C-4/54

JUDGMENT OF THE COURT 11 FEBRUARY 1955 1

Associazione Industrie Siderurgiche Associate (I.S.A.) v High Authority of the European Coal and Steel Community

Case 4/54

1. Application for annulment See summary of judgment in Case 3/54, para. 1

2. Decisions of the High Authority — Statement of reasons — Reference to opinions obtained 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. (Treaty, Arts. 15 and 33)

In Case 4/54

THE COURT

composed of: M. Pilotti, President, P. J. S. Serrarens and Ch. L. Hammes 1 — Language of the Case: Italian.

JUDGMENT OF 11. 2. 1955 —CASE 4,54

(Presidents of Chambers), 0. Riese, L. Delvaux, J. Rueff and A. van Kleffens, Judges,

Advocate General: M. Lagrange Registrar: A. Van Houtte

gives the following

On 18 February 1954 the applicant lodged Journal, English Special Edition at the Court Registry an application for the 1952-1958, pp. 9-12); under the terms annulment of Decisions Nos 1/54, 2/54 of these decisions, undertakings were un­ and 3/54 of the High Authority of 7 Jan­ der an obligation to publish their price- uary 1954 published as follows: No 1/54 lists before carrying out any transactions in the Official Journal, English Special and keep strictly to the prices stated there­ Edition 1952 - 1958, p. 14; No 2/54 in the in—any variation in relation to the afore­ Official Journal, English Special Edition mentioned lists constituting, according to 1952-1958, p. 15; and No 3/54 in the these texts, a prohibited discriminatory Journal Officiel de la Communaute Euro- practice. peenne du Charbon et de l'Acier, 13 Jan­ On 7 January 1954, the High Authority uary 1954, p. 219. amended and supplemented these rules by The application was submitted within the Decisions No 1/54, 2/54 and 3/54 against required period, in accordance with the which the present proceedings are now third paragraph of Article 33 of the Treaty brought. and with Articles 84 and 85 of the Rules of Under this new system, a variation from Procedure of the Court. published prices no longer amounts to a Under the first paragraph of Article 12 of prohibited practice if the seller can show the applicant's articles of association the that the transaction in question does not President directs and represents the asso­ fall within the categories of transactions ciation in its internal and external rela­ covered by his price-list, or that the prices tions. or conditions have been departed from The applicant has established that Mr uniformly in all comparable transactions Pozzi is its President. (Decision No 1/54);—moreover, in the The applicant's lawyer has been properly case of the steel market, and the steel mar­ appointed. ket alone, an average margin of 2.5% was It appears from the documents produced introduced, within which a variation from by the parties as well as from the decisions the lists was allowed in the case of all trans­ at issue that the facts of the case are as actions concluded within the preceding follows: sixty days, without the need for prior pub­ lication of new lists (Decision No Under the terms of Article 60 of the Trea­ 2/54);—lastly, for purposes of verification, ty, the High Authority on 2 May 1953 steel undertakings must submit fortnightly adopted Decisions Nos 30/53 and 31/53 reports on all variations made (Decision which define the practices prohibited by No 3/54). Article 60 (1), and contain rules for the steel market relating to the publication of The applicant claims that the Court price-lists and conditions , of sale (Official should:

A. Misuse of powers; The High Authority's rejoinder was lodged B. Infringement of the Treaty. at the Court Registry within the period laid down in the order of the President of the The application was served on the High Court of 4 May 1954, as extended by the Authority on 19 February 1954 in accor­ order of 2 June 1954, and was served on dance with Article 33 (2) of the Rules of the applicant on 13 July 1954 in accor­ Procedure of the Court. dance with Article 33 (2) of the Rules of The statement of defence was lodged at the Procedure. Court Registry within the period laid down In its rejoinder, the High Authority re­ by Article 31 (1) of the Rules of Procedure. quests, in the alternative, that the Court The High Authority's Agent and Counsel should were duly appointed. In its statement of defence, the High Au­ 'in accordance with Article 29 (3) of the thority contended that the Court should: Rules of Procedure of the Court if approp­ riate declare inadmissible the new sub­ '(a) declare the application submitted by missions contained in the reply.' the Associazione Industrie Siderurgiche Associate (I.S.A.) on 18 February 1954 After the rejoinder had been lodged on 12 and served on 19 February 1954 to be in­ July 1954, the written procedure was ter­ admissible ('improponibile'); or minated, in accordance with the first para­ graph of Article 34 of the Rules of Proce­ (b) Alternatively, dismiss the application dure. as unfounded and in any event order the In accordance with the first paragraph of applicant to pay the costs of the action'. Article 34 of the Rules of Procedure of the Court, the President on 12 July 1954 ap­ The statement of defence was served on the pointed Judge O. Riese as Judge-Rappor­ applicant on 20 March 1954 in accordance teur.

In the course of those hearings, the parties is 'proponibile' only if this misuse of pow presented oral argument. ers has actually been committed. At the hearing on 8 November 1954 the applicant lodged conclusions to the effect (b) Applicant's arguments that the High Authority should be invited to make available to the Court all docu The applicant contends that the interpre ments relating to the case and that the tation placed by the High Authority on Ar applicant's lawyer should have access to ticle 33 is incorrect.

Such an argu At the hearing on 11 November 1954, the ment is incompatible with the status of the President in accordance with Article 50 (2) High Authority; furthermore, it makes the of the Rules of Procedure declared the oral right of individuals to appeal against the procedure closed. general decisions of the High Authority In support of their submissions and con practically worthless. It is inconceivable clusions the parties put forward the argu that the authors of the Treaty should have ments summarized hereunder: wished to grant to undertakings a degree of legal protection less than that which they

tence of this wrong. tions of undertakings may institute pro There is misuse of powers where the High ceedings against a general decision of the Authority allows itself to be influenced by High Authority only if such a decision in considerations other than those by which it volves a misuse of powers affecting them. ought to be influenced and where, more In those circumstances a misuse of powers over, it ignores considerations which it presupposes that the contested decision is ought to take into account. A misuse of general only in appearance and that in powers was committed 'affecting' the ap reality it refers individually to the appli plicant when, as a consequence of the con cant undertaking or undertakings, the tested decision, it suffered direct and spe High Authority having thus exercised its cial damage. Such damage can arise from powers for a purpose other than that pro the fact that the decision in question vided for by the Treaty.

I.S.A. v HIGH AUTHORITY

with Article 30 of the Convention on the In future there can be no alignment since Transitional Provisions, the object of the price charged by competitors is un­ which is the special protection of the Ital­ known. ian steel industry. Decision No 2/54 was, indeed, held out to be only a set of rules on the publication of 2. Substance prices and conditions of sale but, in reality, it contains a definition of discriminatory A. Misuse of powers in relation to Article practices which could be adopted only 60 of the Treaty; infringement of that after consultation with the Council of article Ministers.

(a) Applicant's arguments (b) Defendant's arguments

conclusion may also be drawn from para­ Moreover the allegation that Decision No graph (2) (a) that the provision in para­ 2/54 in fact contains a definition of discri­ graph (1) prohibiting the variation of prices minatory practices and the allegation that from one transaction to another applies in the High Authority may not in principle each case so long as the price-list in ques­ allow any variation were made for the first tion remains in force. In contrast to that time in the reply and they are in conse­ system variations are in future prohibited quence admissible under Article 29 (3) of only in the case of transactions concluded the Rules of Procedure of the Court. simultaneously, a situation of no practical Furthermore, the High Authority did not importance. The criterion of comparable allow itself to be influenced by the inten­ transactions is thus deprived of all mean­ sions attributed to it by the applicant, nor ing. The Treaty is based on the absolute do the contested decisions constitute an in­ principle that any variation from the price- fringement of the Treaty. A breach of the lists is illegal. The mean variation of 2.5% rules on publication, which are no more granted to producers makes it possible, in than a means and do not constitute an end particular cases, to grant appreciably high­ in themselves, and a breach of the princi­ er discounts, which may be as much as ple of non-discrimination are two very dif­ 25%; it thus makes possible those 'purely ferent infractions. As the applicant itself temporary or purely local' price reduc­ accepts, the High Authority has the power tions which are expressly prohibited under to lay down rules on the scope of publica­ Article 60 (1). Furthermore, paragraph (2) tion; this gives it the right to allow, within (a) vests in the High Authority power to de­ certain limits, variations from the price- termine the extent and the manner of pub­ lists and to prescribe the timelimit for en­ lication but no power to make the price- try into force of new price-lists. This is all lists other than compulsory. that Decision No 2/54 contains; in any Since, under paragraph (2) (b), alignment is case, it does not try to give a definition of permitted only on the 'price-lists' of prohibited practices and does not abolish competitors it is also clear that, under the the principle that the price-lists are com­ Treaty, only the published prices are legal. pulsory. Moreover there was, on the sub-

ject of Decision No 2/54, a wide-ranging High Authority has not only the power but discussion with the Council of Ministers, also the duty to impose sanctions on the which is for all intents and purposes the offenders. same as a 'consultation', although consul tation was unnecessary. (b) Defendant's arguments The applicant has misconceived the crite rion of 'comparable transactions'. If, dur The High Authority did not have the in ing a given period, an undertaking applies tention attributed to it by the applicant. prices which vary from one transaction to On the contrary the new rules are designed, another this does not constitute discrimi inter alia, to make it easier to detect any in nation if in the meantime the situation on fringements. Moreover the Treaty confers the market has changed. discretion on the High Authority to decide Discounts cannot be confined to certain whether it wished to impose any penalties. transactions or sales in certain countries It cannot do so with fairness unless it pos but must be applied without distinction to sesses accurate information on the various all comparable transactions. Consequent

reached. (a) Applicant arguments There is no point in the reference to 'purely temporary or purely local' price reduc The contested decisions deprive the article tions since the rule in question is con of any real meaning. Its provisions are in cerned with another objective altogether, tended to protect the Italian steel industry which is that of preventing monopoly po and especially the Italian small-scale and sitions. Furthermore, the possibility ap medium-scale undertakings which are or prehended by the applicant existed to the ganized in the applicant association.

this power. The market in steel, which is highly organized, enables every producer (b) Defendant's arguments to find out the prices applied by his com petitors. Article 30 (2) of the Convention on the Transitional Provisions merely prohibits B. Misuse of powers in relation to Article alignment on the parities of Italian under 64 of the Treaty takings. The new rules have not changed the position. It is difficult for foreign un (a) Applicant's arguments dertakings to sell their products in Italy at prices lower than those of Italian undertak The High Authority made improper use of ings because of the need to add transport its powers in order to evade the obligation costs to the prices and in view of the main to impose penalties in accordance with Ar tenance of Italian protective duties.

I.S.A. v HIGH AUTHORITY

consequence of competition to which (b) Defendant's arguments Italian undertakings, like everyone else, must adapt themselves. The Council of Ministers gave its assent to Decision No 1/54. The Consultative Com­ D. Absence of an explanation for the dif­ mittee, with one dissentient, and the ferent views taken by the Council of Council unanimously recognized the High Ministers and the Consultative Com­ Authority as in principle having power to mittee as evidence of misuse of powers introduce a margin of variation. It was only on one subsidiary matter that the (a) Applicant's arguments Consultative Committee, in declaring it­ self in favour of a uniform margin instead In their opinions, the Council of Ministers of a mean margin, expressed a different and the Consultative Committee declared opinion. Moreover, under the terms of Ar­ their opposition on some important points ticle 15, and on any reasonable view, the to the drafts submitted by the High Au­ Authority is under no obligation to com­ thority. The introduction, proposed by the ment, in the statement of reasons on which members of these bodies, of a fixed and its decisions are based, on the conflicting uniform margin would have provided a opinions expressed by consultative bodies. number of advantages over the arrange­ ments for a mean margin introduced by the By judgment delivered on 21 December contested decisions. In the statement of 1954 in the case of the French Government reasons on which the contested decisions v The High Authority (Case 1/54) the were based, the High Authority did not Court annulled Article 1 of Decision No even mention this different point of view, 2/54. far less offer an explanation on the subject. This represents a breach of the principles By its Decision No 1/5 of 4 January 1955, of sound administration; even if, taken on published in the Journal Officiel 1955, p. its own, this omission does not constitute 542, the High Authority revoked Decision a misuse of powers, it is nevertheless evi­ No 3/54. dence of it.

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 pro­ ceedings 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 un­ dertakings 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 ques­ tion goes to the substance and does not affect admissibility.

I.S.A. v HIGH AUTHORITY

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 conse­ quence, 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 Govern­ ment 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 interpre­ tation 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 com­ parable transactions, it expressly maintains the obligation to comply with the rules concerning the publication of price-lists; this provision in no way compro­ mises the legal position of the Italian steel industry and does not tend to legiti­ mize previous infringements.

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 div­ ergent opinions expressed by the consultative bodies or by some of their mem­ bers. 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 docu­ ments 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.

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.

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.

Pilotti Serrarens Hammes

Riese Delvaux Rueff van Kleffens

Delivered in open court in Luxembourg on 11 February 1955.