C-15/57

HIGH AUTHORITY OF THE EUROPEAN COAL AND STEEL COMMUNITY , represented by its Legal Adviser, Gerard Olivier, acting as Agent, assisted by Professor André de Laubadère of the Faculté de Droit, Paris, with an address for service in Lux­ embourg at its offices, 2 place de Metz, defendant,

Application for the annulment of the decision of the High Authority of 12 Decem­ ber 1956 declaring that the Compagnie des Hauts Fourneaux de Chasse, Chasse- sur-Rhône, Isère, must pay to the Caisse de Péréquation des Ferrailles Importées (the Imported Ferrous Scrap Equalization Fund) the sum due on 31 August 1956 in fulfilment of the provisions on the equalization of imported ferrous scrap,

THE COURT

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

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

gives the following

High Authority dated 30 March 1957. A cate-General delivered his opinion, which certified copy of the decision and of the was that the application be dismissed and communication thereof have been placed that the Compagnie des Hauts Fourneaux on the file. It is to be noted that the date of de Chasse be ordered to pay the costs. the signature on the order for enforcement must be regarded as a clerical error so that 2. Conclusions of the parties '1954' must be read as '1957'.

tice. The form of the application calls for no nulled under Article 33 of the Treaty and comment. that the High Authority, whose offices are The documents appointing the applicant's at 2 Place de Metz, Luxembourg, be ordered representative are in order and his signature to pay the costs'. has been verified as genuine. In its reply the applicant claims that the The applicant's lawyer and the Agent and Court should: lawyer of the defendant have been properly appointed. 'Declare the application lodged by the com The statement of defence, the reply and the pany against the decision of 12 December rejoinder were lodged within the periods 1956 to be admissible and well-founded; prescribed, and all procedural requirements In consequence declare it void as regards have been complied with. the obligation to pay the contributions By order of the President of the Court the claimed both for the period 1 April 1954 to application was assigned to the First Cham 31 December 1955 and for the period 1 Jan ber for the purposes of any preparatory in

ticles 2, 3, 4, 5, 14, 15, 31, 33, 53, 65, 80 and cided to conduct certain measures of inqui 85 of the Treaty, the Protocol on the Statute ry and to put certain questions to the par of the Court of Justice, in particular Article ties; the answers to these questions and the 85 thereof, and the Convention on the final written conclusions have been placed Transitional Provisions, in particular Arti on the file. cle 29 thereof. At the beginning of the oral procedure the The defendant contends that the Court Court decided to deal jointly with the pre

JUDGMENT OF 12. 6. 1958 — CASE 15/57

levy owed by the Compagnie des Hauts During a transitional period, from 9 Febru­ Fourneaux de Chasse, inasmuch as the ary to 15 March 1953, the High Authority applicant is debarred from submitting carried out a distribution of ferrous scrap grounds of complaint against General Deci­ pursuant to Article 2 of the Convention and sions No 22/54 and 14/55 which it did not to Article 59 (3) of the Treaty; the ferrous submit within the prescribed period or, at scrap resources of each Member State were least, inasmuch as the applicant adduces no assigned to it with the exception of the ex­ ground of complaint calculated to demon­ portation to Italy of 5000 metric tons of Ger­ strate that Decisions No 22/54 and 14/55 are man scrap and 20 000 metric tons of French vitiated by misuse of powers affecting it; scrap (Decision No 2/53 of 17.2.1953, JO With all legal consequences, including No 1 of 10.2.1953). those relating to the costs of the When this scrap was put into free circula­ proceedings.' tion within the Community, the High Au­ thority, acting under Article 61 of the Trea­ In its rejoinder the defendant maintains its ty and Annex II thereto, fixed maximum conclusions. prices for specified basic zones. These prices were reduced in due course in order to

stantially reduced; secondly, there conti­ but by Decision No 43/53 of 11 December nued to be an appreciable difference be­ 1953 JO No 3 of 15.12.1953) it was extended until 31 March 1954. tween the prices for ferrous scrap collected on the Common Market and those for im­ On the day on which Decision No 33/53 ported scrap. There was a possibility that was adopted the High Authority addressed this situation would result in the transfer of letters to the Schrottvermittlung GmbH purchases hitherto made abroad to Com­ (Düsseldorf)) and to the Consorzio Nazio­ munity ferrous scrap and that this would nale Approvvigionamenti Materie Prime cause a substantial increase in prices. To Siderurgiche, S.p.A. (Milan), in which they meet this situation the High Authority con­ were informed that their activities were in­

sidered that an equalization arrangement, compatible with Article 65 of the Treaty together with the fixing of maximum and that they must be treated as prohibited prices, might bring the price of imported organizations with effect from 14 June scrap down to the level of that obtaining on 1953.

the Common Market and avoid upsetting At the beginning of 1954, it was clear that the patterns of supply (General Report of the equalization arrangement set up be­ the High Authority, 10.8.1952 — 12.4.1953, tween undertakings producing pig-iron and No 44). steel and authorized by Decision No 33/53

HAUTS FOURNEAUX DE CHASSE v HIGH AUTHORITY

The operation of this ar referred to in Decision No 26/55 was allot rangement was entrusted to the Office ted also for ferrous scrap saved through in Commun des Consommateurs de Ferraille creased use of liquid basic Bessemer steel in (the Joint Bureau of Ferrous Scrap Con the electric furnaces. sumers) and the Caisse de Péréquation des Decisions Nos 14/55, 26/55 and 3/56 were Ferrailles Importées referred to above. All extended until 31 January 1957 by Deci undertakings which were consumers of sions Nos 10/56 of 7 March 1956, 24/56 of scrap were obliged to pay the appropriate 22 June 1956 and 31/56 of 10 October 1956

Saint-Etienne. As a producer exclusively of uary 1955 JO No 3 of 31.1.1955) it was haematite pig-iron and not of steel, it uses extended until 30 June 1955. scrap only in order to enrich the charge of By Decision No 14/55 of 26 March 1955 JO the blast furnace. It does not possess any No 8 of 30.3.1955), adopted pursuant to ferrous scrap which is bought or produced subparagraph (b) of the first paragraph of by itself but its scrap needs are supplied en Article 53, Article 65 (2) and Article 80 of tirely from purchases of sheet scrap and the Treaty and effective until 31 March turnings from regular and long-standing 1956, the existing arrangement was supple suppliers in the Lyon region. mented so as to take account of the supply Since the equalization machinery was first position in the different regions of the Com introduced the applicant has refused to join munity on the basis of comprehensive es the Fund and to pay the fees due.

munity. In order to guarantee regular sup vidual decision concerning the applicant on plies for the market the Joint Bureau was 2 May 1956 declaring that it was required to empowered to purchase on joint account pay to the Fund the sum of 45 133 691 due from third countries the quantities in for the period 1 April 1954 to 31 December tended to be made available subsequently 1955 and the individual decision of 12 De to consumers. cember 1956 for payment of the sum of FF In Decision No 14/55 the High Authority 84 582 316 due for the period 1 January to had already provided for measures to re

JUDGMENT OF 12. 6. 1958 — CASE 15/57

'The High Authority, eighty-two thousand three hundred and Having regard to Articles 53, 80 and 92 of sixteen). the Treaty of 12 April 1951 establishing the European Coal and Steel Community (rat Article 2 ified in France under Law No 52/387 of 10.4.1952 (Journal Officiel de la République This decision may be the subject of enfor Française 1952, p. 3795)); cement pursuant to the said Article 92 of Having regard to Decisions Nos 22/54 of 26

sions; (signed) Rene Mayer President Whereas by enforceable decision of 2 May 1956, communicated on 9 July 1956, the 4. Summary of the submissions High Authority declared that the Société and arguments of the parties des Hauts Fourneaux de Chasse, Chasse- sur-Rhône, which is an undertaking in the A — Admissibility of the application steel industry within the meaning of Article 80 of the Treaty, was required to pay to the The application is, in essence, brought Imported Ferrous Scrap Equalization Fund, against the detailed rules of the equalization Brussels, the sum of FF 45 133 691 for the scheme introduced by general Decisions period 1 April 1954 to 31 December 1955; Nos 22/54 and 14/55 the implementation of Whereas after adjustment of this figure as a which led to the individual decision in result of a final check carried out after 2 question.

basic decisions. For this reason it contends Decision No 14/55, referred to above, and that the application is inadmissible. the sum due in this respect amounts, ac The defendant argues alternatively that, in cording to a provisional statement of ac so far as the application contests the general count, to FF 83 955 900 for the period 1 basic decisions, the applicant can rely only January 1956 to 31 August 1956; Whereas the total of the sums due, in accor on the ground of misuse of powers affecting

HAUTS FOURNEAUX DE CHASSE v HIGH AUTHORITY

the Court. Steel Community. The defendant goes into the question In its reply the applicant maintains that its whether an undertaking can support an ap application is admissible for the following plication against an individual decision by reasons. First of all, it contends that an un submitting as a ground of complaint a mis dertaking cannot be debarred from com use of powers affecting it with which, in its plaining of misuse of powers if it has not view, the basic decision is vitiated but brought proceedings against the general ba where that decision was not contested with sic decision.

their particular case. taking can no longer rely on misuse of pow Secondly, the applicant objects to the fact ers affecting it as a ground of complaint that virtually all individual decisions would against that decision. The defendant main be immune from challenge as a result of the tains this conclusion in its rejoinder. It adds interpretation adopted by the defendant. that while it is true that, in its decisions, the On the other hand, the applicant points Court has, in the case of an action against out that Article 33 of the Treaty contains an individual decision, held all the grounds nothing to justify the conclusion that the provided for under Article 33 of the Treaty right of undertakings to rely on the four to be admissible, that does not mean that grounds against an individual decision this answers the question under considera ceases to exist when those grounds are ap tion since this question did not arise in con plied to a general decision which forms the nexion with any of the cases which have basis of the said individual decision.

JUDGMENT OF 12. 6. 1958 — CASE 15/57

Common Market. were not the subject of argument in either the application originating the proceedings In its rejoinder the defendant states that or in the reply. this ground of complaint constitutes a sub mission of infringement of the Treaty and 1. Infringement of the Treaty not of misuse of powers. Furthermore it emphasizes that the appli (a) Infringement of Article 29 of the cant's reference to Article 1 of the Conven Convention tion is insufficient evidence that Article 29 According to the applicant the equalization is applicable to any measures adopted pur machinery contravenes Article 29 of the suant to Article 53 of the Treaty.

of competition ment by claiming that the High Authority itself recognizes that prior to Decision No The applicant considers that the equaliza 2/57 the result of the scheme was to transfer tion scheme is an infringement of the basic production from pig-iron to steel and, articles of the Treaty laying down the prin moreover, to make it impossible for the pig- ciples of competition the normal operation iron industry to stand the competition. In of which the scheme has distorted by giving these circumstances the High Authority preferential treatment to the consumption could not enact measures under Article 53 of scrap as against that of haematite pig- of the Treaty without at the same time iron. adopting safeguards pursuant to Article 29 In its reply the applicant states that what is (1) of the Convention. This provision, at issue in this case in the infringement of which is of general application and, as is the second paragraph of Article 2, Article 3 clear from Article 1 of the Convention, is (b) and (c), Article 4 (b) and (c) and the fifth intended to avoid the difficulties attribut subparagraph of Article 5 of the Treaty.

HAUTS FOURNEAUX DE CHASSE v HIGH AUTHORITY

Never applicant wishes to give this adjective, theless the defendant adds that the objec namely that of the mere sum of all the in tive of Decisions Nos 26/55 and 3/56 and dividual interests involved; the High Au especially of Decision No 2/57, which was thority is a public body which has the task impugned by the applicant in another ac of achieving the best possible balance tion, is precisely to make it possible for this between the various individual interests consequence of equalization to be corrected involved while acting in the general or by reducing the consumption of scrap. common interest, the two concepts being In its rejoinder the defendant rejects the ap inseparable. plicant's argument that when the High Au thority adopts an equalization system as a (d) Prohibited discrimination giving rise to means of ensuring a regular supply of scrap an indirect subsidy at a reasonable price, this constitutes inter ference with the principle of free competi In its application the applicant claims that it tion contrary to Article 5 of the Treaty. is the victim of discrimination as a result of the fact that the equalization scheme does (c) Disregard of the general objectives of not provide any special rules for the case of

It rejects High Authority is granted certain excep in particular the defendant's argument that tional powers in cases expressly provided the absence of equalization would have re for. Even in these limited cases the High sulted in the alignment of the prices of scrap Authority is required to comply with cer in the Lyon region with the higher prices of tain requirements in order that the rights of imported scrap. The applicant regards this those concerned may be safeguarded; the statement as a hypothetical one which is High Authority is bound to do the same irrelevant to the proceedings.

As to (ii): There is no substance in the de for the remoteness of the Lyon district the fendant's contention that it was necessary defendant agrees that at a time of low eco to ensure that the importation of light scrap nomic activity the district may have a sur did not constitute a heavier burden on plus of scrap and that competing undertak equalization than the importation of heavy ings in the Common Market can get their scrap. The applicant endeavours to show supplies there without difficulty; however, that this argument is paradoxical and that in this gives no guarantee to the applicant.

Every category of scrap is taken a subsidy for the former. The applicant also into account in the calculation of the con points out that first the High Authority and tributions imposed by way of equalization then the Court of Justice imposed a prohi in order to avoid the dearest scrap being bition on the creation of discriminatory subject to the highest rate of contribution. measures, defined the nature of the prohi This method is necessary because, the bited discrimination and, finally, indicated equalization charge being a variable one, that the existence of these discriminatory there could be no indication a priori which measures constituted an indirect subsidy. category would incur the heaviest charge.

On the sub have been objectively adapted to the fur ject of this rate, the defendant emphasizes therance of a particular aim, namely the re that the price of light scrap (domestic or im ported) must not be compared with that of gular supply of scrap at a reasonable price to the whole of the Common Market. heavy scrap (domestic or imported) but, at the most, the price of domestic scrap (light The actual position in which the applicant is or heavy) may be compared with that of im placed may be different from that of other ported scrap (light or heavy). undertakings but it is still a comparable one. As to (iii): In so far as the applicant's indi As to (i): In the absence of equalization, the vidual situation differs from that of other price of domestic scrap would inevitably scrap consumers, the High Authority en tend to fall into line with that of imported deavoured to take this into account by sup scrap, which is much higher. The defendant plementing the equalization machinery by produces figures as evidence that the equal Decisions Nos 26/55 and 3/56 to encourage ization contribution was clearly less than economies in scrap. The applicant supplies the difference between the price of impor no evidence that these measures had no ef ted scrap and that of domestic scrap: this fect. In its rejoinder, the defendant denies difference amounted to US $ 17.44 in July that there is any discrimination.

HAUTS FOURNEAUX DE CHASSE v HIGH AUTHORITY

In disregarding equalization under which charges are uni these restrictions the High Authority dem form constitutes discrimination. onstrated its intention to avoid them and in this way it used its powers for a purpose 2. Misuse of powers other than that for which they were con ferred upon it. In support of its argument In its application the applicant claims that the applicant refers to the case-law of the misuse of powers arises from the fact national courts and tribunals, especially in that the equalization scheme does not ac

labour. Protective or transitional measures lawful aim but another one which was not ought to have been adopted in order to lawful. As regards the first complaint raised make allowance for the applicant undertak in Case 2/57, namely, that the basic deci ing's particular situation, which cannot be sions do not accord with the general objec compared with that of the steel mills. In tives of the Treaty, which constitutes evi view of this and of the local conditions un dence of a misuse of powers, the applicant der which it is supplied, the applicant is the first of all recalled that the legitimate aim victim of discrimination amounting to an which the High Authority set itself in pur indirect subsidy for the benefit of the steel suance of Article 3 is common ground and industry. not the subject of dispute: this aim was the For evidence of the alleged misuse of pow establishment of equilibrium in the pig- ers the applicant refers, in its reply, to the iron/steel market not only by maintaining statements made in its reply in Case 2/57. but also by increasing the production of pig- In order to establish whether a general de

contributions. gard of the declared objective of the deci The applicant also pointed out that the sion, namely the regular supply of ferrous statement of defence emphasizes that the scrap to the market at a reasonable price. objective of the equalization machinery was Under Article 3 of the Treaty the institu the regular supply of ferrous scrap to the tions of the Community are required to act Common Market. This objective differs in the 'common' interest, that is to say, they from the aims described in the High Au must act in the interests of all and not in thority's memorandum of 6 July 1955 de furtherance of the 'general' interest, which fining the general objectives, namely, the

need to restore the balance between pig-iron mon interest in order to ensure a regular production and steel production by increa supply of ferrous scrap to the whole of the sing the production of pig-iron. The substi Common Market. The applicant does not tution in this manner of the legal objective contend that, instead of pursuing an objec by a new one is evidence of a misuse of tive of general interest, the High Authority powers. Further evidence is supplied by the in fact pursued an objective relating parti discrimination already mentioned and by cularly to the applicant but that the individ the contributions which, owing to the ab ual result of the general decisions did not, as sence of any protective measure, leave far as the applicant was concerned, corre Common Market pig-iron defenceless spond to the aim which the High Authority against imported pig-iron, regardless of the set itself. It is quite possible that the result

It ob lawful. They involve limited, theoretical jects to the confusion created by the way in economies which are wholly dependent on which the applicant has stretched its imag the attitude of steel consumers; they are ination on the subject of misuse of powers; supplementary, indirect measures which it considers that the applicant is confusing are no substitute for direct and effective this concept with that of infringement of measures for the maintenance, if not the the Treaty. The defendant maintains its growth, of pig-iron production in accor view that the complaints made by the appli dance with the objective laid down in the cant really refer only to cases of infringe High Authority's memorandum. ment of the Treaty. As for the second complaint, which it put As for the question whether a general deci forward in Case 2/57, to the effect that, for sion can sacrifice the interests of a category reasons which have nothing to do with the of citizens of the Community, the defend aim of equalization, the basic decisions treat ant has explained in its rejoinder in Case heavy and light scrap on the same basis by 2/57 that it does not rely on the unlimited making them subject to a uniform rate, the powers with which it is vested under Article applicant emphasizes that the High Author 53 but argues on the basis of the limitation ity, in order to explain its failure to provide of those powers implied by the wording of for different rates according to types of that provision, namely, that the arrange scrap, with the result that one category of ments in question must be recognized as persons concerned was benefited at the ex necessary for the performance of the tasks pense of another, the High Authority gives set out in Article 3 of the Treaty, a limita a reason which is evidence of lack of fore tion which was fulfilled in the present case. sight, namely, the administrative complica Furthermore, the defendant denies that the tions to which different rates would give applicant has a legally recognizable interest

region. ment so that the existence of a misuse of The defendant has also denied the appli powers is not refuted. cant's contention that it used Article 53 in The defendant claims that the High Author order to avoid declaring a shortage. Equal ity adopted general decisions in the com ization has been carried out without chal-

Law

A — Admissibility

The applicant is objecting to the individual decision for payment taken with regard to it by the High Authority on 12 December 1956 under the equalization scheme for imported ferrous scrap established by Decision No 22/54 of 26 March 1954 and by Decision No 14/55 of 26 March 1955. In the applicant's view those decisions are vitiated by certain irregularities and their resultant illegality necessarily means that the implementing decision taken concerning the applicant, which it is con­ testing, is also illegal. The defendant contends that the applicant cannot impugn the legality of the basic decisions, which are general decisions, in its capacity as a private undertaking, ex­ cept under the conditions and within the periods prescribed in Article 33 of the Treaty. Under Article 33, proceedings 'shall be instituted within one month of the not­ ification or publication, as the case may be, of the decision or recommendation'. If such proceedings are brought by an undertaking or association within the mean­ ing of Article 48 of the Treaty and are concerned with a general decision or rec­ ommendation, they are admissible only if the applicants consider it to involve a misuse of powers affecting them. The application was lodged on 6 May 1957 and although, on account of this, the

JUDGMENT OF 12. 6. 1958 — CASE 15/57

time-limit laid down in the last paragraph of Article 33 has been observed in re­ spect of the decision of 12 December 1956, which was made enforceable by the order for enforcement appended thereto by the competent authority dated 4 March 1957, a certified copy of which was communicated by the High Authority by letter of 30 March 1957, the period had expired in the case of Decision No 22/54 of 26 March 1954 and Decision No 14/55 of 26 March 1955. These last decisions are not impugned directly but by way of the application against the enforceable decision of 12 December 1956. While the decision of 12 December 1956 is an individual decision affecting the applicant. Decisions Nos 22/54 and 14/55 are general decisions on which the decision of 12 December 1956 is based.

The Court takes the view that an unlawful general decision must not be applied to an undertaking and that obligations on the part of such an undertaking cannot arise from a general decision of that nature. In the case of an appeal against a decision of the High Authority imposing pecun­ iary sanctions or periodic penalty payments, Article 36 of the Treaty provides as follows: 'In support of its appeal, a party may, under the same conditions as in the first paragraph of Article 33 of this Treaty, contest the legality of the decision or recommendation which that party is alleged not to have observed'. This provision of Article 36 is not to be taken as a special rule to be applied only in the case of pecuniary sanctions or periodic penalty payments but as the application of a gen­ eral principle on which emphasis is placed in Article 36 only because it applied to the special case of an appeal in which the Court has unlimited jurisdiction. No­ thing in the express reference made in Article 36 can be used as an argument in reverse so as to justify excluding the application of the same right in a case in which it is not expressly mentioned, since the Court has previously ruled that an argument a contrario is to be permitted only if no other interpretation proves to be appropriate and compatible with the wording and context and their underlying aim.

Any other decison would make it difficult to exercise the rights of appeal granted to the undertakings and associations referred to in Article 48 of the Treaty, since it would compel them to study every general decision when published in order to ascertain whether it is not capable of operating to their disadvantage at a later date and whether it cannot be considered to be vitiated by misuse of powers affecting them; undertakings would be encouraged to allow the pecuniary sanctions or pe­ riodic penalty payments provided for under the Treaty to be imposed upon them in order to be able, by virtue of Article 36, to contest the legality of the general

For the foregoing reasons, the application is admissible.

B — Substance

1. Infringement of the Treaty

(a) Infringement of Article 29 of the Convention

The applicant's contention is that the purpose of Article 29 is concern to avoid any shifts in production levels; the High Authority is, accordingly, bound to adopt spe­ cial safeguards not only when difficulties arise during the establishment of the Common Market but also when an undertaking is affected by the measures which the High Authority decides to adopt in implementation of the provisions of the Treaty — in the present case Article 53. Nowhere in Article 29 is there any reference to such an obligation; it does no more than recognize that safeguards may be necessary to ensure that the establishment of the Common Market does not suddenly cause shifts in production levels which

JUDGMENT OF 12. 6. 1958 — CASE 15/57

According to the applicant the normal course of competition has been distorted by equalization because the effect of the latter was to encourage the consumption of ferrous scrap at the expense of that of pig-iron. The defendant does not dispute that the reduction in the price of imported scrap as a result of equalization may encourage undertakings to increase their consumption of scrap; indeed, the de­ fendant accepts that there has been some worsening of the applicant's position as a producer exclusively of haematite pig-iron. Nevertheless it corrected the situa­ tion by the allocation to undertakings consuming scrap of a bonus for ferrous scrap economies effected through increased use of pig-iron (Decisions Nos 26/55 and 3/56). The question which is to be answered is therefore whether the High Authority, convinced as it was of the capital importance of preventing the price of domestic scrap from rising to the price level of imported scrap and determined for this rea­ son to introduce equalization, was under a duty in law to prevent the scheme from having any repercussions which might harm the interests of producers of pig-iron or of some of their number. In view of the fact that, when introducing equalization, the High Authority adop­ ted indirect measures (the bonus for economies in ferrous scrap through increased use of pig-iron) designed to improve to some extent the position of pig-iron pro­ ducers, the question arises whether this precaution was sufficient or whether more comprehensive steps should have been taken to maintain in its entirety the com­ petitive position of producers of pig-iron, for example, by a direct measure exempt­ ing ferrous scrap used in pig-iron production from the equalization contribution. On this point, the Court considers that the applicant's contention that, in adopting its measures, the High Authority ought to have ensured that there was no change in the competitive position of producers of pig-iron as compared with other scrap consumers is an unreasonable demand. If it were accepted that such a strict ob­ ligation existed it would be necessary to apply it not only to the case of pig-iron producers but also to all cases in which the competitive position of a producer coming within the jurisdiction of the Community was affected, even indirectly.

The applicant went only so far as to state that there had been some reduction in the production of open hearth steel compared with that of electric steel but it did not give an adequate answer to the question asked, nor did it dispute the figures supplied by the High Authority. In its final written conclusions and its oral sub­ missions the applicant stated that the High Authority's data proved nothing since it had not indicated to what extent undertakings (and especially the applicant's undertaking) producing haematite pig-iron had benefited from the economies thus achieved. However, against the conclusions which can, as a whole, be drawn from the facts referred to by the High Authority, the applicant has not adduced any information to show that the bonus did not in fact have the effect of making good the disadvantages which the introduction of equalization entailed for pro­ ducers of pig-iron. Nor is it open to the applicant to support his contention by referring to the fact that, in the recitals in the preamble to Decision No 2/57, the High Authority ac­ knowledged that Decision No 26/55 on the detailed rules for implementation of the financial arrangement had not been entirely successful in achieving econo­ mies in scrap by increased use of pig-iron. Even if the bonus system did not pro­ vide a complete safeguard for producers of pig-iron it must not be concluded from this that that system grossly and arbitrarily neglected the interest of producers of pig-iron. Finally, the fact brought out by the applicant in reply to questions put during the preparatory inquiry, that the production of open hearth steel did not follow the same course as that of electric steel does not exclude the possibility that,

According to the applicant, the institutions of the Community are, under Article 3 of the Treaty, required to act 'in the common interest', an expression meaning that the institutions must act in the interests of all concerned without exception; the High Authority is, accordingly, not empowered to adopt measures 'in the gen­ eral interest', that is to say, measures which are in the interest of the generality of those concerned, if those measures are capable of harming the interests of cer­ tain of them, such as those of the applicant in the present case. In any case, Article 59 (4) vests the High Authority with exceptional powers for cases expressly prov­ ided for. Even in those cases, the interests of those concerned are the subject of certain safeguards specified both in Article 59 and in Annex II to the Treaty; it follows that the High Authority is also bound to observe these safeguards when it acts under Article 53.

(d) Prohibited discrimination giving rise to an indirect subsidy

JUDGMENT OF 12. 6. 1958 — CASE 15/57

the different effects of the equalization rate on the various categories of scrap put the applicant in a position comparable to that of other consumers so that there can be no question of the scheme's being discriminatory. It is clear from the documents put in by the parties during the preparatory inquiry that neither the applicant nor any other scrap consumer exclusively uses one cate­ gory of scrap. For example, in its consumption of scrap, the applicant uses, accord­ ing to the nomenclature established by the High Authority (Decision No 28/53, JO No 5 of 15, 3. 1953, pp. 98 and 99), approximately 8096 of 'turnings' and 2096 of bales coming under the category of 'light scrap', whereas the steel mills in the same region use between 1096 and 2596 'turnings' and, in addition, 'heavy' and 'light' scrap in varying proportions. There are, therefore, two groups of purchasers using to some extent the same cate­ gories of scrap. However, inasmuch as the steel mills have, as far as 75% of their purchases are concerned, bought certain categories which the applicant does not use, it is conceivable that a uniform rate may have different effects. But the pre­ pararatory inquiry did not reveal any specific evidence that such a difference ex­ ists. Considering that any differnce could only make itself felt in the case of a pro­ portion of the purchases and bearing in mind the general tendency towards the alignment of prices applicable to the categories of scrap of foreign and domestic origin the applicant has not advanced sufficient legal proof that the application of a uniform rate constituted discrimination to its detriment.

set up a financial arrangement, that is to say an equalization scheme; the Court also considers that this point has been established. The only question, therefore, is whether the use to which the High Authority put this power can be described as a misuse of powers. The majority of the applicant's arguments have already been considered above from the standpoint of infringe ment of the Treaty; in the circumstances of this case there is no need to consider them afresh from the standpoint of a misuse of powers, since the applicant failed to specify what this illegality consists in. On the other hand the complaints which the applicant has added to those which have already been considered must be looked into more particularly from the standpoint of misuse of powers. In the first place the applicant is of the opinion that, by introducing equalization under Article 53 (b) of the Treaty, the High Authority evidenced its intention of evading the safeguards provided for in the provisions of the Treaty covering ex ceptional situations, such as the safeguards in Article 59 of the Treaty. In this connexion it must be recognized that there might have been a misuse of powers if the High Authority had been faced with a situation covered by the proce dure in Article 59 and, in order to evade the safeguards provided for in Article 59, had nevertheless deliberately decided to make use of Article 53 (b) and of the fi nancial arrangements provided for therein. But it has not been established that, when the basic decisions were taken, the High Authority was faced with such a

iron/steel market. The applicant is of the opinion that this substitution is evidence of misuse of powers. The defendant has replied that neither the memorandum nor the basic decisions were concerned with trying to strike a balance between the conflicting interests of pig-iron producers and steel producers but with putting into effect a series of measures which, in the High Authority's view, were required by the economic expansion which was to be foreseen. In this context, the decisions of the High Authority had as their object the establishment of reasonable prices for ferrous scrap with a view to ensuring a regular supply of this material together with an increase in output capacity for pig-iron. This ground of complaint must be rejected because the legality of the basic de cisions cannot depend on their conformity or otherwise with the memorandum published by the High Authority but only on their conformity or otherwise with

JUDGMENT OF 12. 6. 1958 — CASE 15/57

poses of which the High Authority was entitled to act; the variation which the applicant has pointed out between the wording of the memorandum and that of the basic decisions does not suffice to constitute such evidence.

Thirdly the applicant claims that an example of misuse of powers arises from the application of a uniform equalization rate not because such uniformity was neces­ sary to attain the objective pursued but in order to avoid the administrative com­ plications which would have been created by the application of a graded rate, which would have had a balanced effect on the price of the various qualities of scrap, particularly those used exclusively by independent pig-iron producers. It is true that, in its written observations and during the preparatory inquiry, the defendant pointed out the difficulties and administrative complications which would have ensued if a system of graduated rates had been applied. There is no­ thing however to justify the statement that the main reason which led the High Authority to introduce a uniform rate was the desire to avoid complications of that nature; since this rate was consistent with the provisions of the Treaty, the con­ tested decisions would still be in order even if it were proved that a uniform rate was also selected out of concern to avoid administrative complications. This complaint is therefore without foundation.

Costs

Under Article 60 of the Rules of Procedure of the Court of Justice, the unsuccess­ ful party shall be ordered to pay the costs but where parties succeed on some and fail on other heads, the Court may order them to bear their own costs in whole or in part. As the defendant has failed in its submission concerning the admissibility of the application, it must bear a quarter of the total of the costs, the remaining three- quarters being paid by the applicant.

2. Orders the defendant to pay a quarter of the costs of the action and the applicant to pay three-quarters thereof.

Pilotti van Kleffens Delvaux

Serrarens Riese Rueff

Delivered in open court in Luxembourg on 13 June 1958.

A. Van Houtte M. Pilotti

Registrar President

/// — Consideration of the substance of Application No 2/57 . . . 237 Misuse of powers as a result of rules adversely affecting pig-iron producers as compared with steel producers 237 Misuse of powers as a result of the application of a uniform equalization contribution to scrap purchases which are not comparable 237

IV — Consideration of the substance of Application No 15/57 . . . 243 Infringement of Article 29 of the Convention 243 Infringement of the 'principle of free competition' 243 V — Final opinion 244

1 — Translated from the French.