C-9/55

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,

Application for the annulment of certain decisions of the High Authority result­ ing from its letter of28 May 1955 to the Government ofthe Kingdom of Belgium concerning the adjustment of the equalization system and of Decision No 22/55 ofthe High Authority of28 May 1955 (Journal Officiel of 31 May 1955, pp. 753­ 758),

THE COURT

composed of: M. Pilotti, President, J. Rueff and O. Riese (Presidents of Cham­ bers), P. J. S. Serrarens, L. Delvaux, Ch. L. Hammes and A. van Kleffens, Judges,

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

1. Procedure de Belgique v High Authority. The parties presented oral argument at the The application lodged by the 'Société des hearings held in open court on 2, 4, 5, 7 Charbonnages de Beeringen', a limited and 11 May 1956. company whose registered office is in Brus At the hearing on 12 June 1956 the parties sels, the 'Société des Charbonnages de replied to certain questions raised by the Houthalen', a limited company whose re Judge-Rapporteur concerning the level of gistered office is in Brussels and the 'So estimated production costs in several hy ciété des Charbonnages de Helchteren et pothetical situations. Zolder', a limited company whose re On the same date the Advocate General gistered office is at Mariemont-sous-Mor delivered his opinion, to the effect that the lanwelz, is dated 27 June 1955 and was re

would be exclusively concerned with the dure of the Court. level of estimated production costs for The powers of the applicants' representa each type and category of Belgian coal at tives are in order and their signatures have the end of the transitional period and their been verified as genuine. significance in relation to the prices fixed The applicants' lawyers and the Agent and by Decision No 22/55. lawyer ofthe defendant have been properly By Order of 30 July 1956 the President of appointed. the Court postponed that date at the re The procedural requirements have been quest of the parties until 25 October 1956. complied with and the statement of de On 15 October 1956 the parties lodged ad fence, the reply and the rejoinder were ditional information and details concern lodged within the prescribed periods. ing the level of production costs for each By order of the President of the Court the type and category of coal estimated in the application was assigned to the First light of the facts and circumstances known Chamber for the purposes of any prepara when the assessment is made.

JUDGMENT OF 29.11.1956 — CASE 9/55

That de equip considered possible and necessary or cision fixed maximum prices for the sale of are refusing to carry out the transfers or ex certain types ofBelgian coal listed in an an changes of deposits which are regarded as nex to the decision. indispensable for a better development of On the same date the High Authority ad the mining areas; dressed a letter to the Belgian Government (published in the Journal Officiel, No 4, of 2. Annul Decision No 22/55 of the High 13 March 1953) in which it gave details of Authority of the European Coal and Steel the aid which it proposed to grant to the Community of 28 May 1955 and the price Belgian collieries. It stated that as a result list annexed thereto, not only in so far as it ofpreparatory work which had taken place corresponds to the aforementioned deci it had been possible to fix the price list pro sion but also in that it is itself unlawful and vided for in Article 26 of the Convention involves a misuse of powers, in that if fixes and to determine the aids necessary as a re on its own authority a list of reduced prices sult of the application of that price list, that for certain types of coal and obliges the ap is, 29 francs per metric ton extracted, in plicant companies to abide by it, even as addition to the so-called conventional sub regards those types for which equalization sidies already granted to certain collieries is not paid to them although it is paid to by the Belgian Government. other producers. That result had been obtained by calculat ing the difference between the prices in a The defendant contends that the Court 'price list for accounting purposes', based should dismiss the application lodged by upon the receipts of the undertakings, and the three applicant undertakings on 27 those of a 'list of selling prices' at which the June 1955, with all the consequences collieries dispose of their products.

1953. That decision fixed the mode of as letter addressed to the Belgian Govern sessment and collection of the levy by ment on 22 October 1953 informing it of means of which the necessary funds were the new table of selling prices and the new to be obtained in order to ensure the finan price list for accounting purposes (decision cing of the aid provided for to that end in and letter published in the Journal Officiel, the Convention on the Transitional Provi No 12, of 27 October 1953).

BEERINGEN AND OTHERS V HIGH AUTHORITY

2. The defendant accepts that in so far as cision No 15/55 of 28 April 1955 (Journal the letter of 28 May 1955 reduces the Officiel, No 10, of 30 April 1955) that De equalization payments made to three col cisions Nos 15/54 and 27/54 would re lieries it is individual in nature. There is no main applicable 'until the entry into force dispute as to the admissibility of the appli of a new decision concerning the establish cation on that point and the decision in ment of price lists for the Belgian under question may be contested on all the takings'. grounds for annulment. However, the list of 'selling' prices was On the other hand Decision No 22/55 is modified shortly afterwards by Decision general in nature and may be contested No 22/55 of 28 May 1955, whilst a letter only on the ground of misuse of powers af to the Belgian Government of the same fecting the applicants. date replaced the price list 'for accounting The foregoing also applies to the letter of purposes' by a table annexed to that letter 28 May 1955 in so far as it makes the pay which was headed 'Table of equalization ment of equalization conditional upon an rates applying to the various types of Bel action, the main purpose of which is to

4. Summary of the submissions As regards the question whether the deci and arguments of the parties sions are general in nature, the defendant maintains that a decision is general by rea A — The admissibility of the application son of its nature as a regulation and of the extent of its area of application; it does not 1. The defendant leaves the question of become individual as a result of the fact the admissibility of the fourth and fifth that its effects are not identical for all those complaints to the wisdom of the Court. In to whom it applies.

JUDGMENT OF 29.11.1956 — CASE 9/55

The de cation is still admissible in all its parts, fendant maintains that there is a misuse of first, because, as the applicants propose to powers where an administrative measure is show, the decision is vitiated by misuse of objectively in accordance with the legal powers and, secondly, because although rule but is vitiated from a subjective point the secondary role assigned to misuse of of view as a result ofthe aim pursued by the powers may be justifiable in the national administrative authority. It results from system of administrative law it is not so that definition that misuse of powers is a within a system such as that set up by the specific ground for annulment which is dis Treaty, in which the submission of misuse tinct from the three other grounds. of powers is the only one available to a per son wishing to bring proceedings.

form. It is in fact nothing more than a cam misuse of powers, lack of competence and ouflaged individual decision, since those of infringement of the Treaty, the applicants its elements which concern them are actu propose to show that the contested mea ally applicable to the applicant undertak sures are entirely vitiated by misuse of ings alone. According to the argument first powers and that most of them are vitiated put forward by the High Authority those by lack of competence or infringement of undertakings are, therefore, entitled to the Treaty. plead all the submissions listed in Article The applicants consider that if the Court 33 of the Treaty. regards the decisions in question as being The applicants further maintain that the general in nature it must annul them on price list, which forms part of Decision No grounds of misuse of powers, since evi 22/55 and the rate of equalization, which dence of the other vitiating factors sup forms part of the letter of28 May 1955, are ports the evidence of misuse of powers. indissolubly linked. In fact, the decisive le gal basis for the obligations on the under

BEERINGEN AND OTHERS V HIGH AUTHORITY

States. The applicants consider that the aim of the That the equalization scheme applies gen equalization scheme is to maintain the erally to all consumers is shown by the level of receipts and that it applies to all very wording of Article 26(2). Since it uses Belgian mines. The system established the term 'Belgian coal' rather than 'Belgian by the contested decision introduces an ar collieries' that provision must also be in bitrary distribution of equalizationpay terpreted as applying to all producers. ments, since it does not take into account That interpretation is further corroborated the maintenance of the level of receipts of by the general nature ofthe levy referred to certain collieries. On those grounds the

the same category. Since the criterion was conditions of the common market and to the same for all collieries the principle of bring prices into line, not to provide com the selection of undertakings did not exist. pensation in respect ofthe inevitable fall in The fact that the new system is discrimina prices. That implies that equalization pay tory as regards the applicant undertakings ments must be distributed in proportion to means that Article 4 ofthe Treaty has been the individual needs of the recipients, as is infringed, in particular subparagraph (b) moreover indicated by the term 'enable'.

JUDGMENT OF 29.11.1956 — CASE 9/55

Article 24. Instead of guaranteeing that re meet foreign competition unaided at the ceipts will be maintained at a specific level, end of the transitional period. that article is in fact intended to limit the The defendant maintains that it wished closure of certain collieries. The Treaty in Belgian prices to be brought into line with no way guarantees the maintenance of a the double limit referred to in Article 26, certain level of receipts and it would in fact that is, with the ruling common market be impossible to do so, since the aggregate prices—which are principally determined amount ofthe equalization payments must by prices in the Ruhr—and with estimated be gradually reduced. production costs at the end of the tran

26 of the Convention. They refer, first, to clearly that Belgian prices are coming into a passage in the letter of 28 May 1955, ac line with those of the Ruhr. cording to which the High Authority in As regards the criticism that the selective tended to bring the price list down to a lev calculation made by the High Authority el at which it would be more in line with can be based only on the financial results of prices in the common market. The appli

BEERINGEN AND OTHERS V HIGH AUTHORITY

The aim of that threat is any action on its part. That is, however, an to ensure that the equalization scheme per unproved argument for which there is no forms the function assigned to it by the basis in the Treaty—the necessary har Convention. monization may be brought about just as well by raising the price of coal which is The fourth complaint—Power of the High not produced in Belgium as by lowering Authority to fix prices at a reduced level the prices of Belgian coal. The defendant maintains, first, that the ap

That submission is, therefore, inadmissi First, since the equalization arrangements ble. are designed 'to enable' prices charged for Subject to that reservation, the High Belgian coal to be brought into line with Authority maintains that the present com the ruling common market prices, it fol plaint deals only with the question who is lows that the initiative for doing so is left to entitled to fix prices to the extent necessary the producers. to attain the objectives of Article 26(2) (a). Secondly, by referring to the price list 'so The High Authority does not claim that it fixed' the Convention shows clearly that is entitled to fix the list of selling prices of the fixing of a price must be the result of a the undertakings themselves. joint consideration with which the High The High Authority maintains that, as a Authority is in agreement. public authority, it is responsible for the Finally, the list shall not be changed 'with attainment ofthe objectives of the arrange out the agreement of the High Authority', ments referred to in Articles 26(2) (a) and which means that the High Authority is that, as such, it cannot share that respon not empowered to fix it. sibility with private undertakings.

Such a right of veto can not follow, however, that its sovereign not be justified from the point of view of power to intervene is thereby also ex consumers, whose interests were the main tended, since the purpose of Articles 25 et reason for the creation of the equalization

system. The producers cannot therefore be means of a gradual rise in those prevailing left to fix the prices. in the Ruhr. Finally, the reduction in Bel If the fixing of prices is regarded solely as a gian prices can only make re-equipment measure adopted within the context of the more difficult, since the receipts of the un equalization system, it is necessary to re dertakings will decrease as a result, despite ject the argument put forward by the appli the effect of equalization, since the latter is cants that that measure can be adopted on a sliding scale. only under stricter conditions than those The defendant observes that the applicants laid down by Article 61 of the Treaty for must show that the aim ofthe contested de the fixing of maximum prices. cision is extraneous to the terms of the (b) The applicants maintain that, having Treaty. Decision No 22/55 clearly seeks to regard to the aims of Article 26(2), the bring prices into line and that is the aim of High Authority infringed that article and Article 26(2), regardless of the method ap misused its powers by adopting, in the pre plied.

The High Authority must the Belgian producers have not resorted to respect the spirit of the Convention and the equalization arrangements under sub consider the question from a structural paragraph (c) since April 1955, with the re point of view; the grounds put forward in sult that the decision cannot be based upon its letter, including the sales difficulties, those grounds, since they are factually in must be understood in that way. correct. As regards the influence of prices in the The applicants disagree that the ruling Ruhr, the High Authority maintains that it common market prices may be equated has never treated Ruhr prices as being with those of the Ruhr. Until 1 April 1956 those ruling in the common market.

It is the market and the prices ruling in the competition from the Ruhr which is felt Nord, Pas-de-Calais and Aix-la-Chapelle the most strongly on the Belgian market coal-fields are close to Belgian prices and and it is with Ruhr prices that the Belgian apply to the same volume of production. prices must be brought into line. Furthermore, the applicants consider that The High Authority does not consider that prices will have to be brought into line by the development of the common market

will lead to a rise in Ruhr prices enabling by the Judge-Rapporteur in June 1956. As prices to be brought fully into. line. The regards the grouping of the categories, the question whether prices will come into line applicants maintained during the final as a result ofthe effect of free economic for­ hearing that it is necessary either to group ces or whether they can do so only if au­ together the categories fat coal A, fat coal thoritative action is taken to lower Belgian B, 3/4 fat and 1/2 fat, or all the categories, prices is a question of economic policy and leaving out those types of coal to which the involves an assessment of an economic equalization arrangements no longer ap­ situation, on which the Court is not re­ ply. However, neither of those groupings quired to pronounce. In any case, the High appears in the information provided by the Authority considered that alignment of applicants. prices formed part of its responsibilities The applicants maintain that in assessing and that, therefore, it could not take the the estimated production costs the esti­ risk that prices would be insufficiently mates of the subsidies which would be paid aligned by the end of the transitional peri­ by the State to marginal mines in 1958 od. must not be taken into account, since the grant of the subsidies does not reduce pro­ (c) Before the reopening of the oral proce­ duction costs but simply results in making dure prescribed by the Order of the Court the State responsible for a part of them. of 17 July 1956 the parties provided cer­ Furthermore, the applicants assess the tain information and details concerning 'amortization' factor in the production the level of estimated production costs at costs at an average of 65 francs per metric the end of the transitional period. ton. That figure is 27 francs higher than The parties agree that it is not possible to that put forward by the High Authority. establish separate estimated production The applicants maintain that amortization costs for each type of coal within a cate­ must be calculated on the basis ofthe value gory, since all the types within one cate­ of the installations and equipment in 1955 gory are extracted at the same time and un­ at the time of the assessment, in accor­ der the same conditons. Furthermore, the dance, first, with the general concept of parties agree that the coal should be 'facts and circumstances known when the grouped into the following four categories: assessment is made' adopted by the Court fat coal B; fat coal A and 3/4 fat; 1/2 fat; 1/4 in its judgment of 16 July 1956 and, fat and anthracite. secondly, with the 'Directives concerning The applicants consider that in its judg­ the Calculation of Amortization' which ment of 16 July 1956 in Case 8/55 the are valid throughout the Community and Court decided that the parties must take were confirmed by the High Authority in a the beginning of 1955 as the reference per­ letter of 23 July 1954. iod. They also maintain that 850 kg must The applicants maintain that a compari­ be taken as the foreseeable output in 1955, son of estimated costs and average selling which is the figure accepted by the defend­ prices gives the following result: ant in the joint reply to the questions raised

That table shows that the real average sell­ tions and equipment at the time of the as­ ing price of all categories together is lower sessment. It cannot accept either the meth­ than the average estimated cost of produc­ od used to calculate amortization or the re­ tion and that the real average selling price sulting figures. of each category is lower than the corres­ It considers that 38 francs, that is, the ponding average estimated cost of produc­ amount of the re-equipment grant fixed by tion, except in the case offat coal B and an­ the Belgian Government in 1947, must be thracite and 1/4 fat coal. regarded as the amortization figure. That The defendant maintains that the Court figure is the minimum which the Belgian has not yet ruled on the question which re­ collieries were obliged to apply, by way of ference period must form the basis of the amortization, to the financing of invest­ assessment of the estimated production ments. The 'Directives concerning the Cal­ costs. It adheres to its earlier argument that culation of Amortization' have only a lim­ 1952 must be taken as the base year. Dur­ ited aim, that is, the implementation ofAr­ ing the final hearing the defendant stated ticle 2(5) of the Convention in order to that the calculations must be based on the simplify and clarify the statistical informa­ output of 819 kg. assessed in 1952 and tion gathered by the High Authority. In or­ claims that it did not accept the figure of der to show that the 'Directives' cannot ap­ 850 kg. for the reference period 1955, since ply in this instance the defendant points that figure was inadequate. The defendant out that, for example, they enable the sum added that if the Court considers that 1955 of 9 francs, representing depreciation of must be taken as the basic reference peri­ equipment which has already been entirely od, the output figure must be raised to at written off, to be included in the 'amortiza­ least 900 kg., as it proposes to prove by tion' total. means of a fresh investigation of the case The defendant considers that a compari­ on that point. son between estimated production costs The defendant rejects the applicants' argu­ and average selling prices produces the fol­ ment that 'amortization' must be calculat­ lowing result: ed on the basis of the value of the installa-

fat coal A and fat coal B in no way depends free to fix the prices for those types, but it on the difference between their respective refused to allow the applicant undertak­ production costs. Before the opening ofthe ings the same freedom as regards certain common market there was no difference other types of coal for which they alone re­ between those selling prices, and the differ­ ceive no further equalization. ences established at the beginning of the In their reply the applicants maintain that transitional period have remained con­ equalization is in fact the reason for the stant since then. Since Article 26(2) (a) price control exercised rightly or wrongly does not specify whether the prices fixed by by the High Authority. Thus, without the High Authority must be determined on equalization, there is no legal basis for the the basis of the average estimated produc­ maintenance of a price list and it is there­ tion costs for 'all categories' or by category, fore unlawful, despite the possibility of a the defendant considers that it must be de­ return to equalization. That is the case as termined on the basis of the average costs regards the bituminous coals produced by for 'all categories'. During the final hearing the three collieries of the Campine. the defendant added that since the action The defendant acknowledges that Article concerns the price list fixed in 1955 it ap­ 26 does not entitle it to fix prices for those pears to be more justified to consider fat types of coal which it regards as already in­ coal A and B and 3/4 fat as a whole, since the tegrated into the common market, such as modification of the price list of 1952 con­ certain anthracites and 1/4 and 1/2 fat coals. cerns those categories alone. If equalization is not paid in respect of un­ classified bituminous coals, that is only The fifth complaint — Fixing of selling true of the production of the Campine prices without provision for equalization mines. The exclusion of the unclassified bituminous coals from the Campine from The applicants consider that Decision No the benefit of equalization in no way im­ 22/55 is unlawful in that it imposes a list of plies that those types are already sufficient­ selling prices in respect of certain types of ly integrated into the common market to coal for which equalization is withdrawn. be removed from the equalization system. Article 26(2) (a) provides for a list of selling It is possible that if a new reduction were to prices to be drawn up only in relation to be ordered, equalization payments would equalization. When it excluded certain once again be made to the Campine col­ types of coal from the equalization scheme lieries as well. the High Authority left the undertakings

(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 with­ drawn from certain undertakings on the ground that they are not making the ef­ fort to re-equip considered possible and necessary or are refusing to carry out the transfers or exchanges ofdeposits which are regarded as indispensable for a better development of the mining areas.

BEERINGEN AND OTHERS V HIGH AUTHORITY

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 equaliza­ tion aid must be accompanied by a series of measures to be adopted by the Bel­ gian Government. Furthermore, it considers that the Belgian Government ought to apply four measures, indicated at points (a), (b), (c) and (d). The action re­ ferred 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 de­ cided 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 ofArticle 14 ofthe Trea­ ty. Since the individual or general nature of each of the decisions has been estab­ lished, the applicants are entitled to seek the annulment ofthe reduction or with­ drawal 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 admis­ sible it is sufficient for the applicants to claim formally that there has been a mis­ use 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.

Similarly, the grounds upon which the parties relied for the first time in their re­ ply without having mentioned them in the application must also be declared in­ admissible. 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 in­ dividual decision, since its nature depends on its scope rather than on its form. Furthermore, such an interpretation ofArticle 33 and especially ofthe words 'af­ fecting them' cannot be accepted, since the phrase 'accepting them' can be un­ derstood only in the sense ofthe 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 deci­ sions 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 sub­ missions 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 ofpowers. 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 pow­ ers affecting them; it would therefore be illogical to regard that submission as be­ ing merely exceptional and secondary in nature. That argument must be dismissed. If the Treaty provides that private undertak­ ings 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 ac­ tion as extensive as that of the States and the Council and it would be difficult to explain why, instead ofsimply treating actions brought by undertakings in the same way as those brought by States or the Council, Article 33 introduced a clear distinction betweeen individual decisions and general decisions, while restricting the annulment ofgeneral decisions in the case of undertakings to the submission of misuse of powers affecting them. The phrase 'under the same conditions' can­ not 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

The applicants maintain, first that the introduction into the equalization scheme of a selective criterion, that is, the adjustment of the equalization pay­ ments 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 let­ ter 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 discrimi­ nation. The applicants' argument would be convincing only if the High Auth­ ority 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 colleries is in accordance therewith.

JUDGMENT OF 29.11.1956 — CASE 9/55

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). Fur thermore, subparagraphs (b) and (c) contain a number of provisions which are intended to govern the distribution of the equalization payments made thereun der, while there are no such rules for the equalization payments made under sub paragraph (a). In the light ofthose 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 ofArticle 26 alone that the equal ization 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 condi tions ofproduction, 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 nec essarily 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 guar antee to maintain previous levels of receipts. Despite the fact that the Convention does not refer to the existence, where ap propriate, 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 sell ing prices and receipts at the beginning of the transitional period.

Equalization must, therefore, not exceed the limits of what is strictly necessary in order to neutralize to a cer-

tain 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 dur­ ing 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 reorgan­ ization of the Belgian mines. 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 situ­ ations 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 establish­ ment 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 pro­ vide 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.

It results from the foregoing considerations that the amounts ofequalization will necessarily vary from one case to another, but that the mere existence of vari­ ations 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 re­ organization of the collieries. Furthermore, if it were to appear that certain un­ dertakings 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 condi­ tionally 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 Au­ thority is not therefore guilty ofa misuse ofpowers and the application is without foundation on that point.

The defendant alleges that the exclusion from the benefit of equalization of un­ classified 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 ofprices by the High Authori­ ty. 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 un­ dertakings forms the subject of the complaint relating to the application of the principle of selectivity in the implementation of Article 26. The lawful nature 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 Govern­ ment. However, it may be stated that it is impossible to conceive either of the existence of several price lists applying to consumers ofBelgian coal or ofthe co­ existence 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 equal­ ization 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.

1. Dismisses the application for the annulment of certain decisions of the High Authority resulting from its letter of 28 May 1955 to the Govern­ ment of the Kingdom of Belgium concerning the adjustment of the equal­ ization system and of Decision No 22/55 of the High Authority of 28 May 1955;

2. Orders the applicants to bear the costs.

Pilotti Rueff Riese

Serrarens Delvaux Hammes van Kleffens

Delivered in open court in Luxembourg on 29 November 1956.

M. Pilotti A. van Kleffens