONS OF UNDERTAKINGS MAY CHALLENGE A GENERAL DECISION OF THE HIGH AUTHORITY ON THE GROUND THAT IT INFRINGES THE LAW .
6 . THE COURT DISMISSES THE CONCLUSIONS CLAIMING PRODUCTION OF ALL THE DOCUMENTS RELATING TO THE CASE; THOSE PRODUCED BY THE DEFENDANT SUFFICE IN THIS CASE TO EXPLAIN TO THE COURT THE OBJECTIVES BEING PURSUED BY THE HIGH AUTHORITY .
Decision on costs
THE DEFENDANT HAVING FAILED IN ITS PRINCIPAL CONTENTION THAT THE APPLICATION IS INADMISSIBLE ( IMPROPONIBILE ) THE COURT CONSIDERS IT FAIR THAT THE PARTIES SHOULD BEAR THEIR OWN COSTS AS PROVIDED UNDER ARTICLE 60 ( 2 ) OF THE RULES OF PROCEDURE .
Operative part
THE COURT
HEREBY :
DECLARES THAT THERE IS NO NEED FOR A DECISION ON THE APPLICATION FOR ANNULMENT OF ARTICLE 1 OF DECISION NO 2/54 OF THE HIGH AUTHORITY OR OF DECISION NO 3/54 OF THE HIGH AUTHORITY;
DISMISSES THE APPLICATION FOR ANNULMENT OF DECISION NO 1/54 OF THE HIGH AUTHORITY AND OF ARTICLES 2 TO 5 OF DECISION NO 2/54 OF THE HIGH AUTHORITY;
ORDERS EACH OF THE PARTIES TO BEAR ITS OWN COSTS . |
Judgment of the Court of 21 March 1955. - Kingdom of the Netherlands v High Authority of the European Coal and Steel Community. - Case 6-54.
European Court reports
French edition Page 00201
Dutch edition Page 00217
German edition Page 00215
Italian edition Page 00205
English special edition Page 00103
Danish special edition Page 00013
Greek special edition Page 00013
Portuguese special edition Page 00019
Summary
Parties
Subject of the case
Grounds
Decision on costs
Operative part
Keywords
++++
1 . DECISIONS OF THE HIGH AUTHORITY - REASONS - ESSENTIAL ELEMENTS
( TREATY, ARTICLE 15 AND ARTICLE 33 ).
2 . APPLICATIONS FOR ANNULMENT - PROCEDURAL REQUIREMENTS
( TREATY, ARTICLE 33 ).
3 . PRE-EXISTING AGREEMENTS - TRANSITIONAL PROVISIONS
( CONVENTION ON THE TRANSITIONAL PROVISIONS, SECOND PARAGRAPH OF ARTICLE 12 ).
4 . PRICES - MAXIMUM PRICES
( A ) FIXING
( TREATY, SUBPARAGRAPH ( A ) OF PARAGRAPH 1 OF ARTICLE 61 ).
( B ) UNDERTAKINGS IN A DOMINANT POSITION ON THE MARKET
( TREATY, ARTICLE 61 AND ARTICLE 66 ( 7 )).
( C ) NECESSITY OF FIXING MAXIMUM PRICES
( TREATY, ARTICLE 61 ).
5 . APPLICATIONS FOR ANNULMENT
( A ) EXAMINATION OF THE EVALUATION OF THE SITUATION BASED ON THE FACTS AND ECONOMIC CIRCUMSTANCES - CONDITIONS
( TREATY, SECOND SENTENCE OF THE FIRST PARAGRAPH OF ARTICLE 33 ).
( B ) MANIFEST FAILURE TO OBSERVE THE TREATY - CONCEPT
( TREATY, SECOND SENTENCE OF THE FIRST PARAGRAPH OF ARTICLE 33 ).
6 . MISUSE OF POWERS - PROOF
( TREATY, FIRST PARAGRAPH OF ARTICLE 33 ).
Summary
1 . THE HIGH AUTHORITY IS OBLIGED TO MENTION IN THE REASONS FOR ITS DECISION THE ESSENTIAL ELEMENTS OF THE FINDINGS OF FACT ON WHICH THE LEGAL JUSTIFICATION FOR THE MEASURE DEPENDS . ON THE OTHER HAND THE TREATY DOES NOT REQUIRE THAT IT SHOULD STATE, AND STILL LESS THAT IT SHOULD REFUTE, THE OPINIONS EXPRESSED IN THIS REGARD BY CONSULTATIVE BODIES OR BY CERTAIN OF THEIR MEMBERS .
2 . THE PROCEDURAL REQUIREMENTS LAID DOWN BY THE TREATY FOR THE ADOPTION OF DECISIONS MAY BE REGARDED AS ESSENTIAL AND CONSEQUENTLY THE QUESTION WHETHER THEY HAVE BEEN OBSERVED MUST BE EXAMINED BY THE COURT . THE AFFIRMATION THAT THE REQUISITE CONSULTATIONS WERE HELD CANNOT RELIEVE THE COURT OF THE DUTY TO CARRY OUT AN EXAMINATION WITH REGARD TO THE APPLICATION OF THOSE REQUIREMENTS .
3 . THE EXISTENCE OF AGREEMENTS WAS PROVISIONALLY AUTHORIZED SUBJECT TO CERTAIN CONDITIONS BY DECISION NO 37/53 OF 11 JULY 1953 ADOPTED IN APPLICATION OF ARTICLE 12 OF THE CONVENTION AND WITH THE RESERVATION THAT SUCH AGREEMENTS MIGHT SUBSEQUENTLY BE PROHIBITED .
4 . ( A ) THE FIXING OF MAXIMUM PRICES LAID DOWN IN ACCORDANCE WITH ARTICLE 61 OF THE TREATY MAY BE RESTRICTED TO ONE PART OF THE COMMON MARKET .
( B ) THE EXISTENCE OF A SITUATION WHICH MIGHT JUSTIFY THE APPLICATION OF THE PROVISIONS OF ARTICLE 66 ( 7 ) DOES NOT IN ITSELF CONSTITUTE AN OBSTACLE TO THE EXERCISE BY THE HIGH AUTHORITY OF THE POWERS ASSIGNED TO IT BY SUBPARAGRAPH ( A ) OF THE FIRST PARAGRAPH OF ARTICLE 61 .
( C ) IN ORDER TO EXAMINE WHETHER THE FIXING OF MAXIMUM PRICES IS NECESSARY A DISTINCTION SHOULD BE MADE BETWEEN THE FINDING OF FACTS AND ECONOMIC CIRCUMSTANCES ON WHICH THE DECISION IS BASED AND THE CONCLUSIONS DRAWN BY THE HIGH AUTHORITY IN ITS SUBSEQUENT EVALUATION OF THE SITUATION .
5 . ( A ) A STUDY OF THE MARKET TAKING ACCOUNT OF FACTORS RELATING TO THE MARKET STRUCTURE AND ECONOMIC TRENDS WOULD CONSTITUTE AN EVALUATION WITHIN THE MEANING OF THE SECOND SENTENCE OF THE FIRST PARAGRAPH OF ARTICLE 33 . THE EXAMINATION BY THE COURT EXTENDS TO THE EVALUATION OF THE SITUATION RESULTING FROM THE ECONOMIC FACTS AND CIRCUMSTANCES IF THE OBJECTION IS SUPPORTED BY APPROPRIATE EVIDENCE . THE MERE ASSERTION OF A MANIFEST FAILURE TO OBSERVE THE TREATY IS NOT SUFFICIENT TO OPEN THE WAY TO EXAMINATION BY THE COURT; ON THE OTHER HAND ARTICLE 33 DOES NOT REQUIRE PROOF TO BE GIVEN IN ADVANCE WHICH WOULD IMMEDIATELY ENTAIL THE ANNULMENT OF THE DECISION .
( B ) THE TERM " MANIFEST " PRESUPPOSES THAT A CERTAIN DEGREE IS REACHED IN THE FAILURE TO OBSERVE THE LEGAL PROVISIONS SO THAT THE FAILURE TO OBSERVE THE TREATY APPEARS TO DERIVE FROM AN OBVIOUS ERROR IN THE EVALUATION, HAVING REGARD TO THE PROVISIONS OF THE TREATY, OF THE SITUATION IN RESPECT OF WHICH THE DECISION WAS TAKEN . IN THE CASE OF SUBPARAGRAPH ( A ) OF THE FIRST PARAGRAPH OF ARTICLE 61 THE MANIFEST FAILURE TO OBSERVE THE TREATY CAN ONLY RESULT FROM THE FINDING BY THE COURT OF THE EXISTENCE OF AN ECONOMIC SITUATION WHICH, PRIMA FACIE, REVEALS NO NECESSITY FOR THE CONTESTED MEASURE IN THE PURSUIT OF THE OBJECTIVES SET OUT IN ARTICLE 3 OF THE TREATY, IN PARTICULAR PARAGRAPH ( C ).
6 . PROOF OF THE MOTIVES FOR THE CONTESTED DECISION SUCH AS TO ESTABLISH MISUSE OF POWERS MAY BE EVIDENT EITHER FROM THE PREPARATIONS, INCLUDING THE DELIBERATIONS OF THE CONSULTATIVE COMMITTEE AND OF THE COUNCIL OF MINISTERS, OR ELSE FROM THE INCOMPATIBILITY OF THE CONTESTED DECISION WITH THE AVOWED AND EVIDENT AIMS OF THE DECISION .
Parties
IN THE CASE :
GOVERNMENT OF THE KINGDOM OF THE NETHERLANDS WITH AN ADDRESS FOR SERVICE AT THE NETHERLANDS LEGATION IN LUXEMBOURG, REPRESENTED BY J . H . M . VERZIJL, PROFESSOR AT THE STATE UNIVERSITY IN UTRECHT, G . M . VERRIJN STUART, PROFESSOR AT THE UNIVERSITY OF THE CITY OF AMSTERDAM, ACTING AS AGENTS, APPLICANT,
V
HIGH AUTHORITY OF THE EUROPEAN COAL AND STEEL COMMUNITY, WITH AN ADDRESS FOR SERVICE AT ITS OFFICES, 2 PLACE DE METZ, LUXEMBOURG, REPRESENTED BY ITS LEGAL ADVISER, DOCTOR WALTER MUCH, ACTING AS AGENT, ASSISTED BY GEORGES VAN HECKE, ADVOCATE OF THE COUR D'APPEL, BRUSSELS, PROFESSOR AT THE UNIVERSITY OF LOUVAIN, DEFENDANT,
Subject of the case
APPLICATION FOR THE ANNULMENT OF DECISIONS NOS 18/54, 19/54 AND 20/54 OF THE HIGH AUTHORITY DATED 20 MARCH 1954,
Grounds
P . 111
A - ADMISSIBILITY
THE ADMISSIBILITY OF THE ACTION GIVES RISE TO NO CRITICISMS BY THE COURT OF ITS OWN MOTION AND MOREOVER HAS NOT BEEN THE SUBJECT OF ANY OBJECTION .
B - THE SCOPE OF THE ACTION
IT SHOULD BE EMPHASIZED THAT THE ACTION ONLY RELATES TO DECISIONS OF THE HIGH AUTHORITY NOS 19/54 AND 20/54 IN SO FAR AS THEY CONSTITUTE THE IMPLEMENTATION OF THE PRINCIPLE LAID DOWN IN DECISION NO 18/54 .
C - INFRINGEMENT OF ESSENTIAL PROCEDURAL REQUIREMENTS
( A ) THE APPLICANT FIRST ALLEGES THAT DECISION NO 18/54 FAILS TO STATE SUFFICIENTLY THE REASONS ON WHICH IT IS BASED BECAUSE THE HIGH AUTHORITY HAS MERELY JUSTIFIED ITS MEASURES BY STATING IN A PURELY HYPOTHETICAL FORM THAT THE STRUCTURE OF THE COMMON MARKET COULD COMPROMISE THE ACHIEVEMENT OF THE OBJECTIVES OF ARTICLE 3 OF THE TREATY .
UNDER ARTICLE 61 IT SHOULD HAVE FOUND AND STATED THAT THE NECESSITY EXISTED AND SHOULD HAVE SPECIFIED THE OBJECTIVE OR OBJECTIVES COMPROMISED IF THE MAXIMUM PRICES WERE TO BE ABOLISHED ALTOGETHER .
THE GENERAL PROVISIONS OF ARTICLES 5 AND 15 OF THE TREATY OBLIGE THE HIGH AUTHORITY TO STATE REASONS FOR ITS DECISIONS AND TO MAKE THOSE REASONS PUBLIC .
HOWEVER, NO DETAILS ARE GIVEN AS TO THE FORM AND EXTENT OF THAT OBLIGATION .
REASONABLY UNDERSTOOD THOSE REQUIREMENTS OBLIGE THE HIGH AUTHORITY TO MENTION IN THE REASONS FOR ITS DECISION THE ESSENTIAL ELEMENTS OF THE FINDINGS OF FACT ON WHICH THE LEGAL JUSTIFICATION FOR THE MEASURE DEPENDS .
THE TREATY DOES NOT REQUIRE THAT IT SHOULD STATE, AND STILL LESS THAT IT SHOULD REFUTE, THE OPINIONS EXPRESSED IN THIS REGARD BY CONSULTATIVE BODIES OR BY CERTAIN OF THEIR MEMBERS .
THE MEASURES REFERRED TO IN ARTICLE 61 ( A ) OF THE TREATY CAN BE APPLIED IF THE HIGH AUTHORITY " FINDS THAT SUCH A DECISION IS NECESSARY TO ATTAIN THE OBJECTIVES SET OUT IN ARTICLE 3, AND PARTICULARLY IN PARAGRAPH ( C ) THEREOF ".
P . 112
THE CONTESTED DECISION REFERS TO AND AFFIRMS THIS NECESSITY AND INDICATES THAT IT RESULTS FROM THE EXISTENCE OF CERTAIN ORGANIZATION HAVING A DECISIVE INFLUENCE ON THE MARKET IN SUCH A WAY THAT ALL EFFECTIVE COMPETITION IS EXCLUDED .
IT EXPRESSLY REFERS TO A POSITION WHICH IS DETRIMENTAL TO THE ACHIEVEMENT OF THE OBJECTIVES OF ARTICLE 3 WITH REGARD TO PRICES, PRODUCTION OR THE EMPLOYMENT OF LABOUR .
ALTHOUGH THEY DO NOT STATE PRECISELY WHICH OBJECTIVE OR OBJECTIVES REFERRED TO IN ARTICLE 3 ARE SPECIFICALLY ENVISAGED THE STATEMENT OF THE REASONS ON WHICH THE DECISION IS BASED CAN BE REGARDED IN ITS PRESENT FORM AS SATISFYING THE CONDITIONS FOR THE APPLICATION OF ARTICLE 61 ( A ).
THE STATEMENT OF REASONS THUS SATISFIES THE REQUIREMENTS AS TO FORM, WHICH ARE APPLICABLE .
( B ) IN ACCORDANCE WITH THE OPINION OF THE ADVOCATE GENERAL IT IS APPROPRIATE TO EXAMINE WHETHER THE PROCEDURAL REQUIREMENTS LAID DOWN BY THE TREATY FOR THE ADOPTION OF THE CONTESTED DECISIONS WERE COMPLIED WITH .
AS THEY WERE INTENDED TO ENSURE THAT THE MEASURES CONCERNED WERE FORMULATED WITH ALL DUE CARE AND PRUDENCE THESE PROCEDURAL REQUIREMENTS MAY BE REGARDED AS ESSENTIAL AND, CONSEQUENTLY, THE QUESTION WHETHER THEY HAVE BEEN OBSERVED MUST BE EXAMINED BY THE COURT .
ARTICLE 61 OF THE TREATY PROVIDES THAT THE DECISION OF THE HIGH AUTHORITY FIXING MAXIMUM PRICES MUST BE TAKEN :
( 1 ) " ON THE BASIS OF STUDIES MADE JOINTLY WITH UNDERTAKINGS AND ASSOCIATIONS OF UNDERTAKINGS, IN ACCORDANCE WITH THE FIRST PARAGRAPH OF ARTICLE 46 AND THE THIRD PARAGRAPH OF ARTICLE 48 " :
( 2 ) AFTER CONSULTING THE CONSULTATIVE COMMITTEE;
AND
( 3 ) AFTER CONSULTING THE COUNCIL OF MINISTERS .
IT APPEARS FROM THE EVIDENCE SUBMITTED THAT THE STUDIES REQUIRED BY ARTICLE 61 HAVE BEEN CARRIED OUT .
THE TEXT OF THE DECISION AFFIRMS THAT THE CONSULTATIONS WITH THE CONSULTATIVE COMMITTEE AND THE COUNCIL WERE HELD .
THAT AFFIRMATION CANNOT RELIEVE THE COURT OF THE DUTY TO CARRY OUT AN EXAMINATION WITH REGARD TO THE APPLICATION OF THE ABOVE-MENTIONED REQUIREMENTS .
IN THE PRESENT INSTANCE THE CONSULTATIONS REFERRED TO IN THE FIRST PARAGRAPH OF ARTICLE 61 RELATED BOTH TO THE APPROPRIATENESS OF THE MEASURES IN QUESTION AND TO THE LEVEL OF PRICES .
CONSEQUENTLY IN THIS RESPECT NO PROCEDURAL REQUIREMENT FOR THE VALIDITY OF THE DECISION HAS BEEN INFRINGED .
P . 113
D - INFRINGEMENT OF THE TREATY
( A ) IT IS NECESSARY TO EXAMINE THE INTRINSIC LEGALITY OF THE DECISION HAVING REGARD TO THE TERMS OF THE FIRST PARAGRAPH OF ARTICLE 61 OF THE TREATY WHICH GIVES THE HIGH AUTHORITY THE POWER TO FIX MAXIMUM PRICES " FOR ONE OR MORE OF THE PRODUCTS WITHIN ITS JURISDICTION ".
ON THE ONE HAND THAT TEXT MUST BE RECONCILED WITH ARTICLE 5 WHICH PROVIDES FOR LIMITED MEASURES OF INTERVENTION SUCH AS THOSE IN THE PRESENT INSTANCE . ON THE OTHER IN PROVIDING FOR THE ESTABLISHMENT OF MAXIMUM PRICES WITHIN THE COMMON MARKET THE TREATY MERELY DISTINGUISHES THE COMMON MARKET FROM THE EXTERNAL MARKET BUT WAS NOT INTENDED TO PROHIBIT A MEASURE OR MEASURES WHICH ONLY AFFECT CERTAIN SECTORS OF THE COMMON MARKET . FURTHERMORE THE MEASURE IN QUESTION INDIRECTLY AFFECTS THE WHOLE OF THAT MARKET .
( B ) IN SUPPORT OF THE ARGUMENT BASED ON THE BREACH OF THE TREATY THE APPLICANT CLAIMS THAT THE CONTESTED DECISION REFERS TO A MARKET STRUCTURE OF AN ILLEGAL NATURE .
IT STATES THAT THE DEFENDANT IS ACTING IN INFRINGEMENT OF THE TREATY IN STATING AS THE REASONS FOR ITS DECISION THE EXISTENCE OF AGREEMENTS AND CONCENTRATIONS OF UNDERTAKINGS WHICH ARE EXPRESSLY PROHIBITED BY ARTICLES 65 AND 66 OF THE TREATY . THAT ARGUMENT WOULD ONLY BE VALID IF, BY VIRTUE OF THE TREATY, AGREEMENTS AND CONCENTRATIONS WHICH CONFLICT WITH THOSE ARTICLES WERE DEPRIVED OF ALL LEGAL EFFECT . ON THE ONE HAND IN APPLICATION OF THE SECOND PARAGRAPH OF ARTICLE 12 OF THE CONVENTION ON THE TRANSITIONAL PROVISIONS THE EXISTENCE OF AGREEMENTS WAS PROVISIONALLY AUTHORIZED SUBJECT TO CERTAIN CONDITIONS BY DECISION NO 37/53 OF THE HIGH AUTHORITY OF 11 JULY 1953 WITH THE RESERVATION THAT SUCH AGREEMENTS MIGHT SUBSEQUENTLY BE PROHIBITED . IN THIS RESPECT ARTICLE 12 OF THE AFOREMENTIONED CONVENTION PROVIDES NO TIME-LIMIT FOR THE INTERVENTION OF THE HIGH AUTHORITY AND THE LATTER THEREFORE POSSESSES A DISCRETIONARY POWER IN THIS RESPECT WITHIN THE LIMITS OF THE TRANSITIONAL PERIOD .
ON THE OTHER HAND THE APPLICANT FINDS THAT A STRUCTURE CONTRARY TO THE TREATY IS CONSTITUTED BY THE FACT THAT THE NORD AND PAS-DE-CALAIS COALFIELD EXERCISES A DOMINANT INFLUENCE ON THE FRENCH MARKET AND ARGUES THAT THAT SITUATION FALLS EXCLUSIVELY WITHIN THE PROVISIONS OF ARTICLE 66 ( 7 ).
THE EXISTENCE OF A SITUATION WHICH MIGHT JUSTIFY THE APPLICATION OF THE PROVISIONS OF ARTICLE 66 ( 7 ) DOES NOT IN ITSELF CONSTITUTE AN OBSTACLE TO THE EXERCISE BY THE HIGH AUTHORITY OF THE POWERS ASSIGNED TO IT BY SUBPARAGRAPH ( A ) OF THE FIRST PARAGRAPH OF ARTICLE 61 .
CONSEQUENTLY THERE IS NOTHING TO PREVENT THE EFFECTS OF SUCH AGREEMENTS AND CONCENTRATIONS IN SO FAR AS THEY AFFECT THE LEVEL OF PRICES ON THE COMMON MARKET AND THE ACHIEVEMENT OF OBJECTIVES SET OUT IN ARTICLE 3 FROM BEING OPPOSED BY THE DEFENDANT WITH THE AID OF POWERS CONFERRED ON IT BY ARTICLE 61 OF THE TREATY .
( C ) IN SUPPORT OF THE ARGUMENTS BASED ON THE INFRINGEMENT OF THE TREATY THE APPLICANT OBJECTS THAT IN ITS DECISION THE HIGH AUTHORITY RELIES ON THE GENERAL OBJECTIVES OF THE TREATY AND THAT THAT GENERAL REFERENCE CANNOT CONSTITUTE SUFFICIENT REASONS BECAUSE THE SPECIAL PROVISIONS OF SUBPARAGRAPH ( A ) OF THE FIRST PARAGRAPH OF ARTICLE 61 REFER TO SPECIFIC HYPOTHESES .
P . 114
THAT REASONING IS WITHOUT LEGAL FOUNDATION . IN FACT ARTICLE 61 REFERS EXPRESSLY TO THE OBJECTIVES SET OUT IN ARTICLE 3 .
( D ) THE APPLICANT ALLEGES THAT THE CONTESTED DECISION IS BASED ON REASONS WHICH ARE WRONG IN SUBSTANCE .
THE FIXING OF MAXIMUM PRICES WAS NOT NECESSARY AS, IN VIEW OF THE DEVELOPMENT OF THE MARKET, PRICES ALREADY SHOWED A DOWNWARD TREND AND IN ANY CASE MAXIMUM PRICES COULD NOT BRING ABOUT A FALL IN PRICES BUT SOLELY A PRICE FREEZE .
ON THE OTHER HAND THE DEVELOPMENTS IN PRODUCTION AND EMPLOYMENT COULD ONLY BE THREATENED BY A FALL AND IF IT WERE SOUGHT TO COUNTERACT THAT DANGER MINIMUM PRICES SHOULD HAVE BEEN INTRODUCED .
HAVING REGARD TO THOSE ARGUMENTS A DISTINCTION SHOULD BE MADE BETWEEN THE FINDING OF FACTS AND ECONOMIC CIRCUMSTANCES ON WHICH THE DECISION WAS BASED AND THE CONCLUSIONS DRAWN BY THE HIGH AUTHORITY IN ITS SUBSEQUENT EVALUATION OF THE SITUATION .
IN THE PRESENT INSTANCE THE DECISION IN FACT STATES THAT IN SPITE OF THE TRENDS EXISTING ON THE MARKET AND BECAUSE OF THE MARKET STRUCTURE COAL PRICES WERE DETERMINED BY THE SELLING AGENCY OF THE RUHR COALFIELD AND BY THE HOUILLERES DU NORD ET DU PAS-DE-CALAIS .
BY DOCUMENTS SUBMITTED TO THE COURT ( MARKET DIVISION OF THE HIGH AUTHORITY OF 3 AND 15 FEBRUARY 1954, NOS 728 AND 6523 ) THE CONTENT OF WHICH IS NOT DISPUTED BY THE APPLICANT THE HIGH AUTHORITY PROVED THAT IN THE GERMAN AND FRENCH COALFIELDS THERE WAS NO TREND TOWARDS A GENERAL REDUCTION IN PRICES . ON THE CONTRARY PRODUCERS LET IT BE KNOWN THAT THEY INTENDED TO MAINTAIN THEIR PRICES AT THE EXISTING LEVEL .
MORE PARTICULARLY AFTER INTENSIVE DISCUSSION THE REPRESENTATIVES OF THE RUHR COAL PRODUCERS OPPOSED THE REDUCTION IN PRICES AND THE REPRESENTATIVES OF THE HOUILLERES DU NORD ET DU PAS-DE-CALAIS, AFTER LOOKING AT THE POSSIBILITY OF AN INCREASE IN PRICES BUT IN THE END NOT ADOPTING IT, DECLARED THAT THEY WISHED TO APPLY CURRENT PRICES WITH THE PROPOSED CHANGES EVEN IF PRICES WERE FREED WHICH DID NOT CONSTITUTE AN UNDERTAKING SUCH AS TO REMOVE ALL NECESSITY FOR FIXING MAXIMUM PRICES .
IN THE LIGHT OF THE EXISTING SITUATION THE HIGH AUTHORITY CAME TO THE CONCLUSION THAT THE FIXING OF MAXIMUM PRICES WAS NECESSARY; THE CORRECTNESS OF THIS CONCLUSION IS CONTESTED BY THE APPLICANT WHICH ARGUES THAT IN THE PRESENT CIRCUMSTANCES SUCH A MEASURE COULD NOT CAUSE OR SET OFF A FALL IN PRICES BUT AT THE VERY MOST A PRICE FREEZE . THUS IT CLAIMS THAT THE DECISION IS NOT WELL FOUNDED .
THE EVALUATION OF THE SITUATION RESULTING FROM THE ECONOMIC FACTS OR CIRCUMSTANCES IN THE LIGHT OF WHICH THE HIGH AUTHORITY TOOK ITS DECISIONS IS NOT SUBJECT TO EXAMINATION BY THE COURT SAVE WHERE THE HIGH AUTHORITY IS ALLEGED TO HAVE MISUSED ITS POWERS OR TO HAVE MANIFESTLY FAILED TO OBSERVE PROVISIONS OF THE TREATY .
P . 115
A STUDY OF THE MARKET TAKING ACCOUNT OF FACTORS RELATING TO THE MARKET STRUCTURE AND ECONOMIC TRENDS WOULD CONSTITUTE SUCH AN EXAMINATION .
IT IS THEREFORE NECESSARY TO EXAMINE WITH REGARD TO THEIR GENERAL SCOPE AND THEIR PRESENCE IN THIS INSTANCE THE TWO CONDITIONS WHICH ALONE ALLOW OF AN EXAMINATION OF THE PROPER ECONOMIC FOUNDATION OF A DECISION, THAT IS TO SAY MANIFEST FAILURE TO OBSERVE THE PROVISIONS OF THE TREATY AND MISUSE OF POWERS .
E - MANIFEST FAILURE TO OBSERVE PROVISIONS OF THE TREATY
IT SHOULD BE EMPHASIZED THAT THE OBJECTION OF THE MANIFEST FAILURE TO OBSERVE THE PROVISIONS OF THE TREATY WAS NOT RAISED BY THE APPLICANT AS A SEPARATE GROUND FOR ANNULMENT BUT SOLELY WITH A VIEW TO HAVING THE EXAMINATION BY THE COURT EXTEND TO AN ASSESSMENT OF THE SITUATION ARISING FROM THE ECONOMIC FACTS AND CIRCUMSTANCES IN THE PRESENT INSTANCE .
IN THIS RESPECT ARTICLE 33 DOES NOT REQUIRE THAT THE OBJECTION RAISED BE SUPPORTED BY FULL PROOF IN ADVANCE; THIS MOREOVER WOULD IMMEDIATELY ENTAIL THE ANNULMENT OF THE DECISION FOR INFRINGEMENT OF THE TREATY .
ON THE OTHER HAND THE MERE ASSERTION OF A MANIFEST FAILURE TO OBSERVE THE TREATY IS NOT SUFFICIENT TO OPEN THE WAY TO EXAMINATION BY THE COURT OF THE ECONOMIC EVALUATION AS OTHERWISE A SUBMISSION OF THIS KIND COULD BECOME A MERE FORMALITY .
IT IS NECESSARY AND IT IS SUFFICIENT THAT THE OBJECTION IS SUPPORTED BY APPROPRIATE EVIDENCE .
SUCH IS THE CASE IN THE PRESENT INSTANCE AND THAT EVIDENCE SHOULD BE EXAMINED FROM THE POINT OF VIEW OF MANIFEST FAILURE TO OBSERVE THE TREATY .
THE TERM " MANIFEST " PRESUPPOSES THAT A CERTAIN DEGREE IS REACHED IN THE FAILURE TO OBSERVE LEGAL PROVISIONS SO THAT THE FAILURE TO OBSERVE THE TREATY APPEARS TO DERIVE FROM AN OBVIOUS ERROR IN THE EVALUATION, HAVING REGARD TO THE PROVISIONS OF THE TREATY, OF THE SITUATION IN RESPECT OF WHICH THE DECISION WAS TAKEN .
IN THE PRESENT INSTANCE THE " MANIFEST " FAILURE TO OBSERVE THE TREATY CAN ONLY RESULT FROM THE FINDING BY THE COURT OF THE EXISTENCE OF AN ECONOMIC SITUATION WHICH PRIMA FACIE REVEALS NO NECESSITY FOR THE CONTESTED MEASURE IN THE PURSUIT OF THE OBJECTIVES SET OUT IN ARTICLE 3 OF THE TREATY, IN PARTICULAR PARAGRAPH ( C ).
THE STATEMENT IN THE CONTESTED DECISION THAT THE FIXING OF MAXIMUM PRICES WAS NECESSARY TO SERVE THE OBJECTIVES SET OUT IN ARTICLE 3 OF THE TREATY FOR REASONS RELATING TO THE MARKET STRUCTURE DOES NOT CONFLICT A PRIORI WITH THE TEXT OR THE SPIRIT OF SUBPARAGRAPH ( A ) OF ARTICLE 61 WHICH, UNLIKE SUBPARAGRAPH ( B ) DOES NOT ENVISAGE ANY CONDITION RELATING TO THE ECONOMIC CYCLE .
THE APPLICANT'S REASONING TO THE EFFECT THAT THE MAXIMUM PRICES IN FACT CONSTITUTE A MINIMUM WHICH STABILIZES AND FREEZES PRICES DOES NOT PRIMA FACIE EXCLUDE ALL NECESSITY FOR MAXIMUM PRICES AND CONSEQUENTLY IS NOT SUFFICIENT TO CONSTITUTE MANIFEST FAILURE TO OBSERVE THE TREATY .
P . 116
IT IS FURTHER APPROPRIATE TO EXAMINE WHETHER THE MANIFEST LACK OF NECESSITY FOR THE MEASURE RESULTS FROM THE AMOUNTS OF THE PRICES FIXED .
IT IS CLEAR FROM THE TABLE DRAWN UP BY THE PARTIES TOGETHER THAT THE NEW FIGURES ARE NOT IDENTICAL WITH THE OLD FIGURES AND THAT ACCORDING TO THE DEFENDANT'S CONTENTION, NOT CONTESTED BY THE APPLICANT, THE PRICES WHICH WERE FREED HAVE SHOWN A TENDENCY TO INCREASE .
THESE FINDINGS DO NOT THEREFORE REVEAL MANIFEST LACK OF NECESSITY .
HAVING REGARD TO THE OBJECTIVES OF ARTICLE 3 OF THE TREATY THE LACK OF NECESSITY OF THE MEASURE IS NOT EVIDENT IMMEDIATELY FROM THE RATE OF THE PRICES FIXED .
THAT ARTICLE OF THE TREATY OBLIGES THE HIGH AUTHORITY TO ENSURE THE ESTABLISHMENT OF CERTAIN ECONOMIC CONDITIONS AND THIS MIGHT JUSTIFY PREVENTIVE INTERVENTION EVEN IF CERTAIN REASSURING DECLARATIONS HAVE BEEN MADE WHICH CONTAIN NO COMMITMENT AS TO THE EXTENT OF THEIR VALIDITY .
IN THIS CONTEXT PARAGRAPH ( C ) MORE SPECIFICALLY ENVISAGES THE ESTABLISHMENT OF THE LOWEST PRICES BUT DOES NOT REQUIRE AN ATTEMPT TO REACH THE ABSOLUTE MINIMUM BUT MERELY A PRICE WHICH, WHILE BEING THE LOWEST WITHIN THE MEANING OF ARTICLE 3 ( C ), TAKES ACCOUNT OF THE OTHER OBJECTIVES IMPOSED BY THIS ARTICLE ON THE ACTIONS OF THE HIGH AUTHORITY .
IN THIS RESPECT AS WELL A FAILURE TO OBSERVE THE TREATY IS NOT MANIFESTLY EVIDENT FROM THE DECISION .
F - MISUSE OF POWERS
THIS SUBMISSION SEEKS A RULING THAT IN DETERMINING MAXIMUM PRICES ON THE BASIS OF ARTICLE 61 THE HIGH AUTHORITY WAS NOT SO MUCH PURSUING ITS DECLARED OBJECTIVES, IN PARTICULAR THE LOWERING OF PRICES, BUT IN REALITY WAS SEEKING TO COMBAT AGREEMENTS AND CONCENTRATIONS OF UNDERTAKINGS .
CONSEQUENTLY IT HAD MADE USE OF THE POWERS ASSIGNED TO IT BY ARTICLE 61 FOR A PURPOSE OTHER THAN THAT FOR WHICH THEY WERE CONFERRED UPON IT .
PROOF OF THE MOTIVES FOR THE CONTESTED DECISION MAY BE EVIDENT EITHER FROM THE PREPARATIONS, INCLUDING THE DELIBERATIONS OF THE CONSULTATIVE COMMITTEE AND OF THE COUNCIL OF MINISTERS, OR ELSE FROM THE FACT THAT IN VIEW OF THEIR LEVEL RELATIVE TO THE PRICES IN THE LISTS APPLICABLE BEFORE 1 APRIL 1954 THE NEW PRICES ARE INCOMPATIBLE WITH THE AVOWED AND EVIDENT AIMS OF THE DECISION .
HOWEVER, THE DOCUMENTS SUBMITTED BY THE PARTIES DO NOT REVEAL ANY COVERT INTENT .
AS TO THE ARGUMENT DERIVED FROM THE FACT THAT THE NEW PRICES ARE IDENTICAL OR ALMOST IDENTICAL WITH THE OLD PRICES THE COURT HAS ALREADY DISMISSED THIS ALLEGATION WITH REGARD TO THE MANIFEST FAILURE TO OBSERVE THE TREATY AND IN ADDITION EVEN FREEZING PRICES AT THEIR LEVEL AT THAT TIME MIGHT NOT HAVE BEEN WHOLLY WITHOUT ITS USE IN VIEW OF THE POSSIBILITY OF INCREASES INHERENT IN THE MARKET STRUCTURE .
MOREOVER, THE ARGUMENTS OF THE HIGH AUTHORITY CLEARLY RELATE TO A DISQUIETING SITUATION WITH REGARD TO PRICES AND IT IS IMPOSSIBLE TO REGARD THE CONTESTED DECISION AS A MEASURE WHOSE AIMS ARE INCOMPATIBLE WITH THE AIMS FOR WHICH THE POWER TO ESTABLISH MAXIMUM PRICES WAS CONFERRED ON THE HIGH AUTHORITY .
THE MISUSE OF POWERS HAS NOT BEEN ESTABLISHED .
Decision on costs
UNDER ARTICLE 60 OF THE RULES OF PROCEDURE OF THE COURT THE UNSUCCESSFUL PARTY SHALL BE ORDERED TO PAY THE COSTS .
THE APPLICANT GOVERNMENT SHOULD THEREFORE BE ORDERED TO BEAR THE COSTS .
Operative part
THE COURT
HEREBY :
DISMISSES THE APPLICATION FOR THE ANNULMENT OF DECISIONS NOS 18/54, 19/54 AND 20/54 OF THE HIGH AUTHORITY DATED 20 MARCH 1954;
ORDERS THE APPLICANT TO PAY THE COSTS . |
OPINION OF MR ADVOCATE GENERAL LAGRANGE
Summary
Facts
Conclusions and submissions
Submission of infringement of Article 60 of the Treaty
1. As regards Decisions Nos 1/54 and 3/54
2. As regards Decision No 2/54
Literal interpretation of Article 60 (2)(a)
Interpretation in the context of Article 60
Interpretation in the context of the Treaty as a whole.
General discussion
Submission of misuse of powers
Final conclusion
Mr President,
Members of the Court,
According to Article 11 of the Protocol on the Statute of the Court of Justice, ‘it shall be the duty of the Advocate General, acting with complete impartiality and independence, to make, in open court, oral and reasoned submissions on cases brought before the Court, in order to assist the Court in the performance of the task assigned to it in Article 31 of this Treaty’, which, in the words of that article, is to ensure that in the interpretation and application of the Treaty, and of rules laid down for the implementation thereof, the law is observed.
I have the honour of presenting an opinion on the first action to come before the Court of the first European Community, and I shall strive to carry out that task to the best of my ability, in the spirit in which it has been defined by the Statute of the Court. Although the Court is aware of the facts of the case, I venture to set them out again briefly by way of introduction.
Facts
The opening of the common market both in coal and in steel involved, among other things, the need for the High Authority to implement Article 60 of the Treaty on prices. In the field of legislation, the High Authority had to direct its attention in particular to two sets of provisions:
First, those of the last subparagraph of paragraph (1), which states ‘the High Authority may define the practices covered by this prohibition by decisions taken after consulting the Consultative Committee and the Council”, that is, in particular by the prohibition of discriminatory practices;
Secondly, those of paragraph (2) (a), according to which “the price-lists and conditions of sale applied by undertakings within the Common Market must be made public to the extent and in the manner prescribed by the High Authority after consulting the Consultative Committee”.
Thus, on the first point (prohibited practices) action by the High Authority was not mandatory, whereas on the second (publication of price-lists) it was stipulated by the Treaty.
In point of fact, a decision, dated 12 February 1953, concerning the publication of price-lists was adopted immediately after the opening of the common market in coal, iron ore and ferrous scrap on 10 February 1953, whereas Decision No 30/53, directed towards defining certain prohibited practices, was not adopted until 2 May 1953; moreover the latter decision is common to coal and to steel. The common market in steel opened on 1 May and the detailed rules for the publication of price-lists for steel were laid down by Decision No 31/53 of 2 May 1953.
The Court is familiar with those decisions. Let me mention only those parts of them which are essential with regard to the actions before the Court:
(1)
With regard to the definition of prohibited practices (Decision No 30/53), Article 2(1) provides that: “It shall be a prohibited practice within the meaning 60 (1) of the Treaty for a seller to apply increases or reductions on the terms calculable, for the transaction concerned, for his published price-list and conditions of sale”. Thus adherence to the price-lists was linked absolutely to the concept of prohibited practices within the meaning of Article 60 (1) ; and although the latter provision condemns both unfair competitive practices and discriminatory practices, in reality the High Authority was essentially, if not solely, concerned with discriminatory practices, as is clearly shown by the first recital which precedes the decision:
“Whereas compliance with the obligations of non-discrimination involves uniform application by undertakings of the conditions shown in their price-lists with no other increases or reductions…”
(2)
With regard to the publication of price-lists (Decision No 31/53), the purpose pursued is clearly defined in the first two recitals which precede the decision; they are worded as follows:
'Whereas the price-lists and conditions of sale applied by undertakings must be such as to make it possible to verify that the rules of competition laid down in the Treaty, in particular in Articles 4 and 60 thereof, are being observed;
“Whereas they must ensure that users are able to ascertain the quality and calculate precisely the cost of the products they are considering buying, and to compare offers from various suppliers;”.
Thus the purpose here is not limited to observance of the rule of non-discrimination, but extends to all the rules of competition defined in the Treaty. The Court is already familiar with the content of the decision: it stipulates the publication, in addition to the basic price, of such principal details as will make possible a valid comparison between offers and between transactions: extras, place of delivery, discounts to dealers, terms of payment, revision clauses, and so on… Finally, it states that price-lists shall apply not earlier than five days after they have been addressed to the High Authority. Thus free competition must be ensured in favour of buyers, and at the same time the High Authority may carry out almost automatic supervision of the rules laid down by the Treaty and in particular the rule of non-discrimination.
Such was the system under which the Common Market began to function. However, whereas for coal and iron ore that system did not give rise to major difficulties, at least on the point before the Court, the same was not true of the market in steel.
In fact, it very soon became apparent that the prices actually charged in that market were becoming considerably lower than the published prices, without the undertakings publishing fresh price-lists, as they should have done.
That state of affairs can be easily explained. On the one hand, it was quite clear that the prices in each country had been fixed not by a free, unilateral decision on the part of each undertaking, but after agreement: it could hardly be expected to be otherwise, in view of the long-standing system hitherto in force in that industry, which was a system of more or less extensive State intervention, in particular as regards prices, with the functioning of which the industry was more or less closely and even organically associated.
On the other hand, it was at that time a period, if not of crisis, at least of economic recession, bringing about a market downward trend in prices, which the producers doubtless did not wish to become too apparent, for fear of accelerating the trend. These and doubtless still other reasons may explain why some of the prices published were shown above what would appear to have been the normal price, and at times even, as in France, above the prices in force at the time, and also why fresh price-lists with lower prices were not published subsequently.
Be that as it may, the High Authority refrained from reacting to that situation. It did not pronounce any sanction for failure to adhere to the price-lists. It did not seek to take action against any agreement under Article 65.
It preferred to watch and wait. Then, eight months later, after carrying out consultations prescribed by the Treaty, it adopted three decisions, No 1/54, 2/54 and 3/54, all three dated 7 January 1954 published in the Journal Officiel on 13 January 1954 (Nos 1/54 and 2/54 may be found in the Official Journal, English Special Edition 1952-1958, pp. 14 and 15 respectively).
The Court is familiar with those decisions:
The first one, Decision No 1/54, amends Decision No 30/53 on prohibited practices. Its main purpose is to dissociate the concept of non-discrimination from the publication of price-lists by no longer regarding as a prohibited practice the application of prices and conditions which depart from the price-list, as long as the seller is able to show “either that the transaction in question does not fall within the categories of transactions covered by this price-list” (which appears self-evident), “or that the prices or conditions have been departed from uniformly in all comparable transactions”.
The grounds for this very clearly given in the recitals in the preamble to the decision:
“Whereas the rules on publication of prices afford scope inter alia for checking that the rules on non-discrimination are complied with although they do not mutually coincide;
'Whereas, therefore, breaches of the price publication rules are not necessarily in themselves breaches of the non-discrimination rules;”.
Decision No 2/54 amends Decision No 31 /53 on the publication of price-lists: it is the king-pin of the new system. The content of the price-lists published is the same, except for a supplement, which is moreover an important one, concerning quantity discounts, loyalty discounts, and discounts for seconds. However it is decided that amendments to price-lists already published will have to be published only if “there is a mean variation … between effective market prices and published prices” of more than 2.5 %, the variation being calculated, in each category of products, by reference to the whole of the transactions that have taken place during the preceding 60 days. Moreover, it is decided that “where a transaction in the course of an undertakings's activities has exceptional characteristics by virtue of which it is excluded from the categories set out in the price-list, the special conditions applied thereto shall be disregarded in calculating the mean price variation”. Finally, a time-limit of one day is substituted for the time-limit of five days for the application of newly published price-lists.
The first three recitals should be quoted, because in fact they reveal the substance of the High Authority's position in this matter:
'Whereas the publication of prices and conditions of sale, which is necessary for purposes of the application of the rules of competition laid down by the Treaty, must be effected in a manner compatible with freedom to determine steel prices in the light of market trends and of the needs of commercial relations;
'Whereas, therefore, the published price-lists must reflect the price-level existing on the market;
“Whereas, however, undertakings should not be obliged to adjust forthwith their price-lists on account of minor or temporary fluctuations in the steel market;”.
Finally, a new decision, Decision No 3/54, completes the scheme with a system of collecting information, which undertakings must provide twice a month, on the mean variation which they have applied during the period which has elapsed, as well as on the minimum and maximum variations both in relation to their own price-list and, if appropriate, in relation to the price-lists of competing undertakings upon which they have have had reason to align their prices under the conditions laid down in Article 60 (2)(b). It is necessary to know those details in order to be able both to supervise compliance with the rule of nondiscrimination, which henceforward no longer result merely from adherence to the published price-lists, and also to supervise the new publication system itself.
These are the three decisions which are contested before the Court, by means of an application for annulment under Article 33, by the French Government, the Italian Government, the Associazione Industrie Siderurgiche Italiane (Association of Italian Coal and Steel Industries) and the Industrie Siderurgiche Associate (another Italian association). Each of the applicants has submitted to the Court a separate application against the three decisions.
I shall examine the four applications in turn, avoiding repeating myself, of course, in the latter three in regard to any point which I have already covered in a preceding application.
As regards the application by the French Government, with which I am dealing at present, the Court is well acquainted with the arguments in the application; I shall not attempt either to repeat it or to summarize it, and the same applies to the arguments in defence.
Conclusions and submissions
To begin with, I wish only to set out clearly the conclusions and submissions in the application, and to that end I can only refer to the application itself, since as the Court is aware, that document, presented in limine litis within a compulsory time-limit, must set out both the conclusions and the submissions even though, as regards the submissions, only in summary form (this follows from Article 22 of the Protocol on the Statute of the Court).
As regards the conclusions, there is no difficulty: since it is an application for annulment, the conclusions are and can only be for the annulment of the contested decisions. Such conclusions are indeed formulated. The only question which might be asked is whether it is possible for a party to bring proceedings against more than one decision by a single application. No provision of the Statute or of the Rules of Procedure states that it is possible, but no provision forbids it either. In view of the obvious connexion between the three contested decisions, and in view of the fact that they were issued by the same institution, I am of the view that there is no valid reason to demand as many separate applications as there are decisions, in particular since, fortunately, no fiscal considerations are involved here. Furthermore, the defendant has raised no objection of inadmissibility in this connexion.
As regards the submissions, the Court is aware that Article 33 of the Treaty provides for submissions on four grounds: lack of competence, infringement of an essential procedural requirement, infringement of the Treaty or of any rule of law relating to its application and misuse of powers.
The application does not expressly formulate submissions, at least it does not use that term; but it is very clear and very precise, and it is easy to extrapolate in that regard.
The action, as set out in the application, raises two questions: one concerns “the relationship between discriminations and publication”; the other concerns “the actual content of the concept of discrimination”.
On the first point (relationship between discrimination and publication), the application attacks the contested decisions on the grounds, first, that the way in which they govern publication does not allow any serious supervision to be exercised over the rule of non-discrimination, and that thereby they have failed to respect the connexion which Article 60 has established between the two concepts; furthermore that the system is incompatible with the proper operation of the provisions of Article 60 (2)(b) on alignment, which is made impossible in practice; and on the grounds, secondly, that they were aimed in practice at causing the general level of the price-lists to vary instead of at their observance, thus committing a misuse of powers by “sacrificing the specific purposes of Article 60 to the achievement of a particular economic objective”.
On the second point (the actual content of the concept of discrimination), it is argued in the application that (I quote): “Since variation in the prices actually charged may be continuous under the system instituted by the decisions put before the Court for its examination, it follows that discrimination can only operate in respect of strictly simultaneous transactions. Since such a case is purely hypothetical, the concept of discrimination is rendered meaningless”. Like the first point, this point was developed in the reply.
I am of the opinion that the second ground for complaint — that the contested decisions have rendered the concept of discrimination meaningless — is closely related to the ground for complaint concerning the failure to respect the connexion between the rule of non-discrimination and the system governing publication of price-lists. They are two aspects of a single line of argument directly based upon infringement of Article 60.
In fact, I can discern two submissions in the application of the French Government: a submission of infringement of the Treaty, in this case Article 60 thereof, and a submission of misuse of powers. I shall examine them in turn.
Submission of infringement of Article 60 of the Treaty
First of all the submission based on infringement of Article 60.
1. As regards Decisions Nos 1/54 and 3/54
First of all, I think that the real — and even the only — dispute concerns the second decision, No 2/54, which purports to relax the rules on publication.
If reference is made to the first decision, Decision No 1/54, the following provisions are found therein:
(1)
In principle it shall be considered a “prohibited practice” within the meaning of Article 60 (1) for a seller to apply prices or conditions departing from those shown in his price-list.
(2)
However, in two cases the position is different:
—
First, where the seller can show that the transaction in question does not fall within the categories of transactions covered by his price-list; when read together with the preceding sentence, that is a statement of the obvious worthy of Monsieur de La Pa-lice himself. Doubtless, it was intended to refer to the case of those “transactions having exceptional characteristics” which cannot be reduced to expression in a price-list, and which are excluded by the third paragraph of Article 1 (a) of Decision No 2/54.
—
And the position is also different, where the seller can show that “the prices or conditions have been departed from uniformly in all comparable transactions”. Such a formula is perfectly orthodox, and it does not manifest any features which are contrary to the rule of non-discrimination, which on the contrary it respects to the letter. It can doubtless be argued that, since the High Authority has not defined what must be understood by the expression “comparable transactions”, the only means of supervision, both in fact and in law, would be absolute adherence to the published price-lists; but then, that leads back to the question of the legality of the flexible system of publication instituted by Decision No 2/54; if that system did not exist and the argument of the French Government were correct, the result would be simply that the proof required by Decision No 1 /54 would never be accepted and that that decision would be a dead letter, but not that it would be illegal.
The last decision, Decision No 3/54, on information, is also not open to criticism in itself, and moreover is not criticized from that point of view. No-one can deny that Article 47, which provides that “the High Authority may obtain the information it requires to carry out its tasks”, provided that it respects professional secrecy, is most general in its scope. What the applicant claims is that the system of publication provided for by Article 60 (2) is the only one which, always accompanied by the checks which it requires, was intended to ensure observance of non-discrimination in pricing, which it can only do if it is absolute and unqualified, and that Article 47, concerning information intended for the High Authority, cannot be used in a publication system directed at third parties.
Thus from all points of view I am brought back to Decision No 2/54: in the light of the submissions put forward, the other two do not appear to me to contain any vitiating factor of their own and could be annulled only as a consequence of the annulment of Decision No 2/54 by virtue of their connexion with that decision.
(2) As regards Decision No 2/54
The question of the legality of Decision No 2/54 — I use the term “legality” by reference to Article 33 (infringement of the Treaty or of any rule of law relating to its application) and although the Treaty is not a “law” in the formal sence — as I was saying, the question of its legality arises first and foremost in relation to the provisions of Article 60 (2) (a), upon which it is based. The High Authority exercised the power which is conferred on it by that paragraph. Did it exeed that power or not? That is the whole problem.
Despite the light shed upon it in the past few days, for my part I consider that that problem is extremely difficult. In fact, everything depends on the meaning which is to be given wording of paragraph (2) (a), and as has been seen a literal interpretation leaves room for debate. Therefore it is necessary to put it back in its context, which is first of all Article 60 itself in its entirety, and then the Treaty as a whole.
(a) Literal interpretation of Article 60 (2)
Therefore, with the permission of the Court, I shall begin by seeing what can be drawn from a literal interpretation, and I apologize in advance for the dryness of my treatment of that point; then, I shall put the paragraph back in the general context of Article 60, and finally Article 60 itself in the general context of the Treaty.
The first argument — which seems to me clearly to favour the High Authority — is based on the expression “to the extent” which immediately precedes the expression “and in the manner”: “the price-lists and conditions of sale… must be made public to the extent and in the manner prescribed by the High Authority…”. It is clear that the term “to the extent” implies by itself both a possible limitation on publication, which the term “in the manner” would not constitute on its own, and a discretionary power conferred on the High Authority in that connexion.
A second textual argument — which seems to me to favour the applicant — comes from the subject of the sentence: “the price-lists and conditions of sale … must be made public to the extent and in the manner”… so on. Surely the very concept of a price-list involves of itself a certain publication. There are prices, which it is possible not to publish, but if those prices have appeared in a “price-list”, that is a list drawn up by items or categories of products, surely they are then already published. Obviously this publication is merely commercial, and is not necessarily or even usually comparable to the publication of laws or regulations, but it exists none the less. Therefore the High Authority's role must consist in making that publication sufficient to satisfy the requirements of Article 60 (1), in particular to ensure compliance with the rule of non-discrimination; in this argument, the word “extent” indicates merely that the High Authority must set the limits of the details to be published, which concerns above all the “conditions of sale”, as it had done in Decision No 31/53, but it does not authorize it to exempt certain price-lists from any publication whatever, because once again the concept of a price-list implies of itself of certain publication.
The third textual argument — going the other way, that is to say this time favouring the High Authority, — is the expression “made public”. The price-lists must be made public to the extent … and so on. This implies that documents are involved which were not hitherto public, but are liable to become such, to an extent to be determined. That would tend to prove, contrary to what I have just said, that price-lists can exist without being “public”. If the article used the expression “may be published”, there would be room for doubt, because such an expression is currently used (although wrongly so) with reference to provision which are drawn up and published at the same time, in particular when they only become valid by being published. For example, it is said that an authority has published a regulation; that is a current expression to signify that that authority has adopted a regulation which has been published forthwith. However, the choice of the much less common expression “made public” precludes any uncertainty in this connexion.
Moreover, this is the High Authority's argument in its written defences to the French Government's application; the High Authority expressly admits that there can be “unpublished price-lists” which record inter alia the graph of those “minor or temporary fluctuations” which are allowed to go by within the limits of the authorized variations. However, let me point out that, in its defence to the application by the Italian Government, the High Authority does not go far, and adopts a somewhat different argument or at least terminology.
I fail to see the cogency of the argument relating to the word “applied” which appears at the beginning of the paragraph (“the price-lists and conditions of sale applied by undertakings within the Common Market must be made public …”). In its reply, the applicant alleges that if the High Authority's argument were correct, the words “prices charged” ought rather to have been used. In fact, this textual argument can be used to favour either side. If, like the applicant, one accepts that the only “lawful” or “valid” price which an undertaking is authorized to ask is that which appears in its previously published price-list, then one can maintain that the word “applied” which is used in the paragraph is nearer to that concept of lawful or valid prices. If, however, one adopts the High Authority's argument accepting that true price-lists and conditions of sale can exist without any publication since publication is only prescribed “to the extent” necessary, then the term “applied” tends rather to support the latter idea by indicating that there are, independently of any publication, perfectly lawful prices in price-lists and not only prices “charged”. For its part, the High Authority maintains that if the applicant's argument were correct, the paragraph would use the expression “prices to be applied” and not “prices applied”. It is possible, but it is not the case, and the text must be taken as it is. In fact, only limited importance must be attached to the discussion on this point: it is merely a slight difference of wording, which does not have any decisive effect, and in my view does not even have any indicative effect.
To sum up, the textual arguments based on Article 60 (2)(a) itself appear quite inconclusive.
(b) Interpretation in the context of Article 60
I shall now examine subparagraph (2)(a) in the context of Article 60 as a whole.
If one reads paragraph (1) of that article first of all and then immediately afterwards paragraph (2) thereof, as is proper, one is immediately struck by the difference in kind between the two paragraphs: the first states the purposes to be pursued, which are the same as those defined as fundamental objectives of the Community in Articles 2, 3 and 4 of the Treaty. In applying those principles to the field of prices, Article 60 (1) prohibits pricing practices contrary to those articles, in particular unfair competitive practices and discriminatory practices. The second paragraph concerns the practical rules laid down to ensure that the prohibitions laid down in paragraph (1) are observed. The expression “for these purposes” governs the whole of the remainder of the article relating to publication and methods of quotation. Article 60 (2), and in particular Article 60 (2)(a), is only a means to attain the ends which have been defined in Article 60 (1).
That analysis is correct, and both parties agree that it is.
The High Authority immediately draws the following inference therefrom: it argues that the application of subparagraph (2)(a) is entirely subject to the purposes set out in paragraph (1), which moreover do not exclusively concern compliance with the rule of non-discrimination. Therefore, when the said subparagraph (2)(a) empowers, and even obliges, the High Authority to establish a system for the publication of price-lists and conditions of sale, it does so only to the extent to which such system is deemed necessary in order best to attain the ends laid down in paragraph (1), one of which, but only one, is the supervision of the prohibition on discrimination. When read together with the expression “for these purposes”, the expression “to the extent” thus takes on its full meaning.
However, that line of reasoning comes into conflict with the line of argument which is the foundation of the applicant's case: for, although the applicant acknowledges that the two concepts of non-discrimination and publication are “intellectually separable”, to use an expression which appears in the application, and that the publication system is only a means to an end, its maintains that that means was imposed by the Treaty as having to. ensure by itself supervision of the rule of non-discrimination and that by its essence and as defined by the Treaty the publication system cannot allow of the “flexibility” which the High Authority has introduced into it.
Here again the two arguments conflict and the wording of Article 60 (1) is not enough in itself to decide between them. However, it seems to me distinctly to favour the High Authority.
However, if after reading what goes before (subparagraph (2)(a)), we now read what comes after, that is, subparagraph (2)(b), we receive the opposite impression. In fact, the latter subparagraph, which authorizes alignments, speaks only of “price-lists”, and makes no distinction between “published” price-lists and “unpublished” price-lists. Surely that is because the authors of the subparagraph did not for one instant envisage such a distinction, which a priori is somewhat surprising when it is a question of “aligning’ oneself on the prices of a competing undertaking. How could those prices be known otherwise than by the publication of the price-list which contains them? Surely lack of publication and the uncertainty resulting therefrom are contrary both to proper implementation of the alignment system by the seller and to supervision by the High Authority. Thus the reading of subparagraph (2)(b) proves that the price-lists and conditions of sale referred to in Article 60 must always mean only published price-lists, because the concept of a price-list cannot be given a different meaning in the various parts of a single provision.
As the Court is aware, the High Authority does not leave that argument unanswered. It maintains that alignment must be effected on the ‘list of the prices actually charged’ by the competitor, as it pointed out moreover in the penultimate paragraph of its communication of 7 January 1954, published in the Journal Officiel, following the contested decisions. According to that communication, ‘proof of the conditions resulting for the buyer from the prices actually charged by the undertaking on which he is aligning himself may inter alia be based upon a confirmed offer by that undertaking’. The High Authority might have pointed out that a price-list is not a tariff. If adds that, in fact, sellers make extensive use of the possibility of alignment on the actual prices of their competitors, which they are quite capable of finding out both through the offers communicated to them by their customers and through the information which they themselves have on market conditions.
This factual explanation seems correct. The details provided at the hearing by the High Authority's Agent seemed cogent to me in this connexion. I think it must be taken as proved that the possibility of alignment on actual prices not only can be exercised, but in fact is exercised and even extensively so.
If it had been otherwise, I think that the objection would have been decisive, because it would have seemed impossible to me to give legal approval to an argument resulting in preventing the operation of a provision as important as the rules on alignment. However, merely because there is evidence that a contrary situation exists, namely that it is possible for the system of alignment on actual prices to function in practice, it does not follow therefrom that the High Authority is right in law. The difficulty is still the same: can the concept of unpublished price-lists alongside published price-lists be accepted?
To bring the direct analysis of the provisions to a close, I shall dismiss and not return to the applicant's argument regarding Article 64 on fines which, as the Court is aware, provides penalties for an infringement of the provisions ‘of this Chapter’ (and consequently inter alia of Article 60) or of ‘decisions taken thereunder’, by the imposition of fines calculated on the basis of ‘the value of the sales effected in disregard thereof.’ That concept of “sales effected in disregard thereof’ is not accepted by the High Authority, which makes Article 64 inapplicable.
The High Authority's answer on this point appears cogent to me: sales which are concluded in contravention of the decisions adopted by the High Authority under Article 60 constitute “sales effected in disregard thereof’ within the meaning of Article 64. They will include both those which infringe the rule of non-discrimination (for example, a sale under the terms of which prices or conditions have not been departed from uniformly in comparable transactions — infringement of Decision No 1/54), and those which fail to comply with Decision No 2/54 (for example, a sale where the authorized mean variation is exceeded and which was not preceded by the publication of an appropriate amendment to the price-list). Therefore in my opinion there is no infringement of Article 64 concerning fines, which still applies under the new system.
(c) Interpretation in the context of the Treaty as a whole
What conclusions can be drawn from this discussion of the provisions? In my view, the fact is that it does not provide any decisive argument one way or the other. Even putting subparagraph (2) (a) back in the context of Article 60 as a whole, as I have tried to do, does not indicate any certain interpretation of that subparagraph. Therefore it is necessary to go further; the question in dispute must be examined in relation to the Treaty in its entirety. Such an approach is always legitimate; it is particularly necessary in the case of this Treaty of 18 April 1951 because all its parts are interconnected. In particular, all the provisions of Title III represent only the implementation of the principles laid down in Title I, from which Title III must never be dissociated. The High Authority has not failed to point out that Article 60 refers expressly to Articles 2, 3 and 4, and that the prohibitions expressly imposed (unfair competitive practices, discriminatory practices) are preceded by the words “in particular”. However, even if Article 60 had not contained that express reference, which moreover mentions only the provisions containing prohibitions, to the preliminary provisions of the Treaty, it would nevertheless be the duty of the High Authority and the duty of the Court to be constantly aware of them, as well as of the other implementing provisions of Title III which are liable to affect the problem under consideration. What then is the Treaty's immediate purpose (I am not speaking of its ultimate aim, which is to begin to unite Europe)? To create a common market in coal and steel, to define the rules for the functioning of that market, and finally to organize an institutional system suitable to ensure that functioning.
It is possible to discuss indefinitely the meaning of the expressions “Common Market” or simply “market” or “market economy”. Of course I have no intention, and make no claim, to enter into theoretical discussions on those subjects, which moreover would seem to me quite futile. On the contrary, faced with the duty of applying this Treaty, I consider that I have quite simply to look at what it contains.
In view of the concerns raised by this dispute, I am of the opinion that the most interesting idea is expressed in Article 5, where it is stated that the Community shall “ensure the establishment, maintenance and observance of normal competitive conditions and exert direct influence upon production or upon the market only when circumstances so require”. Thus it is clearly a market based on competition, which means a system of freedom, accompanied however by rules considered necessary to ensure that very freedom, and it is for the public authority to ensure the maintenance of that freedom. Competition is a game, but a game which has its rules. At this moment I cannot but think precisely of those “rules of the game” about which a few months ago a speaker as brilliant as he was well qualified came here to speak to an audience of Luxembourg lawyers.
It may be said that the whole Treaty is based on the idea that the task of the Community and the role of the High Authority, which is responsible for carrying out that task, consist essentially of creating and maintaining certain conditions, namely those conditions which are necessary for the desired objectives to be attained by the free operation — or more precisely the normal operation — of productive activity, with direct intervention being confined to those cases in which that normal operation breaks down.
Let me merely quote from the Treaty:
Article 2:
“The Community shall progressively bring about conditions which will of themselves ensure the most rational distribution of production”, and so on;
—
Article 3 (d) :
“…ensure the maintenance of conditions which will encourage undertakings to expand and improve their production potential”, and so on;
—
Article 3 again, in which the words “ensure” and “promote” are used throughout (one finds here the formula:“… ensure the establishment of the lowest prices”);
—
Article 5, which has already been quoted: “The Community shall carry out its task in accordance with this Treaty, with a limited measure of intervention”;
—
and Article 57, which is particularly concerned with the sphere of production and in which it is stated that, in that sphere, “the High Authority shall give preference to the indirect means of action at its disposal, such as … intervention in regard to prices …” (which, in parenthesis, clearly proves the interpenetration of the different provisions of the Treaty).
Doubtless, there are also in the Treaty provisions laying down prohibitions and there are penalties, often very severe ones. However, even in the most extreme cases (I am thinking for example of Articles 65 and 66 on agreements and concentrations), the only purpose of those prohibitions, rules and penalties is also to ensure that “the rules of the game” are observed, but in particularly sensitive cases in which those rules are especially in danger of being ignored: that is the only justification for a greater degree of intervention or more vigilant supervision: far from violating freedom, their purpose is on the contrary to ensure the exercise of it.
What lesson is to be drawn from what may be described as the philosophy of the Treaty, as it emerges from the wording of the Treaty itself?
In my opinion, it is the following: that when the High Authority is called upon to exercise a power, such as the one conferred upon it by Article 60 (2) to lay down the conditions for the publication of price-lists, it must not lose sight of any of the objectives of the Treaty and, in seeking to attain the one or the ones at which the provision to be applied is more particularly directed, it must avoid sacrificing others, perhaps more important. In the event of incompatibility, a compromise may be acknowledged to be necessary. In so far as there is no clear, mandatory provision to the contrary, the Court for its part must interpret the provisions in such a way as to make such compromise possible whilst observing the principles laid down in Title I, in particular the one concerning the maintenance of normal conditions of competition, without which there is no market.
In this connexion, account must obviously be taken of the particular conditions prevailing in the market under consideration, both those'which are inherent to it and those resulting from the immediate economic situation.
I have no wish to expound political economy here. However, I have to mention some basic concepts drawn from distant memories and recorded in the most elementary text-books as well as in highly erudite works: in this way, I hope — but I am not sure — that I shall not be accused of heresy: at all events, no-one will be able to accuse me of modernism …
For example, the following appears in the “Precis d'Economie Politique” (“Summary of Political Economy”) by P. Reboud, published by Dalloz, Paris 1939, at page 436:
“(a)
Theory of free competition.
The theory of perfectly free competition in the market requires the following three conditions to be fulfilled: ( ) sellers and buyers must be able to negotiate their prices freely; — there must not have been any prior agreement between sellers or between buyers by which sellers undertook not to sell below a minimum price or buyers undertook not to buy above a maximum price; — and finally, at all times while the market is in operation, sellers and buyers must be kept completely informed by perfect publicity regarding the quantities of goods which are offered and demanded, so that both sellers and buyers can use the market conditions to the best advantage possible”. And the author adds: “These conditions are not completely satisfied in any actual market’.
It is clear that a market such as the one in steel is not one of the closest to the ‘ideal market’ described by the economists. Not that it is particularly unamenable to the effects of economic trends; on the contrary, it is very sensitive to them. But that very sensitivity makes it vulnerable, and undertakings have a quite natural tendency to guard against those effects by means of agreements; which is understandable, if one thinks of the enormous size of the fixed charges, in particular wages and investments, and of the financial, social and other difficulties which may be brought about by excessively sudden shocks. It might even be said that such fluctuations might prove to be contrary to the general interest both of employees and of consumers, and that such effects of so-called ‘normal’ competition should be kept to some extent in proportion. Moreover, such is the intention of the Treaty, if one is to judge, for example, by the words of Article 3 (c): ‘… ensure the establishment of the lowest prices under such conditions that these prices do not result in higher prices charged by the same undertakings in other transactions or in a higher general price level at another time, while allowing necessary amortization and normal return on invested capital’.
Thus agreements in this field are particularly difficult to avoid, at least completely, and it is also particularly difficult to take steps against them, by reason both of the small number of the undertakings and of their power, which is inherent in the operating conditions of that heavy industry and which is further reinforced by the concentrations made necessary by the very enlargement of the market and the technical advances made necessary by rationalization and the development of production. If prices are not free to find their own level, publication totally fails in its purpose, which is precisely to help them to do so. It even has the opposite effect, in that it crystallizes the positions taken up by the sellers. This is what may have prompted a member of the High Authority to say, in a statement which has been mentioned several times, that if the system set up by Decision No 31/53 had been maintained, the High Authority would have become the ‘cartel police’, and that is profoundly true, because the High Authority was facing just such a situation when the common market in steel began to operate.
Was the High Authority then to use the redoubtable weapons put into its hands by Article 65? Perhaps. That is a problem which I shall come back to when I examine the submission of misuse of powers.
However, it is clear that Article 65 alone is not enough to provide an answer to the question. Even if there is no agreement as such, when undertakings publish their price-lists they cannot be prevented from seeking to find out through contacts, for example through information given to them by their trade-union organizations, the ‘market price’, the apparent ‘normal price’ at the time for the product under consideration, and the simultaneous publication of identical or nearly identical prices must be accepted at least within each country. There was all the more reason for this to be so at the opening of the Common Market, since, as publication was being made for the first time, it had necessarily to be simultaneous and to deal with all of the products at once.
The result was — and could only be — the rigidity of the price-lists. It is a fact that the prices in the price-lists were fixed above what they ought to have been; it is a fact that the undertakings preferred giving more or less large discounts, in view of the downward trend which was appearing in prices, to issuing new price-lists, doubtless fearing that by being in a sense confirmed in this way, the downward trend would thereby be accelerated. However, since the price-lists were not being observed, publication was then failing in its purpose.
The High Authority has told the Court that in this situation, a check on non-discrimination became very difficult, since it was not in the interest of buyers to denounce sellers who had given them more advantageous prices than those listed. Doubtless, it can be replied that there was nothing to prevent the setting up of a system of supervision to detect discrimination. However such supervision would clearly have proved much more difficult, for want of information from the undertakings, whereas under the new system the declarations supplied concerning the variations which have actually taken place constitute a valuable source of information capable of being used as the basis of effective supervision. Such information obviously could not be sought under the old system, because all variations were prohibited under that system, and a public authority cannot require a declaration of infringements committed! On all these points, the additional explanations supplied to the Court in answer to a question asked seemed cogent to me.
Thus a solution had to be found, not one which would perfectly fulfil for that is impossible, but which would tend to fulfil the two conditions essential for the existence of a market (even an imperfect one): freedom of prices to find their own level and publication. In the event, having regard to the state of the market, a certain degree of flexibility was necessary concerning publication: it had to be sufficient to enable the rules on non-discrimination to be complied with but it had to avoid the excessive rigidity which would have made it hard for prices to find their own level and would have stood in the way of normal competition. This was done by Decision No 2/54, which clearly states its purport in this connexion in its first recital, which I have already quoted but which I take the liberty of quoting again:
‘Whereas the publication of prices and conditions of sale, which is necessary for the purposes of the application of the rules of competition laid down by the Treaty, must be effected in a manner compatible with freedom to determine steel prices in the light of market trends and of the needs of commercial relations’.
Indeed, it must not be forgotten that, as the High Authority states in its written defence (page 6), ‘the Common Market determines the prices and not vice versa’, and, as it also says (rejoinder page 24): ‘Whereas automatic publication facilitated the operation of agreements and favoured a uniform attitude on the part of undertakings against downward trends in the market, the mean variation system enables undertakings to react freely and facilitates a greater fluidity of the market’.
Thus it seems to me that the decision adopted by the High Authority is compatible with the purposes which the High Authority had to pursue in order to ensure the progressive establishment of the Common Market. In my opinion, the decision was congruent with the general objectives of the Treaty and the principles laid down by the Treaty.
(d) General discussion
Now I must return to Article 60 (2) and consider whether, in the light of the foregoing explanations, that paragraph can be interpreted in a way which is compatible with the content of the contested decisions. First of all, I think that if, as I have just done, one puts Article 60 back in the general context of the Treaty, the concept of publication appears in a palpably different light from that in which it was presented to the Court by the French Government. According to the French Government, publication is directed towards third parties (which is clearly the case), and it adds that publication must produce legal consequences with regard to them. What is that legal effect with regard to third parties? It has been stated that there can be only one in the field of prices: in the case of a buyer, the right to claim the benefit of the same price; or in the case of a competitor, the right to align his prices. It is alleged that publication within the framework of Article 60 is meaningful only if it is publication of an offer to do business.
I think that that line of argument involves a misunderstanding which springs from a false conception of the Treaty. As I believe that I have shown merely by reading it, the Treaty establishes a common market based on a system of free competition, defines the rules for it, and makes institutions responsible for seeing that those rules are complied with. For those purposes and for those purposes only it confers powers on the institutions, particularly the High Authority, and strictly fixes their limits and the conditions for exercising those powers. Thus it is a question of economic legislation preceded by institutional legislation, since it was necessary to set up the institutions before defining their powers. Quite clearly all of that body of legislation is by its nature public law legislation which has taken the greatest care not to interfere with private law, particularly commercial law, apart from very precise exceptions (there are scarcely any except in Article 66 on concentrations). Thus the principle is that, once again, except as otherwise provided, private law relations as normally established in the different countries, particularly commercial relations, are not affected by the Treaty.
The application of those powers is conceived in relation to producer undertakings, carefully defined for that purpose by an article of the Treaty, and with only a few exceptions both the duties and the penalties concern only those undertakings. Thus, the only legal relations which are established within the framework of the Treaty are established between the High Authority and undertakings, not between the High Authority and third parties.
If reference is made more particularly to the field of prices, what I have just said is strikingly illustrated. All the duties contained in Articles 60 to 63 apply only to undertakings and all the powers of the High Authority are exercised only in relation to them. Even in the exceptional case in which it was desired to create duties on the part of a purchaser or a commission agent, that is a third party, care was taken to do so only by indirect means: this is Article 63 (2), and in that case any penalties which may be necessary are also indirect, taking the form of prohibiting the undertaking from dealing with a purchaser who has failed to comply with his duties, not duties prescribed by the Treaty or by the High Authority but the duties to which he is bound by his contract with the undertaking; and, finally, only the undertaking is liable to a penalty by the High Authority under Article 64. The same is true as regards Article 61 which confers the power of fixing maximum prices or minimum prices. It is obvious that in such a case, there would also be publication resulting quite simply from the publication of the decision itself. It is obvious also that in such a case, the decision could be taken in the interest of third parties. However, the private law relations remain subject to national law; any sales concluded in breach of the decisions adopted are not void. Only the administrative sanctions of the Treaty will be applicable, and only in relation to the undertaking.
A fortiori, decisions taken under Article 60 concerning the rules on publication cannot be allowed to interfere in any way with private law, since here it is a question of the normal free system.
Therefore, when it is argued that since publication is carried out in the interest of third parties it must produce legal effects with regard to them and that the publication referred to in Article 60 can only be ‘publication of an offer to do business’, I take the view that two quite separate concepts, one from private law and the other from public law, are being mixed up. If it is a question of the legal effects of the decision providing for publication, those effects prevail only in the relations between the undertakings and the High Authority, which are public law relations. As to the legal effects of publication itself, that is purely a question of private law. In private law, a price-list may be regarded as an offer to do business, in the same way as a catalogue or the affixing of a price ticket in a shop; it is purely a question of fact whether, by reason inter alia of the nature and of the greater or lesser extent of the publicity given to the price, that price amounts to an offer the mere acceptance of which constitutes the conclusion of a contract.
It can doubtless be accepted that, under the conditions in which the High Authority requires them to be published, the price-lists for steel amount to an offer. However, it is clear that agreement can be reached on another price. Perhaps in such a case economic legislation will be infringed and offences may be committed, but unless the law expressly provides otherwise the application of that legislation will not affect the contract.
This clearly shows that rigid prices, that is to say prices which are always preceded by the publication of a price-list, are only really of use to purchasers when prices are rising: in such a case the published price is a guarantee for him: he has only to accept for the contract to be concluded, and the seller can only raise his price by previously publishing a new price-list. When prices are falling, or even when they are merely stable, the situation is reversed: the buyer will seek to obtain a lower price and it is obviously in his interest for the seller to be able to agree without committing an offence; if an agreement is reached, whether or not it complies with the rules in force, it is perfect from the point of view of private law.
Thus it appears that although the publication of a price-list can amount to an offer to do business on the terms stated in that price-list, the rules on publication laid down by the public authority do not of themselves create any right in favour of the buyer: the buyer only has an interest therein, and then only if the arrangements suit him.
Such is the first conclusion to which I am led by the general analysis of the Treaty which I have felt it my duty to undertake. Moreover, in my view, that analysis particularly strengthens the argument which gives the fullest meaning to the expression ‘to the extent’, which is in fact the key to the matter. The High Authority has to define not only the manner of publication, but also the limits and the conditions thereof. In that connexion it does not have ‘pouvoir discretionnaire’ (unlimited discretion) in the sense in which that expression is understood in French law; I should say rather that it has ‘pouvoir d'appreciation’ (restricted discretion) which is certainly not without its limits: those limits are found in the purpose which the High Authority has to pursue, namely the organization of a system which makes it possible to ensure as much publicity as is compatible with freedom of prices to find their own level and with the establishment of conditions of competition which are as normal as possible; and it is for the Court to exercise its power of review in this connexion, if it is necessary, under the conditions laid down in Article 33 of the Treaty, either by way of an action for misuse of powers or by way of an objective review of a ‘manifest infringement’.
The word extent was certainly not put in the Treaty without due consideration; it relates to the concern for flexibility the introduction of which was acknowledged to be necessary — to a certain extent — into the provisions on prices and which appears so clearly in the complex rules which follow concerning the difficult problem of methods of quotation.
None the less, that flexibility in the rules on publication must not however reach the point, as the application alleges that it does, of depriving the rules enacted of any mandatory effect, thus making the published prices into no more than a sort of indicative price-list, a mere approximation, a source of statistical information. If such were the case, it is clear that Article 60 (2) would be infringed.
However, in reality, that is not the case. In fact, within the limits which it lays down, the system operates in a mandatory way. First of all, ‘at the time when a price-list is published, it must correspond to prices as they really are’ — this is of capital importance. The High Authority points this out, and underlines it, in its communication published in the Journal Officiel de la Communauté of 13 January 1954, p. 223. Immediately afterwards, it adds: ‘By acting otherwise, undertakings would from the outset accumulate variations which they could offset only by successively publishing new price-lists’. That is a counsel of prudence. But what I for my part derive from it in the legal sphere is that it cannot be said, as the applicant argues, that the new system has detached the method of publication from prices as they really are. On the contrary, prices as they really are govern publication, since, at least on the day of publication, the price-lists published must express those prices as they really are: they are indeed ‘the price-lists and conditions of sale applied by undertakings within the Common Market’, according to the very wording of Article 60 (2).
Subsequent alterations are simply exempted from publication so long as the mean variations authorized are not exceeded. This is very clearly expressed in the next part of the High Authority's communication: ‘the latitude which is given to undertakings is designed to enable them to overcome purely temporary fluctuations in the market without any fresh publication and to test by experience the greater or lesser durability of the movements occurring in that market’. Here again, there is the same piece of advice: ‘They would be depriving themselves of the benefit of that room to manoeuvre if they wasted it on publishing prices different from those which they were applying at the time of publication’.
Thus the prices published must be real prices, and moreover, of course, any excess of the mean variation puts the undertaking in breach of Decision No 2/54 and Article 60 (2) which forms the basis thereof, without prejudice to any possible infringement of the rule of non-discrimination.
One last difficulty then remains to be solved, and it is certainly not the least: Let me read the words of Article 60 (2) (a) once again: ‘the price-lists and conditions of sale applied by undertakings within the Common Market must be made public to the extent’, and so on. If the expression ‘to the extent’ must be taken in the fullest sense, as I think it must, it would follow that the concept of a price-list exists independently of the concept of publication. If price-lists can be made public to a given extent, the fact is that they were not public theretofore. Moreover, under the system set up by Decision No 2/54, price-lists may be altered within certain limits without those alterations being published: if that happens, the result is that in reality at any given time there would be two price-lists, the one which was published and which no longer corresponds to reality and the one which, faithfully following the ‘minor or temporary fluctuations’, continues to reflect exactly the state of the market. But then, the following objection arises: is there any such concept as the concept of ‘an unpublished price-list’, in particular in the trade in steel? If there is no such concept, then does not the system collapse, first because the provisions of Article 60 can no longer be applied, and secondly because it will then become impossible for buyers to know the real prices and that will stop prices finding their own level which is however the aim of the operation, and at the same time supervision of non-discrimination will again be as difficult as before? If on the contrary there really are price-lists, even unpublished ones, that is to say not published as prescribed by the High Authority, but comprising a list of prices and a statement of conditions of sale, if buyers are sufficiently aware of those price-lists for the price-lists to play their part in enabling prices to find their level, then why should publication of them not be re-quired, and what disadvantage can that present for anyone?
That is the dilemma.
I think that, as is often the case, it only appears to be a problem. The purely logical reasoning which leads to it, however attractive it may seem, is not decisive, because economic relationships and commercial practice are not governed by pure logic.
To confine myself to the trade in steel, particularly as it has operated since the contested decisions were adopted, I do not think that strictly speaking there are unpublished price-lists alongside the published price-lists. From what we know, there are those price-lists which have been validly lodged with the High Authority, which are fairly widely distributed and which the buyers know. Then there is a discount, since up to now the variations have only been downward. In most cases, at least in the first months of the application of Decision No 2/54, it seems that the discount was equal to the authorized maximum, that is, 2.5 %; this was expressly acknowledged during the hearing by the High Authority's representative. It seems that this is called the ‘Monnet discount’, and that it was given by most undertakings. However, subsequently, certain fluctuations appeared, as an increasingly pronounced upward trend made itself felt. This resulted in the formation of a real rate for those fluctuations remaining between the official price and the maximum authorized variation. Traces of it are to be found in the trade papers. Sellers spontaneously align themselves on the one among them who has given the biggest variation, and it is above all in this way that this semi-official ‘rate’ is naturally formed alongside the price-list. Alignments, as I have already, said, are widely practised, which proves that the real prices are known.
On the other hand, although, at least up to now, there has been no general revision of price-lists, the publication of certain amendments or rectifications to the price-lists previously lodged has been fairly frequent, and it is known, for it was said during the hearing, that recently some undertakings have lodged fresh price-lists without agreement and in a sense individually. Thus it seems that the system functioned in the very spirit in which it had been conceived, at least after a few weeks. However, it can hardly be said that in each undertaking that ‘rate’ of real prices takes the form of an actual ‘price-list’, in effect the ‘list of prices charged or applied’, alongside the published price-list. Moreover, it should be noted that the expression ‘list of prices actually applied’ which the High Authority uses in its defence to the French Government's application is not repeated in the statements in defence entered against the Italian Government's application: the latter speak rather of a ‘tolerance’ or ‘limited variation between prices published and prices charged’. It is easy to see here that the High Authority finds itself in some difficulty. Furthermore, the concept of a price-list as applying to the prices actually applied by undertakings is not the concept found in Decision No 1/54. When that decision states that: ‘It shall be a prohibited practice within the meaning of Article 60 (1) for a seller to apply prices or conditions departing from those shown in his price-list unless he can show … (inter alia) that the prices or conditions have been departed from uniformly in all comparable transactions’, it is clear that it is referring to the published price-list, since the variations are calculated by reference to that price-list. Moreover, if it were otherwise, Decision No 1/54 would be absolutely nugatory; in fact, Decision No 30/53 which it amends, already considered it to be a ‘prohibited practice’ for a seller to apply increases or reductions on ‘his published price-list and conditions of sale’; that rule would have remained perfectly valid under the new publication rules enacted by Decision No 2/54.
In my opinion, too much importance should not be attached to what is after all only a dispute about words which arises from the somewhat loose drafting of Article 60 (2)(a). It is clear that, as has been seen, the concept of a price-list of itself implies a degree of publication: therefore, when the provisions state that they must be ‘made public’, it must not be inferred therefrom, by an exaggerated process of reasoning a contrario, that previously they were not such. It was not for the Treaty to pass judgment on a past situation. It had to take things as they were. The Treaty is concerned with prices and conditions of sale and the publication which they must henceforward be given; that is why it speaks not of ‘price-lists’ but of‘the price-lists’ and conditions of sale. In reality, it would have been better drafting to say: ‘The prices and conditions of sale applied by undertakings within the Common Market must be made public, in the form of price-lists, to the extent’, and so on. Does this interpretation go too far? In all sincerity, I do not think so. Far from distorting the purport of the provisions, on the contrary this interpretation in view gives it back its true meaning.
Therefore in my opinion it is not necessary to postulate that applied price-lists exist alongside the published price-lists. The only price-lists are those which have been lodged with the High Authority and duly published, in accordance with the prices actually applied by the undertakings at the time of publication; and then there are the prices actually charged, which correspond to the notorious ‘minor or temporary fluctuations’ and which, without necessarily requiring actual price-lists in the strict sense of the word to be drawn up, correspond to the commercial rate resulting from the operation of the law of supply and demand, but of which sellers and buyers must be sufficiently aware to enable that law to operate normally.
If this interpretation of the wording of Article 60 (2) (a) is accepted, the same interpretation mutatis mutandis must be accepted as regards Article 60 (2) (b) on alignment. Where the latter subparagraph enables ‘the quotation to be aligned on the price-list, based on another point which secures the buyer the most advantageous delivered terms’, it goes without saying that here again it concerns the prices and conditions of sale which are actually applied in accordance with the price-list drawn up on the basis of the other delivery point and taking account of any authorized variations which the application of that price-list may involve.
There then remains the objection based on the second horn of the dilemma: if the departures from the published price-lists are really the subject of an actual, semi-official rate of which the interested parties are aware, does it not follow that each undertaking is able at any time to determine its own price with full knowledge of the facts, and if that is so why should it not be obliged to publish it? It would be all the more easy since Decision No 2/54 reduces the time-limit for publication to one day. In my opinion the answer is found in the High Authority's communication, which I have already mentioned, in the Journal Officiel of 13 January 1954, p. 222: ‘Variations applied must be extended without discrimination to all comparable transactions. If they are not published immediately, that is not so much because of the material difficulty which would result from it at a time of rapid variation in prices. It is rather because publication binds undertakings, and consequently extends over a period of time price conditions which by their nature may respond to a purely momentary fluctuation in the market’.
That explanation, which was repeated and developed during the hearing, seems cogent to me. It is clear that the publication of fresh prices tends, if not to crystallize those prices, at least to slow down the natural trends on the market and tends to prevent prices finding their own level, which as has been seen is an essential condition for there to be a genuine market.
Undertakings have a quite normal tendency to publish prices somewhat higher than the actual market rate, because in that way they provide against the consequences of any rise in prices which, as we have seen, would oblige them to publish new prices before they could conclude any contract at a price higher than the one in the published price-list, which amounts to an offer to do business; whereas when prices are going down or even stagnating, keeping the prices published in a price-list slightly above the normal rate gives them room for discussion allowing them to give discounts: the essential point is that that room should not be used for discriminatory purposes, but that the flexibility thus introduced into the system should result in a true commercial rate coming into being. For that reason the High Authority seems to me to be right when it states that publication binds an undertaking and tends by its nature to prevent prices finding their own level in accordance with the law of supply and demand. Doubtless in theory this should not be the case, but the present market in steel is not an ideal market, and it is the High Authority's duty to take account of realities.
On the other hand, did the High Authority exercise its powers of supervision with sufficient ‘authority’ ? For example, can it be said that the price-lists which were published when the new system entered into force truly corresponded to prices as they really were at that time, as should have been the case according to the High Authority's own provisions, or on the contrary did the undertakings retain the guarantee of a certain amount of latitude on that occasion as well, which would explain the fact that from the following day and for approximately three months the actual prices were practically the same as the maximum authorized downward variation? It is very possible, if not even highly probable. However, that is not what the Court has to decide upon. It is not for the Court to censure the conduct of the High Authority, but only to decide whether the new system is in itself such as to attain the objectives referred to in the Treaty, in particular Article 60 thereof, and whether it is compatible with the provisions of the Treaty — which I think I have proved. To conclude, I am of the opinion that the contested decisions are not contrary to the provisions of Article 60 and that the first submission in the application cannot be upheld.
Submission of misuse of powers
I shall deal more briefly with the second submission, that of misuse of powers. In fact, I think that the considerations which I set out in my examination of the first submission will make the examination of the second one easier.
Moreover, I propose to make a general examination of the concept of misuse of powers in the Treaty, which I consider I must do, not here but in relation to the applications by the associations, in regard to which the problem presents itself in its fullest form because of the restrictions contained in Article 33.
It is alleged in the application that the misuse of powers which vitiates the contested decisions relates both to Article 61 on price fixing and to Article 65 on agreements. It is alleged that the High Authority sacrificed what the applicant calls ‘the specific effects’ of Article 60 in order to obtain other ‘specific effects’ which, in the applicant's submission, could be obtained only by the application either of Article 61 on maximum prices or of Article 65 on agreements.
As regards Article 61, the High Authority is accused of having used its powers under Article 60, not for the purposes set out in that article, that is, in order to attempt to prevent discrimination, but with a view to bringing prices down, whereas the weapons which it has for the latter purpose, consisting in particular of fixing maximum prices, are given to it by Article 61.
That accusation is unfounded. First, it is clear that the machinery of Article 61 would not have achieved its aim in this case because prices were already falling and because when the contected decisions were adopted actual prices were considerably lower than the price-lists. But above all, it is not true to say that the High Authority sought to bring prices down or to accentuate the falling trend. As has been seen, it confined itself in fact to helping prices to find their own level, and they went down as a natural result of the general economic situation. That is quite a different matter and, as I think I have proved, it fell within the framework of the purposes which the High Authority had to pursue in laying down the rules for the publication of prices.
As regards Article 65, the problem is a little more difficult. The High Authority does not deny that it had the impression, if not the firm belief, that the simultaneous fixing of prices at a higher level by the undertakings was or could only be the result of an agreement between producers. The statements made either by the President or by the Vice-President of the High Authority, which have been mentioned, make no secret of this.
Does it follow that the High Authority was bound to set in motion the procedure laid down in Article 65, and to attempt to break the agreement in question? It would probably have been entitled to do so, but it was not legally bound to do so. Although the agreements referred to in Article 65 are automatically void, although it is true that practices having the same purpose are prohibited, it is for the High Authority alone to rule on whether such agreements are void and to penalize such practices: Article 65 (5) provides ‘The High Authority may impose …’ fines or periodic penalty payments on any undertaking which has entered into such an agreement or has engaged in the practices in question. It may well be thought that the High Authority was right to refrain from making use of that weapon, which is as delicate as it is redoubtable (redoubtable for the one who uses it and not only for the one that against whom it is used), since the putative agreement probably concerned all the undertakings in the Community, and it would have amounted to a sort of declaration of war on producers at the very time when the Common Market had just opened; that, however, is a consideration which bears on the High Authority's policy and which comes under another institution. For my purposes, it suffices to state that there was no duty to act under Article 65; this is not a case of wrongful failure to act.
Moreover, it cannot be said that the aim pursued by the High Authority, under the pretext of laying down the rules for the publication of prices, was really to break up by an indirect means an agreement which it would not or could not challenge by the regular means, namely under Article 65. The Court knows the real aim: it consisted in bringing into being such conditions for publication as were best suited, in view of the market situation, to keep a check on non-discrimination and to help prices to find their own level, and, as has been seen, this came exactly within the ambit of Article 60. Thus in no way was there any departure from the ‘specific’ purpose of that article. The best proof of this is that substantial results have been achieved in that field and that no-one can deny that, although it is not perfect — far from it — the Common Market is today beginning to be a reality.
At the end of this excessively long opinion, I am tempted to sum up. In order to avoid making it still longer, I shall refrain from doing so.
I shall merely say that although my views are clear, I none the less acknowledge that the question is a difficult and complex one, that in this first case brought before the Court for its judgment that question puts in issue problems concerning the substance of the Treaty and even to. a certain extent its philosophy as I have already said, and that that question puts the Court under an obligation to decide on difficulties concerning not only the legislation, but also the extent of its own powers and the method of interpretation which it should adopt. On that point, there is no doubt that it is setting a precedent for the future. Therefore the French Government was right to raise the question.
The decision of the Court cannot fail to have far-reaching effects, and whichever way it goes, I am convinced that it will be useful to the Community.
I am of the opinion that the Court should dismiss the application.
( ) Stanley Jevons, “La Theorie de l'économie politique” (“Theory of Political Economy”), French translation, page 102. |
Judgment of the Court of 11 February 1955. - Industrie Siderurgiche Associate (ISA) v High Authority of the European Coal and Steel Community. - Case 4-54.
European Court reports
French edition Page 00177
Dutch edition Page 00193
German edition Page 00191
Italian edition Page 00181
English special edition Page 00091
Danish special edition Page 00011
Greek special edition Page 00011
Portuguese special edition Page 00015
Summary
Parties
Subject of the case
Grounds
Decision on costs
Operative part
Keywords
++++
1 . APPLICATION FOR ANNULMENT
( TREATY, ART . 33 ).
2 . DECISIONS OF THE HIGH AUTHORITY - STATEMENT OF REASONS - REFERENCE TO OPINIONS OBTAINED
( TREATY, ARTS . 15 AND 33 ).
Summary
( CF . SUMMARY OF JUDGMENT IN CASE 3/54, PARA . 1 ):
1 . FOR AN APPLICATION BY AN UNDERTAKING OR BY AN ASSOCIATION OF UNDERTAKINGS AGAINST A GENERAL DECISION OF THE HIGH AUTHORITY TO BE ADMISSIBLE IT IS ENOUGH FOR THE APPLICANT FORMALLY TO ALLEGE THAT THERE HAS BEEN A MISUSE OF POWERS AFFECTING IT . THE ALLEGATION MUST INDICATE THE REASONS FOR WHICH THE APPLICANT CONSIDERS THAT THERE HAS BEEN A MISUSE OF POWERS AFFECTING IT . IF THE APPLICANT IS AN ASSOCIATION OF UNDERTAKINGS, IT IS SUFFICIENT FOR IT TO CLAIM THAT THERE HAS BEEN A MISUSE OF POWERS AFFECTING ONE OR MORE UNDERTAKINGS WHICH ARE MEMBERS OF THE ASSOCIATION .
THE TREATY DOES NOT IMPOSE ANY FURTHER CONDITION FOR AN APPLICATION TO BE ADMISSIBLE SUCH AS, FOR EXAMPLE, PROOF THAT A MISUSE OF POWERS AFFECTING THE APPLICANT HAS ACTUALLY BEEN COMMITTED, SINCE THIS LATTER QUESTION GOES TO THE SUBSTANCE .
*/ 654J0003 /*.
2 . UNDER ARTICLE 15 OF THE TREATY, THE HIGH AUTHORITY IS BOUND TO STATE IN ITS DECISIONS THE REASONS FOR WHICH IT DECIDED TO PROMULGATE THE RULES IN QUESTION AND IS BOUND TO REFER TO THE FACT THAT THE OPINIONS REQUIRED BY THE TREATY HAVE BEEN OBTAINED . ON THE OTHER HAND, THE TREATY DOES NOT REQUIRE THAT IT SHOULD MENTION, STILL LESS THAT IT SHOULD TRY TO REFUTE, THE DIVERGENT OPINIONS EXPRESSED BY THE CONSULTATIVE BODIES OR BY SOME OF THEIR MEMBERS; FAILURE TO DO SO CANNOT BE REGARDED AS PROOF, OR EVEN THE MEREST EVIDENCE, IN SUPPORT OF THE SUBMISSION OF MISUSE OF POWERS .
Parties
IN CASE 4/54
ASSOCIAZIONE INDUSTRIE SIDERURGICHE ASSOCIATE ( I.S.A .) WHOSE REGISTERED OFFICE IS IN MILAN, REPRESENTED BY ITS PRESIDENT, EMILIO POZZI, ASSISTED BY PIETRO GASPARRI, PROFESSOR AT THE FACULTY OF LAW IN THE UNIVERSITY OF PERUGIA, OF THE ROME BAR, WITH AN ADDRESS FOR SERVICE IN LUXEMBOURG, CARE OF GUIDO RIETTI, 15, BOULEVARD ROOSEVELT, APPLICANT,
V
HIGH AUTHORITY OF THE EUROPEAN COAL AND STEEL COMMUNITY, REPRESENTED BY ITS LEGAL ADVISER, NICOLA CATALANO, ACTING AS AGENT, ASSISTED BY JEAN COUTARD, ADVOCATE AT THE CONSEIL D'ETAT AND THE COUR DE CASSATION, PARIS, WITH AN ADDRESS FOR SERVICE IN LUXEMBOURG AT ITS OFFICES, 2, PLACE DE METZ, DEFENDANT,
Subject of the case
APPLICATION FOR THE ANNULMENT OF DECISIONS NOS 1/54, 2/54 AND 3/54 OF THE HIGH AUTHORITY OF 7 JANUARY 1954,
Grounds
P . 97
THE COURT'S JUDGMENT IN THE PRESENT CASE HAS TAKEN THE FOLLOWING POINTS OF THE LAW INTO ACCOUNT :
1 . ADMISSIBILITY
( A ) THE COURT FINDS THAT BY VIRTUE OF ARTICLE 2 ( B ) OF ITS ARTICLES OF ASSOCIATION THE APPLICANT IS AN ASSOCIATION FULFILLING THE CONDITIONS REQUIRED BY THE SECOND PARAGRAPH OF ARTICLE 33 AND BY ARTICLE 48 OF THE TREATY .
( B ) THE CONTESTED DECISIONS ARE GENERAL DECISIONS . THE COURT REJECTS THE DEFENDANT'S ARGUMENT THAT THE ADMISSIBILITY OF PROCEEDINGS BROUGHT BY UNDERTAKINGS OR ASSOCIATIONS OF UNDERTAKINGS AGAINST GENERAL DECISIONS IS SUBJECT TO PROOF OF THE EXISTENCE OF A MISUSE OF POWERS AFFECTING THEM . UNDER THE PROVISIONS OF THE SECOND PARAGRAPH OF ARTICLE 33 OF THE TREATY, UNDERTAKINGS OR ASSOCIATIONS OF UNDERTAKINGS " MAY ... INSTITUTE PROCEEDINGS ... AGAINST GENERAL DECISIONS ... WHICH THEY CONSIDER TO INVOLVE A MISUSE OF POWERS AFFECTING THEM ". FROM THIS WORDING, WHICH IS PERFECTLY CLEAR, FOR AN APPLICATION TO BE ADMISSIBLE IT IS ENOUGH FOR THE APPLICANT FORMALLY TO ALLEGE THAT THERE HAS BEEN A MISUSE OF POWERS AFFECTING IT JUST AS IT IS SUFFICIENT AS REGARDS THE ADMISSIBILITY OF AN APPLICATION FROM A STATE, FOR IT TO ALLEGE THE EXISTENCE OF ONE OF THE FOUR GROUNDS FOR ANNULMENT SET OUT IN THE FIRST PARAGRAPH OF ARTICLE 33 OF THE TREATY . THE ALLEGATION MUST INDICATE THE REASONS FOR WHICH THE APPLICANT CONSIDERS THAT THERE HAS BEEN A MISUSE OF POWERS AFFECTING IT . THOSE CONDITIONS HAVE BEEN FULFILLED IN THIS CASE . IN THE CASE OF PROCEEDINGS INSTITUTED BY AN ASSOCIATION OF UNDERTAKINGS IT IS SUFFICIENT FOR IT TO CLAIM THAT THERE HAS BEEN A MISUSE OF POWERS AFFECTING ONE OR MORE UNDERTAKINGS WHICH ARE MEMBERS OF THE ASSOCIATION . IN THE PRESENT CASE THE APPLICANT CLAIMS, WITH SUPPORTING ARGUMENTS, THAT THERE HAS BEEN A MISUSE OF POWERS AFFECTING THE UNDERTAKINGS WHICH IT REPRESENTS IN TERMS OF ARTICLE 30 OF THE CONVENTION ON THE TRANSITIONAL PROVISIONS AS WELL AS OF ARTICLES 60 AND 64 OF THE TREATY, AND, AGAIN, AS A CONSEQUENCE OF LACK OF A SUFFICIENT STATEMENT OF THE REASONS ON WHICH THE DECISIONS IN QUESTION WERE BASED .
THE COURT DOES NOT CONSIDER THAT THE TREATY PROVIDES FOR OR IMPOSES ANY FURTHER CONDITION FOR AN APPLICATION TO BE ADMISSIBLE SUCH AS, FOR EXAMPLE, PROOF THAT A MISUSE OF POWERS AFFECTING THE APPLICANT HAS ACTUALLY BEEN COMMITTED . SUCH PROOF IS NECESSARY TO ESTABLISH THAT THE APPLICATION IS WELL-FOUNDED BUT THIS QUESTION GOES TO THE SUBSTANCE AND DOES NOT AFFECT ADMISSIBILITY .
( C ) THE COURT AGREES WITH THE ADVOCATE GENERAL'S VIEW THAT THE THREE DECISIONS IN DISPUTE MAY BE CONTESTED IN A SINGLE ACTION .
2 . SUBSTANCE
FOR THE FOREGOING REASONS THE COURT CONSIDERS THAT THE ACTION HAS LOST ITS PURPOSES AS REGARDS THE APPLICATION FOR ANNULMENT OF THE FIRST ARTICLE OF DECISION NO 2/54 OF THE HIGH AUTHORITY AND ALSO AS REGARDS THE APPLICATION FOR ANNULMENT OF DECISION NO 3/54 . AS FOR THE APPLICATION FOR ANNULMENT OF DECISION NO 1/54 AND OF ARTICLES 2 AND 3 OF DECISION NO 2/54, IT IS WITHOUT FOUNDATION .
IN THESE CIRCUMSTANCES THE COURT IS NOT CALLED UPON TO GIVE A DECISION ON THE DEFINITION OF MISUSE OF POWERS WITHIN THE MEANING OF THE SECOND PARAGRAPH OF ARTICLE 33 OF THE TREATY OR ON THE INTERPRETATION OF THE WORDS, " TO INVOLVE A MISUSE OF POWERS AFFECTING THEM ", EMPLOYED THEREIN .
1 . SINCE ARTICLE 1 OF DECISION NO 2/54 OF THE HIGH AUTHORITY WAS FOR ALL PURPOSES ANNULLED BY JUDGMENT OF 21 DECEMBER 1954 IN THE CASE OF THE FRENCH GOVERNMENT V THE HIGH AUTHORITY, THIS APPLICATION FOR ANNULMENT HAS ON THIS POINT NO LONGER ANY PURPOSE .
IN THESE CIRCUMSTANCES IT IS NOT NECESSARY TO CONSIDER WHETHER, ON THIS POINT, THE APPLICATION IS OR IS NOT WELL FOUNDED OR TO GIVE AN EXPRESS RULING THEREON IN THE JUDGMENT SINCE A DECISION WHICH HAS ALREADY BEEN ANNULLED OR WITHDRAWN IN THE MEANTIME CANNOT COMPROMISE THE RIGHTS OR INTERESTS OF THE APPLICANT . IN CONSEQUENCE, THE PRESENT JUDGMENT MUST BE CONFINED TO STATING THAT NO DECISION IS CALLED FOR ON THE APPLICATION FOR ANNULMENT OF ARTICLE 1 OF DECISION NO 2/54 OF THE HIGH AUTHORITY .
P . 99
2 . THE SAME CONCLUSION MUST BE REACHED AS REGARDS DECISION NO 3/54 SINCE THE HIGH AUTHORITY WITHDREW IT BY ITS DECISION NO 1/55 OF 4 JANUARY 1955 ( JOURNAL OFFICIEL OF 11 JANUARY 1955, P . 542 ). IT MUST IN CONSEQUENCE ALSO BE STATED THAT NO DECISION IS NECESSARY IN RESPECT OF DECISION NO 3/54 OF THE HIGH AUTHORITY .
3 . AS REGARDS DECISION NO 1/54 OF THE HIGH AUTHORITY, THE APPLICANT RELIED ON THE SAME GROUNDS AS THOSE INVOKED AGAINST THE HIGH AUTHORITY BY THE GOVERNMENT OF THE ITALIAN REPUBLIC IN CASE NO 2/54 . THE COURT REJECTED THOSE GROUNDS IN THE JUDGMENT WHICH IT DELIVERED IN THAT CASE WHEN IT HELD THAT THE PROVISIONS IN QUESTION INFRINGED NEITHER THE TREATY NOR THE CONVENTION ON THE TRANSITIONAL PROVISIONS AND DID NOT CONSTITUTE A MISUSE OF POWERS . NO NEW GROUND HAS BEEN ADDUCED CAPABLE OF LEADING THE COURT TO A DIFFERENT DECISION, WHATEVER INTERPRETATION MIGHT BE PLACED ON THE CONCEPT OF " A MISUSE OF POWERS AFFECTING THEM " WITHIN THE MEANING OF ARTICLE 33 OF THE TREATY .
WHILE DECISION NO 1/54 OF THE HIGH AUTHORITY DECLARED NOT TO BE DISCRIMINATORY VARIATIONS FROM THE PRICES CONTAINED IN THE PRICE-LIST OF AN UNDERTAKING IN THE CASE OF AN EXCEPTIONAL TRANSACTION OR WHEN SIMILAR VARIATIONS ARE APPLIED TO ALL COMPARABLE TRANSACTIONS, IT EXPRESSLY MAINTAINS THE OBLIGATION TO COMPLY WITH THE RULES CONCERNING THE PUBLICATION OF PRICE-LISTS; THIS PROVISION IN NO WAY COMPROMISES THE LEGAL POSITION OF THE ITALIAN STEEL INDUSTRY AND DOES NOT TEND TO LEGITIMIZE PREVIOUS INFRINGEMENTS .
4 . IN THE JUDGMENT DELIVERED ON 21 DECEMBER 1954 IN THE CASE OF THE ITALIAN GOVERNMENT V THE HIGH AUTHORITY IT WAS HELD THAT ARTICLES 2 AND 3 OF DECISION NO 2/54 OF THE HIGH AUTHORITY CONSTITUTE NEITHER AN INFRINGEMENT OF THE TREATY OR OF THE CONVENTION ON THE TRANSITIONAL PROVISIONS NOR A MISUSE OF POWERS .
WHILE THE PROVISION IN ARTICLE 3 OF DECISION NO 2/54, WHICH REDUCES TO ONE DAY THE PERIOD WITHIN WHICH NEW PRICE-LISTS MAY BECOME APPLICABLE, OBLIGES ITALIAN UNDERTAKINGS TO REACT MORE QUICKLY TO CHANGES IN THE PRICE-LISTS OF THEIR COMPETITORS, IT DOES NOT SERIOUSLY UNDERMINE THE SPECIAL PROTECTION PROVIDED FOR THEIR BENEFIT .
5 . IT IS CLEAR FROM THE FOREGOING CONSIDERATIONS THAT NONE OF THE CONTESTED PROVISIONS REFERRED TO IN 3 . AND 4 . ABOVE INFRINGES THE TREATY OR THE CONVENTION ON THE TRANSITIONAL PROVISIONS .
P . 100
THERE IS IN CONSEQUENCE NO NEED TO DEAL WITH THE QUESTION WHETHER AND UNDER WHAT CONDITIONS UNDERTAKINGS AND ASSOCIATIONS OF UNDERTAKINGS MAY CHALLENGE A GENERAL DECISION OF THE HIGH AUTHORITY ON THE GROUND THAT IT INFRINGES THE LAW .
6 . THE APPLICANT REGARDS AS A DEPARTURE FROM THE RULES OF SOUND ADMINISTRATION AND IN CONSEQUENCE AS EVIDENCE TENDING TO ESTABLISH A MISUSE OF POWERS THE FACT THAT, IN STATING THE REASONS ON WHICH THE CONTESTED DECISIONS WERE BASED, THE HIGH AUTHORITY FAILED TO COMMENT ON THE DIVERGENT OPINIONS EXPRESSED WITHIN THE CONSULTATIVE BODIES . THE COURT DOES NOT SHARE THIS VIEW . UNDER ARTICLE 15 OF THE TREATY, THE HIGH AUTHORITY IS BOUND TO " STATE THE REASONS " ON WHICH ITS DECISIONS ARE BASED AND TO " REFER TO " ANY OPINIONS WHICH WERE REQUIRED TO BE OBTAINED . IT FOLLOWS FROM THIS THAT IT MUST STATE THE REASONS FOR WHICH IT DECIDED TO PROMULGATE THE RULES IN QUESTION AND THAT IT IS BOUND TO REFER TO THE FACT THAT THE OPINIONS REQUIRED BY THE TREATY HAVE BEEN OBTAINED . ON THE OTHER HAND, THE TREATY DOES NOT REQUIRE THAT IT SHOULD MENTION, STILL LESS THAT IT SHOULD TRY TO REFUTE, THE DIVERGENT OPINIONS EXPRESSED BY THE CONSULTATIVE BODIES OR BY SOME OF THEIR MEMBERS . THE OMISSION COMPLAINED OF CANNOT, IN CONSEQUENCE, BE REGARDED AS PROOF OR EVEN THE MEREST EVIDENCE, IN SUPPORT OF THE SUBMISSION OF MISUSE OF POWERS .
7 . THE COURT DISMISSES THE CONCLUSIONS CLAIMING PRODUCTION OF ALL THE DOCUMENTS RELATING TO THE CASE; THOSE PRODUCED BY THE DEFENDANT SUFFICE IN THIS CASE TO EXPLAIN TO THE COURT THE OBJECTIVES BEING PURSUED BY THE HIGH AUTHORITY .
Decision on costs
THE DEFENDANT HAVING FAILED IN ITS PRINCIPAL CONTENTION THAT THE APPLICATION IS INADMISSIBLE ( IMPROPONIBILE ) THE COURT CONSIDERS IT FAIR THAT THE PARTIES SHOULD BEAR THEIR OWN COSTS AS PROVIDED UNDER ARTICLE 60 ( 2 ) OF THE RULES OF PROCEDURE .
Operative part
THE COURT
HEREBY :
DECLARES THAT THERE IS NO NEED FOR A DECISION ON THE APPLICATION FOR ANNULMENT OF ARTICLE 1 OF DECISION NO 2/54 OF THE HIGH AUTHORITY OR OF DECISION NO 3/54 OF THE HIGH AUTHORITY;
DISMISSES THE APPLICATION FOR ANNULMENT OF DECISION NO 1/54 OF THE HIGH AUTHORITY AND OF ARTICLES 2 AND 3 OF DECISION NO 2/54 OF THE HIGH AUTHORITY;
ORDERS EACH OF THE PARTIES TO BEAR ITS OWN COSTS . |
OPINION OF MR ADVOCATE GENERAL LAGRANGE
Summary
Submission of infringement of Article 60
Submission of misuse of powers
Submission of infringement of Article 30 (2) of the Convention
Conclusions
Mr President,
Members of the Court,
Like the Judge-Rapporteur, I regret not being able to address the Court in the language of the case. I have now to give my opinion in Case 2/54 brought by the Italian Government.
The application makes four formal submissions as follows:
1.
Infringement of Article 60 (1) in conjunction with Article 4 (b) of the Treaty: this submission contests in particular Decision No 1/54 on the definition of prohibited practices;
2.
Infringement of Article 60 (2) by Decision No 2/54 which makes the system of publishing more flexible;
3.
Misuse of powers in the exercise of the power granted to the High Authority by Article 60 (1) and (2) of the Treaty;
4.
Infringement of Article 30 (2) of the Convention on the Transitional Provisions, which, as the Court knows, relates to Italy.
The first three submissions repeat in a slightly different way the same arguments as those put forward in the application by the French Government. My opinion on this matter will therefore necessarily be brief and I apologize to the Italian Government. It goes without saying that this does not imply that I have studied the questions raised only on the occasion of the first action. I have read with the same attention all the statements submitted in the two cases as well as in the last two brought by the associations, and I have listened with the same interest to all oral observations. If so far I have given my opinion only on the single action brought by the French Government it is simply because it was brought first and so clearly presented. No-one I trust will regard this procedure as a prohibited ‘discrimination’ or lack of courtesy.
Submission of infringement of Article 60
The first submission, as I have said, is against Decision No 1/54 which it accuses of having authorized certain practices contrary to the rule of non-discrimination and thereby infringed Article 60 (1) which prohibits them absolutely. According to the applicant respect for the rule of non-discrimination is associated inseparably with the principle of publication and any straining of this latter necessarily involves an infringement of the former.
This, as the Court will see, is precisely the argument of the first action, namely that although the two concepts are ‘separable in theory’, they cannot be separated in practice. I can therefore only refer to my previous observations and say that in my opinion on the contrary Decision No 1/54 is it-self perfectly regular whatever opinion may be held on the regularity of the system of publishing.
The second submission is based on the same notion, namely that publication is a means imposed by the Treaty to ensure observance of the rule of non-discrimination and that, in so far as certain transactions may be concluded at prices other than the published prices, discrimination becomes possible. Therefore the system which allows such results is necessarily contrary to Article 60 (2) in conjunction with Article 60 (1).
I can again only refer to my previous observations. Let me observe only that the application of the Italian Government takes express exception as regards Decision No 2/54 to the provisions of the third paragraph of the new Article la which, as the Court knows, concern a transaction having ‘exceptional characteristics by virtue of which it is excluded from the categories set out in the price-lists’ whereas, as has been seen, the French Government expressly declined to criticize the decision on this issue. The Italian Government, on the other hand, dealt with this question at length at the hearing. It seems to me, however, that this is one of the most justified exceptions since rigidity in such a case would be likely to be an obstacle in particular to the natural price formation and moreover checking discrimination in a case of this nature can only lie in a special check taking into account all the circumstances of the case. In any event it is not possible to bring the sometimes considerable differences relating to these special transactions into the calculation of the average variation of 2,5 %. This calculation must reflect the market price, that is to say, essentially the price of transactions which are comparable inter se. It may be considered that the definition given of these special transactions is too vague; it may be thought that it would have been preferable to require these special transactions to be declared: these are only criticisms relating to expediency.
There is a special issue which the application of the Italian Government urges: that is the argument based on the fact that the system of publication which allows an apparently moderate average variation of 2,5 % more or less may involve in fact in an isolated transaction a very much larger variation extending to 15 or 20 % or theoretically even more while the average is nevertheless maintained, which may involve considerable discrimination.
In answer the High Authority goes into long explanations accompanied by learned tables.
I confess that the argument does not move me. Not only would the practice of such variations make the maintenance of the average within the authorized limits very quickly impossible but it would by itself give rise to very strong presumptions of discrimination. Since the undertakings are required to state the minimum and maximum variation charged during the period which has elapsed and not only the average difference, such differences would not fail to be noticed by the officers of the High Authority and the greater the variation the more difficult it would be for the undertaking to show, as it must under Decision No 1/54, that this variation is applied to all comparable transactions. Or the undertaking has in fact refrained from declaring this transaction regarding it as exceptional and non-comparable and in that event, as I have just said, there can only be a special check; as I have also said, the High Authority would no doubt be well advised to require a special declaration before this check in order to facilitate the operation. With regard to the infringement of Article 60 (1) in conjunction with Article 4 (b) the Italian Government, especially at the hearing, has expounded a point of view which I think deserves to be carefully considered. It is said that it should not be left to undertakings to decide whether a transaction is non-comparable. It is for the High Authority itself to define objectively the criteria of comparability making use of the power which it has been given for this purpose by Article 60 (1); Decision No 1 /54 in fact leaves it to the seller to judge whether a given transaction is or is not comparable with another. The simple and automatic criterion, so to speak, which was that of Decision No 30/53 (namely: any infringement of the price-list is a prohibited practice) has thus been abandoned without re-placing it by any other.
To this I say first of all that it is quite true that with Decision No 1/54 the High Authority has not really used the legislative power which it had under the last subparagraph of Article 60 (1) to attempt to define what is to be understood by ‘comparable transactions’, but it was not obliged to do so: the article states: ‘The High Authority may define the practices covered by this prohibition’, that is to say ‘discriminatory practices involving, within the Common Market, the application by a seller of dissimilar conditions to comparable transactions’. The High Authority has defined the discriminatory practices but it has not specified the criteria of comparability of transactions: perhaps because there are none. In any event it was not obliged to do so.
Further, and this does not appear to me to have been sufficiently stressed, the High Authority has maintained in its second decision the principle adopted by the first, namely that every variation means discrimination. All it has done is to permit this to be rebutted. Let us bear in mind the wording of the article: ‘It shall be a prohibited practice within the meaning of Article 60 (1) for a seller to apply prices or conditions departing from those shown in his price-list unless he can show …’ and so forth.
Finally, and this has not been specially stressed either, Article 2 of Decision No 2/54 supplements Article 2 (f) of Decision No 31/53 by adding new provisions relating to the content of price-lists: quantity discounts, loyalty discounts and discounts for seconds. These details are extremely useful to enable it more easily to be determined whether a transaction is comparable to another. Here again, rather than seeking legal or economic criteria more or less open to challenge, the High Authority has endeavoured to have regard to experience: in particular the so-called discount for seconds is one of the easiest and most widely practised means of according some advantage over the normal price or vice versa while maintaining the appearance of equality of treatment between buyers. It is more useful to discover that in fact seemingly comparable transactions were not actually so rather than to give a more or less scientific definition of comparability.
Submission of misuse of powers
As regards the submission of misuse of powers the application of the Italian Government to some extent takes up again, albeit in a different guise, the argument already developed and intended in fact to show that the decisions infringe the Treaty. I have already given my observations on the misuse of powers in respect of action against restrictive agreements on the occasion of the action by the French Government.
Other aspects of misuse of powers have been stressed at the hearing and in particular the following three about which I must say something:
1.
First of all the High Authority has sought to avoid impossing penalties which on account of the patent and widespread infringement of its earlier decisions would no doubt have had to be imposed against all the undertakings in the Community.
I shall not spend long on this allegation. Perhaps the High Authority ought to have intervened immediately. Perhaps on the contrary it was wise to hold back: the Court does not have to judge this. The fact is that it did not do so and that after some months, as the High Authority admitted very openly to the Court, the attempt failed in so far as the steel market was concerned. Thereupon it sought a more satisfactory system: the objective which it pursued was to achieve a better application of the Treaty and not to avoid imposing penalties.
2.
It is also alleged that there has been a misuse of powers in the fact the new decisions are concerned with taking action against discrimination whereas the powers which the High Authority has under Article 60 have been given it to prevent discrimination occurring rather than to take action when it does occur. This objection applies above all to Decision No 3/54 on information.
I confess openly that I have not understood this any more than I did in the case by the French Government. The demand for information under Article 47 in so far as it appears necessary to enable effective checking appears to me quite normal in the present case and I cannot see in it any infringement of the Treaty or misuse of powers.
3.
Finally it has been alleged that the “defect in the decision-making process” of the High Authority appears in the way it has consulted the Consultative Committee in not having refuted in the recitals to its decisions the opinions which became apparent within the Committee and which differed from the final decision taken.
I have considered the documents produced by the High Authority on the consultation with the Consultative Committee. It appears to me in the light of these documents and the account of the long discussions which took place before the Committee or before its sub-committee that the real and, may I say, crucial objective pursued by the High Authority was, as I said on the occasion of the action by the French Government, to achieve some flexibility in the rules on publication compatible both with regard to non-discrimination and the necessity to ensure that the market freely determined prices which, in short, and as I have also said, came precisely within the scope of Article 60.
In my opinion there is no misuse of powers in this.
Perhaps on the other hand there may be here a defect of form.
This would, however, be a new submission which has not been made in time. The provisions of Article 22 of the Protocol on the Statute of the Court of Justice are formal in this respect: the application, which is strictly required to be lodged within a month in accordance with Article 33 of the Treaty, must contain at least a brief statement of the grounds on which the application is based. Moreover, I am of the opinion that it is not a question of public policy such as lack of competence, which could be raised at any time and even by the Court of its own motion.
In addition, apart from the fact that the submission appears inadmissible, it also appears to be unfounded.
The defect of form may be regarded from a double point of view: 1. At least partial lack of consultation with the Consultative Committee; 2. Absence or at least inadequacy of the statement of reasons on which the contested decisions are based.
With regard to the first point, namely lack of or insufficient consultation, it is generally necessary to compare the request for an opinion by which the matter was brought before the Committee with the decisions ultimately taken.
The matter was brought before the Consultative Committee by a letter from the High Authority dated 20 November 1953, which we were fortunate in seeing at the very last stages of this case. The following are the relevant factors:
1.
“Under Article 60 (1) of the Treaty: Consultation on a possible amendment to Decision No 30/53 of 2 May 1953 on practices prohibited by Article 60 (1) of the Treaty in the common market for coal and steel (published in the Journal Officiel, No 6, p. 109).”
2.
“Under Article 60 (2)(a) of the Treaty: Consultation on a possible amendment to Decision No 31/53 of 2 May 1953 on the publication of price-lists and conditions of sale applied by undertakings in the steel industry (published in the Journal Officiel, No 6, p. 111).”
“Under Article 60 (2)(a) of the Treaty: in the sphere of special steels, consultation on a possible amendment to Decisions Nos 31 and 32/53 of 2 and 20 May 1953 on the conditions of sale applied by undertakings in the steel industry (published in the Journal Officiel, No 6, p. 111, and No 7, p. 130).”
I think that if there were only this letter the consultation no doubt could not be regarded as sufficient for, as drafted, it does not provide sufficiently precise details about the subject-matter of the amendments proposed by the High Authority.
But there are then more documents. First:
1.
A note dated 28 November mentioning general considerations on the problem and accompanied by a draft decision;
2.
Above all a note dated 30 November, much more detailed, in which the High Authority sets out the whole system which was finally adopted in the contested decisions. In particular there is to be found there, expressly mentioned, the concept of the average variation by product (page 2 at the end).
The Consultative Committee requested an extension of the time-limit which had been given to it and by letter dated 3 December the High Authority set 14 December as the new time-limit. It even arranged for an adjournment of the date which had been appointed for the consultation with the Council of Ministers. The opinion was forwarded to the High Authority on 14 December and as you know the decisions were signed on 7 January.
It therefore cannot be doubted in my opinion that the consultation was complete. Let us not forget the special character of the Consultative Committee which is not a Conseil d'Etat with the task of giving opinions on texts but a technical institution required to clarify problems for the High Authority. What is necessary is that it should be informed of all the aspects of the problem. This was the case.
The second aspect of the alleged defect of form, namely the lack or inadequacy of the statement of reasons, is no more valid than the first. Article 15 of the Treaty states that “decisions, recommendations and opinions of the High Authority shall state the reasons on which they are based and shall refer to any opinions which were required to be obtained.” As the Court was reminded by defence counsel this reference in decisions consists in the obligation to mention at the beginning of the decision the fact that the opinion has been obtained. This may be done in the phrase: “Having regard to the opinion of the Consultative Committee”. The High Authority prefers to say: “After consulting the Consultative Committee” which comes to the same thing. Further, decisions must state the reasons on which they are based; it goes without saying that the reasons are to be judged in relation to the decision itself and not in relation to the opinions which may have preceded it. In other words. the High Authority must state the reasons for its own decision as it stands and is in no way bound to refute contrary or different opinions which may have become apparent the opinions previously obtained.
The procedure therefore seems to me to have been completely regular. I may even add, if I am allowed, that I have rarely had the occasion in my own national experience to see cases of such full consultation and collaboration carried so far between the representatives of the administration and the members of the body consulted.
I think there I have said sufficient about the submission or the submissions of misuse of powers to which the applicant has sought to attach, as it were, this submission of defect of form which I have just considered.
Submission of infringement of Article 30 (2) of the Convention
There remains the submission of infringement of Article 30 (2) of the Convention. The wording is as follows:
“The prices charged by undertakings for sales of steel on the Italian market, when reduced to their equivalents at the point chosen for their price-lists, may not be lower than the prices shown in the lists in question for comparable transactions, save where authorized by the High Authority in agreement with the Italian Government, without prejudice to the last subparagraph of Article 60 (2) (b).”
The applicant's argument, based on this article, is obviously very forceful since Article 30 (2) states expressly that the parity prices charged by undertakings for sales on the Italian market may not be lower than the prices shown in the lists in question, which would prohibit the application of any variation from the price shown in the price-list, at least in the sense of a reduction.
I think, however, that if the Court agrees with my views on the interpretation of Article 60 it can only reject this submission of infringement of Article 30 of the Convention.
The latter, and this is not open to question, has only one objective which is quite clear: not to apply the system of alignment established by Article 60 (2) (b) of the Treaty to sales made on the Italian market during the transitional period (except in the event of a special authorization which can only be given by the High Authority in agreement with the Italian Government). It is clear that it would mean completely falsifying the scope of this article to interpret it as exempting the Italian market from the application of the other rules laid down by the Treaty and in particular the rules on competition established by Article 60 (1) and (2) (a). Let us not forget the provisions of Article 1 (5) of the Convention: “Upon the entry into force of the Treaty … the provisions thereof shall apply subject to the derogations allowed by this Convention and without prejudice to the supplementary provisions contained in this Convention for the ends set out above. Save where this Convention expressly provides otherwise, these derogations and supplementary provisions shall cease to apply … at the end of the transitional period.” All the provisions of the Convention thus by their very nature constitute exceptions and are to be interpreted strictly.
All that may be said in my opinion is that the provision of Article 30, in view of the words used, constitutes an argument in favour of interpreting the expression price-list' strictly and of not recognizing any prices other than those listed in the price-lists published. This would be an additional argument in support of the submission of infringement of Article 60 (2) (a) on which the contested decisions are based and an argument which could have been used by the French Government or by any other non-Italian applicant.
There are only two possibilities and here I ask for the Court's indulgence in having re-course to logic which I have belittled in other circumstances, but here logic appears to be called for: either it is impossible in interpreting Article 30 to understand the expression ‘prices shown in the lists’ otherwise than as meaning the prices listed in a properly published price-list — and this impossibility is just as absolute in its application to Article 60 (2) as a whole and in that case the argument of the High Authority must be rejected as a whole and the contested decisions completely annulled; or else the flexible argument which I have advocated must be accepted and then in interpreting Article 30 the same effort must be made as in the interpretation of Article 60 (2) (b) — an effort which is no greater in one case than in the other. But to accept the flexible argument, which would allow prices to vary within certain limits in relation to the published prices, and to accept this argument only for the whole of the Community with the exception of the Italian market would mean giving the Italian market during the transitional period additional protection which the Convention has not provided for. This would mean recognizing that the Italian market is not in a state to support the competition resulting from prices freely determined by the market even having regard to the complete geographical protection which the Convention intended to give it by Article 30 (2) and the customs protection also partially retained in force by Article 30 (1). I would ask the Court what would then remain of the very concept of the Common Market for Italy?
My opinion has not changed: I think the effort can and must be made. This means that the reference made by Article 30 to ‘the prices shown in the lists in question’ (the price-lists of the undertaking which wishes to sell on the Italian market) for comparable transactions' must be understood as referring to the prices (and also the conditions of sale although this is not mentioned) actually applied in accordance with the price-list established on the basis of the undertaking's own parity and having regard to any authorized variations which the application of this price-list and conditions of sale may perhaps entail. This is exactly the same interpretation which I have proposed for Article 60 (2) (b) which also related to the methods of quotation and which the Convention had as objective to make inapplicable in principle to the Italian market during the transitional period. That is all I wish to say and, no matter what the Court's judgment is, in finishing I welcome once again the fact that the Italian Government considered that it ought also to bring an action against the decisions implementing Article 60 for it is this action which has allowed attention to be directed to an important argument based on the Convention which otherwise might have escaped the Court's consideration.
My opinion is that the application should be dismissed. |
Order of the Court of 24 November 1955. - Association des Utilisateurs de Charbon du Grand-Duché de Luxembourg v High Authority of the European Coal and Steel Community. - Joined cases 8-54 and 10-54.
European Court reports
French edition Page 00193
Dutch edition Page 00203
German edition Page 00191
Italian edition Page 00189
English special edition Page 00241
Parties
Grounds
Operative part
Parties
++++
HAVING REGARD TO THE APPLICATION SUBMITTED BY THE LUXEMBOURG GOVERNMENT ON 30 SEPTEMBER 1955 TO INTERVENE IN THE ACTIONS PENDING BEFORE THE COURT OF JUSTICE OF THE EUROPEAN COMMUNITIES
BETWEEN
ASSOCIATION DES UTILISATEURS DE CHARBON DU GRAND-DUCHE DE LUXEMBOURG
AND
HIGH AUTHORITY OF THE EUROPEAN COAL AND STEEL COMMUNITY
( JOINED CASES 8 AND 10/54 );
Grounds
HAVING REGARD TO THE WRITTEN OBSERVATIONS AND CONCLUSIONS SUBMITTED ON 24 OCTOBER 1955 BY THE HIGH AUTHORITY, THE DEFENDANT IN THE MAIN ACTION;
HAVING REGARD TO THE WRITTEN OBSERVATIONS AND CONCLUSIONS SUBMITTED ON THE SAME DATE BY THE ASSOCIATION DES UTILISATEURS DE CHARBON DU GRAND-DUCHE DE LUXEMBOURG, THE APPLICANT IN THE MAIN ACTION;
UPON HEARING THE PARTIES;
UPON HEARING THE OPINION OF THE ADVOCATE GENERAL;
WHEREAS THE FIRST PARAGRAPH OF ARTICLE 34 OF THE STATUTE OF THE COURT OF JUSTICE OF THE ECSC PROVIDES THAT NATURAL OR LEGAL PERSONS ESTABLISHING AN INTEREST IN THE RESULT OF ANY CASE SUBMITTED TO THE COURT MAY INTERVENE IN THAT CASE;
WHEREAS THE SECOND PARAGRAPH OF THE ABOVE-MENTIONED ARTICLE SPECIFIES THAT SUBMISSIONS MADE IN AN APPLICATION TO INTERVENE SHALL BE LIMITED TO SUPPORTING OR REQUESTING THE REJECTION OF THE SUBMISSIONS OF ONE OF THE PARTIES;
WHEREAS THE INTEREST OF THE LUXEMBOURG GOVERNMENT IN INTERVENING IN THE CASE IS INCONTESTABLE AND HAS NOT BEEN CONTESTED;
WHEREAS THE SUBMISSIONS MADE IN THE APPLICATION TO INTERVENE REQUEST ONLY THAT THE APPLICATION LODGED BY THE ASSOCIATION DES UTILISATEURS DE CHARBON DU GRAND-DUCHE DE LUXEMBOURG SHOULD BE DISMISSED AND THEREFORE COMPLY WITH THE PROVISIONS OF THE SECOND PARAGRAPH OF ARTICLE 34 OF THE STATUTE OF THE COURT OF JUSTICE OF THE ECSC;
Operative part
THE COURT
COMPOSED OF : M . PILOTTI, PRESIDENT, L . DELVAUX AND A . VAN KLEFFENS ( PRESIDENTS OF CHAMBERS ), P . J . S . SERRARENS, O . RIESE, J . RUEFF, CH . L . HAMMES, JUDGES,
ADVOCATE GENERAL : K . ROEMER
REGISTRAR : A . VAN HOUTTE
HEREBY ORDERS :
THE LUXEMBOURG GOVERNMENT IS GIVEN LEAVE TO INTERVENE .
THE EXAMINATION OF THE SUBMISSIONS AND ARGUMENTS PUT FORWARD IN THE APPLICATION TO INTERVENE AND OF THEIR ADMISSIBILITY IS RESERVED FOR THE FINAL JUDGMENT .
THE COSTS ARE RESERVED . |
Judgment of the Court of 23 April 1956. - Groupement des Industries Sidérurgiques Luxembourgeoises v High Authority of the European Coal and Steel Community. - Joined cases 7-54 and 9-54.
European Court reports
French edition Page 00053
Dutch edition Page 00057
German edition Page 00055
Italian edition Page 00053
English special edition Page 00175
Danish special edition Page 00021
Greek special edition Page 00025
Portuguese special edition Page 00033
Summary
Parties
Subject of the case
Grounds
Decision on costs
Operative part
Keywords
++++
1 . PROCEDURE - ABSTENTION BY THE HIGH AUTHORITY - CAPACITY TO LODGE AN ADMINISTRATIVE COMPLAINT
( ECSC TREATY, ARTS . 35, 80 ).
2 . PROCEDURE - ABSTENTION OF THE HIGH AUTHORITY - IMPLIED DECISION OF REFUSAL - APPLICATION TO THE COURT OF JUSTICE - NATURE OF THE APPLICATION
2A . PROCEDURE - APPLICATION FOR ANNULMENT - APPLICANT UNDERTAKINGS AND ASSOCIATIONS - SPECIAL FIELD OF THE DISPUTE AND SPECIALITY OF THE PRODUCERS - NO LINK
( ECSC TREATY, ARTS . 33, 35 ).
3 . PROCEDURE - ABSTENTION OF THE HIGH AUTHORITY - IMPLIED DECISION OF REFUSAL - APPLICATION FOR ANNULMENT - INDIVIDUAL CHARACTER OF THE CONTESTED DECISION - UNDERTAKINGS AND ASSOCIATIONS - ADMISSIBILITY
( ECSC TREATY, ART . 33 ).
4 . PROCEDURE - ABSTENTION OF THE HIGH AUTHORITY - IMPLIED DECISION OF REFUSAL - APPLICATION FOR ANNULMENT - REPEAL OF THE MEASURE AGAINST WHICH THE HIGH AUTHORITY HAS ABSTAINED FROM TAKING ACTION - INTEREST OF THE APPLICANT IN PROCEEDING WITH ITS ACTION
5 . PROCEDURE - ABSTENTION OF THE HIGH AUTHORITY - IMPLIED DECISION OF REFUSAL - APPLICATION FOR ANNULMENT - SUBSEQUENT EXPRESS DECISION - APPLICATION MAINTAINED
( ECSC TREATY, ART . 35 ).
6 . COMMON MARKET - INCOMPATIBLE PRACTICES - PROHIBITION OF PRINCIPLE
( ECSC TREATY, ART . 4 ).
7 . COMMON MARKET - INCOMPATIBLE PRACTICES - SPECIAL CHARGES - CRITERIA FOR THE SPECIAL NATURE THEREOF
( ECSC TREATY, ART . 4 ( C )).
8 . COMMON MARKET - INCOMPATIBLE PRACTICES - DISCRIMINATION
( ECSC TREATY, ART . 4 ( B )).
9 . PRICES - MAXIMUM PRICES - GENERAL CHARGES - COMPATIBILITY
( ECSC TREATY, ART . 61 ).
Summary
1 . THE EXPRESSION " AS THE CASE MAY BE " MUST BE CONSIDERED AS GIVING THE POWER TO RAISE A MATTER WITH THE HIGH AUTHORITY TO THE PERSONS SPECIFIED IN ARTICLE 35 WHO HAVE AN INTEREST IN THE DECISION WHICH THE HIGH AUTHORITY IS REQUIRED TO TAKE OR IN THE RECOMMENDATION WHICH IT IS REQUIRED TO MAKE .
THE ASSOCIATIONS REFERRED TO IN ARTICLE 35 MAY ONLY BE ASSOCIATIONS OF UNDERTAKINGS WITHIN THE MEANING GIVEN TO THE WORD " UNDERTAKING " BY ARTICLE 80 OF THE TREATY FOR THE PURPOSES OF THE WHOLE TREATY .
2 . PROCEEDINGS INSTITUTED UNDER THE THIRD PARAGRAPH OF ARTICLE 35 OF THE TREATY ARE PROCEEDINGS FOR ANNULMENT AS PROVIDED IN ARTICLE 33 AND ARE THEREFORE SUBJECT TO THE CONDITIONS THEREOF .
2A . THERE IS NO PROVISION OF THE TREATY WHICH REQUIRES THAT THE SPECIALITY OF THE PRODUCERS MUST BE LINKED TO THE SPECIAL FIELD OF THE DISPUTE .
3 . IT IS SUFFICIENT, IN ORDER THAT AN UNDERTAKING OR ASSOCIATION MAY BE ABLE TO INSTITUTE PROCEEDINGS AGAINST A DECISION OR RECOMMENDATION, FOR THAT DECISION OR RECOMMENDATION TO BE NOT GENERAL BUT INDIVIDUAL IN CHARACTER AND IT IS NOT NECESSARY FOR THAT DECISION TO MANIFEST THIS CHARACTER IN RELATION TO THE APPLICANT PROVIDED THAT IT CONCERNS THE APPLICANT .
A DECISION REFERRING SOLELY TO ONE PARTICULAR ACTIVITY OF A PUBLIC BODY REFERRED TO BY NAME IS A DECISION WHICH IS INDIVIDUAL IN CHARACTER .
4 . THE REPEAL OF A MEASURE AGAINST WHICH THE HIGH AUTHORITY HAS ABSTAINED FROM TAKING A DECISION OR MAKING A RECOMMENDATION DOES NOT RENDER THE APPLICATION DIRECTED AGAINST THAT ABSTENTION PURPOSELESS BUT LEAVES OPEN THE QUESTION AT ISSUE WITH REGARD TO THE PAST . THE APPLICANT MUST THEREFORE BE REGARDED AS HAVING AN INTEREST IN PROCEEDING WITH ITS ACTION .
5 . THE FACT THAT THE HIGH AUTHORITY HAS STATED THE REASONS UPON WHICH ITS REFUSAL TO TAKE A DECISION IS BASED AFTER THE EXPIRY OF THE PERIOD OF TWO MONTHS LAID DOWN IN ARTICLE 35 DOES NOT HAVE THE EFFECT OF MAKING THE APPLICATION PROVIDED FOR IN THAT ARTICLE PURPOSELESS .
6 . THE PROVISIONS OF ARTICLE 4 CONSTITUTE PROVISIONS ESTABLISHING THE COMMON MARKET OF THE COMMUNITY; THEY ARE THEREFORE DIRECTLY APPLICABLE WHEN THEY ARE NOT RESTATED IN ANY PART OF THE TREATY .
WHERE, HOWEVER, THE PROVISIONS OF ARTICLE 4 ARE REFERRED TO, RESTATED OR ELABORATED ON IN OTHER PARTS OF THE TREATY, THE TEXTS RELATING TO ONE AND THE SAME PROVISION MUST BE CONSIDERED AS A WHOLE AND APPLIED SIMULTANEOUSLY .
7 . IN THE FIRST ANALYSIS, WITHOUT ITS BEING POSSIBLE TO CONSIDER THIS CRITERION BY ITSELF AS DECISIVE, A CHARGE MAY BE PRESUMED TO BE SPECIAL AND THEREFORE ABOLISHED AND PROHIBITED BY THE TREATY IF, BY AFFECTING UNEQUALLY THE PRODUCTION COSTS OF COMPARABLY PLACED PRODUCERS, IT INTRODUCES INTO THE DISTRIBUTION OF PRODUCTION DISTORTIONS WHICH DO NOT RESULT FROM CHANGES IN PRODUCTIVITY .
8 . THE PERSISTENCE OF DIFFERENCES IN CONDITIONS OF COMPETITION IS A NECESSARY AND INEVITABLE CONSEQUENCE OF THE PARTIAL NATURE OF THE INTEGRATION BROUGHT ABOUT BY THE TREATY AND DOES NOT INVOLVE DISCRIMINATION PROHIBITED BY THE TREATY .
9 . THE FIXING OF MAXIMUM PRICES DOES NOT PREVENT PRODUCTS FROM BEING SUBJECT TO DUTIES, TAXES OR ANY OTHER GENERAL CHARGE AT THE TIME OF CONSUMPTION OR AT ANY STAGE WHATEVER OF DISTRIBUTION .
Parties
IN JOINED CASES 7 AND 9/54
GROUPEMENT DES INDUSTRIES SIDERURGIQUES LUXEMBOURGEOISES, REPRESENTED BY ITS BOARD OF DIRECTORS, ASSISTED BY ALEX BONN, ADVOCATE IN LUXEMBOURG, WITH AN ADDRESS FOR SERVICE IN LUXEMBOURG AT ITS REGISTERED OFFICE, 31 BOULEVARD JOSEPH II, APPLICANT,
V
HIGH AUTHORITY OF THE EUROPEAN COAL AND STEEL COMMUNITY, REPRESENTED BY ITS LEGAL ADVISER, NICOLA CATALANO, ACTING AS AGENT, ASSISTED BY ERNEST ARENDT, ADVOCATE IN LUXEMBOURG, WITH AN ADDRESS FOR SERVICE IN LUXEMBOURG AT ITS OFFICES, 2 PLACE DE METZ, DEFENDANT,
GOVERNMENT OF THE GRAND DUCHY OF LUXEMBOURG, REPRESENTED BY PIERRE PESCATORE, LEGAL ADVISER TO THE MINISTRY FOR FOREIGN AFFAIRS, WITH AN ADDRESS FOR SERVICE IN LUXEMBOURG AT THE MINISTRY FOR FOREIGN AFFAIRS, 5 RUE NOTRE-DAME, INTERVENER,
Subject of the case
APPLICATION FOR, FIRST, THE ANNULMENT OF THE IMPLIED DECISION OF REFUSAL RESULTING, UNDER ARTICLE 35 OF THE TREATY, FROM THE SILENCE OF THE HIGH AUTHORITY WITH REGARD TO THE LETTER OF 14 JULY 1954 IN WHICH THE APPLICANT REQUESTED IT TO TAKE A DECISION OR MAKE A RECOMMENDATION CONCERNING THE ACTIVITIES OF THE OFFICE COMMERCIAL DU RAVITAILLEMENT OF THE GRAND DUCHY OF LUXEMBOURG ( COMMERCIAL SUPPLY OFFICE ) AND CONCERNING THE CAISSE DE COMPENSATION ( EQUALIZATION FUND ) ATTACHED TO THAT OFFICE BY THE MINISTERIAL ORDER OF 8 MARCH 1954 ( CASE 7/54 );
SECONDLY, FOR THE ANNULMENT " IN SO FAR AS IS NECESSARY " OF THE DECISION OF REFUSAL OF THE HIGH AUTHORITY, FOLLOWING FROM ITS LETTER OF 27 NOVEMBER 1954, OF THE REQUEST CONTAINED IN THE LETTER OF 14 JULY 1954 ( CASE 9/54 ),
Grounds
P . 188
THE COURT
FOR THE PURPOSE OF GIVING JUDGMENT IN THE PRESENT CASES, PUTS FORWARD THE FOLLOWING CONSIDERATIONS IN LAW :
1 . CONSEQUENCES OF THE JOINDER OF APPLICATIONS 7/54 AND 9/54
THE ORDER OF 25 MARCH 1955 JOINING APPLICATIONS 7/54 AND 9/54 DOES NOT PRECLUDE THEIR SEPARATE EXAMINATION IN THE PRESENT JUDGMENT .
P . 189
PART ONE
APPLICATION 7/54
A - THE ADMISSIBILITY OF APPLICATION 7/54
I - THE REGULARITY OF THE PROCEDURE
THE APPLICANT HAS ANNEXED TO ITS APPLICATION A COPY OF THE LETTER WHICH IT HAD SENT TO THE HIGH AUTHORITY ON 14 JULY 1954 AND THIS DATE HAS NOT BEEN CONTESTED BY THE DEFENDANT . THAT DOCUMENT MAY CONSEQUENTLY BE CONSIDERED AS " DOCUMENTARY EVIDENCE OF THE DATE ON WHICH THE REQUEST WAS LODGED " REQUIRED UNDER THE SECOND PARAGRAPH OF ARTICLE 22 OF THE STATUTE OF THE COURT OF JUSTICE OF THE ECSC . THE APPLICATION, WHICH WAS LODGED LESS THAN A MONTH AFTER THE EXPIRY OF THE PERIOD OF TWO MONTHS LAID DOWN IN ARTICLE 35 OF THE TREATY, WAS SUBMITTED WITHIN THE PRESCRIBED PERIOD .
IN ACCORDANCE WITH THE OPINION OF THE ADVOCATE GENERAL THE TWO HEADS OF CLAIM CONTAINED IN THE APPLICATION ARE OBVIOUSLY RELATED .
THE FACT THAT THEY HAVE BEEN PUT FORWARD IN THE SAME APPLICATION CANNOT CALL IN QUESTION THE ADMISSIBILITY OF THAT APPLICATION .
MOREOVER, THE DEFENDANT DOES NOT RAISE " THE FORMAL INADMISSIBILITY " OF THE APPLICATION ORIGINATING THE PROCEEDINGS AND LEAVES THE DECISION ON THIS POINT TO THE DISCRETION OF THE COURT .
II - THE CAPACITY OF THE APPLICANT TO RAISE THE MATTER WITH THE HIGH AUTHORITY IN APPLICATION OF ARTICLE 35 OF THE TREATY
APPLICATION 7/54 REQUESTS THE ANNULMENT OF THE IMPLIED DECISION OF REFUSAL WHICH IS TO BE INFERRED UNDER ARTICLE 35 OF THE TREATY FROM THE SILENCE OF THE HIGH AUTHORITY FOR TWO MONTHS WITH REGARD TO THE REQUEST MADE BY THE APPLICANT IN ITS LETTER OF 14 JULY 1954 .
THE EXPRESSION " AS THE CASE MAY BE " IN ARTICLE 35 MUST BE CONSIDERED AS GIVING THE POWER TO RAISE A MATTER WITH THE HIGH AUTHORITY TO THOSE PERSONS SPECIFIED IN THAT ARTICLE WHO HAVE AN INTEREST IN THE DECISION WHICH THE HIGH AUTHORITY IS REQUIRED TO TAKE OR IN THE RECOMMENDATION WHICH IT IS REQUIRED TO MAKE .
THE DECISIONS REQUESTED FROM THE HIGH AUTHORITY BY THE APPLIANT'S LETTER OF 14 JULY 1954 WERE CERTAINLY OF INTEREST TO THE APPLICANT .
ARTICLE 35 MOREOVER ENABLES " UNDERTAKINGS OR ASSOCIATIONS " TO RAISE A MATTER WITH THE HIGH AUTHORITY .
THE ASSOCIATIONS REFERRED TO IN THAT EXPRESSION MAY ONLY BE ASSOCIATIONS OF UNDERTAKINGS WITHIN THE MEANING GIVEN TO THE WORD " UNDERTAKING " BY ARTICLE 80 OF THE TREATY FOR THE PURPOSES OF THE WHOLE TREATY .
IF IN FACT THIS WERE NOT SO, AN ASSOCIATION COULD FIND ITSELF IN A POSITION TO INSTITUTE PROCEEDINGS WHERE NONE OF THE INDIVIDUAL MEMBERS OF WHICH IT IS FORMED COULD HAVE DONE SO ON ITS OWN .
P . 190
IN THE ABSENCE OF ANY INDICATION TO THE CONTRARY, THE TREATY DOES NOT ESTABLISH SUCH DIFFERENCES IN THE TREATMENT OF AN ASSOCIATION AND THE MEMBERS OF WHICH IT IS FORMED .
THE GROUPEMENT DES INDUSTRIES SIDERURGIQUES LUXEMBOURGEOISES, THE APPLICANT, IS CERTAINLY AN ASSOCIATION OF UNDERTAKINGS, BECAUSE IT GROUPS IN A CO-OPERATIVE SOCIETY UNDERTAKINGS CARRYING OUT PRODUCTION ACTIVITIES IN THE STEEL SECTOR WITHIN ONE OF THE TERRITORIES REFERRED TO IN THE FIRST PARAGRAPH OF ARTICLE 79 .
THE FIRST PARAGRAPH OF ARTICLE 35 GIVES THE STATES, THE COUNCIL OR UNDERTAKINGS AND ASSOCIATIONS THE POWER TO RAISE A MATTER WITH THE HIGH AUTHORITY ONLY WHEREVER THE HIGH AUTHORITY IS REQUIRED BY THE TREATY OR BY RULES LAID DOWN FOR THE IMPLEMENTATION THEREOF TO TAKE A DECISION OR MAKE A RECOMMENDATION AND FAILS TO FULFIL THIS OBLIGATION .
THE APPLICANT ALLEGES THAT ARTICLES 86 AND 88 OF THE TREATY PLACED THE HIGH AUTHORITY UNDER A DUTY TO TAKE A DECISION OR MAKE A RECOMMENDATION CONCERNING THE CAISSE DE COMPENSATION ATTACHED TO THE OFFICE COMMERCIAL DU RAVITAILLEMENT .
UNDER ARTICLE 86 THE MEMBER STATES UNDERTAKE TO REFRAIN FROM ANY MEASURES INCOMPATIBLE WITH THE COMMON MARKET REFERRED TO IN ARTICLES 1 AND 4 .
ARTICLE 88 REQUIRES THE HIGH AUTHORITY, IF IT " CONSIDERS THAT A STATE HAS FAILED TO FULFIL AN OBLIGATION UNDER THIS TREATY ", TO RECORD THIS FAILURE IN A REASONED DECISION .
FOR THAT REASON, THE HIGH AUTHORITY WAS CERTAINLY REQUIRED BY THE TREATY TO TAKE A DECISION IF IT CONSIDERED THE CAISSE DE COMPENSATION TO BE INCOMPATIBLE WITH THE COMMON MARKET REFERRED TO IN ARTICLES 1 AND 4 .
THEREFORE, IT WAS CERTAINLY FOR THE APPLICANT TO RAISE THE MATTER WITH THE HIGH AUTHORITY IN APPLICATION OF THE FIRST PARAGRAPH OF ARTICLE 35 .
III - THE CAPACITY OF THE APPLICANT TO INSTITUTE PROCEEDINGS BEFORE THE COURT OF JUSTICE AGAINST THE IMPLIED DECISION OF REFUSAL WHICH IS TO BE INFERRED FROM THE SILENCE OF THE HIGH AUTHORITY
THE APPLICANT HAS CLAIMED THAT
" THE COURT SHOULD :
ANNUL THE IMPLIED DECISION OF REFUSAL OF THE HIGH AUTHORITY TAKEN AFTER THE GROUPEMENT DES INDUSTRIES SIDERURGIQUES LUXEMBOURGEOISES HAD SENT ITS LETTER OF 14 JULY 1954 "
AND THE APPLICANT CONSIDERS THAT " THIS IMPLIED DECISION OF REFUSAL IS VITIATED BY NULLITY FOR INFRINGEMENT OF THE TREATY AND IN THE ALTERNATIVE FOR INFRINGEMENT OF ESSENTIAL PROCEDURAL REQUIREMENTS ".
P . 191
THE PROCEEDINGS INSTITUTED BY THE APPLICANT UNDER THE THIRD PARAGRAPH OF ARTICLE 35 OF THE TREATY ARE THEREFORE PROCEEDINGS FOR ANNULMENT ON THE GROUND OF INFRINGEMENT OF THE TREATY AND INFRINGEMENT OF ESSENTIAL PROCEDURAL REQUIREMENTS AS PROVIDED IN ARTICLE 33 OF THE TREATY AND ARE THEREFORE SUBJECT TO THE CONDITIONS THEREOF .
UNDER THE SECOND PARAGRAPH OF ARTICLE 33, UNDERTAKINGS OR THE ASSOCIATIONS REFERRED TO IN ARTICLE 48 MAY INSTITUTE LIKE PROCEEDINGS AND, WITHOUT ITS BEING NECESSARY TO SPECIFY THE SCOPE OF THIS REQUIREMENT IN CASES IN WHICH AN APPLICATION IS LODGED PURSUANT TO AN ARTICLE OF THE TREATY OTHER THAN ARTICLE 35, THE APPLICANT ASSOCIATION MAY BE CONSIDERED AS ONE OF THE ASSOCIATIONS REFERRED TO IN ARTICLE 48 OF THE TREATY .
HOWEVER, THE LUXEMBOURG GOVERNMENT IN ITS APPLICATION TO INTERVENE STATED THAT " THE APPLICANT, WHILST COMING WITHIN THE JURISDICTION OF THE COMMUNITY IN OTHER RESPECTS, DOES NOT HAVE THE CAPACITY TO INSTITUTE PROCEEDINGS BEFORE THE COURT OF JUSTICE IN VIEW OF THE SPECIAL NATURE OF THE DISPUTE ".
THE LUXEMBOURG GOVERNMENT SUPPORTS ITS CLAIM BY OBSERVING THAT THE DISPUTE BROUGHT BEFORE THE COURT RELATES EXCLUSIVELY TO COAL, THAT ONLY A COAL-PRODUCING UNDERTAKING OR AN ASSOCIATION OF SUCH UNDERTAKINGS HAS CAPACITY TO INSTITUTE SUCH PROCEEDINGS, BUT THAT ON THE OTHER HAND AN ASSOCIATION OF UNDERTAKINGS WHICH INSTITUTES PROCEEDINGS AND WHICH IN THIS INSTANCE, CAN ONLY INSTITUTE PROCEEDINGS IN ITS CAPACITY AS AN ORGANIZATION REPRESENTING CONSUMERS DOES NOT HAVE SUCH CAPACITY .
AS REGARDS THE ADMISSIBILITY OF THE SUBMISSIONS PUT FORWARD BY THE INTERVENER, THE DEFENDANT HAS LEFT THE DECISION ON THIS POINT TO THE DISCRETION OF THE COURT . ARTICLE 34 OF THE STATUTE OF THE COURT OF JUSTICE LIMITS THE SUBMISSIONS MADE IN AN APPLICATION TO INTERVENE TO SUPPORTING OR REQUESTING THE REJECTION OF THE SUBMISSIONS OF ONE OF THE PARTIES .
NEVERTHELESS THERE IS NO NEED TO INQUIRE WHETHER THE INTERVENER, IN VIEW OF THE PROVISIONS OF ARTICLE 34 OF THE STATUTE OF THE COURT OF JUSTICE, WAS JUSTIFIED IN CONTESTING THE ADMISSIBILITY OF THE APPLICATION, SINCE ITS ADMISSIBILITY MUST IN THIS INSTANCE BE EXAMINED OF THE COURT'S OWN MOTION .
IN THE OPINION OF THE ADVOCATE GENERAL, THERE IS NO PROVISION OF THE TREATY WHICH REQUIRES THAT THE SPECIALITY OF THE PRODUCERS MUST BE LINKED TO THE SPECIAL FIELD OF THE DISPUTE .
THE SILENCE OF THE TREATY ON THIS POINT CANNOT BE INTERPRETED TO THE DISADVANTAGE OF THE UNDERTAKINGS AND ASSOCIATIONS .
FOR THIS REASON THE APPLICANT'S RIGHT TO INSTITUTE PROCEEDINGS BEFORE THE COURT CANNOT IN THIS INSTANCE BE CONTESTED .
THE APPLICANT HAS NOT ALLEGED THAT THE IMPLIED DECISION OF REFUSAL WAS VITIATED BY MISUSE OF POWERS AFFECTING IT AND FOR THAT REASON IT COULD NOT INSTITUTE PROCEEDINGS AGAINST THAT DECISION UNLESS THAT DECISION WAS A DECISION CONCERNING IT WHICH WAS INDIVIDUAL IN CHARACTER .
THIS REQUIREMENT INVOLVES TWO DISTINCT CHARACTERISTICS WITH REGARD TO THE DECISION : IT MUST BE INDIVIDUAL IN CHARACTER AND MUST CONCERN THE APPLICANT .
P . 192
THE TREATY, BY REQUIRING THAT DECISIONS WHICH ARE CAPABLE OF BEING ANNULLED BY THE INSTITUTION OF PROCEEDINGS BY UNDERTAKINGS OR ASSOCIATIONS MUST BE INDIVIDUAL IN CHARACTER WHEN THEY DO NOT INVOLVE A MISUSE OF POWERS AFFECTING SUCH UNDERTAKINGS OR ASSOCIATIONS, DEBARS INDIVIDUALS, WHENEVER NO MISUSE OF POWERS AFFECTING THEM IS ALLEGED, FROM OBTAINING JUDGMENT ON GENERAL DECISIONS OR RECOMMENDATIONS .
IN THESE CIRCUMSTANCES, IT IS SUFFICIENT, IN ORDER THAT AN UNDERTAKING OR ASSOCIATION MAY BE ABLE TO INSTITUTE PROCEEDINGS AGAINST A DECISION OR RECOMMENDATION, FOR THAT DECISION OR RECOMMENDATION TO BE NOT GENERAL BUT INDIVIDUAL IN CHARACTER AND IT IS NOT NECESSARY FOR THE DECISION TO MANIFEST THIS CHARACTER IN RELATION TO THE APPLICANT .
THE IMPLIED DECISION OF REFUSAL WHICH IS TO BE INFERRED FROM THE SILENCE OF THE HIGH AUTHORITY CAN ONLY EXPRESS THE REFUSAL OF THE DECISION REQUESTED BY THE APPLICANT IN ITS LETTER OF 14 JULY 1954 .
THIS DECISION IS THUS DEEMED TO STATE THAT THERE IS NO NEED TO RECORD IN A REASONED DECISION THAT BY AUTHORIZING THE OFFICE COMMERCIAL DU RAVITAILLEMENT TO INCREASE THE PRICE OF SOLID FUELS FOR NON-DOMESTIC USE BY THE ORDER OF 8 MARCH 1954 THE GOVERNMENT OF THE GRAND DUCHY OF LUXEMBOURG HAS FAILED TO FULFIL AN OBLIGATIONS UNDER THE TREATY .
THIS DECISION REFERS SOLELY TO ONE PARTICULAR ACTIVITY OF A PUBLIC BODY REFERRED TO BY NAME, IN OTHER WORDS THE OFFICE COMMERCIAL DU RAVITAILLEMENT, AND IS A DECISION WHICH IS INDIVIDUAL IN CHARACTER .
MOREOVER, THE IMPLIED DECISION OF REFUSAL CONTESTED BY THE APPLICANT PERMITS THE CONTINUATION OF A SYSTEM WHICH IMPOSES ON THE UNDERTAKINGS WHICH FORM THE GROUPEMENT DES INDUSTRIES SIDERURGIQUES LUXEMBOURGEOISES AN ADDITIONAL CHARGE OF 8 FRANCS PER METRIC TON OF COAL CONSUMED BY THEM AND AS SUCH CONCERNS A GROUP FORMED IN ORDER " TO CARRY OUT ... ALL TRANSACTIONS DEEMED BY THE LAW TO BE BUSINESS TRANSACTIONS SO AS TO ENSURE THE SMOOTH RUNNING AND THE DEVELOPMENT OF THE LUXEMBOURG IRON AND STEEL INDUSTRY AND IN PARTICULAR THE INDUSTRY OF ITS MEMBERS ".
FOR THOSE REASONS THE IMPLIED DECISION OF REFUSAL, THE ANNULMENT OF WHICH IS REQUESTED, IS IN THE PRESENT CASE INDIVIDUAL IN CHARACTER AND CONCERNS THE APPLICANT WHICH THEREFORE HAD THE CAPACITY TO INSTITUTE PROCEEDINGS AGAINST IT .
IV - THE INTEREST OF THE APPLICANT IN PROCEEDING WITH ITS ACTION AT LAW AFTER THE REPEAL BY MINISTERIAL ORDER OF 12 SEPTEMBER 1955 WITH EFFECT FROM 2 APRIL 1955 OF THE MINISTERIAL ORDER OF 8 MARCH 1954 CONCERNING THE OPERATION OF THE CAISSE DE COMPENSATION ATTACHED TO THE OFFICE COMMERCIAL DU RAVITAILLEMENT
IN REPLY TO THE QUESTIONS PUT DURING THE PREPARATORY INQUIRY, THE APPLICANT CLAIMED THAT THE LUXEMBOURG GOVERNMENT MAINTAINED THE CAISSE DE COMPENSATION FOR THE PERIOD PRIOR TO 2 APRIL 1955 AND THAT THEREFORE THE QUESTION AT ISSUE, WHICH IS WHETHER THE CAISSE DE COMPENSATION IS COMPATIBLE WITH THE PROVISIONS OF THE TREATY, REMAINS UNANSWERED WITH REGARD TO THE PAST .
IN THE REJOINDER THE DEFENDANT LEFT THE DECISION ON THAT POINT TO THE DISCRETION OF THE COURT .
P . 193
THE COURT ACKNOWLEDGES THAT THE APPLICANT HAS AN INTEREST IN PROCEEDING WITH ITS ACTION .
FOR THE ABOVE-MENTIONED REASONS THE APPLICATION IS ADMISSIBLE .
B - THE SUBSTANCE OF APPLICATION 7/54
I - THE SUBJECT-MATTER OF THE APPLICATION
( A ) THE APPLICANT'S CLAIM THAT THE ACTIVITIES OF THE OFFICE COMMERCIAL DU RAVITAILLEMENT SHOULD BE BROUGHT TO AN END
THE HIGH AUTHORITY TOOK A DECISION ON 7 JANUARY 1955, IN OTHER WORDS AFTER THE APPLICATIONS HAD BEEN LODGED, THAT THE ORDER OF THE MINISTER FOR ECONOMIC AFFAIRS OF THE LUXEMBOURG GOVERNMENT OF 8 MARCH 1954 CONFIRMING THE ACTIVITIES OF THE OFFICE COMMERCIAL DU RAVITAILLEMENT WITH REGARD TO THE IMPORTATION OF SOLID FUELS CONSTITUTES A MEASURE WHICH IS INCOMPATIBLE WITH THE PROVISIONS OF THE TREATY .
IN THE OPINION OF BOTH THE APPLICANT AND THE DEFENDANT THIS DECISION MUST BE CONSIDERED AS THE POSITIVE OUTCOME OF THE HEAD OF CLAIM IN THE APPLICATION CONCERNING THE OFFICE COMMERCIAL DU RAVITAILLEMENT .
THEREFORE, THE APPLICATION HAS BECOME PURPOSELESS IN RELATION TO THAT HEAD OF CLAIM .
( B ) CONSEQUENCES OF THE LETTER OF THE HIGH AUTHORITY OF 27 NOVEMBER 1954 STATING, AFTER THE EXPIRY OF THE PERIOD OF TWO MONTHS, THE REASONS UPON WHICH ITS REFUSAL TO TAKE THE DECISION REQUESTED BY THE APPLICANT WITH REGARD TO THE CAISSE DE COMPENSATION IS BASED .
IN ITS DEFENCE, THE HIGH AUTHORITY STATES THAT THE LETTER OF 27 NOVEMBER 1954 TRANSFORMED ITS SILENCE INTO AN EXPRESS REFUSAL WHICH STATED IN DETAIL THE REASONS UPON WHICH IT WAS BASED .
IT CLAIMS THAT, IN THESE CIRCUMSTANCES, THE ACTION BROUGHT ON THE BASIS OF ARTICLE 35 HAS NO LEGAL FOUNDATION AND THE APPLICATION HAS BECOME PURPOSELESS .
THE LETTER SETTING OUT THE REASONS OF THE HIGH AUTHORITY WAS RECEIVED AFTER THE EXPIRY OF THE PERIOD OF TWO MONTHS LAID DOWN IN THE THIRD PARAGRAPH OF ARTICLE 35 .
AT THE END OF THAT PERIOD THE IMPLIED DECISION OF REFUSAL REFERRED TO IN THAT PARAGRAPH WAS INFERRED TO EXIST AND THE APPLICANT FINALLY ACQUIRED THE RIGHT TO INSTITUTE PROCEEDINGS .
MOREOVER, THE SUBJECT-MATTER OF THE PROCEEDINGS IS NOT THE SILENCE OF THE HIGH AUTHORITY BUT ITS REFUSAL TO TAKE A DECISION WITHIN THE MEANING OF ARTICLE 14 OF THE TREATY WHICH, ACCORDING TO THE APPLICANT, IT WAS UNDER A DUTY TO TAKE .
P . 194
THE LETTER INDICATING THE REASONS FOR THE REFUSAL OF THE HIGH AUTHORITY DOES NOT AFFECT THE EXISTENCE OF THAT REFUSAL WHICH WAS FINALLY ESTABLISHED AT THE END OF THE PERIOD OF TWO MONTHS LAID DOWN IN THE THIRD PARAGRAPH OF ARTICLE 35 OF THE TREATY .
THE IMPLIED DECISION OF REFUSAL WHICH IS TO BE INFERRED AT THE END OF THAT PERIOD FROM THE SILENCE OF THE HIGH AUTHORITY DOES NOT SUBSTANTIALLY CHANGE THE SITUATION RESULTING THEREFROM BUT ONLY GIVES IT POSITIVE EXPRESSION SO THAT THE PROCEEDINGS LAID DOWN IN THE THIRD PARAGRAPH OF ARTICLE 35 MAY BE INSTITUTED AGAINST IT .
THE LETTER OF 27 NOVEMBER 1954 STATING THE REASONS UPON WHICH THE DECISION WAS BASED HAS NOT ALTERED THAT SITUATION ANY FURTHER .
IN THESE CIRCUMSTANCES, IN THE OPINION OF THE ADVOCATE GENERAL, THAT LETTER HAS NOT DEPRIVED THE APPLICATION OF ITS SUBJECT-MATTER OR PREVENTED THE APPLICANT FROM PROCEEDING WITH ITS ACTION BASED ON ARTICLE 35 OF THE TREATY .
II - THE COMPATIBILITY OF THE CAISSE DE COMPENSATION WITH THE PROVISIONS OF THE TREATY
THE APPLICANT CONTESTS THE IMPLIED DECISION OF REFUSAL OF THE HIGH AUTHORITY CONCERNING THE CAISSE DE COMPENSATION ON THE GROUND OF INFRINGEMENT OF THE TREATY AND IN PARTICULAR OF ARTICLES 4 ( B ) AND 4 ( C ) THEREOF AND, IN THE ALTERNATIVE, ON THE GROUND OF INFRINGEMENT OF ESSENTIAL PROCEDURAL REQUIREMENTS INASMUCH AS IT IS NOT BASED ON ANY EXPRESS REASON .
IT IS NECESSARY TO EXAMINE THE TWO SUBMISSIONS SEPARATELY .
C - SUBMISSION CONCERNING INFRINGEMENT OF THE TREATY
I - IS ARTICLE 4 DIRECTLY APPLICABLE OR ONLY " AS PROVIDED IN THIS TREATY "?
ARTICLE 4 DECLARES THAT THE PRACTICES LISTED IN PARAGRAPHS ( A ), ( B ), ( C ) AND ( D ) THEREOF ARE " INCOMPATIBLE WITH THE COMMON MARKET ... AND ACCORDINGLY ... ABOLISHED AND PROHIBITED ... AS PROVIDED IN THIS TREATY ".
CERTAIN OF THOSE PRACTICES ARE REFERRED TO IN OTHER PROVISIONS OF THE TREATY AND, IN PARTICULAR, ANY ACTION BY A MEMBER STATE WHICH IS LIABLE TO HAVE APPRECIABLE REPERCUSSIONS ON CONDITIONS OF COMPETITION IN THE COAL OR THE STEEL INDUSTRY IN ARTICLE 67 OF THE TREATY, SPECIAL CHARGES IN ARTICLE 67 ( 3 ) AND IN ARTICLE 11 AND THE THIRD PARAGRAPH OF ARTICLE 25 OF THE CONVENTION ON THE TRANSITIONAL PROVISIONS .
UNDER ARTICLE 84 OF THE TREATY, THE WORDS " THIS TREATY " MEAN THE PROVISIONS OF THE TREATY AND ITS ANNEXES, OF THE PROTOCOLS ANNEXED THERETO AND OF THE CONVENTION ON THE TRANSITIONAL PROVISIONS .
FOR THAT REASON, THE PROVISIONS CONTAINED IN ALL THOSE INSTRUMENTS ARE EQUALLY BINDING AND THERE IS NO QUESTION OF CONTRASTING THEM WITH ONE ANOTHER BUT ONLY OF CONSIDERING THEM IN CONJUNCTION WITH ONE ANOTHER SO AS TO APPLY THEM APPROPRIATELY .
P . 195
THE COURT HAS ALREADY DECIDED IN ITS JUDGMENT IN CASE 1/54, UNDER II ( A ), THAT " ARTICLES 2, 3 AND 4 OF THE TREATY ... CONSTITUTE FUNDAMENTAL PROVISIONS ESTABLISHING THE COMMON MARKET AND THE COMMON OBJECTIVES OF THE COMMUNITY ... IN AUTHORIZING THE HIGH AUTHORITY TO DEFINE THE PROHIBITED PRACTICES, THE TREATY OBLIGES IT TO TAKE INTO ACCOUNT ALL THE AIMS LAID DOWN IN ARTICLES 2, 3 AND 4 ". FOR THE SAME REASONS, THE PROVISIONS OF ARTICLE 4 ARE SUFFICIENT OF THEMSELVES AND ARE DIRECTLY APPLICABLE WHEN THEY ARE NOT RESTATED IN ANY PART OF THE TREATY . WHERE, HOWEVER, THE PROVISIONS OF ARTICLE 4 ARE REFERRED TO, RESTATED OR ELABORATED ON IN OTHER PARTS OF THE TREATY, THE TEXTS RELATING TO ONE AND THE SAME PROVISION MUST BE CONSIDERED AS A WHOLE AND APPLIED SIMULTANEOUSLY .
II - IS THE LEVY IMPOSED BY THE CAISSE DE COMPENSATION A SPECIAL CHARGE PROHIBITED BY ARTICLE 4 ( C ) OF THE TREATY?
ARTICLE 4 ( C ) PROHIBITS SPECIAL CHARGES IMPOSED BY STATES, IN ANY FORM WHATSOEVER . IT IS NECESSARY TO SEEK THE CRITERIA FOR RECOGNIZING A SPECIAL CHARGE, WHICH IS ABOLISHED AND PROHIBITED BY ARTICLE 4 ( C ) IN THE CIRCUMSTANCES REFERRED TO, IN PARTICULAR, IN ARTICLE 67 ( 3 ).
THE TREATY DOES NOT SPECIFY THE CHARACTERISTICS WHICH ESTABLISH THE SPECIAL NATURE OF A CHARGE BUT ARTICLE 67 ( 3 ) THEREOF GIVES AN EXAMPLE OF A CHARGE DESCRIBED AS SPECIAL BECAUSE IT IS IMPOSED ON THE COAL OR STEEL UNDERTAKINGS WITHIN THE JURISDICTION OF A STATE IN COMPARISON WITH THE OTHER INDUSTRIES IN THE SAME COUNTRY . THE SPECIAL NATURE OF THAT CHARGE IS EVIDENTLY BASED ON THE FACT THAT IT ONLY AFFECTS A PROPORTION OF THE INDUSTRIES WHICH, BECAUSE THEY ARE SUBJECT TO THE JURISDICTION OF THE SAME STATE, ARE COMPARABLY PLACED IN RELATION TO THAT STATE .
HOWEVER, THE FACT THAT THEY ARE COMPARABLY PLACED ONLY SUPPLIES A RELATIVE AND TRANSITORY CRITERION BECAUSE IT DEPENDS ON THE SCOPE OF ITS FIELD OF APPLICATION . A CHARGE WHICH IS GENERAL IN RELATION TO ALL THE UNDERTAKINGS OF A STATE MAY CEASE TO BE SO AND BECOME SPECIAL IF ALL THE UNDERTAKINGS OF THE COMMUNITY ARE CONSIDERED .
IN THOSE CIRCUMSTANCES IT IS NECESSARY, WHERE DOUBTS EXIST, TO REINFORCE THE CRITERION OF COMPARABILITY BY COMPARING THE RESULT TO WHICH IT LEADS WITH THAT INTENDED BY THE TREATY .
UNDER ARTICLE 2 OF THE TREATY THE OBJECTIVE OF THE COMMUNITY IS IN PARTICULAR PROGRESSIVELY TO BRING ABOUT CONDITIONS WHICH WILL OF THEMSELVES ENSURE THE MOST RATIONAL DISTRIBUTION OF PRODUCTION AT THE HIGHEST POSSIBLE LEVEL OF PRODUCTIVITY, WHILE SAFEGUARDING CONTINUITY OF EMPLOYMENT AND TAKING CARE NOT TO PROVOKE FUNDAMENTAL AND PERSISTENT DISTURBANCES IN THE ECONOMIES OF MEMBER STATES . ARTICLE 67 MAKES THIS REQUIREMENT MORE PRECISE BY AUTHORIZING THE HIGH AUTHORITY TO COMPENSATE FOR THE HARMFUL EFFECTS OF AN ACTION TAKEN BY MEMBER STATES WHEN SUCH ACTION IS LIABLE, BY SUBSTANTIALLY INCREASING DIFFERENCES IN PRODUCTION COSTS OTHERWISE THAN THROUGH CHANGES IN PRODUCTIVITY, TO PROVOKE A SERIOUS DISEQUILIBRIUM . IT FOLLOWS FROM THIS, BY REASONING TO THE CONVERSE, THAT THE TREATY AUTHORIZES ACTION TAKEN BY MEMBER STATES WHEN IT DOES NOT SUBSTANTIALLY INCREASE DIFFERENCES IN PRODUCTION COSTS OR INCREASES THEM THROUGH CHANGES IN PRODUCTIVITY .
P . 196
IN THE LIGHT OF THAT PROVISION, THE MOST RATIONAL DISTRIBUTION OF PRODUCTION IN ACCORDANCE WITH ARTICLE 2 IS THAT WHICH IS BASED IN PARTICULAR UPON THE COMPOSITION OF PRODUCTION COSTS RESULTING FROM OUTPUT, THAT IS, FROM THE PHYSICAL AND TECHNICAL CONDITIONS PARTICULAR TO THE VARIOUS PRODUCERS .
IN THE FIRST ANALYSIS, WITHOUT ITS BEING POSSIBLE TO CONSIDER THIS CRITERION BY ITSELF AS DECISIVE, A CHARGE MAY BE PRESUMED TO BE SPECIAL AND THEREFORE ABOLISHED AND PROHIBITED BY THE TREATY IF, BY AFFECTING UNEQUALLY THE PRODUCTION COSTS OF COMPARABLY PLACED PRODUCERS, IT INTRODUCES INTO THE DISTRIBUTION OF PRODUCTION DISTORTIONS WHICH DO NOT RESULT FROM CHANGES IN PRODUCTIVITY .
IT IS NECESSARY TO INQUIRE WHETHER, HAVING REGARD TO THE ABOVE-MENTIONED CRITERIA AND PRESUMPTIONS, THE LEVY IMPOSED BY THE CAISSE DE COMPENSATION IN APPLICATION OF THE MINISTERIAL ORDER OF 8 MARCH 1954 IS A SPECIAL CHARGE WITHIN THE MEANING OF THE TREATY .
UNDER ARTICLE 1 OF THE ABOVE-MENTIONED ORDER, THE OFFICE COMMERCIAL DU RAVITAILLEMENT IS AUTHORIZED TO INCREASE THE PRICES OF SOLID FUELS FOR NON-DOMESTIC USE WHEREVER THEY COME FROM, WHATEVER THE QUALITY AND WHOEVER THE CONSUMER . THE CHARGE IMPOSED ON SOLID FUELS FOR NON-DOMESTIC USE MIGHT BE SPECIAL IF IT AFFECTED ONLY A PART OF THE UNDERTAKINGS SUBJECT TO THE JURISDICTION OF THE GOVERNMENT OF THE GRAND DUCHY OF LUXEMBOURG AND IT WOULD THEN BE THE CHARGE WHICH THE PARTIES HAVE BOTH AGREED TO CALL THE CHARGE IMPOSED ON THE UNDERTAKINGS . IT IS POSSIBLE TO STATE THAT IT WOULD THEN INDEED AFFECT THE COMPOSITION OF PRODUCTION COSTS OTHERWISE THAN THROUGH CHANGES IN PRODUCTIVITY .
HOWEVER, THE INCREASE IMPOSED BY THE CAISSE DE COMPENSATION ON SOLID FUELS FOR NON-DOMESTIC USE REGARDLESS OF THE QUALITY OR THE CONSUMER AFFECTS ALL CONSUMERS OF SOLID FUELS FOR NON-DOMESTIC USE EQUALLY AND IS OBVIOUSLY NOT A SPECIAL CHARGE ACCORDING TO THIS CRITERION .
SINCE HARD COKE IS AFFECTED IN THE SAME WAY AS OTHER TYPES OF FUEL IT IS NOT THEREFORE SUBJECT TO A SPECIAL CHARGE IN SPITE OF THE SITUATION WHEREBY THE IRON AND STEEL UNDERTAKINGS ARE THE PRINCIPAL IF NOT THE ONLY CONSUMERS OF THAT PRODUCT .
THE CHARGE IMPOSED ON SOLID FUELS FOR NON-DOMESTIC USE IN THE GRAND DUCHY OF LUXEMBOURG MIGHT ALSO BE SPECIAL IF IT AFFECTED ONLY SOME OF THE SOLID FUELS FOR NON-DOMESTIC USE CONSUMED BY LUXEMBOURG INDUSTRY AND WOULD THEREFORE BE THE CHARGE WHICH THE PARTIES HAVE CALLED THE CHARGE IMPOSED ON PRODUCTS .
THE EFFECT OF SUCH A CHARGE WOULD CERTAINLY BE TO VARY THE COMPOSITION OF PRODUCTION COSTS RESULTING FROM OUTPUT FOR LUXEMBOURG CONSUMERS OF NON-DOMESTIC COAL AND THUS TO INTRODUCE DISTORTIONS IN THE DISTRIBUTION OF THEIR PURCHASES WITHIN THE COMMON MARKET .
HOWEVER, THE INCREASE IN PRICE IMPOSED BY THE CAISSE DE COMPENSATION IS LEVIED IN LUXEMBOURG ON ALL SOLID FUELS FOR NON-DOMESTIC USE REGARDLESS OF THEIR ORIGIN . AS SUCH IT AFFECTS EQUALLY ALL PRODUCERS OF THE COMMUNITY WHO SELL IN LUXEMBOURG COAL FOR NON-DOMESTIC USE, JUST AS IT WOULD AFFECT THE PRODUCERS OF THE GRAND DUCHY OF LUXEMBOURG IF COALMINES WERE TO BE DISCOVERED AND WORKED THERE .
P . 197
HAVING REGARD TO THIS CRITERION TOO THE CHARGE INTRODUCED BY THE MINISTERIAL ORDER OF 8 MARCH 1954 IS NOT A SPECIAL CHARGE .
IN THE PRESENT CASE IT DOES NOT SEEM THAT THE LEVY IMPOSED BY THE CAISSE DE COMPENSATION MIGHT SHOW ITSELF TO BE OF A SPECIAL NATURE IN RELATION TO OTHER CRITERIA . IN THESE CIRCUMSTANCES, IT IS NOT A SPECIAL CHARGE WHICH IS ABOLISHED AND PROHIBITED BY ARTICLE 4 ( C ) OF THE TREATY .
III - IS THE LEVY IMPOSED BY THE CAISSE DE COMPENSATION A MEASURE OR PRACTICE WHICH DISCRIMINATES AND WHICH IS ABOLISHED AND PROHIBITED BY ARTICLE 4 ( B ) OF THE TREATY?
THE TREATY ABOLISHES AND PROHIBITS MEASURES OR PRACTICES WHICH DISCRIMINATE BETWEEN PRODUCERS, BETWEEN PURCHASERS OR BETWEEN CONSUMERS .
THE CONCEPT OF DISCRIMINATION IS SPECIFIED IN ARTICLE 60 OF THE TREATY WHICH INDICATES THAT PRACTICES INVOLVING, WITHIN THE COMMON MARKET, THE APPLICATION OF DISSIMILAR CONDITIONS TO COMPARABLE TRANSACTIONS, ARE DISCRIMINATORY .
A CHARGE, EVEN IF IT IS NOT SPECIAL, MAY DIRECTLY OR INDIRECTLY INVOLVE EFFECTS WHICH DISCRIMINATE BETWEEN PRODUCERS, BETWEEN PURCHASERS OR BETWEEN CONSUMERS .
IT IS THEREFORE NECESSARY TO INQUIRE WHETHER THE LEVY IMPOSED BY THE CAISSE DE COMPENSATION MUST BE CONSIDERED AS A MEASURE OR PRACTICE WHICH DISCRIMINATES AND WHICH IS ABOLISHED AND PROHIBITED BY THE TREATY .
THE APPLICANT REGARDS THE LEVY IMPOSED BY THE CAISSE DE COMPENSATION AS A MEASURE WHICH DISCRIMINATES BETWEEN CONSUMERS OF HARD COKE AND INDUSTRIAL COAL WHO ARE ESTABLISHED IN LUXEMBOURG, ON THE ONE HAND, AND THOSE OF THE OTHER MEMBER STATES, ON THE OTHER .
IT IS TRUE THAT NORMALLY THE INCREASE IN PRICES OF SOLID FUELS FOR NON-DOMESTIC USE INTRODUCED BY THE MINISTERIAL ORDER OF 8 MARCH 1958 AFFECTS ONLY LUXEMBOURG CONSUMERS OF THAT FUEL AND NOT CONSUMERS OF THE OTHER MEMBER STATES .
IT THEREFORE CREATES A DIFFERENCE BETWEEN THE RESPECTIVE PRODUCTION COSTS OF THE TWO GROUPS OF CONSUMER .
THIS DIFFERENCE COULD ONLY BE REMOVED BY THE ABOLITION OF THAT INCREASE IN PRICES WITHIN THE GRAND DUCHY OF LUXEMBOURG OR THE INTRODUCTION OF AN ANALOGOUS INCREASE IN PRICE IN THE OTHER MEMBER STATES .
THE ABOLITION OF AND PROHIBITION ON SPECIAL CHARGES DOES NOT ADVERSELY AFFECT THE RIGHT OF THE MEMBER STATES TO IMPOSE GENERAL CHARGES OF THEIR NATIONALS .
IT IS IRRELEVANT WHETHER THE CHARGE IS IN THE FORM OF A DUTY OR TAX OR IN THE FORM OF AN EQUALIZATION LEVY HAVING THE SAME ECONOMIC RESULTS AND THE SAME FINANCIAL IMPACT .
SEVERAL PROVISIONS OF THE TREATY, IN PARTICULAR ARTICLE 62 THEREOF, AND ARTICLES 24 AND 25 OF THE CONVENTION ON THE TRANSITIONAL PROVISIONS PROVIDE FOR THE USE FOR CERTAIN PURPOSES OF NATIONAL EQUALIZATION SCHEMES OR ARRANGEMENTS OR OF EQUALIZATION LEVIES .
P . 198
ON THE OTHER HAND, IN THE OPINION OF THE ADVOCATE GENERAL, ALTHOUGH THE TREATY DOES NOT DEPRIVE THE GOVERNMENT OF THE GRAND DUCHY OF LUXEMBOURG OF THE POWER TO IMPOSE A GENERAL CHARGE ON COAL CONSUMERS SUBJECT TO ITS JURISDICTION, IT IS EVIDENTLY IMPOSSIBLE FOR IT TO HAVE THAT CHARGE EXTENDED TO THE CONSUMERS OF OTHER MEMBER STATES .
THE TREATY NOWHERE PROVIDES FOR THE EQUALIZATION OF THE CHARGES ESTABLISHED BY THE MEMBER STATES IN THE FIELDS WHICH COME WITHIN THEIR RESPECTIVE JURISDICTIONS . ARTICLE 26 OF THE TREATY IS CONFIRMATION THAT THE TREATY HAS NOT TAKEN AWAY FROM THE MEMBER STATES THE RESPONSIBILITY FOR THEIR GENERAL ECONOMIC POLICY SINCE IT REQUIRES THE COUNCIL " TO HARMONIZE THE ACTION OF THE HIGH AUTHORITY AND THAT OF THE GOVERNMENTS WHICH ARE RESPONSIBLE FOR THE GENERAL ECONOMIC POLICIES OF THEIR COUNTRIES ".
IT FOLLOWS FROM ARTICLE 67 THAT NOT ALL ACTION BY A MEMBER STATE WHICH IS LIABLE TO HAVE APPRECIABLE REPERCUSSIONS ON CONDITIONS OF COMPETITION IN THE COAL OR THE STEEL INDUSTRY COMING WITHIN THE JURISDICTION OF THE COMMUNITY IS NECESSARILY ABOLISHED AND PROHIBITED BY THE TREATY OR THEREFORE NECESSARILY CONSTITUTES A MEASURE OR PRACTICE WHICH DISCRIMINATES AND IS PROHIBITED BY ARTICLE 4 ( B ) OF THE TREATY, BECAUSE IT EMPOWERS THE HIGH AUTHORITY, BY THE GRANT OF AN AID, TO COMPENSATE FOR, IN OTHER WORDS, TO TOLERATE AND IN PRACTICE TO AUTHORIZE IN CERTAIN CIRCUMSTANCES, THE HARMFUL EFFECTS OF THIS INTERFERENCE WITH COMPETITION .
MOREOVER, ARTICLE 67 PROVIDES IN DETAIL FOR THE INTERVENTION OF THE HIGH AUTHORITY ONLY WITH REGARD TO ACTIONS TAKEN BY THE MEMBER STATES WHICH HAVE " APPRECIABLE " REPERCUSSIONS ON CONDITIONS OF COMPETITION IN THE COAL OR THE STEEL INDUSTRY OR ARE CAPABLE, BY " SUBSTANTIALLY " INCREASING THE DIFFERENCES IN PRODUCTION COSTS OTHERWISE THAN THROUGH CHANGES IN PRODUCTIVITY, OF PROVOKING A " SERIOUS DISEQUILIBRIUM ".
IT FOLLOWS FROM ALL THESE REASONS THAT THE TREATY HAS RECOGNIZED THAT THE ABOLITION AND PROHIBITION OF DISCRIMINATORY MEASURES AND PRACTICES LAID DOWN BY ARTICLE 4 ( B ) COULD NOT HAVE THE EFFECT OF CREATING ABSOLUTE EQUALITY IN THE CONDITIONS OF COMPETITION OF THE COAL AND STEEL INDUSTRIES COMING WITHIN THE COMMUNITY NOR OF ELIMINATING ALL INTERFERENCE WITH THE CONDITIONS OF COMPETITION RESULTING FROM ACTION TAKEN BY MEMBER STATES SUBSTANTIALLY INCREASING DIFFERENCES IN PRODUCTION COSTS OTHERWISE THAN THROUGH CHANGES IN PRODUCTIVITY .
THE PERSISTENCE OF DIFFERENCES IN CONDITIONS OF COMPETITION IS A NECESSARY AND INEVITABLE CONSEQUENCE OF THE PARTIAL NATURE OF THE INTEGRATION BROUGHT ABOUT BY THE TREATY AND DOES NOT INVOLVE DISCRIMINATION FORBIDDEN BY THE TREATY .
ARTICLE 67 CONFIRMS THIS INTERPRETATION SINCE IT GIVES THE HIGH AUTHORITY POWER TO COMPENSATE FOR AND THUS TO CANCEL OUT THE EFFECTS OF INTERFERENCE WITH COMPETITION WHICH THE PROVISIONS OF THE TREATY HAVE NOT ELIMINATED AND THUS TO PREVENT THAT INTERFERENCE WITH COMPETITION FROM JEOPARDIZING, BECAUSE IT CONTINUES AFTER THE ESTABLISHMENT OF THE COMMON MARKET, THE TASK WITH WHICH THE COMMUNITY WAS ENTRUSTED IN ARTICLE 2 OF THE TREATY " IN HARMONY WITH THE GENERAL ECONOMY OF THE MEMBER STATES ".
IN THE LIGHT OF THE ABOVE-MENTIONED PRINCIPLES IT IS NECESSARY TO INQUIRE WHETHER THE INCREASE IN THE PRICE OF SOLID FUELS FOR NON-DOMESTIC USE RESULTING FROM THE MINISTERIAL ORDER OF 8 MARCH 1954 CONSTITUTES A MEASURE OR PRACTICE WHICH DISCRIMINATES BETWEEN CONSUMERS AND IS ABOLISHED AND PROHIBITED BY ARTICLE 4 ( B ) OF THE TREATY .
P . 199
THE FORM OF THE CHARGE IMPOSED ON CONSUMERS OF SOLID FUELS FOR NON-DOMESTIC USE MAKES IT IMPOSSIBLE TO JUDGE WHETHER IT IS OR IS NOT A DISCRIMINATORY MEASURE OR PRACTICE PROHIBITED BY ARTICLE 4 ( B ) OF THE TREATY .
IT IS NOT IMPORTANT UNDER THESE CIRCUMSTANCES TO KNOW WHETHER IT CONSTITUTES A DUTY, A TAX OR AN INCREASE IN PRICE .
THUS THE TREATY DOES NOT PROHIBIT THE INCREASE IN PRICE RESULTING FROM THE MINISTERIAL ORDER OF 8 MARCH 1954 AND ITS EFFECTS ARE NECESSARILY LIMITED TO THE TERRITORY OF THE GRAND DUCHY OF LUXEMBOURG .
AT THE VERY MOST THE HIGH AUTHORITY COULD, IF IT HAD CONSIDERED THAT THE ACTION OF THE GOVERNMENT OF THE GRAND DUCHY OF LUXEMBOURG INVOLVED HARMFUL EFFECTS FOR THE COAL AND STEEL UNDERTAKINGS COMING WITHIN THE JURISDICTION OF THAT GOVERNMENT, HAVE AUTHORIZED IT TO GRANT AN APPROPRIATE AID .
THE HIGH AUTHORITY CONSIDERED THAT THE LEVY IMPOSED BY THE CAISSE DE COMPENSATION " IS NOT CAPABLE OF DISTORTING COMPETITION EITHER FOR THE SALE OF COAL OR FOR THE SALE OF STEEL PRODUCTS, BECAUSE IT HAS LITTLE EFFECT ON THE COST PRICE OF STEEL PRODUCED BY THE LUXEMBOURG IRON AND STEEL INDUSTRY ".
THE APPLICANT CONTESTS THIS STATEMENT AND CONSIDERS THAT THE PRICE OF HARD COKE ACCOUNTS FOR ABOUT 30 PER CENT OF THE COST PRICE OF PRODUCTS OF THE IRON AND STEEL INDUSTRY AND THAT THEREFORE THE INCREASE IN ITS PRICE DISTORTS, BY ITS VERY SERIOUS EFFECT ON THE COST PRICE OF THOSE PRODUCTS, THE CONDITIONS OF COMPETITION BETWEEN THE LUXEMBOURG PRODUCERS AND THOSE OF THE OTHER COUNTRIES OF THE COMMUNITY .
SINCE THE APPLICANT DOES NOT ALLEGE IN THESE PROCEEDINGS THAT THE HIGH AUTHORITY HAS BEEN GUILTY OF A MISUSE OF POWERS OR HAS MANIFESTLY FAILED TO OBSERVE THE PROVISIONS OF THE TREATY OR ANY RULE OF LAW RELATING TO ITS APPLICATION, THE COURT MUST THEREFORE MERELY INQUIRE WHETHER, IN LAW, THE INCREASE IN PRICE IMPOSED ON SOLID FUELS FOR NON-DOMESTIC USE BY THE MINISTERIAL ORDER OF 8 MARCH 1954 INFRINGES THE TREATY OR ANY RULE OF LAW RELATING TO ITS APPLICATION .
THE ABOVE-MENTIONED CONSIDERATIONS SHOW THAT BY IMPOSING ON SOLID FUELS FOR NON-DOMESTIC USE THE INCREASE IN PRICE RESULTING FROM THE MINISTERIAL ORDER OF 8 MARCH 1954, THE GOVERNMENT OF THE GRAND DUCHY OF LUXEMBOURG HAS ADOPTED A MEASURE COMING WITHIN GENERAL ECONOMIC POLICY FOR WHICH, UNDER ARTICLE 26 OF THE TREATY, IT IS STILL RESPONSIBLE AND THAT THAT MEASURE IS NOT A DISCRIMINATORY PRACTICE PROHIBITED AND ABOLISHED BY ARTICLE 4 ( B ) OF THE TREATY .
IV - SHOULD THE ABOLITION OF THE IMPORT MONOPOLY CONFERRED ON THE OFFICE COMMERCIAL DU RAVITAILLEMENT HAVE INVOLVED THE ABOLITION OF THE CAISSE DE COMPENSATION WHICH HAD BEEN ATTACHED TO IT?
THE MINISTERIAL ORDER OF 8 MARCH 1954 WHICH AUTHORIZED THE OFFICE COMMERCIAL DU RAVITAILLEMENT TO INCREASE THE PRICE OF SOLID FUELS FOR NON-DOMESTIC USE, STATES CLEARLY IN ITS PREAMBLE THAT THE CAISSE DE COMPENSATION IS ATTACHED TO THE OFFICE COMMERCIAL DU RAVITAILLEMENT .
P . 200
THE MINISTERIAL ORDER OF 8 MARCH 1954 CONFIRMING THE ACTIVITIES OF THE OFFICE COMMERCIAL DU RAVITAILLEMENT WITH REGARD TO THE IMPORTATION OF SOLID FUELS WAS REPEALED BY THE MINISTERIAL ORDER OF 30 SEPTEMBER 1955 .
THE APPLICANT CLAIMED IN ITS REPLY THAT THE ABOLITION OF THE IMPORT MONOPOLY OF THE OFFICE COMMERCIAL DU RAVITAILLEMENT SHOULD HAVE INVOLVED THE ABOLITION OF THE CAISSE DE COMPENSATION .
THE TWO PROBLEMS OF THE LEGALITY, WITH REGARD TO THE TREATY, OF THE CONTESTED EQUALIZATION SYSTEM, ON THE ONE HAND, AND OF THE MONOPOLY CONFERRED ON THE BODY TO WHICH THE MANAGEMENT OF THAT EQUALIZATION SYSTEM HAD BEEN ENTRUSTED, ON THE OTHER, ARE INDEPENDENT .
THEREFORE, THE DECISION OF THE HIGH AUTHORITY OF 7 JANUARY 1955 DECLARING THAT THE ORDER OF THE MINISTER FOR ECONOMIC AFFAIRS OF THE LUXEMBOURG GOVERNMENT ADOPTED ON 8 MARCH 1954 IN ORDER TO CONFIRM THE ACTIVITIES OF THE OFFICE COMMERCIAL DU RAVITAILLEMENT WAS INCOMPATIBLE WITH THE PROVISIONS OF THE TREATY CANNOT AFFECT THE COMPATIBILITY WITH THE PROVISIONS OF THE TREATY OF THE CAISSE DE COMPENSATION, THE ABOLITION OF WHICH THE HIGH AUTHORITY HAS REFUSED TO REQUEST .
V - DOES THE LEVY IMPOSED BY THE CAISSE DE COMPENSATION INFRINGE THE DECISIONS OF THE HIGH AUTHORITY FIXING, IN APPLICATION OF ARTICLE 63 ( 2 ) ( A ) OF THE TREATY, MAXIMUM PRICES FOR HARD COKE AND INDUSTRIAL COAL FROM CERTAIN COALFIELDS?
THE APPLICANT HAS ALLEGED THAT THE INCREASE IN PRICE IMPOSED BY THE CAISSE DE COMPENSATION IS CONTRARY TO DECISIONS NOS 15/54, 19/54 AND 20/54 OF THE HIGH AUTHORITY ON THE ESTABLISHMENT OF PRICE LISTS APPLICABLE TO COAL FROM CERTAIN COALFIELDS .
THE MAXIMUM PRICES ARE IMPOSED ON COAL-PRODUCING UNDERTAKINGS AND THE FIXING OF THE MAXIMUM PRICES DOES NOT PREVENT THE PRODUCTS FROM BEING SUBJECT TO DUTIES, TAXES OR ANY OTHER GENERAL CHARGE AT THE TIME OF CONSUMPTION OR AT ANY STAGE WHATEVER OF DISTRIBUTION .
IN THOSE CIRCUMSTANCES, THE LEVY IMPOSED BY THE CAISSE DE COMPENSATION DOES NOT INFRINGE THE DECISIONS OF THE HIGH AUTHORITY FIXING MAXIMUM PRICES .
VI - IS THE CAISSE DE COMPENSATION INCOMPATIBLE WITH THE FUNDAMENTAL PRINCIPLES OF THE COMMON MARKET?
THE APPLICANT REGARDS THE EXISTENCE AND THE OPERATION OF THE CAISSE DE COMPENSATION AS AN INFRINGEMENT OF THE FUNDAMENTAL PRINCIPLES OF THE COMMON MARKET .
IN SUPPORT OF ITS OPINION IT SEES THE EQUALIZATION LEVY AS A SYSTEM OF DOUBLE PRICES WHICH IS UNFAVOURABLE TO LUXEMBOURG CONSUMERS OF SOLID FUEL FOR NON-DOMESTIC USE IN COMPARISON WITH OTHER CONSUMERS OF THE EUROPEAN COAL AND STEEL COMMUNITY .
P . 201
IT STATES THAT THE FUNDAMENTAL PRINCIPLES OF THE COMMON MARKET MUST ENSURE THAT ALL CONSUMERS OF THE COMMON MARKET WHO BUY THE SAME PRODUCT OF THE COMMUNITY FROM THE SAME PRODUCER BUY IT AT THE SAME EX WORKS PRICE .
CONTRARY TO THE OPINION OF THE APPLICANT, THE INCREASE IN PRICE RESULTING FROM THE ORDER OF 8 MARCH 1954 DOES NOT AFFECT THE EX WORKS PRICE OF THE SOLID FUELS PURCHASED BY LUXEMBOURG CONSUMERS BUT ONLY THE PRICE AT WHICH THE SOLID FUELS ARE SOLD ON ARRIVAL TO CONSUMERS SUBJECT TO THE JURISDICTION OF THE GOVERNMENT OF THE GRAND DUCHY OF LUXEMBOURG .
IT IS UNIMPORTANT THAT THE LEVY IMPOSED BY THE CAISSE DE COMPENSATION TAKES THE FORM OF A PRICE INCREASE SINCE IT CONSTITUTES, BY ITS NATURE AND EFFECTS, A LEVY ON THE VALUE OF THE SOLID FUELS CONSUMED IN THE GRAND DUCHY OF LUXEMBOURG FOR NON-DOMESTIC PURPOSES .
ALTHOUGH IT CREATES A DOUBLE PRICE FOR SOLID FUELS CONSUMED WITHIN THE GRAND DUCHY, THIS IS ONLY BECAUSE THE PRICE CHARGED TO CONSUMERS OF NON-DOMESTIC COAL DIFFERS FROM THAT PAID BY CONSUMERS OF DOMESTIC COAL .
THIS DOUBLE PRICE, BY MAKING LUXEMBOURG CONSUMERS OF SOLID FUELS FOR NON-DOMESTIC USE BEAR THE FINANCING OF THE CAISSE DE COMPENSATION EXCLUSIVELY, DOES NOT CONSTITUTE, AS THE APPLICANT ALLEGES, A FURTHER INFRINGEMENT OF THE PRINCIPLES OF THE COMMON MARKET SINCE THE TWO GROUPS OF CONSUMERS ARE NOT COMPARABLY PLACED .
THE OBJECT OF THE PRICE INCREASE INTRODUCED BY THE MINISTERIAL ORDER OF 8 MARCH 1954 IS SPECIFIED IN THE RECITALS OF THE PREAMBLE THERETO .
ACCORDING TO THOSE RECITALS THE PURPOSE OF THE SYSTEM FOR THE EQUALIZATION OF THE PRICE OF FUEL FOR INDUSTRIAL USE AND THE PRICE OF FUEL FOR DOMESTIC USE IS ESSENTIALLY TO MAINTAIN THE OFFICIAL PRICES IN THE DOMESTIC SECTOR, PREVENT DEPRECIATION IN WORKERS' PURCHASING POWER AND MAINTAIN THE LEVEL OF WAGES AND SALARIES LINKED TO A SLIDING SCALE .
NONE OF THOSE OBJECTIVES SHOWS AN INTENTION TO DISTORT COMPETITION OR MAY BE CONSIDERED CONTRARY TO THE FUNDAMENTAL PRINCIPLES OF THE COMMON MARKET AS SET OUT IN PARTICULAR IN ARTICLE 2 OF THE TREATY .
THE REPLIES OF THE HIGH AUTHORITY TO THE WRITTEN QUESTIONS ADDRESSED TO IT DURING PREPARATORY INQUIRY SHOW THAT THERE IS NO DISPARITY BETWEEN THE PRINCIPLES UPON WHICH ITS DECISIONS CONCERNING VARIOUS SYSTEMS OF EQUALIZATION WERE BASED AND THOSE WHICH DETERMINED ITS ATTITUDE TO THE CAISSE DE COMPENSATION OF THE GRAND DUCHY OF LUXEMBOURG .
FOR ALL THESE REASONS, THE PRICE INCREASE RESULTING FROM THE MINISTERIAL ORDER OF 8 MARCH 1954 IS NOT INCOMPATIBLE WITH THE BASIC PRINCIPLES OF THE COMMON MARKET .
D - THE SUBMISSIONS CONCERNING THE INFRINGEMENT OF ESSENTIAL PROCEDURAL REQUIREMENTS
THE APPLICANT CLAIMS IN THE ALTERNATIVE THAT THE IMPLIED DECISION OF REFUSAL IS VITIATED BY NULLITY FOR INFRINGEMENT OF ESSENTIAL PROCEDURAL REQUIREMENTS INASMUCH AS THE GROUNDS FOR IT ARE NOT STATED .
P . 202
ARTICLE 88 OF THE TREATY PROVIDES THAT " IF THE HIGH AUTHORITY CONSIDERS THAT A STATE HAS FAILED TO FULFIL AN OBLIGATION UNDER THIS TREATY, IT SHALL RECORD THIS FAILURE IN A REASONED DECISION ".
CONSEQUENTLY, THE DUTY TO GIVE A STATEMENT OF THE REASONS UPON WHICH IT IS BASED APPLIES TO THE DECISION WHICH, IN THE APPLICANT'S VIEW, THE HIGH AUTHORITY WAS REQUIRED TO TAKE WITH REGARD TO THE GOVERNMENT OF THE GRAND DUCHY OF LUXEMBOURG .
THERE IS NOTHING IN THE WORDING OF ARTICLE 88 TO JUSTIFY THE VIEW THAT SUCH A DUTY EXISTS WITH REGARD TO A REFUSAL TO TAKE A DECISION UNDER THAT ARTICLE .
CONSEQUENTLY, THE LACK OF A STATEMENT OF REASONS UPON WHICH THE IMPLIED DECISION OF REFUSAL WAS BASED DOES NOT CONSTITUTE AN INFRINGEMENT OF THE PROVISIONS OF ARTICLE 88 OF THE TREATY .
E - COSTS
UNDER ARTICLE 60 OF THE RULES OF PROCEDURE OF THE COURT, THE UNSUCCESSFUL PARTY SHALL BE ORDERED TO PAY THE COSTS, BUT THE COURT MAY NEVERTHELESS ORDER THAT THE PARTIES BEAR THEIR OWN COSTS IN WHOLE OR IN PART WHERE EACH PARTY SUCCEEDS ON SOME AND FAILS ON OTHER HEADS .
APPLICATION 7/54 RELATES TO TWO DISTINCT HEADS OF CLAIM : THE OFFICE COMMERCIAL DU RAVITAILLEMENT AND THE CAISSE DE COMPENSATION FOR SOLID FUELS .
AS A RESULT OF THE DECISION OF THE HIGH AUTHORITY OF 7 JANUARY 1955 CONCERNING THE OFFICE COMMERCIAL DU RAVITAILLEMENT, THE FIRST HEAD OF CLAIM IN APPLICATION 7/54 HAS BECOME PURPOSELESS .
THE PARTIES HAVE AGREED THAT JUDGMENT SHOULD NOT BE DELIVERED ON THAT HEAD OF THE APPLICATION .
HOWEVER, THE DECISION TAKEN ON 7 JANUARY 1955 BY THE HIGH AUTHORITY COMPLIES WITH THE REQUEST OF THE APPLICANT FOR A DECLARATION THAT THE OFFICE COMMERCIAL DU RAVITAILLEMENT IS INCOMPATIBLE WITH THE TREATY .
IF THAT DECISION HAD BEEN TAKEN WITHIN THE PERIOD OF TWO MONTHS WHICH STARTED TO RUN WITH THE LETTER OF 14 JULY 1954 RAISING THE MATTER WITH THE HIGH AUTHORITY, IT WOULD HAVE MET THE FIRST HEAD OF THE APPLICANT'S CLAIM . THEREFORE, IN SPITE OF THE FACT THAT THAT APPLICATION DID NOT PROCEED TO JUDGMENT, IT MAY BE CONSIDERED THAT THE FIRST HEAD OF THE APPLICANT'S CLAIM WAS WELL FOUNDED .
THE SECOND HEAD OF CLAIM IN APPLICATION 7/54, WHICH SEEKS THE ANNULMENT OF THE IMPLIED DECISION OF REFUSAL OF THE HIGH AUTHORITY, IS DISMISSED .
THE APPLICANT AND THE DEFENDANT MAY BE CONSIDERED AS HAVING EACH SUCCEEDED ON ONE OF THE HEADS OF CLAIM IN THEIR CONCLUSIONS .
THE APPLICATION TO INTERVENE RELATES ONLY TO THE SECOND HEAD OF CLAIM IN THE APPLICATION ON WHICH THE APPLICANT HAS FAILED .
IN THESE CIRCUMSTANCES, IT IS NECESSARY TO ORDER THAT EACH OF THE MAIN PARTIES MUST BEAR ITS OWN COSTS AND THAT THE APPLICANT MUST BEAR THE COSTS OF THE INTERVENER .
P . 203
PART TWO
APPLICATION 9/54
APPLICATION 9/54 WAS LODGED ONLY IN AS FAR AS WAS NECESSARY .
IT SPECIFIES THAT " THE RIGHT TO INSTITUTE PROCEEDINGS HAS BEEN ACQUIRED AND THEREFORE THE WRITTEN REPLY STATING THE REASONS UPON WHICH THE DECISION WAS BASED CANNOT REMOVE OR ALTER THAT RIGHT OR, ONCE THE APPLICATION HAS BEEN LODGED, PLACE THE APPLICANTS UNDER A DUTY TO LODGE A FRESH APPLICATION ".
" SUPPOSING, HOWEVER, THAT AN INTERESTED PARTY SHOULD MAINTAIN THE CONTRARY, IN OTHER WORDS, THAT THE ABOVE-MENTIONED LETTER OF 27 NOVEMBER 1954 CONSTITUTES AN EXPRESS DECISION OF REFUSAL WHICH BREAKS THE SILENCE OF THE HIGH AUTHORITY, THE APPLICANTS HAVE AN INTEREST, IN ORDER TO AVOID A FRUITLESS ARGUMENT ON QUESTIONS OF ADMISSIBILITY, IN LODGING BY THIS DOCUMENT, AN APPLICATION IN SO FAR AS IS NECESSARY AGAINST THE REFUSAL OF THE HIGH AUTHORITY OF THEIR REQUEST ".
THE COURT HAS HELD THAT APPLICATION 7/54 IS ADMISSIBLE .
FOR THAT REASON, APPLICATION 9/54, WHICH WAS LODGED MERELY IN SO FAR AS WAS NECESSARY, IS PURPOSELESS .
THERE IS THEREFORE NO NEED TO GIVE JUDGMENT .
Decision on costs
THERE IS NO NEED TO GIVE JUDGMENT ON APPLICATION 9/54 .
HOWEVER, THE APPLICANT WAS JUSTIFIED IN CONSIDERING IT NECESSARY TO LODGE THAT APPLICATION SINCE THE HIGH AUTHORITY, WITHOUT FORMALLY DECLARING THAT THE LETTER OF 27 NOVEMBER 1954 MADE APPLICATION 7/54 INADMISSIBLE BY TRANSFORMING THE IMPLIED DECISION INTO AN EXPRESS DECISION, PUT FORWARD AND DEVELOPED THIS OPINION IN ITS DEFENCE .
CONSEQUENTLY, ALL THE PARTIES HAVE FAILED TO RECOGNIZE THE ADMISSIBILITY OF APPLICATION 7/54 IN THE SAME WAY .
FOR THAT REASON, THE PARTIES, INCLUDING THE INTERVENER, MUST BE ORDERED TO BEAR THEIR OWN COSTS RELATING TO APPLICATION 9/54 .
Operative part
THE COURT
HEREBY :
I . IN CASE 7/54
( A ) DECLARES THAT THERE IS NO NEED TO PROCEED TO JUDGMENT ON THE FIRST HEAD CONCERNING THE OFFICE COMMERCIAL DU RAVITAILLEMENT;
( B ) DISMISSES THE APPLICATION ON THE SECOND HEAD CONCERNING THE CAISSE DE COMPENSATION ATTACHED TO THE OFFICE COMMERCIAL DU RAVITAILLEMENT;
ORDERS THE MAIN PARTIES TO BEAR THEIR OWN COSTS;
ORDERS THE APPLICANT TO BEAR THE COSTS OF THE INTERVENER .
II . DECLARES THAT THERE IS NO NEED TO PROCEED TO JUDGMENT IN CASE 9/54;
ORDERS THE PARTIES, INCLUDING THE INTERVENER, TO BEAR THEIR OWN COSTS . |
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