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Súdny dvor Európskej únie·Rozsudok·20.3.1957

C-2/56

ECLI:EU:C:1957:4

Súd
Súdny dvor Európskej únie
IČS
61956CJ0002

JUDGMENT OF 20. 3. 1957 — CASE 2/56

5. Cartels — Authorization

The High Authority is not required to alter the contents of an agreement which is submitted to it under Article 65, in order for it to qualify for authorization (Treaty, Article 65).

6. Application for annulment — Extent of the power of review by the Court Where it is not necessary to take into consideration and to assess economic facts in order to find that an agreement is of a restrictive nature, the Court has unlimited jurisdiction to review that finding (Treaty, second sentence of first paragraph of Article 33). 1

7. Discrimination — Cartels

Articles 4(b) and 65 of the Treaty govern the different aspects of economic life in their re­ spective fields of application. Those two articles do not exclude neither do they annul each other; on the contrary, they serve to bring about the objectives of the Community. They are thus complementary in this respect. In certain cases their provisions can cover acts justifying a simultaneous and concurrent ap­ plication of the said articles (Treaty, Articles 4(b), 65).

8. Discrimination — Indirect discrimination practised by certain producers in respect of other producers Discrimination between producers is possible. Where a selling agency takes into account pur­ chases made by its wholesalers from two other given agencies, whereas the same competition should exist between them as exists between the first of those agencies and the other producers of the Community—whose sales it does not take into account—that method of proceeding constitutes indirect discrimination in that it encourages the purchasers towards a preference for obtaining supplies of the products distributed by those other two agencies, to the detriment of the remaining producers of the Community (Treaty, Article 4 (b)).

9. Discrimination — Purchasers — Discrimination between traders

Where traders—who are purchasers within the meaning of Article 4(b)—ordering the same quantity of goods from a given selling agency are treated unequally by the said agency ac­ cording to whether they also obtain supplies from certain other agencies, unequal treatment exists for inadequate reasons and it constitutes discrimination between traders (Treaty, Article 4(b)).

In Case 2/56

1. The undernamed mining undertakings of the Ruhr basin, being members of the Geitling selling agency for Ruhr coal, a limited liability compagny:

STEINKOHLENBERGWERK HEINRICH ROBERT AG, Herringen, BERGWERKE ESSEN-ROSSENRAY AG, Essen, BERGBAU AG LOTHRINGEN , Bochum, MÜL­ HEIMER BERWERKSVEREN , Mülheim/Ruhr, RHEINPREUSSEN AG FÜR BERGBAU UND CHEMIE , Homberg/Niederrhein, STEINKOHLENBERGWERK MATHIAS

1 — Cf. paragraph 5. summary, judgment in Case 6/54, Rec. 1954-1955. p. 201.

GEITLING v HIGH AUTHORITY

STINNES AG, Essen, GEBR. STUMM GMBH, ZECHE MIN. ACHENBACH , Bram­ bauer/Westfalen, HOESCH BERGWERKS AG, Dortmund, GEWERKSCHAFT VER. KLOSTERBUSCH , Herbede/Ruhr, STEINKOHLENBERGWERK FRIEDRICH DER GROSSE AG, Heme, RHEINELBE BERGBAU AG, Gelsenkirchen, GRAF MOLTKE BERGBAU AG, Gelsenkirchen, STEINKOHLENBERGBAU HANNOVER-HANNIBAL AG, Bochum, BERGWERKSGESELLSCHAFT WALSUM MBH , Walsum/Niederr­ hein, GEWERKSCHAFT SOPHIA JACOBA , Hückelhoven/Aachen, HARPENER BERGEAU AG, Dortmund, MONOPOL BERGBAU AG, Kamen, Gewerkschaft ALTE HAASE , Dortmund, GEWERKSCHAFT GOTTESSEGEN , Dortmund, repres­ ented by the Geitling selling agency for Ruhr coal, a limited liability company, 4, Frau-Berta-Krupp-Straße, Essen,

2. The GEITLING SELLING AGENCY FOR RUHR COAL , a limited liability company, Frau-Berta-Krupp-Straße 4, Essen,

jointly represented by Werner von Simson, Advocate at the Oberlandesgericht, Düsseldorf with an address for service at the Chambers of their Advocate at Luxembourg-Capellen,

applicants,

v

HIGH AUTHORIY OF THE EUROPEAN COAL AND STEEL COMMUNITY , represented by its Legal Adviser Robert Krawielicki, acting as Agent, assisted by Philipp Möh­ ring, Advocate at the Bundesgerichtshof, Karlsruhe, with an addres for service in Luxembourg at its offices, 2, Place de Metz,

defendant,

Application for the annulment of Article 8 of Decision No. 5/56 of the High Au­ thority of 15 February 1956,

THE COURT

composed of: Massimo Pilotti, President, Ch. L. Hammes and P.J.S. Serrarens, Presidents of Chambers, L. Delvaux and J. Rueff, Judges,

Advocate-General: K. Roemer Registrar: A Van Houtte

gives the following

JUDGMENT OF 20. 3. 1957 — CASE 2/56

JUDGMENT

Facts

I — Procedure and conclusions of by the Geitling selling agency for Ruhr the parties coal, a limited liability company, with all consequences at law, and order the appli The successive stages of the procedure were cants to bear the costs. as follows: By an authority to act signed by Rene 1. By application lodged at the Court Re Mayer, President of the High Authority, gistry on 25 March 1956 through their Ad and lodged at the Registry on 20 April vocate, Werner von Simson, the 19 mining 1956, Robert Krawielicki was named the undertakings of the Ruhr basin being mem defendant's agent, and by an authority to bers of the Geitling selling agency for Ruhr act also signed by Rene Mayer, President coal, a limited liability company, and the of the High Authority, and lodged at the Geitling selling agency for Ruhr coal, a li Registry on 16 May 1956, Philipp Möh mited liability company, with an address for ring, Advocate at the Bundesgerichtshof, service at the Chambers of their Advocate Karlsruhe, was named an assistant to the at Luxembourg-Capellen, asked for the an aforesaid agent of the High Authority. nulment of Article 8 of Decision No 5/56 of the High Authority of 15 February 1956, 3. On 29 September 1956, the applicants published in the Journal Officiel, No 6, of lodged their reply within the time allowed 13 March 1956, p. 29 et seq., and claimed by order of the President of the Court and that the Court should: reaffirmed the conclusions in their applica

tion. annul Article 8 of Decision No 5/56 of the High Authority of 15 February 1956. 4. The rejoinder was lodged on 15 Novem ber 1956, within the time allowed to the de The following annexes were joined to the fendant by order of the President. The de application: fendant reasserted its earlier conclusions. (a) The issue of the Journal Officiel in which the contested decision was pub 5. After the case had been assigned to the lished; First Chamber, the Judge-Rapporteur, Ch. (b) The agreement made on 6 February L. Hammes, designated as such by the 1956 between the mining undertakings, President of the Court by letter of 3 October being members of the Geitling agency, es 1956, lodged the preliminary report, pursu tablishing trading rules for the Common ant to Article 34 (2) of the Rules of Proce Market from 1 April 1956, and an annex to dure of the Court. those rules.

6. In his report, the Judge-Rapporteur con 2. The High Authority, with an address for cluded that there was no need for any pre service in Luxembourg at its seat, 2 Place de paratory enquiry in the case. In accordance Metz, and with the support of an order with the last paragraph of Article 34 of the made upon its request extending the time- Rules of Procedure of the Court, the Court, limit for sending in its defence, lodged its upon hearing the views of the Advocate- defence on 26 May 1956 within the time al General, decided to commence the oral lowed, and contended that the Court procedure without any preparatory enquiry.

should: In accordance with Article 45 (2) of the reject as unfounded the application Rules of Procedure of the Court, the acting lodged by the 19 mining undertakings of President of the Court set down the hearing the Ruhr basin, being members of the of the oral procedure for 28 January 1957, Geitling selling agency for Ruhr coal, and and if necessary, on the days following.

GEITLING v HIGH AUTHORITY

7. At the opening of the hearing, the the same number of undertakings are mem Judge-Rapporteur, in accordance with Arti bers. cle 21 of the Protocol on the Statute of the Court, read his report. The oral arguments 2. In accordance with the provisions of Ar of the parties were heard through their Ad ticle 65 of the Treaty, that reorganization vocates. and also an agreement made on 6 February 1956 in identical terms by each of the three

8. At the hearing on 11 February 1957, selling agencies on trading rules, were sub pursuant to the procedure laid down by Ar mitted to the High Authority for authoriza ticle 11 and by the last paragraph of Article tion. 21 of the Protocol on the Statute of the Court, the Advocate-General delivered his 3. The abovementioned Decision No 5/56 opinion in which he advised that the appli approved for the most part the applicants' cation should be dismissed and that the ap requests, in so far as in the opinion of the plicants should be ordered to bear the costs. High Authority joint selling would make for an improvement in the distribution of

9. In accordance with Article 50 (2) of the fuels and was necessary in order to ensure Rules of Procedure of the Court, the Pres that the sales would be profitable, that the ident of the Court declared the oral proce employment would be stable, and that sup dure at an end, and the case was reserved plies would be regular. for deliberation. In so far as the High Authority took the view that some of the agreement went be 10. Judges O. Riese and A. van Kleffens yond that purpose, it refused to authorize being prevented from attending, the judg

them. Furthermore certain agreements ment was delivered by the Court composed were granted authorization subject to limi of five judges, in accordance with Article 18 tations and to conditions guaranteeing, in of the Protocol on the Statute of the Court. particular the independence of the selling agencies. More particularly, by virtue of Articles 7 II — Summary of the facts and 8 of the decision, the conditions laid down by the common trading rules for ac The application is based on the following acceptance were authorized, whilst an facts, which are not contested by the par other— the clause at issue — was rejected.

ties: tions, only three ot the conditions for such acceptance were authorized, whilst ano 1. The application contests Article 8 of De ther—the clause at issue—was rejected. cision No 5/56 of 15 February 1956. By virtue of those articles, a wholesale trad The contested measure was adopted in con er may be accepted and given the right to nexion with the reorganization, by the pro obtain direct supplies provided that: ducer undertakings, of the sale of Ruhr coal (a) the trader sells within the Common and its essential provisions were approved Market a minimum of 75 000 metric tons of by the High Authority in Decisions Nos fuel from the producer basins of the Com 5/56 and 8/56 of 15 February 1956, after it munity; had considered whether they were in con (b) of that total, 40 000 metric tons at least formity with the requirements laid down by are sold within the trader's sales area; the Treaty concerning cartels. (c) of which at least 12 500 metric tons That reorganization divides the sales cartel come from the Geitling selling agency. of the mining undertakings of the Ruhr ba The condition contained in the trading sin into three independent selling agencies. rules and rejected by the High Authority Until that time the said undertakings were provided in addition that in his sales area part of a single organization, the Gemein the wholesaler had to sell 12 500 metric tons schafts-Organisation Ruhrkohle GmbH. from one of the three selling agencies for The said agencies consist of applicant No 2 Ruhr coal in addition to the 12 500 metric and the two other agencies of which about tons from Geitling.

JUDGMENT OF 20. 3. 1957 — CASE 2/56

The application concerns the refusal to au­ A — Infringement of essential procedural thorize that condition, contained in Article requirements 8 of Decision No 5/56, and claims that the said article should be annulled. 1. According to the applicants, the contest­ ed decision infringes Articles 5 and 15 of the Treaty, since the High Authority has III — Admissibility not indicated the reasons for which the cri­ terion requiring the sale of 25 000 metric No objection was raised against the admis­ tons of Ruhr coal, which it has rejected, is sibility of the applications during the writ­ illegal. ten procedure. The fact that the limit of 25 000 metric tons

However, during the oral procedure, the de­ may not be necessary for establishing a standard for a certain volume of business fendant argued that in the case of an appli­ cation against one isolated article of a deci­ cannot be put forward as a reason, for other­ sion, the annulment of that article would in wise two of the three other approved criteria practice be tantamount to a new decision should also have been rejected, because each of those criteria also constitutes such which the Court has no jurisdiction to a standard. adopt, even indirectly, since Article 34 only makes provision for referring the matter back to the High Authority, and that there­ 2. The applicants also argue that in the rea­ fore the admissibility was doubtful. sons for its decision the High Authority is required, according to the case-law of the IV — Summary of the submissions Court on Articles 5 and 15 of the Treaty made by the parties (Judgment in Case 6/54), to mention the essential elements of the findings of fact on The arguments of the parties may be sum­ which the legal justification for the measure marized as follows: depends.

1. The applicants claim that Article 8 of Those findings are wanting as regards both Decision No 5/56 of the High Authority of 15 February 1956 should be annulled. (a) the finding as a fact that the rejected They claim that it was wrong not to author­ clause was of a nature restrictive of ize the criterion at issue. competition, and They base their arguments on the ground of infringement of essential procedural (b) the incompatibility of that clause requirements, and of manifest disregard of with Article 65 (2)(a) and (b) of the Trea­ the provisions of the Treaty. ty and, accordingly, the absence of the conditions required for authorization. 2. The defendant contends that the appli­ cation should be dismissed and that the ap­ As to (a): In stating the factual reasons for plicants should be ordered to bear the costs. its decision, the High Authority ought to It is of the opinion that an adequate state­ have mentioned the objective finding, ment of reasons for the contested decision described in Article 4(b), resulting, in its is given and that it is a just decision both on view, in the possibility of altering the sys­ the facts and on the law. It denies that it has tem of competition on the market: in par­ infringed the Treaty or has manifestly dis­ ticular it ought to have indicated where, regarded its provisions. It argues that its de­ in its view, a restriction on competition cision is based on a general economic as­ lay. sessment, which is not subject to review by It does not suffice to state that the au­ the Court in the absence of any such disre­ thorization of the criterion would result gard of the Treaty. in sharing the market and the customers. In addition, mention should have been In support of these submissions, the parties made of the precise consequences liable put forward the following considerations: to restrict competition, for example the

GEITLING v HIGH AUTHORITY

effect on the number of wholesalers ap­ tion under Article 65 (1)(c) was necessary proved if the rejected clause was or was since they submitted a request for authori­ not applied. zation. As to (b): There is no indication of the Since joint selling falls in its entirety under reasons for which the clause at issue Article 65 (1), it was not necessary to prove could not, unlike the other clauses, be au­ this afresh in respect of each particular thorized under Article 65 (2). clause. On the contrary, it was necessary to refuse to authorize any clause which per­ mitted discrimination or which contained a In its defence, for the first time, the de­ restriction which was not necessary in order fendant does not content itself with as­ to achieve the purpose intended. serting that the clause is more restrictive than is necessary for the purpose of the 4. It was for that reason that in its decision agreement, but argues why such is the the High Authority stated that the clause case: that the clause would enable the un­ not authorized more particularly (a) permit­ dertakings to determine the prices of a ted discrimination and (b) was of a more large part of the Community's coal pro­ restrictive nature than was required by the duction, to control extraction and sales purpose of the trading rules. and thus to restrict competition. Those reasons are not stated in the decision it­ As to (a): In particular there is discrimina­ self. tion in respect of producers from other ba­ sins of the Community, since the required b — The High Authority replies to these condition encourages traders towards a arguments as follows: preference, up to 25 000 metric tons, for fuel from the other selling agencies for Ruhr 1. The applicants have failed to understand coal and, therefore, to defer the purchases the scope of Articles 5 and 15 of the Treaty; of fuel from producers from other basins In the statement of the reasons for Decision until that figure is reached. No 5/56, the High Authority did not limit A single instance of discrimination of that itself to the essential elements of fact, kind is sufficient to bring the prohibition which would have been sufficient; it set into action. out, in addition, all the legal aspects.

As to (b): In addition, the rejected clause is 2. In examining the procedural require­ of a more restrictive nature than is required ments, the only possible starting point is the by the legitimate purpose of the trading legal assessment made by the High Author­ rules, namely the establishment of a stan­ ity; in this respect sufficient reasons are dard for a certain volume of business. given in the contested decision. Reference should also be made to the main The only thing that matters is whether suf­ line of thought running throughout Deci­ ficient legal reasons are given for the deci­ sion No 5/56, namely the principle that the sion according to the conception of the three selling agencies should be inde­ High Authority, not whether that concep­ pendent and the possibility of pursuing an tion is contrary to the Treaty. autonomous policy as regards sales. In Decision No 5/56, the High Authority Since the decision contains these findings, has expressly indicated the guiding princi­ the complaint as to infringement of essen­ ples and considerations which, under Arti­ tial procedural requirements is unfounded. cles 4 and 65 of the Treaty, were decisive in deciding whether to authorize the agree­ ments submitted. B — Infringement of the Treaty

3. It is an obvious fact that the establishing a — Preliminary question: Jurisdiction of of sales areas and the setting of limits as to the Court to undertake a review tonnage involve a sharing of the market and of customers. The applicants have them­ The defendant has objected to the com­ selves accepted the fact that an authoriza­ plaint of infringement of the Treaty on the

JUDGMENT OF 20. 3. 1957 — CASE 2/56

general ground that the Court's examina­ (e) Moreover the general finding contained tion can only go into the legality of the de­ in Decision No 5/56, that the clause at issue cision. enables the applicants to determine prices According to the second sentence of the or to control the extraction and sale of a first paragraph of Article 33 of the Treaty, substantial part of the coal production of the the Court may not examine the High Au­ Community is obviously irrelevant as re­ thority's evaluation of the situation result­ gards Article 8 of the decision. The High ing from economic facts in the absence of Authority has authorized the other provi­ evidence allowing of the conclusion that sions of the new rules as being in accor­ there exists a manifest failure to observe the dance with the Treaty, and yet, looked at in provisions of the Treaty. isolation, the clause at issue cannot put the With this reservation, which it puts forward applicants in a monopoly situation. in the rejoinder in respect of the arguments of the applicants, the High Authority only 2. As regards the Court's power of review, adopts a position on the complaint of in­ the defendant denies that there exists any fringement of the Treaty as an alternative. evidence of manifest disregard for the Treaty. 1. (a) The application states first that there It states in detail in the rejoinder the reasons is a manifest failure to observe the provi­ for which the complaints put forward by the sions of the Treaty in the illogicality, on the applicants are not subject to any review: part of the High Authority, of accepting dis­ crimination in respect of other producers as (a) From the point of view of discrimina­ legally possible. tion, a study of the economic justification for a distinction between two groups of (b) Next the applicants say that there is a traders involves examining the repercus­ manifest failure to observe the Treaty in sions of that distinction on the coal market

that a concept not specified in the Treaty as a whole, and thus undertaking a general has been applied to a situation to which it assessment.

manifestly does not relate. Now, the considerations taken into account The High Authority's conception regarding by the High Authority and contested by the the qualifications required for approval as a applicants do not prove a manifest disregard wholesaler is erroneous and is foreign to the for the concept of discrimination, nor, purposes of the Treaty. therefore, of the Treaty, such that the sec­ ond sentence of the first paragraph of Arti­ (c) Furthermore, there can be no question cle 33 can apply, but only an economic as­ sessment different from the applicants' as­ of assessing a situation arising from a set of sessment. economic facts. The assessing of the clause at issue is only concerned with one matter, namely the conditions necessary in order to (b) As regards restriction on competition, it qualify as a wholesaler. is essential for the decision to be based on a manifestly incorrect interpretation of a (d) The finding that the clause as to 25 000 rule of law. Therefore should the High Au­ metric tons prevents, restricts or distorts thority make an incorrect assessment of an normal competition within the meaning of economic situation, this is a matter of little Article 65 is also manifestly erroneous first importance provided, however, that the er­ because it is inconceivable that such conse­ ror does not consist in a manifest disregard quences can arise having regard to the very for a rule of law. large number of wholesalers all of whom are Since the agreement made by the three sell­ treated on the same basis, and secondly be­ ing agencies was caught by Article 65 (1), it cause there would no longer be any compe­ was necessary, pursuant to Article 65 (2), to tition between the three selling agencies for examine its various provisions with regard Ruhr coal if the clause were struck out, for to the repercussions in respect of the third it is that very clause that renders competi­ criterion, in so far as traders were to be ex­ tion possible. cluded for reasons other than an improve-

GEITLING v HIGH AUTHORITY

ment in distribution. That, again, involves mutually have regard in respect of their an economic finding. wholesalers to the tonnages which the latter have bought from the two other agencies. The effect of that is up to the amount in b — Restriction on competition within the question (12 500 metric tons), the interest meaning of Article 65 (I) that traders might have had in purchasing coal from other basins is eliminated. 1. The application starts on the basis that a restriction on competition exists and at first (c) In the rejoinder, the defendant states it only examines the possibility of author­ that the whole of the agreement falls within izing the proposed criterion. Article 65 (1) and so also, therefore, do each During the oral hearing, the applicants' Ad­ of its clauses, which could be prohibited if vocate also accepted that the trading rules they were neither essential nor necessary as a whole needed authorization. for its purpose. In the reply, however, it was denied that the clause as such was of such a nature as to res­ (d) The number of traders is not relevant. trict competition and thus fell under the What is decisive is that those traders who prohibition in Article 65 (1). do not meet the requirements of the clause are set at a grave disadvantage compared (a) The sharing of the market does not re­ with the others for a reason foreign to the strict competition, having regard to the principle of competition. large number of wholesalers approved not­ The clause also has the effect ot restricting withstanding the clause. Furthermore, the the competitiveness of other producers, corrective clause included in the decision which in fact constitutes national discri­ requires that any reduction in the number mination from the point of view of the of wholesalers that might perhaps arise by Community. reason of the application of the provision at issue shall be corrected. (e) Finally the High Authority is of the opinion that the rejected criterion leads to a (b) On the contrary, the clause is a factor mutual sales guarantee between the three which stimulates competition in favour of selling agencies for Ruhr coal, and thus to Ruhr coal because it encourages the pur­ a considerable extent they abandon the pur­ chase of that coal in particular, in which suit of an autonomous sales policy. wholesalers would otherwise have shown a less keen interest.

c — The possibility of authorization under (c) It does not constitute a measure having Article 65 (2) repercussions on the market because its economic purpose is otherwise, namely to 1. The applicants complain first that the ensure that wholesalers shall have adequate High Authority did not consider whether qualifications. the clause at issue could be authorized un­ der Article 65 (2). They are also of the opin­ 2. The defence sets out in detail the reasons ion that if a restriction on competition does for which the defendant is of the opinion exist it is within what is permitted by the that there is a restriction on competition. provisions of the Treaty because it is not more restrictive than is required by the pur­ (a) First, there is a restriction as regards re­ pose of the trading rules. lationship between producers and traders, The reply asserts that the alleged reason, to in the form of a sharing of the market and the effect that the clause at issue is incom­ of customers. That sharing is an element of patible with Article 65 (2)(a) and (b), does the agreement and requires authorization. not appear in the decision and in addition is not correct in fact. There is no limit on the (b) Furthermore the clause restricts compe­ competition between the three selling agen­ tition between the agencies. cies. The requirement of purchases of Since all three apply the same rules, they 25 000 metric tons of Ruhr coal is justified

II

JUDGMENT OF 20. 3. 1957 — CASE 2/56

in fact, because it was necessary to require prohibition in Article 4 (b) on discrimina­ that the means of transport and methods of tory measures reappears in the conditions insurance be identical and that interchange­ for authorization set out at (b) in the first able stocks be accumulated. subparagraph of Article 65 (2). In that re­ The defendant's objections are in reality di­ spect, Article 65 constitutes the lex specialis rected at the fact that the coal offered by the in relation to Article 4. Of itself, Article 4 three agencies is comparable and that the (b) does not suffice as a reason in support of advantages resulting from this are extended a decision to refuse to authorize the creation to the two other agencies. Now the fact that of a cartel. the coal is comparable is attributable to nat­ Rules which meet conditions set out in Ar­ ural conditions. To make a distinction be­ ticle 65 (2) cannot infringe Article 4. tween the applicants' coal and coal from the Article 4 (b) and the first subparagraph ot two other selling agencies would be unreal. Article 65 (2) at (a) and (b) complement each other perfectly in proceedings for the 2. (a) The High Authority rejects the com­ authorization of a cartel, it is the first para­ plaint that it did not examine the possibil­ graph of Article 65 (2) at (a) and (b) alone ities of granting an authorization under Ar­ that can be applied as the rule involving the ticle 65 (2). prohibition of the discrimination in Article 4 (b). In order that section II (1) (c) of the (b) It also states that the disputed part of trading rules may be authorized, it is there­ the trading rules: fore sufficient for it to meet the conditions (1) as regards the relationship between for authorization in the first paragraph of Geitling and the traders of the Community, Article 65 (2), which is the lex specialis. is more restrictive than is required by the In so far as it applies a particular kind of purpose of the agreement; practice tending to restrict competition, the (2) as regards the relationship between prohibition in Article 4 (b) is included in the Geitling and the two other selling agencies general provisions of Article 65 (1) and it is for Ruhr coal, results in restricting compe­ not excluded by those which are enumer­ tition excessively. ated 'in particular'.

The additional requirement is not justified by Geitling's interest in an improved dis­ 2. (a) The defendant argues this is quar­ tribution of the fuel which it sells. Nor can relling over words: it contribute in any way to an improvement A cartel between producers which results in in the sale of coal. It is therefore of a more discrimination between traders and be­

restrictive nature than is required by its pur­ tween producers is not essential in order to pose. obtain an improvement in distribution. Moreover it is always of a more restrictive nature than is required by its purpose. d — The problem of discrimination The case-law of the Court has given to Ar­ ticles 2 to 4 of the Treaty the status of prin­ In the first place, the parties disagree on the ciples. The High Authority must therefore question whether, in the procedure for au­ take those provisions into account in all its thorization, Article 4 (b) of the Treaty has decisions. any significance independently of Article Therefore, when it examines whether and 65 (2). to what extent an agreement meets the con­ ditions set out in Article 65 (2) (a), the High 1. On this subject, the applicants argue that Authority must always consider whether agreements intended to create discrimina­ that agreement involves discrimination. tion may not be authorized simply by virtue In effect, it matters little whether the de­ of the first subparagraph of Article 65 (2). fendant expressly refers to Article 4 (b) in For such discrimination is always, in effect, the procedure for authorization and uses of a more restrictive nature than is required the concept of 'discrimination' or whether it by their legitimate purpose (the improve­ relies only on Article 65 (2). When the con­ ment of distribution or of production). The ditions set out in paragraph 2 (a) and (b) are

GEITLING v HIGH AUTHORITY

met, it is always necessary directly or indi­ business of a trader really runs to a suffi­ rectly to consider whether the agreement cient tonnage. involves discrimination. 2. (a) The defendant on the contrary as­ (b) In its rejoinder, the High Authority says serts that the criterion at issue involves an that its refusal to grant the authorization is unequal treatment of wholesalers, and thus based both on an infringement of Article 4 of purchasers, in support of which the appli­ (b) and on the fact that the provisions set cants cannot adduce any objective reason. out in Article 65 (2) are not met. Therefore It thus constitutes discrimination. the relationship between Article 4 and Ar­ The supplementary requirement that ticle 65 matters but little. 12 500 metric tons from the Ruhr must be Secondly, the parties are not in agreement purchased has no bearing on the definition as to whether discrimination exists. of wholesalers. It thus constitutes excessive restriction (Article 65 (2)) and discrimina­ (I) Discrimination as regards traders tion (Article 4 (b)).

1. (a) The applicants argue that the con­ (b) In its rejoinder, the High Authority re­ cept of discrimination involves a difference futes the applicants' conception that the in treatment between producers or custom­ Treaty does not prohibit discrimination be­ ers bound by an agreement within the mar­ tween traders. It appears necessary to pro­ ket. tect traders against discrimination, since al­ Now, under the rejected clause, the sellers most half the sales take place through trad­ do not discriminate between the purcha­ ers. sers, who are the only possible contracting parties. (c) In assessing the nature of the condition (b) In addition the applicants doubt wheth­ at issue, what is decisive is not whether an er Article 4 (b) is intended to ensure the in­ objective reason exists for establishing a dependent protection of each trader. They distinction, but whether there exists an ob­ are of the opinion that a measure affecting jective reason of such a nature as to justify a trader can only be judged incompatible that differentiation, taking into account its with the Common Market if it affects the object and its effects, in accordance with position of the user or of the producer on the principles on which the Treaty is based. the market. (d) Whereas until the opening of the Com­ (c) Moreover, the prohibited clause only mon Market it was necessary to sell a min­ constitutes a condition of sale which does imum of 6 000 metric tons in order to be ac­ not differ fundamentally from other such cepted as a first-hand trader, the applicants conditions. If the defendant's point of view have not proved that the situation has be adopted, all the conditions are of a dis­ changed so fundamentally that the figure of criminatory nature, because they establish a 12 500 metric tons from one selling agency distinction between purchasers who satisfy is now no longer sufficient. them and those who do not. (e) In practice, a wholesaler is not con­ (d) The applicants have a legitimate inter­ cerned with storage. In the case of carriage est in requiring not only that a wholesaler by rail no problem arises. As regards carri­ shall have proper experience of carriage, in­ age by water, the question of storage comes surance and storage, but also that his busi­ up only at the unloading stage, and here the ness shall involve a sufficiently high ton­ agent for the selling agency uses the pre­ nage of coal from the same source to enable mises existing in the wholesale trade which him, should supplies from one of the selling are available for unloading. No insurance is agencies be temporarily inadequate, to turn necessary as regards carriage by rail. As to supplies from another agency instead. It regards carriage by water, it is usually the is only with a sales figure of 25 000 metric agent who insures. The general conditions tons that there can be certainty that the of insurance apply to contracts of carriage.

JUDGMENT OF 20. 3. 1957 — CASE 2/56

(f) The ostensible purpose of the clause can to discrimination to the detriment of the only be achieved if the trader purchases other two selling agencies for Ruhr coal. 12 500 metric tons from each of the three selling agencies. Otherwise, he is a trader at 2. (a) The High Authority replies that the second hand in the eyes of each of the other criterion of the purchase of 25 000 metric two selling agencies, and he must, for his tons from the Ruhr encourages wholesalers part, obtain supplies from a trader approved to defer, up to that quantity, the purchase of by them, that is to say on terms different fuels from producers of other basins and from those which are applied by the agency that it involves unequal treatment of the by which he is approved as a first-hand other producers which is objectively unjus­ trader. tified. Thus the Geitling selling agency does not establish discrimination between itself (II) Discrimination as regards producers and other producers, but between several other producers, that is to say on the one 1. (a) The applicants see another infringe­ hand the other two selling agencies for ment of the Treaty in the fact that the High Ruhr coal and, on the other hand, the re­ Authority considers it as also legally possi­ maining basins of the Community. ble for a producer to discriminate in respect of other producers. (b) The defendant also argues that condi­ tions encouraging the purchaser to make a (b) The High Authority's conception that distinction between the products of certain the sellers encourage the purchasers to dis­ other producers cannot be considered as le­ criminate, amounts to treating any compet­ gitimate or fair competition. Moreover itive measures as prohibited discrimination. what matters as regards the existence of dis­ It is in the nature of competition for a seller crimination is not the subjective intention to encourage the purchaser to discriminate of the person who adopts a given measure, between that seller and other sellers. The but the practical effect of that measure on applicants' conception is based on the ex­ the Common Market. ample of discount for quantity. (c) The example, mentioned by the appli­ (c) Moreover the clause at issue does not cants, of discount for quantity, legitimate in encourage the customers to distinguish be­ itself, clearly shows the boundary between tween the different producers, but between the practice of legally acceptable competi­ one particular kind of coal, Ruhr coal, and tion and discrimination. The rejected crite­ other kinds. The advantages obtained from rion is tantamount in practice to a fidelity that distinction arise from natural condi­ discount on a collective basis, a discount tions and failure to use them would amount which is prohibited.

Law

A — Admissibility of the application

1. The application has been properly lodged in due form and within the prescribed time-limit. Its admissibility has not been contested by the defendant in the written procedure and the Court has no occasion to raise any objection of its own motion.

2. During the oral procedure it has been argued than an application cannot be ad­ missible if it contests an isolated provision of a decision as a whole, since a partial annulment automatically transforms the remainder of the decision into a new de­ cision, and that this is contrary to Article 34 of the Treaty, which provides that

GEITLING v HIGH AUTHORITY

where a decision is annulled, the matter shall be referred back to the High Authority. This objection is unfounded because under Article 34 the judgment cannot an­ ticipate the measures which the High Authority may be required to adopt in order to amend its decision, having regard to the annulment.

3. The contested decision individually concerns each of the 19 mining undertak­ ings, the applicants at 1, being coal producing undertakings with a right to institute proceedings before the Court. The applicant at 2 must be considered as an undertaking regularly engaged in dis­ tribution within the meaning of Article 80 of the Treaty. Therefore the said article, together with Article 65 of the Treaty, gives it the right to institute proceedings before the Court.

4. The application is therefore admissible. The applicants may raise all the grounds set out in the first paragraph of Article 33.

B — Substance

(I) Infringement of essential procedural requirements

1. The applicants see an infringement of essential procedural requirements in the inadequacy of the reasons in support of Article 8 of the decision; according to them, an error as to reasons is equivalent to an absence of reasons. According to the general provisions of Article 5 and 15 of the Treaty, the High Authority is required to state the reasons for its decisions, mentioning those facts on which the legal justification for the measure depends, and the considerations which have led it to adopt its decision. The reasons on which the decision is based must be stated in order that review by the Court shall be possible. However, the High Authority is not required to discuss all the possible objections which might be raised against the decision.

2. In general terms, it was not necessary in the present case to state independent and exhaustive reasons for the contested article, as an element of a complex de­ cision. Sufficient reasons can be deduced from the context of all the findings stated in support of the decision as a whole. Such is the case as regards the decision at issue. The High Authority found first that the provisions of the trading rules—the clause at issue appears among them—which determine which traders may receive direct supplies, involve a 'sharing of customers and of the market' within the meaning if Article 4 (d) and of Article 65 (1) of the Treaty (JO No 6 of 13.3.1956, p. 33). It went on to state that such rules can be authorized subject to certain conditions. It then explained that the parts of the commercial rules authorized met those conditions and why that was the position (JO No 6 of 13.3.1956, p. 34).

JUDGMENT OF 20. 3. 1957 — CASE 2/56

At the same time, the High Authority indicated the reasons for which it was of the opinion that the clause at issue did not satisfy the said conditions. The effect of the said clause was that up to a quantity of 25 000 metric tons, the dealer would 'defer the purchase of fuels from producers of other basins'. It (thus) leads 'to a discrimination' and is, moreover, 'more restrictive than is necessary in order to achieve the purpose of this delimitation', which is to define which wholesale trad­ ers can be accepted for direct purchases (JO No 6 of 13.3.1956, p. 34). Those reasons must be considered as sufficient, since they clearly and completely set out the considerations of fact and of law on which the rejection of the clause is based.

Moreover, the Court cannot share the opinion of the applicants, that the argu­ ments of the High Authority do not constitute legally acceptable reasons, because they are also applicable to the criteria which the High Authority did not criticize. That opinion is incorrect, if only because the said criteria merely require the pur­ chase of a certain tonnage from the whole of the Community or from the appli­ cants, but not from certain other selling agencies. In order to judge whether there has been an infringement of essential procedural requirements, it is not necessary to examine whether the conception of the High Authority is correct in law. What matters is that it must be logically compatible with the decision adopted.

(II) Infringement of the Treaty

a — In general

Two complaints have been made in support of the submission that the Treaty has been infringed, namely failure to understand the prohibition on discrimination in Article 4 (b) and failure to understand the prohibition on cartels in Article 65. The examination of the submissions of the applicants must start from the request for authorization which they submitted, the partial rejection of which by the High Authority constitutes the subject-matter of the dispute. That request manifestly acknowledged the fact that the agreement concluded by the applicants at 1, relating to 'the sale of fuels from installations within the Com­ mon Market during the period from 1 April 1956 to 31 March 1959 undeniably came within Article 65 (1) of the Treaty. In its general assessment of the situation, the High Authority starts from the ex­ istence of an agreement restricting competition which must be examined in the light of the grounds for authorization. It refers both to the prohibition on discri­ mination and the grounds for authorization set out in Article 65 (2), the provision being perfectly complementary. That point clearly appears from the considerations put forward in the reasons for Decision No 5/56 or arising from the Treaty, namely that the decision is based in particular on Articles 4 and 65 the Treaty (JO No 6 of 13.3.1956, p. 29);

GEITLING v HIGH AUTHORITY

the decision is based in particular on Articles 4 and 65 the Treaty (JO No 6 of 13.3.1956, p. 29);

the trading rules contained in the agreement concluded on 6 February 1956 by the applicants at 1 is considered as part of a joint-selling agree­ ment on fuels (JO No 6 of 13.3.1956, p. 29 and p. 32 et seq. );

Article 65 (2) provides that joint-selling agreements may be authorized. The result is, as is shown by the remainder of the general considerations, that in the first instance they are caught by the prohibition in Article 65 (1) and that they are then subject to authorization.

Therefore the application puts forward a complaint based on an incorrect applica­ tion of Article 65 of the Treaty. The structure of that provision requires that one must first examine whether there exists a restriction on competition subject to authorization (Article 65 (1)), and then examine whether there are grounds for authorizing that restriction (Article 65 (2)).

b — Infringement of Article 65 of the Treaty

1. Is there a restriction on competition within the meaning of Article 65 (1)?

(a) The applicants did not at first deny that the trading rules contained in their agreement constituted a restriction on competition which was subject to author­ ization. In their reply, they argued for the first time that the clause at issue, as such, did not contain a restriction, and that therefore it was not subject to author­ ization.

That argument can have its place as a development of the submission of infringe­ ment of Article 65, put forward in the application, and it must not be considered as an independent complaint, which could be rejected as out of time under Article 22 of the Statute of the Court.

(b) It is not denied that the whole of the applicant's joint-selling agreement, in­ cluding the trading rules, was subject to authorization. It shares the customers and the market and is such as to restrict or distort competition between the different member undertakings in Geitling. Given that the joint-selling agreement, as such, is subject to authorization, the same applies, in principle, to the detailed methods of implementation, and thus, in the present case, to the clause at issue. Moreover any limitation on the number of wholesale traders accepted as first­ hand customers restricts or distorts competition between traders, whatever the number of interested parties. In order to reach this finding, it is not necessary to examine the practical effects of the trading rules in the present case. The finding emerged in abstracto from Article 65 (1).

JUDGMENT OF 20. 3. 1957 — CASE 2/56

(c) Other special considerations are also relevant in the present case. The clause at issue and the reciprocal taking into account of purchases of Ruhr coal which it involves improve the competitive position of all the selling agencies for Ruhr coal vis-à-vis the remainder of the producers of the Community, and thus distort normal competition in the Common Market between each of those agencies and its competitors. The fact that the clause at issue distorts and restricts competition results primarily from the limitation on competition which it involves in respect of the sales of the products of each selling agency for Ruhr coal in favour of the two others.

A wholesale trader who has already purchased 12 500 metric tons from the appli­ cant at 2 must, in order to satisfy the criterion at issue, purchase 12 500 extra metric tons of Ruhr coal from one of the other two selling agencies for Ruhr coal assuming he does not purchase them from the said applicant—and that obligation distorts or restricts competition between the three agencies. The agreements previously submitted by the President and Mausegatt agencies to the High Authority for authorization contained corresponding clauses (cf. Decisions Nos 6/56 and 7/56, JO No 6 of 13.3.1956, p. 47 and p. 60). If the High Authority had authorized the clause at issue and the similar clauses of the other two agencies, it would have practically approved, on that point, of a sort of market- sharing arrangement between all the producers of coal from the Ruhr basin. The High Authority intended to prevent competition from being distorted and to prevent such a concentration from being created. Its aim was 'to ensure by appro­ priate limitations and conditions in this authorization that the independence of the three selling agencies for Ruhr coal shall be preserved, and that in particular it shall remain possible for each selling agency to develop its own policy as regards pro­ duction and sales' (JO No 6 of 13.3.1956, p. 32). The finding that the clause at issue distorts and restricts competition arises from a purely legal assessment of the trading rules, without its being necessary to con­ sider and to assess the economic circumstances.

Thus the question whether the Court has jurisdiction to verify the finding does not arise in the present case. It follows from the foregoing considerations that the clause at issue was subject to authorization, not only as an element of the whole of the agreement concluded by the applicants, but also of itself.

2. Is there a restriction on competition which may be authorized under Article 65 (2)?

(a) The High Authority justifies its refusal to authorize the clause at issue under Article 65 (2), on the ground that the criterion required of a wholesale trader in order that he shall qualify is of a more restrictive nature than is required for the purpose of defining the category (JO No 6 of 13.3.1956, p. 34). Moreover, it appears from the statement, looked at as a whole, of the reasons for the decision, that the clause, being an element of the trading rules and thus of the

GEITLING v HIGH AUTHORITY

joint-selling agreement submitted for authorization, was examined and assessed in particular from the aspect of its possible contribution to an improvement in the distribution of fuels (JO No 6 of 13.3.1956, p. 30) and of the need for it, taking into account in particular the conditions applying to the coal industry (JO No 6 of 13.3.1956, p. 31). In this regard, the applicants say that the clause was necessary as part of the trad­ ing rules for determining the requirement for acceptance as wholesale traders with the right to make direct purchases, that requirement only being met if the trader sells a large tonnage of fuels of the same sort, for present purposes 25 000 metric tons of Ruhr coal, upon identical conditions as to freight, carriage and storage. They argue that a trader is all the more suitable if he is given the possibility of qualifying as a wholesaler with other agencies distributing the same products by means of the provisions for set-off laid down in the rules. They claim that this sensible choice of traders is essential for an appreciable im­ provement in the distribution of the products of the applicants, and that it thus accords with the purpose of Article 65 (2). The clause at issue, and in particular the reciprocal set-off of quantities purchased from certain other selling agencies for Ruhr coal for which it provides, leads in any case to an improvement in the distribution of Ruhr coal as a whole. Under the terms of the trading rules, that task is entrusted to certain organizations common to the three selling agencies. In authorizing certain common organizations and arrangements, the High Au­ thority has in fact taken into account, to the extent permitted by the Treaty, in particular by Article 65, of the natural conditions, mentioned by the applicants, common to all the mining undertakings of the Ruhr. To a large extent, those organizations ensure that the interests which the appli­ cants purport to protect by the application of the clause at issue are upheld, namely publicity in favour of Ruhr coal (Ruhrkohlenberatungsgesellschaft— JO No 6 of 13.3.1956, p. 31) and maintenance of a balance in case of scarcity (Common Bu­ reau— JO No 6 of 13.3.1956, p. 71). However, according to Decision No 5/56 of the High Authority, each of the newly created selling agencies must develop an independent distribution policy. Their trading rules can only be authorized under Article 65 (2) if they make for improve­ ment in the distribution of the product of each of the agencies. The clause at issue does not fulfil that condition, because in determining who are wholesale traders, it provides for taking into account the quantities bought from the other two joint-selling agencies. As has been explained above, that is unnecessary as regards the improvement of the distribution of the product of each of the agencies. It is thus more restrictive than is required by its purpose. This finding arises directly from the text of the clause at issue and not from an assessment of the economic situation, which would not be liable to review by the Court.

(b) The Court need not decide whether the clause could have been authorized if

JUDGMENT OF 20. 3. 1957 — CASE 2/56

it had only required that 25 000 metric tons be purchased from Geitling and if it had not gone beyond what was necessary for a substantial improvement in the dis­ tribution of its products. In any event the High Authority was not required to alter the contents of an agree­ ment which was submitted to it in order for it to qualify for authorization.

(c) Therefore, in refusing to authorize the clause at issue, the defendant did not infringe Article 65 of the Treaty.

c — Discrimination

In giving reasons for its refusal to authorize the disputed part of the trading rules, the High Authority also argues that the said clause establishes discrimination be­ tween the producers of the Community as well as between certain groups or traders.

The applicants see an infringement of the Treaty in the fact that first the High Au­ thority manifestly failed to understand the relationship existing between Article 4 (b) and Article 65 (2) and that secondly it also applied Article 4 wrongly.

1. In support of a failure to understand the relationship existing between Article 4 (b) and Article 65, the applicants claim that the provisions of Article 65, since they rank as a lex specialis, exclude the fundamental provisions of Article 4 (b).

However, such is not the case.

Articles 4 (b) and 65 of the Treaty govern the different aspects of economic life in their respective fields of application. Those two articles do not exclude neither do they annul each other; they serve to bring about the objectives of the Community. They are thus complimentary in this respect. In certain cases their provisions can cover facts justifying a simultaneous and con­ current application of the said articles. That is particularly true where, as in the present case, the clause at issue is more restrictive than is necessary for the purpose of the rules, so that it not only fails to qualify for authorization under Article 65, but also can bring about discrimin­ ation within the meaning of Article 4 (b). Therefore in mentioning Article 4 (b) in support of its decision, the High Author­ ity did not infringe the Treaty.

2. The High Authority was right in stating that the clause at issue could bring about discrimination.

(a) Discrimination between producers is conceivable and possible as the High Au thority has rightly assumed.

GEITLING v HIGH AUTHORITY

The effect of the clause issue is that the applicants take into account purchases made by wholesalers from two other given agencies, whereas the same competi­ tion should exist between the said agencies and the applicants as exists between the latter and the other producers of the Community, whose sales the said appli­ cants do not take into account.

That method of proceeding constitutes indirect discrimination in that it encour­ ages the purchasers towards a preference for obtaining supplies from the producers of Ruhr coal, to the detriment of the remaining producers of the Community.

(b) In addition, the facts of the case show the existence of discrimination between traders.

According to the clause, traders — who are purchasers within the meaning of Article 4 (b)—ordering the same quantity, 12 500 metric tons, from Geitling, are treated unequally, for inadequate reasons, according to whether they also purchase 12 500 metric tons from President or from Mausegatt. The possibility exists of these traders being placed at a disadvantage, and that constitutes dis­ crimination.

Accordingly the submission as to infringement of the provisions concerning discrimination is unfounded.

Therefore the application must be rejected.

C — Costs

Under Article 60 of the Rules of Procedure of the Court, the unsuccessful party shall be ordered to pay the costs; the applicants must accordingly be ordered to bear the costs of the proceedings.

Upon reading the pleadings; Upon hearing the parties; Upon hearing the opinion of the Advocate-General; Having regard to Articles 4, 5, 15, 33, 34, 65 and 80 of the Treaty; Having regard to the Protocol on the Statute of the Court of Justice; Having regard to the Rules of Procedure of the Court of Justice and to the Rules of the Court on costs

THE COURT

hereby:

Dismisses the application for the annulment of Article 8 of Decision No 5/56 of the High Authority dated 15 February 1956;

OPINION OF MR ROEMER — CASE 2/56

Orders the applicants to bear the costs.

Pilotti Hammes Serrarens

Delvaux Rueff

Delivered in open court in Luxembourg on 20 March 1957.

M. Pilotti Ch. L. Hammes President Judge-Rapporteur A. Van Houtte

Registrar

OPINION OF MR ADVOCATE-GENERAL ROEMER1

Summary

I — Facts 22

II — Conclusion and admissibility of the application 23 III — Infringement of essential procedural requirements 24

IV — Relationship between discrimination (Article 4 (b)) and restriction on competition (Article 65) 26

V — Restriction on competition within the meaning of Article 65 (I) 28

VI — Possibility of authorization under Article 65 (2) 32 VII — Discrimination 35

VIII — Result and conclusion 37

Mr President, examination of concrete events. The case is Members of the Court, about a clearly defined passage in the text of an agreement. That text sets out an arrange­ I — Facts ment made by the coal-producing under­ takings of the Ruhr concerning the joint This case, brought before the Court by 19 selling and the rules applicable thereto. The mining undertakings of the Ruhr basin and Court is called upon to examine whether the selling agency which they have set up in that specific clause of the trading rules sub­ the form of a limited company under Ger­ mitted for authorization at the same time as man law against the High Authority of the the articles of association of the company is European Coal and Steel Community, in compatible with the provisions of the Trea­ which the oral procedure will be brought to ty concerning cartels. an end by the delivery of my opinion, does The text of the trading rules and the content not involve assessing the facts and their le­ of the decision adopted by the High Au­ gal consequences. Nor does it involve legal thority on the request for an authorization

1 — Translated from the German.

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